H&H/Allied

For almost 40 years, Associated Mechanical Services (AMS-I) provided quality construction and maintenance services throughout Michigan and neighboring states. But its management deteriorated in recent years. Finally AMS-I declared bankruptcy, abandoning at least thirteen construction projects in the middle of the projects.

After Associated Mechanical Services (AMS-I) folded, the former managers of AMS-I spawned an octopus with many arms. Each arm was an apparently new company, but these entities were and are linked by their ties to the former managers of the failed AMS-I. These companies include H & H Plumbing, Allied Mechanical Services (AMS-II), United Piping, and others. Many of the key officials that managed AMS-I into bankruptcy, have now reemerged as officers in these new companies. At least one of these new AMS-linked companies is also managed by an out-of-state owner. Comfort Systems of Texas, for instance, now owns H & H Plumbing. The Critic doubts that out-of-state ownership and the resulting management by long distance will enhance customer services by any affected company, including H & H.

Some of these new companies may be displaying some of the same problems that plagued AMS-I before its financial failure. These problems include disputes with its own work force and with regulatory agencies. Former managers from AMS-I and their "new" companies have also been filing liens and court suits, often against their own customers.

In the brutally competitive world of construction, some contractors are genuinely attempting to "partner" with their clients and fellow contractors. They try to settle contract disputes informally, and if that fails, the parties can resort to a mutually agreed-on arbitrator. But some contractors are still playing hardball. They submit low-ball bids, and then insist on change orders. When the customer, or another contractor, is late with payments, some contractors promptly slap a lien on the customers’ properties, and ask the courts to begin foreclosures and to have the sheriff auction the property.

One clue to a contractor’s approach is to review their record on filing liens against the construction customer, even when the actual dispute is with another contractor. All too often filing of a lien means that a court suit will swiftly follow. A contractor’s litigation history is another clue to their business practices.

Editor’s Note

The Critic views court cases and liens as a plague on our construction industry. Contractors, employees and their organizations, and customers should be working together and settling their differences outside of the courthouse. But the trend in our industry is towards more court suits, not less. As the Engineering News Report, of February 15, 1999, editorialized:

"If your only tool is a hammer, then every problem will look like a nail. When it comes to the construction industry, the main dispute resolution tool remains a lawyer, and every disagreement will look like a lawsuit. Lawsuits go against the basic nature of the industry. Construction is not an individual endeavor, but rather a business of team building. Successful teams and projects are built on the strengths of each member, while lawsuits and unsuccessful projects are founded on the weaknesses of team members. A decade or more may pass before there is any resolution of a dispute by the courts leaving no one a winner. Some industry sources claim the tide of dispute resolution may be turning back towards the courts. This may indicate that the construction industry has become too complacent to combat creeping litigiousness."

The Critic could not agree more with this ENR editorial. These are the reasons why the Critic devotes its resources to researching and publishing details on litigation in the construction industry. We feel that the sheer numbers and the types of these lawsuits should be of grave concern to every contractor and construction customer. This is why we are publishing the enclosed lists of litigation.