Contractor Sues License Board
June 30, 2011 —
CDJ STAFFJudge Kendall J. Newman of the US District Court handed down a decision on June 24 on the case of Kent v California Department of Consumer Affairs. Mr. Kent, appearing as his own counsel, had brought the suit against the California Department of Consumer Affairs and the Contractors State Licensing Board after he was arrested in a sting operation and, as the plaintiff put it, “was absurdly arrested and uncooperatively detained for a time longer than necessary or allowed by law under the false pretense of contracting with out a license.” Mr. Kent’s alleged that Rick Lopez, one of the defendants, formed him to read allow from the California Business and Professions Code. He said he was later handcuffed and placed in an uncomfortable chair, “enduring physical pain and emotional agony.”
Although Kent was given a Notice to Appear, he alleged that a further defendant, Stuart Rind, “closed the plaintiff’s case marked citation A7773 without giving written notice to anyone.” As a result, the Placer County District Attorney’s Office had no record of his Notice to Appear.
Kent alleged that subsequently his firm was essentially shut down for two years and that he was prevented from “legally contracting or selling services for any other contractor or qualifying for any other licensed capacity governed by the CSLB.” After this, the CSLB suspended the license for his firm, DSI Construction. He was assessed a $1,500 fine, after which he claims he sent a letter to the CSLB demanding money damages. The judge noted that the letter was not included in the plaintiff’s Ninth Amended Complaint.
Judge Kendall recommended that the plaintiff’s Complaints be dismissed, although he did allow that sixth, and perhaps the eighth and ninth, could be amended with a tenth amended complaint.
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Appellate Court of Maryland Construes Notice Conditions of A312 Performance Bond in Favor of Surety
January 02, 2024 —
Joel P. Williams - White and Williams LLPThe Appellate Court of Maryland issued a reported opinion in a case construing an American Institute of Architects (“AIA”) A312 performance bond. In Wildewood Operating Company, LLC v. WRV Holdings, LLC, et al. 2023 Md. App. LEXIS 720 (Oct. 30, 2023), the Appellate Court of Maryland held that a performance bond surety was discharged from liability where the owner/obligee failed to give the surety notice of the contractor’s default termination until after a third party had completed the work.
The project concerned the construction of an assisted living facility in St. Mary’s County, Maryland. The owner, Wildewood Operating Company, LLC, entered into an A312-2010 performance bond with Clark Turner Construction, LLC, as contractor, and First Indemnity of America Insurance Company, as surety. When Clark Turner failed to complete certain stormwater management work adjacent to the site, Wildewood, Clark Turner, and other parties entered into a Work Agreement to address completion of the work. The surety was not a party to the Work Agreement.
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Joel P. Williams, White and Williams LLPMr. Williams may be contacted at
williamsj@whiteandwilliams.com
Crane Dangles and So Do Insurance Questions
November 07, 2012 —
CDJ STAFFHurricane Sandy sent a construction crane dangling from the top of One57, a condo construction project in New York City. In response to the risk, the nearby Parker Meridian and other nearby buildings were evacuated until the crane could be stabilized. Businessweek reports that One57 involves “a tangle of companies,” including the developer, Extell Development and the contractor, Lend Lease Construction. Pinnacle Industries was responsible for providing and operating the crane.
The insurance claims are yet to be made, but they will likely include the costs of evacuating nearby buildings and to cover any damage to the building itself. David DeLaRue, a vice president in construction practice at Willis Group Holdings said there would be two questions: “Did our insured do anything to cause that loss? Does this policy cover it?”
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EPA Announces Decision to Retain Current Position on RCRA Regulation of Oil and Gas Production Wastes
June 03, 2019 —
Anthony B. Cavender - Gravel2GavelAfter much study, EPA has decided against changing its current RCRA Subtitle D rules affecting the state regulation of oil and gas exploration & production waste. Since 1988, EPA has determined that most such wastes should be regulated as only non-hazardous wastes subject to RCRA Subtitle D, and not the more onerous hazardous waste provisions of RCRA Subtitle C. (See the Regulatory Determination of Oil and Gas and Geothermal Exploration, Development and Production Wastes, 53 FR 25,446 (July 6,1988).)
As a result, under the Subtitle D rules, the primary regulators of such waste are state regulatory agencies, which follow the state plan non-hazardous waste guidelines developed by EPA. This regulatory disposition has proven to be fairly controversial, and it was recently challenged in a lawsuit filed in the U.S. District Court for the District of Columbia: Environmental Integrity Project, et al. v. McCarthy. To settle this lawsuit, EPA and the plaintiffs entered into a consent decree by which EPA was to make certain determinations about the future of the program after conducting an appropriate study. That study, Management of Exploration, Development and Production Wastes: Factors Informing a Decision on the Need for Regulatory Action, has been completed, and it concludes, after a fairly comprehensive review of these state regulatory programs, that “revisions to the federal regulations for the management of E&P wastes under Subtitle D of RCRA (40 CFR Part 257) are not necessary at this time.” In a statement released on April 23, 2019, EPA accepted these findings and promised that it would continue to work with states and other stakeholders to identify areas for improvement and to address emerging issues to ensure that exploration, development and production wastes “continue to be managed in a manner that is protective of human health and the environment.”
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
General Liability Alert: ADA Requirements Pertaining to Wall Space Adjacent to Interior Doors Clarified
February 26, 2015 —
Lawrence S. Zucker II and Kristian B. Moriarty – Haight Brown & Bonesteel LLPIn Kohler v. Bed Bath & Beyond (No. 12-56727, filed February 19, 2015) the United States Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment in favor of a department store related to the necessary moving clearance for an interior restroom door pursuant to the Americans With Disabilities Act ("ADA").
Plaintiff, Chris Kohler, is paraplegic and requires the use of a wheelchair to move in public. On two separate days in May 2011, Kohler used the restroom inside the Bed Bath & Beyond store in Riverside, California. Of relevance to the appeal, Kohler contends there was less than ten inches of strike-side wall space on the pull side of Bed Bath & Beyond’s restroom door which allegedly made it difficult for Mr. Kohler to pull open the restroom door by pushing off the strike-side wall with one hand while pulling the door handle with the other. He also contends there was less than three inches of strike-side wall or floor space on the push side of the door, making it difficult for Kohler to open the door from the push side. The door at issue did not have a latch which would stop the door from freely swinging on a hinge.
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Lawrence S. Zucker II, Haight Brown & Bonesteel LLP and
Kristian B. Moriarty, Haight Brown & Bonesteel LLP
Mr. Zucker may be contacted at lzucker@hbblaw.com
Mr. Moriarty may be contacted at kmoriarty@hbblaw.com
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Warren Renews Criticism of Private Equity’s Role in Housing
February 01, 2022 —
Akayla Gardner - BloombergSenator Elizabeth Warren is doubling down on her criticism of private equity’s involvement in the U.S. housing market as the nation grapples with an affordable-housing shortage.
In letters sent Thursday, the Massachusetts Democrat asked housing firms Progress Residential LLC, Invitation Homes Inc. and American Homes 4 Rent about recent rent hikes, plans to acquire more properties and the number of evictions in recent years.
Warren and other Democrats have scrutinized Wall Street’s role in the housing market since the 2008 financial crisis. During the pandemic, lawmakers have been on high alert for violations of eviction moratoriums and unfair treatment as Americans struggled financially to stay on their feet.
Warren also expressed concern about automated homebuying practices, which allow companies to buy up properties using algorithms. Bloomberg reported that last year Zillow offloaded thousands of homes to institutional investors.
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Akayla Gardner, Bloomberg
Useful Life: A Valuable Theory for Reducing Damages
March 29, 2017 —
Brooke E. Beebe, Esq. - Florida Construction Law NewsThe situation is one all too familiar to construction defect litigants. A homeowner contracts with a roofing contractor to install a new roof with a life expectancy of ten years.[1] After only five years, the homeowner brings a claim for construction defects in the roof alleging that the roof requires complete replacement due to water intrusion. The homeowner seeks damages for the full replacement cost of the roof. However, under a “useful life” theory, the homeowner would not be entitled to damages for the full amount of the replacement cost. Instead, the homeowner would be entitled to one-half of the cost of the replacement roof, taking into account the fact that he or she had been deprived of only five, rather than ten, years of use. “Useful life” is best understood as the expected length of time that a newly built construction element can be reasonably anticipated to last, subject to routine maintenance and ordinary wear and tear. The “useful life” theory holds that granting the homeowner damages for the full replacement cost of the roof would result in unjust enrichment to the homeowner, who had contracted for a roof with a ten-year, rather than a fifteen-year, useful life.
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Brooke E. Beebe, Cole, Scott & Kissane, P.A.Ms. Beebe may be contacted at
brooke.beebe@csklegal.com
General Indemnity Agreement Can Come Back to Bite You
October 21, 2019 —
Christopher G. Hill - Construction Law MusingsI talk about payment bonds often here at Construction Law Musings. I talk a bit less about performance bonds and even less about the General Indemnity Agreements (GIA) that are signed by companies and their principals as part of the agreement between a construction company and its bonding company for the provision of these bonds. However, this does not mean that these GIA’s are not important. In fact, these are the agreements that allow a bonding provider to recoup any money paid out pursuant to either a payment or performance bond.
A 2018 case illustrates their importance. In Allegheny Cas. Co. v. River City Roofing, LLC, the Court considered a claim by Allegheny seeking both specific performance of the collateral agreement and reimbursement of certain expenses and investigative costs expended by Allegheny pursuant to its performance bond. Allegheny sought to be reimbursed for certain payments for siding work, investigative costs, and costs spent enforcing the GIA. Allegheny further sought to force the defendants to post sufficient collateral. To do so, Allegheny sued in the Eastern District of Virginia and then moved for summary judgment stating that the GAI uneuivocally required such a result due to the good faith payment for the siding work and the plain language of the GIA.
In response, the Defendants, River City Roofing and its principals that had personally guaranteed the indemnity, argued that the GIA did not apply to the siding work because only the roofing contract was subject to the performance bond and that any bond claims for which collateral was demanded were inchoate and therefore not proper for specific performance.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
