Seattle Washington Building Expert Directory

Client Alert: Stipulated Judgment For Full Amount Of Underlying Claim As Security For Compromise Settlement Void As Unenforceable Penalty

March 26, 2014 — David W. Evans, Krsto Mijanovic, and Gregory M. Smith-Haight Brown & Bonesteel LLP
In Purcell v. Schweitzer (No. D063435 - filed February 24, 2014, certified for publication March 17, 2014), the Fourth District Court of Appeal upheld an order setting aside a stipulated default judgment for the full amount of plaintiff’s claim which had been agreed to by the parties to a settlement agreement, finding that it constituted an unenforceable penalty because the amount bore no reasonable relationship to the settling party’s actual damages resulting from a breach of the settlement agreement. In an agreement settling a breach of contract action seeking $85,000 in damages based on an unpaid debt, the plaintiff agreed to settle the claim and to accept $38,000 in 24 monthly installments, including interest on the unpaid principal at 8.5 percent. The agreement provided that payments were due on the first day of each month and to be considered “timely,” had to be received by the fifth day of each month. If any payment was not made on time, it was to be considered a breach of the entire settlement agreement, making the entire $85,000 original liability due pursuant to a stipulation for entry of judgment for such amount. The stipulation included language to the effect that the $85,000 figure accounted for the “economics” of further proceedings. The agreement also specified that the foregoing provision did not constitute an unlawful “penalty” or “forfeiture” and that defendant waived any right to an appeal and any right to contest or seek to set aside such a judgment. Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys David W. Evans, Krsto Mijanovic, and Gregory M. Smith Mr. Evans may be contacted at devans@hbblaw.com; Mr. Mijanovic may be contacted at kmijanovic@hbblaw.com, and Mr. Smith may be contacted at gsmith@hbblaw.com Read the court decision
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The Difference Between Routine Document Destruction and Spoliation

October 18, 2021 — Steven A. Neeley - Construction Executive
In today’s world, there is a tendency to believe that everything must be preserved forever. The common belief is that documents, emails, text messages, etc. cannot be deleted because doing so may be viewed as spoliation (i.e., intentionally destroying relevant evidence). A party guilty of spoliation can be sanctioned, which can include an adverse inference that the lost information would have helped the other side. But that does not mean that contractors have to preserve every conceivable piece of information or data under all circumstances. There are key differences between routine document destruction (when done before receiving notice of potential claims or litigation) and spoliation. The Armed Services Board of Contract Appeals decision in Appeal of Sungjee Constr. Co., Ltd., ASBCA Nos. 62002 and 62170 (Mar. 23, 2021) provides a good reminder. There, Sungjee challenged its default termination under a construction contract at Osan Air Base in South Korea. Sungjee argued that the government denied it access to the site for 352 days (out of a 450-day performance period) by refusing to issue passes that were needed to access the base. The government argued that it had issued the passes, but it could not produce them to Sungjee in discovery because they had been destroyed as part of a routine document destruction policy. The base security force issued hard copy passes and entered the information in a biometric system. The government was able to produce the biometric system data but not the hard copy passes because they were destroyed each year. Sungjee argued the government was guilty of spoliation and moved for sanctions. It asked the Board to draw an adverse inference that the passes would have shown that the government had not issued proper passes on a timely basis, which delayed Sungjee’s performance. The Board denied Sungjee’s motion for several reasons. Reprinted courtesy of Steven A. Neeley, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Neeley may be contacted at steve.neeley@huschblackwell.com

Congratulations to Haight Attorneys Selected to the 2021 Southern California Super Lawyers List

January 25, 2021 — Haight Brown & Bonesteel LLP
Eight Haight attorneys have been selected to the 2021 Southern California Super Lawyers list. Congratulations to:

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Reprinted courtesy of Haight Brown & Bonesteel LLP

Workers Compensation Insurance: Dangers of the Audit Process

April 12, 2021 — Jason M. Gropper - Autry, Hall & Cook, LLP
If your business obtains workers compensation insurance, it is important you take steps to protect the business and yourself from excessive premiums to the insurance company as a result of misclassification of workers. After applying for and being accepted by an insurance company for workers compensation insurance, your business will receive a Workers Compensation and Employers Liability Insurance Policy. It is important that you or an advisor reviews this document. Generally, this document will explain what the insurance company can do, steps it can take to determine the premium, and the responsibilities of your business. The document will also provide the estimated premium. A premium is the amount you will pay for the coverage provided by the insurance company. The premium is determined by many factors, including the classification of each employee. It is important that when your company applies for insurance, the correct classifications are provided. If those are not provided, or provided in error, the insurance company will assign classifications and the associated rates, based on its assumptions and conclusions. The insurance company will assess the payroll and multiply it by an established rate based on the revised classification. The rates are different for the distinct work being done by each employee, with higher-risk jobs receiving a higher rate. For instance, a roofer or framer will have a higher rate than clerical staff. The rate is generally higher for those with riskier jobs. Read the court decision
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Reprinted courtesy of Jason M. Gropper, Autry, Hall & Cook, LLP
Mr. Gropper may be contacted at Gropper@ahclaw.com

In Louisiana, Native Americans Struggle to Recover From Ida

August 07, 2022 — The Associated Press (Rebecca Santana) - Bloomberg
Along Bayou Pointe-Au-Chien, La. (AP) -- Driving through her village along a southeastern Louisiana bayou, tribal official Cherie Matherne points out the remnants of house after house — including her own — wrecked nine months ago when Hurricane Ida roared through the Pointe-au-Chien Indian Tribe community. Beige trailers from the Federal Emergency Management Agency and travel campers sit next to pilings that elevated homes 14 feet (4.3 meters) off the ground to protect them from flooding. But it was the wind that got them this time. For hours, the Category 4 hurricane tore off roofs and siding, ripped out insulation and scattered treasured belongings. It destroyed shrimp boats and tossed crab traps. “It’s going to take years before people can get back to their lives. The majority of people are still at a standstill,” said Matherne, the tribe’s cultural heritage and resiliency coordinator. Read the court decision
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Reprinted courtesy of Bloomberg

Midview Board of Education Lawsuit Over Construction Defect Repairs

February 04, 2014 — Beverley BevenFlorez-CDJ STAFF
Midview Local Schools Board of Education in Grafton, Ohio, “filed a lawsuit asking Lorain County Common Pleas Court to order the Ohio School Facilities Commission to help pay for repairs on three new schools,” according to The Morning Journal. Scott Goggin, Midview’s Superintendent, told The Morning Journal: “Water-stained ceilings and weeping windows in three new elementary schools, built with financial help and cooperation of the OSFC Expedited Local Partnership Program, irritated the district for months.” “The lawsuit,” as reported by The Morning Journal “claimed other school districts received financial help from the state when correcting repairs to their schools built through the same program.” Furthermore, the lawsuit stated that “OSFC failed to assess the total classroom facilities needs of the school district, and to share the costs of repairing defects.” The Morning Journal reported, “The lawsuit asks for restitution of the state’s share of correcting the construction defects, the costs of the lawsuit and reasonable attorney’s fees, and further relief the court decides is just and fair.” Read the court decision
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Wilke Fleury Secures Bid Protest Denial

March 16, 2020 — Wilke Fleury LLP
After the City of Vacaville, following a sealed bid process, awarded a significant well drilling contract to Roadrunner Drilling & Pump Company, second-place bidder Nor-Cal Pump and Well Drilling filed a protest with the City on January 30, claiming that Roadrunner’s bid failed to meet certain requirements of the proposed contract. Roadrunner hired Wilke Fleury to defend the bid protest. After Wilke Fleury partner Dan Baxter transmitted a letter to the City explaining why the disgruntled bidder’s protest was factually and legally unsupported, the City—a mere nine days after receiving Dan’s letter—rejected the bid protest, and maintained its award of the project to Roadrunner as the lowest responsive and responsible bidder. Wilke Fleury LLP Read the full story... Read the court decision
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Design Professionals Owe a Duty of Care to Homeowners

July 09, 2014 — Stephen A. Sunseri - Gatzke Dillon & Ballance LLP
Today, the California Supreme Court, in Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (Jul. 3, 2014, S208173) __Cal.4th__ [2014 WL 2988058], held that architects owe a duty of care to future homeowners of residential buildings, particularly if they act as principal architects on a project, and are not subordinate to any other design professional. Until now, design professionals were rarely held liable, if at all, for third-party claims for design deficiencies. In Beacon, architectural and engineering firms provided sole design services for The Beacon residential condominium project, a 595 unit project located in San Francisco. The condominiums were initially leased after construction, but were eventually sold to individual owners. The design firms claimed their role was limited to only providing design recommendations to the project's owner, who ultimately controlled and directed which design elements to construct. Not long after completion of the project, the homeowners' association sued the design firms (among others) for construction defects and damages related to alleged water infiltration, inadequate fire separations, structural cracks, and other purported safety hazards. The claims included allegations under SB 800 (the "Right to Repair Act," Civil Code §895, et seq.) and common law negligence theories. The design firms demurred to the complaint, which the trial court sustained. On appeal, however, the Court of Appeal reversed the trial court's ruling, concluding that the design firms owed a duty of care to third parties. The Supreme Court affirmed. Historically, liability for deficient goods and services hinged on whether there is a contractual relationship between a buyer and seller. However, the Supreme Court recognized that in certain circumstances a contractual relationship is not required. In its ruling, the Supreme Court relied on fifty year old precedent, Biankanja v. Irving (1958) 49 Cal.2d 647. In Biankanja, the California Supreme Court outlined several factors to determine whether a duty of care is owed to non-contracting third parties. Although Biankanja analyzes many factors, emphasis was placed placed on whether a purported harm was foreseeable by a defendant's conduct and how close of a connection there is between that conduct and an injury. Here, the Court recognized that even though the design firms did not actually build the project, they did conduct weekly inspections, monitored contractor compliance, altered design elements when issues arose, and advised the owners of any nonconforming work. In applying the Biankanja factors to these circumstances, the Supreme Court determined the homeowners were intended beneficiaries of the design work and the design firms' primary role in the project bore a close connection to the alleged injuries. As a result, the Supreme Court held that the allegations in the complaint were sufficient and, if proven, establishes the defendants owed a duty of care to the homeowners' association. Interestingly, the Supreme Court sidestepped the issue of whether SB 800 was intended to exclusively capture design defects in its scope, even though the Court indicated it may. Nevertheless, the Supreme Court's ruling is significant. The case will affect how design professionals allocate risk on future residential projects, perhaps by raising design prices or insuring around the liability exposure. The likely outcome, however, is that design professionals are now targets in construction defect lawsuits. Read the court decision
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Reprinted courtesy of Stephen A. Sunseri, Gatzke Dillon & Ballance LLP
Mr. Sunseri may be contacted at ssunseri@gdandb.com

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