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Until now, no court has addressed when a project owner is permitted to raise a Business and Professions Code section 7031 claim against a contractor.

Court Holds That One-Year SOL Applies to Disgorgement Claims Under B&P Section 7031

Monday, November 23, 2020 — Garret Murai - California Construction Law Blog

We’ve talked before about Business and Professions Code section 7031 which courts have referred to as “harsh[ ],” “unjust[ ]” and even “draconian.” Under Section 7031, a contractor performing work requiring a contractor’s license, but who doesn’t: (1) is prohibited from suing to recover payment for work performed; and (2) is required to disgorge all money paid by the project owner for work performed. This is true even if the project owner knew that the contractor was unlicensed, the contractor was only unlicensed during part of the time it performed work requiring a license, and even if the work performed by the contractor was free of defects. In short, it’s the nuclear bomb of remedies against a contractor.

However, until now, no court has addressed when a project owner is permitted to raise a Business and Professions Code section 7031 claim against a contractor. In the next case, Eisenberg Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction Company, Inc., Case No B297247 (August 26, 2020), the 2nd District Court Appeal finally answers this question.

Reprinted courtesy of Garret Murai, Nomos LLP

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

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The Woodbridge II court reasoned a claimants’ acknowledgement or recognition of an owner’s title alone is insufficient to defeat “adverse use” in the prescriptive easement context.

Woodbridge II and the Nuanced Meaning of “Adverse Use” in Hostile Property Rights Cases in Colorado

Monday, November 23, 2020 — Luke Mecklenburg - Snell & Wilmer Real Estate Litigation Blog

Earlier this year, the Colorado Court of Appeals issued an opinion addressing at length “whether the requirement that the use be ‘adverse’ in the adverse possession context is coextensive with adverse use in the prescriptive easement context.” See Woodbridge Condo. Ass’n, Inc. v. Lo Viento Blanco, LLC, 2020 COA 34 (Woodbridge II), ¶ 2, cert. granted, No. 20SC292, 2020 WL 5405376 (Colo. Sept. 8, 2020). As detailed below, the Woodbridge II court concluded that the meanings of “adverse” in these two contexts are not coextensive—while “hostility” in the adverse possession context requires a claim of exclusive ownership of the property, a party claiming a prescriptive easement is only required to “show a nonpermissive or otherwise unauthorized use of property that interfered with the owner’s property interests.” Thus, the Woodbridge II court reasoned a claimants’ acknowledgement or recognition of an owner’s title alone is insufficient to defeat “adverse use” in the prescriptive easement context.

This significant ruling is at odds with a prior division’s broad statement, while considering a prescriptive easement claim, that “[i]n general, when an adverse occupier acknowledges or recognizes the title of the owner during the occupant’s claimed prescriptive period, the occupant interrupts the prescriptive use.” See Trask v. Nozisko, 134 P.3d 544, 553 (Colo. App. 2006). Perhaps for that reason, Woodbridge II is currently pending certiorari review before the Colorado Supreme Court in a case that should provide some much-needed clarity on what constitutes “adverse use” in the context of a prescriptive easement. As we await the Colorado Supreme Court’s decision, I thought it worthwhile to provide a brief analysis of the Woodbridge II court’s deep dive into the nuances of “adverse use” in this field of Colorado law.

Reprinted courtesy of Luke Mecklenburg, Snell & Wilmer

Mr. Mecklenburg may be contacted at lmecklenburg@swlaw.com

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The Washington government will be tracking construction site statistics over the next 2 to 3 weeks to see if additional restrictions will be necessary.

Update to Washington State Covid-19 Guidance

Monday, November 23, 2020 — Brett M. Hill - Ahlers Cressman & Sleight PLLC

Yesterday, November 15, 2020, Governor Inslee announced modifications to the current COVID-19 restrictions in response to the current rise in cases across Washington State.

There are no additional restrictions on construction at this time. However, during the Governor’s press conference yesterday, he did indicate that positive cases were increasing on construction sites, and that they would be tracking the statistics over the next 2 – 3 weeks – to see if additional restrictions would be necessary for construction sites in the future. Additionally, the construction industry group is meeting with the Governor’s office today, November 16, 2020, and we will keep you informed of any changes as a result of that meeting.

Unless otherwise specifically noted, the modifications take effect at 12:01 a.m., Tuesday, November 17, 2020. All modifications to existing prohibitions set forth herein shall expire at 11:59 p.m., Monday, December 14, 2020, unless otherwise extended. If an activity is not listed below, currently existing guidance shall continue to apply. If current guidance is more restrictive than the below listed restrictions, the most restrictive guidance shall apply. These below modifications do not apply to education (including but not limited to K-12, higher education, trade and vocational schools), childcare, health care, and courts and judicial branch-related proceedings, all of which are exempt from the modifications and shall continue to follow current guidance. Terms used in this proclamation have the same definitions used in the Safe Start Washington Phased Reopening County-by-County Plan.

Reprinted courtesy of Brett M. Hill, Ahlers Cressman Sleight PLLC

Mr. Hill may be contacted at brett.hill@acslawyers.com

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ABC Launches Tech Alliance to Help Contractors Transform the Construction Process

November 23, 2020 — Associated Builders and Contractors, Inc. - Construction Executive

Associated Builders and Contractors announced the launch of its inaugural Tech Alliance—a consortium of firms that create construction technology and innovative digital solutions for ABC contractor members, the majority of which are classified as small businesses and primarily perform work in the industrial and commercial sectors. Consisting of 13 companies, the Tech Alliance will leverage technology solutions to help ABC members develop people, win work and deliver work safely, ethically and profitably for the betterment of the communities in which they work.

“The need for technological solutions—both big and small—in the construction industry is clear, especially given changing work conditions during the COVID-19 pandemic,” said Matt Abeles, ABC’s vice president of construction technology and innovation. “I look forward to the exceptional products, education and dialogue the Tech Alliance companies will bring to ABC members and our evolving industry, especially as we continue to implement technology to revolutionize the design, build and delivery process.

Reprinted courtesy of Associated Builders and Contractors, Inc., Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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Beyond General Liability Insurance: Other Liability Exposures to Be Aware Of

November 23, 2020 — Jeffrey Cavignac - Construction Executive

Every contractor of any size likely carries commercial general liability insurance. Not only is it prudent to carry, nearly all contracts require it. Auto liability and employers liability (part of a workers' compensation policy) are also mandatory in most agreements. There are, however, a number of other liability exposures that exist for a construction company and should be evaluated and considered.

Reprinted courtesy of Jeffrey Cavignac, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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U.S. Housing Starts Increased More Than Forecast in October

November 23, 2020 — Henry Ren - Bloomberg

U.S. new home construction rose in October by more than forecast to the fastest pace since February, highlighting a robust residential real estate market that’s helping spur the economy.

Residential starts increased 4.9% to a 1.53 million annualized rate from an upwardly revised 1.46 million a month earlier, according to a government report released Wednesday. The median forecast in a Bloomberg survey of economists called for a 1.46 million pace.

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AGC WebEd: 2021 Construction Economic Look Ahead

November 23, 2020 — Beverley BevenFlorez – CDJ Staff

This one-hour webinar presented by the Associated General Contractors of America (AGC) will cover the following topics:

  • Trends in Construction activity across the Country.
  • Which states are recovering and which are not.
  • What sectors and verticals have been impact`ed most.
  • Deep Dive into the key metro area activity.
  • What this means for 2021.

December 3rd, 2020
Webinar

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Attorney Christopher G. Hill presents five reasons that every construction case should at least be submitted for mediation.

Because I Haven’t Mentioned Mediation Lately. . .

Monday, November 23, 2020 — Christopher G. Hill - Construction Law Musings

Any regular reader of Construction Law Musings knows that I am both a great believer in mediation and a certified Virginia mediator. After the last few weeks in which I participated in mediation by Zoom, a Judicial Settlement Conference (read, court-ordered mediation with a retired judge), and will be participating in another mediation in person next week, it seems as if others believe in the process as well.

After all of this mediation activity, all of which related to construction project-related disputes, I am more convinced than ever that almost every construction case should at least be submitted for mediation. The list below gives my reasons for saying this:

  1. The parties are in control. In litigation or arbitration, the parties present their evidence to a third party or parties with no familiarity with the “boots on the ground” reality of the construction project at issue. This third party gives a cold review of what evidence court rules allow them to consider and gives a final ruling that one side “wins” and the other side “loses.” This decision has monetary consequences for the losing party, not the least of which is a large attorney fee bill after potentially several years of legal wrangling. With mediation, those closest to the project, the parties, can say what they want, present what they feel to be the best case, and work for a solution. The solution can be flexible and allow the two sides to reach a business decision that is at least better than a large monetary judgment against one of the parties that is only further enforceable in court.
Reprinted courtesy of The Law Office of Christopher G. Hill

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

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Frightened man with liferaft sinking in water asking for help

Attorneys Stephen M. Tye and Lawrence S. Zucker II discuss RGC Gaslamp v. Ehmcke Sheet Metal Co.

Litigation Privilege Saves the Day for Mechanic’s Liens

Monday, November 23, 2020 — Stephen M. Tye & Lawrence S. Zucker II - Haight Brown & Bonesteel

In RGC Gaslamp v. Ehmcke Sheet Metal Co., the Fourth Appellate District held that a trial court properly granted an anti-SLAPP motion because the recording of a mechanic’s lien is protected by the litigation privilege.

In RGC Gaslamp, subcontractor Ehmcke Sheet Metal Company (“Ehmcke”) recorded a mechanic’s lien to recoup payment due for sheet metal fabrication and installation done at a luxury hotel project in downtown San Diego. Project owner RGC Gaslamp, LLC (“RGC”) recorded a release bond for the lien. Thereafter, Ehmcke recorded three successive mechanic’s liens identical to the first, prompting RGC to sue it for quiet title, slander of title, and declaratory and injunctive relief. After retaining California counsel, Ehmcke then released its liens and advised it did not intend to record any more. Ehmcke then filed a special motion to strike under the anti-SLAPP statute (Code Civ. Proc. § 425.16.) which was granted.

Reprinted courtesy of Stephen M. Tye, Haight Brown & Bonesteel LLP and Lawrence S. Zucker II, Haight Brown & Bonesteel LLP

Mr. Tye may be contacted at stye@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com


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Florida’s Uniform Trade Secret Act defines the terms “trade secret” and “misappropriation.”

Quick Note: Steps to Protect and Avoid the “Misappropriation” of a “Trade Secret”

Monday, November 23, 2020 — David Adelstein - Florida Construction Legal Updates

Florida’s Uniform Trade Secret Act (included in Florida Statute s. 688.001 en seq.) defines the terms “trade secret” and “misappropriation.” These definitions (found here) are important in that just because 1) we deem something a trade secret does not, in of itself, make it so, and 2) we deem someone to have misappropriated a trade secret does not, in of itself, make it so.

If a party deems something to be a trade secret they should identify the document or paper as “confidential trade secret” as the first-step in preserving the confidentiality of that information. The party should also consider entering into an agreement with the party that may receive that information to maximize the protection of such confidential trade secret information during the parties’ agreement.

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

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

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A pile of money bills

Attorney Craig Rokuson analyzes DeLuca v. RLI Insurance Company.

New York’s Second Department Holds That Carrier Must Pay Judgment Obtained by Plaintiff as Carrier Did Not Meet Burden to Prove Willful Non-Cooperation

Monday, November 23, 2020 — Craig Rokuson - Traub Lieberman

In the recent case of DeLuca v. RLI Insurance Company, 2020 WL 5931054 (October 7, 2020), the Supreme Court, Appellate Division, Second Department held that RLI had a duty to pay a judgment obtained by an underlying plaintiff against RLI’s insured, MLSC. The underlying plaintiff brought the action directly against the carrier after obtaining a judgment against MLSC, and when the judgment remained unsatisfied, serving RLI with the judgment. As an initial matter, the court found that the direct action by the plaintiff was proper under New York Insurance Law 3420(a), which allows for an injured plaintiff to maintain a direct action against a carrier if a judgment against that carrier’s insured remains unsatisfied for a period of 30 days and the carrier is served with that judgment. In that event, the plaintiff steps into the shoes of the insured and is entitled to the rights of the insured (and is also subject to the carrier’s coverage defenses).

Reprinted courtesy of Craig Rokuson, Traub Lieberman

Mr. Rokuson may be contacted at crokuson@tlsslaw.com

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This directive implements Executive Order 13924, and includes a comprehensive list of “best practices” that should be employed in their administrative enforcement and adjudicative actions.

OIRA Best Practices for Administrative Enforcement and Adjudicative Actions

Monday, November 23, 2020 — Anthony B. Cavender - Gravel2Gavel

On March 2, 2020, the Environmental Protection Agency revised its “On-Site Civil Inspection Procedures” in accordance with Executive Order 13892 . (The rules are located at 40 CFR Part 31.) These rules set forth the components of an appropriate inspection procedure. Briefly, the rules require that, after the inspector’s credential are made available, the object of the inspection will be discussed (and most inspections will be held during regular working hours), consent to enter must be obtained, there should be an opening and a closing conference with facility representatives, safety protocols must be observed, confidential business information must be protected, and there will be an opportunity for split sampling. Once the report is completed, it will be shared with the facility.

A few months later, on August 31, 2020, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) circulated a memo to the heads of all federal agencies to implement the principles of fairness in administrative enforcement and adjudication. This directive implements Executive Order 13924, and includes a comprehensive list of “best practices” that should be employed in their administrative enforcement and adjudicative actions. Briefly, these best practices (which are framed in broad terms) are:

1. The government has the burden of proving a violation of the rules or other authorities;

Reprinted courtesy of Anthony B. Cavender, Pillsbury

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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The civil settlement arose from a whistleblower’s lawsuit under the False Claims Act.

NY Estimating Consultant Settles $3.1M Government Project Fraud Case

Monday, November 23, 2020 — Eva Fedderly - Engineering News-Record

VJ Associates, a Hicksville, N.Y., estimating consultant, has agreed to pay $3.13 million in civil and criminal penalties to settle charges that the firm overbilled and falsified hours on multiple federal and state government-funded transportation and other contracts in New York and Massachusetts, the U.S. Attorney's office in Boston announced on Oct. 29.

Reprinted courtesy of Eva Fedderly, Engineering News-Record

ENR may be contacted at ENR.com@bnpmedia.com

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Woman Arraigned for Crash That Killed 2 Construction Workers On I-94

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Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal experience.

White and Williams Earns Tier 1 Rankings from U.S. News "Best Law Firms" 2021

Monday, November 23, 2020 — White and Williams LLP

White and Williams has achieved national recognition from U.S. News and World Report as a "Best Law Firm" in the practice areas of Insurance Law, Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law and Media Law. Our Delaware, New York and Philadelphia offices have also been recognized in their respective metropolitan regions in several practice areas. Firms included in the “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal experience.

Reprinted courtesy of White and Williams LLP

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Two businessman at desk with contract

The teaming agreement allows for information to be confidentially shared where the subcontractor agrees that it will only pursue the solicitation with the prime contractor.

Teaming Agreements- A Contract to Pursue a Solicitation and Negotiate

Monday, November 23, 2020 — David Adelstein - Florida Construction Legal Updates

Teaming agreements are practical and useful agreements on public projects where a prime contractor teams with a subcontractor for purposes of submitting a bid or proposal in response to a solicitation. The prime contractor and subcontractor work together to pursue that solicitation and have the government award the contract to the prime contractor. The teaming agreement allows for information to be confidentially shared (estimating and pricing, construction methodologies, systems, and suggestions, value engineering, etc.) where the subcontractor agrees that it will only pursue the solicitation with the prime contractor. In other words, the subcontractor ideally is not going to submit pricing to another prime contractor proposing or bidding on the same project and is not going to share information the prime contractor has furnished to it. Likewise, the prime contractor is not going to use the subcontractor’s information for purposes of finding another subcontractor at a lower price and is agreeing to use its good faith efforts or best attempts to enter into a subcontract with the subcontractor if it is awarded the project. This is all memorialized in the teaming agreement.

The potential problem lies with language that requires the parties to use their good faith efforts or best attempts to enter into a subcontract if the project is awarded to the prime contractor. In essence, this can become a disfavored “agreement to agree” to a future contract that could allow either party to create an argument to back out of the deal under the auspice that they could not come to terms with the subcontract.

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

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

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Gold scales of justice

In one of the first cases to consider producer liability in COVID-19 cases, Judge Eduardo Robreno dismissed the lawsuit against the producer and the carrier.

Court Holds That Insurance Producer Cannot Be Liable for Denial of COVID-19 Business Interruption Claim

Monday, November 23, 2020 — Christopher P. Leise & Marc L. Penchansky - White and Williams LLP

After an insurance carrier denied a lawyer and her law firm’s claim for lost business income due to the COVID-19-related shutdown, she sued both her carrier and the insurance producer that procured the policy. See Wilson v. Hartford Casualty Company, No. 20-3384 (E.D.Pa. Sep. 30, 2020). In one of the first cases to consider producer liability in COVID-19 cases, Judge Eduardo Robreno dismissed the lawsuit against the producer and the carrier.

USI procured the Policy from Hartford for Rhonda Hill Wilson and her law firm. The Policy included coverage for lost business income and extra expense caused by direct physical loss of, or damage to property. Similarly, the Policy covered lost business income if a nearby property experienced a direct physical loss that caused a civil authority to issue an order that prohibited access to the law firm’s property. The Policy also included a virus exclusion “for loss or damage caused directly or indirectly by . . . [p]resence, growth, proliferation, spread or any activity of . . . virus.”

Judge Robreno did not decide whether the Policy afforded any coverage to Wilson and her law firm for their COVID-19 losses. Rather, he found that even if they could, the virus exclusion unambiguously barred any coverage they could possibly claim. For that reason, Judge Robreno dismissed the claims against Hartford.

Reprinted courtesy of Christopher P. Leise, White and Williams LLP and Marc L. Penchansky, White and Williams LLP
Mr. Leise may be contacted at leisec@whiteandwilliams.com
Mr. Penchansky may be contacted at penchanskym@whiteandwilliams.com



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Broken wooden bridge over background of stormy clouds

Something is needed beyond incremental change that will truly disrupt the industry, increase the value of other innovations and tackle industry challenges.

Disrupt a Broken Industry—The Industrial Construction Sandbox

Monday, November 23, 2020 — Brian Sayre - Construction Executive

The existing built environment structure—arguably—is antiquated and must be disrupted to meet the rapidly changing demands of the industry. The built environment struggles with labor shortages, addressing demand, sustainability needs, cost controls, affordability and efficiency gains. Even with the advancement of emerging technology trends, the construction industry still lags behind more technologically advanced verticals.

What’s missing? Something is needed beyond incremental change that will truly disrupt the industry, increase the value of other innovations and tackle industry challenges.

The answer is industrialized construction technology with offsite manufacturing as the cornerstone. Technology innovation becomes exponentially more valuable when placed in this context. Shadow Ventures, a venture capital firm focused on the built environment, set out to test these theories with verifiable research published this year in a report titled, “Disrupt a Broken Industry—The Industrial Construction Sandbox.”

Reprinted courtesy of Brian Sayre, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.



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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

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