Legal Fallout Begins Over Delayed Edmonton Bridges
June 22, 2016 —
Scott Van Voorhis - Engineering News-RecordThe project teams for Edmonton’s two problem bridge-replacement projects have put most of their woes behind them—if trips to civil court and possible late-completion penalties are excluded.
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Scott Van Voorhis, Engineering News-RecordENR may be contacted with questions or comments at
ENR.com@bnpmedia.com
Top 10 Take-Aways from the 2024 Fall Forum Meeting in Pittsburgh
December 03, 2024 —
Marissa L. Downs - The Dispute ResolverOver 500 construction law attorneys and consultants convened last week at the confluence of three rivers in what became the first-ever meeting in Pittsburgh, Pennsylvania of the ABA Forum on Construction Law. The Steel City was a fitting backdrop for a meeting focused on issues of design in construction. Thanks to the hard work of many, most notably the newly minted Forum Chair Keith Bergeron and Meeting Coordinators Kendall Woods and Michael Clark, the meeting's attendees brought home new connections and a host of new lessons learned. Read on for my top 10 take-aways from the 2024 Fall Meeting in Pittsburgh and feel free to share yours in the comments below.
10. An architect's standard of care does not require perfection. A common refrain across many of the meeting's plenary sessions was that any design that is produced by human hands will never be perfect. In recognition of our own fallibility, the legal standard to which design professionals will be held to account does not require that their designs be error-free. A design professional must generally exercise the degree of care and skill ordinarily exercised by professionals performing similar services under similar circumstances. Establishing what that means in each locality will vary and will most likely need to be supported by the expert opinion of another practicing design professional.
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Marissa L. Downs, Laurie & Brennan, LLPMs. Downs may be contacted at
mdowns@lauriebrennan.com
Miller Act Payment Bond Surety Bound to Arbitration Award
December 29, 2020 —
David Adelstein - Florida Construction Legal UpdatesHere is an interesting case binding a Miller Act payment bond surety to an arbitration award against its prime contractor (bond principal) that it received sufficient notice of. Notice is the operative word. The surety could have participated in the arbitration, elected not to, and when its prime contractor (bond principal) lost the arbitration, it was NOT given another bite out of the apple to litigate facts already been decided.
In BRC Uluslararasi Taahut VE Ticaret A.S. v. Lexon Ins. Co., 2020 WL 6801933 (D. Maryland 2020), a prime contractor was hired by the federal government to make security upgrades and interior renovations to a United States embassy in the Czech Republic. The prime contractor hired a subcontractor to perform all of the installed contract work. The prime contractor terminated the subcontractor for default during the course of construction.
The subcontractor demanded arbitration in accordance with the subcontract claiming it was wrongfully terminated. The subcontractor also filed a lawsuit asserting a Miller Act payment bond claim against the prime contractor’s surety (as well as a breach of contract action against the prime contractor). The subcontractor made clear it intended to pursue its claims in arbitration and hold the payment bond surety jointly and severally liable. The parties agreed to stay the lawsuit since the facts were identical to those being arbitrated. The arbitration went forward and an award was entered in favor of the subcontractor and against the prime contractor for approximately $2.3 Million.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
When Construction Defects Appear, Don’t Choose Between Rebuilding and Building Your Case
October 11, 2021 —
Curtis Martin - ConsensusDocsWhen construction defects occur during construction, they intensify pressure from a schedule that may already be tight. Defects must be analyzed, confirmed, removed, and replaced and this can be time consuming. Or course, a construction schedule rarely anticipates defects, demolition, and rework and the owner will still expect the project to be completed on time; however, pressing forward with immediate remediation may have unintended consequences.
Before starting demolition, consider the evidentiary doctrine of spoliation. Spoilation occurs when a party destroys or unreasonably deprives another party of evidence and courts have imposed sanctions on a party that deprives an opponent of evidence. The doctrine has historically concerned documents, but its application has extended to electronic data, and courts also apply it to building conditions in construction defects cases. So, before tearing out or fixing defective work, consider the need to allow the opposing party to inspect, test and document it.
Imagine this scenario. The concrete in a slab placed by your subcontractor shows low compressive strength results in the 28-day cylinder tests. Tearing out the slab and replacing it will put you at least a month behind schedule and you don’t want to waste any time before removing and replacing it. Nevertheless, while you’re rebuilding the defective slab, be mindful that you are also building a case. If you plan to recover the costs you incur because of the defective concrete from the responsible parties, you should allow the subcontractor (and possibly the concrete supplier and other implicated parties) to examine, preserve, and/or test the work in question. Failure to do so may subject you to spoliation sanctions and jeopardize your right to recover damages.
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Curtis Martin, Peckar & AbramsonMr. Martin may be contacted at
cmartin@pecklaw.com
Five Pointers for Enforcing a Non-Compete Agreement in Texas
June 08, 2020 —
Kristopher M. Stockberger - The Grindstone Lewis Brisbois' Labor & Employment Blog1. The Devil’s in the Details
Under Texas law, for a non-compete agreement to be enforceable, it must meet strict requirements as to timing, geography, and the type of conduct that it prohibits. While courts have enforced agreements for between one and two years, your situation could be subject to a shorter time period. If the geographical scope of the agreement is too broad or vague, that could render the agreement unenforceable. Also, the type of conduct prohibited by your agreement should be tied to the specifics of your business, because categorical barriers to other employment are often not enforced. If an employer knowingly instructs an employee to enter an overbroad non-compete agreement, the employer runs the risk of paying the employee’s attorneys’ fees.
2. Timing on the Front End
If an employee has been with an employer for years and the employer suddenly decides to have her sign a non-compete without any other meaningful change in the employee’s role, then the agreement will probably not be enforceable, unless the employee receives “consideration.” In this context, consideration is something of value, other than money or benefits, which the law deems to warrant protection by a non-compete agreement. For example, allowing an employee to learn the secret formula to Coca-Cola or to gain access to an employer’s confidential financials constitutes legally sufficient consideration given to an employee in exchange for the employee’s promises in a non-compete agreement.
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Kristopher M. Stockberger, Lewis BrisboisMr. Stockberger may be contacted at
Kris.Stockberger@lewisbrisbois.com
The New Jersey Theme Park Where Kids’ Backhoe Dreams Come True
April 13, 2017 —
Patrick Clark - BloombergThere is probably only one place in America where an eight-year-old can ride a carousel whose seats look like excavator buckets, then swipe at bowling pins with a mini-digger—where, for a ticket price of less than $40, he or she can operate a backhoe, drive a drum-roller, and ride the telescoping arm of a construction lift 50 feet into the air to admire the Philadelphia skyline.
That place is a small theme park in West Berlin, N.J., called Diggerland USA.
Diggerland opened for the season in March, but even on a recent visit when the park was closed, its discordant appeal was obvious: Small children get to climb into the cabs of heavy-duty construction equipment.
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Patrick Clark, BloombergMr. Clark may be followed on Twitter @pat_clark
Recent Changes in the Law Affecting Construction Defect Litigation
October 19, 2017 —
David M. McLain - Colorado Construction LitigationOn May 23, 2017, Governor Hickenlooper signed HB17-1279 into law. The bill states that before an HOA’s executive board can institute a construction defect action, it must provide notice of the anticipated commencement of the action to each of the HOA’s unit owners, along with certain disclosures about the anticipated action. The bill also requires that the HOA executive committee convene a meeting of the unit owners to consider the action, and that the construction professionals against which the claim is being brought have the opportunity to address the members of the HOA. The bill also states that the HOA executive committee may only initiate a construction defect action if it is approved by “owners of units to which a majority of votes in the association are allocated.”
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
How AB5 has Changed the Employment Landscape
March 16, 2020 —
Jason Morris – Newmeyer DillionAs a result of California's Assembly Bill 5, effective January 1, 2020, the California Supreme Court's ABC test is now the standard for evaluating independent contractor classifications for purposes of the Industrial Welfare Commission Wage Orders, California Labor Code, and the California Unemployment Insurance Code. That dramatically ups the ante for companies that rely on independent contractors, particularly those that have not re-evaluated such classifications under the ABC test.
Misclassification cases can be devastating, especially for misclassified non-exempt employees, and can result in minimum wage violations, missed meal and rest periods, unpaid overtime, unreimbursed business expenses, record-keeping violations, steep penalties, attorneys' fees, and even criminal liability, among other consequences. Misclassifying workers creates enormous risks for companies and is fertile ground for class actions and representative actions under the Private Attorneys General Act (PAGA).
The Costs Of Misclassification Are Expensive, And Hope Is Not A Strategy
Many business owners I speak to understand AB5 has caused the ground to shift beneath their feet and recognize the resulting risks of misclassifying workers. Despite these risks, companies often balk at taking the necessary steps to evaluate their classifications and mitigate the risk of an adverse classification finding.
The most common reason I hear from resistant companies is the worker does not want to be reclassified as an employee and the company trusts the worker ("I've worked with her for years; she won't sue me because she wants to be a contractor"). I get it. Making the change from contractor to employee results in less flexibility and greater administrative burden for everyone involved. While I'm sympathetic, the government is not. Reluctance to change while acknowledging the associated risks amounts to a strategy based on hope. As we say in the Marine Corps, however, "hope is not a strategy."
Aside from the sometimes foolhardy belief that a misclassified worker can be trusted to not file suit after a business breakup (when the deposits stop and mortgage bill comes due, guess who's a prime target), companies often fail to recognize the numerous ways in which their classification decisions can be challenged even when they are in agreement with their (misclassified) contractors. Here are just three examples of how your classifications can be scrutinized despite the lack of a challenge by the worker:
- Auto Accidents: Whether delivering products, making sales calls, or traveling between job sites, independent contractors often perform work that requires driving. Of course, sometimes drivers are involved in automobile accidents. When accidents happen, insurance companies step in and look for sources of money to fund claims, attorneys' fees, costs, and settlements. One potential source is your insurance. "But the driver isn't my employee!," you say. You better buckle up because the other motorist's insurance carrier is about to challenge your classification in an attempt to access your insurance policies.
- EDD Audits: During the course of the last several years, the California Employment Development Department (EDD) has increased the number of verification (random) audits it performs in search of additional tax revenue. One reason government agencies prefer hiring entities classifying workers as employees rather than independent contractors is it's a more efficient tax collection method; employers collect employees' taxes on the government's behalf, which increases collection rates and reduces government collection costs. The consequences of misclassification include pricey fines, penalties, and interest.
- Unemployment Insurance, Workers' Compensation, and Disability Claims: In addition to verification audits, the EDD performs request (targeted) audits. Targeted audits may result when a contractor files an unemployment insurance, workers' compensation, or disability claim because independent contractors are ineligible for such benefits. Request audits, like verification audits, can result in costly fines, penalties, and interest if the EDD concludes you have misclassified your workers. Even so, that may not be the worst of it: the EDD often shares its findings with the Internal Revenue Service.
Your Action Plan
AB5 has changed the measuring stick, misclassification costs are high, and you do not have complete control of when the government or others can challenge your classifications. So what can you do? Here are several steps all prudent companies should take if they are using independent contractors:
- Conduct an audit of current classification practices;
- Review written independent contractor agreements;
- Implement written independent contractor agreements;
- Update workplace policies;
- Update organizational charts;
- Reclassify independent contractors as employees if necessary.
Jason Morris is a partner in the Newport Beach office of Newmeyer Dillion. Jason's practice concentrates on the areas of labor and employment and business litigation. He advises employers and business owners in employment litigation, as well as advice and counsel related to employment policies and investigations. You can reach him at jason.morris@ndlf.com.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's success and bottom line. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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