California Supreme Court Addresses “Good Faith” Construction Disputes Under Prompt Payment Laws
June 06, 2018 —
Garret Murai - California Construction Law BlogIt’s been a rollercoaster. But the ride appears to be over.
In United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., Case No. S231549 (May 14, 2018), the California Supreme Court addressed whether a direct contractor can withhold payment from a subcontractor based on the “good faith dispute” exception of the state’s prompt payment laws if the “dispute” concerns any dispute between the parties or whether the dispute must be directly relevant to the specific payment that would otherwise be due.
California’s Prompt Payment Laws
California has a number of construction-related prompt payment laws scattered throughout the state’s Civil Code, Public Contracts Code and Business and Professions Code. Their application depends on the type of construction involved, whether public or private; the type of payment involved, whether a progress payment or retention; and who is paying, whether it’s a private owner, public entity, direct contractor, or subcontractor.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
The Washington Supreme Court Rules that a Holder of a Certificate of Insurance Is Entitled to Coverage
March 09, 2020 —
Sally Kim & Kyle Silk-Eglit - Gordon & Rees Insurance Coverage Law BlogThe Washington courts have historically found that the purpose of a certificate of insurance is to advise others as to the existence of insurance, but that a certificate is not the equivalent of an insurance policy. However, the Washington State Supreme Court recently held that, under certain circumstances, an insurer may be bound by the representations that its insurance agent makes in a certificate of insurance as to the additional insured (“AI”) status of a third party. Specifically, in T-Mobile USA, Inc. v. Selective Ins. Co. of America, the Supreme Court found that where an insurance agent had erroneously indicated in a certificate of insurance that an entity was an AI under a liability policy, that entity would be considered as an AI based upon the agent’s apparent authority, despite boilerplate disclaimer language contained in the certificate. T-Mobile USA, Inc. v. Selective Ins. Co. of America, Slip. Op. No. 96500-5, 2019 WL 5076647 (Wash. Oct. 10, 2019).
In this case, Selective Insurance Company of America (“Selective”) issued a liability policy to a contractor who had been retained by T-Mobile Northeast (“T-Mobile NE”) to construct a cell tower. The policy conferred AI status to a third party if the insured-contractor had agreed in a written contract to add the third party as an AI to the policy. Under the terms of the subject construction contract, the contractor was required to name T-Mobile NE as an AI under the policy. T-Mobile NE was therefore properly considered as an AI because the contractor was required to provide AI coverage to T-Mobile NE under the terms of their contract.
However, over the course of approximately seven years, Selective’s own insurance agent issued a series of certificates of insurance that erroneously identified a different company, “T-Mobile USA”, as an AI under the policy. This was in error because there was no contractual requirement that T-Mobile USA be added as an AI. Nonetheless, the certificates stated that T-Mobile USA was an AI, and they were signed by the agent as Selective’s “authorized representative.”
Reprinted courtesy of
Sally S. Kim, Gordon & Rees and
Kyle J. Silk-Eglit, Gordon & Rees
Ms. Kim may be contacted at sallykim@grsm.com
Mr. Silk-Eglit may be contacted at ksilkeglit@grsm.com
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Preliminary Notices: Common Avoidable But Fatal Mistakes
August 26, 2019 —
William L. Porter - Porter Law GroupIn the California building and construction industry, service of a “Preliminary Notice” is a prerequisite for Subcontractor and Supplier claims for payment through the Mechanics Lien, Stop Payment Notice and Payment Bond Claim process. Without proper drafting and service of a Preliminary Notice, these extremely valuable claims cannot be protected. Unfortunately, despite the vital importance of the Preliminary Notice, Subcontractors and Suppliers often make common self-defeating mistakes that make their Preliminary Notice efforts completely ineffective, resulting in loss of their claims rights. The purpose of this article is to list some of these common mistakes in the hope that the reader will avoid such mistakes, preserve the integrity of the Preliminary Notice, and protect the claims rights it makes available:
Not Sending out the Preliminary Notice Within 20 Days After Supplying Labor or Materials:
The protection of a Preliminary Notice begins 20 days before it sent out. This means that if a Subcontractor or Supplier claimant delivered $100,000 in materials on February 1, that same claimant must serve the Preliminary Notice on or before February 21 (the sooner the better), or the claimant will not be able to pursue an enforceable Mechanics Lien, Stop Payment Notice or Payment Bond claim for that $100,000. There are very few exceptions. Best practice: A Subcontractor or Supplier must send out the Preliminary Notice as soon as an agreement to provide work or materials to a California construction project is in place (See California Civil Code 8204).
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Cal/OSHA Approves COVID-19 Emergency Temporary Standards; Executive Order Makes Them Effective Immediately
July 11, 2021 —
Leila S. Narvid - Payne & Fears LLPOn June 17, 2021, California's Occupational Safety and Health Standards Board (Standards Board) passed amended COVID-19 Emergency Temporary Standards (ETS). Gov. Gavin Newsom issued an Executive Order to make the amended ETS effective as soon as filed with the Secretary of State. The Office of Administrative Law (OAL) filed them, and the Secretary of State posted them, making the ETS effective immediately. These changes attempt to bring the ETS in alignment with recent changes to California Department of Public Health Order and the latest guidance from the Center for Disease Control (CDC). Highlights of the changes to the ETS can be found here.
Face Coverings in the Workplace; Elimination of Physical Distancing
Notably, fully vaccinated employees do not have to wear a face covering indoors except in limited circumstances. Unvaccinated workers will still need to wear face coverings indoors (unless they are alone in a room or eating and drinking) and in shared vehicles. All employees regardless of vaccination status do not have to wear masks outdoors. Unvaccinated employees must be trained that face coverings are recommended outdoors for individuals who are not fully vaccinated when six feet of physical distance cannot be maintained.
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Leila S. Narvid, Payne & Fears LLPMs. Narvid may be contacted at
ln@paynefears.com
Bert L. Howe & Associates Brings Professional Development Series to Their San Antonio Office
March 28, 2014 —
Beverley BevenFlorez-CDJ STAFFMirroring similar seminars currently provided in other regional markets, BHA’s Professional Development Series provides seminar attendees with a heightened level of knowledge and understanding on a wide range of subjects covering construction and construction defect litigation, tailored to the unique needs of local counsel and insureds.
The first seminar in this series will be presented on May 9th, and is entitled THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION.
This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.0 credit hours, of which 0.0 credit hours will apply to legal ethics/professional responsibility credit.
The seminar will be presented by Don MacGregor, general contractor and project manager, at BHA’s San Antonio office during the noontime hour, and luncheon will be provided. As with all BHA Professional Development activities, there is no cost for participation.
Water intrusion through doors, windows and roofing systems, as well as soil and foundation-related movement, and the resultant damage associated therewith, are the triggering effects for the vast majority of homeowner complaints today and serve as the basis for most residential construction defect litigation.
The graphic and animation-supported workshop/lecture activity will focus on the residential construction process from site preparation through occupancy, an examination of associated damages most often encountered when investigating construction defect claims, and the inter-relationships between the developer, general contractor, sub trades and design professionals.
Typical plaintiff homeowner/HOA expert allegations will be examined in connection with those building components most frequently associated with construction defect and claims litigation.
The workshop will examine:
* Typical construction materials, and terminology associated with residential construction
* The installation process and sequencing of major construction elements, including interrelationship with other building assemblies
* The parties (subcontractors) typically associated with major construction assemblies and components
* The various ASTM standard testing protocols utilized to field test buildings
* An analysis of exposure/allocation to responsible parties
Attendance at THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION seminar will provide the attendee with:
* A greater understanding of the terms and conditions encountered when dealing with common construction defect issues
* A greater understanding of contractual scopes of work encountered when reviewing construction contract documents
* The ability to identify, both quickly and accurately, potentially responsible parties
* An understanding of damages most often associated with construction defects, as well as a greater ability to identify conditions triggering coverage
* Assistance in the satisfaction of important continuing education requirements.
Course #: 901290467 / Sponsor #: 14152
To register for the event, please email Don MacGregor at dmac@berthowe.com.
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Seattle Developer Defaults on Renovated Office Buildings
December 23, 2024 —
Anna Edgerton - BloombergA major developer in downtown Seattle defaulted on a loan backed by two of its most prized office properties, including one that formerly housed a branch of the Federal Reserve Bank of San Francisco.
Firms tied to Martin Selig Real Estate are in default on a more than $200 million loan, according to letters from lender Acore Capital dated Nov. 15 that were filed in Washington’s King County. The buildings would change ownership 30 days after that notice if no other action is taken, according to the letters.
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Anna Edgerton, Bloomberg
Viva La France! 2024 Summer Olympics Construction Features Sustainable Design, Including, Simply Not Building at All
August 26, 2024 —
Garret Murai - California Construction Law BlogIf you’re like me and many others you’ve probably been watching the 2024 Summer Olympics in Paris, France. We were in Paris last year and we passed the construction site of the Aquatics Centre, one of only three new permanent facilities that was constructed for this year’s Olympics. On a side note, Parisian Uber drivers are some of the most aggressive drivers I’ve seen, replete with honking, hand gestures, and cursing at other drivers and pedestrians in, of course, French. Putain!
In recent history, Olympic construction costs have skyrocketed, often vastly exceeding the planned budgets of the host cities, and, in recent years, has caused even some host city hopefuls to reconsider
whether to even throwing their hats in the ring. The 2020/2021Summer Olympics in Tokyo, for example, had an original budget of $7.5 billion. The actual cost was over $13 billion and, depending on what beans you count, may have been over twice that! Paris seeks to change all of this.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Montana Supreme Court: Insurer Not Bound by Insured's Settlement
December 02, 2019 —
K. Alexandra Byrd - Saxe Doernberger & Vita, P.C.In Draggin’ Y Cattle Co., Inc. v. Junkermier, et al.1 the Montana Supreme Court held that where an insurer defends its insured and the insured subsequently settles the claims without an insurer’s participation, a court may approve the settlement as between the underlying plaintiff and underlying defendant, but the settlement will not be presumed reasonable as to the insurer. Therefore, an insurer who defends its insured cannot be bound by a stipulated settlement that the insurer did not expressly consent to.
The case involved Draggin’ Y Cattle Company (the “Cattle Company”), a ranching and cattle business that utilized the services of an accounting firm, Junkermier, Clark, Campanella, Stevens, P.C. (“Junkermier”), to structure the sale of real property to take advantage of favorable tax treatment. It was discovered that Junkermier’s employee misinformed the Cattle Company’s owners of the tax consequences of the sale. The Cattle Company’s owners subsequently filed suit against Junkermier and its employee and alleged nearly $12,000,000 in damages due to the error. Junkermier’s insurer, New York Marine, provided a defense for Junkermier and its employee.
The Cattle Company’s owners offered to settle the claims against Junkermier and its employee for $2,000,000, the policy limit of the New York Marine policy. New York Marine refused to give its consent or tender the policy’s limit. Subsequently, Junkermier, its employee, and the Cattle Company entered into their own settlement agreement for $10,000,000. The settlement was contingent upon a reasonableness hearing to approve the stipulated agreement.
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K. Alexandra Byrd, Saxe Doernberger & Vita, P.C.Ms. Byrd may be contacted by
kab@sdvlaw.com
