Nebraska Court Ruling Backs Latest Keystone XL Pipeline Route
September 30, 2019 —
Tom Ichniowski - Engineering News-RecordAdvocates of the Keystone XL oil pipeline have won a victory in their long effort to construct the project, as the Nebraska Supreme Court upheld a state commission's 2017 finding that supported the project's latest route alignment through the state.
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Tom Ichniowski, ENRMr. Ichniowski may be contacted at
ichniowskit@enr.com
Rhode Island Finds Pollution Exclusion Ambiguous, Orders Coverage for Home Heating Oil Leak
March 06, 2023 —
Kayla S. O'Connor - Saxe Doernberger & Vita, P.C.The Rhode Island case of Regan Heating and Air Conditioning, Inc. v. Arbella Protection Insurance Company, Inc., et. al.1 provides much-needed guidance regarding ambiguity and the term “pollution.”
In Regan, the Rhode Island Supreme Court held that a pollution exclusion contained in the Plaintiff’s “Commercial Package Policy” was ambiguous as to whether home heating oil that escaped into a customer’s basement constituted a “pollutant” under the policy.
This case stems from a 2015 incident wherein Regan was in the process of removing an older heating system and installing a new heating system in a customer’s home when that customer discovered 170 gallons of home heating oil in his basement. The customer sued Regan, alleging negligence and demanding remediation for the property damage caused by the oil leak.
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Kayla S. O'Connor, Saxe Doernberger & Vita, P.C.Ms. O'Connor may be contacted at
KOconnor@sdvlaw.com
The Rubber Hits the Ramp: A Maryland Personal Injury Case
September 17, 2014 —
Beverley BevenFlorez-CDJ STAFFAn elderly woman filed suit against the Town of Ocean City, Maryland, “after allegedly falling from her wheelchair because of a defective rubber warning mat on a resort street corner,” according to The Dispatch.
The accident occurred when the woman’s wheelchair “struck one of the hard rubber warning mats on the handicap-accessible street corners.”
The plaintiff is seeking “$750,000 in damages on three counts including negligence, strict liability and a violation of the Americans with Disabilities Act (ADA).” However, The Dispatch reported that it is not clear who is liable, since the sidewalk is owned and maintained by the town, but the State Highway Administration installed the rubber warning mats.
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California Contractors – You Should Know That Section 7141.5 May Be Your Golden Ticket
February 18, 2020 —
Amy L. Pierce, Mark A. Oertel & John Lubitz - Lewis Brisbois Bisgaard & Smith LLPUnder California’s Contractors’ State License Law, Cal. Bus. & Prof. Code §§ 7000 et seq., all contractors’ and subcontractors’ licenses expire two years from the last day of the month in which the license issued, or two years from the date on which the renewed license last expired. The Contractors State License Board (CSLB) sends licensees a renewal application 60 to 90 days prior to the date the license is set to expire.
Most contractors have various controls in place to make sure that the renewal application is timely filed and the required fee paid. Even so, we are only human and mistakes are made, and a renewal application filing deadline can be missed for a variety of reasons, e.g., the licensee’s mailing address has not been updated on the CSLB’s records, the individual responsible for filing the license renewal is out on leave, there has been a death in the family or a serious health issue, etc. Quoting Robert Burns, even “[t]he best-laid schemes of mice and men go oft awry” (To a Mouse, 1786).
General contractors should be cognizant of both their and their subcontractors’ license renewal obligations and deadlines.
If a licensee missed timely filing its renewal application, Business & Professions Code Section 7141.5may provide some relief. Section 7141.5 provides that the Registrar of Contractors,
“may grant the retroactive renewal of a license if the licensee requests the retroactive renewal in a petition to the registrar, files an application for renewal on a form prescribed by the registrar, and pays the appropriate renewal fee and delinquency fee prescribed by this chapter. This section shall only apply for a period not to exceed 90 days from the due date and only upon a showing by the contractor that the failure to renew was due to circumstances beyond the control of the licensee.”
Reprinted courtesy of Lewis Brisbois Bisgaard & Smith LLP attorneys
Amy Pierce,
Mark Oertel and
John Lubitz
Ms. Pierce may be contacted at Amy.Pierce@lewisbrisbois.com
Mr. Oertel may be contacted at Mark.Oertel@lewisbrisbois.com
Mr. Lubitz may be contacted at John.Lubitz@lewisbrisbois.com
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Landmark Montana Supreme Court Decision Series: The Duty to Defend
February 28, 2022 —
Lorelie S. Masters, Patrick M. McDermott & Rachel E. Hudgins - Hunton Insurance Recovery BlogThis post in our
Landmark Montana Supreme Court Decision Series discusses the Montana Supreme Court’s consideration of an insurer’s duty to defend in
National Indemnity Co. v. State, 499 P.3d 516 (Mont. 2021).
For 67 years, W.R. Grace & Company’s mining operations spread asbestos through the town of Libby, Montana,
causing elevated rates of asbestosis and asbestos-related cancer in Libby residents – even among those who never worked in the mine. The Environmental Protection Agency deemed the Libby Mine the
“most significant single source of asbestos exposure” in US history.
In 2000, Libby residents began filing lawsuits against the State of Montana, alleging that the State had failed to warn them about the mine’s danger, and this failure contributed to their bodily injuries. Id. at 521-22. The Libby plaintiffs’ asbestos exposures and related injuries had occurred decades earlier, and so the State searched its storage units for records of any potentially applicable insurance policies.
Reprinted courtesy of
Lorelie S. Masters, Hunton Andrews Kurth,
Patrick M. McDermott, Hunton Andrews Kurth and
Rachel E. Hudgins, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. McDermott may be contacted at pmcdermott@HuntonAK.com
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com
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Housing Starts in U.S. Climb to an Almost Eight-Year High
August 19, 2015 —
Sho Chandra – BloombergNew-home construction in the U.S. climbed in July to the highest level in almost eight years, indicating the industry will pick up in the second half of the year.
Residential starts rose 0.2 percent to a 1.21 million annualized rate, the most since October 2007, from a 1.2 million pace in the prior month that was higher than previously estimated, a Commerce Department report showed Tuesday in Washington. The median forecast of 77 economists surveyed by Bloomberg was 1.18 million. A drop in permits, a proxy for future construction, signals additional gains will take time to develop.
Rising employment and historically low mortgage rates are enticing buyers, while increasing prices induced by a lack of homes on the market is an incentive to start new developments. Data showing builder sentiment at a decade high in August underscores the view that the housing rebound will stay on track even as the Federal Reserve is poised to boost borrowing costs.
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Sho Chandra, Bloomberg
AB 1701 Has Passed – Developers and General Contractors Are Now Required to Double Pay for Labor Due to Their Subcontractors’ Failure to Pay
October 19, 2017 —
Clayton T. Tanaka – Newmeyer & Dillion LLPOn September 13, 2017, the California State Legislators passed a bill that would make developers and general contractors responsible for subcontractors who fail to pay their employees even though they already paid the subcontractors for the work. Assembly Bill 1701 (AB 1701), sponsored by unions who represent carpenters and other building trades, would require general contractors to “assume, and [be] liable for . . . unpaid wage, fringe or other benefit payment or contribution, including interest owed,” which subcontractors owe their employees. Despite vehement opposition from the California Building Industry Association and the Associated General Contractors of California, this bill has been submitted to the Governor and is expected to be signed into law.
NEW REQUIREMENTS
Once signed, this bill would impose the following requirements under Labor Code section 218.7:
- Applies to All Private Works Contracts That Are Entered Starting January 1, 2018.
For private works contracts entered on or after January 1, 2018, a “direct contractor” (i.e., prime contractor or contractor who has direct contractual relationship with an owner) must assume and be liable for any debt which its subcontractor or a lower tier subcontractor incurs “for [a] wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner.” (Lab. Code, § 218.7, subds. (a)(1) and (e).)
- The Labor Commissioner and Joint Labor-Management Cooperation Committees May Bring Action to Recover Unpaid Wages on Behalf of Wage Claimants.
The California Labor Commissioner and joint Labor-Management Cooperation Committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. § 175a) (typically comprised of labor unions and management) may bring a civil action against the direct contractor for unpaid wages owed to a wage claimant. (Lab. Code, § 218.7, subds. (b)(1) and (3).) The Labor Commissioner may also bring its claims through administrative hearings (Labor Code section 98) or by citations (Labor Code section 1197.1). (Lab. Code, § 218.7, subd. (b)(1).)
- Third Parties That Are Owed Fringe or Other Benefit Payments or Contribution on Behalf of Wage Claimants (Labor Unions) May Bring Action.
Third parties who are owed fringe or other benefit payments or contributions on a wage claimant’s behalf (e.g., labor unions) may bring a civil action against the direct contractor for such unpaid benefit payments or contributions. (Lab. Code, § 218.7, subd. (b)(2).)
- It Does Not Confer Wage Claimants With Any Right to Sue Direct Contractors.
AB 1701 gives the Labor Commissioner, Labor-Management Cooperation Committees and the unions standing to bring an action against the direct contractor, but it does not confer any private right of action by the wage claimants against the direct contractor.
- Labor-Management Cooperation Committees and Labor Unions Shall Recover as Prevailing Plaintiffs Their Attorneys’ Fees and Costs, Including Expert Fees.
For actions brought by Labor-Management Cooperation Committees or labor unions, “[t]he court shall award a prevailing plaintiff in such an action its reasonable attorney’s fees and costs, including expert witness fees.” (Lab. Code, § 218.7, subds. (b)(2)-(3).)
- Direct Contractor’s Property May Be Attached to Pay for Judgment.
AB 1701 authorizes the attachment of direct contractor’s property to pay for any judgment that is entered pursuant to this section. (Lab. Code, § 218.7, subd. (c).)
- One-Year Statute of Limitation to Bring Action under This Section.
Actions brought pursuant to this section must be filed within one year of the earliest of: (1) recordation of a notice of completion of the direct contract; (2) recordation of a notice of cessation of the work covered by direct contract; or (3) actual completion of work covered by direct contract. (Lab. Code, § 218.7, subd. (d).)
- Rights to Receive Payroll Records and Project Award Information from Subcontractors and to Withdraw All Payments Owed for Their Failure to Comply.
Upon the direct contractor’s request, subcontractors and lower tier subcontractors must provide payroll records and project award information. (Lab. Code, § 218.7, subds. (f)(1)-(2).) Direct contractor may withhold as “disputed” all sums owed if a subcontractor does not timely provide the requested records and information without specifying what is untimely and such failure to comply does not excuse direct contractor from any liability under this section. (Lab. Code, § 218.7, subds. (f)( 3) and (i).)
- Rights to Receive Payroll Records and Project Award Information from Subcontractors and to Withdraw All Payments Owed for Their Failure to Comply.
Upon the direct contractor’s request, subcontractors and lower tier subcontractors must provide payroll records and project award information. (Lab. Code, § 218.7, subds. (f)(1)-(2).) Direct contractor may withhold as “disputed” all sums owed if a subcontractor does not timely provide the requested records and information without specifying what is untimely and such failure to comply does not excuse direct contractor from any liability under this section. (Lab. Code, § 218.7, subds. (f)( 3) and (i).)
- Further Legislative Efforts on Subdivision (h) Are Expected in 2018.
Subdivision (h), which states that “[t]he obligations and remedies provided in this section shall be in addition to any obligations and remedies otherwise provided by law . . .” (emphasis added) is potentially misleading since the author and sponsor of the bill have indicated that the bill is not intended to punish direct contractors with liquidated damages or penalties. As such, further legislative efforts on subdivision (h) are expected in 2018.
ADDITIONAL CONSIDERATIONS
While workers should be paid for the work they perform, AB 1701 would place undue burden on general contractors to monitor their subcontractors’ payroll, confirm that all wages and benefits are paid timely and withhold disputed payments from non-compliant subcontractors. General contractors would also need to caution against the chain reaction that could result from such withholding, including work stoppage, increased change order requests, and an overall increase in construction costs. Finally, general contractors would need to brace themselves for at least a year after project completion against any union or a Labor-Management Cooperation Committee actions armed with a prevailing party’s right to recover attorneys’ fees and expert fees, for previously unidentified subcontractor or sub-subcontractor workers.
STRATEGIES DEVELOPERS AND GENERAL CONTRACTORS SHOULD LOOK FOR
In anticipation of AB 1701 being signed into law and its potentially harsh effects, developers and general contractors are advised to consult their attorneys for a review and revision of their existing contracts, to develop plans for accessing and monitoring subcontractor payroll records, and to consider strategies for mitigating claims that may be brought against them, as follows:
- Execute all pending agreements
before January 1, 2018 to avoid the effects of AB 1701;
- Include an audit provision
requiring subcontractors and sub-subcontractors to provide payroll records (at minimum, information set forth in Labor Code section 226) and project award information, regularly and/or upon request, with specific deadlines for such production, as subdivision (f) does not specify what is untimely;
- Include defense and indemnity provisions
that would require subcontractors to defend and indemnify the general contractor for claims that are brought pursuant to this section arising from labor performed by employees for subcontractors and sub-subcontractors, and require subcontractors to include a similar provision in their own contracts with sub-subcontractors that would require lower tier subcontractors to also defend and indemnify the general contractor for claims arising from their respective employees’ work;
- Require subcontractors to provide a payment bond and/or a letter of credit
to satisfy claims that are made against the general contractor under this section;
- Require personal guarantees
from owners, partners or key subcontractor personnel;
- Include withholding and back-charge provisions
that would allow general contractors to withhold or charge back the subcontractors for disputed amounts, for claims brought against them, and for failure to comply with the audit, bond, and guarantee requirements.
- Consider implementing a system to confirm evidence of payments,
such as signed acknowledgment of payment by each subcontractor and sub-subcontractor employees and by third parties entitled to recover fringe and other benefit payments or contribution, possibly working with electronic billing software providers to implement such system.
Clay Tanaka is a partner in the Newport Beach office of Newmeyer & Dillion, focusing on construction, real estate, business and insurance disputes in both California and Nevada. As a licensed civil engineer, Clay has significant experience in design and construction of all types of construction projects, which he has effectively utilized in his litigation, trial and arbitration practice to obtain great results for his clients. For questions related to AB1701, please contact Clay Tanaka (clay.tanaka@ndlf.com) or Newport Beach Partner Mark Himmelstein (mark.himmelstein@ndlf.com).
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Clayton T. Tanaka, Newmeyer & Dillion LLPMr. Tanaka may be contacted at
clay.tanaka@ndlf.com
Real Estate & Construction News Roundup (5/29/24) – Megaprojects on the Rise, Agency Guidance for CRE, and an Upbeat Forecast for Commercial Real Estate Investment
June 21, 2024 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, summer travelers seek alternative lodging options, purpose-built wellness real estate investments grow, bonds backed by CRE debt hit are hit with losses, and more!
- Across all property types, purpose-built wellness real estate investment has grown dramatically in recent years, including properties with wellness features as a focus. (Mary Salmonsen, Multifamily Dive)
- The travelers on the road this summer will have different demographics, budgets and reasons for travel and different preferences on accommodations, with more travelers opting for alternative housing options. (Noelle Mateer, Hotel Dive)
- Megaprojects are on the rise, with massive projects, from rail tunnels to computer chip factories, having myriad stakeholders and lengthy timelines that span political administrations. (Julie Strupp, Construction Dive)
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Pillsbury's Construction & Real Estate Law Team
