Sureties do not Issue Bonds Risk-Free to the Bond-Principal
August 30, 2017 —
David Adelstein - Florida Construction Legal UpdatesIf your construction company is bonded, then you have signed a General Agreement of Indemnity with your surety / bonding company. Stated another way, if a surety issued an obligee on behalf of your construction company, as the bond-principal, a payment or performance bond, then you have signed a General Agreement of Indemnity with your surety.
The General Agreement of Indemnity is NOT to be taken lightly. Without the General Agreement of Indemnity, the surety is NOT issuing the bonds you need to work on a certain project. A bond is not insurance and sureties do not issue the bonds under a risk-free premise. Oh no! If a surety has to pay-out claims under a bond, the surety will be looking to recoup that loss from the indemnitors that executed the General Agreement of Indemnity.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Lease-Leaseback Battle Continues as First District Court of Appeals Sides with Contractor and School District
August 17, 2017 —
Garret Murai - California Construction Law BlogEarlier, we wrote about Davis v. Fresno United School District (2015) 237 Cal.App.4th 261, a Fifth District California Court of Appeals decision that sent shock waves through the school construction industry and raised questions regarding the use of California’s lease-leaseback method of project delivery (Education Code sections 17400 et seq.).
California’s lease-leaseback method of project delivery provides an alternative project delivery method for public school districts than the usual design-bid-build method of project delivery. Under the lease-leaseback method of project delivery, a school district leases its property to a developer, who in turn builds a school facility on the property and leases it back to the school district. One of the benefits of the lease-leaseback method of project delivery is that school districts do not need to come up with construction funds to build school facilities since they pay for the construction over time through their lease payments to the developer. Critics, however, argue that because lease-leaseback projects do not need to be competitively bid, they are ripe for cronyism between developers and school districts.
In Davis, a taxpayer successfully brought suit against the Fresno Unified School District challenging the propriety of a lease-leaseback project because the entirety of the District’s “lease payments” occurred while the project was being constructed and thus, successfully argued the taxpayer, there was no “true” lease of a facility since it was under construction.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
David Uchida Joins Kahana Feld’s Los Angeles Office as Partner
December 31, 2024 —
Linda Carter - Kahana FeldKahana Feld is pleased to announce that David M. Uchida recently joined the firm as a partner in the firm’s Los Angeles Office. He is a member of the firm’s General Liability group.
A client-focused and seasoned litigator, David has defended product manufacturers and suppliers in complex toxic tort and environmental litigation. David also has extensive experience defending clients in alleged asbestos, benzene, and silica exposure claims.
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Linda Carter, Kahana FeldMs. Carter may be contacted at
lcarter@kahanafeld.com
Construction Defect Headaches Can Be Avoided
February 21, 2013 —
CDJ STAFFConstruction defect claims can be an avoidable headache, if builders apply some forethought. Mark J. Peschel of Johnson & Lindberg, a Bloomington, Minnesota law firm, points out that simply says that windows should be weatherproofed by appropriate flashing, without any guidance on accomplishing that. He notes that “builders tend not to know the weatherproofing code provisions as well as they should.” Another lawyer, Eric S. Hayes of Brown and Carlson in St. Louis Park extends this, “it’s not just the building codes that need to be followed, but also the standards in the industry.”
Hayes notes that another way builders can avoid headaches is by being proactive. “I often hear, once things have gone sour and moved toward litigation, that the homeowner contacted the contractor a dozen times about a leaking basement and nothing was done, so they were forced to sue.” His advice for builders: “Don’t let it fester.”
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Clean Energy and Conservation Collide in California Coastal Waters
March 19, 2024 —
Nadia Lopez & Josh Saul - BloombergTwo of President Joe Biden’s biggest priorities — conservation and the switch to clean energy — are colliding in the ocean off California’s quiet Central Coast.
Located halfway between San Francisco and Los Angeles, Morro Bay boasts a rich ecosystem of fish, otters and migrating whales that the Indigenous Chumash people want to protect with a
new marine sanctuary. But 20 miles (32 kilometers) out, developers plan some of the West Coast’s
first offshore wind farms, where 1,100-foot-tall turbines (335 meters) tethered to the seabed will help California cut its carbon emissions.
One US government agency appears poised to approve the sanctuary. Another
already leased 376 square miles of ocean for wind development, just outside the sanctuary’s boundaries. Now, a fight is brewing over whether the scenic bay itself should be left out of the sanctuary, to give undersea power cables from the wind farms a place to come onshore.
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Nadia Lopez, Bloomberg and
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Poor Pleading Leads to Loss of Claim for Trespass Due to Relation-Back Doctrine, Statute of Limitations
April 13, 2017 —
Brett G. Moore & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Scholes v. Lambirth Trucking Co. (No. C070770, Filed 4/6/2017), the California Court of Appeal for the Third Appellate District held that the relation-back doctrine could not save a property owner’s trespass claim against an adjacent neighbor where the property owner’s original complaint was factually devoid and was later amended to include the trespass claim after the statute of limitations had run.
The relation-back doctrine is a well-settled legal principle which allows a plaintiff to amend a complaint to add a cause of action which would otherwise be barred by the statute of limitations. As long as the factual allegations “relate back” to the those alleged in the original complaint, an additional cause of action will not be subject to the applicable statute of limitations. The policy behind statutes of limitation is to put a defendant on notice of the need to defend against a claim in time to prepare an adequate defense.
On May 21, 2007, a fire broke out at defendant Lambirth Trucking Company’s (“Lambirth”) soil enhancement facility adjacent to plaintiff Vincent Scholes’ (“Scholes”) property. Scholes had previously notified Lambirth that wood chips and rice hulls were accumulating on his property as a result of Lambirth’s operations. Local authorities also warned Lambirth of the hazards presented by storage of those materials.
Reprinted courtesy of
Brett G. Moore, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Mr. Moore may be contacted at bmoore@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Utah Supreme Court Allows Citizens to Block Real Estate Development Project by Voter Referendum
June 10, 2019 —
Sean M. Mosman & Mark O. Morris - Snell & Wilmer Under ConstructionThe Utah Supreme Court recently decided Baker v. Carlson, 2018 UT 59, which considered a developer’s ongoing effort to build a mixed-use, part-residential and part-commercial development on the site of the long-defunct Cottonwood Mall located in Holladay, Utah. On November 28, 2018, the Supreme Court affirmed the Third District Court’s ruling that a voter referendum to block the development was valid. This ruling calls into question the certainty of investment-backed real estate decisions in Utah and thus could carry negative implications for the Utah construction and real estate development communities.
The Cottonwood Mall opened in the early 1960s, and for several decades was a popular regional shopping destination. But the mall fell on financial hard times in the mid-1990s, and since 2007 the 57-acre lot has sat vacant. Around that time, the owner of the lot made plans to redevelop it, and asked Holladay City to rezone the site to permit mixed uses. In response, the City rezoned the lot as Regional/Mixed-Use (R/M-U). The City also created a process to control the development of an R/M-U zone, requiring prospective builders to first submit a site development master plan—which sets forth guidelines for the overall development and design of the site—to the City for approval. After the City approves a master plan, the developer must enter into a development agreement with the City, giving the developer certain rights and addressing other development-related issues.
Reprinted courtesy of
Sean M. Mosman, Snell & Wilmer and
Mark O. Morris, Snell & Wilmer
Mr. Mosman may be contacted at smosman@swlaw.com
Mr. Morris may be contacted at mmorris@swlaw.com
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The Future of Construction Tech Is Decision Tech
August 06, 2019 —
Bassem Hamdy - Construction ExecutiveIt doesn’t take much to be catastrophically wrong in construction; some bad information, a touch of misleading intel, a few biased opinions mixed with human error and perhaps a little bad luck to top it off. A poor decision early in a project plants itself like a weed—it grows benignly at first, and becomes gravely pervasive at the end.
Being wrong in construction is dangerous. Error leads to leaning towers and broken buildings. Poorly-built structures can hinder economic growth and deprive communities of good infrastructure. For the enterprise, bad decisions can lead to massive financial loss and—worse—human loss on a jobsite.
Despite knowing all the dangers, it seems that flawed data, misleading intel and human error have become traits the industry can’t shake. To be clear, construction is one of—if not the most—complex industry in today’s economy. Companies walk a tight rope between a 2% margin on one side and ruinous loss on the other. Under such conditions, it’s easy to see why sustained good judgement is difficult.
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Bassem Hamdy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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