SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Blueprint for Change: How the Construction Industry Should Respond to the FTC’s Ban on Noncompetes

May 13, 2024 — Matthew DeVries - Best Practices Construction Law
In a groundbreaking move aimed at fostering fair competition and empowering workers, the Federal Trade Commission (FTC) issued a final rule last week to ban noncompete agreements nationwide. This ruling may carry profound implications for the construction industry, prompting construction businesses to reassess their practices and ensure compliance while maintaining competitiveness. Let’s explore how construction companies, large and small, can navigate this regulatory shift effectively. Noncompete clauses have long been a staple in employment contracts within the construction sector, often used to protect proprietary information and retain skilled talent. However, the FTC’s ban on noncompetes demands a reevaluation of these practices. Employers must recognize the potential consequences of noncompliance, including legal repercussions and reputational damage, and take proactive steps to adapt to the new regulatory landscape. Communications with Employees The FTC rule requires employers to provide a form notice of non-enforcement to all present and former employees subject to an unexpired noncompete provisions. However, given the immediate legal challenges to the FTC’s rule and the fact that the 120-day compliance window has not yet begun, there is no reason to take immediate action or begin notifying employees. Instead, business owners should wait for at least 60 days before taking concrete action in response to the rule to see if any court temporarily enjoins the effectiveness of the rule. Read the court decision
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Reprinted courtesy of Matthew DeVries, Burr & Forman LLP
Mr. DeVries may be contacted at mdevries@burr.com

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Res Judicata Bars Insured from Challenging Insurer's Use of Schedule to Deduct Depreciation from the Loss

June 10, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The insured was barred by res judicata from filing a second lawsuit challenging the insurer's method of establishing the amount of the loss. Burke v. GeoVera Spec. Ins. Co., 2024 U.S. App. LEXIS 9186 (5th Cir, April 16, 2024). On August 29, 2021, Hurricane Ida caused wind damage to the Burkes' home. They filed a claim with their insurer, GeoVera Specialty, and received payment. In calculating the payment, GeoVera Specialty adjusted the damage claim pursuant to its Roof System Payment Schedule, which lists the criteria used in reducing roof damage claims based on depreciation. Based on that schedule, GeoVera Specialty reduced the roof damage component of the Burkes' claim by forty-eight percent. In March 2022, the Burkes filed suit alleging that GeoVera Specialty undervalued their claim. On September 8, 2022, the parties filed a joint motion to dismiss the lawsuit after reaching a settlement, which the district court granted. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Minnesota Civil Engineers Give the State's Infrastructure a "C" Grade for the Second Time

May 02, 2022 — American Society of Civil Engineers
SAINT PAUL, Mn. — The Minnesota Section of the American Society of Civil Engineers (ASCE) today released preliminary findings from the 2022 Report Card for Minnesota's Infrastructure, with 10 categories of infrastructure receiving an overall grade of a 'C', meaning Minnesota's infrastructure is in mediocre condition. Minnesota has taken steps to make its infrastructure network more sustainable to withstand increasingly severe weather, but additional steps must be taken as the state's infrastructure is aging. Funding has been limited for systems throughout the state, particularly for surface transportation networks, and local and state funding must be increased to bring these critical systems up to speed. Civil engineers graded aviation (B), bridges (C), dams (C), drinking water (C-), energy (C), parks (B-), ports (C-), roads (D+), transit (C-) and wastewater (C). "The ASCE report card serves as an important benchmark for where our infrastructure currently stands and lays out how we can make improvements," said Sen. Sandy Pappas, DFL-St. Paul. "Knowing that these systems play such a crucial role in economic progress and the safety of Minnesotan families, we have made infrastructure a topline issue and must continue to do so to secure a prosperous future here in Minnesota." ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel. Read the court decision
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Travelers’ 3rd Circ. Win Curbs Insurers’ Asbestos Exposure

November 21, 2017 — Gregory D. Podolak - Saxe Doernberger & Vita, P.C.
Originally published by CDJ on May 3, 2017 In breaking news this week, LAW360.com posted that the Third Circuit ruled Friday that “a common exclusion found in a Travelers policy bars coverage for claims arising out of asbestos in any form, limiting insurers’ potential exposure to asbestos injury claims by precluding policyholders from arguing that the exclusionary language is ambiguous and doesn’t extend to products containing the carcinogen.” In its detailed analysis of the decision, LAW360 turned to Greg Podolak for his analysis. Gregory D. Podolak, managing partner of Saxe Doernberger & Vita PC’s Southeast office, said the ruling is a cautionary tale that should galvanize policyholders and their insurance brokers to take a closer look at policies to delete or curtail broad “arising out of” language in exclusions. Otherwise, insureds could find themselves without any coverage for claims even remotely related to a certain product, he said. Read the court decision
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Reprinted courtesy of Gregory D. Podolak, Saxe Doernberger & Vita, P.C.
Mr. Podolak may be contacted at gdp@sdvlaw.com

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Weslaco, Texas Investigating Possible Fraudulent Contractor Invoices

March 19, 2014 — Beverley BevenFlorez-CDJ STAFF
The city of Weslaco in Texas fears that they have received “fraudulent invoices from the contractor of the…Valley Nature Center facility,” according to the Mid-Valley Town Crier. The project had been stalled due to “problems with numerous subcontractors claiming they hadn’t received payment.” Furthermore, “[c]onstruction is more than 14 months delayed and now halted as contractor GAS Enterprises demands more money from the city.” City Manager Leo Olivares informed GAS President Rene Salinas “that the city was aware of ‘forged requests for payments,’ ‘padding invoices’ and ‘requests for reimbursement for items, materials and labor that you did not pay,’” reported the Mid-Valley Town Crier. While Salinas did not respond to the Mid-Valley Town Crier when asked for a comment, he did send a letter to the city “arguing that none of the subcontractors had questioned the documents to him.” Read the court decision
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Harlem Developers Reach Deal with Attorney General

February 25, 2014 — Beverley BevenFlorez-CDJ STAFF
Joseph Scarpinito and Shiraz Sanjana, developers of the Mirada condominium in Harlem, New York can avoid a contempt charge from state Attorney General Eric Schneiderman, “if they make the required repairs and obtain a permanent certificate of occupancy at the property,” according to The Real Deal. Scarpinito and Sanjana “agreed to deposit $200,000 into an escrow account and make repairs to stop flooding and other defects at the 161 East 110th Street condo, which are required to obtain a certificate of occupancy from the city Department of Buildings.” Last December, the Attorney General “filed suit against the developers, alleging they submitted false filings to his office in claiming that Scarpinito’s 83-year-old mother was the actual developer of the 68-unit condo.” Furthermore, the condo board lawyers submitted a complaint to Schneiderman “detailing extensive defects in the building, including water leaks entering the building from the roof and façade.” The developers have been ordered “to submit weekly reports to the AG’s office detailing progress on the repairs and obtaining the certificate of occupancy.” Read the court decision
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Powering Goal Congruence in Construction Through Smart Contracts

February 22, 2021 — Michael Matthews - Construction Executive
The $814 billion U.S. commercial construction market requires a unique assembly of designers, contractors, subcontractors and suppliers to work together in a highly orchestrated manner to make sure that the right labor, material, equipment, tools and information all comes together at the right place and time. Alignment and coordination between companies is critical for a project to be successful; completed safely, on time, on budget and resulting in an asset that performs as designed. Yet the industry is slowed by an operating model bogged down by transactional and informational barriers that destroys value across the construction supply chain. Companies are connected through contracts and purchase orders that are undercut by mistrust that yields adversarial relationships and conflicting priorities that result in restricted transparency, elongated payment cycles and an abundance of resource-sucking reconciliations, audits and disputes. With margins already razor thin, company protectionism cascades down from owners, developers and operators to contractors, subcontractors and suppliers with each player focused on optimizing their piece at the expense of the whole. Perhaps this is part of the reason 98% of megaprojects experience cost overruns or delays, 95% of projects are unable to meet even one business objective; and 70% of all construction projects are not completed within 10% of the proposed budget. Reprinted courtesy of Michael Matthews, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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CGL Insurer’s Duty To Defend Broader Than Duty To Indemnify And Based On Allegations In Underlying Complaint

April 10, 2019 — David Adelstein - Florida Construction Legal Updates
The duty to defend an insured with respect to a third-party claim is broader than the duty to indemnify the insured for that claim. The duty to defend is triggered by allegations in the underlying complaint. However, an insurer is only required to indemnify its insured for damages covered under the policy. A recent case example demonstrating the duty to defend is broader than the duty to indemnify can be found in Southern Owners Ins. Co. v. Gallo Building Services, Inc., 2018 WL 6619987 (M.D.Fla. 2019). In this case, a homebuilder built a 270-unit condominium project where the units were included in 51-buildings. Upon turnover of the condominium association to the unit owners, the condominium association served a Florida Statutes Chapter 558 Notice of Construction Defects letter. There was numerous nonconforming work spread out among various subcontractor trades including nonconforming stucco work. The homebuilder incurred significant costs to repair defective work and resulting property damage, and relocated unit owners during repairs. The homebuilder then filed a lawsuit against implicated subcontractors. One of the implicated subcontractors was the stucco subcontractor. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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