A Subcontractor’s Perspective On California’s Recent Changes to Indemnity Provisions
September 10, 2014 —
William M. Kaufman – Construction Lawyers BlogGreat news for California subcontractors and suppliers! “Type I” Indemnity provisions in California construction contracts entered into on or after January 1, 2013 are not enforceable. This change in the law prevents owners and general contractors from shifting enormous exposure and costs of litigation downstream to the little guy, namely subcontractors and suppliers. In October 2011, Governor Brown signed Senate Bill 474 into law, which represented a major legislative victory for subcontractors and suppliers. The new law also imposed exacting limitations on contractors that attempt to require their subcontractors and suppliers to cover their defense fees and costs in litigation.
New Law Prevents Indemnity or Cost of Defense for Active Negligence
Under a "Type I" indemnity provision, the downstream subcontractor agrees to indemnify the owner or contractor, even against liability caused by the upstream owner/contractor's own "active negligence." A “Type I” indemnity provision in general contractors’ subcontracts often require their subcontractors to defend and indemnify them from liability regardless of whether the general contractor is partially at fault. Subcontractors and suppliers historically have complained that they have little bargaining power when entering into these contracts and these types of provisions can result in ruinous liability for those in the construction industry that are most vulnerable-subcontractors and suppliers. Before this change, the law allowed a general contractor who is 99 percent at fault for an injury or damage to shift the entire risk to a subcontractor who is only one percent at-fault or a subcontractor who is not at fault at all, but tangentially involved in the claim. Subcontractors and suppliers joined forces and lobbied the legislature. The legislature and Governor Brown agreed. Under the new law, such "Type I" indemnity provisions will no longer be enforceable. SB 474 adds Civil Code section 2782.05 that precludes indemnity where the party to be indemnified is "actively negligent" and makes void and unenforceable these types of clauses.
Reprinted courtesy of
William M. Kaufman, Lockhart Park LP
Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com
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Pentagon Has Big Budget for Construction in Colorado
January 17, 2013 —
CDJ STAFFThe Pentagon is an important source of construction contracts, and one place where they’re acutely aware of this in Colorado Springs, Colorado. Luckily for the town’s economy, the military awarded $400 million in construction contracts to Colorado, many of them in the town of Colorado Springs.
Projects in Colorado Springs include facilities for a helicopter unit at Fort Carson and renovations at the Air Force Academy. The new operation center for defense intelligence at Buckley Air Force Base will be built in nearby Aurora. The price tag on the operations center is $117 million. Meanwhile, the military has thousands of both civilian and military employees who will be using these facilities.
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Online Meetings & Privacy in Today’s WFH Environment
May 25, 2020 —
Heather Whitehead & Joshua Anderson - Newmeyer DillionAs a result of the COVID-19 (commonly referred to as the Coronavirus) pandemic, remote working arrangements have become the new norm. For those working from home (WFH), the software program “Zoom Meetings,” has found a substantial increase in demand and popularity as a means to facilitate meetings online rather than meeting in person. There are also a number of other similar platforms available for online meetings such as Skype and Teams (from Microsoft), Go to Meeting (from LogMeIn) and WebEx Meetings (Cisco).
Best Practices for Businesses - Privacy and Security Protocols
With these platforms becoming a necessity for businesses, there are a number of best practices that should be considered to safely conduct online meetings and teleconferences as well as protect information. These include the following:
- Upgrade to the most recent version of the program or application;
- Use passwords, especially with recurring meetings;
- Protect all passwords as well as personal meeting identifiers used in Zoom and other platforms;
- Carefully moderate meetings and ask meeting attendees to identify themselves at the beginning of a meeting;
- Consider allowing only authenticated users to participate in meetings;
- Use the Waiting Rooms feature in Zoom; and
- Enable features available only to meeting hosts.
Reprinted courtesy of
Heather Whitehead, Newmeyer Dillion and
Joshua Anderson, Newmeyer Dillion
Ms. Whitehead may be contacted at heather.whitehead@ndlf.com
Mr. Anderson may be contacted at joshua.anderson@ndlf.com
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Keep it Simple with Nunn-Agreements in Colorado
June 28, 2021 —
Jean Meyer - Colorado Construction LitigationOn May 24, 2021, the Colorado Supreme Court published its decision in Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass'n.[1] There, the Colorado Supreme Court was tasked with answering whether an insurer, who is defending its insured under a reservation of rights, is entitled to intervene as of right under C.R.C.P. 24(a)(2) where the insured enters into a Nunn agreement with a third-party claimant, but rather than entering into a stipulated judgment, agrees with the third party to proceed via an uncontested trial to determine liability and damages. Interestingly, however, while the Court ultimately answered the above question in the negative, the real lesson from the Colorado Supreme Court’s decision is that Colorado litigants should not seek a trial court’s blessing as to liability and damages through non-adversarial proceedings when using Nunn-Agreements. Or, as articulated in Justice Carlos Samour’s vociferous dissenting opinion, Colorado litigants desiring to enter into a Nunn-Agreement should not proceed with a non-adversarial hearing, as doing so is “offensive to the dignity of the courts,” constitutes a “bogus,” “faux,” “sham” and “counterfeit” proceeding, and the hearing provides “zero benefit.”
By way of background, the case arrived in front of the Colorado Supreme Court based on the following fact pattern. A homeowner association (Bolt Factory Lofts Owners Association, Inc.) (“Association”) brought construction defect claims against a variety of prime contractors and those contractors subsequently brought third-party construction defect claims against subcontractors. One of the prime contractors assigned their claims against a subcontractor by the name Sierra Glass Co., Inc. (“Sierra”) to the Association. The other claims between the additional parties settled. On the eve of trial involving only the Association’s assigned claims against Sierra, the Association made a settlement demand to Sierra for $1.9 million. Sierra asked its insurance carrier, Auto-Owners Insurance, Co. (“AOIC”), which had been defending Sierra under a reservation of rights letter, to settle the case for that amount, but AOIC refused. This prompted Sierra to enter into a “Nunn-Agreement” with the Association whereby the case would proceed to trial, Sierra would refrain from offering a defense at trial, the Association would not pursue any recovery against Sierra for the judgment, and Sierra would assign any insurance bad faith claims it may have had against AOIC to the Association.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
Benford’s Law: A Seldom Used Weapon in Forensic Accounting
March 05, 2015 —
Roger Hughes – California Construction Law BlogWhat is Digit Analysis and Why it Should be of Interest to Construction Attorneys?
Benford’s Law was named after Frank Benford, a General Electric physicist. Mr. Benford was the first to discover that “leading digits” do not follow a uniform distribution pattern as suggested by intuition. If you are like me, the response to such a statement is “huh”? But stick with me because this is important stuff to anyone who suspects a claim presentation may have been rigged, a bit here or a bit there, or maybe all over. It turns out that calculations purportedly based upon naturally, randomly occurring numbers may have been contrived. By “randomly occurring” we mean numbers that occur naturally without human interference as opposed to a contrived selection. Said another way, it is now accepted as a mathematical truth that the pattern of numbers randomly generated can be distinguished from numbers influenced by human intervention. Yikes, glad you told me that before I prepared my taxes.
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Roger Hughes, Wendel Rosen Black & Dean LLPMr. Hughes may be contacted at
rhughes@wendel.com
Building Codes Evolve With High Wind Events
November 14, 2018 —
William L. Coulbourne - Construction ExecutiveDesigns for wind loads have been in building codes for a long time. Prior to the creation of the International Building Code, the three primary legacy codes had wind load provisions but they mostly dealt with wind loads on the building frame and had little load information about the building components or the exterior cladding.
Since Hurricane Andrew in 1992, building codes include more wind design information that comes from disaster investigations and wind engineering research conducted primarily at the university level. In 2000, the legacy building codes were replaced with the International Building Code (IBC). Residential buildings must comply with the International Residential Code (IRC). Both of these building code documents reference the engineering load standard, ASCE 7 Minimum Design Loads and Other Criteria for Buildings and Other Structures. This load standard has also been in existence for a long time; it now is revised every six years and the building codes revised every three years (IBC and IRC) reference ASCE 7 so the provisions in ASCE 7 become part of the building code requirements.
Reprinted courtesy of
William L. Coulbourne, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Houston Bond Issue Jump-Starts 237 Flood Control Projects
September 10, 2018 —
Louise Poirier & Pam Radtke Russell - Engineering News-RecordMore than $3 billion in flood risk reduction and repair projects can move forward in Houston following a vote held on Hurricane Harvey's anniversary that authorized a $2.5-billion bond program.
Reprinted courtesy of
Louise Poirier, ENR and
Pam Radtke Russell, ENR
Ms. Poirier may be contacted at poirierl@enr.com
Ms. Russell may be contacted at Russellp@bnpmedia.com
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Lessee Deemed Statutory Employer, Immune from Tort Liability by Pennsylvania Court
November 03, 2016 —
Jerry Anders & Alison Russell – White and Williams LLPThe Superior Court of Pennsylvania addressed whether a lessee can be shielded from tort liability as a statutory employer and thus, immune from civil liability under the Workers’ Compensation Act. The court in Doman v. Atlas America, Inc. held that a primary contractor who leased property for the purposes of removing and drilling natural gas is a statutory employer under Section 302(a) of the Act and thus, entitled to tort immunity under Section 203 of the Act.
Reprinted courtesy of
Jerrold Anders, White and Williams LLP and
Alison Russell, White and Williams LLP
Mr. Anders may be contacted at andersj@whiteandwilliams.com
Ms. Russell may be contacted at russella@whiteandwilliams.com
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