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…

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.

On July 6, 2017, the Washington Supreme Court confirmed that the equitable rule announced in Olympic Steamship—providing for attorney fees where the insurer compels the insured to take legal action—applies to performance bond sureties on public projects.[1]  In King County v. Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, the Court affirmed the trial court’s award of over $14 million in attorney fees and costs against sureties of a public works contract.[2]

In 2006, King County contracted with a joint venture of three construction companies to build the piping/conveyance system for the new Brightwater wastewater treatment project.  The joint venture contractor submitted a performance bond from five surety companies.  Under the contract, if the contractor was in default, the sureties were obligated to step in and remedy the default.  When the project was delayed, King County declared the contractor in default and asked the sureties to cure.  They refused, claiming that the contractor was not in default.

Rejecting an argument that the ADA preempts all contractual claims for indemnity and contribution, the Ninth Circuit recently upheld a public owner’s right to seek contribution for damages arising out of ADA violations caused by the designer and contractor of a transportation facility. See City of Los Angeles v. AECOM Services, Inc. (here).…

Creative solutions will likely be required to bridge the gap between the cost of addressing growing infrastructure needs in the U.S., currently estimated at $4 trillion, and the amount of available public funding.  One increasingly popular possibility involves supplementing public funds with private financing through agreements that allow for greater private sector participation in the…

Regular readers of this blog know that Stoel Rives represents the State of Washington Department of Transportation (“WSDOT”) with regard to construction of the new highway 99 tunnel in downtown Seattle. The giant tunnel boring machine, named “Bertha” (not “Big Bertha” as is sometimes reported), finished its work in April and is now undergoing a…