Construction Lien Waiver Provisions Contractors Should Be Using
January 06, 2020 —
Jason Lambert - Construction ExecutiveIt is common in construction for a subcontractor or material supplier of any tier to be required to provide a lien waiver when receiving payment. But not all lien waivers are created equal. While at a minimum, a lien waiver, by definition, needs to include a release of liens, it can also include many other terms that can tie up loose ends or resolve potential problems before they begin.
Additional Releases
A typical lien release is going to release any liens and right to claim liens on the subject property. But a lien waiver can also include releases of any claims against surety bonds, other statutory rights or claims, and at its broadest, claims against the paying party. One example of a provision that could help accomplish this is a release of “any right arising from a payment bond that complies with a state or federal statute, any common law payment bond right, any claim for payment, and any rights under any similar ordinance, rule, or statute related to claim or payment rights.” Broad release language can also be used to effectively preclude any claims arising prior to the date of the release.
Payment Representations and Warranties
A typical lien release has no representations or warranties about payment to subcontractors or material suppliers of a lower tier. But contractors can include language requiring the company receiving payment to represent and warrant that all subcontractors of a lower tier have been paid or will be paid within a certain timeframe using the funds provided and that these are material representations and inducements into providing payment. On a related note, if the contract requires subcontractors to provide lien releases from lower tier subcontractors in addition to their own release when seeking payment, contractors can require the sub-subcontractor releases to include representations that they have been paid by the subcontractor to try and tie up payment loose ends all around.
Reprinted courtesy of
Jason Lambert, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Lambert may be contacted at
jason.lambert@nelsonmullins.com
Defective Stairways can be considered a Patent Construction Defect in California
September 24, 2014 —
William M. Kaufman – Construction Lawyers BlogStairs are not safe! At least the Court of Appeal in the Second Appellate District of California doesn’t think so.
A rail station in Los Angeles was completed by the Los Angeles County Metropolitan Transportation Authority (“MTA”) in 1993. The rail station was part of the development of the Southern California Rapid Transit District Metro Rail Project. In 2011, the plaintiff fell on a stairway at the station. In August 2012, Plaintiff sued the MTA for dangerous condition of public property, statutory liability, and negligence. Among other defects, plaintiff alleged the banister of the stairwell was “too low” and the stairwell “too small” given the number, age, and volume of people habitually entering and exiting the rail station. In addition, plaintiff alleged that MTA “failed to provide adequate safeguards against the known dangerous condition by, among other acts and omissions, failing to properly design, construct, supervise, inspect and repair the Premises causing the same to be unsafe and defective for its intended purposes.” MTA, in turn, cross-complained against Hampton- the entity that provided design and construction services at the station.
Hampton demurred to the first amended cross-complaint, asserting a four year statute of limitations defense pursuant to California Code of Civil Procedure section 337.1, claiming the alleged deficiencies were patent defects. On September 11, 2013, the trial court overruled the demurrer finding that the defect was not patent. Hampton appealed.
The appellate court overruled the trial court’s ruling and in fact, granted Hampton’s writ of mandate and even directed the trial court to sustain the demurrer without leave to amend! (Delon Hampton & Associates v. Sup. Ct. (Los Angeles County Metropolitan Transportation Authority) (Cal. App. Second Dist., Div. 3; June 23, 2014) 227 Cal.App.4th 250, [173 Cal.Rptr.3d 407].)
The appellate court found that the purpose of section 337.1 is to “provide a final point of termination, to proctect some groups from extended liability.” A “patent deficiency” has been defined as a deficiency which is apparent by reasonable inspection. See Tomko Woll Group Architects, Inc. v. Superior Court (1996) 46 Cal.App.4th 1326, 1336. The court found a patent defect can be discovery by the kind of inspection made in the exercise of ordinary care and prudence, whereas a latent defect is hidden and would not be discovered by a reasonably careful inspection. See Preston v. Goldman (1986) 42 Cal.3d 108, 123. The test to determine whether a construction defect is patent is an objective test that asks “whether the average consumer, during the course of a reasonable inspection, would discover the defect…” See Creekbridge Townhome Owners Assn., Inc. v. C. Scott Whitten, Inc. (2009) 177 Cal.App.4th 251, 256.
Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com
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William M. Kaufman, Lockhart Park LP
Changes to Pennsylvania Mechanic’s Lien Code
July 13, 2017 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday here at Musings, we welcome Jim Fullerton. Jim is the President of the law firm of Fullerton & Knowles, P.C., which has attorneys licensed in Virginia, Maryland, Pennsylvania, and the District of Columbia, is a Martindale Hubbell Peer Rated Lawyer AV® Preeminent.™ The firm represents owners, lenders, design professionals, suppliers, subcontractors, general contractors and other members of the real estate and construction industries, filing mechanic’s liens, surety bond and other construction claims across all of the states in the Mid Atlantic region. He also represents creditors in bankruptcy issues nationwide, particularly defense of bankruptcy preference claims; advises owners and lenders in real estate lending and acquisition transactions; on all real estate and construction law issues; contract formation and disputes.
The firm’s Construction Law Survival Manual is well known and widely used by participants in the construction process. The 550 page manual provides valuable information about construction contract litigation, mechanic’s liens, payment bond claims, bankruptcy and credit management and contains over 30 commonly used contract forms. All of this information and recent construction law issues are constantly updated on the firm’s website.
There are two changes to the Pennsylvania Mechanic’s Lien Code that became effective September 2014. First, residential properties built by an owner for their own residence will now have a defense of payment to subcontractor mechanic’s liens. This protects homeowners from mechanic’s liens if they have paid their general contractors in full. Second, construction loan open end mortgages will have priority over mechanic’s liens, as long as at least sixty per cent (60%) of the loan proceeds are used for construction costs. This change was pushed by Pennsylvania lenders in response to a recent court case.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii
January 06, 2012 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court ultimately stayed a construction defect case, but offered comments on the current status of coverage disputes for such defects in Hawaii. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. Simpson Mfg. Co., 2011 U.S. Dist. LEXIS 128481(D. Haw. Nov. 7, 2011).
National Union filed a complaint for declaratory relief to establish it had no duty to defend or to indemnify Simpson Manufacturing Company in four actions pending in the Hawaii state courts. The state court actions concerned allegedly defective hurricane strap tie hold downs that were manufactured and sold by Simpson. The hurricane ties allegedly began to prematurely corrode and rust, causing cracking, spalling and other damage to homes.
National Union contended the underlying allegations did not constitute "property damage" caused by an "occurrence," as defined in the policies.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Court of Appeal Shines Light on Collusive Settlement Agreements
October 21, 2015 —
Kristian B. Moriarty & R. Bryan Martin – Haight Brown & Bonesteel LLPIn Diamond v. Reshko, (filed 8/20/2015, No. A139251) the California Court of Appeal, First District, held that a defendant was entitled to introduce evidence at trial reflecting amounts paid by co-defendants in settlement of a plaintiff’s claim.
Plaintiff, Christine Diamond, was injured during an automobile accident that occurred while she was a passenger in a taxi driven by Amir Mansouri. Christine, and her husband Andrew, filed suit against Mr. Mansouri, the Yellow Cab Collective (“Yellow Cab”), and the driver of the vehicle that collided with the taxi, Serge Reshko. Before trial, Mansouri and the Yellow Cab Collective settled with Plaintiffs, but agreed to appear and participate as defendants at the jury trial of the action. Mansouri and Yellow Cab paid a total of $400,000 to Plaintiffs in settlement.
Reshko filed a pre-trial motion seeking an order permitting Reshko to admit evidence of the settlement between Plaintiffs and the other defendants. The trial court refused to rule on the motion before trial. Ultimately, evidence of the settlement between Plaintiffs, Mansouri and Yellow Cab was excluded during trial. The jury returned a verdict in favor of Plaintiffs in the total amount of $745,778, finding Mansouri 40 percent at fault, and Reshko 60 percent at fault. The Trial Court entered judgment against Reshko in the sum of $406,698.
Reshko appealed the judgment. The First District Court of Appeal reversed, holding that evidence of the settlement should have been admitted at trial because the settling defendant’s position should be revealed to the court and jury to avoid committing a fraud on the court, and in order to permit the trier of fact to properly weigh the settling defendant’s testimony.
Reprinted courtesy of
Kristian B. Moriarty, Haight Brown & Bonesteel LLP and
R. Bryan Martin, Haight Brown & Bonesteel LLP
Mr. Moriarty may be contacted at kmoriarty@hbblaw.com
Mr. Martin may be contacted at bmartin@hbblaw.com
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Edgewater Plans to Sue Over Pollution During Veterans Field Rehab
August 13, 2014 —
Beverley BevenFlorez-CDJ STAFFIn New Jersey, “Borough officials have announced plans to sue ‘all responsible parties’ over new contaminants inadvertently brought onto Veterans Field during soil remediation that was halted last year,” reported The Record.
According to The Record, Waterside Construction “trucked in contaminated crushed concrete” and has “been in mediation for months” with the borough over the issue.
“Waterside violated the sanctity of the public trust by improperly disposing of PCB waste materials at Veterans Field,” Timothy Corriston, special counsel to the borough, told The Record. “They believe that others are partly responsible. That is ultimately what will be litigated.”
Spokesman Alan Marcus wrote in an email to The Record, “Waterside continues to be willing to participate in mediation and hopes to reach an amicable settlement among all of the parties.”
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Construction Demand Unsteady, Gains in Some Regions
June 29, 2011 —
CDJ STAFFThe Associated General Contractors of America reported Tuesday, June 28 that construction employment increased in 120 of the 337 metropolitan areas surveyed between May 2010 and May 2011.
‘While construction employment has stopped plunging, any sign of a recovery remains spotty at best,” said Ken Simonson, the association’s chief economist. ‘The close to even split between areas adding and losing jobs is a reminder that for every market doing well, there is another market that is still hurting.”
The largest number of jobs created was in the Dallas, Texas region, with 5,600 new jobs, a five percent increase. The northern Massachusetts/southern New Hampshire region near Haverhill saw the greatest percentage increase, although that twenty-two percent increase represents only 800 new jobs. The Chicago, Illiinois area added 4,600 jobs, a four percent increase.
Other regions were not so lucky. The Atlanta, Georgia area saw a loss of 7,400 jobs, an eight percent loss. Las Vegas also lost 7,400 jobs, which there represented a sixteen percent decline. The New York City area lost 6,700 jobs, a six percent reduction. The Riverside, California area lost 5,300 jobs, a nine percent loss.
Stephen E. Sandherr, the association’s chief executive officer, blamed a combination of regulation and budget squeezes. "Some in Washington never met a regulation they didn’t like and others never found a penny they didn’t want to pinch. Together that makes for a bad way to boost employment and a great way to stifle the private sector and neglect critical economic infrastructure.”
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End of an Era: Los Angeles County Superior Court Closes the Personal Injury Hub
October 24, 2022 —
Elizabeth A. Evans & Angela S. Haskins - Haight Brown & Bonesteel LLPOn September 21, 2022, the Los Angeles County Superior Court announced that it would start a gradual shutdown of the Personal Injury Hub, currently located at the Spring Street Courthouse. This closure will see the return of personal injury cases being venued in the district where they occurred.
The Personal Injury Hub was established in 2012 as a means of consolidating personal injury cases after several civil courtrooms around the County were closed due to significant budget cuts. It first began as two courtrooms in Stanley Mosk Superior Court, then moved to the Spring Street Courthouse and ballooned to six courtrooms, each handling a case load of reportedly over 9,000 cases at times. Case Management Conferences were abolished and the parties were largely left to their own devices to move cases along. At times, slow chaos ensued. With a new and increased budget, Los Angeles Superior Court has now decided that enough is enough.
Effective October 10, 2022, new personal injury cases will be filed and handled from start to finish in independent calendar courtrooms in the districts where the events giving rise to the claims occurred. Any cases properly filed in the Central District will continue to be heard in the Personal Injury Hub for now. A new Civil Case Cover Sheet Addendum that reflects this change will be available on the Los Angeles County Superior Court website for use as of October 10th.
Reprinted courtesy of
Elizabeth A. Evans, Haight Brown & Bonesteel LLP and
Angela S. Haskins, Haight Brown & Bonesteel LLP
Ms. Evans may be contacted at eevans@hbblaw.com
Ms. Haskins may be contacted at ahaskins@hbblaw.com
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