Look Up And Look Out: Increased Antitrust Enforcement Of Horizontal No-Poach Agreements Signals Heightened Scrutiny Of Vertical Agreements May Be Next
November 28, 2022 —
John F. Finnegan, III & Dominick Weinkam - ConsensusDocsIn the current regulatory environment, it is important for contractors to remain vigilant of heightened anti-competitive enforcement in the construction and procurement spheres by the United States Department of Justice (DOJ). Such vigilance should include, among other things, regular review of applicable laws and implementation of related updates to compliance policies, as well as careful evaluation of joint venture (JV), subcontractor, and teaming agreements.
Recent DOJ Activity Opens The Door To Broader Antitrust Exposure For Contractors
Many contractors include exclusivity and non-compete clauses in their vertical agreements, including subcontractor agreements and certain types of JV and teaming agreements. In fact, many widely available “checklists” for drafting these agreements recommend including such provisions; however, under U.S. antitrust law, particularly as enforced by the DOJ in the last 1-2 years, exclusivity and non-compete clauses may be construed as unduly competition-restricting. Although no court has yet held that exclusivity and non-compete clauses in vertical agreements violate antitrust laws, recent aggressive enforcement activity by the DOJ with regard to horizontal no-poach agreements suggests that the investigatory headwinds may be blowing in that direction.
Reprinted courtesy of
John F. Finnegan, III, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) and
Dominick Weinkam, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)
Mr. Finnegan may be contacted at jfinnegan@watttieder.com
Mr. Weinkam may be contacted at dweinkam@watttieder.com
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Are Housing Prices Poised to Fall in Denver?
December 10, 2015 —
Beverley BevenFlorez-CDJ STAFFDenver, Dallas, and Houston’s housing markets are rising too quickly and will soon hit “’bubble territory’” according to a housing market index by Florida Atlantic University and Florida International University, reported the Denver Business Journal.
"There is about a 70 percent chance that renters in Denver will get more wealth on average than buyers," Ken Johnson, a real estate economist at the university in Boca Raton, Florida, told the Denver Post.
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Is Solar the Next Focus of Construction Defect Suits?
June 28, 2013 —
CDJ STAFFThere’s been a rapid growth in the sale of solar panels, and that’s lead some industry observers to wonder if manufacturers have been cutting back on quality. Current use of solar is six times what it was in 2008, with more than forty percent of that in the last year. The growth shows no sign of stopping, either. The Solar Energy Industry Association expects the amount of power generated by solar to increase by more than two-thirds in 2013.
With the oversupply, some fear that companies are relaxing their quality control. The New York Times found that there were widespread problems of defective units in solar cells, chiefly those manufactured in China. The Times article noted that at two solar plants in Spain, defect rates reached 34.5 percent.
Some industry observers disagree. The Insurance Journal quoted Andy Klump, the CEO of Clean Energy Associates, a Shanghai firm that provides quality assurance in the solar industry, who said that if a business had a 34 percent failure rate, “they would be out of business in a heartbeat.” Mr. Klump described the Times article as “not realistic.”
If the Times is right, Scott Turner, a construction insurance attorney, feels that the industry should ready itself for “a wave of large lawsuits.” Turner feels that “this litigation wave could make the battles over liability and insurance coverage for Chinese drywall seem like a small claims dispute.”
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3 Common Cash Flow Issues That Plague The Construction Industry
August 20, 2019 —
Patrick Hogan, HandleThe construction industry has its fair share of serious cash flow problems. The nature of the industry with long periods between billing and collection, the unpredictability of some business factors, and even the day-to-day decisions of stakeholders have a huge effect on cash reserves.
So how can you protect your business from these cash flow problems? Having a greater awareness of the most common cash flow problems is the key to maintaining your financial stability. Here are some of the top cash flow issues that construction companies need to watch out for.
1. Uncontrolled business growth
The growth of a business as a cash flow problem sounds unintuitive. It is supposed to be a positive thing. So how could it hurt your construction business? When it goes out of control.
During the growth phase, the company will need to expand its operations to meet the increasing demand. This means renting a larger office space, hiring more staff, and buying more inventory, all of which can burn through the company’s cash quickly. The more substantial the level of your growth is, the more your cash flow is affected.
Growth is a good thing, but it is important to be aware of the pitfalls that you could encounter that can lead to cash flow problems. If you are dealing with a volatile growth instead of a stable one, you have to think twice before expanding your operations. A quarter with a large number of construction project deals does not guarantee the same happening in a subsequent quarter.
2. Change of scope or scope creep
The scope, or the statement of work, is the foundation that guides a construction project from start to finish. It specifies all the deliverables needed by the project as agreed by all stakeholders. When the existing requirements are altered, new features are added, or project goals are changed uncontrollably, what happens is scope creep and it can hurt a company’s cash flow.
Construction projects can take a long time before they are finished. A lot of factors can result in changes in the scope. There may be changes in the market strategy, market demand, and other unpredictable variables that make changes in the project requirements a necessity. These changes build up and the project may shift away from what was intended, causing delays, loss of quality, and the rise of planned costs.
One way to prevent scope creep from affecting cash flow significantly is charging a fee for variations of the scope of work. However, having a solid and clear scope baseline is still the best way to combat scope creep. Reminding clients of what you signed up for by referring to the baseline is a good strategy to deal with pushy clients.
3. Payment delays and nonpayment
As previously mentioned, the construction industry tends to have a lengthy period between sending an invoice and collecting payments. And if you are too passive in your collection, clients are more likely to extend pay periods and delay paying you.
Unexpected delays in payment and other payment issues can have a devastating effect on companies that have little to no cash reserves. Without a cash cushion to fall back on, payment issues can threaten the existence of the business itself. If you are unable to manage your receivables, you will not have enough cash to pay the bills, pay employees, and fund your growth.
Payment delays and nonpayment can happen for several reasons. They can be simple like mistakes in the invoicing or the person needed to approve the invoice is unavailable. More serious reasons like a client unsatisfied with your service or, worse, trying to scam you are also possibilities. For these reasons, it is crucial to communicate with clients properly and see if you can agree with a payment structure or pursue legal action.
The construction industry operates slightly differently from other industries. Different projects produce different cash flow issues and require different strategies. By being aware of the top cash flow problems that can hurt your construction business, you will be better equipped in dealing with them in case they happen.
About the Author:
Patrick Hogan is the CEO of Handle, where they build software that helps contractors, subcontractors, and material suppliers secure their lien rights and get paid faster by automating the collection process for unpaid construction invoices. Read the court decisionRead the full story...Reprinted courtesy of
Patrick Hogan, CEO, Handle
That’s Common Knowledge! Failure to Designate an Expert Witness in a Professional Negligence Case is Not Fatal Where “Common Knowledge” Exception Applies
June 03, 2019 —
Lyndsey Torp - Snell & Wilmer Real Estate Litigation BlogIn reversing summary judgment for defendants, the California Fourth District Court of Appeal recently held that homeowners suing their real estate broker for negligence did not need an expert witness to establish the elements of their causes of action. Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal. App. 5th 637. Typically, expert witnesses are required to establish the standard of care in professional negligence cases. But in Ryan, the court of appeal held that the “common knowledge” exception applied despite this general rule, because the conduct required by the particular circumstance of the case was within the common knowledge of a layman. The conduct in question here? The broker’s failure to disclose to his client that the client’s neighbor told him that she planned extensive renovations that would obstruct the client’s property’s ocean views.
Ryan and Patricia Ryan (the Ryans) hired defendant Real Estate of the Pacific, Inc., doing business as Pacific Sotheby’s International Realty (Sotheby’s) and defendant real estate broker to sell their residence in La Jolla, California. During an open house at the residence, a neighbor informed the Ryan’s real estate broker that she planned extensive renovations at her home that would, among other things, permanently obstruct the Ryan’s westerly ocean views and take several years to complete. The real estate broker never informed the Ryans of this, nor the subsequent buyer. The subsequent buyer purchased the property for $3.86 million, and defendants received $96,500 as commission for the sale. The day after escrow closed, the buyers learned of the renovations, and sought to rescind the purchase. Based on advice of defendants, the Ryans refused, and the dispute proceeded to arbitration. The buyer obtained a rescission of the purchase, with the Ryans order to pay damages, interest, and attorneys’ fees and costs in excess of $1 million. The Ryans then sued Sotheby’s and the real estate broker to recover these amounts and damages caused by defendants’ alleged negligence.
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Lyndsey Torp, Snell & WilmerMs. Torp may be contacted at
ltorp@swlaw.com
Managing Infrastructure Projects with Infrakit – Interview with Teemu Kivimäki
June 09, 2016 —
Aarni Heiskanen – AEC BusinessFinland has been in the vanguard in adopting building information modeling (BIM) for infrastructure construction. In this interview I discuss with Teemu Kivimäki, CEO of DCS Finland, how Infrakit helps in projects that use BIM.
Can you say a few words about the background of your company and how Infrakit came about?
The background of DCS Finland (short for Digital Construction Solutions Finland) is in research done in University of Oulu where I worked as a research scientist on construction automation from 2007 to 2010. We were doing research with big infrastructure construction companies, exploring ways to improve worksite management and data flow.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aarni@aepartners.fi
Gary Bague Elected Chairman of ALFA International’s Board of Directors
November 17, 2016 —
Gary A. Bague – Haight Brown & Bonesteel LLPDuring ALFA International’s (ALFA) Annual Business Meeting on October 28, the membership elected Gary Bague to serve as the Chairman of the Board of Directors. Gary’s term as Chairman will run through October 2018. After he completes his term as Chairman, Gary will continue to serve on the Board of Directors as Chair Emeritus for two years.
The Board of Directors is responsible for establishing all policies relative to accomplishing the purposes of ALFA, recommending the Corporation’s budget to the Membership, approving applications for membership, supervising the work of the Chief Executive Officer, and otherwise managing the business and affairs of ALFA. As Chairman of the Board, Gary will preside over all meetings of the Executive Committee, Board of Directors, and Membership. He will also serve as an ex officio member of all committees, and will have the duties of a president of the Corporation.
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Gary A. Bague, Haight Brown & Bonesteel LLPMr. Bague may be contacted at
gbague@hbblaw.com
Insured's Experts Excluded, But Insurer's Motion for Summary Judgment Denied
October 26, 2020 —
Tred R. Eyerly - Insurance Law HawaiiDespite barring the insured's expert witnesses from testifying as to the cause of the loss, lay witnesses were still available, making the district court's award of summary judgment to the insurer improper. Greater Hall Temple Church of God v. Southern Mut. Church Ins. Co., 2020 U.S. App. LEXIS 21934 (11th Cir. July 15, 2020).
Hurricane Matthew damaged the Greater Hall Temple Church of God's (Church) roof. Leaks occurred, causing water damage to the Church's interior. A claim was submitted to Southern Mutual. The policy did not cover loss caused by water. Nor did it cover loss to the interior of buildings unless the rain entered through openings made by a specified peril. An independent adjuster found that the damage was caused not by wind, but by pre-exisiting structural issues. Southern Mutual denied the claim.
The Church filed suit. Southern Mutual moved for summary judgment and also moved to strike three of the Church's expert witnesses. The district court agreed that none of the witnesses could qualify as experts. Two of the witnesses did not have the requisite experience nor had they used a sufficiently reliable methodology formulating their opinions. A third expert was barred because his expert opinion had not been timely disclosed. Thereafter, Southern Mutual's motion for summary judgment was granted because the Church had not provided admissible evidence that damage to the Church's roof was caused by Hurricane Matthew.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com