Labor Development Impacting Developers, Contractors, and Landowners
June 25, 2019 —
John Bolesta & Keahn Morris - Sheppard Mullin Construction & Infrastructure Law BlogIt is unlawful for unions to secondarily picket construction sites or to coercively enmesh neutral parties in the disputes that a union may have with another employer. This area of the law is governed by the National Labor Relations Act (“NLRA”), the federal law that regulates union-management relations and the National Labor Relations Board (“NLRB”), the federal administrative agency that is tasked with enforcing the NLRA. But NLRB decisions issued during the Obama administration have allowed a union to secondarily demonstrate at job sites and to publicize their beefs over the use of non-union contractors there, provided the union does not actually “picket” the site. In those decisions, the NLRB narrowed its definition of unlawful “picketing,” thereby, limiting the scope of unlawful activity prohibited by law. Included in such permissible nonpicketing secondary activity is the use of stationary banners or signs and the use of inflatable effigies, typically blow-up rats or cats, designed to capture the public’s attention at an offending employer’s job site or facilities.
A recently released NLRB advice memo, however, signals the likely reversal of those earlier decisions and that contractors and owners may now be able to stop such harassing union job site tactics simply by filing a secondary boycott unfair labor practice change with the NLRB. The 18 page memo, dated December 20, 2018 (and released to the public on May 14, 2019), directs the NLRB’s Region 13 to issue a complaint against the Electrician’s Union in a dispute coming out of Chicago where the union erected a large, inflatable effigy, a cat clutching a construction worker by the neck, and posted a large stationary banner proclaiming its dispute to be with the job’s general contractor over the use of a non-union electrical sub at the job site’s entrance. Though not an official Board decision, the memo suggests the NLRB General Counsel’s (GC) belief that the earlier Obama era decisions may have been wrongly decided and should be reconsidered by the NLRB on the theories that the Union’s nonpicketing conduct was tantamount to unlawful secondary picketing, that it constituted “signal” picketing that unlawfully induced or encouraged the employees of others to cease working with the subs or that it constituted unlawful coercion.
Reprinted courtesy of
John Bolesta, Sheppard Mullin and
Keahn Morris, Sheppard Mullin
Mr. Bolesta may be contacted at jbolesta@sheppardmullin.com
Mr. Morris may be contacted at kmorris@sheppardmullin.com
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Don't Count On a Housing Slowdown to Improve Affordability
June 13, 2022 —
Conor Sen - BloombergAs mortgage rates continue to rise, all eyes are fixed on the housing market for signs of a potential slowdown. But any slowdown that does materialize won't affect the industry equally because it isn't going to be about fundamental problems with the housing market. Rather, it will be the result of the Federal Reserve intentionally increasing borrowing costs to cool off inflation.
The Fed's efforts are happening in the context of a supply-constrained market where homebuilders have been struggling to complete as many homes as they would like. Any negative impact of rising mortgage rates would be felt disproportionately where affordability problems already are the worst — high-cost coastal markets — and then in materials for the early part of the construction cycle, such as lumber.
Understanding the nature of the housing challenge is important so that you aren’t tempted to compare the situation with past downturns. For now, at least, there is no broad industry downturn as we’ve seen before in oil and gas or the technology sector that would lead to the housing market suffering in places like Houston or the San Francisco Bay Area. Homeowners haven't taken on too much debt, and there's no inventory glut — quite the opposite, in fact — that would lead to a broad-based downturn.
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Conor Sen, Bloomberg
Expansion of Statutes of Limitations and Repose in K-12 and Municipal Construction Contracts
March 27, 2019 —
Henry Bangert - Colorado Construction LitigationThe purpose of this whitepaper is to bring attention to a trend in K-12 and municipal construction contracts, which expands the time periods for law suits against construction professionals.
Introduction and Background
Under Colorado statute, the period of time within which a legal action for construction defects may be brought against a construction professional in Colorado is two years from when the claimant (or its predecessor in interest) discovers or in the exercise of reasonable diligence should have discovered the physical manifestations of a defect (the “Statute of Limitations”), but in no case may an action be brought more than six years after substantial completion of the improvement, unless the claim arises in the fifth or sixth year after substantial completion, in which event the action may be brought within two years of such date, i.e., up to eight years after substantial completion (the “Statute of Repose”). See C.R.S. § 13-80-104. While the triggering events differ for the Statute of Limitations and Statue of Repose, the periods are intended to run concurrently to limit the period of time an action may be brought against construction professionals for construction defects to, at most, eight years after substantial completion. Importantly, these limitations periods may be expanded by agreement.
Prior to 1986, Colorado law provided for a 10-year Statute of Repose. However, in 1986, Colorado’s legislature shortened the Statute of Repose time limit to the current six (or up to eight) year period. In 1986, Colorado also redefined the date the claim arises from the date the defect was discovered or should have been discovered to the date the physical manifestation of a defect was discovered or should have been discovered. Therefore, after 1986, the two-year limitations period could begin to run when a claimant should have discovered the manifestation of a defect, even if the claimant did not recognize that a defect existed.
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David McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Commercial Construction in the Golden State is Looking Pretty Golden
August 26, 2015 —
Garret Murai – California Construction Law BlogIf the $2.1 trillion erased from the U.S. stock market over the last week has you white knuckled, you might consider commercial construction in the Golden State, where things are looking . . . well . . . pretty golden.
According to the Summer/Fall 2015 Commercial Real Estate Survey jointly published by Allen Matkins and the UCLA Anderson School of Management, commercial construction in California has risen to its highest level since 2001.
The survey, conducted of commercial real estate developers and financiers and their outlook for seven metropolitan regions in California including the East Bay, the Inland Empire, Los Angeles, Orange County, San Diego, San Francisco and Silicon Valley, found that all respondents expressed optimism (characterized as an optimism sentiment above 50) that office, multifamily, industrial and retail construction would grow over the next three-years although it varied depending on the region and sentiment was at times lower than when the survey was last taken last year.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Be Strategic When Suing a Manufacturer Under a Warranty with an Arbitration Provision
October 02, 2023 —
David Adelstein - Florida Construction Legal UpdatesI’ve said this before, and I’ll say it again: arbitration is a creature of contract. If you don’t want to arbitrate, don’t agree to an arbitration provision as the means to resolve your dispute. Now, with that said, there are times you may not have a choice. An arbitration provision in a warranty from a manufacturer of a product is an example. If you are procuring the product, you are agreeing to the terms of the express warranty. Manufacturers are not negotiating their product warranty on a case-by-case basis considering they are not typically the ones selling the product directly to the end user. This does not mean that is a bad thing. It just means if you elect to sue the manufacturer directly for an alleged product defect or under the terms of the warranty, you should read the warranty and consider the strategic aspect that suing the manufacturer will have on your case.
In SICIS North America, Inc. v Sadie’s Hideaway, LLC, 48 Fla.L.Weekly D1581c (Fla. 1st DCA 2023), an owner elected to sue a tile manufacturer, a general contractor, the architect, and a window and door company. One of the arguments the owner raised was that exterior tiles installed were defective. The tiles were procured by the general contractor. The owner sued the general contractor under various theories and sued the tile manufacturer for breaches of warranty and negligence. The general contractor asserted a crossclaim for indemnification against the tile manufacturer. The tile manufacturer moved to compel the owner’s claim and the general contractor’s crossclaim to arbitration since there was an arbitration provision in the warranty documents and the general contractor’s indemnification claim arose from that transaction. The trial court denied the motion to compel arbitration. On appeal, the appellate court reversed:
First, because [the owner] was suing [the tile manufacturer] based upon the written warranty, it was bound by the arbitration provision contained in [the general contractor’s] agreement with [the tile manufacturer]. As the Florida Supreme Court has explained, “[W]hen a plaintiff sues under a contract to which the plaintiff is not a party . . . we will ordinarily enforce an arbitration clause contained in that contract, absent some other valid defense. . . .” . [The owner] had no valid defense against arbitration, a fact which it apparently realized when it voluntarily dismissed its express warranty claim after the notice of appeal and initial brief were filed.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Insureds' Experts Insufficient to Survive Insurer's Motion for Summary Judgment
October 17, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe magistrate recommended that insurer's motion for summary judgment be granted due to the insureds' expert's inability to present genuine issues of material fact. Walker v. Century Sur. Co., 2023 U.S. Dist. LEXIS 142408 (E.D. Texas July 17, 2023).
The insureds' property sustained damage from Hurricane Laura. Colonial Claims inspected the property for Century and reported that a portion of the roof was damaged by the hurricane. Century paid insureds $2,212,34. Van Fisher, an engineer with Envista Forensics, then inspected the interior of the property on Century's behalf. Fisher reported that there was some covered interior damage caused by a leak from a storm-created opening in the roof. However, Fisher further reported that there was other interior damage caused by existing water leaks not attributed to the hurricane and thus not covered by the policy. Century then paid the insureds an additional $485.05 based on Fisher's inspection.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Court of Appeals Issues Decision Regarding Second-Tier Subcontractors and Pre-Lien Notice
February 06, 2023 —
Travis Colburn - Ahlers Cressman & SleightVelazquez Framing, LLC (“Velazquez”) v. Cascadia Homes, Inc. (“Cascadia”) is a Court of Appeals, Division 2 case where the primary issue on appeal was whether a second tier subcontractor was required to provide pre-lien notice under RCW 60.04 for its labor.
The defendant, Cascadia, was the general contractor that planned to build a home on property it owned in Lakewood, Washington.[1] High End Construction, LLC (“High End”), submitted a bid to Cascadia for framing work on the home. High End began work on Cascadia’s home, but later subcontracted with Velazquez to complete the framing work.[2] Velazquez did not submit a prelien notice for its work on Cascadia’s home, and Cascadia claimed it was unaware that High End subcontracted with Velazquez for framing at the project.
High End invoiced Cascadia and was paid for its work, but High End never paid Velazquez. Subsequently, Velazquez recorded a lien for both labor and materials, and later filed a complaint to foreclose its lien. Cascadia, due to the fact Velazquez did not provide it with prelien notice, moved for summary judgment, arguing prelien notice was required under RCW 60.04.031(1)[3] and the labor portion of a lien cannot be segregated where a subcontractor’s lien includes both labor and materials. Velazquez argued that no prelien notice was required under RCW 60.04.021[4] and RCW 60.04.031 and claimed that subcontractors can segregate the labor portion from the materials portion. The trial court granted Cascadia’s motion and ruled Velazquez did not fall within one of the exceptions for prelien notice in RCW 60.04.031(2), and therefore, could not enforce the lien. Velazquez appealed.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
North Dakota Court Determines Inadvertent Faulty Workmanship is an "Occurrence"
May 10, 2013 —
Tred EyerlyJoining what it called the majority of jurisdictions, the North Dakota Supreme Court found that damage caused by faulty workmanship can be an "occurrence." K&L Homes, Inc. v. Am. Family Mutual Ins. Co., 2013 N.D. LEXIS 61 (N.D. April 5, 2013).
The insured, K&L, was a general contractor who was sued after completing construction of a new home. The suit was based upon breach of contract and breach of implied warranties claims. The homeowners alleged that improper compacting of soil had caused shifting of their home, leading to property damage. K&L had hired a subcontractor to do the soil compaction work.
The insurer denied coverage. K&L sued the insurer, but lost at the summary judgment stage.
On appeal, K&L argued the policy should be interpreted to give effect to the document as a whole and the "subcontractor exception" to the "your work" exclusion should apply.
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Tred EyerlyMr. Eyerly can be contacted at
te@hawaiilawyer.com