Court of Appeals Issues Decision Regarding Second-Tier Subcontractors and Pre-Lien Notice
February 06, 2023 —
Travis Colburn - Ahlers Cressman & SleightVelazquez Framing, LLC (“Velazquez”) v. Cascadia Homes, Inc. (“Cascadia”) is a Court of Appeals, Division 2 case where the primary issue on appeal was whether a second tier subcontractor was required to provide pre-lien notice under RCW 60.04 for its labor.
The defendant, Cascadia, was the general contractor that planned to build a home on property it owned in Lakewood, Washington.[1] High End Construction, LLC (“High End”), submitted a bid to Cascadia for framing work on the home. High End began work on Cascadia’s home, but later subcontracted with Velazquez to complete the framing work.[2] Velazquez did not submit a prelien notice for its work on Cascadia’s home, and Cascadia claimed it was unaware that High End subcontracted with Velazquez for framing at the project.
High End invoiced Cascadia and was paid for its work, but High End never paid Velazquez. Subsequently, Velazquez recorded a lien for both labor and materials, and later filed a complaint to foreclose its lien. Cascadia, due to the fact Velazquez did not provide it with prelien notice, moved for summary judgment, arguing prelien notice was required under RCW 60.04.031(1)[3] and the labor portion of a lien cannot be segregated where a subcontractor’s lien includes both labor and materials. Velazquez argued that no prelien notice was required under RCW 60.04.021[4] and RCW 60.04.031 and claimed that subcontractors can segregate the labor portion from the materials portion. The trial court granted Cascadia’s motion and ruled Velazquez did not fall within one of the exceptions for prelien notice in RCW 60.04.031(2), and therefore, could not enforce the lien. Velazquez appealed.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
Using Lien and Bond Claims to Secure Project Payments
March 01, 2021 —
Jonathan Cheatham - Construction ExecutiveWhile suing in court for payment on a construction project is nothing new, the very notion of non-payment tends evokes images of hard-working contractors and subcontractors, working with tight margins, owed payment for services rendered and materials. Fortunately, for general contractors and subcontractors in the construction industry, there are better remedies for securing payment on a project before it becomes a bigger issue.
Construction projects, especially large public ones, usually include a dizzying array of general contractors, subcontractors and independent contractors, sometimes numbering more than a hundred entities. The inter-connected groups of companies working toward the goal of project completion require competent construction management in order to stay on time and on budget for completion. One of the project owner’s key tools used to ensure the process runs smoothly is the use of payment bonds and surety bonds.
Payment Bonds
Payment bonds ensure that contractors and subcontractors get paid for work performed in accordance with contract conditions. Disputes can occur before, during and even after the completion of work. Injunctive lawsuits, which contemplate the stoppage of work, would be detrimental to completing a public or private construction project of substantial size. Rather than having such minor disputes derail the entire project, the aggrieved party’s remedy is to file a claim against the payment bond, which offers a solution designed to keep the issue separate from the project’s completion. The payment bond also allows the project owner to transfer risk.
Reprinted courtesy of
Jonathan Cheatham, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Solar and Wind Just Passed Another Big Turning Point
October 21, 2015 —
Tom Randall – BloombergWind power is now the cheapest electricity to produce in both Germany and the U.K., even without government subsidies, according to a new analysis by Bloomberg New Energy Finance (BNEF). It's the first time that threshold has been crossed by a G7 economy.1increase click area
But that's less interesting than what just happened in the U.S.
To appreciate what's going on there, you need to understand the capacity factor. That's the percentage of a power plant's maximum potential that's actually achieved over time.
Consider a solar project. The sun doesn't shine at night and, even during the day, varies in brightness with the weather and the seasons. So a project that can crank out 100 megawatt hours of electricity during the sunniest part of the day might produce just 20 percent of that when averaged out over a year. That gives it a 20 percent capacity factor.
One of the major strengths of fossil fuel power plants is that they can command very high and predictable capacity factors. The average U.S. natural gas plant, for example, might produce about 70 percent of its potential (falling short of 100 percent because of seasonal demand and maintenance). But that's what's changing, and it's a big deal.
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Tom Randall, Bloomberg
California Beach Hotel to Get $185 Million Luxury Rebuild
September 17, 2014 —
Nadja Brandt – BloombergRick Caruso, a Los Angeles shopping-mall developer, plans to spend about $185 million to rebuild a Southern California seaside hotel with a troubled past into a luxury getaway.
The 170-room Miramar Beach Resort and Bungalows in Montecito, near Santa Barbara, will have such amenities as a beach club, spa, restaurants and two swimming pools, said Caruso, founder of closely held developer Caruso Affiliated. The site’s former hotel, known as Miramar by the Sea, has already been razed.
Caruso bought the property in 2007 from H. Ty Warner, the billionaire creator of Beanie Babies plush toys and owner of the Four Seasons Hotel New York. The California hotel, on about 15 acres (6 hectares), had been out of service for more than a decade as past revival efforts were stalled by local opposition to development and the property market’s crash. Former owners include hotelier Ian Schrager.
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Nadja Brandt, BloombergMs. Brandt may be contacted at
nbrandt@bloomberg.net
Judge Gives Cintra Bid Protest of $9B Md. P3 Project Award New Life
March 21, 2022 —
Jim Parsons - Engineering News-RecordThe Maryland Dept. of Transportation will have to reconsider a protest lodged by the losing bidder for the initial phase of its $9-billion Express Lanes project, according to a Feb. 17 state circuit court judge's ruing. The decision likely stalls the state's ambitious plan to add capacity along portions of the I-495/Beltway and I-270 west of Washington, DC, using a progressive public-partnership.
Reprinted courtesy of
Jim Parsons, Engineering News-Record
ENR may be contacted at enr@enr.com
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No Coverage For Construction Defect Under Illinois Law
January 28, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court followed precedent in Illinois and upheld the insurer's denial of coverage for construction defects that did not damage other property. Design Concrete Founds., Inc. v. Erie Ins. Prop. & Cas. Co., 2014 Ill. App. Unpub. LEXIS 2684 (Ill Ct. App. Nov. 26, 2014).
In 2005, the homeowners contracted with the general contractor to build a home. The general contractor hired Design to do the foundation work. Design performed its work in August 2005. After the work was completed, cracks formed in the foundation, allowing water to enter the basement and an inward shifting of the foundation.
The homeowners sued the general contractor and Design. The complaint alleged that Design failed to build the foundation in a workmanlike manner, resulting in the development of cracks in the foundation.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Yes, Indeedy. Competitive Bidding Not Required for School District Lease-Leasebacks
October 01, 2014 —
Garret Murai – California Construction Law BlogRemember when you discovered that the tooth fairy wasn’t real?
It was kind of a bummer on one hand learning that it wasn’t a fairy that magically appeared to swap your tooth for cold hard cash, but rather your mom or, visual horrors, dad.
At the same time, it was, to your nearly-halfway-to-a-decade-on-this-planet-wizened-six-year-old mind, confirmation of what you had a sneaking suspicion was the case in any event.
And, so it is with the next case.
Lease-Leasebacks
In California, most public school construction projects are built using the traditional design-bid-build project delivery method in which a design professional designs the project, the project is put out for competitive bid and the selected contractor builds the project.
But not all school construction projects are built this way.
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Garret Murai, Kronick Moskovitz Tiedemann & GirardMr. Murai may be contacted at
gmurai@kmtg.com
Mediation in the Zero Sum World of Construction
October 02, 2015 —
Christopher G. Hill – Construction Law MusingsConstruction is a zero sum game. What do I mean by that? I mean that even where you, a construction professional with a great construction lawyer, have reviewed and edited a subcontract presented to you or provided a well drafted contract to the other party that contains an attorney fees provision, every dollar that you spend on litigation is a dollar less of profit.
Couple the fact that no construction company can or should bid or negotiate work with an eye toward litigation (aside from having a well written contract that will be enforced to the letter here in Virginia). Particularly on “low bid” type projects, contractors and subcontractors cannot “pad” their bids to take into account the possibility of attorney fees, arbitration, or litigation. Furthermore, the loss of productivity when your “back office” personnel are tied up dealing with discovery, phone calls, and other incidents of litigation that do nothing but rehash a bad project and increase the expense saps money from the bottom line. While the possibility of a judgment including attorney fees may soften this blow, you are still out the cash.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com