Court Sharpens The “Sword” And Strengthens The “Shield” Of Contractors’ License Law
July 24, 2023 —
Kyle S. Case - ConsensusDocsPerforming construction work without the necessary license can have significant repercussions on a contractor’s business. California in particular has become known for its imposition of “strict and harsh” penalties for a contractor’s failure to maintain proper licensure. In the realm of public works projects, any contract with an unlicensed contractor is deemed void. See Business & Professions Code Section 7028.15(e). On private projects, California’s Contractors’ License Law prohibits contractors from maintaining any action to recover payment for their work, and more severe, may require a contractor to disgorge all funds paid to it for performing unlicensed work. See Business & Professions Code Section 7031). These methods of deterrence are referred to as the “shield” and “sword” of the Contractors’ State License Law. Loranger v. Jones, 184 Cal. App. 4th 847, 854 (2010).
In any discussion surrounding licensure, it is important to review the language of the Business and Professions Code (“Bus. & Prof.”). Section 7031(a) states:
Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person…
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Kyle S. Case, Watt, Tieder, Hoffar & Fitzgerald LLPMr. Case may be contacted at
kcase@watttieder.com
Reroof Blamed for $10 Million in Damage
November 06, 2013 —
CDJ STAFFA renovation of the city hall in Bay City, Michigan went wrong when roof repairs lead to fire and flooding of the historic building. Bay City has sued Gregory Construction and Mihm Enterprises, who earlier had been awarded a $1.5 million contract to reroof the building. The cost of repairing the building is expected to exceed the city’s insurance limit of $10 million.
The fire that damaged the building is alleged to have started when a roofer allegedly used a DeWalt grinder in attempt to remove some bolts. Under the contract with the city, the contractor was not going to use grinders, due to the risk of fire. The suit alleges that further water damage was caused, beyond the damage due to the firefighting, due to the contractor failing to “secure a section of the roof which was part of the Roofing Project with a tarp or other water-resistant covering.”
The contractors dispute the claims made by Bay City, with Gregory Construction describing them as “untrue and contrary to the facts.” Gregory Construction also claims that their obligations were delegated to Mihn Enterprises. Mihn Enterprises disputes this and states that they do not “owe a duty to the Plaintiffs; as a result their negligence claim is unenforceable as a matter of law.”
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Musk’s Cousins Battle Utilities to Make Solar Rooftops Cheap
April 15, 2015 —
John Lippert and Christopher Martin – BloombergIn September 2013, Hawaiian Electric Co. told thousands of customers they couldn’t connect their new solar panels to its distribution grid. In some neighborhoods, HECO said, its system couldn’t absorb any more unused energy from home solar arrays. The moratorium, which lasted 13 months, made Hawaii a central battleground in the effort by utilities to control the rapid growth of independent solar companies across the U.S. And it was a big deal to people such as Robert Gould, a retired Northwest Airlines pilot living near Honolulu. He’d just paid $53,000 to have solar panels installed.
Gould and other customers protested loudly to state officials. They finally got help from Lyndon Rive, the CEO of SolarCity. The San Mateo, California, company is the biggest installer of rooftop solar panels in the U.S. and has 10,000 Hawaiian customers, Bloomberg Markets magazine reports in its May issue. Rive studied the situation and zeroed in on a key fact: HECO had never directly measured how much solar its grid could handle, relying on computer simulations instead. “Because the technology is brand-new, no one had ever done this in the field before,” says Colton Ching, HECO’s vice president for energy delivery.
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John Lippert, Bloomberg and
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Impaired Property Exclusion Bars Coverage When Loose Bolt Interferes with MRI Unit Operation
May 16, 2018 —
Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel, LLPIn All Green Electric v. Security National Ins. Co. (No. B279456, filed 3/19/18, ord. pub. 4/17/18), a California appeals court ruled that the impaired property exclusion barred coverage for a claim based on the insured’s failure to tighten a loose bolt that resulted in stray magnetic fields interfering with operation of an MRI machine and allegedly threatening the health of personnel.
All Green was an electrical contractor hired to perform wiring for an MRI unit installation. Stray magnetic fields interfered with the unit’s operation. Efforts to remediate the problem included installing shielding and ultimately relocating the unit to another room. An expert finally determined that a bolt left loose by All Green was causing the magnetic field, which disappeared when the bolt was properly tightened. The facility sought damages for negligence, including costs for unnecessary modifications and repairs, payments to outside sources for substitute mammography testing, operational costs and expenses, damage to reputation, lost profits, and the loss of an HMO contract.
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Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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The ALI Restatement – What Lies Ahead?
July 30, 2018 —
Adam M. Berardi & Sara C. Tilitz - Complex Insurance Coverage ReporterThe American Law Institute voted on May 22, 2018 to approve the final draft of its “Restatement of the Law of Liability Insurance.” This was the culmination of an eight-year project that evolved through 29 drafts resulting in a nearly 500-page final product. At least nine courts cited to the Restatement while it was still in draft form. On June 28, 2018, White and Williams LLP had the privilege of hosting a seminar about the Restatement, chaired by the Reporter for the Restatement, University of Pennsylvania Law Professor Tom Baker, and Randy Maniloff of White and Williams, author of “General Liability Insurance Coverage, Key Issues In Every State.” The seminar was geared toward assisting members of the liability insurance community in navigating the key provisions of the Restatement, including how they compare and contrast with existing case law and the role the Restatement may play in courts’ decision-making processes going forward.
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Adam M. Berardi , White and Williams, LLP and
Sara C. Tilitz, White and Williams, LLP
Mr. Berardi may be contacted at berardia@whiteandwilliams.com
Ms. Tilitz may be contacted at tilitzs@whiteandwilliams.com
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Don’t Ignore a Notice of Contest of Lien
April 29, 2024 —
David Adelstein - Florida Construction Legal UpdatesA recent case, Jon M. Hall Company, LLC v. Canoe Creek Investments, LLC, 49 Fla.L.Weekly D812a (Fla. 2d DCA 2024), demonstrates four important things when it comes to liens:
- An owner can shorten the time period to foreclose on the lien, whether against the real property or a lien transfer bond, to 60 days by recording a notice of contest of lien;
- An owner can transfer a lien to a lien transfer bond during litigation;
- An owner can record a notice of contest of lien to force the lienor to amend its lawsuit to sue the lien transfer bond surety within 60 days; and
- A contractors’ failure to amend its lawsuit to sue the lien transfer bond within 60 days will extinguish its rights to pursue a claim against the lien transfer bond, and will otherwise extinguish the lien, fairly or unfairly.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Mortgage Interest Rates Increase on Newly Built Homes
April 30, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the National Association of Home Builders’ (NAHB) Eye on Housing, while the Federal Housing Financing Agency (FHFA) reported a decrease in mortgage interest rates for existing homes, there was an increase in mortgage rates on newly built homes: “The average contract interest rate on conventional mortgages used to purchase newly built homes actually increased in March, from 3.91 to 4.21 percent, reversing an anomalous drop to under 4 percent that occurred in February.”
“The average price and loan size on conventional mortgages used to purchase newly built homes also reversed previous month declines in March,” reported Eye on Housing. “The average price increased 5.4 percent to $427,200—the second highest number on record.”
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Governmental Immunity Waived for Independent Contractor - Lopez v. City of Grand Junction
September 17, 2018 —
Frank Ingham - Colorado Construction Litigation BlogOn July 12, 2018, the Colorado Court of Appeals announced its decision in Lopez v. City of Grand Junction, 2018 WL 3384674 (Colo. App. 2018). The Court considered whether immunity is waived under Colorado’s Governmental Immunity Act (“CGIA”), pursuant to section C.R.S. § 24-10-106(1)(f), in situations where the public entity hired an independent contractor to perform the work. The Court held that if the public entity would have been liable under the CGIA for the conduct that caused the injury, had it performed the work itself, then it is liable for the work performed by its independent contractor.
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Frank Ingham, Higgins Hopkins McClain & Roswell, LLCMr. Ingham may be contacted at
ingham@hhmrlaw.com