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DIRECTORY AND CAPABILITIES

Where Standing, Mechanic’s Liens, and Bankruptcy Collide

September 17, 2018 — Christopher G. Hill - Construction Law Musings
I have spoken often about mechanic’s liens and the implications of such liens as they relate to bankruptcy here at Construction Law Musings. A recent case out of Loudoun County, Virginia added another wrinkle to this discussion, that of standing and what happens on conveyance of the property and what interest in the property is required to allow a party to seek removal of the mechanic’s lien. In Leesburg Bldg. P’rs LLC v. Mike Berger Inc. the Loudoun County Circuit Court faced the following scenario. Leesburg Building Partners developed certain condominiums and hired Lansdowne Construction to perform the work as general contractor and paid Landsdowne in full for the work. Lansdowne hired Mike Berger, Inc. (“MBI”) to perform concrete work for the project. Landsdowne didn’t pay MBI approximately $48,000.00 and subsequently filed for bankruptcy. MBI, seeking to protect it’s interest in the money it was owed, recorded a mechanic’s lien on the property. Leesburg Building Partners filed an action to declare the lien invalid and have it removed from the property based upon its “payment defense” and the fact that it had paid Landsdowne in full. A relatively simple scenario and one that has been discussed before here at Musings. Not so fast. . . Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Jinx: Third Circuit Rules in Favor of Teamsters in Withdrawal Case

July 28, 2018 — Wally Zimolong - Supplemental Conditions
Bad omen. Last week, I wrote about a Appeals Court decision that affirmed a contractor’s escape from an over $600,000 withdrawal liability assessment from the Laborers Union. The next day the Third Circuit (which covers PA, NJ, and DE) handed down a decision affirming a federal court’s decision to assess withdraw liability. This one shows the dark side of not reading and understanding your CBA. The belligerents in the litigation were, Penn Jersey, a construction material supplier, and Teamsters Local 676. Their collective bargaining agreement contained a clause purportedly covering withdrawal liability. Specifically, the clause stated “should the Employer withdraw from the Agreement in the future, there will be no withdrawal liability. The CBA expired and Penn Jersey did not renew its agreement with the Teamsters. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

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Does the Miller Act Trump Subcontract Dispute Provisions?

May 16, 2018 — Christopher M. Horton - Smith Currie
All general contractors performing public building or public works contracts with the federal government must be familiar with the Miller Act. It is a requirement for doing business with the federal government. Pursuant to the Miller Act, a general contractor entering into a public building or public works contract with the federal government must furnish a payment bond in an amount equal to the contract price, unless the contracting officer determines that it is impractical to obtain a bond in that amount and specifies an alternative bond amount. Miller Act payment bonds guarantee payment to certain subcontractors and suppliers supplying labor and materials to contractors or subcontractors engaged in the construction. As a result, subcontractors have an avenue of relief should they not get paid for work done on the project. Specifically, subcontractors have a right to bring an action against the surety within 90-days after the date on which the person did or performed the last labor or furnished or supplied the last of material for which the claim is made. Any such action must be brought no later than one year after the date on which the person did or performed the last labor or furnished or supplied the last of material. 40 United States Code § 3133. Read the court decision
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Reprinted courtesy of Christopher M. Horton, Smith Currie
Mr. Horton may be contacted at cmhorton@smithcurrie.com

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The Contingency Fee Multiplier (For Insurance Coverage Disputes)

September 10, 2018 — David Adelstein - Florida Construction Legal Updates
The contingency fee multiplier: a potential incentive for taking a case on contingency, such as an insurance coverage dispute, where the insured sues his/her/its insurer on a contingency fee basis. In a recent property insurance coverage dispute, Citizens Property Ins. Corp. v. Agosta, 43 Fla.L.Weekly, D1934b (Fla. 3d DCA 2018), the trial court awarded the insured’s counsel a contingency fee multiplier of two times the amount of reasonable attorney’s fees. The insurer appealed. The Third District affirmed the contingency fee multiplier. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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How Long Does a Civil Lawsuit Take?

August 14, 2018 — Bremer Whyte Brown & O’Meara
How long does a civil lawsuit take? One common question among parties to a civil lawsuit, whether a plaintiff or defendant, is how long will it take to reach a resolution? The answer is tricky. The time it takes to resolve a civil lawsuit is highly dependent on various factors including the complexity of the matter and the parties’ willingness to settle. At the outset, parties to a civil case may resolve the matter at any time by mutual agreement (i.e., settlement). In that case, the parties draft a Stipulation and Order outlining the terms of the agreed settlement and submit the document to the judge for approval. Absent of any glaring inequity in the terms of the Stipulation, the judge will typically approve of the parties’ settlement, and the matter will be deemed resolved (either in whole or in part, depending on the case, the terms of the settlement and indemnity agreement). Read the court decision
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Reprinted courtesy of Bremer Whyte Brown & O’Meara

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Construction Defects Checklist

July 18, 2018 — Bremer Whyte Brown & O’Meara
Construction defects have existed since humans first began building structures, and will continue to be an occurrence into the future. For builder developers, contractors, and subcontractors, the specter of construction defects is a constant worry. Construction defect litigation is commonplace and can occur years after the construction project has been completed. This opens up an ongoing channel of risk and liability for construction contractors and project managers that are at risk of litigation far after they have completed a project. In this article, we’ll provide a helpful construction defects checklist that outlines the key avenues of risk and areas where construction defects litigation is most often focused. This checklist can help project managers, contractors, and subcontractors anticipate areas of their projects that may need extra attention or focus in order to ensure that they adhere to relevant local and state construction ordinances. Gaining a greater understanding of what construction defects are can provide insight into how construction litigation can prove beneficial for structure owners or contractors who received substandard work. Many clients may not understand that they have an avenue to seek redress in cases where faulty workmanship may have resulted in economic damages or safety concerns in their home, building, or another construction project. Understanding the scope of what a construction defect is, and the areas that are most commonly litigated is helpful to understand when construction defect litigation is a viable option to pursue redress. Read the court decision
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Reprinted courtesy of Bremer Whyte Brown & O’Meara

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9th Circuit Closes the Door on “Open Shop” Contractor

September 04, 2018 — Garret Murai - California Construction Law Blog
At the height of the Great Depression nearly one-quarter of Americans were unemployed. In response, Congress enacted a series of laws including the Smoot-Hawley Tariffs Act, which raised tariffs on foreign goods in an effort to spur domestic investment and to increase the number of jobs. Sound familiar? Background The Davis-Bacon Act Among the new laws enacted by Congress was the Davis-Bacon Act which required contractors on federal works projects to pay their workers the wages prevailing in the area where a project was located, also known as “prevailing wages,” in an effort to stem the practice of employers bringing in lower-wage workers from outside the area. The same year that the Davis-Bacon Act was enacted, California enacted its own prevailing wage law modeled after the Davis-Bacon Act and applicable to state and local public works projects. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel, Rosen, Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

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Motion to Dismiss Insureds' Counterclaim on the Basis of Prior Knowledge Denied

September 04, 2018 — Tred R. Eyerly - Insurance Law Hawaii
The insurer unsuccessfully moved to dismiss portions of the insureds' counterclaim based upon prior knowledge. Hudson Spec. Ins. Co. v. Talex Enter., 2018 U.S. Dist. LEXIS 105598 (S. D. Miss. June 25, 2018). The insureds' building collapsed in McComb, Mississippi. Pubic utilities were damaged and traffic disrupted. The City sued the insured, alleging that the building collapsed because there was too much water gathered on its roof. The City further alleged that the insureds knew too much water was on the roof because they had been told by someone hired to clean the drain that it was clogged and by a contractor that the roof was so damaged that it could not safely be repaired. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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