Pa. Contractor Pleads No Contest to Prevailing-Wage Charges, Pays Workers $20.7M
September 20, 2021 —
Tom Ichniowski - Engineering News-RecordPennsylvania construction contractor Glenn O. Hawbaker Inc. has pleaded no contest to counts of theft of worker pay—in alleged violation of state prevailing-wage laws—and will pay 1,267 workers restitution of $20.7 million in unpaid wages, Pennsylvania Attorney General Josh Shapiro said.
The company entered its plea to four felony counts of “theft by failure to make required disposition of funds received” on Aug. 3 before President Judge Pamela A. Ruest of the Centre County Court of Common Pleas in Bellefonte, Pa.
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Tom Ichniowski, Engineering News-Record
Mr. Ichniowski may be contacted at ichniowskit@enr.com
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California’s Fifth Appellate District Declares the “Right to Repair Act” the Exclusive Remedy for Construction Defect Claims
September 03, 2015 —
Stephen A. Sunseri – Gatzke Dillon & Balance LLPAugust 26, 2015 - The Fifth Appellate District ruled SB800 (California's "Right to Repair Act" [the "Act"]) provides the sole remedy for homeowners in construction defect actions. The court found "no other cause of action is allowed to recover for repair of the defect itself or for repair of any damage caused by the defect." (McMillin Albany LLC v. Superior Court of California (Aug. 26, 2015, No. F069370) __ Cal.App.4th __ [2015 WL 5029324].) The court issued a blistering criticism of the Fourth Appellate District's prior opinion in Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, which severely limited the reach of the Act to actions not involving property damage and allowing property damage claims to proceed freely under common law without any constraints posed by the Act.
In McMillin, the court reviewed whether a homeowner was required to follow the Act's prelitigation procedures even after dismissing a cause of action arising under the Act. In deciding the issue, the court quoted directly from the first line of the Act (Civ. Code § 896) and found "[i]n any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction … , the claimant's claims or causes of action shall be limited to violation of" the standards set out in the Act. The court recognized the statutory exceptions to this rule, such as for claims arising under contract, or any action for fraud, personal injuries, or statutory violations. (Civ. Code., § 943.) However, this result directly conflicts with the Fourth Appellate District's decision in Liberty Mutual, which found homeowners can circumvent the entire Act by simply alleging property damage claims. McMillin rejects Liberty Mutual's "reasoning and outcome" as being inconsistent with the express language of the Act.
McMillin found that Liberty Mutual failed to fully analyze the statutory language of the Act, which (on its face) limits any action for construction deficiencies to the requirements of the Act. McMillin concludes the Legislature intended that all construction defect actions (for new residences sold on or after January 1, 2003), are subject to the requirements of the Act, including the prelitigation procedures, regardless of whether a complaint expressly alleges a cause of action under the Act or not.
McMillin is a great victory for homebuilders, but battle lines are now clearly drawn between the two appellate districts. McMillin directly conflicts with Liberty Mutual, and because of this conflict, the issue will need to be resolved by the California Supreme Court. Until such review is granted, the conflict will remain and trial courts will likely continue to conflate the issue.
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Stephen A. Sunseri, Gatzke Dillon & Balance LLPMr. Sunseri may be contacted at
ssunseri@gdandb.com
The Evolution of Construction Defect Trends at West Coast Casualty Seminar
May 24, 2018 —
Don MacGregor – Bert L. Howe & Associates, Inc.Twenty-five years ago. 1993. On January 23rd, Bill Clinton was sworn in as the 42nd President of the United States. The average cost of a gallon of gasoline was $1.16, a movie ticket cost $4.00, and the average cost of a new home was $113,200.00.
1993 also marked the first of what would be a quarter century of annual seminars hosted by West Coast Casualty Service, and provided to the combined professionals within the Construction Defect Community. As the seminar has grown both in attendance and prominence within this community under the watchful stewardship of David and Coral Stern, much has changed both with regard to the content of the seminar and the climate within which it was presented. A quick look at the topics addressed over the past 25 years of the Construction Defect Seminar provides one with a veritable history of construction defect litigation and insurance coverage trends across the United States and beyond.
While the first seminar was hosted in 1993, my first attendance didn’t occur until 1999, and the first time I was honored to be a panelist would have to wait until 2007. In the subsequent years, I’ve had the opportunity to sit on panels an additional three times, and each one I gained rare and valuable insights into the Construction Defect Community, its willingness to challenge itself, and the amazing professionals we all have the distinct pleasure of working with every day (and whom we sometimes take too much for granted).
In the mid to late 90’s, topics at the seminar included such subjects as the Montrose Chemical Corp v. Superior Court decision (Montrose) regarding a carrier’s duty to defend and the subsequent Stonewall Insurance case that examined the duty to indemnify in the context of construction defect claims. The California Calderon Act of 1997, laying out the roadmap for HOA’s filing construction defect lawsuits was also a topic of discussion and debate within the West Coast “arena.”
The new millennium saw the landmark Aas v. William Lyon decision, which disallowed negligence claims for construction defects in the absence of actual resultant damage. This was followed by Presley Homes v. American States Insurance wherein the court ruled that a duty to defend applies where there is mere potential for coverage and the duty to defend applies to the entire action. Each of these bellwether decisions was addressed contemporaneously by panels at the West Coast seminar, contemporaneously bringing additional dialog to the CD community, from within the community.
2002 brought what has become the defining legislation in California regarding construction defect litigation and a builder’s right to repair. Senate Bill 800 (SB800), and its subsequent codification as Title 7, Part 2 of Division 2 of the California Civil Code, Sections 895 through 945.5 would become the defining framework for similar legislation across the United States. During the course of its drafting, movement through the legislature, and final adoption in January of 1993, many of the questions raised and debated in committees in Sacramento, had already been and were continuing to be addressed by panelists at the West Coast Seminar. How does SB800 work with Calderon? How does it affect the prior Aas decision? What now constitutes a defect, and what are timeframes established within the complex pre-litigation process? Open the pages of the 2002 – 2004 Seminar invitations and you’ll see panels comprised of the finest members of the insurance law and coverage communities addressing those very questions (and more)!
As the first decade of the new century drew to a close, a brief review of the WCC invitations from that period suggests a trend towards programmatic analyses of key themes selected for the seminar. In 2008, my second opportunity as a guest speaker, topics included a review of the state of construction defect litigation in a post-SB 800 environment. Panelists offered retrospective insight into the state of right to repair statutes in multiple states, while others offered a glimpse at where the industry might be headed, as similar legislation was enacted across the country. As always, pertinent court decisions bearing on construction defect, both in California, and elsewhere were given unique perspective and additional clarity by multiple panels of gifted speakers. In 2009, claims and coverage were examined from multiple unique perspectives, including that of plaintiff, the policyholder, and the insurer. Wrap policies and the gaps in due to self-insured retention obligations were examined.
As we rapidly approach the end of the second decade of the 21st Century, West Coast Casualty’s Construction Defect Seminar continues to lead the Construction Defect Community as the premier source for information and peer dialog on all matters relating to construction law, coverage, and emerging trends. In 2017, the Seminar tackled such broad subjects as the role of women in the construction industry, claims management, and risk management, challenges raised by wrap versus non-wrap litigation, and the emergent trend of apartment to condo conversions (and the attendant coverage challenges).
On May 16th at the Disneyland Resort, in Anaheim California, America’s largest Construction Defect event kicked off its 25th Anniversary celebration. As has been every year since 1993, the Seminar provided insurance, legal, and industry professionals an exciting and informative array of salient and timely panel topics, as well as a stellar faculty of gifted panelists. This year’s West Coast Casualty’s Construction Defect Seminar, like the past 25 years, was not only informative and educational, but also a promise for another 25 years of peerless service to the Construction Defect Community.
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AGC Seeks To Lead Industry in Push for Infrastructure Bill
May 01, 2019 —
Jennifer Seward - Engineering News-RecordThe ongoing call for better infrastructure funding, along with workforce innovation and an enhanced focus on diversity and inclusivity, is taking center stage at the Associated General Contractors of America. The association’s leaders emphasized that these issues are crucial to the industry’s future as more than 2,800 attendees gathered for AGC’s annual convention in Denver April 1-4.
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Jennifer Seward, ENRENR may be contacted at
ENR.com@bnpmedia.com
Court Upholds Plan to Eliminate Vehicles from Balboa Park Complex
June 10, 2015 —
Kristen Lee Price and Lawrence S. Zucker II – Haight Brown & Bonesteel LLPIn Save Our Heritage Organisation v. City of San Diego, et al. (No. D063992, filed 5/28/15), the California Court of Appeal for the Fourth Appellate District upheld a controversial plan to eliminate vehicles from various plazas in historic Balboa Park. In reaching its decision, the Court of Appeal considered a question of first impression involving the interpretation of San Diego Municipal Code section 126.0504.
Balboa Park, designated a National Historic Landmark in 1940, is a large urban park in the center of San Diego. The City of San Diego (“City”) recently approved a proposed plan (“Project”) to eliminate vehicles from the plazas within the Balboa Park complex and to return the plazas to purely pedestrian zones. Subsequently, a community group named Save Our Heritage Organisation (“SOHO”) filed a petition for a writ of mandate alleging, among other things, the City erroneously approved the Project. SOHO contended Municipal Code section 126.0504 mandated two key findings be made before the Project could be approved: (1) that the intended purpose of the property would not be adversely affected; and (2) without the proposed project, the property would not be put to a “reasonable beneficial use.” SOHO argued that although the City made the requisite findings, those findings lacked substantial evidentiary support. The trial court agreed with SOHO and directed the City to rescind the site development permit.
The City argued on appeal that Municipal Code section 126.0504 vested it with “discretion to make a qualitative determination of whether an existing use of the property, even if deemed beneficial, is also a reasonable use of that property under all of the facts and circumstances applicable to the particular property in question.” The Court of Appeal agreed and reversed.
Reprinted courtesy of
Kristen Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com; Mr. Zucker may be contacted at lzucker@hbblaw.com
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“License and Registration, Please.” The Big Risk of Getting Busted for Working without a Proper Contractor’s License
July 25, 2021 —
Christopher A. Henry & Mia Hughes - ConsensusDocsThe need for contractors to maintain the proper contracting license may seem like a mundane, clerical detail, and generally is just that. If, however, the contractor ignores or mishandles paperwork and the proper license is not in hand, licensing may go from a mundane, clerical detail to a financial catastrophe. An unlicensed contractor may be barred from asserting claims or collecting payments for work already performed; the contractor may even be required to return payments for unlicensed work performed.
A recent case in Georgia, a state that had no state-wide general contractor’s license requirement in effect until 2008 illustrates the risk of unlicensed work.[1] In Saks Management and Associates, LLC v. Sung General Contracting, Inc.,[2] the court ruled that without a license the general contractor did not have the right to enforce a contract. The contractor’s claims for payment failed, and the mundane, clerical error led a major financial loss. This disastrous result for the Georgia contractor is far from an outlier, and is a real risk in many states.
Reprinted courtesy of
Christopher A. Henry, Jones Walker LLP and
Mia Hughes, Jones Walker LLP
Mr. Henry may be contacted at chenry@joneswalker.com
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New Home Permits Surge in Wisconsin
October 10, 2013 —
CDJ STAFFSeptember saw a 42% increase in the number of permits issued to build new homes in the metro areas of Wisconsin. MTD Marketing Services of Wisconsin described it as “another good month as starts continue to increase across the state.” In September 2012, 266 permits were issued, while September 2013 saw that increase to 378.
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Construction Litigation Roundup: “That’s Not How I Read It”
June 05, 2023 —
Daniel Lund III - LexologyA general contractor seeking to litigate with its subcontractor concerning a construction project in Indiana found itself fighting in court against assertions by the sub that arbitration of the dispute was required.
The GC was already in litigation in federal court with the project owner. The GC filed a third-party demand against the sub, which was met with a motion to stay and to compel arbitration.
At the crux of the sub’s argument was this clause in its subcontract: “Subcontractor agrees that the dispute resolution provisions of the Prime Contract between [GC] and Owner, if any, are incorporated by reference as part of this Subcontract so as to be binding as to disputes between Subcontractor and [GC] that involve, in whole or in part, questions of fact and/or law that are common to any dispute between [GC] and Owner or others similarly bound to such dispute resolution procedures... ."
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
