Sick Leave, Paid Time Off, and the Families First Coronavirus Response Act
April 20, 2020 —
Garret Murai - California Construction Law BlogUnemployment claims hit a historic high this past week as 3.3 million Americans filed for unemployment benefits. To give you some context, this is not only the highest number of unemployment claims ever filed, it is five times higher than the previous record of 695,000 unemployment claims in 1982.
Restaurants, hotels, airlines and other businesses have begun to layoff or furlough workers. According to a survey conducted by the Associated General Contractors of America this past week, 39% of respondents reported that project owners have halted or cancelled construction projects due to deteriorating economic conditions, 45% reported project delays or disruptions, and 23% reported supply chain disruptions.
While the construction industry likely won’t be impacted nearly to the same degree as the retail sector has, some involved in the construction industry may nevertheless be faced with the prospect of having to lay off or furlough workers as “shelter in place” orders are extended. If you’re faced with that situation here are a few things to remember:
Paid Sick Leave
Under California law, nearly all employers are required to provide paid sick leave to employees who work for 30 or more days in a given year. Paid sick leave can be used by an employee for illnesses, including COVID-19, the diagnosis, care, or treatment of existing health conditions, and preventative care for the employee or employee’s family member. The important thing to remember here is that use of paid sick leave is an employee’s choice. While an employer, concerned that an employee may have contracted COVID-19, may require that an employee not come to the office, the employer cannot force such an employee to use his or her paid sick leave. For more information, the California Labor Commissioner has created a webpage specific to COVID 19.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Drastic Rebuild Resurrects Graves' Landmark Portland Building
September 14, 2020 —
Nadine M. Post - Engineering News-RecordFifteen minutes into a 105-minute job interview for the $195-million overhaul of the long-troubled Portland Public Service Building in Oregon’s largest city, owner’s rep Mike Day threw a curve ball to the unwitting design-build team of Howard S. Wright Construction Co. and architect DLR Group. Already hard at work solving Day’s first faux crisis scenario—a budget buster that threatened the viability of the makeover of the notoriously dysfunctional landmark—they had to regroup.
Reprinted courtesy of
Nadine M. Post, Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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Care, Custody or Control Exclusion Requires Complete and Exclusive Control by Insured Claiming Coverage
July 30, 2019 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn McMillin Homes Construction v. Natl. Fire & Marine Ins. Co. (No. D074219, filed 6/5/19) a California appeals court held that a “care, custody or control” exclusion did not bar coverage for defense of a general contractor as an additional insured under a subcontractor’s policy, because the exclusion requires exclusive control, but the facts and allegations posed a possibility of shared control with the subcontractor.
McMillin was the general contractor on a housing project and was added as an additional insured to the roofing subcontractor’s policy pursuant to the construction subcontract. The homeowners sued, including allegations of water intrusion from roof defects. McMillin tendered to the roofing subcontractor’s insurer, which denied a defense based on the CGL exclusion for damage to property within McMillin’s care, custody or control.
In the ensuing bad faith lawsuit, McMillin argued that the exclusion required complete or exclusive care, custody or control by the insured claiming coverage, which was not the case for McMillin. The insurer argued that the exclusion said nothing about complete or exclusive care, custody or control. Further, the intent to exclude coverage for damage to any and all property in McMillin’s care, custody or control, to whatever degree, was demonstrated by the fact that the additional insured endorsement in question was not an ISO CG2010 form, but a CG2009 form, which expressly adds a care, custody or control exclusion to the additional insured coverage not found in the CG2010 form. The argument was that the CG2009 form evidences an intent to conclusively eliminate coverage for property in the additional insured’s care, custody or control. In addition, the insurer argued that this result was also reinforced by its inclusion of an ISO CG2139 endorsement in the roofer’s policy, which eliminated that part of the “insured contract” language of the CGL form, defining an “insured contract” as “[t]hat part of any other contract or agreement pertaining to your business . . . under which you assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization.” The insurer’s argument was that by having eliminated coverage for contractual indemnity or hold harmless agreements, it had “closed the loop” of eliminating additional insured coverage for construction defect claims.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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Insurer Has Duty to Defend Sub-Contractor
July 25, 2022 —
Tred R. Eyerly - Insurance Law HawaiiInterpreting Connecticut law, the federal district court had that the insured sub-contractor was entitled to a defense. County Wide Mech. Servs. LLC v. Regent Ins. Co., 2022 U.S. Dist. LEXIS 86726 (D. Conn. May 13, 2022).
The underlying plaintiff, The Saybrook at Haddam, entered a contract with PAC Group to serve as general contractor for construction of an addition to The Saybrook's facility. PAC Group sub-contracted with County Wide Mechanical Services to install the HVAC system.
The HVAC system was put into service on November 14, 2014. In October 2019, The Saybrook filed the underlying action against PAC group, County Wide, and others. The underlying complaint alleged that there had been at least seven "critical failures" of the HVAC system. As a result, The Seabrook had to replace multiple compressors and several circuit boards, valves, and other components. Further, the entire system had to be replaced. The underlying complaint alleged breach of contract against PAC Group and County Wide. In addition to the alleged breach of contract between The Saybrook and County Wide, the Saybrook also alleged it was a third-party beneficiary of PAC Group's contract with County Wide regarding installation of the HVAC system. PAC Group cross-claimed against County Wide, asserting one count of contractual indemnification and one count of breach of contract under the PAC Group's contract with County Wide.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Seattle Independent Contractor Ordinance – Pitfalls for Unwary Construction Professionals
October 09, 2023 —
Travis Colburn - Ahlers Cressman & SleightChapter 14.34 of the Seattle Municipal Code is a relatively new ordinance that can affect the parties to a construction contract for work performed within the City of Seattle’s city limits. The Independent Contractor Protection Ordinance (“ICPO”) was enacted to provide self-employed persons, or entities composed of not more than one person, regardless of corporate form, recourse for timely payment for work performed. The ICPO applies to contracts of $600[i] or more between an independent contractor and a hiring entity where the work, in whole or in part, is known to be performed within the City of Seattle’s city limits.[ii] The ICPO cannot be waived by parties to a contract.[iii]
Historically, the primary legal recourse for non-payment or late payment for work performed under a contract involves an expensive breach of contract action, and one reason the ICPO was enacted was to give greater protection to a growing number of Washington independent contractors who report problems with timely and accurate payment.
The ICPO affects “hiring entities” or any individual, partnership, association, corporation, business trust, or any entity, person or group of persons, or a successor thereof, that hires independent contractors to provide services within the scope of a hiring entity’s business or commercial activities. In the construction context, most general contractors, subcontractors, design professionals, and design consultants should be aware of this ordinance, as well as certain owners[iv] and development-side entities.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
Independent Contractor v. Employee. The “ABC Test” Does Not Include a Threshold Hiring Entity Test
October 03, 2022 —
Garret Murai - California Construction Law BlogIn 2018, in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018), the California Supreme Court overturned nearly thirty years of jurisprudence governing the manner in which workers are classified as employees or independent contractors. The Dynamex decision replaced the “Borello test,” derived from a case of the same name, S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), in which the California Supreme Court at the time set forth a variety of factors to be considered when determining whether a worker was an employee or independent contractor.
The Dynamex decision replaced with the “Borello test” with the “ABC test.” Under the ABC test, a worker can be deemed an independent contractor if three conditions are met:
- The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
- The worker performs work that is outside the usual course of the hiring entity’s business; and
- The worker is customarily engaged in an independent established trade, occupation, or business
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Exception to Watercraft Exclusion Does Not Apply
September 24, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe court determined that an additional insured was not entitled to coverage despite an exception to the watercraft exclusion. Holden v. U.S. United Ocean Serv., LLC, 2014 U.S. App. LEXIS 15954 (5th Cir. Aug. 19, 2014).
United entered a contract with Buck Kreihs Company, Inc. under which Buck Kreihs would perform ship-repair work for United. Under the contract, Buck Kreihs would indemnify United for all liabilities arising out of the work or services performed by Buck Kreihs for United. The contract further provided that Buck Kreihs was to procure general liability coverage and name United as an additional insured. Buck Kreihs did so under a policy issued by St. Paul.
Holden, an employee of Buck Kreihs, was injured while preparing to remove a gangway that led from a dock at Buck Kreihs's facility to a barge owned by United. Holden sued United, which tendered to St. Paul as an additional insured. St. Paul denied coverage under the policy's watercraft exclusion. Holden and United settled. United pursued its third party suit against St. Paul. The district court granted summary judgment to St. Paul.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Congratulations to Jonathan Kaplan on his Promotion to Partner!
February 10, 2020 —
Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara, LLP is proud to announce the promotion of Jonathan Kaplan to Partner!
Jonathan has been with the firm for nearly eight years out of our Newport Beach office. He focuses his practice on general liability defense and construction litigation matters, in addition to handling high-profile plaintiff defect cases. Jonathan earned his law degree from Chapman University School of Law, obtaining a certificate in Environmental, Real Estate and Land Use Law, and went to undergrad at the University of Washington. Jonathan is an active participant within the firm’s Hiring Committee and assists with legal recruitment at the prominent Orange County law schools. Jonathan is also an avid hiker and has coordinated several hiking events for our Southern California offices.
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Bremer Whyte Brown & O'Meara LLP
