The Sureties Strike Back: The Expedited Dispute Resolution Performance Bond

Construction contract exampleSubcontractor default insurance (“SDI”) — insurance  that covers certain losses related to a subcontractor’s material breach of a subcontract — has been gaining in popularity over bonds among general contractors. However, for a number of reasons, sureties assert that bonds are better than SDI, despite the common complaint about bonds that sureties are slow to pay claims. The expedited dispute resolution (“EDR”) bond addresses that complaint by providing the coverage of a traditional bond with an abbreviated investigation and dispute resolution process. In my latest article for the Daily Journal of Commerce I address potential pitfalls of EDR bonds and advantages and disadvantages parties who use the bonds should carefully consider when deciding whether to use them.  Read the full article here.

Originally published as “The sureties strike back: the expedited dispute resolution bond” on February 14, 2019, by the Daily Journal of Commerce.

Recent Washington Court Decision Examines Whether Lien Claim on Condominium Unit Was Frivolous (Subject to Release) or Excessive (Subject to Reduction)

On February 11, 2019, Division One of the Washington Court of Appeals issued an opinion in the case of Woodley v. Style Corp. d/b/a Servpro of Shoreline/Woodinville, No. 77352-6-I (Wash. Ct. App. Feb. 11, 2019).  The case highlights the care that should be exercised in filing a lien claim for services furnished to improve a condominium and the consequences that may befall a claimant under Washington’s frivolous lien claim statute, RCW 60.04.081.

The case arose from water intrusion at a unit in the Bellevue Park condominium complex. After discovery of the condition, the condominium’s property management company contacted Servpro and executed a work authorization for the contractor to clean up the water and perform restoration work.  Servpro was not paid for its work and filed a claim of lien.  The lien named the association as the indebted person, recited that it applied to the 20 specific units and a common storage area of the condominium, and named each owner of the 20 units but did not allocate a specific portion of the total debt to each unit. Continue Reading

Here’s what building owners need to know following last year’s wildfires, earthquakes

California’s 2018 wildfire season — the most damaging and deadly on record — and a pair of earthquakes in Alaska can serve as case studies for Northwest property owners as to steps they can take to mitigate their risks in the event such disasters strike closer to home. In my latest article for the Seattle Daily Journal of Commerce, I provide examples of the most common types of damages incurred by property owners and types of insurance that are available to cover those damages, and look at other tools owners should consider implementing, including emergency response and business continuity plans. Read the full article here.

Originally published on January 31, 2019, by the Seattle Daily Journal of Commerce.

California Employers: Ignore Piece-Rate Compensation Rules at Your Peril

A recent California Court of Appeal decision upheld the state’s complex rules for compensating piece-rate employees.  In Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal.App. LEXIS 10 (Cal.Ct.App. Jan. 4, 2019), the Court held that the Labor Code’s requirement that piece-rate employees be separately compensated for “nonproductive time” was not unconstitutionally vague.  With California’s “productive vs. non-productive time” rubric firmly in place, employers must take great care to track and compensate piece-rate employees’ time, or face stiff penalties.

What Does “Piece-Rate” Mean, And Why Might An Employer Chose It?

Piece-rate compensation plans are very popular in some industries.  They can incentivize employee productivity, while giving an employer greater control over labor costs. Under a piece-rate compensation system, the worker is paid a fixed amount of money for each unit produced or action performed, regardless of the number of hours worked. Industries that pay employees on a piece-rate basis include: Continue Reading

Update on Alaska Way Viaduct Replacement

Occasional visitors to Seattle may be surprised to discover that their favorite route from the airport to downtown has changed. State Highway 99 no longer links to the Alaskan Way Viaduct into downtown Seattle.  The waterfront viaduct has been closed and demolition has begun.  The Battery Street tunnel that connected viaduct traffic to Aurora Avenue North will also be demolished.

Closure of the viaduct is the culmination of planning that began when the viaduct was damaged by an earthquake in 2001. After considering many engineering and financial studies, the Washington State Department of Transportation decided to replace the viaduct with a highway tunnel.  WSDOT signed a design-build contract in 2011 and tunnel mining began in July 2013. Unfortunately, the tunnel boring machine stopped advancing in December 2013.  After dramatic efforts that included building a shaft 120 feet deep and lifting huge pieces of the TBM to the surface for inspection and repairs, the contractor resumed mining in January 2016.  The tunnel is now completed.  There will be a grand opening ceremony on February 2 and 3, 2019.  The tunnel will open to traffic shortly after that.  It will be free at first, with tolls phasing in later this year.

Once the viaduct is gone, the City of Seattle has big plans for expanding the Alaskan Way surface street and revitalizing the near-waterfront area.

Further information about this mega project can be found by googling any of the following:

Alaskan Way Viaduct – Tracking Progress
99Tunnel.com
Seattle Waterfront Project

Three “Basic Best Practices” New Year Resolution Tips for Construction Projects

Ultimately, improving our companies, like improving ourselves, is up to us and our own diligence and persistence in identifying and implementing improvements on an ongoing basis. A strong market as we start 2019 means a great opportunity to review for and ensure solid implementation of legal compliance and financial goals for your construction projects – before the next down cycle hits our industry. In my latest article for the Daily Journal of Commerce, I identify three prime areas to review as you start the new year. Read the full article here.

Originally published as “Three basic best practices for construction companies” on January 17, 2019, by the Daily Journal of Commerce.

Practical Law and Stoel Rives LLP Publish New Lien Law Resources for Washington

Practical Law, a Thomson Reuters company and division of West Publishing Corporation that produces online legal resources for attorneys, is pleased to partner with Stoel Rives LLP to present its Washington Construction Lien Practice Note and Workflow Checklist.

The resources, now published and available through Practical Law’s online services, afford access to valuable content about construction liens in Washington for attorneys practicing nationally and globally in law firms and corporate legal departments.  Practical Law employs unique formats to present the material in an easily readable manner and to aid attorneys’ access to critical information about construction lien claims (e.g., required notices, deadlines, procedures, and notable cases).

Practical Law recognized and invited members of the Construction & Design Group of Stoel Rives’ Seattle office to provide construction lien resources for Washington.  According to Kate Kruk, Practical Law’s Content Acquisition Editor, “[s]erving as a Practical Law contributor showcases [Stoel Rives’] expertise and drives home [its] position as a legal thought-leader in the northwest.”

The contributing authors for the Practical Law resources on construction lien claims in Washington are three construction lawyers from Stoel Rives’ Seattle office: Karl Oles, Bart Reed, and Loni Hinton.  They value the opportunity to present a unique set of reference materials that highlight their group’s experience and expertise in this area.

PDF copies of the Practice Note and the Workflow Checklist for construction lien claims in Washington can be found here:  Practice Note Workflow Checklist

Reimagining the Dispute Resolution Provision in Construction and Design Contracts

In construction projects, experienced owners, contractors, or designers know that disputes will almost invariably arise — even when the parties have the best of intentions. And they understand that detailed contract provisions to resolve those disputes can have major benefits if they are properly drafted to suit the project, parties, and types of dispute most likely to occur. In my latest article for the Daily Journal of Commerce, I look at how concepts like mediation, arbitration, and attorney fee shifting — firmly established in the world of construction and design contracting and contained in almost every form contract — can be reimagined in small ways for use in those documents to save the parties time and resources during the course of the project. Read the full article here.

Originally published as “Reimagining the dispute resolution provision in contracts” on December 19, 2018, by the Daily Journal of Commerce.

When “Art” Strikes Development

A 2018 legal case in New York arose over the disposition of a collection of run-down warehouses in Long Island City, Queens, New York, which graffiti artists began to use as a canvas for their work after the buildings went undeveloped by the owner for many years. When the owner announced that he would demolish the buildings to make way for luxury condominiums, 21 of the graffitists sued for an injunction to prevent the destruction of the buildings and their artwork. The owner whitewashed the walls, destroying most of the graffiti, and after a trial, the Court found the owner liable of violating the Visual Artists Rights Act of 1990 in obliterating the graffiti and awarded the maximum statutory damages, $150,000 per work, for a total of $6.75MM. In my latest article for the Daily Journal of Commerce, co-authored with Stoel Rives law clerk Antonia Krizanec, I discuss a few steps an owner-developer might take in the face of a similar situation. Read the full article here.

Originally published as “A case of New York City graffiti becoming art” on November 16, 2018, by the Daily Journal of Commerce.

Reminder of January 1, 2019 Mandatory New Notice Requirement by CA Residential Solar Contractors

In 2017, the California Legislature passed a bill that resulted in Business and Professions Code (BPC) section 7169, which ultimately would require Home Improvement Contractors, which include contractors that install solar systems on residences, to issue specific disclosures to any residential consumers who may want to purchase, finance or lease, and install a solar system on their property. Recently in August, the California Public Utilities Commission “endorse[d] the solar energy systems disclosure document as being compliant with [BPC section 7169]….” The Disclosure terms include:

  • The total cost for the solar system, including financing and energy/power costs (if applicable);
  • The statutory License Board Disclosure statement for contractors and / or the home improvement salesperson who sold the system information regarding with whom to file if there are complaints; and
  • The statutory Three-Day Right to Cancel Disclosure if the contract is not negotiated at the contractor’s place of business.

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