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DIRECTORY AND CAPABILITIES

Real Estate & Construction News Roundup (6/18/24) – Cannabis’ Effect on Real Estate, AI’s Capabilities for Fund Managers and CRE’s Exposure on Large Banks

July 15, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, hotel-to-apartment conversions take big leap, state governments pass squatting legislation, US regional banks risk having debt ratings downgraded, and more!

• Reclassifying cannabis as a lower-risk substance could bring significant changes to the real estate sector associated with cannabis. (Margaret Jackson, Yahoo)
• More than 60 of the largest banks in the country are at increased risk of failure due to their commercial real estate (CRE) exposures. (Florida Atlantic University).
• As extreme weather grows in frequency and intensity, the nation’s patchwork of building codes have not kept up with modern conditions and if something goes wrong, contractors are not off the hook if they simply build to code. (Julie Strupp, Construction Dive)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Transportation Officials Make the Best of a Bumpy 2020

January 18, 2021 — Jim Parsons & Aileen Cho - Engineering News-Record
The year 2020 provided a bumpy budgetary ride for all modes of transportation, and some industry insiders don’t expect airport and transit ridership to return to pre-pandemic levels for years. Agencies are taking lessons learned, coupled with hopes for the new Biden administration, to carry on as best they can. Reprinted courtesy of Jim Parsons, Engineering News-Record and Aileen Cho, Engineering News-Record Ms. Cho may be contacted at choa@enr.com Read the full story... Read the court decision
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Partner John Toohey is Nominated for West Coast Casualty’s Jerrold S. Oliver Award of Excellence!

March 11, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Bremer Whyte Brown & O’Meara, LLP is honored to share that Newport Beach Partner John Toohey is nominated for West Coast Casualty’s 2024 Jerrold S. Oliver Award of Excellence! Every year, West Coast Casualty recognizes an individual who is committed, trustworthy, and has contributed years to the betterment of the construction defect community. The award is named after the late Judge Jerrold S. Oliver who is considered a “founding father” in the alternate resolution process in construction claims and litigation. Each year, members of the construction community are asked to nominate individuals who invoke the same spirit as Judge Oliver. Read the court decision
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Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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Using the Prevention Doctrine

April 22, 2019 — David Erhart - Gordon & Rees Construction Law Blog
The following scenario happens regularly in the construction industry. A contractor on a project reaches out to a subcontractor to perform work. Excited about the prospect of performing the work, the subcontractor signs a contract and puts it nose to the grindstone. After dutifully completing the work the subcontractor turns to the contractor and asks to be paid. But, the contractor refuses saying that there is a provision in the subcontract that says the contractor is only obligated to pay the subcontractor if the contractor receives payment from the owner. So the contractor has completed the work, but has no money to show for it. One potential remedy for a subcontractor in this situation is the use of the prevention doctrine. “Under the prevention doctrine, ‘if a promisor prevents or hinders fulfillment of a condition to his performance, the condition may be waived or excused.’” Cox v. SNAP, Inc., 859 F.3d 304, 308 (4th Cir. 2017) (quoting Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 7171, 725 (4th Cir. 2000)). “Put simply, ‘where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure.’” Haddon Hous Assocs v. United States, 711 F.3d 1330, 1338 (Fed. Cir. 2013) (quoting Restatement (Second) of Contracts § 245; Williston, § 39:4). Read the court decision
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Reprinted courtesy of David Erhart, Gordon & Rees Scully Mansukhani
Mr. Erhart may be contacted at derhart@grsm.com

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Bright-Line Changes: Prompt Payment Act Trends

September 16, 2024 — Stephanie L. Cooksey - Peckar & Abramson, P.C.
Untimely payment by the owner for contract work and additional work on construction projects can place an unfair financial burden on contractors and subcontractors. Most states have attempted to eliminate or mitigate this inequity in construction contracting through Prompt Payment Acts that govern payment deadlines and provide remedies for untimely payment. This article addresses the legislative trends aimed at minimizing the risk of non-payment, overdue payment, and withholding retainage in favor of downstream parties to a construction contract. Fortifying Contractor Protections with “Bright-Line” Language Over the last decade, states have been tightening prompt payment laws by replacing broad, general statutory language with bright-line rules. What is a bright-line rule? A specific or definite figure, a quantifiable marker—i.e., something owners, contractors, subcontractors, and suppliers should be aware of. Practically speaking, the more bright-line a prompt payment statute is, the greater the likelihood it will affect a construction project in your state. A standard form construction contract, if not reviewed carefully, can create conflicts or confusion if it gives a party more leeway on payment deadlines than the applicable Prompt Payment Act. For example, consider an owner-issued Construction Change Directive (“CCD”) that requires a contractor to commence additional work immediately while a formal change order is negotiated. Consequently, a CCD can push financial burdens downstream, whether inadvertently or not, and may conflict with statutory payment deadlines. Nevertheless, an owner can be justified in its utilization of a CCD to maintain the project schedule. How should the parties competing interests be resolved? Read the court decision
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Reprinted courtesy of Peckar & Abramson, P.C.

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Taking the Stairs to Human Wellness and Greener Buildings

June 22, 2016 — Rob Finch – Construction Informer Blog
If taking the stairs catches on, buildings with elevators could automatically get greener. The people working in them also stand a good chance of getting healthier. However, designers and builders working for owners who want to reap these advantages, will need to learn a few new tricks when it comes to how stairs get placed and promoted. They also get a chance to unleash creativity in how they are finished. Read the court decision
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Reprinted courtesy of Rob Finch, Construction Informer Blog

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Are Construction Contract Limitation of Liability Clauses on the Way Out in Virginia?

March 11, 2024 — Christopher G. Hill - Construction Law Musings
Remember BAE Systems and Fluor? This post is the third here at Construction Law Musings relating to this case which is a seemingly never-ending source for content. In the prior post discussing this case, the Court found that Va. Code 1-4.1:1 which bars waiver of a right to payment before work is performed did not apply because Fluor had provided work before execution of the contract or any change orders. In the most recent opinion in this long-running litigation, and after a motion to reconsider by Fluor that was granted, the Court re-examined this finding along with the contractual language found in the Limitation of Damages (LOD) clause and came to the opposite conclusion regarding certain change orders that remained unpaid by BAE. The Court first looked to the language of the contract itself and specifically the language in the LOD provision that states “Except as otherwise provided in this Subcontract.” The Court then looked at the change order provision and its typical equitable adjustment language and the mandatory nature of the equitable adjustment language. The Court found that the LOD provisions did not apply to change orders both because price increases due to change orders are not “damages” and because of the exception language in the LOD provision itself. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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That’s Common Knowledge! Failure to Designate an Expert Witness in a Professional Negligence Case is Not Fatal Where “Common Knowledge” Exception Applies

June 03, 2019 — Lyndsey Torp - Snell & Wilmer Real Estate Litigation Blog
In reversing summary judgment for defendants, the California Fourth District Court of Appeal recently held that homeowners suing their real estate broker for negligence did not need an expert witness to establish the elements of their causes of action. Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal. App. 5th 637. Typically, expert witnesses are required to establish the standard of care in professional negligence cases. But in Ryan, the court of appeal held that the “common knowledge” exception applied despite this general rule, because the conduct required by the particular circumstance of the case was within the common knowledge of a layman. The conduct in question here? The broker’s failure to disclose to his client that the client’s neighbor told him that she planned extensive renovations that would obstruct the client’s property’s ocean views. Ryan and Patricia Ryan (the Ryans) hired defendant Real Estate of the Pacific, Inc., doing business as Pacific Sotheby’s International Realty (Sotheby’s) and defendant real estate broker to sell their residence in La Jolla, California. During an open house at the residence, a neighbor informed the Ryan’s real estate broker that she planned extensive renovations at her home that would, among other things, permanently obstruct the Ryan’s westerly ocean views and take several years to complete. The real estate broker never informed the Ryans of this, nor the subsequent buyer. The subsequent buyer purchased the property for $3.86 million, and defendants received $96,500 as commission for the sale. The day after escrow closed, the buyers learned of the renovations, and sought to rescind the purchase. Based on advice of defendants, the Ryans refused, and the dispute proceeded to arbitration. The buyer obtained a rescission of the purchase, with the Ryans order to pay damages, interest, and attorneys’ fees and costs in excess of $1 million. The Ryans then sued Sotheby’s and the real estate broker to recover these amounts and damages caused by defendants’ alleged negligence. Read the court decision
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Reprinted courtesy of Lyndsey Torp, Snell & Wilmer
Ms. Torp may be contacted at ltorp@swlaw.com

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