Best Practices for Staying Off of OSHA’s “Naughty List”

Construction projects, both big and small, pose a host of safety risks and challenges and, as a result, are subject to a number of regulations designed to limit the probability and severity of jobsite accidents. In my latest article for the Daily Journal of Commerce, I discuss common violations, some recent regulatory changes, best practices for complying with OSHA regulations, and some do’s and don’ts in the unfortunate event that an accident occurs. Read the full article here.

Originally published as “OP-ED: Best practices for staying off of OSHA’s ‘naughty list’ ” by the Daily Journal of Commerce on December 14, 2017.

Microsoft Planning Large Campus Renovation and Expansion Project in Redmond

Microsoft Corporation recently announced plans to revitalize its 500-acre Redmond campus with dramatic renovation and expansion work to be completed over the next five to seven years. The project will include the addition of 18 new buildings, 6.7 million square feet of renovated office space, $150 million in transportation infrastructure improvements, public spaces, sports fields and green space.  Upon completion of the project, the Microsoft campus will have 131 buildings of modern workspaces to accommodate 47,000 employees, with room to add up to 8,000 more people.

Microsoft has been headquartered in Redmond since 1986, and this project will modernize many of the historic structures on the campus. The new “refreshed” campus will feature more open space to capture more light and will be divided into “team neighborhoods” to promote personal creativity and innovation in the industry.   In addition, personal transportation will figure prominently in the design, as all automobiles will be moved to an underground parking facility in favor of bike paths and pedestrian walkways.  This concept will extend to Microsoft’s planned investment in the region, with construction of a foot- and bike-only bridge across WA-520 to connect both sides of the campus and eventually to join with Link Light Rail’s Redmond Technology Transit Station, to be completed in 2023.

More information about this exciting and transformative Microsoft project, including an entertaining 3-D video rendering of the development, can be found here.

What is Imputed Agent Knowledge Under California’s Real Estate Disclosure Rules

Recently, in RSB Vineyards LLC v. Orsi, the First Appellate District Court of Appeal confirmed the long-standing rule in California: sellers must disclose all known material matters.  While this affirmed rule was not surprising, the court was very helpful  in providing the first detailed framework for what it means for a seller to have “knowledge” of such material matters.  The devil, as they say, is in the details, and that is no different in a failure to disclose dispute.  Although a number of cases addressed the “type” of disclosures a seller must make and what is required of a seller when selling real estate (which we addressed in our prior blog article), no previous court addressed in any great detail what exactly constitutes “knowledge” for purposes of a seller’s disclosures and representations.

Here, the plaintiff purchased a vineyard property that included a residential building that had been renovated in 2010 to be used as a wine tasting room. Shortly after closing, the plaintiff discovered that the building had structural defects that were not disclosed by the sellers.  The plaintiff sued, and the sellers claimed that they had no knowledge of the building’s flaws and submitted declarations to demonstrate that the four members comprising the sellers had no such information.  According to the evidence, the sellers had previously hired an architect to prepare the plans for the building and the county approved such plans, and the construction work was completed by a licensed contractor.  The work was subsequently inspected and approved by county officials and a certificate of occupancy was issued before the property was sold to the plaintiff.  In the plaintiff’s deposition, its own representatives admitted that they had no information to suggest that the sellers had actual knowledge of the defects.  However, the plaintiff hired its own civil engineer who evaluated the property and concluded that (a) the building floor was defective and (b) the various deficiencies were substandard for commercial construction.  The trial court rejected the plaintiff’s argument and held in favor of the sellers, stating that the plaintiff had not established that the sellers had actual knowledge of the undisclosed defects.

On appeal, the plaintiff’s primary theory was that the sellers possessed imputed knowledge of the defects because the construction professionals were agents and had acquired knowledge of the defects. In analyzing the allegations, the court provided the framework for determining when knowledge will be imputed to a seller as a result of information acquired by such seller’s consultants or professionals.  In its detailed analysis and ruling, citing to Trane Co. v. Gilbert (1968) 267 Cal.App.2d 720, 727, the court stated that the general rule established in California provides that “the principal is chargeable with, and is bound by the knowledge of, or notice to, his agent, received while the agent is acting within the scope of his authority, and which is in reference to a matter over which his authority extends.”  However, this rule is subject to significant limitations concerning the circumstances when the principal will be bound by his or her agent’s knowledge.  First, not all professional services result in an agency relationship.  Thus, if a professional simply furnishes services or advice to a principal and does not interact with third parties as a representative of the principal then such professional is not acting as an agent.  Second, a professional merely acting “for the benefit” of the principal is not an agent for imputed knowledge purposes because such consultant must also act in such manner in his or her dealings with third persons.  Therefore, an architect who merely provides architectural services to the principal and nothing more is not an agent of the principal until and unless such architect acts for the benefit of the principal in his or her dealings with third persons.  In that instance, knowledge acquired by a professional while not acting as an agent will not be imputed to the principal.  Third, such professionals must actually acquire knowledge of the defect or misrepresented matter while they are acting as an agent of the principal.  So, if a professional is deemed to be an agent, then before knowledge will be imputed to the principal such agent must have acquired knowledge of the defect or misrepresented matter (i.e., an architect would not have knowledge of how a general contractor constructed a building unless he or she was hired to perform inspections that revealed the defect, and thus structural defects would not be imputed to the architect as a matter of course).  In affirming the trial court, the appeals court concluded that in the present case the professionals who worked for the sellers did not act as agents, and the sellers did not have actual or constructive knowledge of the defects because the defects were only discovered when the wine tasting room was demolished by the plaintiff.

While the court also analyzed other aspects of the case, the discussion on imputed knowledge and what constitutes an agency relationship for such knowledge will have a lasting impact on how both buyers and sellers proceed in California real estate transactions.

When Three’s Company, and Not a Crowd

Negotiating construction contract language in 2017 can have important consequences years into the future. The obligations and rights arising from one often overlooked clause, that addressing contractual “third-party beneficiaries,” i.e. “a person or entity who, though not a party to the contract, stands to benefit from the contract’s performance,”  can vary considerably from state to state and even case to case. In my latest article for the Daily Journal of Commerce, I look into the legal aspects of the third-party beneficiary clause in Oregon, Washington and Utah and give you some pointers to protect your rights with regard to the clause in your next contract negotiation. Read the full article here.

“When Three’s Company, and Not a Crowd” was originally published by the Daily Journal of Commerce on November 17, 2017.

Oregon Supreme Court Rules That the Practice of Architecture Includes Development of Master Plans

In a rare opportunity to interpret Oregon’s statutory requirements for licensure of architects, the Oregon Supreme Court recently held that the development of master plans constitutes the “practice of architecture”—even if constructible drawings and specifications are not contemplated or produced.

The case, Twist Architecture & Design, Inc. v. Oregon Board of Architect Examiners, 361 Or 507, 395 P3d 574 (2017), stemmed from a determination by the Board of Architect Examiners (the “Board”) that Seattle based firm Twist Architecture & Design, Inc. and two of its principals who were not licensed in Oregon (collectively “Twist”) engaged in the unlawful practice of architecture and unlawfully represented themselves as architects in violation of ORS 671.020—Oregon’s statute containing the licensure requirement—when they prepared master plans for three proposed commercial developments in Oregon. Continue Reading

Is “As-Is” Really “As-Is” in Real Estate Contracts? Tell the Truth, the Whole Truth, or Risk Liability for Nondisclosure

The inclusion of an “as-is” clause in a contract for a real estate transaction has led courts in Oregon to allow parties to a deal to allocate the risk as to the property differently than through the historic concept of “caveat emptor” (let the buyer beware), which permitted a seller to shift the obligation to the buyer. In our recent Daily Journal of Commerce article, we look at how the courts are interpreting the inclusion of the “as-is” clause in Oregon and in California, where the courts have not allowed such a clause to protect a seller from liability for nondisclosure of known material matters or fraud. Read the full article here.

Originally published as “OP-ED: Is ‘as is’ really ‘as is’ in real estate contracts?” by the Daily Journal of Commerce on October 20, 2017.

Doing It Differently: Portland’s Plan to Redevelop the U.S. Post Office Site and Broadway Corridor

Portland real estate is booming and Portland is now on the map for many national and international developers for the first time. This success, while enviable, is not without some negative consequences, as evidenced by increasing housing costs and congestion.

As Portland anticipates the arrival of even more people, it is trying to figure out where to put those new arrivals and how to preserve and enhance quality of life for both new and existing residents. Large-scale City planning efforts such as the 2012 Portland Plan and 2017 Comprehensive Plan reflect a recognition that not everyone has enjoyed the benefits of past prosperity and public investment, and that the City will seek to be more intentional and inclusive going forward.

Broadway Corridor Study Area, Prosper Portland

An emerging redevelopment area offers an opportunity to try new things and develop differently this time. The Broadway Corridor redevelopment area is 24 acres located between the Pearl District and Old Town/Chinatown. The area is centrally located in downtown Portland, has freeway access and is served both by Amtrak, via historic Union Station, and by TriMet’s light rail.  The “pearl” of this redevelopment area is the 14-acre U.S. Post Office site, bordered by NW 9th Avenue, NW Hoyt Street, NW Broadway and NW Lovejoy and purchased by the City of Portland in 2016.

The City purchased the Post Office site for almost $90,000,000 and understandably is carefully shepherding this public investment. The City’s Broadway Corridor Framework Plan provides a conceptual “framework” for future development of a 24-acre area including the Post Office site, but actual development will require a new type of public-private partnership and substantial further refinement of the plan, with the City committed to recovering its financial investment. Continue Reading

Stoel Rives’ Construction & Design Group Selected for Practical Law Publication on Construction Lien Claims

Practical Law, a Thomson Reuters Company and division of West Publishing Corporation that produces online resources for attorneys across myriad legal topics, recently invited members of the Construction & Design Group of Stoel Rives’ Portland and Seattle offices to provide construction lien resources for Oregon and 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 resources, once published in the coming months, will afford attorneys practicing nationally and globally in law firms and corporate legal departments access to valuable online content to answer their respective questions about construction liens in Oregon and Washington.  Practical Law will employ unique formats to present the information in an easily readable manner and to aid attorneys’ access to critical information (e.g., required notices, deadlines, procedures, and notable cases) about construction lien claims in the two states.

The contributing authors for the Practical Law resources on construction lien claims in Oregon and Washington are Stoel Rives’ construction lawyers Kip Childs (from the Portland office) and Karl Oles and Bart Reed (both from the Seattle office).  The contributing attorneys value the opportunity to highlight the firm’s depth of experience and expertise regarding construction lien claims.

An additional notice and an announcement will be published on Stoel Rives’ Ahead of Schedule blog once Practical Law confirms the date of publication of the online construction lien resources.

Insurers Attempt to Avoid Coverage (Mis)using the Professional Services Endorsement

Parties spend significant time negotiating insurance provisions for protection in the event they face claims related to defective construction, but those protections can be rendered worthless if the wrong insurance forms are used.  In my recent Daily Journal of Commerce article, I look at one particularly troublesome provision – the “professional services” endorsement – and discuss tips for avoiding the unintended exclusion of otherwise covered losses, including endorsements that are specifically tailored for use in connection with contractors’ and design-builders’ liability insurance policies. Read the full article here.

Originally published as “OP-ED: Watch for insurers misusing professional services endorsement” by the Daily Journal of Commerce on September 15, 2017.

The Poisoned Foreclosure – Lawyers Beware of the Affirmative Duty to Search Records

A Sacramento bankruptcy judge issued a hard hitting judgment against Bank of America for the way it handled a single residential foreclosure in Lincoln, California.  Referring to the famous novelist whose works evoke oppressive and nightmarish characteristics, Judge Klein wrote: “Franz Kafka lives… [and] he works at Bank of America.”  This ruling has been widely discussed for the hefty award recovered by the plaintiff.  In addition to the harsh ruling, Judge Klein memorialized a rule that was not previously addressed in case law – the affirmative duty of an attorney to search bankruptcy filings to confirm whether a violation of a stay order was likely.  While this rule could arguably be characterized as dicta, because there were no claims against the attorneys in the suit, all attorneys should take note of this rule or risk serious consequences.  The relevant facts are summarized below.

In 2008, the plaintiffs entered into a loan with the expectation that they could refinance or modify the loan immediately after closing. However, after closing, Bank of America said that it would not consider a loan modification request unless and until the homeowners ceased making payment.  Accordingly, in 2009, the homeowners defaulted on their loan payments, which triggered a series of troublesome events.  During the course of the ensuing years, Bank of America strung along the homeowners with multiple “lost” loan modification requests, while at the same time pursuing foreclosure. Continue Reading

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