Quick Note: Be Careful with Pay if Paid Clauses (Both Subcontractors and General Contractors)
October 12, 2020 —
Christopher G. Hill - Construction Law MusingsAside from waiver of lien rights (something that will be illegal in Virginia after July 1, 2015), the most troublesome contractual impediment to payment for a subcontractor or supplier on a project often is the “pay if paid” clause. As a general rule, in Virginia, these clauses where drafted in the proper fashion, are enforceable. As I have said many times, in Virginia freedom of contract almost always wins out.
While this is the case, I emphasize that such clauses must be very explicit and specific. Furthermore, and in something that should be obvious, these clauses are generally limited by the Courts of Virginia to only be enforceable and to only forgive the need for payment if the upstream contractor on the construction job has not been paid for the work that the sub claiming non payment has done.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
It’s Time to Change the Way You Think About Case Complexity
August 07, 2018 —
Ben Patrick - Gordon & Rees Construction Law BlogThere are few things that lawyers love more than telling war stories. Partially, that’s because many lawyers either only or primarily have friends who are lawyers, and war stories are a way for lawyers to relate to each other—your barber doesn’t understand the pain of reading through 5 paragraphs of irrelevant objections posed to each of 75 interrogatories, but your fellow lawyers will. One common feature of war stories is a note regarding how much was at issue in the case. “I was handling this $25 million claim once….” Lawyers include the dollar figure in dispute as a shorthand for the complexity of the case they’re talking about. “Oh, we’ll be in depositions for a month solid, this is a $10 million case!”
I don’t know where I picked up this habit, but I know exactly how I learned to rethink it. A friend of mine, as in-house counsel, was handling a case worth over a billion dollars. When he told me about it, my jaw dropped. One of the first things I asked him was, how do you manage a case that big? And he told me about the several law firms he had engaged, all the people working on it. But then he said: it’s not really a complicated case. There were only 4-5 real factual questions, and a similar number of legal ones. It’s just that every factual question had a very high price tag associated with it. The high price tag doesn’t make the factual question any more complex, or any harder to litigate. For example, your builders’ risk policy either has coverage for flood damage or it doesn’t. If it does, then it doesn’t matter whether the flood washed the whole building away or just some materials from the laydown area—coverage is coverage, irrespective of quantum.
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Ben Patrick, Gordon & Rees Scully MansukhaniMr. Patrick may be contacted at
jpatrick@grsm.com
Congratulations to Woodland Hills Partner Patrick Au and Senior Associate Ava Vahdat on Their Successful Motion for Summary Judgment!
February 14, 2023 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPCongratulations to Woodland Hills Partner Patrick Au and Senior Associate Ava Vahdat on their successful Motion for Summary Judgment in Los Angeles Superior Court!
BWB&O’s client was a concrete contractor hired by a government entity for a limited sidewalk repair project many years ago. The Plaintiff, who was confined to a wheelchair, filed suit against BWB&O’s client alleging Negligence and Premises Liability after an alleged fall injury on a public sidewalk. Plaintiff’s primary alleged theory of liability against BWB&O’s client was that it either worked on or was supposed to work on that subject sidewalk and in doing so, or failure to do so, caused Plaintiff’s fall and subsequent alleged injuries/damages. Plaintiff claimed in excess of $1 million in damages.
After extensive discovery, Mr. Au and Ms. Vahdat gathered enough evidence to prove that BWB&O’s client neither worked on the subject area nor was required to do so. Accordingly, they prepared a successful Motion for Summary Judgment on the basis that no duty was owed to Plaintiff thereby refuting the negligence cause of action. The dispositive motion also proved that the subject sidewalk was not owned, controlled, or maintained by BWB&O’s client thereby negating the premises liability cause of action.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
Safe and Safer
May 01, 2023 —
Grace Austin - Construction ExecutiveThere’s always room for improvement” is a cliché that applies to nothing if not health and safety in the construction industry, where doing things differently—doing them better—means preventing injuries and saving lives. In that spirit, Construction Executive asked five industry safety advocates a simple question: What is one thing about construction safety you’d like to see change?
Ranging from sweeping to granular, their answers all focus on the people underneath the hard hats. As Miller & Long’s Frank Trujillo notes: “‘Safety first’ has been a mantra in the industry for decades, but I think companies have forgotten what that means. It’s about people—who they are, what they care about, who they love and their wellness.”
But each of our experts—all of them representing companies who participate in ABC’s STEP Safety Management System —has a different idea of how safety in the construction industry can and should evolve, and what needs to change. Their answers below have been condensed and edited for clarity.
Reprinted courtesy of
Grace Austin, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Top 10 Lessons Learned from a Construction Attorney
February 18, 2015 —
Craig Martin – Construction Contractor AdvisorI have had the pleasure of working with
Cordell Parvin, who in his earlier career was a preeminent construction attorney, and now,
coaches attorneys. Cordell has shared countless construction guides and presentations with me over the years, for which I am extremely grateful. Below is Cordell’s Lesson’s Learned list, that is as true today as when he drafted it years ago.
1. Contracts and owners are not all alike. Some are fairer than others. Some create greater risks of making the budget if we encounter changes, delays and impacts. We should appreciate the risks before bidding and not underestimate indirect costs of staff to deal with these situations.
2. It is important to have a thorough understanding of the Contract Administration requirements of complex contracts. Identifying specifically what must be done when changes, delays and differing site conditions are encountered is one way to establish the understanding.
3. If a project ever ends up in court, every letter, note, e-mail and memo is evidence and will be taken out of context by the opposing lawyer. Recording every mistake, miscalculation, problem or lesson learned during construction of the project will come back to haunt you.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Get Construction Defects in Writing
December 11, 2013 —
CDJ STAFFSometimes, even if a developer is willing to make a repair, sometimes the repair doesn’t get to the actual problem, according to Nicholas D. Cowie of Cowie & Mott, writing on his blog. He notes that “getting it ‘right’ the first time is important and written documentation is key.” He gives the example of “when a developer agrees to informally repair a window or roof leak, the ‘repair,’ as far as the developer is concerned, may consist merely of sending out a worker with a caulk gun to seal gaps that should have been protected with a solid flashing material during the original installation.”
As a better course, he says that homeowner associations should “request a written description of the proposed repair” in order that it can be evaluated. This also allows follow-up to determine if the agreed-upon repair was done properly. And, although some homeowners associations would rather not have the original subcontractor repair their own work, here warranties often come into play.
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Arizona Court Determines Statute of Limitations Applicable to a Claim for Reformation of a Deed of Trust (and a Related Claim for Declaratory Judgment)
October 16, 2018 —
Kevin J. Parker - Snell & Wilmer Real Estate Litigation BlogIn a recent Arizona Court of Appeals case, Deutsche Bank National Trust Co. v. Pheasant Grove LLC, 798 Ariz. Adv. Rep. 15 (August 23, 2018), the Court of Appeals addressed the question of what statute of limitations was applicable to a declaratory judgment claim. In that case, a bank’s deed of trust inadvertently omitted one of the lots that was supposed to secure that bank’s loan. The deed of trust should have covered lots 8 and 9, but by its terms covered only lot 8. A different bank subsequently recorded a deed of trust that encumbered lot 9. In connection with the second bank’s foreclosure of its deed of trust, the first bank sought reformation and a declaratory judgment with regard to its deed of trust, seeking to have that deed of trust cover both lots 8 and 9, as intended. The trial court determined that the first bank’s reformation claim was filed too late, and also determined that the declaratory judgment claim was filed too late, beyond the applicable statute of limitations.
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Kevin J. Parker, Snell & WilmerMr. Parker may be contacted at
kparker@swlaw.com
Partners Jeremy S. Macklin and Mark F. Wolfe Secure Seventh Circuit Win for Insurer Client in Late Notice Dispute
November 12, 2019 —
Jeremy S. Macklin & Mark F. Wolfe - Traub Lieberman PerspectivesIn a written decision dated August 12, 2019, authored by Chief Judge Diane P. Wood, the U.S. Court of Appeals for the Seventh Circuit ruled in favor of Traub Lieberman’s insurer client, affirming the District Court’s grant of summary judgment in the insurer’s favor. Partners, Jeremy S. Macklin and Mark F. Wolfe, represented the insurer client in the District Court and before the Seventh Circuit. Macklin argued the case before the Seventh Circuit on behalf of the insurer on May 28, 2019.
The insurer client issued an excess liability policy to Deerfield Construction, a telecommunications construction company, which incorporated the notice requirements of the primary liability insurance policy issued by American States Insurance Company. The insured’s employee was involved in an automobile accident in 2008, during the effective dates of the excess liability policy. A lawsuit arising from the accident was filed and served in 2009. While Deerfield Construction, through its retained insurance intermediary, provided immediate notice of the accident and lawsuit to the primary liability insurer, the insurer client did not receive notice of either the accident or the lawsuit from any source until December 2014, approximately six weeks before trial.
Following a $2.3 million judgment, the insurer client filed a complaint for declaratory judgment seeking a finding that Deerfield Construction materially breached the excess liability policy by not providing reasonable notice of the accident or the lawsuit, as required by the policy. The District Court found that the notice given to the insurer client was unreasonable as a matter of law. The District Court rejected Deerfield Construction’s argument that an insurance broker involved in the purchase of the excess liability policy, Arthur J. Gallagher, was the insurer client’s apparent agent for purposes of accepting notice. The District Court also rejected Deerfield Construction’s argument that the insurer client’s acts of requesting discovery, reviewing trial reports, and participating in settlement discussions raised equitable estoppel concerns.
Reprinted courtesy of
Jeremy S. Macklin, Traub Lieberman and
Mark F. Wolfe, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com
Mr. Wolfe may be contacted at mwolfe@tlsslaw.com
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