California Court of Appeals Says, “We Like Eich(leay)!”
March 30, 2016 —
Garret Murai – California Construction Law BlogTime is money.
And nowhere can than be best observed than on a construction project.
Project delays can mean lost profits for owners, liquidated damages for general contractors, and increased material, labor, field overhead, and home office overhead costs for general contractors and subcontractors alike.
Pricing the impact of delays, however, can be thorny. Particularly, for home office overhead.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
New Case Law Update: Mountain Valleys, Chevron Deference and a Long-Awaited Resolution on the Sacketts’ Small Lot
June 12, 2023 —
Anthony B. Cavender - Gravel2GavelThis is a brief roundup of recent federal court environmental and regulatory law decisions from the federal courts over the past few months, including the much anticipated ruling in Sackett, et ux., v, Environmental Protection Agency.
THE U.S. SUPREME COURT
Sackett, et ux., v, Environmental Protection Agency
Last year, the Supreme Court issued a significant decision curtailing some of the EPA’s regulatory powers in the Clean Air Act in West Virginia v. Environmental Protection Agency. On May 25, 2023, the Court limited EPA’s—and the U.S. Army Corps of Engineers’ authority—under the Clean Water Act. This, too, is a major environmental ruling. The Court held that the EPA could not classify the wetlands located on the Idaho property of Michael and Chantell Sackett as “Waters of the United States” on the basis of the “significant nexus” test devised by Justice Kennedy in his separate opinion in the 2005 case of Rapanos v. United States. Accordingly, the Court unanimously held that their property was not subject to the EPA’s or the U.S. Army Corps of Engineers’ permitting and enforcement power. In 2004, the Sacketts purchased a small lot near Priest Lake in Bonner County, Idaho, on which to build a home. As related by Justice Alito, once they began to fill in their property with dirt and rocks, they were notified by EPA that their backfilling operation violated the Clean Water Act (CWA) because they were affecting protected wetlands. The Sacketts challenged this action, thus beginning a long legal battle with EPA and the federal government. In 2021, the U.S. Court of Appeals for the Ninth Circuit upheld the federal government’s regulatory authority over these wetlands, holding that the CWA covers “adjacent” wetlands having a significant nexus to traditional navigable waters. The Supreme Court decided that this case was suitable for determining whether the Sackett’s wetlands are “waters of the United States” and thus subject to the permitting and regulatory enforcement powers of the EPA and the Corps of Engineers.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
An Uncharted Frontier: Nevada First State to Prohibit Defense-Within-Limits Provisions
July 10, 2023 —
Geoffrey B. Fehling & Andrew S. Koelz - Hunton Insurance Recovery BlogNevada recently became the first state to prohibit defense-within-limits provisions in liability insurance policies. Defense-within-limits provisions—resulting in what’s called “eroding” or “wasting” policies—reduce the policy’s applicable limit of insurance by amounts the insurer pays to defend the policyholder against a claim or suit. These provisions are commonly included in errors and omissions (E&O), directors and officers (D&O) and other management liability policies. This is in contrast to other policies, most commonly commercial general liability policies, which provide defense “outside of limits” where defense costs do not reduce the policy’s limit.
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Geoffrey B. Fehling, Hunton Andrews Kurth and
Andrew S. Koelz, Hunton Andrews Kurth
Mr. Fehling may be contacted at gfehling@HuntonAK.com
Mr. Koelz may be contacted at akoelz@HuntonAK.com
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Spotting Problem Projects
October 26, 2017 —
David R. Cook Jr. - Autry, Hanrahan, Hall & Cook, LLPPerhaps more than any other specialty contractor, electrical contractors bear the brunt of the “problem project.” Long after most other trades have completed their work and scattered in the wind, electrical contractors remain on site until the owner’s last inspection. And when the project is a “problem project,” the owner or prime contractor tend to liberally share their losses and liquidated damages among those specialty contractors remaining on site at the end. So what is an electrical contractor to do when the project starts coming off the rails?
What is a Problem Project?
First, it helps to identify the attributes of a problem project. While there are many negative qualities of a bad job, a problem project is one that busts budgets – whether labor, material, or time. Most commonly, the problem project will significantly exceed the labor budget. Because an electrical contractor’s most important (and understandably expensive) resource is its people, the labor budget is critical to the success of a job. When a project suffers delays or is ineptly managed, the labor costs soar, turning a potentially profitable job into a disaster.
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David R. Cook, Autry, Hanrahan, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
New Jersey Traffic Circle to be Eliminated after 12 Years of Discussion
February 04, 2014 —
Beverley BevenFlorez-CDJ STAFFThe online publication New Jersey.com reported that on February 6th a “Pre-Construction Public Information hearing” will be held in Little Ferry, New Jersey, to discuss “the upcoming Route 46 Circle Elimination construction project.” The project includes “installation of a storm water pump station” as well as reconfiguring the circle into “a conventional four-way signalized intersection with a brand new traffic signal.”
Conti Enterprises of Edison was awarded the bid “at a cost of $33,837,739,” according to New Jersey.com. The project, which has been discussed for over a decade, stalled over combining the elimination of the traffic school with rehabilitation of a bridge. Improvements include “replacing of the entire bridge deck, structural steel member replacement and strengthening, sidewalk replacement on both sides of the structure and substructure patching, crack sealing and reconstruction where needed.”
The informational meeting will introduce the public to the engineer and contractor for the project. "This information session will help residents learn more about the project and what to expect as the state undertakes this work," Little Ferry Mayor Mauro Raguseo told New Jersey.com. "I wish we could fast forward to the completion of the project so we can realize the benefits without the headaches, but that's not reality. We all need to be prepared."
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Deducting 2018 Real Property Taxes Prepaid in 2017 Comes with Caveats
January 04, 2018 —
William Hussey – White and WilliamsMany clients and friends have inquired about accelerating the payment of their 2018 real property taxes as a result of the recent enactment of the federal Tax Cuts and Jobs Act. Pursuant to that Act, the deduction for state and local income, real property and other taxes will be capped at $10,000 in tax years 2018 through 2025. The Act, moreover, specifically disallows a deduction in 2017 for 2018 state and local income taxes that are prepaid before year-end.
The Act was not clear on whether a prepayment of 2018 real property taxes would be deductible in 2017. For certain taxpayers that are not subject to the alternative minimum tax, a prepayment of those 2018 real property taxes might be of current benefit to them.
Yesterday, the IRS issued an advisory to taxpayers outlining which real property tax prepayments will be deductible in 2017 and which are not. The text of that advisory, together with the illustrative examples, is set out below for your consideration.
IR-2017-210, DEC. 27, 2017
WASHINGTON - The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.
The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.
The following examples illustrate these points.
Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.
Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.
The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline.
IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.
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William Hussey, White and WilliamsMr. Hussey may be contacted at
husseyw@whiteandwilliams.com
Las Vegas Harmon Hotel to be Demolished without Opening
May 22, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Architectural Record, the Harmon Hotel, part of the CityCenter hotel-casino-entertainment complex on the Las Vegas Strip in Nevada, “is being razed without ever opening.” MGM Resorts International will be demolishing “the unfinished 27-floor, oval-shaped tower following a protracted legal battle with its contractor, Tutor Perini Corp., over building defects.”
Demolition is expected to cost $11.5 million, while the “incomplete construction” had cost $279 million. Problems for the hotel began after the discovery “that reinforcing steel was improperly installed on 15 building floors during construction.” Architectural Record reported that a third-party inspector “had falsified 62 daily reports between March and July of 2008 stating that things were okay when they were not. The findings prompted a temporary project shut-down and eventual building redesign.”
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Ackman Group Pays $91.5 Million for Condo at NYC’s One57
April 15, 2015 —
David M. Levitt and Oshrat Carmiel – BloombergA group including billionaire investor Bill Ackman paid $91.5 million for a duplex penthouse at Extell Development Co.’s One57 condominium tower, one of New York City’s most expensive home purchases ever.
The purchase of unit 75 in the luxury skyscraper overlooking Central Park closed on March 27, according to property records filed Thursday. The buyer was listed as 57157 Co. LLC, a single-purpose entity that Ackman controls.
The 13,554-square-foot (1,259-square-meter), six-bedroom home spans the 75th and 76th floors of the 90-story skyscraper. Ackman last year told the New York Times it was “the Mona Lisa of apartments.” Monthly common charges on the unit were estimated at $23,595, according to documents Extell filed with the state attorney general’s office.
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David M. Levitt, Bloomberg and
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