A written teaming agreement is useful in defining the roles and responsibilities of a team of designers and contractors seeking to win a contract for a construction project. In my recent article for the Daily Journal of Commerce, I detail several key aspects of a well-drafted teaming agreement. Read the full article here.
Under California’s Right to Repair Act, Ignore Deadlines at Your Own Peril
In a very recent decision, the Fourth District Court of Appeal in Blanchette v. Superior Court affirmed the plain language of the Home Builder’s Right to Repair Act, holding that even a facially insufficient notice of defect triggers the obligation of a builder to respond within 14 days. The statute, Civil Code section 895 et.
Design-Build Certification
One should never stop learning, so next week I will attend a three-day seminar presented by the Design-Build Institute of America. If I complete the seminar and pass a test, I will become a Designated Design-Build Professional. The DBIA has an informative page about certification on its website.
In preparation for the seminar, I completed
Lenders Beware: Ensure Those HOA Dues Get Paid! Nevada HOA Superpriority Statute Survives Constitutional Challenge
The Supreme Court of Nevada stirred a great deal of controversy in its 2014 opinion SFR Investments Pool 1, LLC v. U.S. Bank, N.A.,[1] holding that a 1991 statute granting superpriority status to certain homeowner’s association (HOA) liens[2] created a true priority lien such that its foreclosure extinguishes all other liens, including a first deed of trust on the property.[3]
Prior to the SFR Investments decision, most lenders assumed the statute merely provided for a payment priority, so that upon a lender’s foreclosure of its deed of trust, the HOA would recover a portion of its overdue assessments—they certainly did not anticipate that an HOA would have the ability to wipe out a “first position” deed of trust. As one can imagine, the SFR Investments decision did not sit well with lenders and prompted a flurry of additional lawsuits, including a constitutional challenge claiming that the statute violates the Due Process and Takings Clauses of both the United States and Nevada Constitutions.
When “Non-Binding” LOIs Become Binding
A letter of intent (“LOI”) is often the first document in a proposed deal – a summary of a range of key terms or concepts for negotiation toward entering into a final, formal agreement. But what seems like a simple document can be much more than a mere list of possible terms to be discussed by the parties, and might just result in a final agreement in one side’s sole discretion. In some cases, an LOI can be an enforceable agreement to negotiate in good faith toward a final agreement based, at least in part, on its stated terms. Even those LOIs that specifically say they are non-binding may, in fact, be binding. For instance, an LOI could be enforceable in its own right if all material terms of a final agreement are set out in the LOI and the parties’ conduct suggests they treated the LOI as a final agreement. Rather than being a “safe haven” that can be terminated at will without liability, an LOI can present great risk and unintended consequences to the parties if not recognized and handled with care. Missteps in documentation and/or subsequent conduct of the parties along the way could result in blown deals and damages. Even an otherwise carefully and clearly drafted LOI may not be free from risk or unintended consequences.
Choice of Law Provisions Cannot Bypass California’s Prohibition on Jury Waivers
Last week, the California Court of Appeal ruled that a property owner was entitled to a jury trial in a dispute with a lender despite the fact that the loan agreement contained a jury waiver provision and a New York choice-of-law provision.
The case involved the San Francisco apartment complex known as the Rincon Towers. In 2007, the plaintiffs borrowed $110 million on a two-year loan to finance the acquisition. In 2009, the plaintiffs failed to repay the loan. The plaintiffs claimed that under the terms of the loan agreement they were entitled to a one-year extension of the maturity date. The lender disagreed and instead completed a nonjudicial foreclosure sale.
Is Late Notice A Big Deal? Ninth Circuit Asks For An Opinion From CA Supreme Court On Insurance Question
So, what’s the big deal if you’re a little “late” in giving your insurer notice of the claim or lawsuit against your company? That’s the question, albeit in essence, that the Ninth Circuit has posed to the California Supreme Court recently in an Order Certifying Questions, Pitzer College v. Indian Harbor Insurance Co.
Specifically, the Ninth Circuit is asking for legal insight as to the following:
1. Is California’s common law notice-prejudice rule a fundamental public policy for the purpose of choice-of-law analysis? May common law rules, other than unconscionability not enshrined in statute, regulation, or the constitution, be fundamental public policies for the purpose of choice-of-law analysis?
2. If the notice-prejudice rule is a fundamental public policy for the purpose of choice-of-law analysis, can a consent provision in a first-party claim insurance policy be interpreted as a notice provision such that the notice-prejudice rule applies?
Calling All Owners and Contractors! Pay Attention to Disclosure Statement Requirement to Protect Against or Preserve Lien Claims in Washington
Lurking in the depths of the Contractor Registration Act (Chapter 18.27 RCW) is an important statute that has the potential to eviscerate lien rights if not satisfied by contractors furnishing improvements on certain projects in Washington. RCW 18.27.114 requires that contractors working on residential projects or commercial projects of limited scope furnish a Model Disclosure Statement Notice to Customer (“Disclosure Statement”) prior to commencing work.
The form of this document and additional information required of a contractor can be found on the Washington Department of Labor & Industries (“L&I”) website. The Disclosure Statement advises the contractor’s customer (upfront in the contract documents usually, and prior to the commencement of work) of his/her rights and responsibilities, discloses the contractor’s registration and bonding requirements, and warns the customer of the contractor’s right to file a lien claim in the event of nonpayment.
Joint Venturers Must Venture Carefully
There are good reasons to partner with other designers or contractors–even competitors–on construction and design projects. Perhaps such a collaboration gives you access to new geographical or industry markets, or enables you to take on a project of broader scope. A joint venture arrangement is a straight-forward way to collaborate in such instances. However, there
Year-End Insurance Review: Common Coverage Oversights
Carrying adequate insurance on construction projects is a critical aspect of risk management for developers, builders and designers. But it’s a complicated and time-consuming subject, and if you haven’t slogged through the complexity of the details in policies, you may be vulnerable to unintended consequences. In my recent article for the Daily Journal of Commerce