A Deep Dive Into an Undervalued Urban Marvel
December 26, 2022 —
Linda Poon - BloombergDeep beneath the city, an intricate network of pipes and pumps carries our waste to treatment facilities. Ideally, the entire process is hidden from the eyes — and nose — of the urban dweller who, from the moment the toilet flushes, remains blissfully unaware of what it takes to direct billions of gallons of wastewater out of a city.
The development of sewer infrastructure is one of the perks of modern urban living, rendering the consequences of our daily habits out of sight, out of mind — until it doesn’t.
In the US and beyond, many sanitation systems date back to the early 20th century or earlier, and they’re showing their age: Increasingly heavy downpours as a result of climate change often overwhelm antiquated combined sewers that collect stormwater as well as wastewater, while leaky pipes and trash-laden clogs bring stinky backups that can poison local waterways. But as cities scramble to repair and update their networks, another challenge lurks: Getting people to stop taking for granted a public good that’s essential but invisible.
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Linda Poon, Bloomberg
Skanska Will Work With Florida on Barge-Caused Damage to Pensacola Bay Bridge
October 19, 2020 —
Jim Parsons - Engineering News-RecordFlorida Dept. of Transportation investigators continue to assess damage to the Pensacola Bay Bridge, which sustained multiple impacts from two construction barges unmoored by Hurricane Sally’s storm-driven waves on Sept. 15.
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Jim Parsons, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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AB 1701 Has Passed – Developers and General Contractors Are Now Required to Double Pay for Labor Due to Their Subcontractors’ Failure to Pay
October 19, 2017 —
Clayton T. Tanaka – Newmeyer & Dillion LLPOn September 13, 2017, the California State Legislators passed a bill that would make developers and general contractors responsible for subcontractors who fail to pay their employees even though they already paid the subcontractors for the work. Assembly Bill 1701 (AB 1701), sponsored by unions who represent carpenters and other building trades, would require general contractors to “assume, and [be] liable for . . . unpaid wage, fringe or other benefit payment or contribution, including interest owed,” which subcontractors owe their employees. Despite vehement opposition from the California Building Industry Association and the Associated General Contractors of California, this bill has been submitted to the Governor and is expected to be signed into law.
NEW REQUIREMENTS
Once signed, this bill would impose the following requirements under Labor Code section 218.7:
- Applies to All Private Works Contracts That Are Entered Starting January 1, 2018.
For private works contracts entered on or after January 1, 2018, a “direct contractor” (i.e., prime contractor or contractor who has direct contractual relationship with an owner) must assume and be liable for any debt which its subcontractor or a lower tier subcontractor incurs “for [a] wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner.” (Lab. Code, § 218.7, subds. (a)(1) and (e).)
- The Labor Commissioner and Joint Labor-Management Cooperation Committees May Bring Action to Recover Unpaid Wages on Behalf of Wage Claimants.
The California Labor Commissioner and joint Labor-Management Cooperation Committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. § 175a) (typically comprised of labor unions and management) may bring a civil action against the direct contractor for unpaid wages owed to a wage claimant. (Lab. Code, § 218.7, subds. (b)(1) and (3).) The Labor Commissioner may also bring its claims through administrative hearings (Labor Code section 98) or by citations (Labor Code section 1197.1). (Lab. Code, § 218.7, subd. (b)(1).)
- Third Parties That Are Owed Fringe or Other Benefit Payments or Contribution on Behalf of Wage Claimants (Labor Unions) May Bring Action.
Third parties who are owed fringe or other benefit payments or contributions on a wage claimant’s behalf (e.g., labor unions) may bring a civil action against the direct contractor for such unpaid benefit payments or contributions. (Lab. Code, § 218.7, subd. (b)(2).)
- It Does Not Confer Wage Claimants With Any Right to Sue Direct Contractors.
AB 1701 gives the Labor Commissioner, Labor-Management Cooperation Committees and the unions standing to bring an action against the direct contractor, but it does not confer any private right of action by the wage claimants against the direct contractor.
- Labor-Management Cooperation Committees and Labor Unions Shall Recover as Prevailing Plaintiffs Their Attorneys’ Fees and Costs, Including Expert Fees.
For actions brought by Labor-Management Cooperation Committees or labor unions, “[t]he court shall award a prevailing plaintiff in such an action its reasonable attorney’s fees and costs, including expert witness fees.” (Lab. Code, § 218.7, subds. (b)(2)-(3).)
- Direct Contractor’s Property May Be Attached to Pay for Judgment.
AB 1701 authorizes the attachment of direct contractor’s property to pay for any judgment that is entered pursuant to this section. (Lab. Code, § 218.7, subd. (c).)
- One-Year Statute of Limitation to Bring Action under This Section.
Actions brought pursuant to this section must be filed within one year of the earliest of: (1) recordation of a notice of completion of the direct contract; (2) recordation of a notice of cessation of the work covered by direct contract; or (3) actual completion of work covered by direct contract. (Lab. Code, § 218.7, subd. (d).)
- Rights to Receive Payroll Records and Project Award Information from Subcontractors and to Withdraw All Payments Owed for Their Failure to Comply.
Upon the direct contractor’s request, subcontractors and lower tier subcontractors must provide payroll records and project award information. (Lab. Code, § 218.7, subds. (f)(1)-(2).) Direct contractor may withhold as “disputed” all sums owed if a subcontractor does not timely provide the requested records and information without specifying what is untimely and such failure to comply does not excuse direct contractor from any liability under this section. (Lab. Code, § 218.7, subds. (f)( 3) and (i).)
- Rights to Receive Payroll Records and Project Award Information from Subcontractors and to Withdraw All Payments Owed for Their Failure to Comply.
Upon the direct contractor’s request, subcontractors and lower tier subcontractors must provide payroll records and project award information. (Lab. Code, § 218.7, subds. (f)(1)-(2).) Direct contractor may withhold as “disputed” all sums owed if a subcontractor does not timely provide the requested records and information without specifying what is untimely and such failure to comply does not excuse direct contractor from any liability under this section. (Lab. Code, § 218.7, subds. (f)( 3) and (i).)
- Further Legislative Efforts on Subdivision (h) Are Expected in 2018.
Subdivision (h), which states that “[t]he obligations and remedies provided in this section shall be in addition to any obligations and remedies otherwise provided by law . . .” (emphasis added) is potentially misleading since the author and sponsor of the bill have indicated that the bill is not intended to punish direct contractors with liquidated damages or penalties. As such, further legislative efforts on subdivision (h) are expected in 2018.
ADDITIONAL CONSIDERATIONS
While workers should be paid for the work they perform, AB 1701 would place undue burden on general contractors to monitor their subcontractors’ payroll, confirm that all wages and benefits are paid timely and withhold disputed payments from non-compliant subcontractors. General contractors would also need to caution against the chain reaction that could result from such withholding, including work stoppage, increased change order requests, and an overall increase in construction costs. Finally, general contractors would need to brace themselves for at least a year after project completion against any union or a Labor-Management Cooperation Committee actions armed with a prevailing party’s right to recover attorneys’ fees and expert fees, for previously unidentified subcontractor or sub-subcontractor workers.
STRATEGIES DEVELOPERS AND GENERAL CONTRACTORS SHOULD LOOK FOR
In anticipation of AB 1701 being signed into law and its potentially harsh effects, developers and general contractors are advised to consult their attorneys for a review and revision of their existing contracts, to develop plans for accessing and monitoring subcontractor payroll records, and to consider strategies for mitigating claims that may be brought against them, as follows:
- Execute all pending agreements
before January 1, 2018 to avoid the effects of AB 1701;
- Include an audit provision
requiring subcontractors and sub-subcontractors to provide payroll records (at minimum, information set forth in Labor Code section 226) and project award information, regularly and/or upon request, with specific deadlines for such production, as subdivision (f) does not specify what is untimely;
- Include defense and indemnity provisions
that would require subcontractors to defend and indemnify the general contractor for claims that are brought pursuant to this section arising from labor performed by employees for subcontractors and sub-subcontractors, and require subcontractors to include a similar provision in their own contracts with sub-subcontractors that would require lower tier subcontractors to also defend and indemnify the general contractor for claims arising from their respective employees’ work;
- Require subcontractors to provide a payment bond and/or a letter of credit
to satisfy claims that are made against the general contractor under this section;
- Require personal guarantees
from owners, partners or key subcontractor personnel;
- Include withholding and back-charge provisions
that would allow general contractors to withhold or charge back the subcontractors for disputed amounts, for claims brought against them, and for failure to comply with the audit, bond, and guarantee requirements.
- Consider implementing a system to confirm evidence of payments,
such as signed acknowledgment of payment by each subcontractor and sub-subcontractor employees and by third parties entitled to recover fringe and other benefit payments or contribution, possibly working with electronic billing software providers to implement such system.
Clay Tanaka is a partner in the Newport Beach office of Newmeyer & Dillion, focusing on construction, real estate, business and insurance disputes in both California and Nevada. As a licensed civil engineer, Clay has significant experience in design and construction of all types of construction projects, which he has effectively utilized in his litigation, trial and arbitration practice to obtain great results for his clients. For questions related to AB1701, please contact Clay Tanaka (clay.tanaka@ndlf.com) or Newport Beach Partner Mark Himmelstein (mark.himmelstein@ndlf.com).
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Clayton T. Tanaka, Newmeyer & Dillion LLPMr. Tanaka may be contacted at
clay.tanaka@ndlf.com
Additional Insured Not Entitled to Coverage for Post-Completion Defects
December 21, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe general contractor, an additional insured on the subcontractor's policy, was not entitled to coverage for construction defect claims that arose after completion of the project. Weitz Co. v. Acuity, 2016 U.S. Dist. LEXIS 150433 (S.D. Ohio Oct. 31, 2016).
Weitz was the general contractor hired by Twin Lakes for construction of a residential community. One of the subcontractors, Miter Masonry, was insured by Acuity under a CGL policy. Work on the project began in 2002 and was substantially completed in 2005. In 2011, Twin Lakes notified Weitz that there were moisture infiltration issues at the project that may be related to work during the project.
Twin Lakes filed a Demand for Arbitration against Weitz on November 30, 2012. Twin Lakes alleged that the defects included the building wrap, windows, doors, wood trim, aluminum wrap, vinyl siding, flashing and brick veneer not being installed in accordance with contract documents and/or industry standards. The arbitration panel awarded damages to Twin Lakes in the amount of $2,775,771.86. The panel found that Weitz breached sections of the contract which caused moisture intrusion and damage to all the units. The panel ultimately held that Weitz could recover from the subcontractors 100% of the $2,775,771.86 awarded. Acuity's insured, Miter Masonry, was determined to be 4% at fault for the damages.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Julie Firestone & Francois Ecclesiaste Recognized as 2023 MSBA North Star Lawyers
July 15, 2024 —
Lewis Brisbois NewsroomMinneapolis, Minn. (June 11, 2024) - Minneapolis Partners Julie Firestone and Francois Ecclesiaste were recently named to the Minnesota State Bar Association (MSBA) 2023 North Star Lawyers list, which recognizes attorneys who provide pro bono service to people of low income at no fee.
All attorneys who were recognized by MSBA provided 50 hours or more of pro bono service to low-income Minnesotans last year. MSBA has a long-standing dedication to advancing the Bars’ pro bono efforts through training, recruiting, and sharing pro bono stories in the community.
“Lewis Brisbois has a long-standing commitment to serving our local communities, including through our pro bono practice, and we are proud of our partners who exemplify this core value of our Firm,” expressed Michelle Gilboe, Managing Partner of the Minneapolis office.
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Lewis Brisbois
A Year-End Review of the Environmental Regulatory Landscape
January 11, 2022 —
Anne Idsal Austin & Joel Simon - Gravel2Gavel Construction & Real Estate Law BlogOur guest today is Anne Idsal Austin, a nationally recognized environmental lawyer who has held several high-profile federal and state regulatory roles. As a partner who recently joined Pillsbury’s environmental and natural resources practice, she provides strategic consulting and policy advice, helping clients navigate the dynamic regulatory and legal waters in an era of energy transition, decarbonization and an emphasis on ESG principles. Prior to joining Pillsbury, Anne was the Principal Deputy Assistant Administrator for the U.S. Environmental Protection Agency’s Office of Air and Radiation, known as OAR or OAR, where she had primary oversight over United States clean air policy and regulation. Prior to that, she served as the EPA regional administrator for Region 6, overseeing all federal environmental programs in Texas, Louisiana, New Mexico, Oklahoma and Arkansas. Prior to joining EPA, Anne held several positions where she shaped environmental and energy policy at the highest levels of government in the state of Texas. Welcome to our podcast, Anne.
Anne Austin: Thanks so much. It’s great to be here today, Joel.
Joel Simon: Anne, I’m really excited for this chance to speak with you because there’s so much going on at the federal environmental policy level, and it would be great to have someone really knowledgeable present this to us in an organized fashion. So with that minor task ahead of you, could you start us off with a brief overview of the environmental regulatory landscape?
Reprinted courtesy of
Anne Idsal Austin, Pillsbury and
Joel Simon, Pillsbury
Ms. Austin may be contacted at anne.austin@pillsburylaw.com
Mr. Simon may be contacted at joel.simon@pillsburylaw.com
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Alexander Moore Promoted to Managing Partner of Kahana Feld’s Oakland Office
May 08, 2023 —
Alexander R. Moore - Kahana FeldKahana Feld is pleased to announce that Alexander R. Moore, Esq., has been promoted to Managing Partner of our Oakland office. Mr. Moore has been at Kahana Feld since 2021 and is a member of the construction defect and general liability practice groups.
Mr. Moore has over 23 years of experience representing individual and commercial clients in complex disputes arising out of construction contracts, construction defect allegations, premises liability matters, landlord-tenant disputes, and contractual disputes arising out of various business relationships involving financial services companies, technology companies, telecommunications companies, real estate brokerages, non-profits, and a range of small businesses. When not focused on litigation, Mr. Moore enjoys consulting on transactional matters including the development of construction and business contracts. He has extensive experience evaluating rights and obligations under construction contracts and related insurance programs. He also assists clients in the implementation of pre-litigation risk management strategies.
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Alexander R. Moore, Kahana FeldMr. Moore may be contacted at
amoore@kahanafeld.com
Buyer Beware: Insurance Agents May Have No Duty to Sell Construction Contractors an Insurance Policy Covering Likely Claims
May 20, 2024 —
David McLain - Higgins, Hopkins, McLain & Roswell, LLCConstruction contractors in the market for insurance coverage have few legal protections if their insurance agent fails to provide insurance that covers likely claims against the contractor. As construction defect lawsuits continue to be a frequent occurrence throughout Colorado, we have seen an increase in the number and complexity of coverage endorsements and exclusions in insurance policies. Some of these exclusions result in insurance policies that are essentially useless to the contractor who purchased them. For example, we have seen dirt work contractors with earth movement exclusions or an earth movement sublimit that turns their $2 million policy into a $100,000 policy. We have seen contractors who primarily build tract homes in subdivisions with tract home exclusions. We have seen general contractors whose policies state that every subcontractor must name the contractor as an additional insured or else the general contactor’s policy converts from a seven-figure policy to a five-figure policy with eroding limits (meaning that the attorney’s fees, expert fees, and litigation costs reduce the coverage limits). The list goes on and leads to an unfortunately high number of contractors who pay significant sums for their insurance policies, finding themselves uninsured or underinsured.
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David McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
