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DIRECTORY AND CAPABILITIES

Private Project Payment Bonds and Pay if Paid in Virginia

January 05, 2017 — Christopher G. Hill – Construction Law Musings
One of the many items of construction law that has always been about as clear as mud has been the interaction between a contractual pay if paid clause and payment bond claims either under the Federal Miller Act or Virginia’s “Little Miller Act.” While properly drafted contractual “pay if paid” clauses are enforceable by their terms in Virginia, what has always been less clear is whether a bonding company can take advantage of such a clause when defending a payment bond claim. As always, these questions are very fact specific both under the Federal Act and the state statute. I wish that this post would answer this question, but alas, it will not. A recent case from the City of Roanoke, Virginia looked at the interaction between a payment bond and a “condition precedent” pay if paid clause as it relates to a private project that is not subject to the Little Miller Act. In the case of IES Commercial, Inc v The Hanover Insurance Company, the Court examined a contractual clause between Thor Construction and IES Commercial in tandem with the bond language between Hanover Insurance Company and Thor as it related to a surprisingly familiar scenario. The general facts are these: IES performed, Thor demanded payment from the owner for the work that IES performed and the owner, for reasons that are left unstated in the opinion, refused to pay. IES sues Hanover pursuant to the payment bond and Hanover moves to dismiss the suit because Thor hadn’t been paid by the owner and therefore Hanover could take advantage of the pay if paid language. Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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What is the Effect of an Untimely Challenge to the Timeliness of a Trustee’s Sale?

April 13, 2017 — Ben Reeves - Snell & Wilmer Real Estate Litigation Blog
Ever wonder what happens if a person challenges the timeliness of a trustee’s sale after the sale already occurred? Waiver of the argument of course! And, in the case of Wells Fargo Bank, N.A. v. Waltner, the affirmance of an eviction judgment. In the Waltner case, Wells Fargo Bank, N.A., as Trustee for WaMu Mortgage Pass-Through Certificates, Series 2005-PR4 Trust (the “Bank”), purchased a residential property at a trustee’s sale in September 2015. The Bank gave the occupant of the house, Sarah Waltner (“Waltner”), notice to vacate the property, but she did not do so. Accordingly, the Bank filed a summary action to evict Waltner, which the trial court ultimately granted. After the trial court granted the Bank relief, Waltner filed a motion to dismiss and a motion to vacate the eviction judgment arguing, among other things, that the judgment was void because the Bank conducted the trustee’s sale after the statute of limitations expired. Both motions were denied, and Waltner appealed. Read the court decision
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Reprinted courtesy of Ben Reeves, Snell & Wilmer
Mr. Reeves may be contacted at breeves@swlaw.com

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Real Estate & Construction News Round-Up (01/11/23) – Construction Tech, Housing Market Confidence, and Decarbonization

February 01, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
To kick of 2023, this week’s news round-up dives into contech inventions projected to impact the industry, shifting home prices and buyer confidence, investors prioritizing decarbonization efforts, and more.

• From holograms to robots, these 6 contech innovations are projected to tackle some of construction’s toughest issues. (Robyn Griggs Lawrence, Construction Dive)
• Manufacturing and data center projects will support the U.S. construction industry as work begins to slow on retail projects, warehouses and offices. (Sebastian Obando, Construction Dive)
• Despite macroeconomic headwinds, doubling down on decarbonization efforts is projected to be top-of-mind for investors and occupiers in 2023. (JLL)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Precedent-Setting ‘Green’ Apartments in Kansas City

September 17, 2015 — Beverley BevenFlorez-CDJ STAFF
According to the Kansas City Star, the Missouri riverfront apartment development, Second and Delaware, is being constructed with “greener-than-green technology” and features the following: “Sixteen-inch-thick concrete walls. Rooftop gardens. A 90 percent reduction in energy use compared to current building codes.” The two buildings “will comprise the largest U.S. multifamily apartment project using Passive House Institute-certified construction, a system that’s more energy-efficient than the highest LEED (Leadership in Energy and Environmental Design) building standard.” Read the court decision
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Contractual “Pay if Paid” and “Pay when Paid” Clauses? What is a California Construction Subcontractor to Do?

November 29, 2021 — William L. Porter - Porter Law Group
The Situation California Construction Subcontractors Face in Obtaining Payment: California construction subcontractors find themselves faced with a significant payment issue every time they are asked to sign a subcontract on a major project. Invariably, the subcontract the prime contractor presents to the subcontractor for signature will contain a clause by which the prime contractor imposes a condition on payment from the prime contractor to the subcontractor. The condition will be either one or the other of two general types. Either the prime contractor will specify that it never has to pay the subcontractor if the prime contractor itself is not paid by the owner (a “pay-if-paid” clause), or the prime contractor will pay the subcontractor only after the prime contractor has first exhausted all its efforts to obtain payment from the owner through litigation, arbitration or otherwise, possibly delaying payment to subcontractors by months or even years (a “pay-when-paid” clause). Goal of the Article: The goal of this article is to draw a distinction between the pay-if-paid and pay-when-paid clauses, discuss the legality of these clauses in California, the problems these clauses create for subcontractors, advise the reader of helpful recent legal developments in this area of law, address the possibility of a further legislative remedy to address the issue, and discuss what the subcontractor might do to protect itself while awaiting a legislative remedy that may or may not ever arrive. Read the court decision
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Reprinted courtesy of William L. Porter, Porter Law Group
Mr. Porter may be contacted at bporter@porterlaw.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 LLP
In 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 Read the court decision
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First-Time Buyers Home Sales Stagnates

October 22, 2014 — Beverley BevenFlorez-CDJ STAFF
Despite a rise overall in home sales, “first-time buyer share remained unchanged from the previous two months at 29%, far behind the historical average first-time buyer share of about 40%,” reported National Association of Home Builders’ Eye on Housing. However, “[e]xisting home sales increased to the highest level of the year, having posted gains for five of the last six months, despite weakness among first-time buyers. Existing home sales increased 2.4% in September, but remain 1.7% below the same period a year ago.” According to Eye on Housing, existing sales is expected to continue to increase throughout the year, though the first-time buyer segment is “the weak spot.” Read the court decision
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Fire Consultants Cannot Base Opinions on Speculation

May 20, 2019 — Christopher Konzelmann - The Subrogation Strategist
Larsen v. 401 Main St. Inc., 302 Neb. 454 (2019), involved a fire originating in the basement of the Quart House Pub (Pub) in Plattsmouth, Nebraska that spread to and damaged Plattsmouth Chiropractic Center, Inc., a neighboring business. Fire investigators could not enter the building because the structure was unsafe and demolished. The chiropractic center nevertheless sued the Pub alleging that its failure to maintain and replace basement mechanical equipment caused ignition. To prove its claim, the plaintiff retained a mechanical engineer who reviewed documents and concluded that the fire “originated from a failure of one of the items of mechanical equipment located in the area of the [basement] boiler.” Importantly, however, the consultant could not determine the root cause of the fire, could not eliminate the possibility that the fire originated in a compressor, and could not rule out the building’s electrical service as the ignition source because it was outside his area of expertise. The consultant nevertheless found that the fire most likely would not have occurred if the Pub had regularly serviced and replaced the equipment when needed. Read the court decision
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Reprinted courtesy of Christopher Konzelmann, White and Williams LLP
Mr. Konzelmann may be contacted at konzelmannc@whiteandwilliams.com

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