The California Legislature Passes SB 496 Limiting Design Professional Defense and Indemnity Obligations
June 15, 2017 —
Mark Himmelstein & Jenny Guzman – Newmeyer & Dillion LLPSince 2008 when the California legislature limited subcontractor indemnity obligations, the design professional community has been shouting “what about us?” Well, the legislature finally responded and a new law that limits design professional’s defense and indemnity obligations to their percentage of fault goes into effect on January 1, 2018.
THE NEW LAW – SB 496
SB 496 amends California Civil Code section 2782.8 and states that indemnity agreements must be limited to the negligence, recklessness or willful misconduct of the indemnitee (i.e. no more Type I indemnity with design professionals). The amendment also provides that “in no event shall the cost to defend charged to the design professional exceed the design professional’s proportionate percentage of fault”, with a limited opportunity for reallocation in the event another defendant is judgment proof.
However, the duty to defend still remains and still arises at the time of the tender of the defense (both issues that were unsuccessfully targeted by the design professional lobbyists).
WHAT CAN BE DONE NOW?
Developers and Owners should strongly consider reviewing and revising the indemnity provisions in their consultant contracts to comply with the new legislation before the first of the year. This includes master agreements because project addenda entered into after January 1 are subject to the new law. The statute does not apply to current contracts, so these do not need to be amended.
Questions? Newmeyer & Dillion is happy to assist in navigating the process to ensure you are compliant prior to January’s deadline. Please let us know how we can help.
Mark Himmelstein is a partner focused in the areas of construction, real estate, business and insurance litigation. He has an in-depth experience in drafting and negotiating construction and real estate contracts. You can reach him at mark.himmelstein@ndlf.com.
Jenny Guzman is a litigation associate in the Newport Beach office, focusing her practice in the areas of business and real estate litigation and transactions. You can reach her at jenny.guzman@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit http://newmeyeranddillion.com/
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Six Inducted into California Homebuilding Hall of Fame
February 04, 2013 —
CDJ STAFFThe California Homebuilding Foundation has inducted six industry leaders into their Homebuilding Hall of Fame, in recognition of both their professional accomplishments and their philanthropic and volunteer activities.
The six homebuilders to be honored are Sherman S. Haggerty of Lennar Corp., Joe Head of the SummerHill Land Division of SummerHill Homes, Robert B. MacLeod of Newland Real Estate Group, John J. Ryan Jr. of Brookfield Homes Bay Area, Tom Sudberry of Sudberry Properties, and Bill Watt of Baywood Development Group.
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Shaken? Stirred? A Primer on License Bond Claims in California
July 14, 2016 —
Garret Murai – California Construction Law BlogShaken?
Stirred?
A bit hot under the tuxedo collar perhaps?
Maybe it’s time for a martini. Or two.
When your project’s a mess, your contractor isn’t returning your calls, and you don’t have a license to kill it’s only natural that you would want to go after that other license: the contractor’s license bond.
However, except for smaller claims, or situations where you discover that the contractor is or might be judgment-proof, going after a contractor’s license bond isn’t necessarily the panacea many might hope it to be. Read on to learn why.
What is a license bond?
First, a license bond is not insurance. While insurance is typically limited to property damage and personal injury, a license bond covers a contractor’s violation of the Contractors State License Law. All California contractors are required to have on file a license bond (or, alternative, such as a cash deposit) with the California Contractors State License Board (“CSLB”).
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
US Appeals Court Slams FERC on Long-Muddled State Environmental Permits
March 27, 2019 —
Mary B. Powers and Debra K. Rubin - Engineering News-RecordWhat may be the nation’s largest dam removal project—delayed for years by regulatory and legal disputes of a utility, stakeholders and states over licensing and environmental permits—now may have new momentum after a hard-hitting January federal appeals court ruling.
Reprinted courtesy of
Mary B. Powers, ENR and
Debra K. Rubin, ENR
Ms. Rubin may be contacted at rubind@enr.com
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Default, Fraud, and VCPA (Oh My!)
September 12, 2023 —
Christopher G. Hill - Construction Law MusingsI’ve discussed the
Virginia Consumer Protection Act (VCPA) and the interaction between
fraud and contract on numerous occasions here at Construction Law Musings. A recent case from the Eastern District of Virginia District Court discusses this interaction (along with
that dreaded default) further.
In
Bhutta v. DRM Construction Corp., the homeowners, the Bhuttas, sued DRM for breach of contract, conversion, fraud, and a violation of the VCPA. These allegations were based upon DRM having taken a $40,000.00 deposit from the Bhuttas and then failing to even begin work. As you may have guessed from the title of this post, DRM did not respond to the Complaint and the Court granted default. The Court then took up the question of whether the Bhuttas had alleged enough on each count for default judgment on those counts. After going through a procedural recitation and finding that DRM was properly served and that the Court had jurisdiction, the Court got to the meat of the matter.
The Court held that the Bhuttas properly plead a breach of contract for the obvious reason. The reason was that DRM never performed any work and the Bhuttas were damaged because they both paid the deposit and also had to hire another contractor to complete the work at a higher price. The Court granted default judgment for breach of contract.
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The Law Office of Christopher G. HillMr. Eyerly may be contacted at
te@hawaiilawyer.com
Uneven Code Enforcement Seen in Earthquake-Damaged Buildings in Turkey
February 14, 2023 —
Jeff Rubenstone & Neelam Matthews - Engineering News-RecordThe aftermath of the Feb. 6 earthquakes and aftershocks in central Turkey has begun to shift from immediate search-and-rescue efforts to a grim cataloguing of the extent of the destruction, with emergency response teams in Turkey and Syria beginning the work of evaluating the condition of thousands of buildings and infrastructure impacted by the temblors.
Reprinted courtesy of
Jeff Rubenstone, Engineering News-Record and
Neelam Matthews, Engineering News-Record
Mr. Rubenstone may be contacted at rubenstonej@enr.com
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New York City Council’s Carbon Emissions Regulation Opposed by Real Estate Board
July 01, 2019 —
Kristen E. Andreoli - White and William's Taking Care of Business BlogOn April 10, 2019, the New York City Council adopted Intro No. 1253 – the largest effort in a series of bills known as the Climate Mobilization Act. Intro No. 1253 enacts new regulations to reduce the city’s current largest source of carbon emissions – the operation of buildings.
Jared Brey, in his April 25, 2019 article in U.S. News and World Report, “How an Evolving Movement Pushed NYC to Address the Climate Crisis,” states that “[i]n the city, around 70% of carbon emissions are produced by buildings, and around half of all building emissions are produced by just 2% of structures larger than 25,000 square feet that are covered by the bill.”
The level of development, population density and relative economic power of a city such as New York have made this bill particularly interesting to other jurisdictions around the globe which may be considering their own similar legislation. In his article, Brey cites David Miller, a former mayor of Toronto and the North American regional director for C40, a group of cities coordinating strategies to meet the goals of the Paris Agreement:
“I think what New York has done is globally significant … It’s really a huge step forward, using the city’s powers and influence to directly address a huge source of greenhouse gas emissions without waiting for the national government or the international community to act.”
Several other jurisdictions have already begun to approach this issue, generally either by passing bills or creating task forces to further investigate how to meet stated emissions reduction goals. In 2018, Governor Jerry Brown of California signed an executive order with a stated goal of net-zero carbon emissions within the state by the year 2045. The California State Assembly subsequently passed a bill creating a task force to investigate the potential to reduce the emission of greenhouse gasses by both commercial and residential buildings by 2030, although their plan is not due until January 1, 2021. The city of San Jose has implemented new building standards for all new residential buildings to be net-carbon neutral by 2020, and all new commercial buildings must be so by 2030.
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Kristen E. Andreoli, White and Williams LLPMs. Andreoli may be contacted at
andreolik@whiteandwilliams.com
In Massachusetts, the Statute of Repose Applies to Consumer Protection Claims Against Building Contractors
January 28, 2019 —
Shannon M. Warren - The Subrogation StrategistIn Bridgwood v. A.J. Wood Construction, Inc., 105 N.E.3d 224 (Mass. 2018), the Supreme Court of Massachusetts determined that the statute of repose barred the plaintiff’s consumer protection claims commenced more than six years after the occurrence of the event that gave rise to the claims. In Bridgwood, the homeowner filed suit against the contractors who had performed renovations 15 years earlier. The homeowner asserted that concealed faulty electrical work caused a fire 11 years after the work was completed. The complaint alleged that the contractors, by violating Mass. Gen. Laws. Chapter 142A §17(10), committed an unfair and deceptive act pursuant to Mass. Gen. Laws Chapter 93A.
Section 17(10) prohibits contractors from violating building laws and specifically states that a violation of Section 17(10) constitutes an unfair and deceptive act as defined by Chapter 93A. Chapter 93A is regarded as one of the most stringent consumer protection statutory schemes in the nation, and allows litigants to seek remedies such as treble damages and attorney fees.
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Shannon M. Warren, White and WilliamsMs. Warren may be contacted at
warrens@whiteandwilliams.com
