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Even Where Fraud and Contract Mix, Be Careful With Timing

April 12, 2021 — Christopher G. Hill - Construction Law Musings
I have often discussed the limited circumstances under which a construction contract claim and a fraud claim can coexist. A recent case from the Western District of Virginia federal court demonstrates that care is necessary even in those limited circumstances. In Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys., the Court examined the question of a fraud statute of limitations under Virginia law. The basic facts found in the Complaint are these: In 2011, the United States Army awarded BAE Systems Ordinance Systems Inc. a basic ordering agreement under which BAE was responsible for modernization projects at the Radford Army Ammunition Plant. This action stems from a subcontract between Fluor Federal Solutions LLC and BAE, under which Fluor agreed to design and construct a new natural gas boiler at the plant. Fluor has completed work on the project, and BAE has accepted that work. Nonetheless, Fluor claims that BAE has refused or failed to pay for the balance of the project costs. Fluor alleges that BAE received several changes to its prime contract from the Army but did not pass those changes along to Fluor until after BAE solicited a bid from Fluor and entered a contract with Fluor to build a temporary facility. Instead, BAE continued to misrepresent the scope of the project. Fluor alleges that the change in plans increased costs substantially, but that BAE withheld information about those changes so that it could solicit lower bids. Fluor alleges that it requested a copy of BAE’s prime contract on numerous occasions, but BAE failed to provide a copy of it. Instead, Fluor submitted a request under the Freedom of Information Act. It received a copy of BAE’s prime contract on Oct. 3, 2018. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

On the Ten Year Anniversary of the JOBS Act A Look-Back at the Development of Crowdfunding

May 02, 2022 — J. Kyle Janecek & Jeffrey M. Dennis - Newmeyer Dillion
Last month marked the ten-year anniversary of the Jumpstart Our Business Startups (JOBS) Act, which was signed into law by President Obama on April 5, 2012. On May 16, 2016, Title III of the JOBS Act was enacted, as the final piece of the JOBS Act, which gave businesses better access to crowdfunding tactics due to the ability to raise funds based on equity. Today, the JOBS Act and the impact of equity crowdfunding more generally has grown among multiple industries, from entertainment and technology to real estate and construction, and has come a long way from the non-equity crowdfunding of Kickstarter and Indiegogo. So what have been the powers that businesses gained from Title III of the JOBS Act? What has been the impact of the last ten years? Where do businesses go from here to better utilize this source of funding? WHAT ARE THE CROWDFUNDING POWERS GIVEN BY THE JOBS ACT? The main difference and change that the JOBS Act had on the field of "crowdfunding" was that for the first time, unaccredited investors could obtain equity stakes in businesses through online solicitations. However, a business was still required to go through the proper approved channels, like accredited crowdfunding portals to solicit and receive funding. Prior to this, crowdfunding had gotten more of an impact and reputation from platforms like Kickstarter and Indiegogo, platforms that benefitted creative works or could act as a "pre-order" system with no guaranty of performance or quality of goods by the party seeking funds. Reprinted courtesy of J. Kyle Janecek, Newmeyer Dillion and Jeffrey M. Dennis, Newmeyer Dillion Mr. Janecek may be contacted at kyle.janecek@ndlf.com Mr. Dennis may be contacted at jeff.dennis@ndlf.com Read the court decision
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Pine River’s Two Harbors Now Targets Non-Prime Mortgages

November 05, 2014 — Jody Shenn - Bloomberg
Count Two Harbors Investment Corp. (TWO) among investors looking for profits in riskier home loans -- and expecting a market for bonds backed by them to re-emerge even with safer issuance showing limited signs of life. The real-estate investment trust, whose 74 percent total return over the past three years is almost double that of peers, recently told the lenders that have been selling it big, high-quality mortgages that it’s now also seeking to purchase non-prime loans and those with low down payments, Chief Investment Officer Bill Roth said today during a conference call for analysts and investors. “Our expectation and certainly hope would be as this market opens up and becomes fairly meaningful that a securitization market would develop,” he said. Of course, he sees the timeline as “probably measured in years, not months.” Read the court decision
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Reprinted courtesy of Jody Shenn, Bloomberg
Ms. Shenn may be contacted at jshenn@bloomberg.net

Vaccine Mandate Confusion Continues – CMS Vaccine Mandate Restored in Some (But Not All) US States

January 03, 2022 — David S. Harvey, Jr. & Sarah Hock - Lewis Brisbois
Tampa, Fla. (December 16, 2021) - As has been widely publicized, the Biden Administration has attempted to impose various forms of vaccine mandates under a variety laws and programs. At the same time, we have seen a flurry of opposition to these efforts ranging from new state laws (for example, in Florida) to court challenges seeking to enjoin the effort. One of the federal mandates was issued by the Centers for Medicare & Medicaid Services (CMS) and is applicable to staff at Medicare- and Medicaid-certified healthcare providers. Initially, fourteen states sued in opposition to the CMS mandate and were able to obtain a nationwide injunction issued by a federal district judge in Louisiana. That injunction was appealed to the Fifth Circuit Court of Appeals, which has now issued a decision that awards points to both sides. The Fifth Circuit ruled the injunction only applies to the 14 states that participated in the Louisiana lawsuit and not nationwide. Those states are Alabama, Arizona, Georgia, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Montana, Ohio, Oklahoma, South Carolina, Utah, and West Virginia. This opinion has the potential to revive the CMS vaccine mandate in just over half of U.S. states. We can anticipate new suits will be filed as to other states, with the outcome still uncertain. It is unknown at this point whether the United States Supreme Court will agree to review the issues when such review is sought in the near future. Reprinted courtesy of David S. Harvey, Jr., Lewis Brisbois and Sarah Hock, Lewis Brisbois Mr. Harvey may be contacted at David.Harvey@lewisbrisbois.com Ms. Hock may be contacted at Sarah.Hock@lewisbrisbois.com Read the court decision
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What If Your CCP 998 Offer is Silent on Costs?

March 18, 2019 — Tony Carucci - Snell & Wilmer Real Estate Litigation Blog
In California, the “prevailing party” in litigation is generally entitled to recover its costs as a matter of law. See Cal. Code Civ. Proc. § 1032. But under California Code of Civil Procedure section 998, a party may make a so-called “offer to compromise,” which can reverse the parties’ entitlement to costs after the date of the offer, depending on the outcome of the litigation. Cal. Code Civ. Proc. § 998. The potential payoff of a 998 offer is that “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.” Cal. Code Civ. Proc. § 998(c)(1) (emphasis added). But how do you determine whether a plaintiff obtained a more favorable judgment when the 998 offer is silent with respect to whether it includes costs? In Martinez v. Eatlite One, Inc. (2018) 27 Cal.App.5th 1181, 1182–83, the defendant made a 998 offer of $12,001 that was silent regarding the treatment of attorneys’ fees and costs. Plaintiff did not respond to the offer, and the jury ultimately awarded plaintiff damages of $11,490. Id. In resolving the parties’ competing memoranda of costs and plaintiff’s motion for attorneys’ fees, the trial court awarded plaintiff her costs and attorneys’ fees. Id. at 1182. The trial court reasoned that plaintiff had obtained a more favorable judgment than the 998 offer because she was entitled to pre-offer costs and attorneys’ fees under the statute, which meant plaintiff’s ultimate recovery exceeded the 998 offer when added to the judgment. Id. at 1183. In other words, the court added plaintiff’s pre-offer costs and attorneys’ fees to the $11,490 verdict for the purposes of determining whether the “judgment” was greater than the 998 offer of $12,001. Id. Read the court decision
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Reprinted courtesy of Tony Carucci, Snell & Wilmer
Mr. Carucci may be contacted at acarucci@swlaw.com

Not All Design-Build Projects are Created Equal

June 28, 2021 — Nicole Markowitz & Richard Robinson - Peckar & Abramson, P.C.
As the need for faster and more efficient construction increases, design-build agreements are growing in popularity. Design-build projects may account for 44% of nonresidential building in the United States this year. However, contractors who venture into a “design builder” role may unexpectedly become liable for design errors/omissions that are not covered by their insurance policies. In turn, they may expose themselves to liability and insurance risks that are neither insured nor managed. In this article, we’ll discuss how the contractor who becomes a design-builder, or performs design-related work through subcontractors, faces potentially unmanaged risk. We will also explore indemnity, warranty, and insurance traps by paying attention to contract language in both traditional design-build and design-assist scenarios. Reprinted courtesy of Nicole Markowitz, Peckar & Abramson, P.C. and Richard Robinson, Peckar & Abramson, P.C. Ms. Markowitz may be contacted at nmarkowitz@pecklaw.com Mr. Robinson may be contacted at rrobinson@pecklaw.com Read the court decision
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Will Colorado Pass a Construction Defect Reform Bill in 2016?

December 17, 2015 — Beverley BevenFlorez-CDJ STAFF
According to blogger Jill Jamieson-Nichols of the Colorado Real Estate Journal, another construction defects bill may be debated in Colorado next year. Representative Dan Pabon told Jamieson-Nichols that “the answer lies in ‘thinking about the insurance piece’ so condominium developers can afford insurance against litigation that might arise.” She also stated that the city of Denver is considering ways to increase funding to increase affordable housing in the area. Read the court decision
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Wake County Justice Center- a LEED Silver Project done right!

October 01, 2014 — Melissa Dewey Brumback – Construction Law in North Carolina
Yesterday evening, I had the privilege of attending the Triangle USGBC’s “Talk & Walk” at the Wake County Justice Center. The 576,996 square foot Justice Center was completed 6 months early and over 30 million under budget. (The final cost, including soft costs, came in at ~$141,000,000). Now that’s what I call a LEED project done right! Interestingly, the County did not endeavor for a LEED Silver rating– the plan was to aim for a Certification. However, as the process unfolded, the Team kept meeting the goals and points for a Silver certification without any appreciable additional costs. The end result? An “iconic but energy efficient building,” according to Tim Ashby, current Wake County Facilities Project Manager. Tim was initially involved in the Project while working at O’Brien Atkins, which served as the architecture firm for the Project under the direction of Architect Andrew Zwiacher. Read the court decision
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Reprinted courtesy of Melissa Dewey Brumback, Construction Law in North Carolina
Ms. Brumback may be contacted at mbrumback@rl-law.com

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