Contractors: Revisit your Force Majeure Provisions to Account for Hurricanes
September 20, 2017 —
David Adelstein - Florida Construction Legal UpdatesWe now know and can appreciate the threat of hurricanes. Not that we did not appreciate the reality of hurricanes–of course we did–but Hurricane Harvey and Hurricane Irma created the type of actual devastation we fear because they hit close to home. The fear came to life, creating panic, anxiety, and uncertainty. It is hard to plan for a force majeure event such as a hurricane because of the capriciousness of Mother Nature. But, we need to do so from this point forward. No exception! And, I mean no exception!!
A force majeure event is an uncontrollable event that cannot be anticipated with any degree of definitiveness. The force majeure event will excusably delay or hinder performance obligations under a contract. One type of force majeure event is a hurricane—an uncontrollable and unforeseen act of Mother Nature.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
United States Supreme Court Limits Class Arbitration
May 13, 2019 —
Jeffrey K. Brown & Raymond J. Nhan - Payne & FearsOn April 24, 2019, the United States Supreme Court held that the Federal Arbitration Act ("FAA") bars orders requiring class arbitration when an agreement is ambiguous about the availability of such a procedure. Lamps Plus v. Varela, 587 U.S. __ , 2019 WL 1780275, (2019). In Lamps Plus, the Court clarified a 2010 case in which it held that a court may not compel arbitration on a class-wide basis when an agreement is silent on the availability of class arbitration. Stolt-Nielsen S.A. v. Animal Feeds Int'l Corp., 559 U.S. 662, 687 (2012).
In Lamps Plus, a 5-4 decision authored by Chief Justice Roberts, the Court explained that because the FAA envisions the use of traditional individualized arbitration, a party cannot be forced under the FAA to submit to class arbitration unless the parties explicitly agreed to do so. Because class arbitration does not share the benefits of traditional arbitration -- lower costs, greater efficiency and speed, and the parties' choice of a neutral -- the FAA requires more than an "ambiguous" agreement to show that the parties bound themselves to arbitrate on a class-wide basis. Unlike individualized arbitration, or even traditional class actions, class arbitration raises serious due process concerns because absent class members will have limited judicial review. Based on these critical differences between individual and class arbitration, the Court reiterated in Lamps Plus that "courts may not infer consent to participate in class arbitration absent an affirmative contractual basis for concluding that the party agreed to do so."
Reprinted courtesy of
Jeffrey K. Brown, Payne & Fears and
Raymond J. Nhan, Payne & Fears
Mr. Brown may be contacted at jkb@paynefears.com
Mr. Nhan may be contacted at rjn@paynefears.com
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Expert Excluded After Never Viewing Damaged Property
October 28, 2015 —
Tred R. Eyerly – Insurance Law HawaiiPlaintiff's expert was excluded for never having seen the property. Wehman v. State Farm Fire and Casualty Co., 2015 U.S. Dist. LEXIS 117445 (D. N.J. Sept. 3, 2015).
Plaintiff's home was damaged by Superstorm Sandy on October 29, 2012. He reported his loss to State Farm on Octorber 25, 2013, claiming that some roof shingles had come loose during the storm. No other damage was reported. An investigator for State Farm visited the property. The investigator determined that the damage to the roof was not caused by Sandy, but by age, wear and tear, all of which were excluded causes under the policy. Plaintiff informed the investigator there was no damage to the interior of the home and denied the investigator's request to enter the house to inspect.
Plaintiff then sued State Farm for breach of contract and bad faith. Plaintiff designated Timothy Fife of Gulf Coast Estimating Services as his expert in the litigation. Fife's estimate of damages consisted of twelve pages of allegedly required repairs for both the interior and exterior of Plaintiff's property totaling $86,351.01. Fife never visited the property to inspect and never spoke with Plaintiff regarding the condition of the property prior to Sandy or the damage allegedly caused by Sandy. Instead, Fife relied upon an inspection conducted by someone else.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Challenging and Defending a California Public Works Stop Payment Notice: Affidavit vs. Counter-Affidavit Process
October 21, 2019 —
William L. Porter - Porter Law GroupOne of the most effective collection procedures available to subcontractors and suppliers to California Construction projects is the “stop payment notice” procedure found under California Civil Code sections 9350 – 9364. Under this procedure, the unpaid subcontractor or supplier may serve the stop payment notice on the public entity and the direct or “prime” contractor and cause the public entity to withhold from the direct contractor 125% of the funds identified in the stop payment notice. Thereafter, funds will not generally be released unless the parties reach a settlement agreement or the issue is decided through litigation, arbitration or mediation. There is however an alternative procedure available to direct contractors to expedite the determination of whether a stop payment notice is valid and to possibly obtain an early release of the funds withheld by the public entity. This “summary proceeding” process could result in release of funds to the direct contractor in less than 30 days. The summary proceeding can also be challenged by the unpaid subcontractor or supplier. All public works contractors, subcontractors and suppliers should be aware of the process. The process for direct contractors to release a stop payment notice and for subcontractors and suppliers to challenge the process works as follows:
After a California stop payment notice has been served and the public entity has withheld funds accordingly, the direct contractor may challenge the stop payment notice by serving an “affidavit” (basically a sworn statement showing why the stop notice is not valid) on the public entity, demanding that the public entity release all funds withheld. Upon receipt of such an affidavit, the public entity will serve the subcontractor or supplier who served the stop payment notice with a copy of the affidavit, along with a “demand for release of funds”. If the stop payment notice claimant does not respond with a “counter-affidavit” by the date stated on the notice sent by the public entity (“not less than 10 days nor more than 20 days after service on the claimant of a copy of the affidavit”), then the public entity will be within its rights to release the withheld funds to the direct contractor, and the stop payment notice claimant will relinquish its stop payment notice rights.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
More on the VCPA and Construction
February 01, 2023 —
Christopher G. Hill - Construction Law MusingsI have posted before regarding the intersection between the Virginia Consumer Protection Act (VCPA) and construction contracting in regard to residential construction projects. A case out of the Eastern District of Virginia District Court further discusses this intersection as it relates to design contracts that also include the procurement and installation of certain design elements post-design. The basic facts of Marcus v Dennis are as follows:
In October of 2018, Defendant Marlene Dennis, the owner of Marlene Dennis Design, LLC (“MDD”), operating out of Virginia, entered into a contract to provide design services and the procurement and installation of certain design elements for the Plaintiffs, Gregory and Jamie Marcus, at their Maryland home. The Marcuses agreed to $175 per hour to Dennis with a cap of a total of $100,000.00 for design consultation and furniture selection and procurement. The Marcuses also agreed that they would pay no more than $250,000.00 for furnishings, rugs, artwork, decorative lighting, and accessories. In November 2020, Dennis sent an invoice for $68,000.00 and informed the Plaintiffs that the total contract fees would be more than the $100,000.00 cap. After paying $124,722.41 in design fees, the Plaintiffs received an invoice for $255,5560.72 in January of 2021. Despite the cap of $250,000.00, the Plaintiffs wired $255,000.00 to Dennis while requesting the backup invoices for the material charges. After much effort and a threat of litigation, the Plaintiffs received documents from Dennis showing that Dennis inflated the costs of the materials prior to passing the costs along to the Marcuses. The Plaintiffs’ home was unfurnished and empty as of April 10, 2021, and the Marcuses had to hire and pay another design team over $85,000.00 to finish Dennis’ work. Needless to say, the Marcuses sued both Dennis and her firm for breach of contract, breach of fiduciary duty, and for violation of the VCPA. Dennis moved to dismiss the Complaint.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Expert Can be Questioned on a Construction Standard, Even if Not Relied Upon
August 07, 2022 —
Garret Murai - California Construction Law BlogIt’s not uncommon in construction defect litigation for each side retain one or more experts to give their opinion as to whether something was constructed in accordance with the standard of care. This usually results in what we legal practitioners call a “battle of the experts.”
The California Code of Civil Procedure and Evidence Code include specific provisions applicable to experts including when they must be disclosed, when and how they can be deposed, and what opinions they can render. When attempting to challenge an expert it is not uncommon for one side to argue that the other side’s expert did not consider a certain fact or certain standard in reaching his or her opinion, therefore, allowing that party to argue at trial that the expert’s opinion is somehow flawed.
However, there are also certain limitations, including a limitation restricting a party from cross-examining an expert on any scientific, technical, or professional test, treatise, journal or similar publication if the witness did not rely on such publication in arriving at or forming his or her opinion. The next case,
Paige v. Safeway, Inc. (2021) 74 Cal.App.5th 1108, involved a case of first impression: Namely, whether an expert who did not rely on a publication in forming his or her opinion can nevertheless be questioned on a publication (in this case an ASTM standard) because the publication is a “reliable authority.”
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
BWB&O Expands to North San Diego
December 09, 2019 —
Bremer Whyte Brown & O’MearaBremer Whyte Brown & O’Meara is excited to announce our expansion to North San Diego County. Our new office location in Encinitas is strategically located between our Newport Beach and Downtown San Diego offices. The new North San Diego office will provide further resources to better serve our clients.
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Bremer Whyte Brown & O’Meara
Construction Laborers Sue Contractors Over Wage Theft
September 17, 2014 —
Beverley BevenFlorez-CDJ STAFFAspen Journalism reported that “[f]our laborers who worked on the Burlingame Phase II affordable housing project financed by the city of Aspen are suing three of the project’s contractors, alleging they weren’t paid for some of their work and were never paid overtime when they worked more than 40 hours per week.”
Towards Justice, nonprofit legal services group, filed suit in August on behalf of Fernando Villalobos, Sergio Roman, Ramon Gonzalez and Hugo Esqueda, and against construction companies Haselden Construction, LLC of Centennial, Continental Constructors, LLC of Littleton, and JMS Building of Glenwood Springs.
Both sides have agreed that “the men were paid for some, but not all, of their work,” but dispute “the value of the work done by the laborers.”
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