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The AIA Releases 2007 Editions of Its Construction Contract Forms Amid Competition from Upstart “ConsensusDOCS” Forms.

By Mathew R. Troughton For the first time in a decade, the American Institute of Architects (“AIA”) revised several of the key standard forms of contract it publishes for use on construction projects.  The various AIA forms are widely used as the starting point for negotiating the terms of contracts between various project participants.  The … Continue Reading

Court Of Appeal Finds That A Tolling Agreement Between An HOA And Developer Tolls The Applicable Statute Of Limitations Even As To A Non-Party Subcontractor.

Landale-Cameron Court, Inc. v. Ahonen (Oct. 10, 2007, B190309 [2nd Dist., Div. 2]), ___ Cal. App. 4th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions By Thomas B. Snyder and Andriana Ledesma In Landale?Cameron, the homeowner’s association of a condominium complex ("HOA"), discovered various water leaks to the building and subsequently sued the builder-developers Arnold and Helen Kaufman ("Kaufman") and Petri … Continue Reading

Federal Arbitration Act Preempts Contrary California Law and Prevents Purchaser of Real Property from Bringing an Action in Court for Construction and Design Defects

Shepard v. Edward Mackay Enterprises, Inc., et al., — Cal. Rptr. 3d —, No. C052564, 2007 WL 853456 (Cal. Ct. App. Mar. 22, 2007) While Section 1298.7 of the California Code of Civil Procedure generally allows homebuyers to pursue defect litigation in court regardless of an agreement to arbitrate, the Third District Court of Appeal … Continue Reading

A Public Entity’s Determination That A Subcontractor Could Be Substituted Under Public Contracts Code Section 4107 Is Denied Preclusive Effect In Subsequent Litigation

Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4th By Thomas B. Snyder In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD").  It subcontracted the electrical work to Titan Electric on both projects.  Partway through performance, Titan began to struggle with its … Continue Reading

California Department of Industrial Relations Expands Prevailing Wage Coverage

By Richard M. Freeman In December, 2006, the Departmentf Industrial Relations adopted a new, official position which could adversely affect the real estate development and construction community.  Its new position is that any type of public subsidy, waiver of permitting fees, discount or assistance from a public body to a developer does not have to … Continue Reading

Clean Water Act Regulations Do Not Require Numeric Testing Of Individual Pollutants Or Numeric Effluent Limitations For Industrial Stormwater Discharges

Divers’ Environmental Conservation Organization v. State Water Resources Control Board (Nov. 29, 2006, D046112) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions By Ella Foley-Gannon and Julie Austin The Court of Appeals held that a permitting agency under the Clean Water Act is not required to conduct a numeric analysis of individual pollutants in industrial stormwater discharges in order to comply … Continue Reading

Contract Clause Requiring Contractor To Continue Performing Work During Pendency Of Dispute

Barton Properties, Inc. v. Superior Gunite Corp., California Court of Appeal, Second Appellate District (not officially published) In an unpublished decision, Barton Properties, Inc. v. Superior Gunite Corp, the Second Appellate District of the California Court of Appeal has held that a “continued performance” clause in a construction contract was rendered unenforceable by the owner’s … Continue Reading

A Cautionary Tale On Relying On Advice From Commission Staff

A Summary of Benson v. California Coastal Commission (2006) 139 Cal. App. 4th 348 By Brenna Moorhead "Predictions and suggestions from staff may be helpful or misleading to a party with a matter before the Coastal Commission. Therefore a party should take such advice with caution." (Id. at 348.) John Benson alleged a due process violation by … Continue Reading

California Supreme Court Limits Pre-Election Challenges to Ballot Initiatives

California courts generally should defer judicial review of ballot initiatives until after the election, the state Supreme Court reaffirmed last week in a holding that limits the scope of pre-election review. The unanimous opinion in Independent Energy Producers Ass’n v. McPherson, S135819 (2006), emphasizes that courts should consider the availability and adequacy of post-election relief in … Continue Reading

Labor Through Contract Theory of Sanctions Liability

On May 8, 2006, Immigration and Customs Enforcement (“ICE”) arrested 76 undocumented workers and 4 construction site managers at Fischer Homes, Inc. worksites in Kentucky. Fischer and its managers were charged criminally with harboring and transporting undocumented workers for financial gain. Tax investigators were also involved. On May 2, 2006, ICE carried a similar operation … Continue Reading

Court Of Appeal Holds That The Privette Doctrine Applies Not Only To Employees Of A Contractor, But Also To Independent Contractors Hired By The Contractor

Michael v. Denbeste Transportation, Inc. California Court of Appeal, Second Appellate District By Robert T. Sturgeon Defendant Denbeste Transportation, Inc. hired plaintiffDavid Michael as an independent contractor to haul hazardous waste from a construction site. Michael was injured when he fell from his truck while attempting to roll a tarp over the top of the trailer … Continue Reading

New Legislation Affects Allocation of Risk in Residential Construction Contracts

New Legislation Creates Additional Carve-out By Candace Matson Legislation effective January 1, 2006 (AB 758), amending California Civil Code §2782, creates a further exception to parties’ ability to negotiate indemnity terms in construction agreements. AB 758 has been touted as addressing the “insurance crisis” of residential subcontractors. Some opine that, viewed in conjunction with SB … Continue Reading

California LLC Fee Unconstitutional; Filing Protective Claim For Refund

California LLC Fee Unconstitutional The limited liability company fee imposed under California law recently was held to be unconstitutional according to the court in Northwest Energetic Services, LLC v. California Franchise Tax Board (Super. Ct. San Francisco County, 2006, No. CGC-05-437721). The decision states that the graduated fee imposed on the "total income" of an … Continue Reading

Appellate Court Finds That the Filing of a Stop Notice Is Potentially Subject to the Litigation Privilege if Made in Good Faith Contemplation of Litigation

By Thomas B. Snyder In AF Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc., issued March 23, 2006, the Fourth Appellate District was faced with the question of whether an electrical supplier’s conduct in filing a stop notice fell within the ambit of C.C.P. § 425.16, the anti-Slapp statute.… Continue Reading

California Court Of Appeal Holds That A Contractor “Completes His Contract” Under Civil Code Section 3115

When The Owner Anticipatorily Breaches The Contract, And Therefore A Lien Recorded One Day After The Breach Is Not Premature Howard S. Wright Construction Co. v. BBIC Investors, LLC, California Court of Appeal, First Appellate District, 2006 DJDAR 1339 By Robert T. Sturgeon Cases concerning the timeliness of recording a mechanic’s lien generally concern the … Continue Reading

New Legislation Affecting Allocation Of Risk In Residential Construction Contracts

By Candace L. Matson Legislation effective January 1, 2006 (AB 758) creates a new exception to parties’ ability to negotiate indemnity terms in residential construction agreements. AB 758 amends California Civil Code Section 2782 to generally limit subcontractors’ indemnity obligations to builders in connection with construction defect claims on contracts entered into on or after … Continue Reading

California Court of Appeal Affirms That Certain Types of Public Contributions Do Not Make Development a “Public Work” Under Former Version of Statute

Greystone Homes, Inc. v. Cake37 Cal. Rptr. 3d 183 (2005) By Matthew W. Holder The California Court of Appeal recently affirmed a 2004 Supreme Court decision that impacts when prevailing wages need to be paid on projects where the contract was signed before January 1, 2001. At issue in Greystone Homes, Inc. v. Cake, 37 … Continue Reading

9th Circuit Preliminarily Enjoins Homebuilder From Using Copyrighted Drawings In Second Phase of A Development

By Robert T. Sturgeon In LGS Architects, Inc. v. Concordia Homes Of Nevada, 9th Circuit (January 11, 2006), the 9th Circuit reversed the district court’s denial of a motion for preliminary injunction. LGS, an architecture firm, had provided four copyrighted plans for Concordia’s construction of a development known as Arbor Glens I. LGS and Concordia … Continue Reading

California Supreme Court Holds Landowner May Be Liable For Injuries To Independent Contractor’s Employee When Landowner Fails To Warn Contractor Of Concealed Hazard

Kinsman v. Unocal Corp. 36 Cal. Rptr. 3d 495 (Dec. 19, 2005) The state Supreme Court ruled that a landowner who hires an independent contractor may be liable for injuries to the contractor’s employees if the landowner knew or reasonably should have known of a concealed hazardous condition, and the condition could not reasonably have … Continue Reading

Court Of Appeal Holds General Contractor Is Not Entitled To Indemnity From Subcontractors Under General Indemnity Clause Because General Contractor Was Actively Negligent

McCrary Construction Company v. Metal Deck Specialists, Inc., California Court of Appeal, First Appellate District, November 14, 2004 By Robert T. Sturgeon In McCrary, a general contractor sought indemnity from two of its subcontractors for damages arising from the death of a construction worker who fell through a hole in the metal roof of the … Continue Reading

Court Of Appeal Vacates $3 Million Arbitration Award Because Arbitrator Failed To Make Timely Disclosures

Ovitz v. Shulman California Court of Appeal, Fourth District. Decided October 26, 2005 By Robert T. Sturgeon The California Court of Appeal has vacated an arbitration award of over $3 million in damages and attorney’s fees on the grounds that the arbitrator failed to disclose that he would entertain offers to serve as an arbitrator … Continue Reading
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