To Sea or Not to Sea: Fifth Circuit Applies Maritime Law to Offshore Service Contract, Spares Indemnity Provision from Louisiana Oilfield Indemnity Act
March 29, 2017 —
Richard W. Brown & Afua Akoto – Saxe Doernberger & Vita, P.C.Faced with the issue of whether maritime or state law should be applied to determine the validity of an indemnity clause in a Master Services Contract (MSC), the Fifth Circuit affirmed that where there is no historical treatment of the contract in question (1), it would consider six factors established in Davis (2).
In Doiron, the Apache Corporation and STS (3) entered a broad-form blanket MSC, under which STS agreed to perform flow-back services, a process designed to dislodge solid objects from inside a well, on Apache’s well located off shore of Louisiana. The MSC also contained an indemnification provision, which required STS to defend and indemnify Apache and its company groups against all claims of property injury or bodily injury. During the flow-back operation, Larry Doiron Inc. (LDI), one of the Apache Company groups, supplied a crane barge for use by STS employees. Subsequently, the crane knocked over an STS employee, causing him to suffer severe injuries. LDI then made a formal demand to STS for defense and indemnification. STS rejected the demand and argued that the Louisiana Oilfield Indemnity Act applied to the MSC instead of maritime law. Pursuant to the Act, indemnity clauses in agreements pertaining to wells for oil, gas or water are void as against public policy. But, under maritime law, the enforcement of such provisions is not barred. Therefore, if the MSC was construed under the Act, STS had no duty to defend or indemnify LDI.
Reprinted courtesy of
Richard W. Brown, Saxe Doernberger & Vita, P.C. and
Afua S. Akoto, Saxe Doernberger & Vita, P.C.
Mr. Brown may be contacted at rwb@sdvlaw.com
Ms. Akoto may be contacted at asa@sdvlaw.com
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Construction Employment Rose in 38 States from 2013 to 2014
March 19, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Associated General Contractors of America (AGC) reported that 38 states experienced construction job growth from January 2013 to January 2014, and 27 states showed gains from December 2013 to January 2014. AGC stated that “the fact so many states added construction jobs for the year and month despite harsh winter conditions in many parts of the country is a sign that demand appears to be recovering.”
Kansas ranked first in the “12-month gain or loss” category with a 10.7% gain. Wyoming came in last with a -5.9% over a 12-month period. However, if examining a one-month period (between December 2013 and January 2014), Idaho showed the highest growth with a 5.8% gain, while Vermont was ranked 51 at -5.5%.
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Portion of Washington State’s Prevailing Wage Statute Struck Down … Again
July 04, 2023 —
Brett Hill & Mason Fletcher - Ahlers Cressman & SleightIn 2018, the Washington Legislature amended its prevailing wages statute adopting S.S.B 5493 and codified as RCW 39.12.015(3). RCW 39.12.015(3) changed how the Washington State Department of Labor and Industries’ industrial statistician set the prevailing wages for employees on public works projects, from a county-by-county basis to a “geographic jurisdiction” basis established in collective bargaining agreements (“CBA”) or if multiple CBAs, the CBA with the higher wage would prevail. This change proved problematic for contractors since it allowed a minority of employees to determine the prevailing wage through side agreements and limited meaningful wage negotiations by industry trade groups. Contrary to the previous rule wherein wages were set by the average or majority wage rate in a certain county (which was normally the collectively bargained wage) and provided some flexibility to the industrial statistician in determining the prevailing wage, now, RCW 39.12.015(3)(a) directs the industrial statistician to “establish the prevailing rate of wage by adopting the hourly wage … paid for the geographic jurisdiction established in [CBAs],” removing flexibility, and requiring the inclusion of CBA (which could encompass multiple counties) wage rates as a part of the prevailing wage formula.
Reprinted courtesy of
Brett Hill, Ahlers Cressman & Sleight and
Mason Fletcher, Ahlers Cressman & Sleight
Mr. Hill may be contacted at brett.hill@acslawyers.com
Mr. Fletcher may be contacted at mason.fletcher@acslawyers.com
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Final Thoughts on New Pay If Paid Legislation in VA
August 15, 2022 —
Christopher G. Hill - Construction Law MusingsThis past General Assembly session, and after a governor’s amendment and with the convening of a study group, a new statute banning so-called “pay-if-paid” clauses from enforcement was passed. Some of the key features of the legislation are as follows:
It does not take effect until January 1, 2023, and,
For those construction contracts in which there is at least one general contractor and one subcontractor:
- It requires payment within 60 days of receipt of an invoice following the satisfactory performance of the work or within 7 days of receipt of payment by the Owner
- It allows for retainage
- It allows the higher-tier contractor to withhold money for improper performance
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Witt Named to 2017 Super Lawyers
March 29, 2017 —
Jesse Howard Witt - The Witt Law FirmThe Witt Law Firm is proud to announce that Super Lawyers has recognized lawyer Jesse Howard Witt as Top Rated Construction Litigation Attorney in Boulder Colorado.
Super Lawyers is a rating service of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. Super Lawyers selects attorneys using a patented multiphase selection process. Peer nominations and evaluations are combined with independent research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis.
Reprinted courtesy of
Jesse Howard Witt, Acerbic Witt
Mr. Witt may be contacted at www.witt.law
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4 Steps to Take When a Worker Is Injured on Your Construction Site
March 27, 2023 —
Zachary Perecman - Construction ExecutiveThe construction industry continues to be one of the fastest-growing labor trades. According to the
Center for Construction Research and Training, since 2019, 11.4 million U.S. workers have been employed in construction, a 25% increase from 2011. Amid this growth, the industry has remained one of the most dangerous, and workers are often at higher risk of injuries and deaths due to occupational incidents. According to the U.S. Bureau of Labor Statistics, there are 150,000 injuries on construction work sites annually.
Under Occupational Health and Safety Administration (OSHA) law, employers have a responsibility to provide a safe work environment. That includes providing a workplace that is free of serious recognized hazards. Despite best efforts in implementing risk-mitigation and safety protocols, employers must be prepared with an incident procedure should an incident occur on a jobsite. Taking immediate, clear actions can impact the severity and outcome of injuries from a workplace incident. With this in mind, employers should take the lead in implementing safety procedures for injuries on construction sites and should inform all safety site managers and workers of the steps that should be taken.
Reprinted courtesy of
Zachary Perecman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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How California’s Construction Industry has dealt with the New Indemnity Law
October 22, 2014 —
Mark S. Himmelstein, Esq. - Newmeyer & DillionIt has been almost two years since the California legislature enacted changes to the state’s indemnity law affecting commercial construction contracts. Although we do not yet have any court opinions analyzing the new statutes, the attorneys at
Newmeyer & Dillion now have real world experience in negotiating such indemnity provisions. It is time to evaluate how the construction community has reacted to the changes. In this article, we examine the practical applications of the new law to various construction agreements.
Enacted on January 1, 2013, the new legislation was the latest in a series of efforts by subcontractors and their insurers to eliminate “Type I” indemnity clauses. Under a Type I provision, a subcontractor has a duty to indemnify the developer or general contractor for the negligence of the developer or general contractor or other subcontractors, in addition to the negligence of the subcontractor itself. In 2006, the law was changed to preclude Type I provisions regarding “For Sale” residential construction defect claims. At that time, there was no such restriction enacted for commercial construction contracts. However, since then, commercial subcontractors have been seeking similar legislation. Their efforts culminated in the 2013 revisions regarding commercial contracts.
Commercial Subcontracts
Pursuant to the new indemnity statute — Civil Code section 2782.05 — we have revised our clients’ commercial subcontracts to:
(a) Eliminate the requirement that the subcontractor indemnify the general contractor for the general contractor’s “active negligence;” and
(b) Include the subcontractor’s options for defending claims for which they have an indemnity obligation.
Many subcontractors have responded: “Hey, wait a minute, the new legislation eliminated Type I indemnity so you (general contractor) cannot still require any indemnification for the general contractor’s negligence”. Well, that might be the rumor in subcontractor circles, but the new statute does not eliminate indemnity for the general contractor’s passive fault. In addition, the Civil Code lists 13 instances where the new indemnity restrictions do not apply.
Residential Subcontracts
The legislature did not make anyone’s job easier by drafting a different indemnity provision for commercial subcontracts than for residential subcontracts. In fact, the residential and commercial statutes are different in several critical respects. First, the restrictions on indemnity in the residential statute apply only to construction defect claims in newly constructed “For Sale” houses. The statute does not preclude Type I indemnity provisions for any other claims arising out of residential subcontracts. In contrast, the indemnity restrictions in the commercial statute apply to all claims arising out of commercial subcontracts. In addition, the commercial statute allows indemnity for the general contractor’s passive fault. Since some subcontractors on “residential” projects perform off-site “commercial” work as well, we have amended even residential subcontracts to address the subcontractors’ various indemnity obligations for different parts of their work (e.g., residential work versus commercial work).
Owner-Contractor Agreements
The January 1, 2013 new indemnity provisions apply not only to subcontracts, but also to owner-contractor agreements. Civil Code section 2782(c)(1) precludes indemnity for an owner’s active negligence. Interestingly, the exclusions contained in Civil Code section 2782.05 for subcontracts do not apply, and the statute does not provide contractors with the option of defending claims set forth in the sections concerning subcontracts. Therefore, we have revised the indemnity provisions in owner-contractor agreements to exclude indemnity for the owner’s active negligence.
Design Professional Agreements
The 2007 revisions with respect to “For Sale” residential contracts (discussed above), and the 2013 revisions for commercial contracts do not apply to design professionals. The new indemnity statute concerning commercial subcontracts specifically excludes design professionals from the “anti-indemnity” benefits provided to subcontractors. Therefore, Type I indemnity provisions are fair game and can still be included in design professional contracts.
Conclusion
In sum, Civil Code sections 2782 et seq. now contain an increasingly complex framework for indemnity rules in construction contracts. For example, there is one set of rules for “For Sale” residential construction defect claims (no indemnity for the developer’s active or passive negligence), another for any other claims arising out of residential construction (Type I indemnity is permitted), another for commercial subcontracts (no indemnity for the general contractor’s active negligence, but indemnity for the general contractor’s passive negligence unless any of the exceptions apply, in which case Type I indemnity is permitted), and yet another for commercial owner contractor agreements (no indemnity for the owner’s active negligence, but indemnity for the owner’s passive negligence with no exceptions).
California’s indemnity laws are complex, and rumors as to the impact of the new legislation have made it even more difficult to negotiate these provisions. It is imperative that indemnity clauses in construction contracts clearly delineate the obligations for the specific type or types of work contemplated by the contract. The legislature’s attempt to simplify indemnity obligations has actually made such provisions lengthier and more cumbersome. As experienced construction attorneys, our task is to draft indemnity provisions that comply with the laws, address potential claims, and are understandable.
Mr. Himmelstein is a partner in the Newport Beach office of Newmeyer & Dillion and practices in the areas of construction, real estate, business and insurance litigation. He also specializes in drafting and negotiating construction and real estate contracts. Mark can be reached at mark.himmelstein@ndlf.com.
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Unlicensed Contractors Caught in a Sting Operation
March 19, 2015 —
Beverley BevenFlorez-CDJ STAFFSeven suspects were cited for contracting without a license after being caught by the Contractors State License Board (CSLB), reported CBS local news, and eighty-five people may face criminal charges. The undercover sting operations occurred over a two day period in Rancho Mirage, California. A hearing is scheduled for June 3rd at Riverside County Superior Court.
CSLB Registrar Cindi A. Christenson told CBS, “Several of the suspects we targeted turned out to be repeat offenders and individuals with a criminal history and drug violations. If you knew their backgrounds, you'd never allow them near your home or family."
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