Category Archives: Other

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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Inc. v. Superior Gunite Corp., California Court of Appeal, Second Appellate District (not officially published) In an unpublished decision, Barton Properties, Inc. v. Superior Gunite Corp, the Second Appellate District of the California Court of Appeal has held that a “continued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

California Supreme Court Clarifies That A Contractor Cannot Recover Any Compensation For Work Performed That Requires A Contractor’s License Unless The Contractor Was Licensed At All Times During The Performance Of The Work

MW Erectors, Inc. v. Niederhauser Ornamental and Metal Works Co., 30 Cal. Rptr. 3d 755 (2005) By Robert T. Sturgeon The California Supreme Court has clarified the rules under California Business & Professions Code section 7031 regarding an unlicensed contractor’s ability to recover compensation for performance of work which requires a contractor’s license.… Continue Reading

Criminal Penalties For Violating OSHA Standards

By Candace L. Matson and Kevin M. Rivera Safety is important to all of us, but did you know you could be subject to criminal penalties, as well as civil penalties, for violating standards set by the California Occupational Safety and Health Administration (OSHA)? These penalties include prison sentences of up to four years and … Continue Reading

Federal Circuit Court Rejects Claim That Contractor Violated The False Claims Act By Allegedly Submitting A Fraudulently Low Bid With The Intent Of Later Making Up For The Loss By Submitting Change Orders For Extra Work

United States ex. rel. Bettis v. Odebrecht Contractors of California, Inc. 393 F.3d 1321 (D.C. Cir. 2005) By Robert T. Sturgeon A contractor entered into a contract with the Army Corp of Engineers for construction of the Seven Oaks Dam in San Bernardino County, California. The plaintiff was an alleged “whistleblower” who worked for one … Continue Reading

California Court of Appeal Upholds Dismissal of Claims Based on Overbroad Prop 65 Notices

In Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America, et al., 129 Cal. App. 4th 540 (2005), the California Court of Appeal (2nd District) reviewed and rejected as invalid certain notices served by plaintiff Consumer Advocacy Group (CAG) on numerous hotels and retail establishments under Proposition 65. The court accordingly upheld the trial court’s … Continue Reading

Mediation

Rojas v. Superior Court (Coffin) 33 Cal. 4th 407(Jul. 12, 2004) Owner of an apartment complex mediated and settled a dispute with the general contractor who built the complex. Subsequently, tenants in the complex sued owner and contractor for damages caused by construction defects. The tenants moved to compel discovery of the mediation files from … Continue Reading

Arbitration

Azteca Construction, Inc. v. ADR Consulting, Inc. 121 Cal. App. 4th 1156 (3d Dist. Aug. 25, 2004) A dispute arose out of a written contract pursuant to which ADR had agreed to provide consulting services to Azteca. The contract required the dispute to be resolved through the American Arbitration Association. In compliance with Code of … Continue Reading

Construction Defects and Claims

BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. 119 Cal. App. 4th 848 (4th Dist. Jun. 21, 2004) A school district contracted with an architect for construction of a high school and contracted with two general contractors for the same project. The District filed claims for breach of contract and professional negligence against the architect, … Continue Reading
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