Seattle Washington Building Expert Directory

Pay-if-Paid Clauses, Nasty, but Enforceable

March 12, 2015 — Craig Martin – Construction Contractor Advisor
I am preparing for a presentation this week on Troublesome Contract Clauses to the Construction Specifications Institute (“CSI”), Nebraska Chapter. One of the clauses we will be discussing is the dreaded Pay-if-Paid clause, a particularly nasty provision that places the risk of owner’s solvency squarely on the subcontractor’s shoulders. While pay-if-paid clauses can create tremendous problems for subcontractors, they are enforceable. Pay-if-Paid clauses eliminate the obligation to pay the subcontractor until the general contractor is paid by the owner. Pay-if-paid clauses usually contain something akin to the following phrases:

payment to subcontractors are “expressly and unequivocally contingent upon receipt of payment from the Owner for the Subcontract Work.”
the subcontractor “expressly acknowledges that it relies on payment under the Subcontract on the creditworthiness of Owner, not that of the General Contractor.”
the owner’s acceptance of the work and payment to the General Contractor are “conditions precedent to any obligation of the General Contractor to pay the subcontractor.”

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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

Another (Insurer) Bites The Dust: Virginia District Court Rejects Narrow Reading of Pollution Exclusion

September 10, 2018 — Michael S. Levine & Latosha M. Ellis - Hunton Insurance Recovery Blog
In a victory for policyholders, and an honorable mention for Merriam-Webster’s Dictionary, a federal judge in Virginia ruled that the dispersal of concrete dust that damaged inventory stored in an aircraft part distributor’s warehouse was a pollutant, as defined by the policy, but that it also constituted “smoke” as that term was defined in the dictionary, thereby implicating an exception to the policy’s pollution exclusion. The Court then granted summary judgment for the policyholder, who had suffered a $3.2 million loss. Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Latosha M. Ellis, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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How the Pandemic Pushed the Construction Industry Five Years Into the Future

September 06, 2021 — Alexandra McManus & Hussein Cholkamy - Construction Executive
On any given day, there are a multitude of variables playing out on construction jobsites, from maintaining daily logs to track hundreds of workers to creating daily schedules to keep projects on track. What made an industry that’s arguably about 20 years in the past get a dramatic technology boost five years into the future? A global pandemic that nobody saw coming. When COVID-19 made its first appearance on construction sites in early 2020, the domino effect of project shutdowns and labor shortages created uncertainty along with budget and timeline nightmares. The pandemic shook up the industry, with many projects coming to a screeching halt. As general contractors scrambled to keep their projects moving and workers safe, technology proved to be the solution. With jobsites shutting down, coupled with a nationwide labor shortage, real-time visibility over workforce variables, such as who was on-site, where they were and who they interacted with was more important than ever. Safe proximity tracking, virtual density and access control technologies helped construction companies gain more control, visibility and the ability to deal with the ever-changing regulations due to the global pandemic. More importantly, it helped keep their valuable workforce safe. Reprinted courtesy of Alexandra McManus & Hussein Cholkamy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Cholkamy may be contacted at hussein@eyrus.com Ms. McManus may be contacted at alex@eyrus.com Read the court decision
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Design Immunity of Public Entities: Sometimes Designs, Like Recipes, are Best Left Alone

October 21, 2015 — Garret Murai – California Construction Law Blog
April 23, 1985 will live in infamy. The Coca Cola Company, responding to diminishing sales as its “sweeter” rival Pepsi-Cola gained market share, announced that it was changing its “secret” recipe and introducing a new kind of Coke, referred to by the public simply as, “new Coke.” The reaction was unexpected. People around the world began hoarding “old Coke.” Protest groups, such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America, sprang up around the county. Angry letters addressed to “Chief Dodo” were sent to Coca-Cola’s chief executive officer. And even Fidel Castro, a longtime Coca-Cola drinker, joined the backlash calling “new Coke” a “sign of American capital decadence.” By July it was over. Coca-Cola announced that it would once again produce “old Coke,” and in a sign (I’m sure Fidel Castro would say) of American arrogance, announced that “old Coke” would be produced under the name “Coca-Cola Classic” alongside “new Coke” which would continue to be called “Coca-Cola” suggesting that “new Coke” would be the Coke of today as well as the future. By 1992, however, “new Coke” whose sales dwindled to 3% of market share was demoted to “Coke II” and by 2002 was discontinued entirely. The moral of the story: Change the recipe at your own risk. Castro v. City of Thousand Oaks In the next case, Castro v. City of Thousand Oaks, Case No. B258649, California Court of Appeals for the Second District (August 31, 2015), the corollary might well be change the recipe design at your own risk. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Toll Brothers Faces Construction Defect Lawsuit in New Jersey

October 10, 2013 — CDJ STAFF
Toll Brothers is facing a construction defect lawsuit from homeowners in West Windsor, New Jersey. The homebuilding company had a lengthy battle with the town over its intention to build the community they named the Estates at Princeton Junction, now its residents are alleging defects in the construction of their homes and the common infrastructure. The community is close to Princeton University, parts of which are also in West Windsor. Toll Brothers states that they are “working very closely with the HOA Board to investigate the claims that have been alleged in the lawsuit.” Andrea Marushack, the spokesperson for Toll Brothers would not elaborate due to the lawsuit. Among the allegations are claims that the townhomes in the development are prone to water intrusion. The complaint also claims that there were defects in the construction of sidewalks, roads, and other common features. Read the court decision
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Shaken? Stirred? A Primer on License Bond Claims in California

July 14, 2016 — Garret Murai – California Construction Law Blog
Shaken? Stirred? A bit hot under the tuxedo collar perhaps? Maybe it’s time for a martini. Or two. When your project’s a mess, your contractor isn’t returning your calls, and you don’t have a license to kill it’s only natural that you would want to go after that other license: the contractor’s license bond. However, except for smaller claims, or situations where you discover that the contractor is or might be judgment-proof, going after a contractor’s license bond isn’t necessarily the panacea many might hope it to be. Read on to learn why. What is a license bond? First, a license bond is not insurance. While insurance is typically limited to property damage and personal injury, a license bond covers a contractor’s violation of the Contractors State License Law. All California contractors are required to have on file a license bond (or, alternative, such as a cash deposit) with the California Contractors State License Board (“CSLB”). Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Second Circuit Denies Petitions for Review of EPA’s Final Regulations to Establish Requirements for Cooling Water Intake Structures

August 20, 2018 — Anthony B. Cavender - Gravel2Gavel
On July 23, 2018, the U.S. Court of Appeals for the Second Circuit decided the case of Cooling Water Intake Structure Coalition v. EPA. Environmental conservation groups and industry associations petitioned for review of a final rule promulgated by the U.S. Environmental Protection Agency (EPA) pursuant to section 316(b) of the Clean Water Act (CWA), establishing requirements for cooling water intake structures at existing facilities. Denying the petitions for review, the Court of Appeals summarized:

“Because we conclude, among other things, that both the Rule and the biological opinion are based on reasonable interpretations of the applicable statutes and sufficiently supported by the factual record, and because the EPA 3 gave adequate notice of its rulemaking, we DENY the petitions for review.”

This is a significant CWA and Endangered Species Act (ESA) decision involving the operation of major industrial facilities requiring the daily use of large amounts of water taken from adjacent bodies of water. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Hawaii Supreme Court Finds Excess Can Sue Primary for Equitable Subrogation

October 21, 2015 — Tred R. Eyerly – Insurance Law Hawaii
In responding to a certified question from the U.S. Distric Court, the Hawaii Supreme Court determined that an excess carrier can sue the primary carrier for failure to settle a claim in bad faith within primary limits. St. Paul Fire & Marine Ins. Co. v. Liberty Mut. Ins. Co., 2015 Haw. LEXIS 142 (Haw. June 29, 2015). St. Paul, the excess carrier, and Liberty Mutual, the primary carrier, issued polices to Pleasant Travel Service, Inc. The primary policy covered up to $1 million. Pleasant Travel was sued for damages resulting from an accidental death. St. Paul alleged that Liberty Mutual rejected multiple pretrial settlement offers within the $1 million primary policy limit. A trial resulted in a verdict of $4.1 million against Pleasant Travel. The action settled for a confidential amount in excess of the Liberty Mutual policy limit. St. Paul paid the amount in excess. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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