www.????.com – Protecting Your Digital Presence

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I wanted to take a break from my usual posts about more traditional construction issues and address a problem that contractors (and businesses in general) are increasingly facing: how to properly secure your long-term digital presence.

As a personal intro, my father, the owner of a mechanical construction company, recently discovered the wonders of the internet, including “the Google” and YouTube (solely for guitar videos).  Since pigs are officially flying, I figure it is only a matter of time before all contractors bring their presence online.  

As a professional intro, I was recently involved with a matter that addressed many of these issues.  Thus, hopefully this post will help organizations deal with these issues before they turn into litigation.

First Issue: Domain names

Securing the proper domain name (www.????.com) for your organization is often the first place to start when creating a website.  Getting a domain name involves registering the name you want with an organization called ICANN (Internet Corporation for Assigned Names and Numbers, a non-profit company that contracts with the government) through a domain name registrar (like GoDaddy.com).

For instance, if you choose a name like “example.com”, you will have to go to a registrar, pay a registration fee that costs between $10-$35.  That will then give you the right to the name for a year, and you will have to renew it annually for the same amount (generally).

If a domain name is available, it is yours.  Basically, think of it as a digital version of the Oklahoma land rush.  Domain names have been disappearing extremely fast.  Thus, if you want a domain name for your site (or future site), act now, or face the agony of having someone else scoop it up first.  After all, $10 for a year’s ownership of the domain name is minimal compared with losing the perfect name for your website.  And, if the domain is already taken, you can always try to buy it from the current owner (but this is often cost prohibitive).

Now what if a domain name that clearly represents the trademark of your company, such as www.uniquecompanyname.com, is already taken.  There are options to gain control if you think someone has registered your trademark with only the intent to profit by selling it to you (often referred to as “cybersquatting”).  Note: generally, a trademark is a distinctive sign or indicator used to identify a company’s products or services to consumers, and to distinguish its products or services from those of other entities.

First, all registrars must follow the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”). Under the policy, most types of trademark-based domain-name disputes must be resolved by agreement, court action, or arbitration before a registrar will cancel, suspend, or transfer a domain name.  However, disputes alleged to arise from abusive registrations of domain names (i.e., cybersquatting) may be addressed by expedited administrative proceedings that the holder of trademark rights initiates by filing a complaint with an approved dispute-resolution service provider.    

Second, you can also file a lawsuit in federal court under the Anticybersquatting Consumer Protection Act (“ACPA”).  The purpose of the law is to thwart cybersquatters who register domain names containing trademarks with no intention of creating a legitimate web site, but instead plan to sell the domain name to the trademark owner or a third-party.

Generally, a UDRP proceeding can be faster and cheaper for trademark owners than an ACPA lawsuit 

Second Issue: Dealings with information technology (“IT”) vendors

In creating and maintaining a website, organizations often rely heavily on internet consultants or vendors, as this is specialized knowledge and is generally better in the hands of professionals.  However, there are risks to such relationships, which can be minimized.  For example, when registering a domain name with a registrar (see above), you have to provide the name of the “registrant.”  The registrant is generally presumed to be the owner, so if your vendor registers as the registrant, it may lead to issues later if you transfer vendors and want to take your domain name with you.

Also, vendors often contract with other third parties for hosting services or to acquire licenses and software on behalf of the client.  These contracts could provide that ownership of the licenses or software is with the vendor.

Overall, any organization that outsources its IT work should have a clear contract that lays out the rights and liabilities of the parties, which may include: specifying what is being purchased, identifying the owner of all relevant items, providing for a smooth unwinding of the relationship at the end of the term, and requiring the vendor to help in a transition.

The irony of a post on an internet blog about helping companies get an online presence is not lost on me.  However, my hope is that anyone with access to “the Google” can find this post and gain some helpful information.

Where art thou documents (perils of document collection)

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As I am digging out from a trial (which explains my recent absence from the blogosphere) and digging out from the icepocolypse here in Indianapolis, I wanted to take a break and share some insight regarding document collection issues. 

As is often the case in most lawsuits, parties are requested to search for and collect documents relevant or related to the issues in the lawsuit.  Such requests are often called requests for production, document requests, or subpoenas (if you are not a party to the lawsuit). 

Under Indiana law, a party has a responsibility to perform a reasonably diligent search to locate the requested documents.  Now, what constitutes a reasonably diligent search is a very fact intensive inquiry depending on the specific situation, such as whether the documents are maintained in electronic or hard copy form, whether there is a document retention policy, and whether litigation is anticipated, to name a few.

Nowadays, with the emergence of smartphones, tablet PCs, on site wi-fi, etc., all of which are creating a paperless process for most contractors, the paper chase that has long been synonymous with construction is steadily decreasing.  Thus, performing a reasonably diligent search for electronically stored information has becoming an even more challenging process. 

While I strongly recommend consulting with a qualified attorney regarding the specifics of any document collection you may be facing, I wanted to share a few of the sanctions that can be imposed if a party fails to meet its diligence requirements.  These aren’t meant to scare anyone, but rather to provide the possible sanctions, depending on the degree of disobedience.  While these generally apply when a party refuses to produce requested documents pursuant to a court order, they can also apply when a party represents that they cannot locate documents, the documents were destroyed, or the documents do not exist, when, in actuality, the party failed to search for them. 

Under Indiana law, if a party fails to make or cooperate in discovery it can be subject to the following sanctions:

  • Certain designated facts can be taken as established without evidence;
  • Refusing to allow the disobedient party to support or oppose designated claims or defenses;
  • Prohibiting a party from introducing designated matters in evidence;
  • Striking out pleadings or parts thereof;
  • Staying further proceedings until the documents are produced;
  • Dismissing the action or proceeding or any part thereof;
  • Rendering a judgment by default against the disobedient party;
  • Contempt of court;
  • Requiring the disobedient party or the attorney advising him or both to pay the reasonable expenses, including attorney’s fees, caused by the failure.

On an additional note, absent exceptional circumstances, a court may not impose sanctions on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.

Hopefully this post will help you avoid such perils.  Now if only I can avoid the perils of my outdoor ice rink, a/k/a my driveway…

Oh Those Pesky Deadlines: Indiana Payment Bond Claims

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Happy 2011!!  Now that the ball has dropped, the champagne is drunk, and the glitter is gone, it is time to commit to your New Year’s resolutions.  One of my ongoing resolutions is stay on top of all deadlines.  So, with my outlook calendar in hand and reminders popping up faster than popcorn, I wanted to remind all of our Indiana contractors of the deadlines for submitting payment bond claims and the suit limitations period for filing suit against sureties on various Indiana public projects.  Again, it’s always a good idea to consult with an attorney to make sure that you have complied with all notice and suit requirements as well as any deadlines. 

Indiana does not require payment bonds to be posted on private projects.  If a bond is posted the deadlines for filing a claim and filing suit will be outlined in the bond. It is also essential that regardless of the statutory deadlines, you should always read the bond.  If the bond enlarges these time periods, the deadlines in the bond will control. 

There are four different types of public projects in Indiana.  It’s important to know which type of project you are working on so that you are aware of your statutory rights and obligations. The four types of projects are:

Title 4 State Projects – Indiana Code §4-13.6-1-1 et seq.

Title 4 projects are Indiana state public works projects solicited by the Indiana Department of Administration, the Public Works Division.  Unless the bond provides for a greater period of time, a claimant must file a claim with the Public Works Division and the surety within 60 days from the last date labor was performed, material furnished or service rendered.  If you have submitted your notice of claim and have not yet been paid, you must wait at least 30 days before filing suit against the surety to recover under the Bond.  However, any suit must be brought against the surety within 1 year after final settlement of the contract with the contractor.   

Title 5 State Projects – Indiana Code §5-16-1-1 et seq.

Any Indiana state public works project not covered under Title 4 or Title 8 are Title 5 projects.  In order to make a claim against the bond on a Title 5 project, the claimant must file a verified claim with the state agency that commissioned the project within 60 days after completing labor or furnishing materials.  The state agency will furnish a copy of the claim to the surety.  The claimant must then wait at least 30 days.  If payment has not been received a suit may be filed against the surety.  Any suit against the surety must be brought within 60 days from the date of the final completion and acceptance of the project.    

Title 8 Indiana Department of Transportation Projects – Indiana Code §8-23-9-1 et. seq.

Title 8 covers any project for the Indiana Department of Transportation.  In order to make a claim on a bond posted for a Title 8 project, a claimant must within 1 year after acceptance of the labor, material, or services by the Commissioner furnish the surety a statement of the amount due.  The claimant must wait at least 60 days after furnishing the statement to file suit against the surety.  The claimant must bring any action within 18 months from the date of final acceptance of the project by the Commissioner. 

Title 36 Local Government Projects – Indiana Code §36-1-12-1 et. seq.

Title 36 projects are projects for local governments, political subdivisions or their agencies.  A claimant must within 60 days of last performing labor or furnishing material file with the local government board a signed statement of the amount due.  The board will forward the statement to the surety.  The claimant must then wait 30 days.  If payment has not been received, a suit may be filed against the surety.  Any suit against the surety must be brought within 60 days after the date of the final completion and acceptance of the project.   

Dizzy yet?  It can be difficult to keep track of things.  So here is a quick reference guide.  LAW under CONSTRUCTION wishes you Happy and Profitable New Year!

Project Type Notice of Bond Claim Deadline Grace period before filing suit Suit Against the Surety Deadline
Title 4 60 days from the last date of labor performed, material furnished or services rendered 30 days after filing notice to file suit against the surety 1 year from final settlement with the contractor
Title 5 60 days after completion of labor or service or within 60 days after last item of material was furnished 30 days after filing notice to file suit against the surety 60 days from the date of final completion and acceptance of the project
Title 8 1 year after acceptance of the labor, material, or services by the Commissioner furnish the surety a statement of the amount due 60 days after furnishing the statement to file suit against the surety 18 months from the date of final acceptance of the project by the Commissioner
Title 36          60 days from the date of last performing labor or furnishing materials 30 days after filing the notice of claim 60 days after the date of final completion and acceptance of the project

Contractors and Bankruptcy: Getting the Piper Paid

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This , which provides an overview of basic strategies for contractors, subcontractors and suppliers who are faced with non-payment from a bankrupt entity on a project, can be found on , Christopher Hill’s excellent construction law blog (our second guest posting honor) (click ).  I hope you won’t have a construction project affected by a bankruptcy any time soon, especially as we emerge from the recession.  But just in case you do, check out my post and be prepared for getting paid for work you performed or materials you supplied.

Guards? Moats? Indiana court addresses jobsite protection

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And I quote: “Lee could have protected himself from liability only by stationing a guard upon the premises to insure that neither Rider, nor anyone else entered upon the inherently dangerous worksite.”  A guard?  Complete with a shack and taser?  Is that the rule?  Let me explain.

The facts…

On December 6, 2010, in , the Indiana Court of Appeals addressed the duties owed by both a general contractor and an independent subcontractor to the purchaser of a home when she visited the construction site, without permission, and suffered serious injuries.

The purchaser, Rider, entered into a contract to buy a house from a general contractor.  The general was also the landowner, as possession would be transferred at closing.  The general hired Lee, a sub, to perform most of the labor.  Importantly, the contract required that any visitor needed permission from the general or the real estate agent to enter the premises. 

Although Rider obtained permission once, she visited 30-35 other times without anyone’s permission.  On the ill-fated visit in question, Lee and his crew were working on the deck.  When rain set in, they split from the site for an early lunch, leaving an unfinished deck.  Rider subsequently arrived, leaned on the unattached railing, fell, and suffered severe injuries.  Lee and his crew returned, discovered the incident, and nonetheless, finished the deck.

The majority’s view…

Rider filed a complaint for negligence against the general and sub.  The court first addressed the liability of the general.  As a threshold issue, the court noted that since the general still owned the property and was in possession, its duties are judged based on its status as the landowner.  The court ultimately relied on the fact that the general/landowner was neither in actual possession or control of the deck when the accident occurred nor was in control of the premises because he did not perform any actual work.  Since the sub did all of the immediate work, Rider’s negligence claim against the general failed.

The court next addressed the sub’s liability.  Since the independent contractor had worked on the deck right before the incident and a short time after, the court first held that it was in control for purposes of establishing a duty to Rider.  The court then held that the sub’s liability was dependant on whether Rider was rightfully on the premises or whether it was foreseeable that she would visit and be harmed.  Although there were unanswered questions of fact, foreseeability was the key issue. 

The dissent…

One judge disagreed with the majority’s analysis of the sub’s liability.  The judge noted that the construction process is fraught with peril and involves many inherent dangers.  To him, the key fact was that the contract required permission to enter.  End of story.  She didn’t follow the protocol and the sub was not present when the injury occurred.   Therefore, it was not foreseeable that she would be there.   The dissent felt the issue is more properly the risk incurred by Rider in entering a dangerous site, rather than the duty owed.  The dissent stated that the majority’s view “places an impossible burden on contractors” and added the statement I initially quoted. 

The moral…

  • Don’t wander around dangerous construction sites.  Everyone loves watching their dream house as it’s built.  However, I think everyone also loves actually moving into that dream home.  Take the time to follow the procedure specified in the contract when you want to visit.   
  • Despite the dissent’s strong rhetoric, the majority is the law.  Thus, if you are in control of the construction, and it is foreseeable that a homeowner (or similar party) will come on the site, take the necessary precautions.  (consult a qualified attorney for such precautions). 
  • Kudos to the sub for finishing the deck.

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