Seattle Washington Building Expert Directory

Navigating Threshold Arbitration Issues in Construction Contracts

April 29, 2024 — Daniel D. McMillan and TJ Auner - The Dispute Resolver
Including an arbitration clause in your construction contract may not mean that your dispute will be confined to arbitration. Instead, parties often find themselves in court litigating threshold issues related to the existence and/or enforceability of an arbitration clause. Common issues include whether the underlying contract containing the arbitration clause is valid, whether the dispute falls within the scope of the clause, whether the parties complied with contractual prerequisites to arbitration, whether issues related to arbitrability are decided by the court or arbitrator, and whether one of the parties has waived their right to arbitrate. This blog post highlights two recent construction cases addressing threshold issues that a party seeking to enforce—or oppose enforcing—an arbitration clause might face. Seifert v. United Built Homes, LLC: Delegating Issues of Arbitrability to the Arbitrator In Seifert, an owner sued a homebuilder in Texas federal court for breach of contract and sought damages and declaratory relief. No. 3:22-CV-1360-E, 2023 WL 4826206 (N.D. Tex. July 27, 2023). The builder moved to compel arbitration. The owner opposed and argued that: (1) there was no agreement to arbitrate because the underlying contract was null and void, and (2) its claim for declaratory relief fell outside the scope of the arbitration clause. The court did not address the merits of either argument. Instead, it determined that these were issues for the arbitrator to decide. Reprinted courtesy of Daniel D. McMillan, Jones Day and TJ Auner, Jones Day Mr. McMillan may be contacted at ddmcmillan@jonesday.com Mr. Auner may be contacted at tauner@jonesday.com Read the court decision
Read the full story...
Reprinted courtesy of

No Third-Quarter Gain for Construction

November 18, 2011 — CDJ STAFF

The Associated Builders and Contractors released their analysis of construction work under contract and found that there was no increase in construction backlog from the second quarter of 2011. There was still improvement, however, over 2010, as the third quarter backlog is 16.3 percent higher than that of a year ago.

The current backlog is 8.1 months, which according to Anirban Basu, the chief economist of the ABC, “is consistent with flat construction spending.” He noted that less than 8 months indicated a decline.

Read the full story…

Read the court decision
Read the full story...
Reprinted courtesy of

Construction Litigation Roundup: “It’s None of Your Business.”

May 22, 2023 — Daniel Lund III - Lexology
“It’s none of your business.” So said a construction surety resisting discovery of its underwriting file in the context of the surety’s affirmative $2 million indemnity claim (on a $25M bond), and a Missouri federal court agreed. In response to the surety’s indemnity suit, the defaulted principal contractor and additional corporate indemnitors offered up defenses of “lack of consideration and the doctrine of unclean hands, laches, waiver and/or estoppel, among others.” The indemnitors also issued written discovery to the surety seeking to obtain the surety’s underwriting file – which would reveal the underpinnings of the surety’s decision to issue the bond to the contractor – asserting “that the underwriting and due diligence documents are relevant to the[] lack of consideration defense. [Indemnitors] claim that ‘[t]his defense is based on Defendants' belief that Plaintiff did not conduct any reasonable inquiry into any Defendants' ability to pay or financial resources and therefore Plaintiff did not rely on the financial condition of each Defendant in determining whether to issue the bonds.’" Read the court decision
Read the full story...
Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Update: Supreme Court Issues Opinion in West Virginia v. EPA

August 03, 2022 — Anne Idsal Austin, Shelby L. Dyl & Sheila McCafferty Harvey - Pillsbury
Takeaways

The Supreme Court sided with a coalition of states and coal mining companies constraining EPA’s ability to regulate CO2 emissions from power plants.
The Supreme Court’s deployment of the “major questions doctrine” could have far-reaching implications for agencies’ authority to take actions that are politically and economically significant.
The Court also announced a broad interpretation of standing, finding that the challengers could bring their suit notwithstanding EPA’s announced nonenforcement of the Clean Power Plan and intent to engage in a rulemaking to replace it.

Introduction On June 30, 2022, the Supreme Court issued its opinion in West Virginia v. EPA, invalidating the 2015 Obama-era Clean Power Plan (CPP). Chief Justice John Roberts delivered the opinion of the court, holding that Section 111(d) of the Clean Air Act does not authorize EPA to devise emissions caps based on “generation shifting”—the approach EPA took in the CPP wherein power plants would be required to transition from higher-emitting (e.g., coal) to lower-emitting (e.g., natural-gas) to then even lower-emitting (e.g., wind and solar) electricity production. The Court’s holding that the case was justiciable despite the Biden administration’s stated intent to repeal the Clean Power Plan and engage in a new rulemaking, as well as its deployment of the “major questions doctrine,” is likely to have far-reaching implications for legal challenges to all administrative agency actions. Reprinted courtesy of Anne Idsal Austin, Pillsbury, Shelby L. Dyl, Pillsbury and Sheila McCafferty Harvey, Pillsbury Ms. Austin may be contacted at anne.austin@pillsburylaw.com Ms. Dyl may be contacted at shelby.dyl@pillsburylaw.com Ms. Harvey may be contacted at sheila.harvey@pillsburylaw.com Read the court decision
Read the full story...
Reprinted courtesy of

OSHA Announces Expansion of “Severe Violator Enforcement Program”

November 15, 2022 — Kip J. Adams & Steven G. Gatley - Lewis Brisbois
(October 28, 2022) - Employers beware! The Occupational Safety and Health Administration (OSHA) is significantly expanding its “Severe Violator Enforcement Program” (SVEP). Employers that are placed into the program by OSHA will be significantly scrutinized, with the potential for very damaging information about their failure to maintain a safe workplace being made public for customers, partners, and vendors to see. As the name suggests, the program is meant to identify, classify, and then stringently monitor employees deemed to be “severe violators” of the OSH Act. According to the OSHA website alert, to be deemed a “severe violator”, the agency must find that the employer has demonstrated “indifference” to the regulations by committing “willful, repeated, or failure-to-abate” violations. Reprinted courtesy of Kip J. Adams, Lewis Brisbois and Steven G. Gatley, Lewis Brisbois Mr. Adams may be contacted at Kip.Adams@lewisbrisbois.com Mr. Gatley may be contacted at Steven.Gatley@lewisbrisbois.com Read the court decision
Read the full story...
Reprinted courtesy of

The General Assembly Seems Ready to Provide Some Consistency in Mechanic’s Lien Waiver

March 14, 2018 — Christopher G. Hill – Construction Law Musings
Back in 2015, the Virginia General Assembly amended the mechanic’s lien statute (Va. Code 43-3) here in Virginia to preclude any contractual provision that diminishes a subcontractor or supplier’s “lien rights in a contract in advance of furnishing any labor, services, or materials.” However, this amendment was only applicable to subcontractors and suppliers. For political and other reasons, general contractors in Virginia were left out of this change. This omission by the legislature put Virginia general contractors in the position of potentially being forced by project owners to waive their mechanic’s lien rights without the ability to run that risk downstream to their subcontractors and suppliers. Read the court decision
Read the full story...
Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Specific Source of Water Not Relevant in Construction Defect Claim

June 28, 2013 — CDJ STAFF
The Nebraska Court of Appeals has concluded that a lower court came to the correct conclusion in a construction defect case involving water intrusion. The Hiatts built a home in North Platte, Nebraska, in in 2004 which they sold to the Oettingers in May, 2006. Shortly thereafter, the Oettingers started experiencing problems with water intrusion and contacted the Hiatts. The Hiatts responded by replacing the septic lift. Subsequently, the Oettingers landscaped their yard, which they allege was done with the assistance of the Hiatts. The water problems continued and “the parties took substantial remedial measures, including excavating the sidewalk and inspecting the downspouts.” The water problems continued, getting worse and requiring increasingly aggressive responses. The Oettingers then had a series of inspections, and they hired the last of these inspectors to actually fix the water intrusion problem. At that point, they filed a lawsuit against the Hiatts alleging that the Hiatts “breached their contact by constructing and selling a home that was not built according to reasonable construction standards,” and that they “were negligent in the repair of the home in 2009.” During the trial, Irving Hiatt testified that they “tarred the outside of the basement and put plastic into the tar and another layer of plastic over the top of that.” He claimed that the problem was with the Oettingers’ landscaping. This was further claimed in testimony of his son, Vernon Hiatt, who said the landscaping lacked drainage. The Oettingers had three experts testify, all of whom noted that the landscaping could not have been the problem. All three experts testified as to problems with the Hiatts’ construction. The court concluded that the Hiatts had breached an implied warranty, rejecting the claim that the water intrusion was due to the landscaping. The Hiatts appealed the decision of the county court to the district court. Here, the judgment of the lowest court was confirmed, with the district court again finding a breach of the implied warranty of workmanlike performance. The Hiatts appealed again. They alleged that the district court should not have held a breach of implied warranty existed without proving the source of the water intrusion, and that damages should have been apportioned based on the degree to which the Oettingers’ landscaping and basement alterations were responsible. The appeals court dispensed with the second claim first, noting that “they do not argue this error in their brief nor do they explain how or why the trial court should have apportioned damages.” The court also noted that although the Oettingers made a negligence claim in their suit, the case had been decided on the basis of a breach of implied warranty. The appeals court upheld the Oettingers’ claim of a breach of implied warranty. In order to do this, the court noted that the Oettingers had to show that an implied warranty existed, that the Haitts breached that warranty, damage was suffered as a result, and that no express warranty limited the implied warranty. That court noted that “the record is sufficient to prove that the Hiatts breached the implied warranty in the method in which they constructed the basement” and that “this breach was the cause of the Oettingers’ damages.” The court concluded that the Oettingers “provided sufficient evidence that the Hiatts’ faulty construction allowed water, whatever its source, to infiltrate the basement.” The court rejected the Hiatts’ claim that the Oettingers’ repairs voided the warranty, as it was clear that the Hiatts were involved in carrying out these repairs. The court’s final conclusion was that “the evidence in the record supports the trial court’s factual finding that the Hiatts’ flawed construction caused water damage to the Oettingers’ basement.” Read the court decision
Read the full story...
Reprinted courtesy of

First-Time Buyers Shut Out of Expanding U.S. Home Supply

August 13, 2014 — Prashant Gopal – Bloomberg
The four-bedroom house that Ilia Nielsen-Dembe purchased in west Denver earlier this year wasn’t her top choice. The first-time buyer had to settle on a home in a neighborhood with a high crime rate after losing out on bids for five properties in more desirable areas. “I definitely sacrificed in terms of location,” said Nielsen-Dembe, 33, who lives with her husband and two daughters in the house she bought in April for $184,500. “I had to cross streets that were not ideal in order to get a house.” While the supply of U.S. homes for sale is at an almost two-year high and price gains are moderating, buyers such as Nielsen-Dembe wouldn’t know it. An inventory crunch for entry-level houses has only worsened during the past year as discounted foreclosures become scarce and cash-paying investors snap up affordable listings to convert to rentals. Properties at the lower end of the market are also the most likely to have underwater mortgages, keeping would-be sellers from moving. Read the court decision
Read the full story...
Reprinted courtesy of Prashant Gopal, Bloomberg
Mr. Gopal may be contacted at pgopal2@bloomberg.net

SEATTLE WASHINGTON BUILDING EXPERT DIRECTORY AND CAPABILITIES