SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Public Works Bid Protests – Who Is Responsible? Who Is Responsive?

December 14, 2020 — Eric Divine - Porter Law Group
Most Public Works Solicitations Are Low Bid The process for awarding public works projects in California is controlled by the Public Contract Code. Generally, regardless of whether the public agency is the State, a county, a city or a local district, the project is awarded to the contractor who is “responsible” and submits the least expensive “responsive” bid. This is generally known as a “low bid” contract. In the context of public works, the terms responsible and responsive have very important meanings. As a result, State and local governments have gotten into very expensive trouble for not following the law. So, to understand how to best present a bid protest on a low bid solicitation, you, as a contractor should have a good understanding of the meaning of these terms. Note: There are other methods of contracting for public works that are not low bid, which are typically called “best value” contracts because the procurement process considers factors other than just price. These methods are typically used for large projects because the added complexity and expense of the procurement process only makes sense when the project is itself complex and expensive. Read the court decision
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Reprinted courtesy of Eric Divine, Porter Law Group
Mr. Divine may be contacted at edivine@porterlaw.com

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SEC Approves New Securitization Risk Retention Rule with Broad Exception for Qualified Residential Mortgages

November 26, 2014 — Neil P. Casey & Lori S. Smith – White and Williams LLP
The Securities and Exchange Commission (SEC) and five other federal agencies recently approved a joint rule (the “Risk Retention Rule”) mandating that sponsors of certain types of securitizations retain a minimum level of credit risk exposure in those transactions and prohibiting such sponsors from transferring or hedging against that retained credit risk.[i]The final Risk Retention Rule will be effective one year after its publication in the Federal Register for securitizations of residential mortgages, and two years after publication for securitizations of all other asset types. The SEC vote was 3-2, with sharp dissents from Commissioners Gallagher and Piwowar concluding that the adopting agencies had missed a prime opportunity to rein in risky mortgage lending practices that had precipitated the 2008 financial crisis. Background Following the meltdown of the securitization markets in 2007 (particularly subprime residential mortgage-backed securities), and the resulting global financial crisis, the Dodd-Frank Act mandated that the U.S. federal banking, securities and housing agencies adopt and implement rules to require sponsors of most new securitizations to retain not less than five percent of the credit risk of any assets that the securitizer, through the issuance of an asset-backed security, transfers, sells or conveys to a third party. It was thought that requiring securitization sponsors to keep “skin in the game” would align the interests of the sponsors with the interests of investors and thereby incentivize the sponsors to ensure the quality of the assets underlying the securitization through appropriate due diligence and underwriting procedures when selecting assets for securitization. Although the Dodd-Frank Act explicitly exempted securitizations of certain types of mortgage loans called “qualified residential mortgages” (or “QRMs”) from this risk retention requirement, it invited the rulemaking agencies to define that key term, provided that their definition could be no broader than the definition of “qualified mortgage”adopted by the Consumer Financial Protection Bureau (CFPB) pursuant to the Truth in Lending Act.[ii] In considering how to define QRM, the rulemaking agencies were directed by the Dodd-Frank Act to take into consideration “underwriting and product features that historical loan performance data indicate result in a lower risk of default.”[iii] Reprinted courtesy of Neil P. Casey, White and Williams LLP and Lori S. Smith, White and Williams LLP Mr. Casey may be contacted at caseyn@whiteandwilliams.com; Ms. Smith may be contacted at smithl@whiteandwilliams.com Read the court decision
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Bad Welds Doom Art Installation at Central Park

October 30, 2013 — CDJ STAFF
Last year, the sculpture “How I Roll” was supposed to be doing its rolling at Central Park from June through August of last year, but the exhibit was taken down a month early, over concerns that the welding had rendered the moving piece “structurally unsound and unsafe.” Now the Public Art Fund is suing the company hired to do the welding. Titon Builders of Lake Park, Florida was supposed to do the welding, but they subcontracted the work to Tru-Steel Corp. of Fort Pierce, Florida. The Public Art Fund is claiming that Titon’s contract obligated them to do the fabrication, not subcontract it. Jeffrey Klein, a lawyer for the Public Art Fund, said, “it’s sad that it had to be taken down because of shoddy workmanship.” Read the court decision
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Real Estate & Construction News Round-Up (02/15/23) – Proptech Solutions, Supply Chain Pivots, and the Inflation Reduction Act

March 06, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up explores how proptech could alleviate the financial burden of property owners’ vacant office space, manufacturing firms are bolstering the industrial real estate sector, a 200-MW Texas project is first to leverage IRA tax credit for stand-alone energy storage, and more.

• Proptech could serve as an economic regenerator to the rise in empty office space that has recently become a major financial liability for businesses. (Joe Dyton, Connected Real Estate Magazine)
• The global business process outsourcing (BPO) industry and accompanying real estate infrastructure that supports it should be aware of the potential impact of AI chatbots becoming capable of optimizing customer service with minimal human input. (Zain Jaffer, Forbes)
• Industrial real estate is being bolstered by manufacturing firms increasingly returning their operations to the U.S., which was already one of the hottest commercial property sectors in the last decade. (JLL)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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A Reminder to Get Your Contractor’s License in Virginia

April 25, 2023 — Christopher G. Hill - Construction Law Musings
How are ducks and contractors alike? A question I get often, particularly from construction contractors outside of Virginia is whether they need to get a Virginia contractor’s license. The answer is almost invariably “yes.” The next question is why? The answer is almost always “Because state law says so.” With some minor exceptions for material suppliers and the like, Virginia law requires that all of those that perform construction for others carry the proper license and specialization for the work performed. There is no exception for the proverbial “paper contractor” that takes money from an owner and subcontracts all of the actual physical work. It does not matter if you use a different term for what you do for the owner. If it walks like a duck and quacks like a duck. . .its a duck. If you take money to perform construction, you’re a contractor. Some of the consequences of contracting without a license (aside from possible criminal charges) include among other things, the inability to perfect a mechanic’s lien under Va. Code 43-3(D) and, with minor exceptions, the ability to enforce a contract (meaning it really hurts your ability to get paid). Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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California Court of Appeal Provides Clarity On What Triggers Supplemental Analysis Under California Environmental Quality Act

July 20, 2020 — Kelly Alhadeff-Black & Alexander N. Knaub - Lewis Brisbois
In a recent ruling, California’s Sixth District Court of Appeal clarified the need for supplemental environmental analysis under the California Environmental Quality Act (CEQA). Willow Glen Trestle Conservancy v. City of San Jose (6th Dist., May 18, 2020). Specifically, the court held that seeking additional discretionary approvals, such as regulatory permits, does not constitute a “new discretionary approval for the project” under the California Public Resources Code Section 21166 and the California Code of Regulations, title 14, section 15162 (the CEQA Guidelines). In 2014, the City of San Jose approved a project that included the demolition and replacement of a wooden railroad bridge known as the Willow Glen Trestle (the Project). CEQA review for the Project was conducted via mitigated negative declaration (MND). The Project was quickly challenged by a local group called Friends of the Willow Glen Trestle, alleging that the City should have prepared an Environmental Impact Report based on the allegation that the Willow Glen Trestle constituted an historic resource for CEQA purposes. Ultimately, the City prevailed in that litigation (See Friends of the Willow Glen Trestle v. City of San Jose, et al. (6th Dist., 2016), which remanded the case to the trial court for further review consistent with the Court of Appeal’s verdict) with the court eventually finding that the City correctly analyzed and answered the question of historic resource classification and significance in reference to the Willow Glen Trestle. Reprinted courtesy of Kelly Alhadeff-Black, Lewis Brisbois and Alexander N. Knaub, Lewis Brisbois Ms. Alhadeff-Black may be contacted at Kelly.Black@lewisbrisbois.com Mr. Knaub may be contacted at Alexander.Knaub@lewisbrisbois.com Read the court decision
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After Breaching Its Duty to Defend, Insurer Must Pay Market Rates for Defense Counsel

October 30, 2023 — Tred R. Eyerly - Insurance Law Hawaii
After breaching its duty to defend, the insurer could not take advantage of a California statute allowing insurers to establish rates for defense counsel. S. Cal. Edison Co. v. Greenwich Ins. Co., 2023 U.S. Dist. LEXIS 151695 (C.D. Cal. July 28, 2023). Edison was an additional insured under a policy issued by Greenwich Insurance Company to Utility Tree Service, Inc. (UTS). UTS contracted with Edison to provide vegetation management services near Edison's transmission lines. The Greenwich policy provided additional insured coverage to third parties to the extent of UTS's obligations under the contract. Edison was sued in numerous lawsuits for property damage caused by the Bobcat wildfire in the Angeles National Forest (Bobcat Wildfire lawsuits). Edison tendered the defense in each lawsuit to Greenwich. Coverage was denied, however, based on a lack of underlying allegations or extrinsic evidence that Edison's liability resulted from UTS's negligent actions. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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M&A Representation and Warranty Insurance Considerations in the Wake of the Coronavirus Pandemic

April 06, 2020 — Lori Smith & Patrick Devine - White and Williams Taking Care of Business Blog
Increasingly, M&A transactions are using representation and warranty insurance (RWI) to bridge the gap between a buyer’s desire for adequate recourse to recover damages arising out of breach of representations in the purchase agreement and a seller’s desire to minimize post-closing risk and holdbacks or purchase price escrows traditionally used as the means to satisfy such obligations. When it works, RWI provides a significant benefit to both parties: it mitigates the buyer’s risk in the event that the seller’s representations and warranties prove untrue, and it permits the seller to reduce the portion of the purchase price that it would otherwise have to leave in escrow to cover future claims for breach of those representations and warranties. However, as the coronavirus pandemic ravages the global economy, insurers are now expressly adding COVID-19 exclusions to their RWI policies. If RWI insurers decline coverage for these losses, the allocation of risk in the representations and warranties (and related indemnity provisions) will be more critical than the parties contemplated when they negotiated the transaction documents. Unlike in the case of a natural disaster, insurers cannot quantify the economic fallout that may result from the coronavirus pandemic. This uncertainty breeds systemic concern about the number of insurance claims that covered parties of all varieties will bring, which in turn creates an industry-wide reluctance to cover the claims. Based on discussions with market participants, we understand that, at the present time, 70% to 80% of RWI insurers are broadly excluding losses resulting from COVID-19 and similar viruses, epidemics, and pandemics (including government actions in response thereto), 5% to 10% are narrowly excluding specific coronavirus-related losses that are more likely to be implicated in a particular transaction (e.g., losses caused by business interruption), and 10% to 15% may be willing to narrow their exclusions upon completion of the underwriting process, depending on their comfort level after conducting rigorous and heightened diligence. Insurers’ concerns are wide-ranging, but the representations and warranties causing the greatest distress appear to be those regarding customer retention, supply chain matters, undisclosed liabilities, and the absence of changes between the date of the seller’s most recent financial statements and the transaction closing date. Reprinted courtesy of Lori Smith, White and Williams and Patrick Devine, White and Williams Ms. Smith may be contacted at smithl@whiteandwilliams.com Mr. Devine may be contacted at devinep@whiteandwilliams.com Read the court decision
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