Federal Court of Appeals Signals an End to Project Labor Agreement Requirements Linked to Development Tax Credits

Thursday, October 20, 2016 — Gregory R. Begg & Aaron C. Schlesinger – Peckar & Abramson, P.C.

What Action Should Owners, Developers and Contractors Take in Anticipation of Successful Challenges to PLA Requirements?

Recently, a federal court in New Jersey issued a decision which very well may invalidate all Project Labor Agreements (“PLA’s”) entered into as a condition to receipt of tax incentives for private development. Tax incentives utilized to promote private development are different, according to the court, than typical public works projects where PLA requirements have generally been held valid. Owners, developers, contractors and governmental entities must assess the consequences of this decision upon contracts already and to be awarded in the future where tax benefits may be linked to a PLA requirement.

In 1993, in what has become known as the Boston Harbor Case, the United States Supreme Court held that state and local governmental entities may condition the award of public works contracts on the contractor’s agreement to enter into PLA’s.

That decision has been followed nationwide since then to uphold the validity of various state and local law bidding conditions requiring successful bidders to negotiate and enter into project labor agreements as a condition to the award of public works contracts. The rationale is that when the government, like any other private party, is participating in an economic market, it may exercise its discretion in setting terms and conditions it believes best suit its interests in the efficient procurement of goods and services in that market. Therefore, a PLA requirement by a governmental entity engaged in market activity is no more or less valid than a PLA requirement on a purely private project.

Reprinted courtesy of Gregory R. Begg, Peckar & Abramson, P.C. Aaron C. Schlesinger, Peckar & Abramson, P.C.
Mr. Begg may be contacted at gbegg@pecklaw.com
Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com

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Tom Newmeyer Elected Director At Large to the 2017 Orange County Bar Association Board of Directors

Thursday, October 20, 2016 — Newmeyer & Dillion LLP

NEWPORT BEACH, Calif. – OCTOBER 17, 2016 – Prominent business and real estate law firm Newmeyer & Dillion LLP is pleased to announce that co-founding partner Tom Newmeyer has been elected Director at Large to the 2017 Orange County Bar Association Board of Directors. Newmeyer was elected to the Board for a three-year term beginning January 2017 and will be installed during the OCBA Judges’ Night & Annual Meeting in January along with the 2017 Officers and other Board members.

“It’s an honor to be selected by my fellow OCBA members to represent their interests as a Board member,” said Tom Newmeyer. “As Director at Large, I will do my utmost to preserve and enhance the OCBA’s commitment to the members it serves.”

Tom Newmeyer is one of the founding partners of Newmeyer and Dillion LLP, which has grown from three attorneys in 1984 to over 70 lawyers in Newport Beach and Walnut Creek, California and Las Vegas, Nevada. Newmeyer has an active trial and appellate practice covering all areas of business litigation, including unfair competition, trade secrets, contract disputes, corporate and partnership dissolutions, trusts and estates, and labor and employment. He has extensive experience in representing clients in diverse areas including “green” technologies, subprime mortgages, internet and computer software, as well as real estate.

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 www.ndlf.com

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Oregon Court of Appeals Rules That Negligent Construction (Construction Defect) Claims Are Subject to a Two-Year Statute of Limitations

Thursday, October 20, 2016 — John P. Ahlers – Ahlers & Cressman PLLC

Statutes of limitations are distinct from statutes of repose. There is a lot of confusion between the two.

Generally, a statute of limitations is a law which sets the maximum period of time which one can wait before filing a lawsuit, depending on the type of case or claim. The periods vary by state and by type of claim. Most states also employ a “discovery rule,” which provides that the statute of limitations does not “accrue” until such time as the plaintiff knew or should have reasonably known that the injury or property damage has occurred.

Reprinted courtesy of John P. Ahlers, Ahlers & Cressman, PLLC

Mr. Ahlers may be contacted at jahlers@ac-lawyers.com

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Top 600 Specialty Contractors Had a Good Year

October 20, 2016 — Gary J. Tulacz – Engineering News-Record

The construction market has been growing steadily for the past six years, and, for large specialty contractors, things are looking up. But there are some clouds on the horizon, such as staff shortages in the field and in management and uncertainties about the upcoming presidential election. However, right now, specialty contractors have a lot to be pleased about.

Mr. Tulacz may be contacted at tulaczg@enr.com


Matthew May Cost Insurers as Much as $8.8 Billion, AIR Says

October 20, 2016 — Oliver Suess – Bloomberg

Hurricane Matthew, which devastated parts of the Caribbean before battering the U.S. East Coast, may cost insurers as much as $8.8 billion, according to AIR Worldwide.

Insured losses range from $2.2 billion to $6.8 billion for the U.S. and from $600 million to $2 billion for the Caribbean, the catastrophe-modeling firm estimates.


Construction Innovation Workshop Opens in Boston

October 20, 2016 — Johanna Knapschaefer – Engineering News-Record

Fifteen guest builders-in-residence are taking advantage of new workshop and design space in Boston’s Seaport Innovation District. The space is devoted to experiments in futuristic building technologies, materials and techniques.

You may contact ENR at enr.com@bnpmedia.com


Webinar: Construction Defect Claims: And the Walls Came Tumbling Down

October 20, 2016 — Beverley BevenFlorez – CDJ Staff

Lorman presents a live webinar that focuses on “why defects occur, how they can be prevented and who is responsible when defects happen.” Attorneys Jason J. Quintero and Mark A. Smith of Carlton Fields will be teaching the course. After attending the webinar, participants should be able to describe commercial general liability insurance, discuss notice and timing, explain what is and what is not a construction defect, and review identification and evaluation – inspection and analysis.

December 14, 2016
1:00 – 2:30 pm EST
Live Webinar

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Colorado Court of Appeals Defines “Substantial Completion” for Subcontractors’ Work so as to Shorten the Period of Time in Which They Can Be Sued

Thursday, October 20, 2016 — David M. McLain – Colorado Construction Litigation Blog

Over the past few years, there has been a battle raging on in district courts and arbitration hearing rooms throughout Colorado regarding when a subcontractor’s work is to be deemed “substantially complete,” for purposes of triggering Colorado’s six-year statute of repose. C.R.S. § 13-80-104 states, in pertinent part:

Notwithstanding any statutory provision to the contrary, all actions against any architect, contractor, builder or builder vendor, engineer, or inspector performing or furnishing the design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property shall be brought within the time provided in section 13-80-102 after the claim for relief arises, and not thereafter, but in no case shall such an action be brought more than six years after the substantial completion of the improvement to the real property, except as provided in subsection (2) of this section.

* * *

(2) In case any such cause of action arises during the fifth or sixth year after substantial completion of the improvement to real property, said action shall be brought within two years after the date upon which said cause of action arises.

C.R.S. § 13-80-104 (emphasis added).

As the battle raged on at the trial court level, subcontractors and design professionals argued that their work should be deemed “substantially complete” when they finished their discrete scope of work within a project. Developers and general contractors, seeking to maintain third-party claims against the subcontractors and design professionals, typically argued either that the subcontractors’ and design professionals’ work should be deemed “substantially complete” upon the issuance of the final certificate of occupancy on the project, or upon the issuance of the final certificate of occupancy for the last building within a project on which the subcontractor or design professional worked. Trial court judges and arbitrators have been split on this issue, with perhaps a slight majority favoring one or the other approaches advocated by developers and general contractors, that the subcontractors’ and design professionals’ work is “substantially complete” upon the issuance of the last certificate of occupancy in a project (the minority view) or upon the issuance of the last certificate of occupancy for the last building within a project on which the subcontractor of design professional worked (the majority view).

Reprinted courtesy of David M. McLain, Higgins, Hopkins, McLain & Roswell, LLC

Mr. McLain may be contacted at mclain@hhmrlaw.com

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Insurer Granted Summary Judgment on Faulty Workmanship Claim

Thursday, October 20, 2016 — Tred R. Eyerly – Insurance Law Hawaii

The federal district court found no coverage for the insured developer after water intruded into the homeowners' basements. W. Bend Mut. Ins. Co. v. Cleland Homes, 2016 U.S. Dist. LEXIS 108030 (N.D. Ind. Aug. 16, 2016).

The underlying complaint alleged that the subdivision was designed to create a run off of ground water onto the lots where Cleland built plaintiffs' homes. The design of the subdivision and construction of the homes was defective in that the plaintiffs' homes were situated so that the water table underneath their homes was so high that their basements flooded and damage occurred to the structure of their homes. Cleland was allegedly negligent in designing and/or constructing the homes or negligent in the water drainage plan for the subdivision.

Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii

Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Economic Loss Doctrine Bars Negligence Claim Against Building Company Owner, Individually

Thursday, October 20, 2016 — Michael L. DeBona – The Subrogation Strategist

In Beaufort Builders, Inc. v. White Plains Church Ministries, Inc., 783 S.E.2d 35 (N.C. Ct. App. 2016), the Court of Appeals of North Carolina addressed whether the economic loss rule barred the negligence claim of White Plains Church Ministries, Inc. (White Plains) against Charles F. Cherry (Cherry), the owner of Beaufort Builders, Inc. (Beaufort Builders). The court held that, because the economic loss rule would bar White Plains’ negligence claims against Beaufort Builders, White Plains could not pursue a third-party negligence claim against Cherry, individually.

Reprinted courtesy of Michael L. DeBona, White and Williams LLP

Mr. DeBona may be contacted at debonam@whiteandwilliams.com

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Is Performance Bond Liable for Delay Damages?

Thursday, October 20, 2016 — David Adelstein – Florida Construction Legal Updates

There is an argument that a performance bond is not liable for delay damages UNLESS the bond specifically allows for the recovery of such damages. Keep this in mind when requiring a performance bond so that the bond covers the associated risks (and damages) you contemplate when requiring the bond. This argument is supported by the Florida Supreme Court’s 1992 decision in American Home Assur. Co. v. Larkin General Hosp., Ltd., 593 So.2d 195, 198 (Fla. 1992):

The language in the performance bond, construed together with the purpose of the bond, clearly explains that the performance bond merely guaranteed the completion of the construction contract and nothing more. Upon default, the terms of the performance bond required American [performance bond surety] to step in and either complete construction or pay Larkin [obligee] the reasonable costs of completion. Because the terms of the performance bond control the liability of the surety, American’s liability will not be extended beyond the terms of the performance bond. Therefore, American cannot be held liable for delay damages.

However, the Eleventh Circuit in National Fire Ins. Co. of Hartford v. Fortune Const. Co., 320 F.3d 1260(11th Cir. 2003), also analyzing an issue relating to the recoverability of delay-type damages against a performance bond, did not narrowly interpret the Florida Supreme Court’s decision in Larkin General Hospital.

Reprinted courtesy of David Adelstein, Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.

Mr. Adelstein may be contacted at dma@katzbarron.com

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Civil RICO Case Against Johnny Doc Is Challenging

Thursday, October 20, 2016 — Wally Zimolong – Supplemental Conditions

News that a non-union contractor had filed a Lawsuit against IBEW Local 98 and its leader, John Dougherty, made headlines this week. While making fodder for local media, the plaintiffs must bound several legal hurdles before IBEW Local 98 and “Johnny Doc” face any threat of liability.

Background on RICO

The lawsuit was filed under a set of laws known as the Racketeer Influenced and Corrupt Organizations Act (RICO). I have written about RICO’s impact on labor unions on this blog before and predicted that recent federal court cases made RICO claims against more viable. RICO is a Nixon era set of laws that were originally passed to combat organized crime. There is both a civil and criminal component to RICO. (Interestingly, the RICO act remained relatively dormant until then U.S. Attorney Rudy Giuliani began effectively using it to prosecute the mob in the 1980’s.) Although recent decisions have made RICO claims against unions more viable, any RICO claim is still challenging. Indeed, some courts require a plaintiff in civil RICO cases to file a separate RICO case statement detailing its allegations. RICO claims are powerful. Some have called RICO claims a “thermonuclear” litigation device because the law permits the award of trebel (triple) damages and attorneys fees.

Reprinted courtesy of Wally Zimolong, Zimolong LLC

Mr. Zimolong may be contacted at wally@zimolonglaw.com

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“You’re Out of Here!” -- CERCLA (Superfund) Federal Preemption of State Environmental Claims in State Courts

Thursday, October 20, 2016 — Joshua J. Anderson & John E. Van Vlear – Newmeyer & Dillion LLP

The Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C § 9601 et seq. (“CERCLA”), commonly referred to as “Superfund,” is a federal statute
that provides funding and cost-recovery to address our nation’s worst hazardous-waste
sites. While CERCLA generally vests United States District Courts with exclusive original
jurisdiction over all related controversies, section 113(h) of the Act delays such jurisdiction
while the United States Environmental Protection Agency supervises or undertakes
environmental response action plans. What impact does this delayed federal jurisdiction
have on state law claims brought in state courts? Short answer: “You’re out of here!”
Litigants are precluded from bringing claims in state court that “challenge” environmental
response actions under CERCLA during the pendency of those actions.

Reprinted courtesy of Joshua J. Anderson, Newmeyer & Dillion LLP and John E. Van Vlear, Newmeyer & Dillion LLP
Mr. Anderson may be contacted at joshua.anderson@ndlf.com
Mr. Van Vlear may be contacted at john.vanvlear@ndlf.com

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Hurricane Matthew Aftermath


Appellate Court Reinforces When the Attorney-Client Relationship Ends for Purposes of “Continuous Representation” Tolling Provision of Legal Malpractice Statute of Limitations

Thursday, October 20, 2016 — Stephen J. Squillario & David W. Evans – Haight Brown & Bonesteel, LLP

In Gotek Energy, Inc. v. Socal IP Law Group, LLP (No. B26668, October 12, 2016), the Second District Court of Appeal held that rather than the date on which a client file is transferred to new counsel, the attorney-client relationship ends for statute of limitations purposes when, using an objective standard, there is no “ongoing mutual relationship” nor evidence of “activities in furtherance of the relationship.” (Emphasis in opinion.)

Reprinted courtesy of Stephen J. Squillario, Haight Brown & Bonesteel LLP and David W. Evans, Haight Brown & Bonesteel LLP
Mr. Squillario may be contacted at ssquillario@hbblaw.com
Mr. Evans may be contacted at devans@hbblaw.com

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CSLB’s Military Application Assistance Program

Thursday, October 20, 2016 — Garret Murai – California Construction Law Blog

Who knew? I didn’t.

Military Applicants, with Proper Forms, Move to Front of Line for Contractor License Processing

SACRAMENTO – The Contractors State License Board (CSLB) salutes U.S. military personnel for their service and offers expedited application processing by specially trained staff to veterans seeking to become licensed contractors. Unfortunately, not all veterans applying for California contractor licenses are able to take advantage of this opportunity because they do not submit the forms required for this service.

Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP

Mr. Murai may be contacted at gmurai@wendel.com

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Did You Get a Notice of Mechanic’s Lien after Project Completion? Don’t Panic!

Thursday, October 20, 2016 — Christopher G. Hill – Construction Law Musings

So, you own a piece of property. You decided to have some work done and after what you thought was proper due diligence, you hire a general contractor to build a great office building on the property. Your architect designs the space, you sign the construction contract for a price you find fair and that the bank approves. Construction starts and with a few minor hiccups, a couple of written changes and one minor but slightly annoying change required by the local building inspector, completes relatively on schedule. You write the final check to the general contractor for its final draw and start the process of leasing the space out. All is right with the world as best you can tell.

A month later, you walk to your mailbox and lo and behold, you have a certified mailing containing a notice that the plumbing subcontractor has recorded a mechanic’s lien on your property. After counting to 10 to let the various emotions pass, you call the general contractor to see what is going on. You’re told that there is a dispute regarding a change order about which you knew nothing and that the general contractor feels it is in the right and should not have to pay the money represented in the memorandum of lien so it won’t be paying the subcontractor unless and until it is told to do so by a court or an arbitrator.

Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill, PC

Mr. Hill may be contacted at chrisghill@constructionlawva.com

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What Do I Do With This Stuff? Dealing With Abandoned Property After Foreclosure

Thursday, October 20, 2016 — Lyndsey Torp – Snell & Wilmer Real Estate Litigation Blog

You’ve successfully foreclosed on a commercial building in California, and, thankfully, the borrower moved out after foreclosure or after a period of tenancy. But the borrower left behind all sorts of property – furniture, filing cabinets, records, and other assorted property. While you may be tempted to just toss it all in the dumpster, doing so may subject you to liability. There are several statutes that you should consider when determining how to handle the abandoned property.

Statutory Options for a Landlord

A landlord-tenant relationship may arise following foreclosure if, for example, the owner of the property accepts rent from the former owner. If the tenant subsequently turns over possession of the commercial property but leaves personal property at the premises,[1] California Civil Code provides a landlord with statutory options to deal with “lost” (Cal. Civ. Code § 2080) or “abandoned” property (Cal. Civ. Code §1993).

Reprinted courtesy of Lyndsey Torp, Snell & Wilmer

Ms. Torp may be contacted at ltorp@swlaw.com

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Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

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