TOP TAKE-AWAY SERIES: The 2023 Fall Meeting in Washington, D.C.
November 13, 2023 —
Marissa L. Downs & Jennifer M. Kanady - The Dispute ResolverOver 500 construction lawyers, experts, and consultants descended on Washington last week for the Forum’s 2023 Fall Meeting. Newly minted Forum Chair John Cook and Program Coordinators Catherine Delorey and Brian Zimmerman put together a stellar program focused on navigating government construction. For this installation of the post-meeting post, I'm teaming up with guest contributor, Jennifer Kanady, to bring you 10 of our top take-aways from this unique program.
10. Contracting with the government is replete with risk that could easily trap the unwary. Nobody likes to be taken advantage of. But hell hath no fury like the U.S. Government scorned. Erin Cannon-Wells and Aaron Silberman, gave a (truly) delightful, Indiana-Jones-inspired presentation on the regulations that can doom the unwitting contractor who is less than perfectly forthright in its dealings. The government has created financial incentives for members of the public to report your company’s violations as part of a qui tam action. When you consider the number of potential whistleblowers in the bidding process and the contracting chain, a qui tam action would seem more likely than not. Add to that the sanctions contractors might face for even innocent errors either by their own companies or their downstream subs, and government contracting begins to sound increasingly like the Temple of Doom. Oh, and in case you were only focused on affirmative claims, beware the “reverse false claim” which is concealing information that would rightfully entitle the government to a credit…
Reprinted courtesy of
Marissa L. Downs, Laurie & Brennan, LLP and
Jennifer M. Kanady, FAC Services, LLC
Ms. Downs may be contacted at mdowns@lauriebrennan.com
Ms. Kanady may be contacted at JKanady@facfin.com
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The Road to Hell is Paved with Good Intentions: A.B. 1701’s Requirement that General Contractors Pay Subcontractor Employee Wages Will Do More Harm Than Good
November 02, 2017 —
Steven M. Cvitanovic & Omar Parra - Haight Brown & Bonesteel LLPTales of subcontractors who close up shop before paying their employees are not all that uncommon, but they are certainly not common enough to require General Contractors to pay for that same labor twice. Last month, the California Legislature passed Assembly Bill No. 1701, which requires the General Contractor of a private construction project to pay all unpaid wages and fringe benefits owed to an employee of a subcontractor, irrespective of the tier, and even if the General Contractor made the payment. With the Governor’s recent signature, Assembly Bill No. 1701 is now the law of the land. Here is what you need to know:
- It applies to all private (but not public) construction contracts entered into on or after January 1, 2018;
- It gives a subcontractor’s employee a direct cause of action against the General Contractor for any unpaid wages and fringe benefits, even if the General Contractor has fully paid the subcontractor;
- It gives a third party owed fringe or other benefits a cause of action against the General Contractor;
- All actions by the employee or third party must be filed within one year of the earliest of the recordation of the notice of completion, the recordation of the notice of cessation of work, or the actual completion of the work;
- The General Contractor cannot contract to avoid the liability imposed by Assembly Bill No. 1701, but it can seek indemnity from the subcontractor; and
- At the General Contractor’s request, the subcontractor shall provide the General Contractor with its payroll records.
Reprinted courtesy of
Steven Cvitanovic, Haight Brown & Bonesteel LLP and
Omar Parra, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com
Mr. Parra may be contacted at oparra@hbblaw.com
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Tarriffs, a Pandemic and War: Construction Contracts Must Withstand the Unforeseeable
May 16, 2022 —
Brett Moritz, Adrian Bastianelli III & Adam Handfinger - Construction ExecutiveSince the tariffs on steel and the first wave of the COVID-19 pandemic, the construction industry has been reeling from the impact of material shortages and price increases, labor shortages, breakdowns in the supply chain and the inflationary effect of these issues. Unfortunately, the war in Ukraine has only exacerbated the situation.
International conflicts can constrain supply, resulting in delays and price increases for contractors, subcontractors and suppliers. The disruption caused by the war is expected to be particularly acute due to the role that Russia and Ukraine play in the world economy and the effect of the economic sanctions that have been imposed on Russia by the United States and other countries. Russia controls approximately 10% of the global copper reserves and is estimated to produce about 10% of the world’s nickel supply. It also provides at least 30% of Europe’s oil and natural gas. Ukraine is a significant source of raw materials, such as iron. Thus, the war will cause significant shortages and price increases to the global construction industry. There are already reports of delays and cost increases for commodities such as nickel, aluminum, copper and—most importantly—steel, which have resulted in impacts to construction costs and schedules. Suppliers are especially sensitive to the volatile markets caused by these conditions. Some are insisting on automatic price increases in their purchase orders.
All of this, not to mention the anticipation of what may come next, points to the necessity for a new paradigm to achieve a successful project. It is more important today than ever that owners, contractors, subcontractors and suppliers reasonably address the economic and time impacts of these unforeseeable events in preparing contracts for future work and in administering existing contracts. Otherwise, the risk of a default on more than one level may put projects in jeopardy, to no one’s benefit.
Reprinted courtesy of
Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Illinois Appellate Court Address the Scope of the Term “Resident” in Homeowners Policy
April 11, 2022 —
James M. Eastham - Traub LiebermanIn Farmers Ins. Exch. v. Cheekati, 2022 IL App (4th) 210023, the 4th District Court of Appeals for the State of Illinois addressed whether the term “resident” in a homeowners policy included a tenant leasing the insured premises. The Insureds owned property which was insured through Farmers under a homeowner’s policy. Unable to sell the property, the Insureds entered into a two-year lease agreement with a tenant. Several months after entering into the lease agreement, the tenant allegedly sustained physical injuries inside of the rented premises when a staircase collapsed. The tenant sued the Insureds and the matter was tendered to Farmers. Thereafter, Farmers denied coverage based on an exclusionary provision in the homeowner’s policy. Specifically, the policy contained a "Liability Exclusions" section, which provided:
"Coverage E (Personal Liability) *** and personal injury coverage, if covered under this policy, do not apply to: Any insured or other residents of the residence premises. We do not cover bodily injury or personal injury to: (a) any insured; or (b) any resident of the residence premises, whether resident in the dwelling or a separate structure." (Emphases in original.)
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James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
Palm Beach Billionaires’ Fix for Sinking Megamansions: Build Bigger
June 14, 2021 —
Prashant Gopal & Amanda L. Gordon - BloombergThomas Peterffy became one of the world’s richest people by mastering risk on Wall Street. Building his Mediterranean-style mansion seven years ago on a vulnerable stretch of Florida’s Palm Beach Island was a matter of seeing the odds clearly once again. The consequences of climate change will play out over decades, and Peterffy is 76 years old.
“I don’t have a care about it at all,” he said over lunch at Mar-a-Lago earlier this year, just down the street from his home. The founder of Interactive Brokers Group has a fortune of more than $21 billion, according to the Bloomberg Billionaires Index.
“If something needs to be done to save it,” he added, “it’s not going to be my problem.”
The town of Palm Beach is busy adapting to the risks of a warming planet, even if there appear to be fewer worriers among the buyers and speculative builders on the island. Some of the lowest-lying properties in the U.S. are seeing the highest-flying prices. The real estate website Zillow estimates the value of Peterffy’s home at $52 million. This year a new nine-bedroom mansion with toes-in-the-sand views sold to financier Scott Shleifer for a record-breaking price in excess of $122 million.
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Prashant Gopal & Amanda L. Gordon, Bloomberg
Meet the Forum's ADR Neutrals: LESLIE KING O'NEAL
January 29, 2024 —
Marissa L. Downs - The Dispute ResolverCompany: JAMS
Office Location: Orlando, FL
Email: lkoneal1117@gmail.com
Website: https://www.jamsadr.com/oneal/
Law School: University of Florida, J.D. (1977)
Types of ADR services offered: Mediation, arbitration, neutral evaluation
Geographic area served: Nationwide
Q: Describe the path you took to becoming an ADR neutral.
A: Florida was one of the first states to allow judges to send civil cases to mediation. When I was an advocate, nearly all my cases went to mediation at least once—sometimes more than once! I became a firm believer in the value of mediation and other ADR methods. I became a Florida certified circuit court mediator in 2021 and I joined JAMS in 2022, after retiring as in-house counsel with Brasfield & Gorrie, a large commercial general contractor. I am also an adjunct professor at Pepperdine Law School, teaching arbitration theory and practice in its master of dispute resolution and master of laws programs.
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Marissa L. Downs, Laurie & Brennan, LLPMs. Downs may be contacted at
mdowns@lauriebrennan.com
An Insurance Policy Isn’t Ambiguous Just Because You Want It to Be
December 20, 2021 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to insurance contracts, there is a rule of law that states, “where interpretation is required by ambiguity in insurance contracts[,] the insured will be favored.” Pride Clean Restoration, Inc. v. Certain Underwriters at Lloyd’s of London, 46 Fla. L. Weekly D2584a (Fla. 3d DCA 2021) (citation and quotation omitted). Stated another way: ambiguities in insurance contracts will be interpreted in favor of the insured and against the insurer.
With this rule of law in mind, insureds oftentimes try to argue ambiguity even when there is not one. This was the situation in Pride Clean Construction. In this case, the property insurance policy contained a mold exclusion that stated the policy did NOT insure for “a. loss caused by mold, mildew, fungus, spores or other microorganism of any type, nature, or description including but not limited to any substance whose presence poses an actual or potential threat to human health; or b. the cost or expense of monitoring, testing, removal, encapsulation, abatement, treatment or handling of mold, mildew, fungus, spores or other microorganism as referred to in a) above.” Not only did the policy not insure for loss caused by mold, it went further to state it was NOT insuring for any mold testing or abatement.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
San Francisco Office Secures Defense Verdict in Legal Malpractice Action
November 25, 2024 —
Lewis Brisbois NewsroomSan Francisco, Calif. (October 31, 2024) - After a ten-day jury trial in San Francisco Superior Court, Partner Alex Graft recently secured a defense verdict in a legal malpractice action arising out of underlying litigation with the claimants’ homeowners association. The claimants alleged his client attorneys negligently advised them that the terms of the settlement agreement would result in the creation of a so-called independent board of directors for the homeowners association. It did not come to fruition. After the attorneys withdrew, they sued for their outstanding fees, which elicited a cross-complaint alleging malpractice, breach of fiduciary duty, breach of contract and negligent misrepresentation.
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Lewis Brisbois
