Can an Owner Preemptively Avoid a Mechanics Lien?
May 25, 2020 —
William L. Porter - Porter Law GroupVarious sections of the California Civil Code, beginning with section 8000, protect the right of contractors, subcontractors and suppliers in the construction industry to obtain payment for work performed and materials supplied to construction projects. Under these statutes, unpaid claimants are entitled to use mechanics liens, stop payment notices and other methods to protect their right to payment. Mechanics liens allow unpaid claimants to sell the property where the work was performed in order to obtain payment. Stop payment notices force the owner or the bank to set money aside to pay unpaid claimants. Article XIV of our California Constitution even elevates the mechanics lien remedy to a “constitutional right”. The system generally works well, and claimants are paid.
As someone who practices and teaches construction law, I have noticed a seldom used statutory tool that seems to provide a mechanism for property owners under certain circumstances to prevent subcontractors and suppliers from imposing enforceable mechanics lien on property where work was performed. Under California Civil Code section 8520, it appears that all that an owner of property need do to avoid a mechanics lien on its property is to give a proper notice (per Civil Code section 8100 et seq.) to a person who has a mechanics lien right (a subcontractor or supplier) that the owner is invoking Civil Code section 8520 and that if the claimant is unpaid for work performed or materials supplied to the owner’s property that the claimant must either provide the owner with a stop payment notice or forfeit the right to a mechanics lien on the owner’s property. This would allow an owner to avoid a mechanics lien on its property if the claimant failed to send a stop payment notice to the owner.
Providing the “notice” under Civil Code section 8100 appears to be easy. It can be sent by “registered or certified mail or by express mail or by overnight delivery by an express service carrier”. It can even be by “hand delivery”. As far as the notice itself, it would seem that it can be very simple and easily performed under the process described below, which can be implemented within the office of any owner or developer.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Fourth Circuit Questions EPA 2020 Clean Water Act 401 Certification Rule Tolling Prohibition
August 10, 2021 —
Karen C. Bennett - Lewis BrisboisLast week, in North Carolina Department of Environmental Quality v. Federal Energy Regulatory Commission, the Fourth Circuit Court of Appeals suggested that Congress did not intend for the states, or tribes, to take final action on Clean Water Act (CWA) Section 401 applications within a year of filing. The opinion conflicts with the Environmental Protection Agency's (EPA) 2020 final rule that sought to limit state and tribal certifying authorities’ ability to delay federal projects through various tolling schemes. 85 Fed. Reg. 42210 (Jul. 13, 2020).
EPA’s rule, codified in existing regulations, states that the CWA imposes a strict one-year deadline for certification decisions, otherwise certification is waived. However, the Fourth Circuit’s view suggests that this waiver is not triggered in cases where the certifying authority has acted on the application, even if it takes longer than a year to make a final certification decision. The court ultimately decided the case on other grounds, leaving a resolution on the statutory interpretation question for another day.
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Karen C. Bennett, Lewis BrisboisMs. Bennett may be contacted at
Karen.Bennett@lewisbrisbois.com
Randy Okland Honored as 2019 Intermountain Legacy Award Winner
January 06, 2020 —
Jennifer Seward - Engineering News-RecordA passion for construction is in Randy Okland’s blood. His family’s business, Salt Lake City’s Okland Construction, was founded in 1918 by his grandfather, John Okland, a Norwegian immigrant and shipbuilder. Randy swept the floors and cleaned and fueled company vehicles while working as a laborer and later as a carpenter and concrete former. After graduating from the University of Utah, Randy worked full time at Okland, eventually taking over leadership of the company from his father in 1980.
Jennifer Seward, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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Pay Loss Provision Does Not Preclude Assignment of Post-Loss Claim
July 30, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court determined that a policy's loss payment provision did not bar a post-loss assignment. One Call Prop. Servs. v. Sec. First Ins. Co., 2015 Fl. App. LEXIS 7643 (Fla. Ct. App. May 20, 2015).
After One Cell performed emergency water removal for the insured, the insured assigned his rights to policy proceeds as payment. One Cell alleged that Security First refused to reimburse the insured adequately for the services provided. One Cell filed suit, and Security First moved to dismiss. The trial court granted the motion based upon the policy's non-assignment provision.
One Cell appealed. One Cell argued post-loss assignments were valid under Florida law even when the policy contained an anti-assignment provision, and the right to payment accrued on the date of the loss.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Professional Liability and Attorney-Client Privilege Bulletin: Intra-Law Firm Communications
January 07, 2015 —
David W. Evans & Stephen J. Squillario – Haight Brown & Bonesteel LLPAttorney-Client Privilege Protects Confidential Communications Between Law Firm Attorney Representing Current Client and Firm’s General Counsel Regarding Disputes with Client Who Later Files Malpractice Suit
In a case of first impression in California, Edwards Wildman Palmer LLP v. Superior Court (No. B255182 - filed November 25, 2014), Division Three of the Second District Court of Appeal addressed the question of whether the attorney-client privilege applies to intrafirm communications between law firm attorneys concerning disputes with a current client, when that client later sues the firm for malpractice and seeks to compel production of such communications. The court concluded that when an attorney representing a current client seeks legal advice from the law firm’s designated in-house “general counsel” concerning disputes with the client, the attorney-client privilege applies to their confidential communications. The court held that adoption of the so-called “fiduciary” or “current client” exceptions to the attorney-client privilege is contrary to California law because California courts are precluded from creating implied exceptions to the statutorily created attorney-client privilege.
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David W. Evans, Haight Brown & Bonesteel LLP and
Stephen J. Squillario, Haight Brown & Bonesteel LLP
Mr. Evans may be contacted at devans@hbblaw.com; Mr. Squillario may be contacted at ssquillario@hbblaw.com
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Insurer Not Responsible for Insured's Assignment of Policy Benefits
February 21, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Florida Court of Appeals affirmed the lower court's granting summary judgment to the insurer after failing to abide by an assignment to which it was not a party. Expert Inspections, LLC v. United Property & Cas. Ins. Co., 2022 Fla. App. LEXIS 88 (Fla. Ct. App. Jan. 5, 2022).
The insured's property sustained damage from Hurricane Irma resulting in a covered loss. The insured retained Expert Inspections to perform mold-related services. As payment, the insured assigned her policy benefits pursuant to an assignment of benefits agreement. Under the agreement, the insured agreed to cooperate with the assignee to ensure that payments were made by the insurer upon completion of work. The insured gave authority to the assignee to endorse any checks with her name listed on the check.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Committeewoman Requests Refund on Attorney Fees after Failed Legal Efforts
February 10, 2014 —
Beverley BevenFlorez-CDJ STAFFWest Deptford, New Jersey township redevelopment counsel Mark Cimino had spent a year arguing that the city should receive a $4 million reduction in construction costs due to “inadequate documentation provided by the bank, as well as receipts showing disbursement had ‘improperly’ been made toward uses other than construction,” according to a December 30th 2013 article in the South Jersey Times. However, a state appellate court upheld the ruling that “the township had no basis” to request the reduction.
Now, Committeewoman Denice DiCarlo is “seeking a $10,000 refund on the attorney fees paid” to Cimino, the South Jersey Times reported on February 6th. “This entire matter has been a monumental waste of tax dollars, and I am angry that the entire township committee was misled by Mr. Cimino and induced to believe we had any reasonable chance of recovering loan proceeds from this lawsuit,” DiCarlo stated in a letter to Mayor Raymond Chintall.
Not all committee members agree with DiCarlo. Committeeman Sam Cianfarini told South Jersey Times that “he still believed Fulton Bank owed it to West Deptford to answer for any funds put toward anything other than construction.”
Cimino declared “that both the lawsuit and appeal were valid,” according to the February 6th article. He “accused DiCarlo of ‘playing politics.’”
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Nevada Budget Remains at Impasse over Construction Defect Law
June 01, 2011 —
CDJ STAFFNegotiations for the Nevada state budget have stalled over proposals to amend the state’s construction defect laws. Assembly Republicans had offered changes to the law to make it friendlier to contractors; however, after a state Supreme Court ruling that the state could not move a local government entity’s funds into state coffers, pressure has increased on the governor to lift the expiration dates of taxes approved in 2009.
The Reno Gazette-Journal quotes John Madole, a construction industry lobbyist, “We agree with them that you have to address the issue of the attorney fees, and for all practical purposes, they are automatically awarded when anybody brings any kind of suit.”
Speaker of the Assembly, John Oceguera, a Democrat, has proposed a bill that “makes it absolutely crystal clear that the only time you get attorney's fees is if you're the prevailing party.”
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