School District Gets Expensive Lesson on Prompt Payment Law. But Did the Court Get it Right?
February 26, 2015 —
Garret Murai – California Construction Law BlogMy kids don’t like riding in my car.
I urge them to look outside the window (I don’t have DVD), suggest that they roll down their windows to get some fresh air (rather than have me turn on the A/C) and persist on listening to that archaic device called the radio (I don’t “stream”).
Plus, I make them play “Dad Games.” Like Synonyms.
In Synonyms, I say a word, and the next person has to come up with a synonym for that word until someone can’t think of another synonym. Sometimes, I take a walk on the wild side, and play “Antonyms.”
Things can get heated, though. Like when someone says a word and there is a disagreement over whether that word is a synonym or not.
The next case, FTR International, Inc. v. Rio School District, California Court of Appeal for the Second District, Case No. B238618 (January 27, 2015), also involved a disagreement over synonyms . . . except that the loser had to cough up nearly $10 million.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Alleging and Proving a Florida Deceptive and Unfair Trade Practices Act (FDUTPA) Claim
December 13, 2021 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to construction disputes, a Florida Deceptive and Unfair Trade Practices Act (known by its acronym “FDUTPA”) claim is not commonly asserted. A FDUTPA claim is a statutory claim under Florida Statute s. 501.201 en seq. This claim is NOT easy to prove, particularly in the construction context. Sometimes, a party will assert a FDUTPA claim to create a basis for attorney’s fees; however, that basis cuts BOTH ways, i.e., you can be liable for fees if you fail to prove the FDUTPA claim. In a construction dispute, a FDUTPA claim is one that really should be pled with caution after a party understands and fully considers what it MUST prove including the all-important consideration of how actual damages are determined under FDUTPA, which requires an actual loss. Nevertheless, it is good to know what you need to prove to support a FDUTPA claim in case you believe you have facts that can support a FDUTPA claim and actual damages under FDUTPA (known as benefit-of-the-bargain damages).
Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com
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AAA Revises Construction Industry Arbitration Rules and Mediation Procedures
July 22, 2024 —
Patrick McKnight - The Dispute ResolverThe American Arbitration Association (AAA) recently revised its Construction Industry Arbitration Rules and Mediation Procedures (“the Rules”). Several notable changes went into effect March 1, 2024, involving the scope of confidentiality, regular and fast track procedures, and updates to certain monetary thresholds.
I. Revisions to Regular Track Procedures
Rule 45: Confidentiality
For the first time, confidentiality is now the default standard. Under Rule 45(a), arbitrators must keep all matters confidential unless otherwise required by law, court order or the agreement of the parties. Rule 45(b) allows a mediator to issue confidentiality orders and “take measures for protecting trade secrets and confidential information.”
Rule 7: Consolidation and Joinder
Under the new provisions, consolidation and joinder requests must be filed before confirmation of the Merits Arbitrator’s appointment. This language eliminates a previous option that allowed confirmation up to 90 days after filing of such requests. A failure to timely respond to a joinder request will result in a waiver of objections. Now, a party must establish both good cause and prejudice for a successful joinder request after confirmation of the arbitrator.
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Patrick McKnight, Fox Rothschild LLPMr. McKnight may be contacted at
pmcknight@foxrothschild.com
An Overview of the New EPA HVAC Refrigerant Regulations and Its Implications for the Construction Industry
September 30, 2024 —
Stefanie A. Salomon, Nadia Ennaji & Ali Heyat - Peckar & Abramson, P.C.The U.S. Environmental Protection Agency (EPA) recently announced a series of significant changes to the rules governing the use of refrigerants in heating, ventilation, and air conditioning (HVAC) systems. These changes, which were promulgated under the American Innovation and Manufacturing (AIM) Act, are designed to phase down the use of hydrofluorocarbons (HFCs), a class of potent greenhouse gases.
The AIM Act: A Game-Changer for HVAC Industry
The recent changes to refrigerant regulations by the EPA signify a substantial shift in environmental policy that will have profound implications for the construction industry. For the construction industry, this means a transition to next-generation technologies that do not rely on HFCs. The AIM Act’s sector-based restrictions will affect a wide range of equipment, including refrigeration and air conditioning systems integral to building design and function.
Starting January 1, 2025, the manufacturing or importing of any product in specified sectors that uses a regulated substance with a global warming potential of 700 or greater is prohibited (40 C.F.R. § 84.54(a)). The specified sectors listed include R-410A, the most common refrigerant used in the HVAC industry. The installation of systems using a regulated substance with a global warming potential of 700 or greater in specified sectors is allowed until January 1, 2026, provided that all system components are manufactured or imported before January 1, 2025. See 40 C.F.R. § 84.54 (c). “Installation” of an HVAC system is defined as the completion of assembling the system’s circuit, including charging it with a full charge, such that the system can function and is ready for its intended purpose. See 40 C.F.R. § 84.52.
Reprinted courtesy of
Stefanie A. Salomon, Peckar & Abramson, P.C. and
Nadia Ennaji, Peckar & Abramson, P.C.
Ms. Salomon may be contacted at ssalomon@pecklaw.com
Ms. Ennaji may be contacted at nennaji@pecklaw.com
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When Construction Contracts Go Sideways in Bankruptcy
February 16, 2017 —
Tracy Green - California Construction Law BlogThe contractor on a project files a bankruptcy case. How should the property owner and subcontractors proceed? When a party to a contract files bankruptcy, the other party’s actions are constrained by the bankruptcy code.
Types of Bankruptcies
The typical bankruptcy case involves a chapter 7 complete liquidation, chapter 13 reorganization for an individual, or a chapter 11 reorganization or liquidation. In a chapter 7 the business ceases to operate and a panel trustee is appointed immediately upon the filing of the case. The chapter 7 trustee’s duties are to liquidate assets for the benefit of creditors and to prosecute litigation that can result in assets for the creditors. In a chapter 13, the individual debtor continues to operate, and there is a trustee, but the trustee’s roll is limited to reviewing the chapter 13 plan and making sure that the plan is performed. In a chapter 11, the debtor retains control of its assets and continues to operate its business until a plan is confirmed. During the chapter 11 period before a plan is approved, the debtor will decide which contracts it wants to assume or reject, all while operating the company and preparing a plan.
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Tracy Green, Wendel Rosen Black & Dean LLPMs. Green may be contacted at
tgreen@wendel.com
Supreme Court of New York Denies Motion in all but One Cause of Action in Kikirov v. 355 Realty Assoc., et al.
April 28, 2011 —
Beverley BevenFlorez CDJ STAFFIn the construction defect suit Kikirov v. 355 Realty Associates, LLC, et al., the Supreme Court of the State of New York granted a dismissal of the plaintiff’s fourth cause of action, but denied the defendants’ motion in all other respects. The plaintiff alleged breach of contract, among other claims. “355 Realty was the sponsor of 355 Kings Highway Condominium, a condominium project located at 355 Kings Highway, in Brooklyn, New York. The condominium units were allegedly marketed as ‘ultra luxury condos,’ and a ‘Manhattan style condominium building,’ which would be the ‘epitome of luxury and quality.’ The construction of the six-story 28 unit residential condominium building began in approximately November 2003. […] Plaintiff entered into a purchase agreement, dated December 21, 2005, with 355 Realty (which was executed on behalf of 355 Realty by Michael Marino, as its member) for the purchase of Unit 2G in the building.”
The plaintiff alleged that construction defects emerged soon after moving into the unit: “After taking occupancy of his condominium unit, plaintiff allegedly experienced serious leakage and moisture problems in his unit, which caused a dangerous mold condition to develop, in addition to causing actual damage to the structural elements of his unit. According to plaintiff, the walls, moldings, and wood floors of his unit are constantly wet and moist, and there is severe buckling of the wood floors. Plaintiff claims that these problems have caused his unit to be uninhabitable. Plaintiff alleges that he has been forced to remove all of his personal belongings from his unit and has been unable to occupy his unit.”
According to the plaintiff, Foremost attempted to repair the defects, but only made the situation worse: “Specifically, plaintiff asserts that Foremost’s contractors opened his walls to remove the stained drywall, but never corrected the cause of the leaks, destroyed the walls, and never properly taped and painted the sheet rock. Plaintiff alleges that Foremost repaired the openings in a defective manner. Plaintiff also claims that his floor was repaired at that time by a subcontractor hired by Foremost, but the basic structural problem was never resolved and the leaks continued, compromising the beams and causing the mold conditions, in addition to all of the physical damage present in the unit. On or about July 16, 2009, plaintiff allegedly sent a notice of the defects to 355 Realty and to the managing agent designated by the condominium board, by certified mail, return receipt requested. Plaintiff asserts that defendants have failed and refused to repair and remedy the defective condition, and that the damage is extensive and requires major structural repairs.”
The plaintiff filed suit on May 4, 2010, and the original complaint asserted eight causes of action. “By decision and order dated September 13, 2010, the court granted a motion by defendants to dismiss plaintiff’s second cause of action for breach of implied covenants of good faith and fair dealing, his third cause of action for breach of implied warranties, his fifth cause of action for negligence as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his seventh cause of action for negligence as against Vision, Foremost, and MMJ, and his eighth cause of action for violations of General Business Law § 349 and § 350, and granted plaintiff leave to replead his first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his fourth cause of action for breach of statutory warranties, and his sixth cause of action for breach of contract as against Vision, Foremost, and MMJ.”
The plaintiff amended their complaint on October 18, 2010, and “has repleaded these three causes of action by asserting a first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, a second cause of action for breach of statutory warranties, and a third cause of action for breach of contract as against Vision, Foremost, and MMJ. In addition, plaintiff, in his amended complaint, has added a fourth cause of action for fraud.”
The defendants, on the other hand, “argue that each of the four causes of action alleged by plaintiff in his amended complaint fail to state a claim upon which relief may be granted, and that plaintiff’s amended complaint must be dismissed pursuant to CPLR 3211 (a) (7). Defendants also cite to CPLR 3211 (a) (1), and (5), asserting that dismissal is also required based upon documentary evidence and the Statute of Limitations contained in the limited warranty.” The defendants’ motion to dismiss the first cause of action, breach of contract against 355 Realty, was denied: “While defendants dispute that the alleged defects are actually structural in nature, plaintiff’s allegations as to their structural nature are sufficient, at this juncture, to withstand defendants’ motion to dismiss. Thus, dismissal of plaintiff’s first cause of action must be denied.”
Next, the court reviewed the second cause of action, which was breach of statutory warranties: “Defendants’ motion also seeks dismissal of plaintiff’s second cause of action for breach of statutory warranties, which alleges that, under applicable law, including General Business Law § 777-a, et seq., the sponsor warranted to purchasers of units that the units would be constructed in a skillful, careful, and workmanlike manner, consistent with proper design, engineering, and construction standards and practices, and free of material latent, design, and structural defects. Defendants argue that General Business Law § 777-a, known as the housing merchant implied warranty, is inapplicable to this case because it is limited to the construction of a ‘new home,’ defined in General Business Law § 777 (5) as ‘any single family house or for-sale unit in a multi-unit residential structure of five stories or less.’ As noted above, the building in which plaintiff’s condominium unit is located is a six-story building.”
The motion to dismiss the second cause of action is denied. The court provided this reasoning: “the full text of the offering plan has not been provided, the court is unable to examine the entire written agreement so as to determine the purpose of the inclusion of the text of General Business Law § 777.”
In the third cause of action, the plaintiff alleges “a breach of contract claim as against Vision, Foremost, and MMJ based upon their contract with 355 Realty, pursuant to which they agreed to be the general contractors/construction managers for the condominium, to undertake oversight responsibility for the design and construction of the condominium, to prepare and/or review drawings, plans, and specifications for the condominium, and to otherwise manage and oversee the project. Plaintiff alleges that Vision, Foremost, and MMJ breached their contractual obligations in that the condominium units were improperly and inadequately designed and constructed, and completed in an incompetent and unworkmanlike manner, with material design and construction defects.”
The motion to dismiss the third cause of action was denied as well: “Plaintiff alleges, in his amended complaint, that Vision, Foremost, and MMJ have acknowledged notice of the defects and have not denied that they are responsible for providing a warranty to plaintiff. Plaintiff also refers to this warranty, in his amended complaint, by noting that paragraph 16 of the purchase agreement stated that the ‘[s]eller shall not be liable to . . . the [p]urchaser for any matter as to which an assignable warranty . . . has been assigned . . . to [p]urchaser and in such case the sole recourse of such . . . [p]urchaser . . . shall be against the warrantor . . . except that in the event a contractor or subcontractor is financially unable or refuses to perform its warranty . . . [s]eller shall not be excused from its obligations enumerated in the [offering p]lan under Rights and Obligations of Sponsor.’ Consequently, the court finds that dismissal of plaintiff’s third cause of action as against Foremost and MMJ must also be denied.”
In the fourth cause of action, the plaintiff alleges “that defendants made false statements and representations orally, in advertisements, and in the purchase agreement, that the condominium was properly and adequately designed and constructed and completed in a competent and workmanlike manner, in accordance with the condominium plans and specifications and proper design, engineering, and construction standards and practices consistent with applicable standards for a first class, luxury condominium in Brooklyn.”
The court dismissed the fourth cause of action stating, “it must be dismissed because it is duplicative of his first cause of action for breach of contract.” Therefore, “defendants’ motion to dismiss plaintiff’s amended complaint is granted to the extent that it seeks dismissal of plaintiff’s fourth cause of action, and it is denied in all other respects.”
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You Say Tomato, I Say Tomahto. But When it Comes to the CalOSHA Appeals Board, They Can Say it Any Way They Please
January 08, 2024 —
Garret Murai - California Construction Law BlogWe lawyers do a fair amount of reading. Documents. Court decisions. Passive aggressive correspondence from opposing counsel. As well as statutes, regulations and administrative guidance. And you might be surprised how often words can be ascribed very different meanings depending on who is reading it. Such, I suppose, is the nature of language. When it comes to public agency interpretations of its own regulations, however, you would be well to heed that authors are often the best interpreters of their own works, or at least that’s how the courts tend to view it, as in the next case L & S Framing Inc. v. California Occupational Safety and Health Appeals Board, Case No. C096386 (July 24, 2023).
The L & S Framing Case
Martin Mariano, an employee of L & S Framing, Inc., suffered a brain injury when he fell from the “second floor” while working on a single family house. What, exactly, this “second floor” was, was a point of a contention in the legal case that followed.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Quick Note: Charting Your Contractual Rights With Respect To The Coronavirus
April 06, 2020 —
David Adelstein - Florida Construction Legal UpdatesAs more and more information is being learned, and more and more industries are being impacted, it is likely that the construction industry will follow suit. And, while impacts with the global supply chain may not yet be realized, impacts could begin with labor supply and, frankly, employers’ safety protocols dealing with the coronavirus. One suggestion that should be implemented is a detailed chart, similar to the below, where you are charting rights and obligations under your contracts dealing with force majeure, notice, and project suspensions. This is step one to make sure you are making prudent decisions, preserving rights, and making sure contractual obligations are being met. Be proactive, not reactive.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
