Is Arbitration Okay Under the Miller Act? It Is if You Don’t Object
October 15, 2014 —
Christopher G. Hill – Construction Law MusingsI have discussed both payment bond claims under the Miller Act and alternate dispute resolution (ADR) here at Construction Law Musings on many an occasion. A question that is sometimes open is what to do when there is contractually mandated arbitration for claims “relating to the contract or the work.”
While here in Virginia, as in most places, the courts will almost automatically send any breach of contract case with such a clause to arbitration, a question exists whether the claim against the bond held by a surety that is not a party to the contract is subject to being referred. Well, in a recent opinion the District Court for the Eastern District of Virginia in Norfolk weighed in on this question where there was no opposition or objection to a motion to stay pending arbitration.
In U.S. for Use of Harbor Construction Co. Inc. v. THR Enterprises Inc. the Court considered a fairly typical payment dispute leading to a Miller Act claim. The general contractor and surety filed a motion to dismiss or alternatively stay the litigation based upon a clause in the contract between general contractor and subcontractor allowing the general contractor to elect the type of ADR to be used to resolve the dispute.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Haight Welcomes Robert S. Rucci
August 26, 2015 —
Robert S. Rucci – Haight Brown & Bonesteel LLPHaight Brown & Bonesteel LLP welcomes new partner Robert S. Rucci. Mr. Rucci joins Haight’s San Diego office in the Construction Law, General Liability and Risk Management & Insurance Law Practice Groups. For 25 years, Mr. Rucci has specialized in defending design professionals, businesses and their employees in addition to representing clients against declaratory relief, breach of contract and bad faith litigation. During his career, he has tried 60 cases to defense verdict and successfully resolved countless matters via mediation, arbitration and settlement conference. His extensive litigation experience is invaluable to our clients.
Haight Brown & Bonesteel LLP
402 West Broadway
Suite 1850
San Diego, CA 92101
www.hbblaw.com
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Robert S. Rucci, Haight Brown & Bonesteel LLPMr. Rucci may be contacted at
rrucci@hbblaw.com
The Power of Planning: Four Key Themes for Mitigating Risk in Construction
November 09, 2020 —
Zac Hays - Construction ExecutiveConstruction is, and always has been, known as a relatively risky business. Whether it is dealing with factors that can be controlled or beyond control, proactively managing risk has proven to be of the most critical factors in delivering quality projects faster, more efficiently and with wider margins.
Many people assume on-site activities introduce the greatest amount of uncertainty and potential risk. But many mistakes in construction originate in the planning phase – meaning preconstruction is ripe with opportunity to be the most effective place for mitigating risk, saving money and ultimately broadening margins. There are many ways to mitigate risk before projects even start, but four key themes emerge to be clear, repeatable opportunities for success.
DIGITIZE THE PLANNING PHASE
Preconstruction is where ideas are brought to life by translating architectural designs into a real, constructible plan. Decisions made at this stage can determine the project’s success and profitability – but it’s far from straightforward. Estimating, scheduling and planning are highly complex activities that depend on constantly changing details and are all areas where missed information or miscommunication can lead to costly rework down the line.
Reprinted courtesy of
Zac Hays, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Report to Congress Calls for Framework to Cut Post-Quake Recovery Time
February 01, 2021 —
Bruce Buckley - Engineering News-RecordEngineers and government agencies along with model building code and standard developers should work together to create a national framework more focused on earthquake resilience and post-quake recovery time, according to a report delivered to Congress last week. While current seismic codes address life safety, the report says stakeholders should also consider re-occupancy and functional recovery time, taking into account the potential impacts to a community as a whole.
Reprinted courtesy of
Bruce Buckley, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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Construction Contract Basics: Indemnity
October 30, 2023 —
Christopher G. Hill - Construction Law MusingsI’m back after a welcome
change of offices from a Regus location to a separate and more customer-friendly
local shared office space location. I thought I’d jump back into posting with a series of construction contract-related posts, the first of which relates to indemnification clauses.
An indemnification clause in a contract obligates one party (the Indemnitor) to take on liability (read pay for) any damages to another party (the Indemnitee) under certain circumstances. In a construction context, this type of arrangement can arise in a
bonding context with a general indemnity obligation to the surety among other contexts outside of the four corners of any prime or subcontract. I will not be discussing those other contexts and will focus on the typical indemnity clause found in most if not all, construction contracts. These clauses most often state that the “downstream” party is to indemnify all of the upstream parties for any and all damages incurred by the indemnitees due to any action of the downstream party, its employees, subcontractors, sub-subcontractors, etc. The clauses are often not limited in scope and generally include attorney fee provisions and generally require indemnity for breaches of contract by their terms.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Don’t Waive Too Much In Your Mechanic’s Lien Waiver
December 22, 2019 —
Christopher G. Hill - Construction Law MusingsIn the past few years, the Virginia General Assembly has, with certain caveats, precluded pre-furnishing waiver of mechanic’s lien rights. While this essentially outlawed the types of mechanic’s lien waiver clauses that pervaded construction contracts in Virginia, the key to the previous sentence is “pre-furnishing.” What the General Assembly left intact were the usual waivers of mechanic’s lien rights typically required to be provided to Owners and others in the payment chain in exchange for payment.
These lien waivers come in a few “flavors” from conditional to unconditional, partial to full. Their terms usually include an acknowledgement of receipt of payment (we’ll get to this later), and a statement that the one seeking payment knows of no possible claims by lower tier subcontractors and then waives all mechanic’s lien rights against the property for work performed and included in the request for payment. Often over my years as a Virginia construction attorney, I have noticed that these waivers are often signed without comment or review. They are just part of the process and more often than not are not even an issue for most projects. Of course, if they are an issue they can be a big one, and their terms can come back to bite a claimant that has not properly vetted them.
The first potential issue is waiving lien rights while acknowledging receipt prior to actual receipt of the check or wire. Many of the waiver forms that are out there list a payment amount, or possibly simply state that the waiver is in exchange for some small payment, and then state “receipt of which is acknolwedged” or something similar. The issue here is that receipt may not have happened yet because these lien waivers are submitted as part of the payment package in order to get paid in the first place. In short, should you sign the waiver prior to payment, you may have acknowledged a non-event and in the event of non-payment have a written document stating that you waived your claim to a lien for that money. What a court would do with this, I am unsure, but why risk it? My advice, be sure your waiver is contingent on actual clearance of payment as well as receipt.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Withdrawal Liability? Read your CBA
July 10, 2018 —
Wally Zimolong – Supplemental Conditions Withdrawal liability is a huge issue facing unionized employers. According to Bloomberg, 93% of the Top 200 largest pension plans are underfunded by a combined $382 billion. Contractors that withdraw from a multi-employer pension plan can face hundreds of thousands or millions of dollars in assessed withdrawal liability. However, employers may be able to avoid that liability, plus the legal and consulting fees to fight it, by simply reading their collective bargaining agreement.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
After Sixty Years, Subcontractors are Back in the Driver’s Seat in Bidding on California Construction Projects
September 22, 2016 —
William L. Porter – Porter Law Group BulletinFor almost the last sixty years, the standard for bidding on California construction projects has been governed by the landmark case of Drennan v. Star Paving (1958) 51 Cal.2d 409; which generally states that the contractor bidding to perform work for a project owner is entitled to rely on the bids of subcontractors in formulating its own bid to do the work. Under the equitable legal doctrine of “promissory estoppel”, which serves as the foundation of the Drennan case, even though there was no actual “contract” between the contractor and subcontractor at the time of bid, the contractor was entitled to enforce the subcontractor’s bid in reliance on this doctrine. For bidding purposes, promissory estoppel serves as an equitable substitute for an actual contract. The courts have, since that time, allowed promissory estoppel to act as a substitute for the contract in public bidding because, in equity, when a contractor “reasonably” relies on a subcontractor’s bid in formulating its own bid, it would be unjust to allow the subcontractor to withdraw a bid on which the contractor had relied in submitting its own successful bid.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com