FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Infrastructure Money Comes With Labor Law Strings Attached

July 25, 2022 — Cheryl Behymer, Patrick M. Dalin & Collin Cook - Construction Executive
The federal government has committed to spending $1 trillion under the Infrastructure Investment and Jobs Act on nationwide construction, alteration and repair projects. Billions of dollars have already been deployed on projects to improve highways, bridges, airports, electrical infrastructure and drinking water distribution, and the government is poised to spend the remaining funds on a massive infrastructure build-out over the next five years. While federal government contracts may provide a lucrative and reliable stream of revenue for construction companies, contractors must be prepared to comply with special requirements, particularly under the labor and employment laws enforced by the U.S. Department of Labor (USDOL). 1. The Davis Bacon Act Requires Payment of Prevailing Wages and Fringe Benefits The Davis Bacon Act (DBA) applies to most federally funded and federally assisted projects for construction, alteration or repair work. This law requires all contractors and subcontractors on a covered project to pay all “laborers or mechanics” the wages and fringe benefits that “prevail” in the locality where the work is being performed. The USDOL determines what the prevailing wages and fringe benefits are for each trade and publishes them in wage determinations that should be issued to all contractors on the project. Reprinted courtesy of Cheryl Behymer, Patrick M. Dalin & Collin Cook, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Resolving Subcontractor Disputes with Pass-Through Claims and Liquidation Agreements

May 13, 2024 — Stephanie Cooksey - Peckar & Abramson, P.C.
Imagine a project where you are unable to reach final completion due to an unresolved subcontractor claim. If the project owner is responsible for the claim, and both the owner and subcontractor are entrenched in their positions, how would you resolve this dispute? The default option is a three-party lawsuit where the subcontractor sues you in your capacity as general contractor. By denying the claim, you bring the owner into the lawsuit as a liable party to the subcontractor’s claim. This option is efficient from the judicial system’s perspective, as it means one lawsuit instead of two. The subcontractor cannot sue the owner since the two have no contract between them. Thus, the subcontractor’s recourse is limited to suing the contractor. In the three-party lawsuit, you argue that if the subcontractor prevails in its claim against you, the owner is liable. If the owner successfully defends against the claim, the subcontractor takes nothing. Putting judicial economy aside, it may not make economic sense for contractors to have a lawyer involved in litigating a case where they have no skin in the game. Fortunately, there is a better option than the three-party lawsuit on multi-party construction projects. Read the court decision
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Reprinted courtesy of Stephanie Cooksey, Peckar & Abramson, P.C.
Ms. Cooksey may be contacted at scooksey@pecklaw.com

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In Hong Kong, You Can Find a Home Where the Buffalo Roam

September 17, 2014 — Shai Oster – Bloomberg
To city dwellers worried about mice and rats, spare a thought for Hong Kongers confronting half-ton feral beasts. A few miles from some of the most densely populated neighborhoods in the world, more than 1,000 cows and buffalo from abandoned farms roam the countryside. Development now is pushing them into harm’s way and onto roads. Hong Kong represents an extreme example of the task many communities face of balancing conservation and growth. Wolves sniff near the suburbs of Paris, bears roam Lake Tahoe and moose stumble across the roads of Halifax. There’s a new word to describe how undomesticated animals adapt to man-made environments: synurbanization. Read the court decision
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Reprinted courtesy of Shai Oster, Bloomberg
Shai Oster may be contacted at soster@bloomberg.net

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AB 1701 – General Contractor Liability for Subcontractors’ Unpaid Wages

December 01, 2017 — Alex Baghdassarian, Eric M. Gruzen, & Kerri Sakaue – Peckar & Abramson, P.C.
Contractors will soon find themselves on the frontline of wage disputes on projects if laborers working on behalf of their subcontractors or vendors are unpaid. On October 14, 2017, Governor Jerry Brown signed into law AB 1701, which will allow laborers to seek direct compensation from the general contractors on private projects, if their wages remain unpaid. The legislative mandate requires direct contractors—defined as contractors who have a direct contractual relationship with an owner—to assume liability for any debt incurred by a subcontractor, at any tier, for a wage claimant’s performance of labor included in the subject of the original contract between the general contractor and the owner. The California bill will apply to all private construction contracts entered into on or after January 1, 2018. Previously, all laborers could maintain a mechanic’s lien claim against private property, without needing to serve a 20-day preliminary notice, but there was no statutory obligation on the “direct contractors” to reimburse the laborers their unpaid wages. Reprinted courtesy of Peckar & Abramson, P.C. attorneys Alex Baghdassarian, Eric M. Gruzen and Kerri Sakaue Mr. Baghdassarian may be contacted at abaghdassarian@pecklaw.com Mr. Gruzen may be contacted at egruzen@pecklaw.com Ms. Sakaue may be contacted at ksakaue@pecklaw.com Read the court decision
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Virginia Allows Condominium Association’s Insurer to Subrogate Against a Condominium Tenant

August 10, 2020 — Gus Sara - The Subrogation Strategist
In Erie Insurance Exchange v. Alba, Rec. No. 190389, 2020 Va. LEXIS 53, the Supreme Court of Virginia considered whether the trial court erred in finding that a condominium association’s property insurance provider waived its right of subrogation against a tenant of an individual unit owner. The Supreme Court reversed the lower court’s decision, holding that the insurance policy only named unit owners as additional insureds, not tenants, and thus the subrogation waiver in the insurance policy did not apply to tenants. The court also found that the condominium association’s governing documents provided no protections to the unit owner’s tenant because the tenant was not a party to those documents. This case establishes that, in Virginia, a condominium association’s insurance carrier can subrogate against a unit owner’s tenant where the tenant is not identified as an additional insured on the policy. The Alba case involved a fire at a condominium building originating in a unit occupied by Naomi Alba (Alba), who leased the condominium under a rental agreement with the unit owner, John Sailsman (Sailsman). The agreement explicitly held Alba responsible for her conduct and the conduct of her guests. An addendum to the lease stated that Sailsman’s property insurance only applied to the “dwelling itself” and that Alba was required to purchase renters insurance to protect her personal property. Along with the rental agreement, Alba received the condominium association’s Rules & Regulations, Declarations and Bylaws. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Brazil Builder Bondholders Burned by Bribery Allegations

October 22, 2014 — Paula Sambo and Sabrina Valle – Bloomberg
Brazil’s biggest construction companies are leaving bondholders with losses in the wake of allegations they bribed Petroleo Brasileiro SA to win contracts. Queiroz Galvao SA’s $700 million of notes due 2019 have dropped 2.5 percent since Oct. 9, when the Department of Justice made available video in which former Petrobras head of refining Paulo Roberto Costa alleged that builders formed a cartel to overcharge for projects and divert money to politicians. OAS SA’s $875 million of 2019 notes have slumped 1.9 percent in that span, versus a 0.1 percent loss for emerging markets. Ms. Sambo may be contacted at psambo@bloomberg.net; Ms. Valle may be contacted at svalle@bloomberg.net Read the court decision
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Reprinted courtesy of Paula Sambo and Sabrina Valle, Bloomberg

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Failure to Allege Property Damage Within Policy Period Defeats Insured's Claim

October 03, 2022 — Tred R. Eyerly - Insurance Law Hawaii
The insured's inability to determine when water damage occurred meant it could not pursue claims of property damage against the insurers. Creek v. State Farm Fire & Cas. Co., 2022 U.S. Dist. LEXIS 116939 (W.D. Wash. July 1, 2022). Gold Creek Condominium complex experienced water damage. The complex was completed in 1982. The owners sued State Farm and Travelers under all-risk policies when tenders for the damage were denied. In 2017, Creek hired an expert to investigate deterioration due to water intrusion. The expert noted that "water intrusion had been evident in the exterior walls, soffits, terraces, handrails and elevated entry walkways for some time." Thereafter, Creek tendered claims for property damage to State Farm and to Travelers. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Sweet News for Yum Yum Donuts: Lost Goodwill is Not an All or Nothing Proposition

October 07, 2019 — Josh Cohen - California Construction Law Blog
Last month a California Court of Appeals clarified that a property owner facing eminent domain is only required to prove partial loss of goodwill, not total loss of goodwill, to be entitled to a trial on the amount of goodwill lost. Yum Yum Donuts operated a shop in Los Angeles that was subject to eminent domain by the Los Angeles Metropolitan Transportation Authority (MTA) to make way for light railway track. At trial, Yum Yum sought loss of goodwill as part of its condemnation damages under Code of Civil Procedure section 1263.510. At trial the MTA’s expert testified that Yum Yum could have reduced its goodwill loss if it relocated to one of three alternative locations rather than simply closing the shop. But the expert conceded that even if Yum Yum had relocated, it would have lost some goodwill. Yum Yum refused to relocate, arguing that its relocation costs would render the move unprofitable. The trial court found that Yum Yum’s failure to mitigate its damages barred Yum Yum from having a jury trial to recover any goodwill damages. Read the court decision
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Reprinted courtesy of Josh Cohen, Wendel, Rosen, Black & Dean LLP
Mr. Cohen may be contacted at jcohen@wendel.com

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