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My, How Time Flies: Windows 7 Will Be Gone in a Flash

in Technology
Joe Balsarotti

By JOE BALSAROTTI

It seems that the upcoming discontinuation of Windows 7, Microsoft Server 2008 and Adobe’s Flash were somehow a surprise to a number of businesses. Microsoft drops its monthly security updates and patches as of January 2020, as in the beginning of next year. We’ve consulted with our clients for a while to develop budgets and replacement plans for their networks, but far too many IT firms don’t like to give “bad news” – and as such, they leave such discussions until the last minute.

If your business is all Windows 10 or Server 2016, congratulations. Pat yourself on the back; you’re more prepared than most, it seems. If all this is all news to you, you need to get ready quick. The computer industry has been plagued with shortages of Intel processors for months now and there is no relief in sight. That means multiple months-long wait times for server and higher-end PC orders. Also, there are a number of application programs that need to be upgraded to run under Windows 10, so this tech refresh will probably take longer, from a calendar perspective, than previous ones. Networks with older NAS (network attached storage) units and old servers have problems connecting to new Windows 10 equipment, as W10 slammed the door on many of the security holes that the operating systems of these devices have.

Microsoft did its biggest push ever to position Windows 10 as its premier operating system. For more than a year, Microsoft gave free updates for users of both Windows 7 and Windows 8. Personally, I suspect sweeping the anything-but-popular Windows 8 under the rug was a large part of the strategy. However, narrowing the development focus to just one version certainly can’t hurt Microsoft, who has had its hands full trying to patch and secure multiple operating systems at the same time.

In January 2020, when Microsoft stops updating Windows 7, all those old machines become a security risk for your business and the data of both your company and its customers. As we’ve discussed before, running a business with known flaws in its PCs and networks opens it up for liability and loss of customers. Assuming one wants to stay in business, updating older technology is a business imperative in today’s environment. A new wrinkle is that Microsoft has said that updates will be available for those Windows 7 and Server 2008 customers who sign support contracts, but pricing will be such that updating the machines will be a far, far less expensive strategy.

Microsoft’s position is that Windows 10 is the “last version of Windows” and will morph over the years and undergo substantial updates on the fly, adopting the philosophy of Apple with its operating systems. Whether that idea will survive amidst changes in technology and widely varying needs of users is a gigantic question. Just ask the Apple owners who wake up to notice things that used to work no longer do because their systems can’t handle the new updates. Also, look forward to “as a service” offerings from Microsoft where monthly or annual payments will replace Windows bundled with systems. Microsoft has already been successful transitioning millions of Microsoft Office buyers onto monthly or annual payments for Office 365.

On top of these Microsoft changes, Flash – the language that powered websites for two decades – is finally going away. Flash, which was developed by Macromedia (and acquired by Adobe in 2005), brought easy animation to the web. However, Flash has been plagued with bugs and security flaws. Apple dropped support in its browsers and Apple co-founder Steve Jobs publicly skewered the software in an open letter back in 2010. Those using Firefox for browsing saw Flash support end, and Microsoft is dropping it from IE and Edge as well. At one point, more than 80 percent of users accessed some Flash-enabled website each and every day, but at last count that had dropped into the teens as HTML5 became the web language of choice. As with the Windows 7 transition, look for disruptions as old websites and applications that have not been rewritten become inaccessible.

Be sure to not only plan for the physical replacement of machines, servers and upgraded software, but also for training as Windows 10 and Windows servers have some substantial differences from their predecessors – and rewritten websites might have different functionality from their Flash version days.

Hopefully this isn’t new news. Hopefully your company and its tech staff (or outside provider) are already discussing this on an ongoing basis. However, if your current IT provider isn’t consulting with you at least annually to talk through refreshes to your technology, you may want to get serious about upgrading soon.

Technology is always in motion. To ignore it is to put your company at a disadvantage.

Joe Balsarotti is President of Software To Go and is a 40-year veteran of the computer industry, reaching back to the days of the Apple II. Keep up with tech by following him at Facebook.com/SoftwareToGo or on Twitter @softtogo.                             

Eastern District Orders Insurance Company Back to Trial Court on its Refusal to Cover Homeowners’ Construction Policy Claim

in Law/Uncategorized
James R. Keller

BY JAMES R. KELLER

Missouri’s Eastern District Court of Appeals recently granted judgment for homeowners and against their insurance carrier on claims for construction damages to piers, a pole and the foundation of their home. The appellate court sent part of the dispute back to the trial court to consider further whether the insurance company’s refusal to cover a policy claim for these damages was vexatious.

The case is Cockerham v. American Family Mutual Insurance Company, 561 S.W.3d 862 (Eastern District, MO 2018).

The appellate court noted this was the first case in Missouri to directly address the issue of insurance coverage under a policy of this sort. The Missouri Supreme Court denied on Dec. 18 an application to consider the Eastern District’s opinion.

The Eastern District’s decision is now new law affecting all similarly worded insurance policies, at least in Missouri courts in the Eastern District.

Homeowners Robert and Stacia Cockerham sued their insurance provider, American Family Mutual Insurance Company, for damages relating to the construction of an addition to their residence. The addition was a celestial observatory.

The alleged damages involved a newly installed telescope support system attached to the foundation of their home and the homeowners’ loss of use of the observatory.

The homeowners purchased their home on Lakeshore Drive in Creve Coeur, MO in 2001. In 2005 they hired Nicholas Schalk and Schalk Construction, LLC to construct the observatory addition to their home.

The project included a telescope and its support system. Schalk had never before built such a system.

Schalk hired one subcontractor to install the piers and a separate subcontractor to pour concrete over the piers. The homeowners claimed the concrete subcontractor poured the concrete incorrectly, damaging the piers, the support system and the foundation.

The homeowners made a claim on their insurance policy to cover the losses. American Family denied coverage. It contended the claims were excluded from coverage or were not covered at all under the homeowner policy.

After cross motions for summary judgment, the trial court granted American Family’s motion in part by dismissing the homeowners’ claim for vexatious refusal to pay for the piers, pole and foundation damage. The homeowners appealed.

The appeal involved interpretation of the insurance policy and its various sections.  Typically, this is a question of law for judges, not juries, to decide.

The policy excluded defective construction in part C but it did cover “resulting loss” to property described in Part C that was “not excluded.”

The Eastern District found its job to be difficult. The policy required the appellate court to “decipher a rather prolix word puzzle.” Insurance policies tend to be complicated, layered with qualifiers, exceptions and exclusions.

American Family argued that it did not cover the loss because the homeowners’ losses were already excluded due to faulty construction. The “not excluded” clause did not apply, the carrier contended, since the coverage already was excluded.

Focusing on the “resulting loss” clause, the Eastern District rejected this argument. The policy did not define “resulting loss.” As Missouri courts typically do when the contract does not define a word whose meaning the parties dispute, the court turned to Webster’s Dictionary for guidance.

Webster’s Third New International Dictionary (1993), unabridged, defines the verb form of the word “result” as “to proceed, spring or arise as a consequence, effect or conclusion: to come out or have an issue.”

The court noted that the policy did not specifically state what a “resulting loss” may result from except to the extent such losses will not be covered that are “excluded or excepted” from the policy.

The Eastern District concluded that an ordinary purchaser of insurance would conclude that where one loss results from another loss caused by faulty construction, “such resulting loss is covered.”

Thus, the policy covered the damages to the piers, pole and foundation due to the incorrectly poured concrete. This includes the cost to remove and replace the bad concrete.

The Eastern District also found there were factual questions as to whether American Family’s refusal to pay on this claim was vexatious. This included a dispute as to whether the insurance company’s position denying coverage was willful and unreasonable.

The court’s finding means the dispute has returned to the trial court for further consideration regarding the piers, pole and foundation claims for vexatious refusal to pay.

The homeowners also had a claim for loss of use of their observatory. The policy, however, covered such a loss only when the property as a whole was uninhabitable, causing additional homeowner expenses.

The appellate court agreed with the trial court’s denial of this claim.

It was undisputed that the house was not uninhabitable – especially since the homeowners continued to live there.  They had no claim for additional living expenses because there were none.

The appellate court concluded that American Family clearly was not subject to a vexatious refusal to pay claim for loss of use. Since there was no coverage, the carrier’s position was proper.

The homeowners had additional assertions that the Eastern District found persuasive enough to raise more genuine fact questions meriting further trial court consideration.  They included that American Family’s representatives told the homeowners they did not need a builder’s risk policy to cover losses like the ones that occurred in this case, given the policy they had. The representatives included an adjuster who allegedly told them that “their losses would be covered.”

The appellate court also noted that the carrier did not cite the “resulting loss” clause in its defense when it filed its answer to the initial lawsuit. It did not rely on this clause in its briefs on the motions for summary judgment.

The insurance company relied solely on the faulty construction exclusion.

James R. Keller is counsel with Sandberg Phoenix & von Gontard P.C. where he concentrates his practice on construction law, complex business disputes, real estate and alternative dispute resolution. He also is an arbitrator and a mediator. Keller can be reached at (314) 446-4285 or jkeller@sandbergphoenix.com.

Former Equipment Sales Eye Trends, Patent Technology to Serve New Markets

in Marketing
Stephanie Woodcock

By STEPHANIE WOODCOCK

Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.”

Chuck Justus, owner of Green2Go Rental Power & Light, a supplier of eco-friendly rental power and field lighting products, quotes Ford while explaining an industry that refuses to change. “On one hand, you have smaller rental houses that are mom and pops and don’t take chances, and on the other hand, you have large companies that are slow to change,” said Justus. “Because of the lack of innovation and this unwillingness to change, both sides are killing product evolution in the rental industry.”

Justus’ work experience helped him develop his patented technology. Years ago, he worked for a large company that manufactured equipment and saw engineers wringing their hands trying to find a solution when in 2015, a large portion of diesel engines in mobile applications were required to meet heightened emission standards. Contractors had to look in different directions for alternatives, according to Justus, which led to increased acquisition costs for generators and a longer learning curve for both technicians and end users. Power and lighting equipment were becoming more complex.

In 2016, Justus started Green2Go, an emerging supplier in the rental power industry in St. Louis. According to the founder, his products challenge the status quo and add innovation to an industry that had seen little innovation over the last fifteen years.

“I saw an opportunity I call ‘radically different’ and I took a chance,” said Justus, who cites St. Louis Art Fair as a client that uses his generators. “They were spending north of $50,000 in electric rental and installation for their festival. With my product, the were able to save 50 percent on electrical infrastructure.”

Keith Jackson, president and owner of 24/7 Onsite Cameras, also uses the words “radically different” when describing his mobile camera trailers. Jackson says there has always been security and there have always been cameras, but there hasn’t always been the ability to rent security mobile camera trailers.

“The concept of onsite security cameras is fairly new,” he said. “I took these two concepts – security and cameras – and customized them for jobsites. I made security trailers that were customized to be mobile and rentable because I saw the emerging market and need for this technology.”

There is a radically different mindset for renting versus owning security equipment, according to Jackson.

“You have to think about what can go wrong with a piece of equipment and how to meet the harsh demands of the environment. There is no rulebook,” he said. “You find a need and develop the product to fit the need, but if you’re going to rent it like we do, you have to industrialize it and be willing to invest the dollars in production and in owning that product for a long period.”

In addition to embracing and understanding the nuances of an emerging market, Jackson said he also pours much time and expertise into thinking through the manufacturing process. “For instance, when my mobile camera trailers travel, they have to have the capability of being lowered to a certain level so they can be transported by truck. From the industrial housings that store the electronics to the solar panels that make the product stand-alone, each production detail is customized to be ‘road rental ready,’” he said.

Jackson’s experience in the rental industry spans more than 25 years. When he launched 24/7 Onsite Cameras in 2010, Jackson says no one was renting mobile security trailers. “Few companies saw the need to have security on their jobsites,” he said. “Instead, they bought extra product to counteract the anticipated loss of supplies on a jobsite and hired security guards when necessary. Rental units never sleep, never take breaks or bribes, and have a photographic memory.”

Contractors today see beyond the benefit of security alone, according to Jackson. They can consolidate manpower, remotely oversee deliveries and contractors and reduce theft on their jobsites. Safety on jobsites is improving with onsite cameras, he says, because surveillance increases worker awareness. Mobile security trailers continue to change the jobsite culture.

The education process remains a big component of his long-term success, according to Jackson. Once contractors realize the return on their investment is beyond jobsite security, they become loyal customers. “But the industry is slow to change,” he said. “Hurdles in this emerging market are setting precedents with price and changing customer perceptions and expectations. Customers want to continue to do things the way they have always been done. Unfortunately, sometimes it’s too late. We are the least expensive first option and the most expensive last resort.”

Another business owner changing the culture of the jobsite and willing to invest in innovative equipment is Chase Darrah, owner of ChaseCo Equipment Rental & Sales. With four locations in the Midwest, Darrah started his rental company in 2004 after working in equipment sales for one of the largest Ditch Witch dealers in the world based out of Sullivan, MO.

In the 2000s, Darrah noticed the trend of contractors renting equipment rather than purchasing it.

“It made total sense to me,” Darrah said. “Why pay for the insurance, maintenance and taxes and have that fixed cost on a piece of equipment that you don’t use every day?”

At that time, Darrah also detected the need for a specialty equipment rental facility. “A great rental store does really well at managing the equipment from all aspects including purchasing, replacing, maintaining, servicing, delivering, inspecting and stocking,” he said. “The rental store isn’t in the building business or the manufacturing business. It is in the equipment business. On the flip side, many companies in these industries aren’t in the equipment business. It makes sense to sub the equipment needs out to the rental company,” he added.

Like his colleagues Jackson and Justus, Darrah saw an emerging market in renting advanced equipment that could change the landscape of jobsites. Every year the percentage of equipment that is rented versus purchased increases, according to Darrah. “I saw an unfulfilled need before other rental houses did, and I was willing to invest the dollars into my vision.” Like Justus, he faced a slow-to-change industry that favor adapting to new technology.

Darrah currently stocks Ditch Witch vacuum excavators (hydrovacs) in his rental fleet, trailer-mounted vacuums on steroids with high-powered water pressure systems commonly used in the directional boring field. This product, however, is in its infancy stage with so many unknown uses, Darrah says.  ChaseCo Rental was one of the first equipment rental companies to purchase these in the country, according to Darrah. “I knew we could present these to our existing customer base involved in directional boring, but I also knew we would have to educate our other customers in other markets for our rental revenue to increase. It has been a long road, but every year the demand is rising,” he said.

Darrah says uses for this product are plenty, but it takes a while to get customers on board. “We went through the same process with mini-excavators when we first opened,” he said. “Many of our customers were using full-size backhoes at that time and thought mini-excavators were a joke. But eventually, when they needed to rent an excavator, they began to see the many benefits that excavators provided over backhoes.”

Another commonality between the three innovators is their ability to gain traction from new, less traditional markets. Green2Go rents to event organizers.  24/7 Onsite Cameras rents to the oil and gas market, utilities, industrial and large contractors. Chase Rental Co. rents to large manufacturing plants.

Are You Losing Contact with Sales Humanity?

in Marketing
Tom Woodcock

By TOM WOODCOCK

The pressure to give in is immense.

Do everything electronically and save time. You’ll also cut costs. Sounds great, doesn’t it? Communicating by social media, email or text. Getting plans off FTP sites. Researching suppliers through their websites. Electronic deposits for payment (though for some reason, few “modernize” to this technique).

All of these make the need to meet face to face, or even voice to voice, obsolete. Nobody comes by the plan room anymore. iPads manage project information onsite and appointments are held via Skype. Attendance begins to drop at construction events and association meetings. Pretty soon, everything in construction will have an app.

I’m not an old fuddy-duddy, but I just don’t quite buy into the totality of complete, non-human communication. I’m the farthest thing from a computer geek and I still enjoy face-to-face contact with customers. I regularly speak to general contractors, subcontractors and their suppliers about getting personal again. They communicate a longing for the old days when you looked into someone’s eyes in a live situation, not through a computer screen. I find it interesting that purchasing products online during the holiday season has flatlined a bit. Isn’t it remarkable that so many people waited in line for a ridiculous amount of time to be first for Black Friday? Hmmm, seems people still like to physically go out and shop.

This really doesn’t surprise me in the least. It may sound simplistic, but people still prefer to do business with other people. Yes. Face to face, in meetings, working together. When you reduce your customer interaction to solely electronic sources, you lessen your own personal role in securing a project.

It’s easy to simply work through electronic communication and sit comfortably in our posture- supporting desk chair. This techno-generation finds avoiding personal contact preferable, not to mention do all our social interaction on Facebook or LinkedIn. Sheesh. Soon, we’ll just order our food online and have it delivered to our desk. Oh, you already do that? At least you won’t have to worry about sun poisoning.

The last time I looked, construction took place outside and around people. It amazes me how many contractors skip walk-throughs, client meetings or doing follow-up meetings on project completion. The more you eliminate customer contact, the more you make yourself exactly like your competitors. Why would anyone choose you or your firm over another if all the data came from each company electronically? You may think, “That’s what my customers want.” Well, my son wants cake for dinner every night, but I know it’s not the best thing for his health. How can you educate your customers on innovations, competitive differences or negative market practices if you’re not getting in front of them?

Accepting every electronic innovation that comes along is a bit irresponsible. Evaluate how effective the innovation is: Does it move you closer to the customer or further away? The closer you are to the customer, the more you’ll learn his/her needs, tendencies or preferences. Tweeting, posting or friending does not count as developing customer relationships. Tried and true sales tools such as the handshake, the smile and the thank-you are still alive and well. You cannot do any of these without being with the client.

I know you’re busy; having all this technology at your fingertips buys you more time. But that time is worthless if it comes at the cost of a lesser connection to your customer base. If no one visits plan rooms anymore, then I want to be the only one who does. If nobody delivers bids personally anymore, call me FTD. If you live by the price, you’ll die by the price. If Electrician A looks just like Electrician B, my choice will be made according to price. If GC A looks like GC B, who can build my building cheaper? It’s not very complex. For those of you who feel all of this is a waste of time and are convinced that 100 percent electronic communication is the wave of the future, please compete against my clients.

Once again, I’m not anti-technology. You should be getting email and project information on your phone, being active on business social networks and leveraging electronic marketing vehicles. These are simply no-brainers. However, they are merely support mechanisms, not primary communication tools. You are your primary communication tool. It’s much tougher for anyone to tell you “no” when looking into your eyes.

The one thing that this all takes is courage. So many people hide behind their keyboards and attack from cyberspace. I challenge you to buck the trends and keep the tradition of personal contact in your repertoire. It will truly make a significant difference if you stick with it. There are no quick fixes to a slow, fast or highly competitive economy. Yet by combining effective electronic tools with traditional human contact, you’ll have a greater level of success. As a matter of fact, I don’t just think it. I know it.

Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website,  www.tomwoodcocksealthedeal.com, or at (314) 775-9217.

Eastern District Affirms Abuse of Process Damages in St. Louis County Subdivision Lot Split Lawsuit

in Law

By JAMES R KELLER

Missouri’s Eastern District Court of Appeals recently upheld sizable attorney fee awards for a seller and against subdivision trustees. The court also found in favor of those same trustees and against a buyer of a residential lot in the City of Frontenac.

The dispute involved an attempted lot split for construction of another home. The case is Trustees of Clayton Terrace Subdivision v. 6 Clayton Terrace, LLC and Huey, Trustee, June 19, 2018.

The seller’s mother, Jane Huey, lived in a home on a 2.3-acre parcel known as Lot 6 Clayton Terrace. Lot 6 was part of a 22-lot subdivision in Frontenac established by plat in 1923.

Huey died in 2011. The seller was the trustee of her mother Huey’s estate, including Lot 6. The seller had not lived in the home on Lot 6 for decades. She listed Lot 6 with Janet McAfee Real Estate, Inc. in 2012. A few months later, Lot 6 was sold.

The subdivision had various recorded restrictions amended over time. One of them required a 15-day notice to all subdivision lot owners of a pending sale. This allowed the subdivision owners, who had a right of first refusal, the first opportunity to purchase the lot at the sale price of the original sale – subject to all its other sale terms and conditions.

If more than one lot owner decided to a timely purchase, all such purchasing owners would own the lot on a pro rata basis.

The realtor timely hand-delivered notice of the sale to all lot owners. The sale closed for $415,000. No lot owner made a claim to purchase. This was a key piece of evidence for part of the appellate court’s decision.

The seller had no notice of any objection to the sale. There were no signs for someone to claim an irregularity in the sale going forward. The seller disbursed the proceeds to the estate beneficiaries.

The buyer wanted Lot 6 for investment purposes. Meanwhile, he leased it to Kevin McGowan and his six children.

The family made considerable improvements to their new home. Among them were removal of walls, combining the kitchen and dining areas, adding bedrooms and an exterior door, removing trees, refinishing the swimming pool, adding a new heater and replacing/refinishing the concrete pool deck.

The subdivision indentures provided that each lot—no matter its size—can only have one house.

More than a year after the sale, the buyer filed an application with the City of Frontenac to subdivide Lot 6. The City’s Planning and Zoning Commission approved the lot split.  This would allow another house on the new lot.

Two months later, the subdivision trustees sued the seller and the buyer. Count I sought a declaratory judgment against the seller for alleged failure to follow the required 15-day notice of a pending sale. It alleged that the seller failed to accept the offer of lot owner Elizabeth Schwartz to purchase the property under the 15-day notice provision.

Count II sought to enjoin (prohibit) the buyer from building an additional home on Lot 6. The subdivision indenture prohibiting any lot split had been “a matter of public record for almost 85 years and was still in effect,” according to the appellate court. This was another key piece of evidence.

The seller made a counterclaim against the trustees for abusive process in bringing Count I.

The trial took place on stipulated facts with no jury. This means the parties agreed on the evidence. It was up to the judge to apply these facts to the law and decide who would prevail. A stipulated record is not typical in a case tried before a judge, but it does occur occasionally. It never happens in a case tried before a jury.

The trial court’s decision sparked this appeal. On Count I, the judge ruled the sale was proper and the trustees abused process by suing the seller. A claim for abuse of process requires proof that the defendant made an illegal, improper, perverted use of process, a use neither warranted nor authorized by the process. The claim alleges that a defendant had an improper purpose in exercising its action, and this resulted in damage.

The trial court found the seller’s attorney fees and costs due to the litigation in the amount of $119,243 to be fair and reasonable. And yet, the court only awarded her $60,000 with $40,000 of that amount to be paid by the buyer and the other $20,000 to be paid by the trustees. The buyer had no claim against the seller.  The seller had no abuse of process claim against the buyer, only the trustees.

In Count II, the trial court found for the trustees. This allowed the division of Lot 6 into two parcels with a house on each.

The case turned in large part on the testimony of the head subdivision trustee. He stated that the only reason for suing the seller was to have the buyer move out of the neighborhood and take “their schemes with them.” He also acknowledged that the trustees had no “beef with the seller.”

There also was no evidence that subdivision lot owner Schwarz had made an offer to purchase the lot. This lack of evidence probably sealed the trustees’ fate on this point.  Based upon this record, the appellant court increased the attorney fee award to the seller and against all trustees to its full amount of $119,243.

The appellant court decided that the trustees should prevail against the buyer and prevent the splitting of the lot based upon the subdivision indentures which prohibited any lot split.

The Eastern District decided that the trial court’s award of $203,915 in attorney fees and costs to the trustees was too high. It sent the case back to the trial court to determine a “more reasonable amount” to be paid by buyer, “if any.”

James R. Keller is counsel with Sandberg Phoenix & von Gontard, P.C. where he concentrates his practice on construction law, complex business disputes, real estate and alternative dispute resolution. He is also an arbitrator and a mediator. Keller can be reached at (314) 446-4285, jkeller@sandbergphoenix.com.

A look back at 2018: Did My Technology-Based Predictions Materialize?

in Technology

By JOE BALSAROTTI

About a year ago, I wrote “What 2018 May Bring” in these pages. Let’s see how I did.

Then: Faster Internet – The pros or cons of the repeal of net neutrality will have to play out, but one thing is sure. Fiber to the home and gigabit infrastructure really took a hit the last couple years, possibly because the payoff was unclear or due to rising build and maintenance costs, but the technology exists for multi-gigabit Internet. Will 2018 see the likes of Google Fiber, Comcast’s Xfinity or Charter Spectrum ramp up their roll-outs?

Now: The world didn’t end when the short-lived net neutrality regs were rolled back. Locally, Spectrum doubled its base speeds and is pushing its fiber offerings more and more.

Then: Faster Wireless – Remember 3G, then 4G? 5G is almost upon us. This one might take until 2019 or 2020, but once 5G gets implemented, your smartphone data speeds will rival that of your wired connection. That dynamic should make for very interesting times as the “cord cutting” of cable TV could become cord cutting completely if wireless is priced comparatively with wired. The undeniable upside of this is that people will truly have choices in their communications options, beyond merely their phone company or cable provider as an on-ramp to the Internet for their business and personal use.

Now: We’re still waiting for 5G. And as too many of my recent travels have shown, 3G isn’t even prevalent outside major metro areas.

Then: Artificial Intelligence – You’ve already heard about this one. From experts warning that The Terminator is a real possibility (and imploring the military across the globe not to put machines in charge of weapons) to the far more benign, such as Amazon’s “you may be interested in…” After all, I remember reading an article maybe a decade ago that computers had already replaced human engineers in designing the very processors which become the next generation of computers. So maybe we’re already past the point of Skynet?

Now: 2018 saw the likes of Elon Musk and Stephen Hawking sounding the alarm on AI creators doing things because they can without thought to the unintended consequences.

Then: 4K Video – This one is already here and readily available. Simply put, the picture resolution is four times better than HD. Netflix, Amazon and Apple are already on the bandwagon, producing most of their new offerings in 4K.

Now: Very quickly, 4K has taken hold. Most TVs (except the very low-end ones) now have built-in 4K capability, as do video cameras and newer smartphones.

Then: The Internet of Things – I think IoT is one of the stupidest acronyms the tech industry has ever come up with. If consumer electronic companies and ad agencies have their way, every light bulb, thermostat, door lock and dog collar will be Internet enabled. The upside is we can control almost everything from our phones and know where Fido is at all times. The downside is there will always be a smarter programmer to hack into it. Instead of just losing data on a hard drive or network, now a hacker can cause physical damage by burning out an air conditioning compressor, spy on you from your own surveillance system or heat a building until equipment fails. There are predictions that by 2020 there will be 75 billion Wi-Fi-connected devices.

Now: 2018 definitely saw smart speakers become commonplace. You speak “order dinner” into them and it appears. But the unintended consequence of every word uttered in your home going to someone’s cloud server to be parsed might take the shine off for those who actually value privacy and security over convenience.

Then: The Gig Economy – This is the name given to the rise of temporary independent contractors, freelancers and others with alternative work arrangements. This drastic change in basic business continues to send shockwaves through industries. Lyft and Uber did it to the taxi business, Airbnb did it to timeshares and hotels. The playing field has not only been leveled; technology has taken an earthmover to it and changed the landscape completely.

Now: Uber, Lyft and the like are commonplace. Heck, even Lambert International now has Ride Sharing areas. If that doesn’t prove the concept has stuck, nothing will.

Looking ahead through 2019:

  • Continued push toward 5G cellular communications. The on-off-on merger of Sprint and T-Mobile cleared a hurtle in December. If it happens, the combined company says its claim to fame will be the most robust 5G system in the country. Much still has to happen for this to come to fruition, but a strong competitor to AT&T and Verizon might make it a reality.
  • We’ll see a pause in the breakneck speed of technology change in 2019. Amazon keeps adding massive warehouses. The accompanying overhead may just force business and common sense to win out over the things better left for Sci-Fi, like the now-shelved drone delivery.
  • Data security will continue to dog all industries and all types of tech. It seems to me the pendulum between cloud and on-premise might just swing back a tad this year as vendors see increasing pushback to their data being in someone else’s hands. Look for new and expanded private versions of cloud applications ranging from video surveillance to voice command, accounting and CRM systems.
  • Quantum computing (developing computer technology based upon the principles of quantum theory) is one of those things straight out of the Sci-Fi realm. Yet seeing a model of an IBM quantum machine at CES (the world’s largest consumer tech show) makes it seem that one of these days, things will drop into place for this technology. What it could mean for humanity is as unclear as it is boundless. The whole idea of computing gets upended in the quantum world. Answers are not exact and not identical, and final results are averages of millions of runs of the same equation – and those millions of runs can be done in less time than a single run can in the digital world. Modeling extremely complex things like the universe, the weather, medicine, motions of subatomic particles and the data generated by IoT devices might need this weird but compelling technology. It won’t happen in 2019, but this could be the most life-changing of any technology being talked about.

 

Joe Balsarotti is President of Software To Go and is a 39-year veteran of the computer industry, reaching back to the days of the Apple II. Keep up with tech by following him at Facebook.com/SoftwareToGo or on Twitter @softtogo.

Enacting a Construction Sales Process: Make Time for Sales to Have Sales

in Marketing/Sales

By TOM WOODCOCK

Contractors often must wear many hats – everything from estimating to project managing, vendor relations and, oh yeah, selling.

The selling part can often be an afterthought. The problem is that it needs forethought. Not allotting time and strategizing to sell can cripple a construction firm. Instead of trying to reshape an entire construction firm’s approach to sales, I often find it more effective to increase the level of efficiency and time usage. This is a process, but once enacted it produces opportunity.

My biggest challenge is to convey cause and effect, as many contractors tend to be a point A to point B types of thinkers. Sales rarely flows in that fashion. But if you practice the basics efficiently and consistently, results follow. The first step is to allot a percentage of time consistently to selling. This will require looking honestly at the amount of time you currently commit and what you can realistically designate for sales. Whether it’s a percentage of time or actual hours, start where you are, increase that number a bit and stick to it. A weekly total is most desirable.

The next level is to determine what to do with that time. What will get you the most bang for the buck? What actions will get you in front of more clients and potential customers? What is the quality of that contact time? This may sound daunting, but if you put a little effort into it, you’ll save time in the future.

Analyze which associations are most effective in generating opportunity. Which of the events you normally attend produce leads and relationships? Of the current relationships you have, which afford quality business opportunities? Invest time in these areas and reduce time in those that are nonproductive. Remember, you’re busy and you have other responsibilities. Sacrifice the more hit-or-miss opportunities that are out there. On a side note, make sure those other responsibilities are worth sacrificing any type of sales time to at all.

After you have time allotment laid out and know where you’re going to get in front of people, you need some preliminary marketing. The quickest, least expensive option is electronic marketing. But even in this realm, you still need to use your time efficiently. Hitting every aspect of social media can be alluring and trendy; however, realistically investing quality time into one avenue is best. Becoming consistently active on LinkedIn by joining the proper customer groups, connecting with industry professionals and searching for high-caliber networking functions should suffice – at least as far as social networking goes. Tie that activity to a monthly electronic newsletter properly designed and produced, and you have an effective platform.

Now you’re set to implement. Ah, there’s the rub. It’s far easier to get a company to strategize its approach and another to get it to diligently implement the plan. Even though we’re being respectful of all the other responsibilities that professionals have, still, many tend to put sales on the back burner. Effort cannot be structured into a strategy. It either exists or doesn’t.

Practicing efficient sales time usage will help with your corporate sales results, but true dedication to your firm’s sales dynamic always produces. Efficiency is effective, and yet a high level of time committed to a sales effort trumps efficiency – even if it’s not as effectively managed as a smaller, tighter effort.

There’s a principle in sales that holds true: If you’re out amongst people more, you’ll discover more opportunity. Projects come from unique leads, and introductions can be made to stronger network contacts. Creativity can be invoked in the sales approach, resulting in greater attention or differentiation. This larger type of time commitment is very rare in the construction industry. It’s usually inherent within larger contractors whose firms can afford specific business development and marketing personnel.

The final stage in this process is to continually evaluate what is producing the best results. Adjust your time commitment to those areas and expand their impact. Take actions producing good results and develop them into producing even greater success. Discontinue actions that are not producing sales opportunity, and you now have a formula for growing greater results. Of course, your efforts will eventually hit an artificial ceiling in terms of how much time you’re able to allot. The decision at that point will be to 1) stay put and maintain your new status quo, or 2) adjust the level of time your company commits to sales work. This is a good problem to have. It’s one that takes companies to the next level in revenue and profitability.

Construction is a hands-on industry. It’s filled with individuals who take complex plans and turn them into projects. Sales can be a foreign concept that is too often practiced on an as-needed basis. If the same amount of planning goes into a sales approach, quality results should be the expectation. The efficient usage of time relevant to sales can solidify a revenue base, not to mention increase overall profits. The old adage “time is money” must’ve been coined by a sales individual…if you consider Benjamin Franklin a sales rep.

Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website,  www.tomwoodcocksealthedeal.com, or at (314) 775-9217.

Eighth Circuit Court of Appeals Vacates $6 Million Jury Verdict Against Title Company on Mechanics’ Liens at Lake Condo Project

in Law
James R. Keller

By JAMES R. KELLER

The Eighth Circuit Court of Appeals recently vacated a jury verdict of $6 million in favor of a lender and against the title insurance company on a construction loan. The parties face a new trial with a different jury in federal court in St. Louis on this 13-year-old project.

The case is Captiva Lake Investments, LLC v. Fidelity National Title Insurance Co., 883 F.3d 1038 (8th Cir. 2018). This is a significant opinion about Missouri law from the nation’s second-highest court on construction lending, insurance coverage and mechanics’ liens.

The construction project was a condominium development at the Lake of the Ozarks in Sunrise Beach, MO that started in 2005.

National City Bank of the Midwest had loaned Majestic Pointe Development Co., LLC $21,280,000. National purchased title insurance for the project from Fidelity National Title Insurance Co.

Partway through construction, Majestic defaulted on the construction loan and went bankrupt. Captiva Lake Investments, LLC bought National City’s ownership interest in the project. Various contractors and subcontractors filed mechanics’ liens against the property.

Captiva (the lender) sued Fidelity (the title company) in 2009 asking Fidelity to protect Captiva on the mechanics’ liens. Fidelity agreed to defend Captiva under a reservation of rights. In turn, Fidelity sued Captiva alleging there was no coverage for the mechanics’ liens.

A reservation of rights is not unusual in the insurance industry. In this case, it meant that Fidelity would provide and pay for the defense of the lawsuit; it reserved the right to later disclaim there was insurance coverage.

Fidelity based its reservation on a specific exclusion contained in the title policy it had issued. The exclusion excluded from coverage claims based on liens that were “created, suffered, assumed or agreed to by the insured claimant.” In this case, that was Captiva.

After some procedural maneuvering in court, Captiva became the plaintiff in its claim against Fidelity for insurance coverage. The facts and claims are complicated.

The trial court judge did not allow Fidelity to present its exclusion defense to the jury.  The judge determined that there had to be evidence of intentional misconduct or inequitable dealings by National City (the original lender) to advance that defense, and there was no such evidence.

The Eighth Circuit noted “construction lending can be risky.” In case of bankruptcy, the lender’s loan is only protected by the unfinished project, “which is often worth far less than the money put into it.”

Title insurance protects the owner and insurer against defects in title that already existed before the date of the policy. It generally does not protect from events that occur after the date of the policy.

In this case, the title insurance policy was a standard 1992 American Land Title Association (ALTA) lender’s title policy. ALTA writes industry-standard policy forms that are used nationwide.

Fidelity issued the policy after the work had begun. Fidelity agreed to the lender’s deletion of standard policy language that excluded from coverage mechanics’ liens.

This created a risk to the title company that mechanics’ liens might be covered by its policy and that the liens might be given priority over Captiva’s deed of trust for the construction loan.

Missouri law gives priority to mechanics’ liens to protect unpaid contractors, subcontractors and material suppliers. These project partners may be the first in line to be paid before others, including the lender – even a lender whose loan predated any recorded mechanics’ lien. This depends in part on when the work first started in relation to the date of the construction loan.

This priority encourages those trades farther down the food chain to work. Otherwise, some would argue that nothing would get done on a construction project without up-front payment.

Since at least 1855, Missouri has followed the first-spade rule. This rule provides that the first day of work by any contractor, subcontractor or supplier is the operative first date of work for all of them as far as mechanics’ liens are concerned. The liens of all of them – no matter when filed (as long as timely filed) – revert for priority purposes to that first date.

If that date is before the date of the filing of the construction loan, all mechanics’ liens have priority over that lender. In this case, mechanics’ liens were filed after the date of the loan – but at least some of the work apparently preceded that date.

The Eighth Circuit stated that evidence was not presented to show that any work done before the policy date became part of a later lien.

Captiva did not provide any legal authority that applying the first-spade rule was determinative of whether unresolved mechanics’ liens rendered a title unmarketable.  Coverage for a title that is unmarketable allows the insured to be indemnified when there is a title defect that existed prior to the date of the policy.

There was another consideration in this case, however, besides mechanics’ lien priority and the first-spade rule.

The Eighth Circuit concluded that the jury should have been allowed to consider the lien exclusion contained in the policy without needing to find intentional misconduct or inequitable dealings by National City.

National City may have “allowed” or “suffered” the liens when it stopped funding the project. The general contractor – Kidwell Construction, Inc. – paid itself about $681,000 of a $1 million fee. This money was supposed to be deferred until the construction loan was repaid.

The schedule of values revealed there were insufficient funds to pay for finishes and site improvements. These events caused National City to stop funding the loan, leaving $1.2 million unpaid from the original loan.

Such evidence could persuade a jury that the “allowed” and “suffered” exclusion should apply, thereby releasing the title company from coverage even though the general exclusion for mechanics’ liens was not in the policy.

James R. Keller is counsel with Sandberg Phoenix & von Gontard P.C. where he concentrates his practice on construction law, complex business disputes, real estate and ADR. He also is an arbitrator and a mediator. Keller can be reached at (314) 446-4285 or jkeller@sandbergphoenix.com.

Relationship is to Sales what Messaging is to Marketing

in Marketing
Stephanie Woodcock

Good salespeople know the importance of relationships to sales and long-term success. Good marketers know the importance of messaging and the brand that supports that message.

There is a reason it’s called marketing and sales. They are two different things.  Marketing needs to create a message Sales believes in. Sales needs to help convey the message that is reflected in Marketing. In addition, Sales should also share input as to what the marketing message is, so that he can reinforce the message. Each department needs buy-in and the sharing of internal marketing needs to occur to get companywide buy-in. When the system is working correctly, Marketing generates leads and Sales follows up and closes.

With a cohesive email marketing campaign and marketing automation tools, B2B (business-to-business) companies can close the gap between marketing and sales by consistently nurturing prospects with helpful content and creative, concise branding. Buyer behaviors are changing. B2B marketers must communicate with buyers in new ways and create content marketing that answers questions, provides market insight and is personalized to the customer’s role, needs and level of interest.

One major change is that buyers do more research on their own. They investigate solutions on their own and discuss with peers before engaging vendor sales reps. Sales cycles start with the email campaign of the marketing department, and the message is key. The marketing team is tasked with developing a message and content that educates while it sells.

Too many times, marketers use existing content to power lead-nurturing campaigns but find that the content consists mainly of product brochures, technical white papers and press releases. Pushing this kind of technical content that does not have an underlying message pushes prospective clients away. Buyers have a low tolerance for commercial messages that sell first. The key is to engage buyers with a creative, cohesive message before selling your wares.

Marketers need to create a relationship, just like sales, between their brand and the leads they want to nurture. They need to create email campaigns that entice clients to open and click through for more information. New, educational content for these marketing campaigns can be culled through resources within the company. Sales, engineers, estimators and customer service personnel can add valuable, raw content for marketing to craft into a cohesive message.

Once the brand and message has been established, sales can use this as a starting point, engage these nurtured leads and continue the relationship and sales cycle.  One needs the other. Neither Sales nor Marketing should be operating alone. When married, the “whole is greater than the sum of its parts.” When Marketing and Sales are working toward the same goal, that synergy drives motivation, company culture and sales. It also increases more than the bottom line. It creates a culture of customer service, client relationship and client loyalty.

The marriage of both departments proves that while every company needs sales to drive revenue, they need marketing, too.

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at stephanie@sealthedealtoo.com.

Let’s Get Married! How Sales & Marketing Should Operate Together

in Marketing
Stephanie Woodcock

When meeting with clients, one important topic is how we, as a marketing team, plan to drive sales, engage the sales team and better measure our efforts. How do we marry sales and marketing? How do we create a long-lasting, meaningful relationship between the two departments that not only increases sales but also engages the company’s internal resources?

In many companies, the sales and marketing departments are still only dating and haven’t fully committed to each other.

Here’s a sample scenario: Sales pops into Marketing’s office unannounced and asks (pleads):

  • Do you have a flyer for this product?
  • Can you create some brochures for this trade show?
  • Can you work up a PowerPoint presentation for a new client meeting that I have tomorrow?
  • I need 25 of those polo shirts you ordered, like now.

Many times, these unexpected but welcome requests are time-sensitive, top priorities. Marketing rises from her desk and scrambles around trying to make Sales happy. They put aside their long-term projects and quickly (but lovingly and willingly) try to put a sales package together that doesn’t look like it was assembled five minutes ago. There is no real cohesion, strategy or underlying message between Sales and Marketing. They haven’t said their vows yet.

Another scenario that occurs is when Sales and Marketing haven’t even met yet and they are still going about their business as singles, with no inkling that they need each other. This is actually worse than the former scenario because there is no marketing message to support the sales effort. Sales is on its own, using material that he generated on his own, and he is basically relying on his skill, talent and likeability to generate business.

We love you, Sales. We love your passion, your tenacity and your ideas. We want you knocking down our door to get our marketing materials. We want to meet your needs and help you “bring home the bacon.” But in order to truly meet those needs, we need a plan. We need you to “put a ring on it” and together we need to commit to a long-term marketing message and strategy. Then we need you to help make it happen. We cannot do it without you.

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