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June 2018

Construction Law Update

Second Quarter 2018

Gordon & Rees's Construction Group is pleased to publish the latest issue of our Construction Law Update, a quarterly take on trends of interest to design professionals, contractors, and developers throughout the country.

INSIDE THIS ISSUE
  1. Recent California Legislation May Have an Impact Contractors and Design Professionals

  2. Positive Developments in California Wildfire Mitigation

  3. Gordon & Rees Construction Attorneys Making Headlines

  4. Gordon & Rees Construction Law Blog

  5. About Gordon & Rees's Construction Group

I. Recent California Legislation May Have an Impact Contractors and Design Professionals
     
  By Kimberly A. Blake
   

Several bills that have recently been introduced in California will likely have an impact on the construction industry and, in particular, contractors and design professionals. Below is an overview of recent and pending legislation in California that includes the Labor Code, the Business and Professions Code, and the Government Code.

Contractor Liability Under the Labor Code

AB 1701, which was introduced February 2017, and became effective on January 1, 2018, adds Section 218.7 to the Labor Code.1

The Labor Code governs the basic rights and obligations of workers and employers in the employment context. Under current law, an employee may generally sue her employer for wage claims, such as nonpayment of wages, fringe benefits, and contributions to a health and welfare or pension fund. Until January 2018, however, there had been no requirement that a direct contractor must assume liability for any successful wage claims brought against a subcontractor working for the direct contractor.

To read a full, expanded version of this article, click here.

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II. Positive Developments in California Wildfire Mitigation
     
  By Richard R. Ames
   

California experienced an explosive wildfire season in the Fall and Winter of 2017, as hundreds of fires devastated large swaths of the state. The fires in Northern California alone cost at least 44 lives, at least $9 billion in insured damages, and may have cost the U.S. economy at least $85 billion in total.1 Clearly, wildfires present a massive danger to the population and economy of California nowadays.

Fortunately, local and state legislatures have responded to this danger to some degree by putting forward legislation designed to further mitigate the damage of future wildfires. One of the more significant developments is the state legislature’s push to give homeowners greater power to remove flammable materials on state-owned lands that are adjacent to the homeowner’s residence.

To read a full, expanded version of this article, click here.

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III. Gordon & Rees Construction Attorneys Making Headlines

Gordon & Rees Charleston Team Defeats Class Certification in Billion Dollar Construction Defect Case
On April 26, 2018, the U.S. District Court for the District of South Carolina denied class certification in Craft v. Del Webb, a 2,500+ house construction defect class action against Del Webb Communities, Inc. and Pulte Homes, Inc. Del Webb and Pulte were represented by lead counsel A. Victor Rawl, Jr., partner Henry W. Frampton, IV, and a team of other attorneys from the Charleston office of Gordon Rees Scully Manuskhani.

The Craft case was initially filed in state court in 2008 but did not become a putative class action until late 2015. In December 2015, Pulte removed the case to federal court under the Class Action Fairness Act. The removal held up despite significant and sustained attempts to obtain a remand to state court. Read More

Gordon & Rees San Francisco Team Wins Demurrer Without Leave to Amend on Personal Injury Claim
Partner Gregory Gangitano and Associate Jessica Clouse recently obtained a dismissal of a claim for personal injuries sustained at a construction project. The Plaintiff, who was injured while working for a roofing contractor on a roofing remodel, sued the project manager for damages incurred due to his injury. The project manager brought a demurrer on the grounds that the Plaintiff’s claims were barred by the exclusivity of the workers’ compensation doctrine. Cal. Lab. Code. §3600 et seq.; Privette v. Superior Court (1993) 5 Cal.4th 689, 731. The California Workers’ Compensation Act pertains to injuries sustained during the course of employment and is the sole and exclusive remedy of the employee. The Plaintiff argued that the project manager, whose contract with the owner contained an obligation to create a program wide safety program, should be held liable because the safety responsibilities created an affirmative duty owed to third parties. The Court rejected this argument finding that the construction manager’s duty to the owner did not establish a duty owed to an employee of the roofing subcontractor. The roofing subcontractor, not the construction manager, was legally responsible for the safety of its work. The court also denied Plaintiff’s request for leave to amend the complaint effectively dismissing the suit entirely. This ruling is significant because it reaffirms the exclusivity of the workers’ compensation scheme and neglects to expand the duties of construction managers to third parties of a construction project.
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Boston partner Jay Gregory will be presenting a 2-hour CLE seminar entitled, “Alternative Dispute Resolution In Action: A Mock Mediation,” to graduates of the Boston Architectural College on June 2, 2018.

San Francisco senior counsel Catherine Delorey will be moderating a CLE webinar entitled "Innovative Delivery Methods for Renewing America's Water Infrastructure," for the ABA Forum on Construction Law on June 14, 2018.

Los Angeles partner Brenda Radmacher presented "Advanced Negotiating Skills: How to Tackle any Negotiation" at at the Marsh Women's Exchange on May 31, 2018, and was a featured panelist at the U.S. Green Building Council - LA's Women in Green Breakfast on May 22, 2018 for a discussion which covered issues from the #MeToo movement to actions employers can take to create a more equitable work place environment.

Louisville partner Angela Richie presented "Every Rose Has Its Thorn: It’s Time to Take Another Look at Your Subcontracts," at the Texas Structural Steel Institute on May 11, 2018; “I’ve Got A Bad Feeling About This: What Can you do to Avoid Having that “Bad Feeling” When you are Trying to Collect Changes?” at the Virginia Carolinas Structural Steel Fabricators Association on April 26-28, 2018; and “What Fabricators Need to Know About Providing Early Involvement Pre-Construction Services versus Engaging in a Design-Assist Contract,” for the Early Involvement & Marketing Workshop for the Structural Steel Industry at the American Institute of Steel Construction on March 8, 2018.

Partners Keith Cramer, Tom Cronin, Julie Haddon, and Matthew Hawk co-presented "2018 Hot Topics in Construction Claims" for the firm's Annual Hartford and New York Legal Education Conferences on May 2, 2018 and May 4, 2018.

On April 19, 2018, San Francisco partners Dion Cominos and Ernie Isola presented a 2-hour seminar to Dealey Renton & Associates and its design professional clients entitled, “The Double Edged Sword: How to Handle Payment Disputes with Clients,” in Oakland, California.

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IV. Gordon & Rees Construction Law Blog

The Gordon & Rees Construction Law Blog continues to post new content addressing topical issues affecting the construction industry throughout the country. From analysis of new court decisions, discussions of timely legislation, and commentary on real-world, project-specific issues, Gordon & Rees’s Construction Law Blog provides insight on the issues that affect the construction industry now.

We invite you to visit the blog at www.grconstructionlawblog.com and see for yourself what we are up to. If you like what you see, do not hesitate to subscribe under the “Stay Connected” tab on the right side of the blog. There you can choose how you would like to be informed of new content (Twitter, LinkedIn, email, etc.). If you have any questions about the blog or would like to discuss further any of its content, please do not hesitate to contact us.

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V. About Gordon & Rees's Construction Group

Gordon & Rees's Construction Group consists of more than 100 lawyers in 50 offices throughout the nation. The firm continues to expand, opening three new offices in 2018 which include Detroit, Louisville, and Missoula.

Gordon & Rees’s construction attorneys focus their practice on the comprehensive range of legal service required by all participants in the construction industry – architects, engineers, design professionals, design joint ventures, owners, developers, property managers, general contractors, subcontractors, material suppliers, product manufacturers, lenders, investors, state agencies, municipalities, and other affiliated consultants and service providers.

We serve clients who design, develop, or build all types of structures, including commercial buildings, single and multifamily residential projects, industrial facilities, universities, hospitals, museums, observatories, amusement parks, hotels, shopping centers, high-rise urban complexes, jails, airports, bridges, dams, and power plants. We also have been involved in projects for tunnels, freeways, light rail, railway stations, marinas, telecom systems, and earth-retention systems. Our experience includes private, public, and P3 construction projects.

If you have questions about this issue of the Construction Law Update or our nationwide construction practice, click here to visit our practice group page or contact partner Tom Cronin.

Thomas G. Cronin
Gordon & Rees, LLP
1 North Franklin
Suite 800
Chicago, IL 60606
(312) 980-6770
tcronin@grsm.com

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