Seattle Washington Building Expert Directory

California Subcontractor Gets a Kick in the Rear (or Perhaps the Front) for Prematurely Recorded Mechanics Lien

October 21, 2019 — Garret Murai - California Construction Law Blog
California provides three statutorily recognized construction payment remedies: (1) mechanics liens; (2) stop payment notices; and (3) payment bond claims. Each is intended to provide payment protections for those who furnish labor, materials and services on a construction project. However, each is also different in important ways. One of those differences has to do with timing. Specifically, when the statutory payment remedy may be used by a claimant. Stop payment notices can be served at any time during a project even before a claimant has completed its work. However, mechanics liens may only be recorded and payment bond claims may only be made after a claimant has completed or ceased performing its work. In Precision Framing Systems, Inc. v. Luzuriaga, Case No. E069158 (August 29, 2019), the 4th District Court of Appeal examined whether a subcontractor had prematurely recorded a mechanics lien and, thereby, was prevented from filing a lawsuit to foreclose on its mechanics lien. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel, Rosen, Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Subcontractor Not Liable for Defending Contractor in Construction Defect Case

February 10, 2012 — CDJ STAFF

The California Court of Appeals has ruled on January 9, 2012 in Hensel Phelps Construction Company v. Urata & Sons Cement, upholding the judgment of the lower court.

Hensel Phelps was the general contractor for a high-rise in Sacramento. They were sued by the owners of the building after problems were discovered in the concrete slabs of the building’s parking garage. Instead of welded steel wire mesh, the slabs had been constructed with fiber mesh. Hensel Phelps filed a cross-complaint against Urata Cement, the subcontractor that had performed the cement work. Urata refused to defend Hensel Phelps. The owners’ case was subsequently dismissed due to the statute of limitations.

Although the original case was over, Hensel Phelps continued in their claims against Urata. “Urata argued that a handwritten interlineation required Hensel Phelps to prove Urata was at fault for the injury alleged in the building owners’ complaint before Urata was obliged to defend Hensel Phelps in that action.”

The lower court concluded that Urata would have been obligated to defend Hensel Phelps if the owners’ lawsuit had alleged that the damage was due to the subcontractor’s work or if evidence at trial established this. The lower court found neither of these true. Instead, the use of the fiber mesh was a design issue and “that decision was outside the scope of the subcontractor’s work.”

During the trial, Hensel Phelps conceded that Urata was not at fault. The appeals court could find no reading of the contract that would cause Urata to be obligated to defend Hensel Phelps, calling Hensel Phelps’s reading of the contact as “grammatically infeasible.”

Judges Nicholson, Raye, and Butz upheld the decision of the lower court and awarded costs on appeal to Urata.

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Could This Gel Help Tame the California Fires?

November 28, 2018 — Gordy Megroz - Bloomberg
In 2009, Jeff Denholm was making a living as an adventure athlete, competing in stand-up paddleboard races and riding giant waves at Mavericks, the famous surf break near his home in Santa Cruz, Calif. Denholm was sponsored by Patagonia Inc., but to generate extra cash—“Adventure athletes don’t make a ton of money,” he says—he had a side gig leasing a fire truck to state and county crews that had run out of equipment battling wildfires. One firefighting tool that Denholm kept onboard was retardant, which helps tamp down existing fires and can prevent them; he used a type known as a foam suppressant. Last year the U.S. Forest Service spent about $72 million on retardants, but in researching them, Denholm discovered some discouraging information. Read the court decision
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Reprinted courtesy of Gordy Megroz, Bloomberg

Anti-Concurrent, Anti-Sequential Causation Clause Precludes Coverage

February 26, 2015 — Tred R. Eyerly – Insurance Law Hawaii
Where the building was damaged by both a covered cause and a non-covered cause, the policy's anti-concurrent/anti-sequential causation clause barred coverage for a collapsed building. Ashrit Realty LLC v. Tower Nat'l Ins. Co., 2015 N.J. Super. Unpub. LEXIS 107 (N.J. Super. Ct. App. Div. Jan. 20, 2015). The property sustained moderate damage during a storm on August 14, 2011. More extensive damage was caused by Hurricane Irene two weeks later. After the hurricane, a large hole formed due to the collapse of a pipe which ran underneath the property. Once the pipe collapsed, leaking water caused substantial soil erosion, which led to the collapse of the rear portion of the building. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Former SNC-Lavalin CEO Now Set for Trial in Bribe Case

December 11, 2018 — Debra K. Rubin - Engineering News-Record
Pierre Duhaime, the former CEO of Canadian design-build giant SNC-Lavalin—who resigned from the firm in 2012 in the wake of a contracting bribery scandal in which he was arrested for his alleged role—is now set for a February trial start in Quebec Superior Court. The case relates to payoffs on one project, a multibillion-dollar Montreal hospital on which the firm led the public-private construction consortium. Read the court decision
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Reprinted courtesy of Debra K. Rubin, ENR
Ms. Rubin may be contacted at rubind@enr.com

Sellers of South Florida Mansion Failed to Disclose Construction Defects

October 08, 2014 — Beverley BevenFlorez-CDJ STAFF
A couple who reportedly sold their custom, beach-front home on Golden Beach for more money than any other home in that town previously, may have failed to disclose construction defects, according to Daily Business Review. The original owners, reported Daily Business Review, claimed (according to court documents) that “they were ‘unable to spend even one night because an overwhelming smell of mold in the home triggered a severe reaction in Mrs. Hochberg.’" They also alleged the new home had “cracked walls, drafty doors, leaky windows, poorly cut marble and peeling stucco.” The owners sued the subcontractors, but lost due to not filing within the four-year statute of limitations. While water leaks were disclosed during the sale with a notation that all leaks had been repaired, “the extent of the home's repair history was not discussed during nearly eight months of haggling over the property, the buyer's broker said.” Read the court decision
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Executing Documents with Powers of Attorney and Confessions of Judgment in PA Just Got Easier

October 27, 2016 — Thomas C. Rogers, Nancy Sabol Frantz and Susan Fetterman – White and Williams LLP
Certain tedious requirements in Pennsylvania for the execution of a document used in a commercial transaction which contains a power of attorney have been eliminated. Act 103 of 2016, which was signed by Governor Wolf on October 4, 2016, exempts certain powers of attorney from the requirement that it be acknowledged by a notary public as well as other formalities. Reprinted courtesy of White and Williams LLP attorneys Thomas C. Rogers, Nancy Sabol Frantz and Susan Fetterman Mr. Rogers may be contacted at rogerst@whiteandwilliams.com Ms. Frantz may be contacted at frantzn@whiteandwilliams.com Ms. Fetterman may be contacted at fettermans@whiteandwilliams.com Read the court decision
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Arguing Cardinal Change is Different than Proving Cardinal Change

April 05, 2021 — David Adelstein - Florida Construction Legal Updates
The cardinal change doctrine has become a popular doctrine for a contractor to argue under but remains an extremely difficult doctrine to support and prove. Arguing cardinal change is one thing. Proving cardinal change is entirely different. As shown below, this is a doctrine with its origins under federal government contract law with arguments extending outside of the federal government contract arena. For this reason, the cases referenced below are not federal government contract law cases, but are cases where the cardinal change doctrine has been argued (even though these cases cite to federal government contract law cases). A party argues cardinal change to demonstrate that the other party (generally, the owner) materially breached the contract based on the cardinal change. In reality, a party argues cardinal change because they have cost overruns they are looking to recover and this doctrine may give them an argument to do so. But it is important to recognize the distinction between raising it as an argument and the expectation that this (difficult doctrine to prove) will carry the day. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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