Haight’s 2020 San Diego Super Lawyers and Rising Stars
July 06, 2020 —
Haight Brown & Bonesteel LLPHaight congratulates partners
Michael Parme and
Arezoo Jamshidi who were selected to the 2020 San Diego Super Lawyers Rising Stars list.
Each year no more than 2.5% of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.
Haight Brown & Bonesteel LLP
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MTA’S New Debarment Powers Pose an Existential Risk
July 15, 2019 —
Steven M. Charney, Gregory H. Chertoff & Paul Monte - Peckar & Abramson, P.C.The normal project and contractual risks faced by contractors, consultants and suppliers to the Metropolitan Transportation Authority are considerable. A new law and regulations mandating that the MTA debar contractors, consultants and suppliers for unexcused schedule and cost overruns creates a new and unfair existential risk.
The new law, Public Authorities Law Section 1279-h, slipped into the New York State budget bill and passed without public comment, was enacted on April 12, 2019. Implementing regulations were issued on June 5, 2019, and mandate that the MTA debar contractors (defined to include consultants, vendors and suppliers) if they: (1) fail to achieve substantial completion of their contractual obligations within 10% of the adjusted contract time; or (2) present claims for additional compensation that are denied in an amount that exceeds the total adjusted contract amount by 10% or more.[1]
To say that your business and your livelihood are at risk is not an overstatement. The MTA umbrella includes the New York City Transit Authority, MTA Capital Construction, Bridges & Tunnels, Long Island Railroad and Metro North, among others. A debarment by one of these authorities will lead to a debarment by all of them, and then to a debarment by all New York State agencies and authorities,[2] and possibly debarment across state lines. Public and major private owners, as part of their RFP and procurement processes, routinely inquire regarding a bidding contractor’s debarment history.
The risk is to new contracts and, because the MTA has decided to give retroactive effect to the law and regulations, to contracts that are already ongoing (even though these risks could not have been considered, priced or agreed to by contractors or their sureties).
Reprinted courtesy of Peckar & Abramson, P.C. attorneys
Steven M. Charney,
Gregory H. Chertoff and
Paul Monte
Mr. Charney may be contacted at scharney@pecklaw.com
Mr. Chertoff may be contacted at gchertoff@pecklaw.com
Mr. Monte may be contacted at pmonte@pecklaw.com
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New Strategy for Deterring Intracorporate Litigation?: Delaware Supreme Court Supports Fee-Shifting Bylaws
May 13, 2014 —
Marc Casarino and Lori Smith – White and Williams LLPA fee-shifting bylaw of a Delaware non-stock corporation is not facially invalid according to the Delaware Supreme Court’s May 8, 2014 opinion in ATP Tour, Inc. v. Deutscher Tennis Bund.
In this case, ATP Tour, Inc., a non-stock membership corporation (“ATP”) governed by a seven member board, had adopted a bylaw provision which provided that current and former members of ATP would be responsible for the litigation costs arising out of any litigation initiated by any such member against ATP or any of the other members in which the initiating party did not obtain a judgment on the merits that substantially achieved in substance and amount the full remedy sought. The bylaw provision had been adopted, in accordance with ATP’s charter, by the Board unilaterally without any consent from the members. The members had agreed at the time they joined ATP to be bound by the bylaws, as amended from time to time. Two members of ATP initiated a suit against ATP relating to certain actions taken with respect the ATP’s tournament schedule and format alleging both federal antitrust claims and Delaware fiduciary duty claims but did not prevail on any of their claims. ATP then moved to recover its legal fees relating to such actions.
Reprinted courtesy of
Marc Casarino, White and Williams LLP and
Lori Smith, White and Williams LLP
Mr. Casarino may be contacted at casarinom@whiteandwilliams.com; Ms. Smith may be contacted at smithl@whiteandwilliams.com
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Tenants Underwater: Indiana Court of Appeals Upholds Privity Requirement for Property Damage Claims Against Contractors
April 25, 2022 —
Melissa Kenney - The Subrogation StrategistIn United States Automatic Sprinkler Corp. v. Erie Ins. Exch., et al., No. 21A-CT-580, 2022 Ind. App. LEXIS 87 (Automatic Sprinkler), the Court of Appeals of Indiana (Court of Appeals) considered whether there is a privity requirement for property damage claims against contractors. The court imposed a privity requirement. The court also addressed whether a subrogation waiver in a contract with a tenant applied to damage caused by work done outside the contract, at the landlord’s request. The court held that the waiver did not apply.
In this case, United States Automatic Sprinkler (Automatic Sprinkler) contracted with a tenant (Contract Tenant) to inspect and test a sprinkler system at a commercial building in Indiana. The contract included a waiver of subrogation provision. The building landlord subsequently hired Automatic Sprinkler to repair a leak in the sprinkler system. After completing the repairs, the system failed and flooded the building, causing significant property damage to several tenancies.
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Melissa Kenney, White and Williams LLPMs. Kenney may be contacted at
kenneyme@whiteandwilliams.com
Prevailing HOAs Not Entitled to Attorneys’ Fees in Enforcement Actions Brought Under Davis-Stirling
August 30, 2017 —
Lawrence S. Zucker II & Michael C. Parme – Haight Brown & Bonesteel LLPIn Retzloff v. Moulton Parkway Residents’ Ass’n, (2017) Cal. App. LEXIS 727, the Fourth District Court of Appeal considered the novel question of whether attorneys’ fees can be included as part of the cost award to a ‘prevailing association’ under Cal. Civ. Code §5235(c).
Plaintiffs were former board members of Moulton Parkway Residents’ Association, No. One (“the Association”) who sued the Association for alleged violations of the Davis-Stirling Common Interest Development Act (Civ. Code §4000 et. seq.) which regulates the governance of common interest developments such as condominium communities and homeowners associations. Plaintiffs’ suit alleged that the Association regularly conducted business outside of scheduled board meetings and failed to make certain records available for inspection.
Reprinted courtesy of
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP and
Michael C. Parme, Haight Brown & Bonesteel LLP
Mr. Zucker may be contacted at lzucker@hbblaw.com
Mr. Parme may be contacted at mparme@hbblaw.com
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Risk-Shifting Tactics for Construction Contracts
February 24, 2020 —
Nate Budde - Construction ExecutiveAnyone who has worked in the construction industry is familiar with the financial risks involved. With thin margins, cash flow issues and the litany of potential claims and damages that can arise, contractors need to be able to manage that risk properly.
There is the right way of going about it, and there's a wrong way. Unfortunately, the wrong way (which involves using leverage and shifting risk to other parties) is the more prevalent approach. There are different contractual tactics employed by owners and general contractors alike to shift financial risk to other parties.
Why is construction so financially risky?
There are a few different reasons there is so much risk involved. First and foremost, the construction payment chain itself is inherently risky. Owners and lenders release project funds and trust that the money will reach everyone on the job. But that can’t happen unless each link in the payment chain passes payment to the next. That's a lot of trust for an industry that's not particularly known for it.
Another reason is how construction projects begin. Upfront payment is rare in this industry. This leads to floating the initial costs, extending credit and potentially borrowing money to do so. And those who typically bear this burden, lower-tier subs and suppliers, are the least equipped for that level of risk.
Reprinted courtesy of
Nate Budde, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Budde may be contacted at
nate@levelset.com
CA Supreme Court Rejects Proposed Exceptions to Interim Adverse Judgment Rule Defense to Malicious Prosecution Action
August 24, 2017 —
David W. Evans & Stephen J. Squillario – Haight Brown & Bonesteel LLPIn Parrish v. Latham & Watkins (No. S228277 - August 10, 2017) (“Parrish”), the California Supreme Court examined the “interim adverse judgment rule” in a different context than previous decisions on the subject. The rule provides that if an earlier action succeeds after a hearing on the merits, this success establishes the existence of probable cause and precludes a subsequent malicious prosecution action. In a typical case applying the rule, a plaintiff in the underlying action defeats the defendant’s motion for summary judgment but then loses the case at trial leading to a subsequent malicious prosecution claim. In Parrish, the Court addressed whether the rule applies when the trial court had denied the defendant’s summary judgment motion but concluded after the defense prevailed at a bench trial that the suit had been brought in “bad faith” due to a lack of evidentiary support.
Reprinted courtesy of
David W. Evans, Haight Brown & Bonesteel LLP and
Stephen J. Squillario, Haight Brown & Bonesteel LLP
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Squillario may be contacted at ssquillario@hbblaw.com
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SCOTUS Opens Up Federal Courts to Land Owners
July 15, 2019 —
Wally Zimolong - Supplemental ConditionsFor nearly 36 years, the United States Supreme Court’s decision in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985) severely frustrated, if not all but foreclosed, a property owner’s right to bring a claim in federal court based on a regulatory taking. Under the Fifth Amendment, a property owner whose land has been “taken” by the government is entitled to just compensation. There are two types of takings direct or “inverse” or regulatory takings. A direct taking is where the government declares that it needs your land for public use and offers to pay you compensation. You might disagree with the amount offered – and that often is the case. But, a mechanism exists whereby a neutral third party – a condemnation board – will arrive at the compensation that is owed. On the other hand, an inverse condemnation or regulatory taking occurs when the government takes some action that restricts the use of the land in such a way as to severely impact it beneficial economic use. For example, if you own a strip of commercial property and intend to develop it and then the municipality comes along and suddenly changes the zoning classification of the parcel such that you can no longer develop it in a beneficial way, then you might have a regulatory takings case.
Under the Court’s Williamson County decision, property owners falling within the later category were required to exhaust state remedies before proceeding to federal court under a claim that their Fifth Amendment rights were violated. The problem with this is that, as the Supreme Court explained, it creates a Catch-22. If property owners exhaust their state remedies and the state remedies result in an unfavorable outcome, the federal court is powerless to overturn that decision under the doctrines of res judicata and the full faith and credit clause of the Constitution.
Well, yesterday, the Court overturned Williamson County, in Knick v. Township of Scott, 588 U.S. _____ (2019). There the Court held unequivocally a “property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under Section 1983 at that time.”
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
