New Washington Law Nixes Unfair Indemnification in Construction Contracts
April 25, 2012 —
Douglas Reiser, Builders Council BlogContractual fairness ? it is part of my mantra. If you read the blog, you probably know that I preach brevity, balance and clarity in contracting. The State of Washington did well to finally eliminate something that has angered me for quite some time ? unfair indemnification.
One of my favorite construction contract revisions is mutual indemnification. Many “up the chain” contractors and owners are going to stick you with a unilateral indemnification clause that protects them for just about everything, including their own fumbling of a project. Adding mutual indemnification provides some balance, and keeps parties reliant upon each other for success on the job site.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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New York Revises Retainage Requirements for Private Construction Contracts: Overview of the “5% Retainage Law”
January 22, 2024 —
Levi W. Barrett, Patrick T. Murray, Skyler L. Santomartino & Mark A. Snyder - Peckar & Abramson, P.C.On November 17, 2023, the State of New York enacted the “5% Retainage Law.” This legislation effectively limits the amount of retainage that can be held from general contractors and subcontractors to no more than 5%. It applies to many but not all construction contracts. In addition, the new law revises late stage billing requirements, enabling contractors to invoice for retainage at substantial completion. Previously, the parties to a construction contract were free to negotiate any retainage amount, limited only by an unspecified “reasonable amount” that would be released as the parties contractually set forth.
Summary
The new law amends Sections 756-a and 756-c of the General Business Law (part of Article 35E of the GBL, known as the “Prompt Pay Act”), and applies to private construction contracts “where the aggregate cost of the construction project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars.”
Reprinted courtesy of
Levi W. Barrett, Peckar & Abramson, P.C.,
Patrick T. Murray, Peckar & Abramson, P.C.,
Skyler L. Santomartino, Peckar & Abramson, P.C. and
Mark A. Snyder, Peckar & Abramson, P.C.
Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Murray may be contacted at pmurray@pecklaw.com
Mr. Santomartino may be contacted at ssantomartino@pecklaw.com
Mr. Snyder may be contacted at msnyder@pecklaw.com
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A Community Constantly on the Brink of Disaster
February 06, 2023 —
Jason Daniel Feld - Kahana FeldIn the beautiful coastline region along the famous Pacific Coast Highway between Ventura and Santa Barbara rests the small cottage town of La Conchita. With unobstructed ocean views, this community is only 820 feet wide on a narrow strip of land abutting a 590 feet high cliffside bluff. The bluff has a slope of approximately 35 degrees and consists of poorly cemented marine sediments. This is the perfect recipe for constant disaster from a geological perspective and the site of several major landslides that have devastated this community. Geologic evidence indicates that landslides, which are part of the larger Rincon Mountain slides, have been occurring at and near La Conchita for many thousands of years up to the present with reported landslides beginning as early as 1865. In both 1889 and 1909, the
Southern Pacific Rail Line
running along the coast was inundated. In the 1909 slide, a train was buried. Since that time, other slides have occurred, covering at times cultivated land, roadways, and the community itself. The two most devastating landslides occurred in 1995 and 2005.
1995 Landslide
From October 1994-March 1995, there was double the amount of seasonal rainfall for the area – in excess of 30 inches. The slide occurred on March 3, 1995, when surface cracks in the upper part of the slope opened on the hillside, and
surface runoff was infiltrating into the subsurface. The heavy rains essentially saturated the slope causing a massive slide. On March 4, 1995, the hill behind La Conchita failed, moving tens of meters in minutes, and buried nine homes with no loss of life. The
County of Ventura immediately declared the whole community a
Geological Hazard Area, imposing building restrictions on the community to restrict new construction. On March 10, 1995, a subsequent debris flow from a canyon to the northwest damaged five additional houses in the northwestern part of La Conchita. In total, the slide measured approximately 390 feet wide, 1080 feet long and 98 feet deep. The deposit covered approximately 9.9 acres, and the volume was estimated to be approximately 1.7 million cubic yards of sediment. The devastation was immeasurable and the damage to homes, property and infrastructure was in the millions of dollars to repair. Litigation quickly arose following the 1995 slide with seventy-one homeowners suing the La Conchita Ranch Co. in Bateman v. La Conchita Ranch Co. The judge ruled that irrigation was not the major cause of the slide and that the ranch owners were not responsible.
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Jason Daniel Feld, Kahana FeldMr. Feld may be contacted at
jfeld@kahanafeld.com
New-Home Sales in U.S. Unexpectedly Fall to Four-Month Low
January 07, 2015 —
Victoria Stilwell – BloombergPurchases of new U.S. homes unexpectedly declined in November to a four-month low, underscoring a lack of momentum this year in residential real estate.
Sales dropped 1.6 percent to a 438,000 annualized pace last month following a 445,000 rate in October that was weaker than previously estimated, Commerce Department figures showed today in Washington. The median estimate of 73 economists surveyed by Bloomberg called for a 460,000 pace in November.
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Victoria Stilwell, BloombergMs. Stilwell may be contacted at
vstilwell1@bloomberg.net
Traub Lieberman Partner Gregory S. Pennington and Associate Emily A. Velcamp Obtain Summary Judgment in Favor of Residential Property Owners
December 13, 2022 —
Gregory S. Pennington & Emily A. Velcamp - Traub LiebermanTraub Lieberman Partner Gregory S. Pennington and Associate Emily A. Velcamp obtained summary judgment in favor of their clients, owners of a residential property [the “Owners” or “Defendants”] used as a short-term rental in Beach Haven, New Jersey. Plaintiff alleged injuries resulting from a fall into an open water meter pit, located in the public sidewalk abutting the Owners’ property during the time within which the property was rented to plaintiff and his family. According to plaintiff, defendants breached their duty owed to him, relying on a Borough of Beach Haven Ordinance, thereby allowing the water meter pit to be raised in an unsafe manner, which resulted in plaintiff’s fall and subsequent injuries.
After the Court denied defendants’ initial Motion for Summary Judgment on the grounds that issues of material fact existed regarding defendants’ duty and the alleged breach of that duty, a Motion for Reconsideration was filed. Mr. Pennington and Ms. Velcamp argued that their clients, as residential landowners, owed no duty of care to plaintiff for the raised condition of the water meter pit lid, located in the abutting sidewalk, as they did not cause or contribute to the alleged condition. Defendants further argued that even if a duty of care existed, no breach occurred given the lack of notice to defendants, either actual or constructive. Plaintiff attempted to argue that defendants had constructive notice of the lid’s raised condition, relying on his expert report and the fact that defendants had 3.5 months from the date the property was purchased, to the date of the subject accident to discover the lid’s raised condition. Mr. Pennington and Ms. Velcamp successfully argued that despite plaintiff’s allegations and the findings contained in plaintiff’s expert report, authored 2 months after the alleged accident, there was still no credible, material evidence to say how long the water meter pit lid was in that raised condition to allow defendants a reasonable time to discover it, remedy it, or report it to the Borough.
Reprinted courtesy of
Gregory S. Pennington, Traub Lieberman and
Emily A. Velcamp, Traub Lieberman
Mr. Pennington may be contacted at gpennington@tlsslaw.com
Ms. Velcamp may be contacted at evelcamp@tlsslaw.com
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Be Proactive, Not Reactive, To Preserve Force Majeure Rights Regarding The Coronavirus
March 30, 2020 —
David Adelstein - Florida Construction Legal UpdatesIf you are involved in construction, NOW is the time to consider the potential force majeure impacts associated with the pandemic Coronavirus. Things are beginning to drastically change on a minute-by-minute basis. From travel restrictions, to the suspension or cancellation of events on an international level, to company-wide policies and restrictions, the global uncertainty has led to the possibility that a force majeure delay will occur. Thinking otherwise is not being proactive. The Coronavirus, and the impacts / delays associated therewith, is beyond anyone’s control. Due to the uncertainty, it is hard to fathom at this time a reasonable challenge to someone’s reaction to this concern or their companywide response to the concern.
If you are a contractor, subcontractor, or even a supplier, my suggestions would be as follows:
- Revisit your contracts and see what type of force majeure language it has – anything relating to delays beyond your control or epidemics;
- Examine to see whether you have a basis for additional compensation AND additional time;
- Examine what type of notice you are required to provide for force majeure events;
- Be proactive – send notice now of the potentiality that this pandemic can impact / delay the job –no one should take offense to this letter as this pandemic has impacted all walks of life;
- If an impact occurs, send follow-up notice accordingly to ensure rights under the contract are preserved; and
- For future contracts, incorporate language that specifically addresses epidemics and pandemics now that the occurrence of this issue has become real.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Design-Build Contracting: Is the Shine Off the Apple?
March 09, 2020 —
John P. Ahlers - Ahlers Cressman & Sleight PLLCThe design-build delivery method offers many benefits to owners. Among the cited benefits are that projects are generally completed faster, at a lower cost, by allowing innovative approaches through early and continual contractor involvement in the design process. The design contractor serves as a single point of contact responsible for both the design and construction of the project.
The Washington State Department of Transportation (“WSDOT”) utilized the design-build procurement method on the largest project ($2 billion) of its type in the state of Washington: the Highway 99 Tunnel, which was finished almost three years late after the tunnel-boring machine (“Bertha”) broke down six years ago. The sorted tale of the SR-99 Tunnel Project was the source of many of this firm’s blog articles.[1] The State of Washington staunchly maintained that the design-build contract protected its taxpayers from covering the repair costs to the tunnel-boring machine when it broke down in 2013. Bertha did not resume tunneling for almost two years, putting on hold removal of the Alaska Way viaduct and rebuilding of the Seattle Waterfront without an elevated highway.
In December 2013, the contractor for the project, Seattle Tunnel Partners (“STP”), contended that a 110-foot long 8” steel pipe which Bertha hit caused the breakdown. That pipe had been installed for groundwater testing by WSDOT in 2002 during its preliminary engineering for the viaduct replacement project. The project’s Dispute Review Board (“DRB”) composed of three tunneling experts found that the pipe constituted a “differing site condition” for which the State was responsible to disclose to contractors. The Board, whose views were non-binding, did not opine about how much damage the undisclosed pipe cost.[2] In other words, the mere fact that a differing site condition occurred did not establish that there was a causal connection between the damages which STP was seeking (in excess of $600 million) and the differing site condition (the 8” steel pipe which WSDOT lawyers at trial derisively referred to as “nothing more than a toothpick for Bertha’s massive cutter head”). STP maintained that Bertha had made steady progress except for three days immediately after hitting the pipe. It didn’t help the contractors’ case that during the discovery phase of the two-month trial, WSDOT lawyers uncovered documents showing that the contractor’s tunnel workers encountered and logged the pipe before digging began.[3]
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John P. Ahlers, Ahlers Cressman & Sleight PLLCMr. Ahlers may be contacted at
john.ahlers@acslawyers.com
2019 California Construction Law Update
January 15, 2019 —
Garret Murai - California Construction Law BlogThe California State Legislature introduced 2,637 bills during the second year fo the 2017-2018 Legislative Session. Of these, 1,016 were signed into law.
It was last official bill signing for Governor Jerry Brown who ends not only his second term as Governor but a colorful political career spanning nearly 50 years during which he has dated pop stars, practiced Zen meditation, kicked it with radical ex-nuns and an Apollo astronaut and, at 80, has sparred regularly with President Trump on issues ranging from climate change to immigration to net neutrality.
For those in the construction industry it wasn’t quite as exciting, unless of course you count SCR 120, which officially makes April “California Safe Digging Month.” Hooray!
Each of the bills discussed below took effect on January 1, 2018, except as otherwise stated.
Building Codes
SB 721 – Requires the inspection of exterior elevated elements, including balconies, decks, porches, stairways, walkways, and elevated entry structures, of multifamily buildings with three or more dwelling units by an architect, engineer or contractor with a Class A, B or C-5 license by January 1, 2025 and by January 1st every six years thereafter. Elements posing an immediate threat to the safety of occupants, or which prevent occupant access or emergency repairs, are required to be repaired immediately. Elements not posing an immediate threat to the safety of occupants, or which do not prevent occupant access or emergency repairs, are required to be repaired within 180 days.
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Garret Murai, Wendel RosenMr. Murai may be contacted at
gmurai@wendel.com
