Seattle Washington Building Expert Directory

Unpaid Subcontractor Walks Off the Job and Wins

September 01, 2016 — John P. Ahlers – Ahlers & Cressman PLLC
Make the following inquiry of your constructional lawyer, watch him/her sit up in his/her chair and give your question immediate attention: “I haven’t been paid, can I walk off the job?” The answer to this question is a strong “maybe, but it’s risky.” Walking off the project has a significant downside. The risk is that the judge who reviews your decision, sometimes years after the event, may not agree that the non-payment was a material breach and, thus, suspension of performance (walking off) is not justified. A breach of contract occurs where, without legal justification, a party fails to perform any promise that forms a whole or part of the contract. Not all breaches are equal. Some failures to perform a promise are “nominal,” “trifling” or “technical.” These breaches do not excuse performance under the contract by the non-breaching party. If the breach is “material,” that is, goes to the essential purpose of the agreement, is a question that only a judge decides, and only after the decision was made as to whether to walk off the job or not. Therefore, before deciding whether to walk off the job, you have to second guess what a judge may decide under the circumstances. Since not all judges see things the same way, the decision is fraught with uncertainty and risk. Read the court decision
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Reprinted courtesy of John P. Ahlers, Ahlers & Cressman PLLC
Mr. Ahlers may be contacted at jahlers@ac-lawyers.com

Retainage: What Contractors Need to Know and Helpful Strategies

June 04, 2024 — Gerard J. Onorata - ConsensusDocs
Introduction Most, if not all, construction contracts contain a provision for “retainage.” The origin and concept of retainage dates back to the railroad boom that embraced Great Britain in the 1840s. In its simplest terms, retainage is a mechanism by which an owner or general contractor withholds disbursement of funds from the payment of a requisition in order to secure future performance of a contract and/or to pay for repair of defectively performed work. Retainage typically ranges from five to ten percent, with the amount being reduced as the project progresses to substantial and final completion. One of the reasons for withholding retainage is to incentivize a contractor to complete its work in accordance with the contract terms and conditions. While this may be well-intentioned in concept, it all too often leads to abuse that impacts project cash flow and raises tension between the parties. This typically happens on projects that have delay issues, deficient drawings, and/or claims of defective work. When a project has “gone bad,” the withholding of retainage is one of the first things that an owner will latch onto in order to leverage its position against a contractor. In order for a contractor to put itself in the best position possible, the following negotiation techniques and protective measures should be kept in mind. Know Your Applicable Statute Every state except West Virginia has statutes in place that govern the payment of retainage on public projects. On federal projects, the amount of retainage withheld shall not exceed ten percent as set forth in the Federal Acquisition Regulations (“FAR”). The common thread running through these statutes is the payment of interest as a remedy when the retainage is not timely paid. Historically, most retainage statutes were applicable only to publicly funded projects. This has recently changed with a substantial number of state legislatures recognizing that the payment of retainage on private projects was a serious enough problem to warrant regulation. These include Alabama, Arizona, California, Colorado, Connecticut, Idaho, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, and Vermont. New York’s retainage laws relating to private projects were enacted only this past November. Read the court decision
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Reprinted courtesy of Gerard J. Onorata, Peckar & Abramson
Mr. Onorata may be contacted at gonorata@pecklaw.com

New York’s 2022 Comprehensive Insurance Disclosure Act: Significant Amendments to the C.P.L.R.

January 17, 2022 — Ellen H. Greiper & Kristen Carroll - Lewis Brisbois
New York, N.Y. (January 4, 2022) - On December 31, 2021, New York State Governor Hochul signed into law the Comprehensive Insurance Disclosure Act. The alleged justification for the act was to reduce the use of “delaying tactics” by compelling disclosure of the complete primary, excess, and umbrella policies implicated by the claim. These amendments will be unduly onerous on both carriers and defense counsel—for a multitude of reasons. It imposes an obligation on the insurer to immediately identify excess policies, eroding policies, and other information or contracts that affect the available coverage. Reprinted courtesy of Ellen H. Greiper, Lewis Brisbois and Kristen Carroll, Lewis Brisbois Ms. Greiper may be contacted at Ellen.Greiper@lewisbrisbois.com Ms. Carroll may be contacted at Kristen.Carroll@lewisbrisbois.com Read the court decision
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Seventh Circuit Remands “Waters of the United States” Case to Corps of Engineers to Determine Whether there is a “Significant Nexus”

July 10, 2018 — Anthony B. Cavender - Gravel2Gavel Construction & Real Estate Law Blog
On June 27, the U.S. Court of Appeals for the Seventh Circuit decided the case of Orchard Hill Building Co. v. U.S. Army Corps of Engineers. The Court of Appeals vacated the decision of the District Court granting the U.S. Army Corps of Engineers’ (Corps) motion for summary judgment dismissing the Orchard Hill Building Company’s (Orchard) complaint that the Corps’ jurisdictional determination erroneously found that the waters at issue were “jurisdictional waters” under the Clean Water Act (CWA) subject to the Corps’ jurisdiction. Acknowledging that the Corps and EPA had promulgated a new rule re-defining “waters of the United States” in 2015—which is now being challenged in the courts—the Court of Appeals noted that this case is controlled by the pre-2015 definition of “waters of the United States.” The Court of Appeals remanded the case to the Corps, directing it to determine if there was a significant nexus, as required. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury Winthrop Shaw Pittman LLP
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Residential Building Sector: Peaking or Soaring?

October 01, 2013 — CDJ STAFF
Forbes notes that residential builders and remodelers are one of the fastest-growing groups of privately held companies, but is that growth going to continue? Tim McPeak, an analyst at Sageworks, said, “aside from the strong sales growth, these companies have a relatively healthy 4.6% net profit margin.” Another analyst, Scott Cresswell of The Bonadio Group, said that his “clients who do multifamily are exponentially off the charts with new work. Cresswell also noted that firms in the Northeast are also experiences labor shortages, particularly with wood-frame construction, since, “there are not a lot of carpenters out there.” As a result of the new construction, some workers are more money from overtime. A further hike in interest rates may stop this growth. Mr. McPeak noted that “the expectation of everyone is we’re going to see rates rise.” Read the court decision
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Courthouse Reporter Series: Two Recent Cases Address Copyright Protection for Architectural Works

January 16, 2024 — Stu Richeson - The Dispute Resolver
Recent decisions by the Seventh Circuit and the Eight Circuit have addressed the scope of protection afforded to architectural works under copyright law. The Seventh Circuit case of Design Basics, LLC v. Signature Constr., Inc., 994 F.3d 879 (7th Cir. 2021), took a somewhat narrow view of the copyright protection afforded to the design of an “affordable, multipurpose, suburban, single-family home.” In Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc., 9 F.4th 803 (8th Cir. 2021), cert. denied, 142 S. Ct. 2888, 213 L. Ed. 2d 1103 (2022) the Eight Circuit held that the publication of floor plans of a house in a real estate listing was not protected from claims of copyright infringement. Design Basics, LLC v. Signature Constr., Inc., involved a plaintiff that the court described as holding registered copyrights in thousands of floor plans for suburban, single-family homes that are basic schematic designs, largely conceptual in nature, and depict layouts for one- and two-story single-family homes that include the typical rooms: a kitchen, a dining area, a great room, a few bedrooms, bathrooms, a laundry area, a garage, stairs, assorted closets, etc. The court described the plaintiff as a “copyright troll” and noted that litigation proceeds had become the principal revenue stream for the plaintiff. The plaintiff sued a contractor and related businesses contending hat the defendants had infringed plaintiff’s copyrighted floor plans. Read the court decision
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Reprinted courtesy of Stu Richeson, Phelps
Mr. Richeson may be contacted at stuart.richeson@phelps.com

You're Doing Construction in Russia, Now What?

May 16, 2022 — Anazette Ray & Michael Vardaro - Zetlin & De Chiara LLP
In recent weeks, there has been a long list of companies, from all industries spanning from construction/engineering to fashion and hospitality, that have announced that they are completely severing ties with Russia, while a host of others have announced a temporary halt. See Jeffrey A. Sonnenfeld, Over 400 Companies Have Withdrawn from Russia – But Some Remain, Yale School of Management (Updated Mar. 21, 2022), https://som.yale.edu/story/2022/over-400-companies-have-withdrawn-russia-some-remain?utm_campaign=mb. For those developers, EPC contractors, and design professionals (engineers and architects) who have construction projects in Russia, the question is, “How should we proceed?” The U.S. initially stated that it was not issuing a total embargo on business dealings and trade relations with Russia in response to the nation’s invasion of Ukraine. Instead, the U.S., along with many other Western nations, issued targeted sanctions. See Francesco Giumelli, Understanding Targeted U.N. Sanctions: An Empirical Analysis, International Affairs, 91(6), 1351-1368 (explaining the difference between embargoes and targeted sanctions). However, after evidence of war crimes by Russia emerged, President Biden issued an Executive Order prohibiting U.S. individuals, whether in the states or abroad, from new investments in Russia and prohibiting U.S. individuals from transactions with Russian state-owned entities. See April 6, 2022, Presidential Actions, https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/06/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to-continued-russian-federation-aggression/. This new Executive Order is said to not affect existing contracts in Russia, but instead prohibits new ones. Reprinted courtesy of Anazette Ray, Zetlin & De Chiara LLP and Michael Vardaro, Zetlin & De Chiara LLP Ms. Ray may be contacted at aray@zdlaw.com Mr. Vardaro may be contacted at mvardaro@zdlaw.com Read the court decision
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Fifth Circuit Concludes Government’s CAA Legal Claims are Time-Barred But Injunctive-Relief Claims are Not

November 28, 2018 — Anthony B. Cavender - Gravel2Gavel
In another recent U.S. Court of Appeals for the Fifth Circuit decision, on October 1, 2018, the Fifth Circuit affirmed, in part, the District Court’s ruling that the general federal statute of limitations, 28 U.S.C. § 2462, required the dismissal of the government’s civil enforcement action in the case of U.S., et al., v. Luminant Generation Co., LLC, et al. The Fifth Circuit agreed that the statute barred the imposition of any civil fine for the alleged unlawful construction operations regarding the modification of major emitting facilities contrary to Section 7475(a) of the Clean Air Act (CAA). But, the Fifth Circuit remanded the injunctive-relief claims to the District Court for further consideration. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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