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Key California Employment Law Cases: October 2018

December 11, 2018 — Alejandro G. Ruiz & Eric C. Sohlgren - Payne & Fears
This month’s key employment law cases address the test for independent contractor status, the legality of an incentive compensation system, and personal liability for wage and hour violations. Garcia v. Border Transp. Group, LLC, Cal. Ct. App. Oct. 22, 2018 Summary: Defendants must satisfy Dynamex ABC test to establish independent contractor status as defense to wage order claims, but Borello multifactor test applies to non-wage-order claims. Facts: Plaintiff leased a taxicab license and taxicab from defendants. Plaintiff brought several employment claims against defendants, including claims for whistleblower wrongful termination, unpaid wages, minimum wages, meal and rest break penalties, wage statement penalties, civil penalties under the California Labor Code Private Attorney Generals Act (“PAGA”), waiting time penalties, and unfair competition. Defendants filed a motion for summary judgment on all claims on the ground that plaintiff was an independent contractor and not an employee. Relying on the factors described in Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341, 256 Cal. Rptr. 543 (1989), defendant presented evidence that plaintiff set his own hours, used the cab for personal business, kept collected fares, used a radio dispatch service, entered into sublease agreements, held other jobs, and advertised services in his own name.The trial court granted summary judgment in favor of defendants. While plaintiff’s appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903, 232 Cal. Rptr. 3d 1 (2018), establishing a new test for independent contractor status under the definition of employment found in the California Industrial Welfare Commission Wage Orders. Reprinted courtesy of Alejandro G. Ruiz, Payne & Fears and Eric C. Sohlgren, Payne & Fears Mr. Ruiz may be contacted at agr@paynefears.com Mr. Sohlgren may be contacted at ecs@paynefears.com Read the court decision
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BHA Announces New Orlando Location

September 30, 2019 — Donald MacGregor - Bert L. Howe & Associates, Inc.
Bert L. Howe & Associates, Inc., one of the country’s leading construction forensics and consulting firms has just announced the opening of their second Florida office. Located in Orlando, this new office will join BHA’s existing Miami location, expanding BHA’s presence in the state and increasing the firm’s ability to provide the highest level of services and logistic support to their clients in Central and North Florida, and in particular, the Orlando, Tampa, Jacksonville and Tallahassee markets. Since 1993, BHA has been an industry leader in providing construction consulting and forensic services and has been a trusted partner with builders and insurance carriers, both large and small, across the United States. In Florida, BHA has been providing construction defect, storm, and general construction-claims related forensic expert services for the past decade with a proven track record of successful results. With the addition of new offices in Orlando, Bert L. Howe & Associates, Inc. offers the experience of over 20 years of service to carriers, defense counsel, and insurance professionals as designated experts in over 7,000 claims. BHA’s staff encompasses a broad range of Florida-licensed and credentialed experts in the areas of general contracting and specialty trades, as well as architects, and both civil and structural engineers, and has provided services on behalf of carriers, developers, general contractors and sub-contractors alike. BHA’s new Orlando office is located in the Regions Bank Tower, 111 North Orange Avenue, Suite 800, Orlando FL, 32801. Read the court decision
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Reprinted courtesy of Donald MacGregor, Bert L. Howe & Associates, Inc.
Mr. MacGregor may be contacted at donm@berthowe.com

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The Need for Situational Awareness in Construction

January 27, 2020 — Aarni Heiskanen - AEC Business
Recent research backs up what we already know from practice: construction work is suboptimal. What happens on a construction site has not kept up with the demands of an increasingly complex work environment. Situational awareness could give on-site employees the necessary means to finally reap the productivity benefits of digitalization. Under the guidance of Professor Olli Seppänen, research teams at the Finnish Aalto University have delved into everyday conditions at a construction site. With the workers’ permission, they used video cameras, sensors, and surveys to locate the bottlenecks in productivity. The researchers also monitored the movement of products and materials on a construction site. The results are eye-opening. According to Aalto’s data, digitalization has not improved the productivity of construction foremen and workers. A typical worker still spends up to 70% of their time on activities that add no value: searching for information, unnecessary movement, and waiting. Construction materials are moved from place to place six times on the site before being consumed. In addition, especially on large construction sites, machinery often goes missing or is displaced. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Insurer's In-House Counsel's Involvement in Coverage Decision Opens Door to Discovery

January 11, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The Mississippi Supreme Court held that the insurer must produce written communications from and make available for deposition the in-house counsel who orchestrated the denial of coverage. Travelers Pro. Cas. Co. of Am. v. 100 Renaissance, LLC, 2020 Miss. LEXIS 409 (Miss. Oct. 29, 2020). An unidentified driver struck a flagpole owned by the insured Renaissance, causing $2,134 in damages. Renaissance filed a claim with Travelers for uninsured-motorist coverage. The Travelers' claims handler, Charlene Duncan, determined there was no coverage because the flagpole was not a covered auto. Before corresponding with the insured, Duncan sought legal advice from Travelers' in-house counsel, Jim Harris. Renaissance sued Travelers for coverage and bad faith. Renaissance then took Duncan's deposition and asked that she explain both the denial letter and the reasons Travelers denied the claim. Duncan repeatedly said she did not know the basis of the denial and that she had consulted with Harris. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Comparing Contracts: A Review of the AIA 201 and ConsensusDocs - Part II

March 28, 2018 — Michael Sams and Amanda Cox – Construction Executive, A publication of Associated Builders and Contractors. All Rights Reserved.
Part II of this three-part series compares and analyzes important contract sections in the AIA 201 (2007 and 2017 versions) and ConsensusDocs (2014 and 2017 versions), including Schedule/Time, Consequential Damages/LDs, Claims and Disputes/ADR. Part I covered Financial Assurances, Design Risk, Project Management and Contract Administration. Part III will cover Insurance and Indemnification and Payment. SCHEDULE/TIME Relevant Sections:

• 2007 & 2017 A201: Section 3.10.1

• 2014 & 2017 ConsensusDocs: Section 6.2

AIA:

• Section 3.10.1 of the 2007 A201 requires that the Contractor promptly after being awarded the Contract, prepare and submit a construction schedule providing for Work to be completed within the time limits required in the Contract Documents.

• This schedule shall be revised at appropriate intervals.

• The 2017 edition breaks down the schedule to contain date of commencement, interim milestone dates, date of substantial completion, apportionment of Work by trade or building system, and the time required for completion of each portion of the Work.

• Under section 3.10.2 of the 2007 and 2017 versions, if the Contractor fails to provide a submittal schedule, the Contractor is not entitled to any additional compensation or a time extension based on the Owner’s or the Architect’s slow processing of submittals, regardless of how long they take.

ConsensusDocs 200:

• The 2017 Contract replaces the term Contract Time and instead requires a “Schedule of the Work…formatted in detailed precedence-style critical path method that (a) provides a graphic representation of all activities and events, including float values that will affect the critical path of the Work and (b) identifies dates that are critical to ensure timely and orderly completion of the Work.”

• The Constructor must submit an initial schedule to the Owner only before, “first application for payment” and thereafter on a monthly basis. (Section 6.2.1).

• The Owner is allowed to change the sequences provided in the schedule as long as it does not “unreasonably interfere with the Work.” (Section 6.2.2).

Reprinted courtesy of Michael Sams , Kenney & Sams and Amanda Cox, Kenney & Sams Read the court decision
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New York Building Boom Spurs Corruption Probe After Death

August 19, 2015 — Chris Dolmetsch & David M. Levitt – Bloomberg
New York’s building boom has spurred the formation of a task force to probe corruption in the construction industry. The group of prosecutors and inspectors plan to go after companies that ignore or hide safety violations or commit other crimes including bid rigging and extortion. The formation of the task force was announced the same day two men and their companies were indicted for causing a worker’s death in April by failing to address repeated warnings about safety at a construction site in Manhattan’s Meatpacking District. Reprinted courtesy of Chris Dolmetsch, Bloomberg and David M. Levitt, Bloomberg Read the court decision
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Homeowner's Claim for Collapse Survives Summary Judgment

September 20, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The insurer failed to present adequate evidence on summary judgment that damage caused by the collapse of a swimming pool was not covered. Klein v. State Farm Ins. Co., 2017 N.Y. Misc. LEXIS 3030 (Sup. Ct. N.Y. July 11, 2017). Klein notified State Farm that his in-ground pool collapsed on February 5, 2014, with a side wall falling into the pool, causing damage to brick, borders and the patio around the pool. Upon inspection, State Farm's agent found that the cover of the pool had partially fallen into the pool, and that the vinyl pool liner had a tear. State Farm covered the damage to the pool liner, but denied coverage for the in-ground swimming pool walls, the brick border and the patio surrounding the pool. State Farm maintained that the loss was due to a "collapse," which was excluded under the homeowner's policy. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Contractor’s Unwritten Contractual Claim Denied by Sovereign Immunity; Mandamus Does Not Help

September 22, 2016 — David R. Cook Jr. – AHHC Construction Law Blog
In a very well-reasoned opinion, the Supreme Court of Georgia upheld the denial of a contractor’s unwritten-contract claim against a county based on sovereign immunity. Based on an alleged oral contract, Contractor built a sewer pumping station for the County in exchange for an interest in the station’s pumping capacity. When the County denied Contractor’s demand for an interest, he filed suit. As noted in many prior posts, the Georgia constitution reaffirms sovereign immunity of the state – which the courts interpret to include counties. One common exception in the public works area is the Constitution’s “ex contractu clause,” which waives sovereign immunity for claims based on written contracts. Of course, a precondition to the waiver of sovereign immunity is the existence of a written contract – which Contractor did not have. Applying these rules, the court affirmed the denial of Contractor’s claims based on contract and quasi contract. In the absence of a written contract, there can be no contractual claim against the County. The same rule applies for quasi-contractual claims. Read the court decision
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Reprinted courtesy of David R. Cook, Autry, Hanrahan, Hall & Cook, LLP
Mr. Cook may be contacted at cook@ahclaw.com

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