One to Watch: Case Takes on Economic Loss Rule and Professional Duties
June 28, 2011 —
Douglas Reiser, Builders Council BlogAccording to the Supreme Court of Washington Blog, The Supreme Court heard oral argument in Jackowski v. Hawkins Poe on Thursday, June 16, 2011. The court’s synopsis of the case can be found on the Washington State Court website.
In short, two home purchasers brought a lawsuit against the home’s sellers, the sellers’ agent and the purchasers’ own agent, alleging claims of fraud, fraudulent concealment, negligent misrepresentation and breach of common law and statutory duties. The trial court dismissed the buyers’ claims on the basis of the economic loss doctrine and Division II reversed, opining that the ELR does not apply to professional duties. The Supreme Court will now look at applying the Independent Duty Doctrine established last year, and whether professional duties (those of the real estate agents) should be reviewed under a different light.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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Construction Recovery Still Soft in New Hampshire
May 10, 2013 —
CDJ STAFFThe latest building news out of New Hampshire is somewhat mixed. Yes, there has been an increase of seventeen percent in the value of future residential construction on the state. But that’s not enough to offset the general slide in the value of future construction overall. The New Hampshire Business Review reports that the state saw a four percent drop in the cost of planned construction, comparing March 2012 to March 2013.
The total value of the drop was shared between the twelve percent drop in nonresidential construction and the fifty-two percent drop in infrastructure building, each of which were more than $4 million less than in the prior year. The rise in residential construction could not make up the loss in other areas.
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Avoiding 'E-trouble' in Construction Litigation
September 10, 2018 —
Judah Lifschitz - Construction ExecutiveDuring the 2016 presidential election, the FBI subpoenaed Hillary Clinton's emails after she used a private email server during her time as Secretary of State. Separately, the more recent investigation into Donald Trump’s campaign policy adviser, George Papadopoulos, resulted in scrutiny over both his email and social media.
As shown the above examples, there are damaging effects of electronically stored information in politics, but how does it impact the construction industry?
If not used carefully and properly, emails will serve as “truth serum” in court. Attorneys can simply read an email to know employees’ thoughts or actions, meaning an impulsive email or social media post will most likely come back to haunt the company. Requests for ESI are inevitable in litigation today and the production of inappropriate emails and other ESI open the door for an opposing attorney to argue that a company fosters a culture of uncouth, unprofessional and unfocused project management.
Reprinted courtesy of
Judah Lifschitz, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Lifschitz may be contacted at
lifschitz@slslaw.com
Anti-Concurrent Causation Clause Bars Coverage for Pool Damage
February 23, 2016 —
Tred R. Eyerly – Insurance Law HawaiiRelying upon the policy's anti-concurrent causation clause, the Illinois Court of Appeals affirmed the trial court's ruling that there was no coverage for a pool that popped out of the ground. Bozek v. Erie Ins. Group, 2015 Ill. App. LEXIS 940 (Ill. Ct. App. Dec. 17, 2015).
Following a rainstorm, the insureds reported damage to the swimming pool to Erie. An investigation determined that the heavy rain saturated soils around the pool. This created a significant uplift hydrostatic pressure. The weight of the water in the pool typically prevented the uplift forces, but the pool had been emptied to clean debris making it susceptible to uplift. The pool had a pressure relief valve to prevent uplift, but it was not working properly.
As a result, the pool was damaged to the point that it had to be replaced in its entirety. The heaving of the pool also damaged the concrete slab around the pool, which also had to be replaced.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Construction Safety Technologies – Videos
November 02, 2017 —
Aarni Heiskanen - AEC BusinessSmart hard hats, drone imaging, indoor positioning, and augmented reality are some of the technologies that can make construction sites safer.
Construction remains one of the most dangerous industries. In the USA, one in ten construction workers are injured every year. According to ILO, there are at least 60,000 fatal accidents on construction sites around the world every year, one in every 10 minutes. Investments in safety will certainly pay off.
Culture, behavior, and attitudes have a great impact on construction safety. Technology can help, but only if it is used properly and consistently. Here’s a collection of recent videos that explain and demonstrate how digital technology can advance construction safety.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
info@aepartners.fi
Will a Notice of Non-Responsibility Prevent Enforcement of a California Mechanics Lien?
March 05, 2015 —
William L. Porter – Porter Law Group, Inc.The “Notice of Non-Responsibility” is one of the most misunderstood and ineffectively used of all the legal tools available to property owners in California construction law. As a result, in most cases the answer to the above question is “No”, the posting and recording of a Notice of Completion will not prevent enforcement of a California Mechanics Lien.
The mechanics lien is a tool used by a claimant who has not been paid for performing work or supplying materials to a construction project. It provides the claimant the right to encumber the property where the work was performed and thereafter sell the property in order to obtain payment for the work or materials, even though the claimant had no contract directly with the property owner. When properly used, a Notice of Non-Responsibility will render a mechanics lien unenforceable against the property where the construction work was performed. By derailing the mechanics lien the owner protects his property from a mechanics lien foreclosure sale. Unfortunately, owners often misunderstand when they can and cannot effectively use a Notice of Non-Responsibility. As a result, the Notice of Non-Responsibility is usually ineffective in protecting the owner and his property.
The rules for the use of the Notice of Non-Responsibility are found in California Civil Code section 8444. Deceptively simple, the rules essentially state that an owner “that did not contract for the work of improvement”, within 10 days after the owner first “has knowledge of the work of improvement”, may fill out the necessary legal form for a Notice of Non-Responsibility and post that form at the worksite and record it with the local County Recorder in order to prevent enforcement of a later mechanics lien on the property.
What commonly occurs however is that early in the process the owner authorizes or even requires its tenant to perform beneficial tenant improvements on the property. This authorization is often set forth in a tenant lease or other written document. The dispositive factor for determining whether the Notice of Non-Responsibility will be enforceable though is that the owner knows that these improvements will be made to the property and intends that they be made, usually long before the work begins. Indeed, the owner has usually negotiated these very terms into the lease contract. The owner then mistakenly believes that once work on the property commences it has 10 days to post and record a Notice of Non-Responsibility and thereby protect itself from a mechanics lien.
The usual error is two-fold. First, the statute states that the Notice is available when the owner “did not contract for the work of improvement”. The fact though is that the owner did contract for the work of improvement. It did so through the lease contract. This is true even though the owner’s contract was not with the contractor or supplier directly. Secondly, the 10 day period to post and record the Notice begins when the owner first “has knowledge” of the work of improvement. This knowledge was of course gained when the lease was negotiated and signed, providing knowledge typically many days before the work has begun. Thus, the 10 day period can also seldom be met. The Notice of Non-Responsibility will therefore fail both rules because the owner has in fact contracted for the improvement and because he does not act within 10 days of gaining this knowledge.
The next event in the typical scenario occurs when the tenant does not pay its contractor. The contractor then has nothing to pay its subcontractors. Material suppliers also go unpaid. Mechanics liens are then recorded by the unpaid claimants, followed by foreclosure actions within ninety days thereafter. Owners will typically point to the Notice of Non-Responsibility they posted and recorded, claiming its protection. Claimants then in turn point to the lease or other evidence that the owner knew of the pending improvements and contracted in some way that the improvements be performed, often also more than 10 days before they posted the Notice. Judges generally agree with the unpaid mechanics lien claimants and the Notice of Non-Responsibility is deemed ineffective.
The fact that the Court does not enforce the Notice of Non-Responsibility under these circumstances is not an unfair result. Since the owner authorized the work to be performed and it received a substantial benefit in the form of those improvements, it is not unfair that the owner should pay for those benefits. It would be inequitable for the owner to obtain the benefit of the improvements which it authorized but for which it did not pay, while allowing those who provided the benefit to go unpaid. Moreover, without such a system in place the door would be open to owners setting up sham “tenants” who would enter into contracts to have work performed, only to disappear when the work is completed, leaving the contractor without a source of payment. The system in place as described above prevents such duplicity. Owners would do well to arm themselves with proper knowledge of when the Notice of Non-Responsibility will and will not protect them and then responsibly use the Notice of Non-Responsibility.
For the legal eagles among you, the following cases illustrate the view of the courts, consistent with the above: Baker v. Hubbard (1980) 101 Cal.App.3d 226; Ott Hardware v. Yost (1945) 69 Cal. App.2d 593 (lease terms); Los Banos Gravel Co. v. Freeman (1976) 58 Cal.App.3d 785 (common interest); Howard S. Wright Construction Co. v. Superior Court (2003); 106 Cal.App.4th 314 (participating owner).
William L. Porter of
Porter Law Group, Inc. located in Sacramento, California may be contacted at (916) 381-7868 or bporter@porterlaw.com
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Ex-Engineered Products Firm Executive Convicted of Bid Rigging
March 06, 2022 —
James Leggate - Engineering News-RecordA federal jury convicted a former executive at an engineered construction products firm Feb. 1 for his role in a bid-rigging scheme that targeted the North Carolina Dept. of Transportation.
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James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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Why You May Not Want a Mandatory Mediation Clause in Your Construction Contract
October 26, 2017 —
Christopher G. Hill - Construction Law MusingsI know, you are likely surprised by the title of this post. You’ve read Construction Law Musings for a while now and know that as a Virginia Supreme Court certified mediator, I have advocated mediation as a great way to resolve your construction disputes short of the expensive and time consuming litigation process. Knowing all of this, you as a reader of this blog (thanks by the way) probably wonder why I think that a mandatory mediation clause may not be the best thing for your construction contracts. I can understand your possible confusion (particularly
in light of this post from @sethsmiley).
Please don’t take the headline as my suddenly taking a new view of mediation. Short of simply resolving the dispute between the parties to the construction contract, mediation still remains number one on my list of construction dispute resolution mechanisms. I still believe that it is useful even when a resolution is not met after a good faith attempt by both sides to come to a business agreement. However, I also believe that mediation works best when entered into voluntarily by the parties.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
