While conducting an analysis of your company’s risks related to a particular construction project, I believe it is always important to consider whether your company’s potential liability exposure on a particular project is similar to and bears some relationship to the potential reward your company will receive from properly performing the project.  One of the ways to try to assure yourself that your company’s liability exposure is not out of proportion with its potential reward is to draft and include a limitation of liability in your company’s construction contracts.

My recommendation is that your limitation of liability provision be drafted in such a fashion that your company’s total liability for any and all claims related to the project shall in no event exceed the contract price for that project.  These types of limitations of liability are routinely enforced in the State of Indiana, and go a long way in helping your company have an effective risk management strategy with respect to its contracts.

If you need assistance in drafting a limitation of liability provision to include in any of your construction related contracts, the construction lawyers at Bamberger are ready to assist you in this endeavor.

Author:  Herb Davis  (bio)
Phone:  812.452.3538
email:  hdavis@bamberger.com

This change in the registration system is made to increase the accuracy of the FAA’s database which is used by financial institutions, among others, in conjunction with financing transactions.  This change in the law will require lenders and leasing companies to more closely track the registration status of aircraft.  At a minimum, it would be advisable for financing documents to add a covenant requiring borrowers to show proof of compliance with these registration requirements.  In addition, lenders will need to make sure that they have tracking mechanisms in place in order to confirm compliance.  According to the FAA, this rule will not affect security interests that lenders register with the FAA.  Those registrations of security interests will continue in perpetuity regardless of the status of the aircraft’s own registration.  However, as with any new rule, its ultimate effects remain to be seen.

Since the effect of failure to comply with these re-registration or renewal requirements will result in an aircraft being grounded, lenders will want to make sure that these new rules are complied with since non-compliance may have a detrimental effect on collateral values.  If you would like more information, or if you have questions regarding the new rules, please contact Laura Scott.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

The difficulty with this requirement is that the creditor has the burden of proving that it complied with this requirement in the event that a question arises.  There is no requirement that the financing statement delivered be a file-marked copy of the financing statement.  To comply with this requirement, the creditor should include a document to be executed by the debtor at closing acknowledging receipt of a copy of the financing statement.  The Indiana statute is silent on whether the debtor can waive its right to receive a copy of the financing statement and security agreement. 

In the event that such a waiver is enforceable, financial institutions should consider including such a waiver provision in its security agreements used in Indiana so that a financial institution can attempt to assert the waiver as a defense in the event that the signed acknowledgement is lost or inadvertently not obtained. However, financial institutions should not rely on any waiver language, and should continue to obtain signed acknowledgements from the debtors.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

Because of the cancellation statute, often times those owners and operators assume that even a pittance of a royalty paid to the mineral owner or a feeble effort by the lessee of the well to maintain production is sufficient to keep a lease operative.  A mineral owner may suffer paltry royalty payments and ineffective operation of the well for years under the incorrect assumption that he or she has no alternative.

However, even if the requirements of the cancellation statute are not triggered, the mineral owner may have legal means available to rid himself or herself of the problem lessee.

Long before Indiana adopted its cancellation statute in 2002, common law and the terms of the lease protected mineral owners from irresponsible and unproductive oil operators.

Many fail to realize that there are a number of “implied duties” on the part of the lessee in any oil and gas lease— including a long-recognized implied duty of “reasonable development.”  Irrespective of the terms of the oil and gas lease, the lessee has an affirmative duty to the mineral owner to operate the well as a prudent operator.  Courts have held that where a lessee has failed to exercise as a prudent operator, the lease may be terminated by the mineral owner.  If a lessee has failed to make efforts to maximize profits from an oil or gas well, the lessee may be in breach of the implied convenant of reasonable development and the prudent operator standard.

A mineral owner suffering difficulty or disappointment with a lessee’s operations should not assume that just because he or she is receiving royalty checks from time to time the lessor/lessee marriage cannot be dissolved.  The mineral owner may have other rights not expressly stated in the lease or the statutes to terminate the lease.

Author: Adam J. Farrar (bio)
Phone: 812.838.5066
email: afarrar@bamberger.com

1)      Pre-suit Foreclosure Notice.  Under the new law, the 30-day pre-suit foreclosure notice (which was previously required to be sent in all foreclosure cases), is now only required in cases involving the debtor’s primary residence.  The new law serves to clarify an ambiguity under prior law, which should help to reduce costs and delays in commercial foreclosure actions while still protecting consumers at risk of losing their homes.

2)      New 180-Day Period to File Praecipe.  Previously, a judgment holder in a foreclosure action was essentially left to praecipe a sheriff’s sale at-will.  Now, if the judgment holder fails to file a praecipe initiating a sheriff’s sale within 180 days after:

1. the judgment and decree of foreclosure is entered or
2. 3 months from the filing of the complaint,

whichever is later, and such sale is not otherwise prohibited by law, subject to a voluntary statewide foreclosure moratorium, or subject to a written agreement between the owner of the property and the judgment holder, an enforcement authority that has issued an abatement order may proceed to set the property for sale. 

For purposes of this new provision, an enforcement authority is defined as the executive department authorized by ordinance to administer the Unsafe Building Law or, in a consolidated city, the department of metropolitan development.  It should be noted, however, that if no abatement order has been issued, or one of the other exceptions apply, the traditional rule regarding setting a property for sheriff’s sale remains unchanged. 

3)      New 120-Day Requirement to Sell Property.  In addition to the new praecipe time limits, all sheriff’s sales in Indiana must now be conducted within 120 days after the judgment and decree of foreclosure is certified to the sheriff under seal of court.  While this new requirement should not cause many problems in traditional sheriff-conducted sales, it might present an issue with foreclosure sales conducted by an auctioneer if the new time limits are not kept in mind.

4)      Payment of Property Taxes Prior to Sale.   Finally, all outstanding property taxes must now be paid prior to a sheriff’s sale.  This requirement includes redeeming all property taxes which were sold in a prior tax sale and/or payment of all delinquent taxes and penalties.  Although most Indiana sheriffs already required the taxes to be brought current prior to a sale, it has now been codified statewide.

If you have any questions about the changes to Indiana’s foreclosure law, please contact a Bamberger attorney for more information.

Author: Daniel R. Robinson (bio)
Phone: 812.452.3564
Email: drobinson@bamberger.com

Recently, the patient’s attorneys have started to ask treating physicians to give a deposition concerning the care of the patient in hopes that the testifying physician will be critical of the health care provider that has been named in the complaint, thus giving the patient an advantage in the claim.  The logic behind this tactic is that it can be part of human nature for a person to profess his or her innocence in a situation by looking negatively at another individual’s involvement in the same situation. 

In some situations, if not most, the patient’s attorney is going as far as telling the testifying physician that the patient is not looking to sue the testifying physician.  This can provide a false sense of security for the testifying physician that he or she will not be dragged into a medical malpractice claim leaving the testifying physician unprepared for the actual deposition.  Healthcare providers need to be cautious because there is nothing to stop the patient’s attorney from adding the testifying physician as a party to the medical malpractice claim after the deposition has been taken.  If that were to happen, the patient’s attorney has the testifying physician’s deposition to use against the targeted health care provider and the patient’s attorney can look to build a case against the testifying physician. 

So what can health care providers do to protect themselves?  There are two quick and simple options you have to make certain you are protected and well advised on how to proceed.  The first is to call your private attorney to advise him or her of the situation.  Your private attorney can make a call to the patient’s attorney to get more information on the matter and then advise you what you should be doing.  The second option is for you or your private attorney to call your medical malpractice insurer to advise it of the situation.  The medical malpractice insurer may opt to provide you with an attorney at the insurer’s expense, especially if the patient’s attorney wants to move forward with the deposition. 

In this type of situation, it is not a bad idea to call both your private attorney and your medical malpractice insurer to ensure you receive as much guidance as possible.  If you have a risk manager associated with your practice group or hospital, you most certainly should contact the risk manager as soon as you are approached by a patient’s attorney.  Your risk manager will be able to help you navigate this situation as well.  If you are ever placed in this situation, the most important thing to remember is that accommodating the request of a patient’s attorney does not mean that you will not be sued even if the patient’s attorney states that you are not being targeted for a lawsuit.

Author: Chad M. Smith (bio)
Phone: 812.452.3597
email: csmith@bamberger.com

If no work has been performed on a property in the last 90 days, there is little risk for the title insurer to delete the mechanic’s lien exception.  Title companies will typically agree to delete the exception upon the execution of an appropriate vendor’s affidavit by the seller of the property.  If the title insurance coverage is requested by a lender in a refinance transaction, a mortgagor’s affidavit will be obtained from the borrower/owner.

If work has been recently performed on the property, the title insurer is less likely to delete the mechanic’s lien exception.  In such situations, the title insurer must carefully review all risks and determine its recovery options if a mechanic’s lien is later filed by a contractor or subcontractor.

To underwrite affirmative coverage against unfiled mechanic’s liens, the title insurer will need a copy of all construction contracts in effect for the project.  The title insurer will also want financial information for the parties who will be requested to execute affidavits or indemnity agreements related to the coverage.  The owner and its contractor may be required to execute such documents.  In addition, if the property is owned by an entity such as a corporation, all individual owners or shareholders of that entity may be required to sign an indemnity or personal guaranty in favor of the title insurer.

The title insurer may require a contractor or subcontractor to execute lien waiver forms at the time that each payment is made on behalf of the owner.  Contractors and subcontractors should carefully review such documents before agreeing to waive any lien rights, especially if future payments will be due from the owner. 

Affirmative title insurance coverage against unfiled mechanic’s liens is beneficial and sometimes a “deal-breaker” issue from a lender’s perspective.  Due to the number of parties affected by such coverage, the party requesting the coverage should discuss title insurance requirements as early as possible with the title company.  It may take several days to a few weeks before all steps can be taken for this type of coverage.

Author: Jason P. Lueking (bio)
Phone: 317.464.1591
email: jlueking@bamberger.com

In modern usage, most people have come to associate “probate” with court proceedings related to the transfer of property at death.  Many have concerns about such court proceedings, including cost, delay, publicity, and uncertainty.  Some of these concerns are justified, and others are exaggerated.

In America, each of us may own and control our own property, and that includes the legal right to designate how and to whom our property is to be transferred at our death (subject to certain limitations such as rights of creditors and payment of death taxes if applicable).  This is a treasured legal right.  Laws have developed to make sure this legal right to transfer our property at death is protected, and that the rights of persons designated to receive property at death are protected.  We can all cite instances in which the assistance of a court has been necessary to protect these rights, but most of the time such assistance is not needed from a court, even though some coordination and supervision of the process is almost always needed.

In fact, there are many methods to transfer property at death under modern law, including the use of revocable trusts, wills, beneficiary designations, pay on death and transfer on death registrations, and joint tenancies with rights of survivorship.  The objective today is to choose and properly coordinate the best methods to obtain the desired result in the most efficient manner.

The attorneys of the Personal Services Group at Bamberger are experienced in helping our clients identify the best method or methods to choose and implement to accomplish their estate planning objectives.

Author: John P. Broadhead (bio)
Phone: 812.452-3577
email: jbroadhead@bamberger.com

Generally speaking, the government is required to award a public works contract to the “lowest responsible and responsive bidder.”  “Responsibility” generally relates to reputation, competence, and the ability to get the job done.  “Responsiveness” generally relates to compliance with bid instructions, specs, and procedural requirements for competitive bidding.

What happens when an aggrieved contractor feels that the government failed to follow the requirements for competitive bidding in awarding the contract? 

While remedies are somewhat limited, the contractor may be able to enjoin the award of the contract by filing a lawsuit under the Indiana Public Lawsuit Act.  Furthermore, the public meetings where contracts are awarded are often under the watchful eyes of the news media and the general public, even in smaller communities.  Public pressure on the governmental entity to do what is lawful and right for the taxpayers can yield effective results.

Author: Adam J. Farrar (bio)
Phone: 812.838.5066
email: afarrar@bamberger.com

Local governments need funding for identifying past uses, determining any existing contamination, planning redevelopment and cleanup and keeping the community involved in the process.  Since its inception in 1995, many communities in the Midwest have obtained grants through the United States Environmental Protection Agency Brownfields Program to fund these tasks.  With up to $400,000 available per applicant, these grants can make a difference in getting over environmental hurdles.

You probably know of properties and areas in your community that fit the Brownfield definition.  A Brownfield site is defined as real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of hazardous substances, pollutants, contaminants, controlled substances, petroleum or petroleum products, or is mine-scarred land.  

With the push for more Brownfield funding available in FY 2011 (starting in October 2010), redevelopment planning now will place you in the best position for getting your grant application considered this fall.  Although grant funding is only one resource in a redevelopment plan, it is a key part of many successful community redevelopments.  Even if grants only partially fund your assessment and cleanup work, the results of that work can lead to identification of other funding sources including former property owners and operators and their insurance companies.

EPA has issued guidance on its grant programs, which is available on its website. Many communities have found it beneficial to hire environmental professionals who have streamlined the grant writing process and worked through a successful redevelopment project. Planning now will give your community the best opportunity to add up to $400,000 and jump-start next year’s Brownfield redevelopment efforts.

Author: Jamie B. Dameron (bio)
Phone: 317.822.6787
Email: jdameron@bamberger.com