Unlicensed Contractor Shoots for the Stars . . . Sputters on Takeoff
September 20, 2017 —
Garret Murai - California Construction Law BlogElon Musk . . .
Eccentric engineer.
Technology billionaire.
And, now, litigation bad ass.
Frequent readers of the California Construction Law Blog know that we’ve talked about the importance of being properly licensed when doing construction work and the risks to you if you don’t.
One California contractor recently found this out the hard way.
In Phoenix Mechanical Pipeline, Inc. v. Space Exploration Technologies Corp., California Court of Appeals for the Second District, Case No. B269186 (June 13, 2017), contractor Phoenix Mechanical Pipeline, Inc. (Phoenix) lost its boosters . . . err britches . . when it sued Elon Musk’s Space Exploration Technologies Corp. (Space X) due to its failure to have a California contractor’s license.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Are Mechanic’s Liens the Be All End All of Construction Collections?
August 12, 2024 —
Christopher G. Hill - Construction Law MusingsFor those of you familiar with
Construction Law Musings, you are aware of my affinity and discussion of those
powerful but tricky collection tools: mechanic’s liens. You have heard me tout their ability to secure payment when a contractor or subcontractor has not been paid on a construction project (
even in the face of bankruptcy). If you read my construction law blog regularly (though recently not-so-regularly updated), you could get the impression that a mechanic’s lien is an automatic avenue to payment.
While
mechanic’s liens can be a powerful collection tool, this post is going to discuss some pros and cons of recording, and ultimately suing to enforce, a mechanic’s lien in Virginia.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
In Review: SCOTUS Environmental and Administrative Decisions in the 2020 Term
August 10, 2021 —
Anthony B. Cavender - Gravel2GavelSeveral decisions of interest were issued in the 2020 term, which stretched from October 2020 until early July 2021. This review will concentrate on environmental and administrative law cases.
Texas v. New Mexico
On December 14, 2020, the Court issued its ruling in an Original Action. Water is precious in the Pecos River Valley, and the distribution of water is governed by the Pecos River Compact. Here, Texas complained that New Mexico illegally was seeking delivery credits for evaporated water credits but the Court agreed that New Mexico was entitled to these credits under the provisions of the River Master’s Manual.
Florida v. Georgia
On April 1, 2021, in another waters right ruling on an Original Action filed in the Supreme Court, the Court rejected Florida’s claims that Georgia’s use of interstate waters harmed Florida’s businesses. Florida had to satisfy a heavy burden of proof, which it failed to do.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Architect Not Responsible for Injuries to Guests
September 01, 2011 —
CDJ STAFFThe Texas Court of Appeals has ruled, with one dissent, that the architectural firm that designed a home was not responsible to the injuries caused to guests when a balcony collapsed. Judge David Puryear wrote the majority opinion in Black + Vernooy Architects v. Smith.
Black + Vernooy designed a vacation home for Robert and Kathy Maxfield in 2000. The Maxfields hired a general contractor to build the home. The general contractor hired a subcontractor to build a balcony; however, the subcontractor did not follow the architect’s design in building the balcony.
A year after the house was completed; the Maxfields were visited by Lou Ann Smith and Karen Gravely. The balcony collapsed under the two women. Ms. Gravely suffered a broken finger, a crushed toe, and bruises. Ms. Smith was rendered a paraplegic as a result of the fall. They sued the Maxfields, the general contractor, and the architects for negligence. The Maxfields and the general contractor settled. A jury found that the architects held 10% of the responsibility. The architects appealed the judgment of the district court.
The Appeals Court reversed this judgment, noting that “there has been no allegation that the Architects negligently designed the balcony or that the Architects actually created the defects at issue.” Further, “the Smiths allege that the defect was caused by the construction practices of the contractor and subcontractor when the balcony was not built in accordance with the design plans of the Architects.”
The court found that even though the architects had a duty “to endeavor to guard against defects and deficiencies in the construction of the home and to generally ascertain whether the home was being built in compliance with the construction plans,” this duty did not extend to third parties.
Read the court’s decision…
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Wall Street Is Buying Starter Homes to Quietly Become America’s Landlord
February 27, 2023 —
Patrick Clark - BloombergJavier Vidana started out as a real estate agent in 2013, when Arizona’s Salt River Valley seemed wide open. It was the aftermath of a housing market crash that had seen the typical home value in the Phoenix metro area fall more than 50%, and a single parent with good credit could tap loan programs geared toward first-time homeowners and find a pretty decent place to live. For Vidana, the challenge was convincing potential clients that a house was something they wanted to own. “We were on the phone begging people to buy,” he says. “There was no buyer confidence whatsoever.”
The economy crawled forward, and the housing market with it. Vidana made a specialty of tutoring young buyers on real estate basics. Soon he was supplementing his commission income by selling how-to PDFs on his website and collecting ad revenue on his YouTube channel. Then the pandemic sparked a boom that gave him something new to explain.
Americans responded to the work-from-home era by house shopping, and no big city was hotter than Phoenix. The median home was worth about $285,000 at the beginning of the pandemic; it was valued at $435,000 two years later. It wasn’t unheard of for a seller to receive 50 offers or more, or for a prospective buyer to make offers on a dozen different homes before finally closing a deal.
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Patrick Clark, Bloomberg
No Duty to Defend Faulty Workmanship Under Hawaii Law, but All is not Lost for Insured Contractor
June 06, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found no duty to defend claims of faulty workmanship under certain policies issued to the insured contractor, but rejected arguments made by the Insurers regarding various provisions of the general liability and excess policies. St. Paul Fire & Marine Ins. Co. v. Bodell Consr. Co., 2022 U.S. Dist. LEXZIS 79379 (D. Haw. May 2, 2022). (Note- our office represents the insured contractor).
In 2003, Bodell was hired by developer Sunstone Realty Partners L LLC to be the general contractor for construction work on a condominium project, "Ali`i Cove." The project consisted of approximately 37 buildings and one recreation center that were constructed over the course of four years. On August 14, 2015, the AOAO of Ali`i Cove sued Sunstone, alleging that Sunstone developed, built, and sold condominium nits using embedded straps that did not meet building codes, instead of bolting house frames to their foundations. The AOAO filed a second amended complaint alleging numerous additional defects which were referenced in an expert report. These included additional alleged construction defects such as site conditions, structural issues, building envelope, roofing, general architecture, mechanical, plumbing and electrical. In all, the report purported to find approximately 281 instances of faulty workmanship.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Illinois Town’s Bond Sale Halted Over Fraudulent Hotel Deals
June 26, 2014 —
William Selway and Elizabeth Campbell – BloombergA city outside Chicago was blocked from selling bonds after the U.S. Securities and Exchange Commission accused it of defrauding investors and steering secret fees to a municipal official.
The case against Harvey, Illinois, a struggling city of 25,000 battered by poverty and crime, involves about $14 million in bonds sold from 2008 to 2010 that were to pay for development of a Holiday Inn hotel and conference venue.
The SEC said that the city hoodwinked investors by using $1.7 million to pay payroll and other operating expenses, while the hotel stands in disrepair with holes in its facade, exposed studs and a gutted interior. The SEC said Comptroller Joseph Letke, 55, also profited by receiving $269,000 in undisclosed payments while advising the developer of the ill-fated project.
Mr. Selway may be contacted at wselway@bloomberg.net; Ms. Campbell may be contacted at ecampbell14@bloomberg.net
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William Selway and Elizabeth Campbell, Bloomberg
Contractor Given a Wake-Up Call for Using a "Sham" RMO/RME
October 02, 2015 —
Steven M. Cvitanovic & David A. Harris – Haight Brown & Bonesteel LLPTwo weeks ago we wrote about a disgorgement case winding its way through the courts where a contractor who let its license lapse after assigning its contract to a related but properly licensed entity was still facing disgorgement of the entire contract amount. Judicial Council of California v. Jacobs Facilities, Inc. (Ct. of Appeal, 1st App. Dis., Div. One, A140890, A141393.)
Now another disgorgement case, Jeff Tracy, Inc. v. City of Pico Rivera (Ct. of Appeal, 2nd App. District, Div. 2, B258563), shows the risk of not having a genuine RMO/RME. The consequences of disgorgement are potentially devastating and would certainly cause some contractors to go belly-up. The good news for the contractor in this particular case is that the Court of Appeal reversed the trial court. The bad news for the contractor is that damaging facts were revealed during the process of the court trial that will make a victory very difficult to pull off.
Reprinted courtesy of
Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and
David A. Harris, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com
Mr. Harris may be contacted at dharris@hbblaw.com
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