SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Quick Note: Subcontractor Payment Bond = Common Law Payment Bond

February 16, 2017 — David Adelstein – Florida Construction Legal Updates
What is a common law payment bond? A common law payment bond is a bond not required or governed by a statute. For example, if a prime contractor provides the owner a payment bond, that bond will be a statutory payment bond. On the other hand, if a subcontractor provides the general contractor with a payment bond, that bond will be a common law payment bond. Why? Because there is not a statute that specifically governs the requirements of a subcontractor’s payment bond given to a general contractor. The subcontractor’s payment bond is aimed at protecting the general contractor (and the general contractor’s payment bond) in the event the subcontractor fails to pay its own subcontractors and suppliers. The subcontractor’s payment bond will generally identify that claimants, as defined by the bond, are those subcontractors and suppliers the subcontractor has failed to pay. This common law payment bond is not recorded in the public records so sometimes it can be challenging for a claimant (anyone unpaid working under the subcontractor that furnished the bond) to obtain a copy of the bond. With that said, an unpaid claimant should consider pursuing a copy of this bond in certain situations, particularly if it may not have preserved a claim against the general contractor’s statutory payment bond. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

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Creative Avenue for Judgment Creditor to Collect a Judgment

October 27, 2016 — David Adelstein – Florida Construction Legal Updates
I have a judgment against another entity. Now what? I want to briefly talk about this “now what?” in the context of the recent decision in MYD Marine Distributor, Inc. v. International Paint, Ltd., 41 Fla. L. Weekly D2364a (Fla. 4th DCA 2016). Although this case is not a construction case, it poses an interesting issue for any entity that has a judgment entered against it (known as the judgment debtor) while it is contemporaneously the plaintiff and pursuing monetary damages in an unrelated case or cases. This case also presents an avenue for any judgment creditor to pursue in the event other post-judgment collection efforts are unsuccessful. Read the court decision
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Reprinted courtesy of David Adelstein, Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
Mr. Adelstein may be contacted at dma@katzbarron.com

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Dear Engineer: Has your insurer issued a “Reservation of Rights” letter? (law note)

April 20, 2017 — Melissa Dewey Brumback - Construction Law in North Carolina
In my previous post, I made reference to getting a “Reservation of Rights” letter. I noted that the carrier may decide to defend you under a Reservation of Rights (i.e., hire your lawyer) but may not, necessarily, accept the responsibility for paying the claim. Does this mean that the insurance company has denied your claim, or will never pay? No. Reservation of Rights (ROR) letters are sent for a variety of reasons- most notably, when some portion of the construction lawsuit against you is not covered under your E&O policy. The letter must state the reason(s) that the ROR is being issued. With the ROR, the insurance company is telling you that it reserves the right to withdraw from your defense and/or deny payment of damages at a later date, depending upon how facts in the case develop. The notice is intended to let you know that there *may* be issues later, and to put you notice that you have the right to hire your own lawyer (at your own expense) to protect yourself from that future potential risk. Read the court decision
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Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC
Ms. Brumback may be contacted at mbrumback@rl-law.com

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Michigan Civil Engineers Give the State's Infrastructure a "C-" Grade, Improving from "D+" Grade in 2018

May 08, 2023 — The American Society of Civil Engineers
LANSING, MI. — The Michigan Section of the American Society of Civil Engineers (ASCE) released the 2023 Report Card for Michigan's Infrastructure today, with 14 categories of infrastructure receiving an overall grade of 'C-', an improvement over the 'D+' grade issued in the state's 2018 report card. That means Michigan's infrastructure systems are improving but are still in average condition and require attention. Michigan's grade is on par with the national average of 'C-' given in the 2021 Report Card for America's Infrastructure. Civil engineers graded Michigan's aviation (C), bridges (D+), dams (C-), drinking water (D+), energy (D), inland waterways (C), public parks (C), rail (C), roads (D), schools (C-), solid waste (C+), stormwater (D), transit (C-), and wastewater (C). The report also included a chapter on the state's broadband infrastructure, which did not receive a grade due to insufficient available data. Michigan policymakers have driven progress in the last five years to improve infrastructure assets by implementing short-term funding solutions to address decades of deferred maintenance, including surface transportation funding through the Rebuilding Michigan plan and improved water infrastructure systems through the MI Clean Water Plan. The state will also benefit from recent federal infrastructure investments included in the Bipartisan Infrastructure Law (BIL), Coronavirus Aid, Relief, and Economic Security (CARES) Act, and American Rescue Plan Act (ARPA). However, Michigan generally lacks sufficient long-term funding mechanisms to ensure all infrastructure sectors reach and sustain a state of good repair. ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel. Read the court decision
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Is Settling a Bond Claim in the Face of a Seemingly Clear Statute of Limitations Defense Bad Faith?

October 11, 2021 — Christopher G. Hill - Construction Law Musings
We have often discussed payment and performance bonds here at Construction Law Musings, most often in the context of payment bond claims relating to federal and state-owned. construction projects. A late 2020 case out of the Eastern District of Virginia federal court examined what happens after such a claim, in this case, based upon a developer’s subdivision bonds, is made and negotiations commence between the surety and the claimant. Specifically, Fidelity & Deposit Co. of Maryland v. Ransgate Corp., et. al. looked at claims for indemnity by a surety and the principal/indemnitors in the event that the Surety settled such a claim. In the Ramsgate case, Surety provided two separate subdivision subcontract bonds to Ramsgate. Pursuant to those bonds and the indemnity clause of its indemnity agreement, the Surety sought reimbursement of its $80,000.00 settlement payment to the local building authority that it paid to resolve what was originally a claim for over $420,000.00 by the City. The project was started in 2002 and after many years of failures to complete (according to the City of Suffolk), the City made its claim for expenses in 2017. Ramsgate claimed that it completed the subdivisions in 2003. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Caterpillar Said to Be Focus of Senate Overseas Tax Probe

March 26, 2014 — Richard Rubin and Jesse Drucker - Bloomberg
A U.S. Senate investigative panel is examining Caterpillar Inc. (CAT) and whether the company improperly avoided U.S. taxes by moving profits outside the country, said three people familiar with the inquiry. The Senate’s Permanent Subcommittee on Investigations will hold a hearing in early April, said two of the people. They spoke on condition of anonymity before an official announcement. Rachel Potts, a spokeswoman for Caterpillar, declined to comment. Two staff members for the subcommittee declined to comment. In 2009, Daniel Schlicksup, an employee who had worked on tax strategy, alleged in a lawsuit in federal court that Caterpillar used a “Swiss structure” to shift profits to offshore companies and avoid more than $2 billion in U.S. taxes. He also alleged that Caterpillar used a “Bermuda structure” involving shell companies to return profits to the U.S. without paying required taxes. Mr. Rubin may be contacted at rrubin12@bloomberg.net; Mr. Drucker may be contacted at jdrucker4@bloomberg.net Read the court decision
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Reprinted courtesy of Richard Rubin and Jesse Drucker, Bloomberg

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Contract Terms Can Impact the Accrual Date For Florida’s Statute of Repose

October 19, 2017 — William L. Doerler - White and Williams LLP
When the validity of a construction defect claim depends on whether the claim is barred by the applicable state’s statute of repose, it is important to review the statute to identify when claims subject to the statute of repose accrue. In Busch v. Lennar Homes, LLC, 219 So.3d 93 (Fla. Ct. App. (5th Dist.) 2017), the Court of Appeals of Florida clarified the accrual date for the statute of repose in cases where the accrual date depends on a construction contract’s completion date. Pursuant to Busch, the date of full performance under the contract, not the building’s purchase closing date, is the date on which claims accrue. In Busch, Timothy Busch (Busch), pursuant to a Purchase and Sale Agreement, contracted to have Lennar Homes build him a house. Nearly ten years after closing on the home, Busch served Lennar Homes with a notice of construction defects, as required by Florida’s right-to-repair act. Shortly thereafter, but more than 10 years after the home’s closing date, Busch filed suit against Lennar Homes, alleging that there were multiple construction defects associated with the home. Lennar Homes, relying on Florida’s statute of repose, Fla. Stat. § 95.11(3)(c), filed a motion to dismiss Busch’s complaint. Read the court decision
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Reprinted courtesy of William L. Doerler, White and Williams LLP
Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com

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Virginia Chinese Drywall “property damage” caused by an “occurrence” and number of “occurrences”

August 04, 2011 — CDCoverage.com

In Dragas Management Corp. v. Hanover Insurance Co., No. 2:10cv547 (E.D. Va. July 21, 2011), claimant residential home general contractor and developer DMC filed for arbitration against insured drywall supply and install subcontractor Porter-Blaine seeking damages for (1) the replacement of defective Chinese drywall, and (2) the repair of resulting property to other components of the DMC homes and homeowners’ personal property in seventy-four homes. Porter-Blaine’s CGL insurer Citizens and excess insurer Hanover defended Porter-Blaine in the DMC arbitration.

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Reprinted courtesy of CDCoverage.com

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