Accounting for Payments on Projects Became Even More Crucial This Year
September 21, 2020 —
Christopher G. Hill - Construction Law MusingsI discussed
several of the statutory changes affecting the construction industry here at Construction Law Musings in the run-up to July 1, 2020. One of those changes, an amendment to
Virginia Code Section 43-13, may add another arrow to the collection quiver of subcontractors and suppliers. As part of the previously-linked rundown, I highlighted one of the big additions in 2020, namely the amendment making those pesky clauses that let those up the payment chain from you hold money on “this or any other project” void as against public policy.
The other big addition to 43-13 is the change that adds a possible civil cause of action for downstream and unpaid subcontractors and suppliers in the event that funds paid to a general contractor or subcontractor are not first used to pay their downstream contractors and suppliers. Prior to July 1, 2020, this statute provided criminal penalties for such behavior but did not contain the possibility of a civil penalty. The operative language for the change is as follows:
The use by any such contractor or subcontractor or any officer, director, or employee of such contractor or subcontractor of any moneys paid under the contract before paying all amounts due or to become due for labor performed or material furnished for such building or structure for any other purpose than paying such amounts due on the project shall be prima facie evidence of intent to defraud. Any breach or violation of this section may give rise to a civil cause of action for a party in contract with the general contractor or subcontractor, as appropriate; however, this right does not affect a contractor’s or subcontractor’s right to withhold payment for failure to properly perform labor or furnish materials on the project.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Flag on the Play! Expired Contractor’s License!
October 02, 2015 —
Yas Omidi – California Construction Law BlogIt’s football season again. Which means, of course, that in addition to touch downs and field goals, you’ll also see hooting and hollering when the ref throws down a yellow flag signaling that a foul has been committed.
In Judicial Council of California v. Jacob Facilities, Inc., Case Nos. A140890, A141393 (August 20, 2015), The California Court of Appeals for the First District threw down its own yellow flag under the dreaded Business and Professions Code section 7031, finding that a contractor was required to disgorge all monies received on a project – to the tune of a whopping $18 million – when its parent company allowed the subsidiary’s contractor’s license to lapse when it rebranded a new company to perform the work of the old company but never formally assigned the contract. I think someone in marketing may be in big trouble.
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Yasmeen, Omidi, Wendel Rosen Black & Dean LLPMs. Omidi may be contacted at
yomidi@wendel.com
EEOC Builds on Best Practice Guidance Regarding Harassment Within the Construction Industry
August 12, 2024 —
Abby M. Warren & Christohper A. Costain - Construction Law ZoneIn June 2024, the Equal Employment Opportunity Commission (EEOC) issued
guidance tailored to the construction industry concerning harassment in the workplace or at the jobsite. The guidance is important for construction industry leaders and employers to understand how to prevent and remedy harassment in the workplace — more than a third of all EEOC discrimination charges filed between 2019 and 2023 asserted harassment. The guidance represents the EEOC’s latest effort in executing its Strategic Enforcement Plan for Fiscal Years 2024 to 2028, which, in part, focuses on combatting systemic harassment and eliminating barriers in recruitment and hiring, particularly for underrepresented groups in certain industries, including women in construction, through the EEOC’s enforcement efforts. In this article, we highlight key principles and practices from this guidance
Leadership and Accountability
The guidance reiterates that consistent and demonstrated leadership is critical to creating and maintaining a workplace culture where harassment is unacceptable and strictly prohibited. Worksite leaders, including project owners, crew supervisors, and union stewards, are each expected to regularly communicate that harassment is intolerable through several suggested efforts.
Reprinted courtesy of
Abby M. Warren, Robinson+Cole and
Christohper A. Costain, Robinson+Cole
Ms. Warren may be contacted at awarren@rc.com
Mr. Costain may be contacted at ccostain@rc.com
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The Expansion of Potential Liability of Construction Managers and Consultants
November 18, 2019 —
Scott D. Cessar - Construction ExecutiveOver the last decade or so, there has been far more judicial willingness to adopt legal theories that result in an increased risk of exposure to construction managers and consultants working on construction projects. This has resulted in a greater likelihood of lawsuits being filed that name construction managers and consultants as defendants and a greater likelihood of those lawsuits surviving efforts to have the lawsuits dismissed prior to trial. The consequence of more claims has led to increased costs for legal expenses, settlements and uncompensated personnel time devoted to the defense of the claims.
This expansion of potential liability may be broken into two sets:
- claims for pure economic loss not arising from property damage or personal injury by parties not in a contractual relationship with a construction manager or consultant; and
- claims for property damage or personal injury by a party not in a contractual relationship with a construction manager or consultant.
The first set concerns claims by a contractor against a construction manager or consultant that its breach of duties owed to the owner on a project and/or its provision of incomplete or inaccurate information on a project, which it knew, or should have reasonably anticipated, would be relied on by the contractor, resulted in damages to the contractor.
Reprinted courtesy of
Scott D. Cessar, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Cessar may be contacted at
scessar@eckertseamans.com
New Hampshire Asbestos Abatement Firm Pleads Guilty in Federal Fraud Case
February 02, 2017 —
Justin Rice - Engineering News-RecordFor the second time in three months, a New England-based asbestos removal company pleaded guilty in federal court to wage and benefit violations.
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Justin Rice, ENRMr. Rice may be contacted at
ricej@enr.com
Contract Change #8: Direct Communications between Owners and Contractors (law note)
March 28, 2018 —
Melissa Dewey Brumback - Construction Law in North CarolinaAs the Engineer or Architect of Record, you probably have frequently experienced Owners and Contractors communicating directly, in direct contravention of the language of the contract that requires them to endeavor to route all communications through the design team. With the latest version of the 201,
direct communication is now authorized, to recognize both the reality of what was happening on the ground and to recognize that sometimes Owners and Contractors may need to communicate without waiting for the design team.
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Melissa Dewey Brumback, Construction Law in North Carolina
Best Lawyers® Recognizes 49 White and Williams Attorneys
September 16, 2024 —
White and Williams LLPThirty-eight White and Williams lawyers were recognized in Best Lawyers in America® 2025. Inclusion in Best Lawyers® is based entirely on peer-review. The methodology is designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. Best Lawyers® employs a sophisticated, conscientious, rational, and transparent survey process designed to elicit meaningful and substantive evaluations of quality legal services.
In addition, eleven lawyers were recognized as Best Lawyers: Ones to Watch® in America. This recognition is given to attorneys who are earlier in their careers for outstanding professional excellence in private practice in the United States.
The firm is also pleased to announce Best Lawyers® has recognized three attorneys as "Lawyer of the Year” including: Chuck Eppolito, Litigation - Health Care, Philadelphia, who focuses his practice on medical malpractice defense as well as other insurance-related defense; William D. Kennedy, Litigation – Insurance, Philadelphia, who focuses his practice on complex claims of injury and damage arising in both the professional and general liability contexts; and, Michael O. Kassak, Litigation – Insurance, Cherry Hill, who focuses his practice on large complex commercial matters including insurance coverage and healthcare disputes.
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White and Williams LLP
Economic Loss Not Property Damage
November 04, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit agreed with the district court that the insured subcontractor's economic losses did not amount to covered property damage. Greenwich Ins. Co. v. Capsco Industries, Inc., 2019 U.S. App. LEXIS 23949 (5th Cir. Aug 12, 2019).
Capsco Industries, Inc. was a subcontractor on the construction of a casino. Capsco subcontracted with Ground Control to install water, sewage, and storm-drain lines. Ground Control was terminated from the project by the general contractor for alleged safety violations and failed drug tests of its employees. Ground Control sued in state court against multiple parties, including Capsco, seeking payment for work on the project. The claims were dismissed on summary judgment because neither party had obtained the required certificates of responsibility from the state, making the parties' contract void. The Mississippi Supreme Court agreed the contract was void, but reversed and remanded for further proceedings based solely on theories of unjust enrichment and quantum meruit.
While the state case was on remand, Capsco's liability insurers, Greenwich Insurance Company and Indian Harbor Insurance Company, filed a compliant for declaratory judgment in federal district court seeking a declaration that they did not owe a defense or indemnity to Capsco. The defendants were Ground Control, Capsco, the general contractor, and the casino owner. The latter two parties were dismissed. Ground Control counterclaimed for coverage of its claims against Capsco. The district court stayed proceedings until the state court litigation ended.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com