Board of Directors Guidance When Addressing Emergency Circumstances Occasioned by the COVID-19 Pandemic
May 11, 2020 —
Marc Casarino, Lori Smith & Gwenn Barney - White and Williams LLPThe COVID-19 pandemic has sent massive shockwaves throughout the global economy. This crises requires business leaders to confront a host of deleterious effects on an emergency basis – the likes of which many companies have never experienced. Boards of directors must remain cognizant of their oversight responsibilities in these trying times. This post offers guidance to directors of Delaware companies for addressing emergency circumstances occasioned by the COVID-19 pandemic.
Board Oversight – Lessons from Marchand V. Barnhill
Directors should consider the lessons learned from the recent Delaware Supreme Court case Marchand v. Barnhill, a ruling we addressed in a previous blog post, when considering board oversight during the COVID-19 pandemic. Marchand centered on a lawsuit brought by shareholders in an ice cream manufacturing company against the company’s board of directors. The shareholders claimed that the directors violated their duty of loyalty[1] to the company when they failed to provide sufficient oversight and compliance-monitoring during a listeria outbreak that led the company to recall all products, temporarily cease product production at all plants and lay off more than one-third of the company’s workforce.
Reprinted courtesy of White and Williams LLP attorneys
Marc Casarino,
Lori Smith and
Gwenn Barney
Mr. Casarino may be contacted at casarinom@whiteandwilliams.com
Ms. Smith may be contacted at smithl@whiteandwilliams.com
Ms. Barney may be contacted at Barneyg@whiteandwilliams.com
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Exceptions to Privette Doctrine Do Not Apply Where There is No Evidence a General Contractor Affirmatively Contributed to the Injuries of an Independent Contractor's Employee
November 17, 2016 —
Renata L. Hoddinott & Lawrence S. Zucker II – Haight Brown & Bonesteel LLPThe Court of Appeal of the State of California – Second Appellate District in Khosh v. Staples Construction Company, Inc. (10/26/16 – Case No. B268937) affirmed the trial court’s granting of summary judgment in favor of the defendant under the Privette doctrine where plaintiff presented no evidence that the defendant affirmatively contributed to his injuries.
Plaintiff Al Khosh (“Khosh”) was injured while performing electrical work on a project. He was employed by Myers Power Products, Inc. (“Myers”) a subcontractor for the project. Khosh sued the general contractor, Staples Construction Company, Inc. (“Staples”) to recover damages for his injuries.
Reprinted courtesy of
Renata L. Hoddinott, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Hoddinott may be contacted at rhoddinott@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Catching Killer Clauses in Contract Negotiations
January 29, 2024 —
James T. Dixon - Construction ExecutiveRisk-management personnel who are in the business of reviewing and negotiating construction contracts have some simple tools at their disposal to make sure their edits are addressing all of the killer risk-shifting clauses in those contracts. One of those is the index to that document. But not all authors of construction contract documents are kind enough to include an exhaustive index in their form agreements.
One of the most popular sets of general conditions, the A201 General Conditions published by the American Institute of Architects, includes one that is fairly comprehensive. It identifies the six terms that include a reference to indemnification, for example. On the other end of the spectrum are the innumerable custom forms created by public and private project owners, and these rarely have an index.
Even more powerful than an index is the search or find functions that are available in word processing applications and now in Adobe, the publisher of documents in portable document format, more commonly known as PDF. But with PDF documents, one must be careful to make sure the document under review is in fact searchable. Because every letter counts, it is important to have full confidence in the integrity of the search.
Reprinted courtesy of
James T. Dixon, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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4 Lessons Contractors Can Learn From The COVID-19 Crisis
May 25, 2020 —
Patrick Hogan - Handle.comAt the start of 2020, the industry outlook in construction was positive. Many contractors were optimistic about what the year had in store for construction businesses in terms of profit, expansion of operations, and even payment issues. That was until the COVID-19 pandemic put a wrench in everyone’s business plans.
There’s no question about how huge the impact of the novel coronavirus crisis is on business operations. With the federal and state governments implementing strict measures to slow down the spread of COVID-19, construction businesses are experiencing significant delays and disruptions in their operations. Because of the lockdowns and stay-at-home orders, many construction projects are forced to postpone operations or, worse, cancel them altogether.
Nevertheless, there are lessons in the COVID-19 pandemic that contractors can learn. Here are some of them.
1. Contractors need to be proactive in meeting preliminary notice requirements
Cash is tight in times of crisis. As the economy comes to a standstill, construction businesses will need to deal with decreasing profits. They may even have to dip into their own cash reserves to cover fixed expenses and their employees’ salaries.
In times like this, it is crucial that contractors perform due diligence in protecting their right to get paid. The first step in doing so is to prepare
preliminary notices. These notices are an important step in the mechanics lien process and without them, chances contractors will not be able to recover the unpaid compensation for the materials they furnished and services they rendered.
2. Force majeure provisions are crucial parts of a contract
The novel coronavirus pandemic has highlighted the importance of force majeure provisions in construction contracts. Before the COVID-19 crisis hit business operations, force majeure provisions were typically considered as simple boilerplate clauses. This means they were just there as a standard part of contracts.
However, the same force majeure clauses, as well as impossibility of performance provisions, have become crucial in the current crisis. As many construction businesses experience difficulties with their operations, they may not be able to fulfill their contractual responsibilities. The said clauses can give contractors a much-needed reprieve.
As the current crisis continues, contractors should review contracts as these provisions can give them more time to finish the job. And in the hopefully near future when the crisis ends, business owners should review the contract creation process and ensure that these clauses included in contracts will be able to address the impact of situations similar to COVID-19.
3. Having solid internal communication is crucial
There’s a lot of uncertainty with the COVID-19 situation. With work operations temporarily stopping, the circumstances can be quite stressful for employees. There will be doubts and fears within your workforce on whether work will be back to normal as soon as possible or not.
Keeping your workforce well-informed and trusting of your organization is crucial, especially in this time of uncertainty. That is why it is paramount that you have a solid internal communication infrastructure to disseminate information about the current work situation and the next steps that the business will take. In addition, only through proper employee communication can the implementation of social distancing and hygiene measures be effective.
4. Contractors can benefit from flexible work arrangements
As the coronavirus crisis has made it necessary for everyone to stay at home, construction businesses should look for ways to continue operations. Expanded work arrangements such as work-from-home setups may just be the solution.
Of course, most of the physical work that is needed to be done on-site will be impossible to do at home, but office-based functions such as sales, client relations, design, and administrative roles can still continue. This can even have additional benefits to productivity and health. And when the crisis is over, business owners should consider incorporating these work arrangements into their operations permanently.
The COVID-19 crisis is not showing any sign of stopping soon, and even when it ends, it will take quite a long time before we can be back to business as usual. As the crisis continues, however, business owners should take the situation as a learning experience.
Once the COVID-19 crisis is over, it will take a long time for things to go back to normal. In fact, things may not end up going back to the way they were before and businesses will need to adapt to the new normal. However the situation evolves, business owners should take this opportunity to learn new things and maintain resilience in trying times.
About the Author:
Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.
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Ensuing Loss Provision Does Not Salvage Coverage
December 09, 2011 —
Tred R. Eyerly - Insurance Law HawaiiWater intrusion caused by a construction defect was not covered under the all risk policy’s ensuing loss provision. See Friedberg v. Chubb & Son, Inc., 2011 U.S. Dist. LEXIS 123582 (D. Minn. Oct. 25, 2011).
Extensive water damage was discovered in the insureds’ home when a small hole in the exterior wall was being repaired. Chubb’s adjuster and an expert found water intrusion causing rot, mold, and damage to the home’s wood framing and insulation. Chubb denied coverage because water intruded through the roof and wall, resulting in gradual deterioration. The insureds filed suit.
The policy excluded coverage for construction defects, but insured "ensuing covered loss unless another exclusion applies."
The court agreed there was a prima facie case for coverage because the home suffered a physical loss.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Texas res judicata and co-insurer defense costs contribution
March 23, 2011 —
CDCoverage.comIn Truck Ins. Exchange v. Mid-Continent Casualty Co., No. 03-08-00526-CV (Tex. App. 3d Aug. 27, 2010), insured contractor DCI was sued by the project owner seeking damages for defective construction. DCI tendered its defense to its CGL insurers Truck and Mid-Continent. Truck agreed to defend while Mid-Continent denied a defense. While the underlying suit was pending, Mid-Continent sued DCI, but not Truck, and obtained a judicial declaration of no duty to defend or indemnify DCI in the underlying suit. After settling the underlying suit, Truck sued Mid-Continent seeking contribution towards defense costs and indemnity payments. The state trial court entered summary judgment for Mid-Continent. The intermediate appellate court affirmed.
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Reprinted courtesy of CDCoverage.com
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CA Supreme Court Rejects Proposed Exceptions to Interim Adverse Judgment Rule Defense to Malicious Prosecution Action
August 24, 2017 —
David W. Evans & Stephen J. Squillario – Haight Brown & Bonesteel LLPIn Parrish v. Latham & Watkins (No. S228277 - August 10, 2017) (“Parrish”), the California Supreme Court examined the “interim adverse judgment rule” in a different context than previous decisions on the subject. The rule provides that if an earlier action succeeds after a hearing on the merits, this success establishes the existence of probable cause and precludes a subsequent malicious prosecution action. In a typical case applying the rule, a plaintiff in the underlying action defeats the defendant’s motion for summary judgment but then loses the case at trial leading to a subsequent malicious prosecution claim. In Parrish, the Court addressed whether the rule applies when the trial court had denied the defendant’s summary judgment motion but concluded after the defense prevailed at a bench trial that the suit had been brought in “bad faith” due to a lack of evidentiary support.
Reprinted courtesy of
David W. Evans, Haight Brown & Bonesteel LLP and
Stephen J. Squillario, Haight Brown & Bonesteel LLP
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Squillario may be contacted at ssquillario@hbblaw.com
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16 Wilke Fleury Attorneys Featured in Sacramento Magazine 2021 Top Lawyers!
September 20, 2021 —
Wilke Fleury LLPCongratulations to Wilke Fleury’s featured attorneys who made the Sacramento Magazine’s Top Lawyer List for 2021!
The voting for Professional Research Services’ survey to determine the top attorneys in 2021 for Sacramento Magazine was open to all licensed attorneys in Sacramento, Calif. Attorneys were asked whom they would recommend among 56 legal specialties, other than themselves, in the Sacramento area. Each attorney was allowed to recommend up to three colleagues in each given legal specialty. Once the online nominations were complete, each nominee was carefully evaluated on the basis of the survey results, the legitimacy of their license, and their current standing with the State Bar of California. Attorneys who received the highest number of votes in each specialty are reflected in the following list. – Sacramento Magazine
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Wilke Fleury LLP
