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Not If, But When: Newly Enacted Virginia Legislation Bans “Pay-If-Paid” Clauses In Construction Contracts

August 22, 2022 — Joseph A. Figueroa & Thomas E. Minnis - ConsensusDocs
Recently passed legislation in Virginia is likely to dramatically change contractual relationships between prime contractors and subcontractors in the Commonwealth. Abrogating well-established common-law principles set forth by the Supreme Court of Virginia, on April 27, 2022, the Virginia General Assembly, after receiving input from Virginia Governor Glenn Youngkin, passed Senate Bill 550 banning “pay-if-paid” clauses in public and private construction contracts. Contractors performing work in Virginia should take note of the new law, which goes into effect next year and will apply to any contracts executed after January 1, 2023. The History Of Pay-if-Paid Clauses In Virginia Broadly speaking, “pay-if-paid” clauses are a commonly used tool by prime contractors on construction projects to shift the risk to subcontractors in the event that the owner does not pay the prime contractor for work. Such clauses usually include language creating an express condition precedent to the subcontractor’s right to be paid for work under a subcontract, stating that the prime contractor shall be under no obligation to pay the subcontractor for work unless and until the prime contractor first receives payment for that work by the project owner. The “pay-if-paid” clause also has a less extreme cousin, the “pay-when-paid” clause, which merely delays the time in which the prime contractor is obligated to pay the subcontractor to the time in which the prime contractor is paid by the owner. It does not, however, extinguish the prime contractor’s ultimate obligation to pay the subcontractor. Reprinted courtesy of Joseph A. Figueroa, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) and Thomas E. Minnis, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) Mr. Figueroa may be contacted at jfigueroa@watttieder.com Read the court decision
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10 Year Anniversary – Congratulations Greg Podolak

November 23, 2016 — Edwin L. Doernberger – Saxe Doernberger & Vita, P.C.
2016 marks 10 years of successful practice for SDV Partner, Gregory Podolak. Greg has spent his entire professional career with Saxe, Doernberger & Vita, rising up the ranks from Summer Associate to Managing Partner of SDV’s first satellite office located in Naples, FL. Greg also manages SDV’s Cyber Risk group and is a nationally recognized author and speaker on the topic. Over the past decade, Greg has been honored with numerous awards, including the Connecticut Law Tribune’s 2015 New Leaders in the Law, and for the past five years in a row has been chosen as a Super Lawyers® Rising Star. Read the court decision
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Reprinted courtesy of Edwin L. Doernberger, Saxe Doernberger & Vita, P.C.
Mr. Doernberger may be contacted at eld@sdvlaw.com

Apartment Construction Ominously Nears 25-Year High

August 27, 2014 — Karen Weise – Bloomberg
If you live in a major U.S. city and look out over the skyline, chances are good you’ll see construction cranes. Lots of them. Only twice in the past 25 years have new apartment buildings been going up as fast as they are right now. That’s not necessarily a good omen. The first time, in February 2000, was right before the dot-com bubble burst. The second time, January 2006, came right before the housing bubble burst. Now we learn that builders broke ground on 423,000 new multifamily units in July, right before … who knows what? Monthly building data released earlier this week by the Census Bureau and the Department of Housing and Urban Development showed that new home construction overall posted strong gains in July, with the highest number of new home starts in eight months. The comeback largely manifested in an uptick in apartment buildings with five or more units, which saw an almost 50 percent increase in new starts in July over a year earlier. By comparison, starts on single-family homes were up only about 10 percent over the same period. That’s part of the reason that the Northeast, with its large, dense cities, saw the biggest monthly increase, up 44 percent from June. That matches the analysis by Trulia (TRLA) Chief Economist Jed Kolko, who found that among metro areas, Boston and New York are building more than in the past. Read the court decision
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Reprinted courtesy of Karen Weise, Bloomberg
Ms. Weise may be contacted at kweise@bloomberg.net

Online Meetings & Privacy in Today’s WFH Environment

May 25, 2020 — Heather Whitehead & Joshua Anderson - Newmeyer Dillion
As a result of the COVID-19 (commonly referred to as the Coronavirus) pandemic, remote working arrangements have become the new norm. For those working from home (WFH), the software program “Zoom Meetings,” has found a substantial increase in demand and popularity as a means to facilitate meetings online rather than meeting in person. There are also a number of other similar platforms available for online meetings such as Skype and Teams (from Microsoft), Go to Meeting (from LogMeIn) and WebEx Meetings (Cisco). Best Practices for Businesses - Privacy and Security Protocols With these platforms becoming a necessity for businesses, there are a number of best practices that should be considered to safely conduct online meetings and teleconferences as well as protect information. These include the following:

Upgrade to the most recent version of the program or application;
Use passwords, especially with recurring meetings;
Protect all passwords as well as personal meeting identifiers used in Zoom and other platforms;
Carefully moderate meetings and ask meeting attendees to identify themselves at the beginning of a meeting;
Consider allowing only authenticated users to participate in meetings;
Use the Waiting Rooms feature in Zoom; and
Enable features available only to meeting hosts.

Reprinted courtesy of Heather Whitehead, Newmeyer Dillion and Joshua Anderson, Newmeyer Dillion Ms. Whitehead may be contacted at heather.whitehead@ndlf.com Mr. Anderson may be contacted at joshua.anderson@ndlf.com Read the court decision
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Efficient Proximate Cause Applies to Policy's Collapse Provisions

February 23, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The court applied the efficient proximate cause doctrine to find coverage under a property policy for a building's collapse. Vardanyan v. Amco Ins. Co., 2015 Cal. App. LEXIS 1181 (Cal. Ct. App. Dec. 11, 2015). The insured submitted a claim to Amco for damage to the flooring of the house and for mold. Amco's adjustor reported that the house seemed to be settling, possibly due to a water leak. A structural engineer then inspected and found multiple potential leaks in the roof, gutters in disrepair, downspouts that deposited water at the base of the walls of the house, and evidence that a faucet had been spraying the wall in one area. Water damage was noticed in these areas. Further, the kitchen was water damaged and had past termite infestation. 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

Megaproject Savings Opportunities

April 15, 2014 — Beverley BevenFlorez-CDJ STAFF
Joel Levy in Construction Digital interviewed Christopher Dann, a Partner of Booz & Company’s Energy, Chemicals and Utilities practice, regarding how to be more efficient and save money when managing billion dollar construction megaprojects. According to Construction Digital, “Booz & Company, (recently rebranded as Strategy&), is celebrating its 100th anniversary this year, and over a century of working with huge clients in several sectors, has gathered the knowledge to identify what it terms a $40 trillion opportunity for savings in construction megaprojects over the next 20 years as clients combat a 30 percent average figure of overrun in schedule and cost.” Dann cited several reasons for inefficiencies in megaprojects, including “inefficient advance planning and analysis” and “lack of completion of detail design engineering prior to the start of construction,” reported Construction Digital. The inefficiencies can be countered, according to Dann, “when following a clear strategy.” Read the court decision
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The California Legislature Passes SB 496 Limiting Design Professional Defense and Indemnity Obligations

June 15, 2017 — Mark Himmelstein & Jenny Guzman – Newmeyer & Dillion LLP
Since 2008 when the California legislature limited subcontractor indemnity obligations, the design professional community has been shouting “what about us?” Well, the legislature finally responded and a new law that limits design professional’s defense and indemnity obligations to their percentage of fault goes into effect on January 1, 2018. THE NEW LAW – SB 496 SB 496 amends California Civil Code section 2782.8 and states that indemnity agreements must be limited to the negligence, recklessness or willful misconduct of the indemnitee (i.e. no more Type I indemnity with design professionals). The amendment also provides that “in no event shall the cost to defend charged to the design professional exceed the design professional’s proportionate percentage of fault”, with a limited opportunity for reallocation in the event another defendant is judgment proof. However, the duty to defend still remains and still arises at the time of the tender of the defense (both issues that were unsuccessfully targeted by the design professional lobbyists). WHAT CAN BE DONE NOW? Developers and Owners should strongly consider reviewing and revising the indemnity provisions in their consultant contracts to comply with the new legislation before the first of the year. This includes master agreements because project addenda entered into after January 1 are subject to the new law. The statute does not apply to current contracts, so these do not need to be amended. Questions? Newmeyer & Dillion is happy to assist in navigating the process to ensure you are compliant prior to January’s deadline. Please let us know how we can help. Mark Himmelstein is a partner focused in the areas of construction, real estate, business and insurance litigation. He has an in-depth experience in drafting and negotiating construction and real estate contracts. You can reach him at mark.himmelstein@ndlf.com. Jenny Guzman is a litigation associate in the Newport Beach office, focusing her practice in the areas of business and real estate litigation and transactions. You can reach her at jenny.guzman@ndlf.com. About Newmeyer & Dillion For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit http://newmeyeranddillion.com/ Read the court decision
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Estimate Tops $5.5B for Cost of Rebuilding After Maui Fires

August 21, 2023 — James Leggate - Engineering News-Record
Rebuilding after wildfires on the island of Maui in Hawaii could cost more than $5.5 billion, according to a preliminary assessment prepared by the University of Hawaii Pacific Disaster Center and local officials. Reprinted courtesy of James Leggate, Engineering News-Record Mr. Leggate may be contacted at leggatej@enr.com Read the full story... Read the court decision
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