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DIRECTORY AND CAPABILITIES

Property Damage, Occurrences, Delays, Offsets and Fees. California Decision is a Smorgasbord of Construction Insurance Issues

November 21, 2017 — Garret Murai - California Construction Law Blog
Originally published by CDJ on November 15, 2017 I read once that 97 percent of cases never go to trial. However, there are still the ones that do. And, then, there are the ones that do both. The following case, Global Modular, Inc. v. Kadena Pacific, Inc., California Court of Appeals for the Fourth District, Case No. E063551 (September 8, 2017), highlights some of the issues that can arise when portions of cases settle and other portions go to trial, the recovery of delay damages on a construction project through insurance, and the recovery of attorneys’ fees. Global Modular, Inc. v. Kadena Pacific, Inc. The U.S. Department of Veterans Affairs contracted with general contractor Kadena Pacific, Inc. (Kadena) to oversee construction of its Center for Blind Rehabilitation in Menlo Park, California. Kadena, in turn, contracted with subcontractor Global Modular, Inc. (Global) to construct, deliver and install 53 modular units totaling more than 37,000 square feet for a contract price of approximately $3.5 million. 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

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Plehat Brings Natural Environments into Design Tools

May 01, 2019 — Aarni Heiskanen - AEC Business
Natural elements are an essential part of the built environment. However, BIM tools offer almost no support to landscape architecture. Plehat is introducing a new solution that helps architects and decision-makers to understand the dynamics of nature and make smart design choices. Plehat used photogrammetric 3D models of Uunisaari islands, to the south of Helsinki. The experimenters modeled the buildings and the plants on the island and used game engine software to create a virtual reality (VR) experience. They called the app the “Landscape Time Machine”. The technology solution they developed paved the way for new software that the company will launch later this year. In 2018, Plehat, a landscape design startup, received funding from the Finnish national KIRA-digi digitalization project to carry out a test. The experimentation demonstrated how seasonal changes and weather conditions affect plants, and how the environment can be visualized and analyzed virtually. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Brazil's Detained Industry Captain Says No Plea Deals Coming

September 03, 2015 — Sabrina Valle & Yasmine Batista – Bloomberg
Marcelo Odebrecht, the most prominent executive who has been detained in Brazil’s largest corruption scandal, said he sees no reason to strike a plea bargain with authorities because he has nothing to reveal. Odebrecht said in a congressional hearing Tuesday that he probably discussed with President Dilma Rousseff and her predecessor Luiz Inacio Lula da Silva the relationship between Odebrecht SA and Petrobras, the state-controlled oil producer at the center of the kickback investigation. It was a natural topic given the economic importance of his construction and engineering empire, he said. He declined to answer questions related to the criminal case, saying it is ongoing and he is unaware of the full extent of the accusations. Reprinted courtesy of Sabrina Valle, Bloomberg and Yasmine Batista, Bloomberg Read the court decision
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Texas Mechanic’s Lien Law Update: New Law Brings a Little Relief for Subcontractors and a Lot of Relief for Design Professionals

June 07, 2021 — Tracey L. Williams - Peckar & Abramson, P.C.
After several recent failed attempts to amend Chapter 53 of the Texas Property Code (the “Texas Mechanic’s Lien Statute”), it appears that long awaited relief may, at least in part, be on the horizon for subcontractors in Texas. Additionally, architects, engineers, and surveyors also appear to be significant benefactors of House Bill 2237 (“HB 2237”). Under existing law, many subcontractors often fail to perfect their mechanic’s liens under the Texas Mechanic’s Lien Statute because of complex notice requirements which must be sent for every month in which labor or material are furnished. And architects, engineers and surveyors currently have no lien rights unless they have a direct contractual relationship with the owner of the project. Effective January 1, 2022, HB 2237 amends the Texas Mechanic’s Lien Statute in several significant respects. Subcontractor Impacts HB 2237 impacts subcontractors in the following ways:

1. Establishes uniformity in the notice requirements by imposing the same notice obligation on all subcontractors regardless of with whom they have contracted. Rather than sending one notice to the owner and one to the general contractor, the single notice now required must be sent to both simultaneously. Additionally, HB 2237 prescribes the form of the notice to be given under both Section 53.056 (notice of derivative claimant) and 53.057 (notice of contractual retainage).

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Reprinted courtesy of Tracey L. Williams, Peckar & Abramson, P.C.
Ms. Williams may be contacted at twilliams@pecklaw.com

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Carwash Prosecutors Seek $1.6 Billion From Brazil Builders

February 26, 2015 — Sabrina Valle – Bloomberg
(Bloomberg) -- Some of Brazil’s biggest building companies were targeted for the first time in an investigation into alleged kickbacks at Petroleo Brasileiro SA, with prosecutors seeking 4.47 billion reais ($1.6 billion) in compensation. Federal prosecutors in Parana state accused Camargo Correa, Mendes Junior, OAS, Galvao Engenharia, Grupo Engevix and Sanko of diverting public funds and called for them to be banned from new state contracts, the prosecutors said in an e-mailed statement Friday. The allegations -- called acao de improbidade in Portuguese, or misconduct action -- mark the first time companies have been singled out in connection with Brazil’s biggest-ever corruption scandal, in which Petrobras executives are accused of accepting bribes from a cartel of builders. Until now, only individuals have been accused of wrongdoing. Executives from companies including OAS and Camargo Correa have been jailed since November as part of the first sweep against contractors in the case known as Carwash. Read the court decision
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Reprinted courtesy of Sabrina Valle, Bloomberg
Ms. Valle may be contacted at svalle@bloomberg.net

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Homeowners May Not Need to Pay Lien on Defective Log Cabin

July 01, 2011 — CDJ STAFF

The Idaho Supreme Court has ruled in the case of Perception Construction Management v. Bell. The Bells hired PCM to build a log home, agreeing to play monthly invoices in full within ten days. The Bells paid the first four invoices in full, part of the fifth, and ceased payment after that. Beofre seventh invoice, the Bells terminated the contract and hired a new contractor. PCM filed a claim of lien and ceased work.



The Bells responded that PCM was in breach of contract and had failed to fulfill the contract in a workmanlike manner. They claimed construction defects and in the lien suit, sought to include testimony from an architect and a plumber reviewing PCM’s work. The court only allowed the architect to testify as to whether the amount of the lien was reasonable. No testimony was permitted from the plumber.



The Idaho Supreme Court concluded that the claims of construction defects were important to case and remanded it to the lower court for a new trial taking into evidence that Bell’s contention that PCM’s work was defective.

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EPA and the Corps of Engineers Repeal the 2015 “Waters of the United States” Rule

January 13, 2020 — Anthony B. Cavender - Gravel2Gavel
The pre-publication version of the final rule to be promulgated by EPA and the U.S. Army Corps of Engineers (ACOE) to repeal the 2015 redefinition of the Clean Water Act’s term “Waters of the United States” which is the linchpin of these agencies’ regulatory power under the CWA, was made available on September 12, 2019. The rule should be published in the Federal Register in the next few weeks, and it will be effective 60 days thereafter. Many challenges are expected to be filed in the federal courts. The 2015 rule was very controversial, and petitions challenging the rule were filed in many federal district courts, several courts of appeal, and finally in the Supreme Court (see NAM v. Department of Defense), which held that all initial challenges must be filed in the federal district courts. The upshot of these challenges is that, at this time, the 2015 rule has been enjoined in more than half the states while the other states are bound by the 2015 rule, a situation which is frustrating for everyone. In addition to repealing the 2015 rule, the agencies also restored the pre-2015 definition had had been in place since 1986. As a result, the pre-2015 definition of waters of the U.S. will again govern the application of the following rules: (a) the ACOE’s definition of “waters of the U.S.” at 33 CFR Section 328.3; (b) EPA’s general Oil Discharge rule at 40 CFR Section 110; (c) the SPCC rules at 40 CFR Part 112; (d) EPA’s designation of hazardous substances at 40 CFR Part 116; (e) EPA’s hazardous substance reportable quantity rule at 40 CFR Part 117; (f) the NPDES permitting rules at 40 CFR Part 122; (g) the guidelines for dredged or fill disposal sites at 40 CFR Part 230; (g) Exempt activities not requiring a CWA 404 permit (guidelines for 404 disposal sites at 40 CFR Part 232); (h) the National Contingency Plan rules at 40 CFR Part 300; (i) the designation of reportable quantities of hazardous substances at 40 CFR Part 302; and (j) EPA’s Effluent Guidelines standards at 40 CFR Part 401. 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

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CSLB Joint Venture Licenses – Providing Contractors With The Means To Expand Their Businesses

April 28, 2016 — David A. Harris – Haight Brown & Bonesteel LLP
California’s Business and Professions Code requires contractors to be licensed by the Contractors State License Board (“CSLB”). The CSLB issues licenses in 44 different classifications which are separated into three categories: “A” licenses are for general engineering contractors, “B” licenses are for general building contractors, and “C” licenses are specialty licenses that cover everything from installing boilers to installing ornamental metal. Performing construction work without a license or without the requisite license is a misdemeanor and can lead to the imposition of fines and in certain instances, jail time. (California’s Business and Professions Code Section 7028(a).) While potential imprisonment is unlikely, contractors are frequently fined, or prohibited from filing suit to collect money for their work. Perhaps most onerous, a contractor who is unlicensed, or working with a suspended license or the wrong license, can be forced to return all of the money it was paid for its work. (See our alert:Performing Work with a Suspended CSLB License Costs Big: Subcontractor Faces $18,000,000 Disgorgement.) Read the court decision
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Reprinted courtesy of David A. Harris, Haight Brown & Bonesteel LLP
Mr. Harris may be contacted at dharris@hbblaw.com

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