Seattle Washington Building Expert Directory

Unlicensed Contractors Caught in a Sting Operation

March 19, 2015 — Beverley BevenFlorez-CDJ STAFF
Seven suspects were cited for contracting without a license after being caught by the Contractors State License Board (CSLB), reported CBS local news, and eighty-five people may face criminal charges. The undercover sting operations occurred over a two day period in Rancho Mirage, California. A hearing is scheduled for June 3rd at Riverside County Superior Court. CSLB Registrar Cindi A. Christenson told CBS, “Several of the suspects we targeted turned out to be repeat offenders and individuals with a criminal history and drug violations. If you knew their backgrounds, you'd never allow them near your home or family." Read the court decision
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Cogently Written Opinion Finds Coverage for Loss Caused By Defective Concrete

November 07, 2012 — Tred Eyerly, Insurance Law Hawaii
If ever in need of a concise, well-reasoned opinion on “occurrence,” “property damage” and applicability of the business risk exclusions, turn to Pamperin Rentals II, LLC v. R.G. Hendricks & Sons Construction, Inc., 2012 Wis Ct. App. LEXIS 698 (Wis. Ct. App. Sept. 5, 2012). A contractor was hired to install concrete during construction of seven gas stations. Red-D-Mix provided the concrete. The contractor and Red-D-Mix were eventually sued by the gas stations, based upon allegations that the concrete was defectively manufactured and installed. The gas stations alleged that Red-D-Mix supplied concrete that was defective and resulted in damages, including the need to repair nearby asphalt. Red-D-Mix tendered to its insurers, who denied coverage. Suit was filed and the insurers moved for summary judgment. The trial court determined there were no allegations of either “property damage” or an “occurrence.” Therefore, there was no duty to defend or indemnify Red-D-Mix. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii.
Mr. Eyerly can be contacted at te@hawaiilawyer.com

DC Circuit Upholds EPA’s Latest RCRA Recycling Rule

September 23, 2019 — Anthony B. Cavender - Gravel2Gavel
On July 2, 2019, the U.S. Court of Appeals for the District of Columbia Circuit decided the case of California Communities Against Toxics, et al. v. EPA. In this decision, the court rejected the latest petition to strike or vacate EPA’s 2018 revisions to the Resource Conservation and Recovery Act (RCRA) hazardous waste recycling rules. In 1985, EPA promulgated a new regulatory definition of “solid waste,” which is the linchpin of the agency’s very stringent hazardous waste management rules. (See the rules located at 40 CFR Sections 260-268.) Unless a material is a “solid waste” as defined by the rules, it cannot also be a hazardous waste. The 1985 rules grappled with the challenges posed by recycling practices, and attempted to distinguish between legitimate recycling which is not subject to hazardous waste regulation, and other more suspect forms of recycling. The rules are complex and replete with nuance. In doing so, EPA was adhering to RCRA’s statutory mandate that it develop appropriate rules to govern the treatment, storage and disposal of hazardous waste, while also promoting “properly conducted recycling and reuse.” The DC Circuit reviewed the 1985 rules in the seminal case of American Mining Congress v EPA, 824 F.2d 1177 (1987), (AMC) and stressed that only those materials that were truly discarded could be regulated as solid waste; for instance, those materials that were destined for immediate recycling or recovery in an ongoing production process were not discarded and hence were not solid waste. Over the years, the court has struggled to clarify the basic holding of AMC in numerous cases while EPA has frequently revised and amended the RCRA rules, and in particular the definition of solid waste, in an attempt to balance the policies mandated by the statute. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Condos Down in Denver Due to Construction Defect Litigation

November 06, 2013 — CDJ STAFF
A new report suggests that fears of construction defect litigation may be the cause of the slump in condo building in the Denver area. The Denver Business Journal reports that the Denver Regional Council of Governments commissioned the study by Economic & Planning Systems. The conclusion of the report was that the only type of condominium likely to be built is high-cost units with high profit margins. This is not good news for the DRCOG, which is seeking to create more affordable housing. The report found that builders assess the likeliness of being sued “is nearly 100 percent,” that costs of addressing construction defects are 12% higher than at apartment complexes, and that preparing for litigation adds about $15,000 to the cost of a condo unit. One possible remedy is to reform Colorado’s construction defect laws. Bob Muphy, the mayor of Lakewook and an advocate of construction defect litigation reform, said that he sees “this as a verification of what I’ve been talking about.” Read the court decision
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What is a Subordination Agreement?

May 06, 2019 — Bremer Whyte Brown & O'Meara LLP
Put simply, a subordination agreement is a legal agreement which establishes one debt as ranking behind another debt in the priority for collecting repayment from a debtor. It is an arrangement that alters the lien position. Without a subordination clause, loans take chronological priority which means that a deed of trust recorded first will be considered senior to all deeds of trusts recorded after. As such, the oldest loan becomes the primary loan, with first call on any proceeds from a sale of a property. However, a subordination agreement acknowledges that one party’s claim or interest is inferior to that of another party in the event that the borrowing entity liquidates its assets. Further, shareholders are subordinate to all creditors. The junior debt is referred to as a “subordinated debt”, and the debt which has a higher claim to any assets is the senior debt. Often, the borrower does not have enough funds to pay all debts, and lower priority debts may receive little or no repayment. For example, if a business has $400,000 in senior debt, $100,000 in subordinated debt, and a total asset value of $420,000, upon liquidation of the company, only the senior debtholder will be paid in full. The remaining $20,000 will be distributed among the subordinated debtholders. Subordinated debts are, therefore, riskier and lenders will require a higher interest rate as compensation. Read the court decision
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Reprinted courtesy of Bremer Whyte Brown & O'Meara LLP

New York Restrictions on Flow Through Provision in Subcontracts

August 14, 2023 — Bill Wilson - Construction Law Zone
Most subcontracts include a flow through provision (also called flow down and incorporation clauses) stating that the subcontractor and contractor are bound by the same obligations as set forth in the prime contract between the contractor and owner. Many jurisdictions interpret such provisions narrowly, as illustrated in a recent case out of New York. In Amerisure Insurance Company v. Selective Insurance Group, Inc., 2023 WL 3311879, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s interpretation of a flow through clause in a construction subcontract. The Amerisure case involved a dispute over insurance coverage for a personal injury to a subcontractor’s employee on a construction project. The owner of the project sought defense and indemnity from the general contractor (GC) and its insurance company, who in turn sought coverage for the owner as an additional insured under the subcontractor’s policy. The GC based its argument for coverage on the flow through provision in the subcontract. The prime contract required the GC to procure commercial liability insurance including the owner as an additional insured for claims caused by the GC’s negligent acts or omissions. The subcontract likewise required the subcontractor to procure commercial general liability insurance but required only that the GC be named as an additional insured. However, the subcontract also included a flow through clause, binding the subcontractor to the terms of the prime contract and assuming toward the GC all the obligations and responsibilities that the GC assumed toward the owner. However, the subcontract did not expressly require that the subcontractor name the owner as an additional insured, and in order for the owner to qualify as an additional insured under the subcontractor’s insurance policy, the subcontractor must have agreed in the subcontract to name the owner as an additional insured. Read the court decision
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Reprinted courtesy of Bill Wilson, Robinson & Cole LLP
Mr. Wilson may be contacted at wwilson@rc.com

Maine Case Demonstrates High Risk for Buying Home “As Is”

August 27, 2014 — Beverley BevenFlorez-CDJ STAFF
According to Meredith Eilers of Bernstein Shur, writing in JDSupra Business Advisor, a Boston Appeals court “enforced an 'as is' provision in a purchase and sale agreement and concluded that the sale of a multimillion dollar oceanfront property in Bar Harbor was not accompanied by Maine’s implied warranty of habitability.” Eilers explained that “the first circuit concluded that the bargained-for ‘as is’ provision that was incorporated into the purchase and sale agreement—in exchange for a reduction in the purchase price—essentially waived any claims from the buyer regarding misrepresentations by the sellers.” This left “the buyer to incur the repair costs without the ability to recover those costs from the seller” and it demonstrated “that agreeing to such a clause when closing a real estate deal has real risks.” Read the court decision
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Are Proprietary Specifications Illegal?

April 11, 2018 — Wally Zimolong – Supplemental Conditions
A friend came to me with a question regarding a case he was working: “can a public owner require that bidders use a specific brand name product?” “Of course not,” I said “proprietary specifications are illegal.” Or, at least that’s what I assumed. To my surprise, the law in the Commonwealth of Pennsylvania is not as clear as it is in other jurisdictions. What is a proprietary specification? A proprietary specification lists a product by brand name, make, model and/model that a contractor must (shall) utilize in construction. A basic example of a proprietary specification would state:

“Air Handlers shall be “Turbo Max” as manufactured by Chiller Corp.”

There are two problems with a proprietary specification (other than potentially being illegal): (a) they limit competition, and (b) invite steered contract awards. They limit competition because it limits the type of material that can be used on the project. In the example above, there could be equivalent air handlers available at a better price but the contractor could not use that lower priced product in its bid. Thus, the taxpayers end up paying more for tile. Also, contractors may not be able to secure a certain brand name product because of exclusive distribution agreements. Again, using the example above, contractor A’s competitor may have the exclusive distribution agreement with Chiller Corp. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

SEATTLE WASHINGTON BUILDING EXPERT DIRECTORY AND CAPABILITIES