Best Practices: Commercial Lockouts in Arizona
March 19, 2024 —
Patrick Tighe - Snell & Wilmer Real Estate Litigation BlogIf a tenant defaults under a commercial lease, Arizona law permits the landlord to re-take possession of the premises by locking out the defaulting tenant. However, if the landlord’s lockout is wrongful, the landlord may be liable for the damages the tenant sustains because of the wrongful lockout. To minimize such liability, here are some general best practices to follow when locking out a defaulting tenant:
- Do Not Breach the Peace. It is vital when performing a lockout to not breach the peace. What constitutes a “breach of the peace” depends on the particular circumstances at hand. For example, if a tenant arrives during the lockout and becomes angry or threatens violence, the landlord should stop performing the lockout and return at a later time. As a general rule of thumb, it is best to perform lockouts in the early morning hours or in the late evening hours when the landlord is less likely to encounter the tenant.
- Provide A Notice of Default. Many commercial leases require the landlord to provide a notice of default before the landlord can lock out a defaulting tenant. Check, double check, and triple check that the landlord followed the lease’s notice of default provisions correctly, including that the landlord sent the notices to all required parties in accordance with the time requirements set forth in the lease.
Read the court decisionRead the full story...Reprinted courtesy of
Patrick Tighe, Snell & WilmerMr. Tighe may be contacted at
ptighe@swlaw.com
Shifting Fees and Costs in Nevada Construction Defect Cases
November 26, 2014 —
Casey J. Quinn - Newmeyer & Dillion LLPIn Nevada, homeowners who sue a builder for residential constructional defects may recover attorneys’ fees and costs caused by the defect. Many times, the request for attorneys’ fees can outpace the size of the actual claim for defects. However, Nevada provides builders with two ways to potentially shift the right to recover attorneys’ fees and costs away from the homeowner and to the builder.
The first arises during the Nevada Revised Statutes (NRS) Chapter 40 process (Nevada’s Right to Repair law). After a builder receives notice of construction defects, it is required to provide the claimant with a written response to each defect, which may include a proposal for monetary compensation (including contribution from a subcontractor, supplier, or design professional). See NRS 40.6472. If a claimant unreasonably rejects a reasonable written offer of settlement included in the response and decides to commence litigation, the court may deny the claimant’s attorneys’ fees and costs and award attorneys’ fees and costs to the builder. See NRS 40.650. Thus, by including a reasonable offer of monetary compensation in a Chapter 40 response, a builder could possibly avoid paying any fees and costs and even recover its own fees in defending against the claim.
A second method for shifting fees and costs is through a written offer of judgment (OOJ). See NRS 17.115 and NRCP 68. Not limited solely to construction defect matters, an OOJ is a useful tool in all kinds of litigation. OOJs are designed to facilitate and encourage pre-trial settlement by incentivizing parties to make reasonable settlement offers that—when unreasonably rejected—have the consequence of shifting the right to recover attorneys’ fees. Basically, when a party rejects an OOJ and fails to obtain a more favorable judgment, the court cannot award any attorneys’ fees and costs to the rejecting party and may award attorneys’ fees incurred from the date of the offer to the entry of judgment, as well as all reasonable costs, to the party who made the offer. In a recent decision, the Nevada Supreme Court affirmed that when a homeowner rejects an OOJ and fails to obtain a more favorable judgment, it can wipe out that homeowner’s right to Chapter 40 fees and costs. See Gunderson, et al. v. D.R. Horton, 130 Nev. Adv. Op. 9 (Feb. 27, 2014). In other words, “While NRS Chapter 40 permits an award of reasonable attorney fees proximately caused by a construction defect, it does not guarantee it.” Id.
Because of the potentially harsh consequences of rejecting an OOJ, there are specific requirements that must be met to trigger them. An offer of judgment must be made in writing, can be made at any time at least 10 days before trial, and is irrevocable for 10 days with no provision for withdrawal before the 10 days expire. See Nava v. Second Judicial Dist. Court, 118 Nev. 396, 46 P.3d 60 (2002). A party may make successive offers of judgment, but the most recent offer extinguishes previous offers and is controlling for determining the date from which attorneys’ fees may be awarded. See Albios v. Horizon Communities, Inc. 132 P.3d 1022 (2006).
In Beattie v. Thomas, 99 Nev. 579, 668 P.2d 268, 274 (1983), the Nevada Supreme Court explained that the purpose of OOJs are not to cause plaintiffs to unfairly forego legitimate claims. However, when a valid offer of judgment is made, the offer is rejected, and the party rejecting the offer fails to obtain a more favorable judgment, a court must evaluate whether the plaintiff's claim was brought in good faith; whether the offer of judgment was reasonable and in good faith in both its timing and amount; whether the plaintiff's decision to reject the offer and proceed to trial was grossly unreasonable or in bad faith; and whether the fees sought by the offer are reasonable and justified. “After weighing the foregoing factors, the district judge may, where warranted, award up to the full amount of fees requested.” Id.
It is worth noting that in Albios v. Horizon Communities, Inc. 132 P.3d 1022 (2006), the Nevada Supreme Court held that when a party rejects a reasonable OOJ and is foreclosed from recovering fees and costs, the party is likewise foreclosed from an award of fees and costs under Chapter 40. This means that even if a builder fails to include a monetary settlement offer as part of a Chapter 40 response, it may still avoid paying the claimant’s fees and costs with a reasonable and timely OOJ.
Finally, it is important to remember that OOJs are a powerful tool that can cut both ways. If an OOJ is not reasonable and timely, or if it fails to contemplate all the potential recovery of an offeree, the OOJ may have no effect on the outcome of a case. Moreover, if a party rejects an OOJ and fails to obtain a more favorable judgment, that party could end up paying the offeror’s costs and attorney’s fees incurred from the date of the offer. Given this powerful impact, OOJs should be an integral part of pre-litigation planning and overall litigation strategy.
About the Author
Casey J. Quinn is an associate in the Las Vegas office of
Newmeyer & Dillion LLP. His practice focuses on complex commercial, construction, and insurance litigation and appellate work. Casey can be reached by email at Casey.Quinn@ndlf.com.
Read the court decisionRead the full story...Reprinted courtesy of
Another Reminder to ALWAYS Show up for Court
July 20, 2020 —
Christopher G. Hill - Construction Law MusingsI have discussed the need to always respond to a lawsuit on multiple occasions here at Construction Law Musings. However, I keep reading cases where the defendant fails to appear either by pleading or in person. Such action is never a good idea as demonstrated once again in the case of Balfour Beatty Infrastructure, Inc. v. Precision Constr. & Mgmt. Group, LLC, a case out of the Eastern District of Virginia.
The basic facts are not a surprise and are taken from the magistrates report that was adopted by the District Court. Balfour Beatty and Precision entered into a subcontract for some electrical work at a project located in Loudoun County. The subcontract included an attorney fees provision and provided for liquidated damages for late performance and the typical damages for default. The project began in July of 2016 with substantial completion July 5, 2018. Precision failed to supply sufficient manpower and sent a letter to Precision stating the same. After an agreement between the parties regarding supplementation by Balfour Beatty and to the accompanying back charge, Balfour Beatty informed Precision by letter that it would be liable for any liquidated damages. The Owner began assessing liquidated damages and Balfour Beatty subsequently terminated the subcontract and discovered defective work by Precision.
Read the court decisionRead the full story...Reprinted courtesy of
The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Claim Preclusion: The Doctrine Everyone Thinks They Know But No One Really Knows What it Means in Practice
April 25, 2023 —
Garret Murai - California Construction Law BlogGenerally, I think restraint in litigation is a good thing. Don’t go crazy on your claims, don’t go nut-so in your discovery, and don’t present your case at trial in a way that causes the judge and/or jury to raise their eyebrows or shake their heads in disbelief. But, as with nearly everything, there’s always an exception. One of which is: don’t hold back on a claim because you “think” you might be able to bring it later, because you might not be able to as the next case, 5th and LA v. Western Waterproofing Company, Inc., 87 Cal.App.5th 781 (2023), demonstrates.
The 5th and LA Case
At the outset, let me first say how much I enjoyed reading this case based on the writing alone. The case, as the 2nd District Court of Appeals states, involves “a second lawsuit about an increasingly leaky roof.”
In 2012, property owner 5th and LA hired roofing contractor Western Waterproofing Company, Inc. to remove and recoat a parking lot that served also served as the roof over retail and office space below. Western completed its work in July 2012 and almost immediately 5th and LA noticed water that the coating was failing causing water leaks to the interior of the building.
Read the court decisionRead the full story...Reprinted courtesy of
Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
How to Mitigate Lien Release Bond Premiums with Disappearing Lien Claimants
May 20, 2019 —
Scott MacDonald - Ahlers Cressman & Sleight PLLCIt is one of those dreaded business situations that plagues the construction industry, especially in times of economic downturn—what to do when a lower-tier entity files a lien against a property then disappears. It has happened to countless owners, general contractors, subcontractors, and even some particularly unlucky sub-tier subcontractors and suppliers. Here is how it arises: a project is moving along, then performance or payment issues arise, and a company that is over extended or unwilling to continue work stops performance, walks off the job, and files a lien against the property for whatever amounts were allegedly unpaid. Often, the allegedly unpaid sums were legitimately withheld due to a good faith dispute over payment/performance, and it is not unusual for the defaulting entity to not be entitled to any of the sums claimed in the lien. Regardless, the lien stays on the property, and pressure is applied from the “upstream” entities to the party who contracted with the defaulting entity to “deal” with the lien.
Oftentimes, a contract will require the parties to “deal” with a lien by obtaining a lien release bond (“release bond”). For those lucky enough to not have encountered this issue, a release bond is a nifty statutory device whereby a surety agrees to record a release bond for the full claimed amount of the lien, with the release bond substituting in for the liened property, effectively discharging the property from liability under the lien. In other words, the lien is released from the property and attaches to the release bond. If the lien claimant recovers on its lien, it is technically satisfied by the surety providing the release bond (or the party who agrees to indemnify and defend the release bond). In exchange for delivering the release bond, the surety demands yearly premiums be paid on the release bond amount
Read the court decisionRead the full story...Reprinted courtesy of
Scott MacDonald, Ahlers Cressman & Sleight PLLCMr. MacDonald may be contacted at
scott.macdonald@acslawyers.com
Foreclosing Junior Lienholders and Recording A Lis Pendens
July 13, 2020 —
David Adelstein - Florida Construction Legal UpdatesWhen you foreclose on a construction lien, there are a couple of pointers to remember.
First, you want to make sure you include junior lienholders or interests you are looking to foreclose (or you want to be in a position to amend the foreclosure lawsuit to identify later). The reason being is you want to foreclose their interests to the property. “[J]unior interest holders are a narrow class of mortgagees whose interest in the underlying property is recorded after the foreclosing contractor’s claim of lien is filed. This class is routinely joined to the construction lien enforcement action under section 713.26 to allow the construction lienor to foreclose out the junior lienholder’s interest in the property encumbered by the construction lien.” See Decks N Sunch Marine, infra.
Second, you want to record a lis pendens with the lien foreclosure lawsuit. Failure to do so could be problematic because Florida Statute s. 713.22(1) provides in part, “A lien that has been continued beyond the 1-year period by the commencement of an action is not enforceable against creditors or subsequent purchasers for a valuable consideration and without notice, unless a notice of lis pendens is recorded.”
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Quick Note: October 1, 2023 Changes to Florida’s Construction Statutes
November 13, 2023 —
David Adelstein - Florida Construction Legal UpdatesEffective October 1, 2023, there were changes to Florida’s statutory scheme dealing with construction projects. This includes Florida’s Lien Law. A copy of these changes can be found below which identify additions in blue and deletions with strikethroughs. No different than before, if you have questions or concerns as to your statutory rights on a construction project, do the prudent thing, consult a construction lawyer. A construction lawyer can help you understand changes to the applicable statutory scheme or how the statutory scheme pertains to your rights. This is important because you want to make sure you understand statutory changes that apply to your work and rights.
A noteworthy change, bolded in blue below, is that there is now a basis to lien for a contractor performing construction management services “which include scheduling and coordinating construction and preconstruction phases for the construction project, or who provides program management services”:
Fla. Stat. s. 713.01 (8) “Contractor” means a person other than a materialman or laborer who enters into a contract with the owner of real property for improving it, or who takes over from a contractor as so defined the entire remaining work under such contract. The term “contractor” includes an architect, landscape architect, or engineer who improves real property pursuant to a design- build contract authorized by s. 489.103(16). The term also includes a licensed general contractor or building contractor, as those terms are defined in s. 489.105(3)(a) and (b), respectively, who provides construction management services, which include scheduling and coordinating preconstruction and construction phases for the construction project, or who provides program management services, which include schedule control, cost control, and coordinating the provision or procurement of planning, design, and construction for the construction project.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Portions of Policyholder's Expert's Opinions Excluded
November 13, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court granted, in part, the insurer's motion to exclude portions of expert testimony. Tundra M. Holdings, LLC v. Markel Ins. Co., 2023 U.S. Dist. LEXIS 139952 (D. Alaska Aug. 10, 2023).
Plaintiff alleged a building it owned suffered damages consisting of building roof failure due to snow load. Plaintiff submitted a claim to Markel for its loss.
Plaintiff hired an engineering firm to conduct an inspection. The recommendation was to install snow guards and that 28 rafters be replaced with new beams. The evaluation did not state that the recommendation was required by law or ordinance. Nor did the evaluation make mention of replacing the metal roof on the building or anything about the water system or sprinkler system. Plaintiff then obtained an estimate of $687,500 for roof repair/replacement, store front repair, a sprinkler system installer and a water system upgrade.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
