New California Laws Forbid Broad Type I Indemnity Obligations and Require Sharing More Information About Wrap-Up Policies

By Peter K. Zweighaft
Howrey LLP

In 2005, the California Legislature amended Civil Code §2782 in an effort to prevent home builders from imposing "Type I" indemnity obligations on subcontractors. Such indemnity obligations typically forced the indemnitor/subcontractor to indemnify

Line Item Pricing in Government Contracts Is Exempt from Disclosure Under Freedom of Information Act, Court Holds

By Christian Henel
Howrey LLP

The U.S. Court of Appeals for the District of Columbia Circuit has held that the federal government is not permitted to disclose line item pricing information in a government contract in response to a Freedom of Information Act (FOIA) request.

Some U.S. Courts Give 'Manifest Disregard of the Law' New Life as a Basis for Challenging Arbitration Awards

By Clark T. Thiel
Howrey LLP

In March 2008, the U.S. Supreme Court held that manifest disregard of the law was not an independent ground for vacating arbitration awards. Rather, it held, the grounds set out in the Federal Arbitration Act

After California's Public Works Shutdown: How to Evaluate Legal Options and Damage Claims

By Aaron R. Gruber
Howrey LLP

After the California Legislature failed to timely resolve budget issues in 2008, many state agencies shut down ongoing construction projects – making good on earlier warnings that work would have to stop because the agencies would be unable to pay for work performed.

Broker Held Liable for Failing to Obtain Insurance for Sub Under Wrap-Up Policy

By Stephen Palley
Howrey LLP

The U.S. Court of Appeals for the 5th Circuit has held that an insurance broker was liable to a participant in a wrap-up insurance program for negligent failure to procure insurance even though the broker and participant were not in privity of contract.

Obama Ups the Ante for Climate Change Legislation by Proposing to Regulate Greenhouse Gases Under Clean Air Act

By Christopher Marraro
Howrey LLP

The Environmental Protection Agency has made a game-changing move in the policy debate over climate change. EPA declared in a proposed rule that greenhouse gases endanger human health and welfare and that greenhouse gas emissions from new motor vehicles and

Choosing the Seat in International Arbitration: Overview of the Leading European Arbitral Centres

By Markus Esly
Howrey LLP

Choosing the seat for an international arbitration has important consequences. It is more than simply a decision as to where the arbitration hearings will take place because the law of the seat will apply to determine certain key questions in any proceedings.

Contractor Faces False Claims Act Liability for Payments Made by Iraq's Coalition Provisional Authority

By Laura Thomson
Howrey LLP

The U.S. Court of Appeals for the 4th Circuit has held that payments to a U.S. security contractor by the Coalition Provisional Authority in Iraq are subject to the False Claims Act. The appeals court reversed a trial court's ruling limiting the reach of the

Government Contractors Beware: Stimulus Money Will Bring Heightened Scrutiny of How It Is Spent

By Mary Carter Andrues
Howrey LLP

The stimulus package, also known as the American Recovery and Reinvestment Act, has been touted by many members of Congress as the mechanism for reducing U.S. dependence on foreign oil by investing in renewable energy production and for improving the environment

Caltrans Retentions Waived; More Design-Build Approved; Green Building, Renewables Get a Boost in New California Laws

Edited by Clark T. Thiel
Howrey LLP


Caltrans Prohibited from Withholding Retention from Progress Payments

Previously, the Department of Transportation (Caltrans) could withhold retention from progress payments to its contractors. New Public Contract Code §7202 prohibits Caltrans from withholding retention from progress payments.

How Insurance, Contracts Can Protect General Contractors from Liability Caused by Subs

By Andrew M. Reidy and Seth Lamden
Howrey LLP

General contractors sometimes face liability for the acts of their subcontractors. The most common ways to protect general contractors from liability are by indemnification agreements with subcontractors and with additional insured endorsements to subcontractors' liability insurance.

New Tools to Fight Bid Rigging in Public Procurement Issued by Organization of Major World Governments

By James Newland, Ethan Litwin and John Foust
Howrey LLP

To assist governments in battling bid rigging, the Organisation for Economic Co-operation and Development (OECD) has issued "Guidelines for Fighting Bid Rigging in Public Procurement." They include specific methodology and checklists to help OECD member governments prevent and detect cartel activity in procurement.

Obama's Government Procurement Reforms to Require Extensive Use of Fixed Price Contracting

By David Beck
Howrey LLP

President Barack Obama has signed a memorandum intended to reform the federal procurement process by eliminating wasteful and inefficient government contracts. With Sen. John McCain, his former rival for the Presidency, at his side, Mr. Obama announced:

Requirement to Post Beck Notices Revoked; Government Contractors Now Must Post Labor Rights Notices

By W. Samuel Niece
Howrey LLP

Since 2001, federal government contractors and subcontractors have been require to post so-called "Beck Notices" advising certain employees of their right to opt-out of contributing to union political activities. The new administration has revoked this

Foreign Corrupt Practices Act: Primer for In-House Counsel, Review of 2008's Big Penalties and What to Expect in 2009

Howrey LLP

If recent history is a barometer, there is every indication that enforcement of the Foreign Corrupt Practices Act will continue to be a priority for both the Department of Justice and Securities and Exchange Commission in 2009. As the nature and scope of enforcement actions filed by DOJ and SEC demonstrate, no business sector is immune from FCPA oversight, and corporate executives and officers are not exempt from prosecution.

Guarantor Held Liable on Contractor's Entire Debt Despite Credit Limit, Release of Collateral

By Laura Kent
Howrey LLP

The Nebraska Supreme Court has held a guarantor liable under a guaranty agreement despite (1) the release of collateral that partially secured the guaranty and (2) the guarantor's contention that liability was capped at $525,000.

$50 Million Fraud Penalty Against Contractor on Federal Project Affirmed by Appeals Court

By Jeffrey R. Gans
Howrey LLP

The U.S. Court of Appeals for the Federal Circuit has affirmed a finding that Daewoo Engineering and Construction Co., Ltd. must pay the U.S. government $50,629,855.88 in penalties for a Contract Disputes Act violation plus $10,000 for a False Claims Act violation

How to Maximize Insurance Coverage for Mold Damage

By Ernest Summers
Howrey LLP

Molds are a type of fungi that can cause millions of dollars in property damage and serious health problems, sometimes before the mold is even discovered. Some molds have been linked to triggering asthma attacks.

Molds grow from spores that can be

$130 Billion for Construction in the Economic Stimulus Bill: Where It Will Be Spent

By Barbara Werther and David Beck
Howrey LLP

The American Recovery and Reinvestment Act, the economic stimulus bill signed into law last week by President Obama, provides more than $130 billion for construction-related spending.

The spending covers a wide range of projects, including roads, public transportation, federal buildings and hospitals. With a requirement that much of the $130 billion be obligated by September 30, 2010, the legislation has the potential to immediately impact the construction industry and to provide significant opportunities in an otherwise slow economy.

FTC Updating Green Guides, Which Govern Environmental Building Claims

By Benjamin D. Heath
Howrey LLP

The Federal Trade Commission's Green Guides, which govern environmental marketing claims, will be updated this year. The Green Guides are the FTC's primary tool for preventing consumer deception in the ever-expanding arena of environmental claims. The manual was last updated in 1998. This year's version will clarify the legal parameters for environmental promises made to consumers and business clients.

Construction Workers at Multiple Jobsites Cannot Be Counted Together to Trigger Notice Requirement Under WARN, Court Holds

By Laura Bourgeois
Howrey LLP

The U.S. Court of Appeals for the 9th Circuit has ruled that employees of a construction company that worked at scattered construction jobsites on different projects were not employed at a "single site" and, therefore, did not qualify for prior notice of termination under the fed

Concealment in Applying for Insurance: Overview of Insurer's Rights and Insured's Responsibilities

By Sanaz Asgharzadeh
Howrey LLP

When seeking insurance coverage, did you tell your insurer of certain details about your business? Did you wonder if those details were relevant to whether or not the insurer would issue or reissue the policy? It may be that the insurer already was aware of these facts or that it

Responding to a Trade Secret Theft: 12 Key Steps

By Benjamin K. Riley
Howrey LLP

It's Friday afternoon. One of your most important clients calls and says that its key technologist is leaving the company and is starting a similar job with a competitor on Monday. The client believes that many of the company's most important trade secrets will go with him. What

Design-Build Construction Projects: Overview and Tips for Success

By W. Samuel Niece
Howrey LLP

Public and private owners, contractors and design professionals all have an interest in better project delivery methods. Design-build is viewed by many as an alternative to the inefficiencies and adversarial nature of traditional design-bid-build contracting. Following is a guide to de

Courts in 3 States Decide Impact of Anti-Indemnity Statutes on Liability Limitation Clauses

By John Fedun
Howrey LLP

Indemnity is the duty of one person to make good any loss, damage or liability incurred by another. This duty is common in construction industry contracts. One example is a clause requiring a contractor to indemnify an owner for damages resulting from personal injuries on the job.

EPA Steps Up Enforcement Activity to Reduce Storm Water Runoff from Construction Sites

By Christopher Marraro
Howrey LLP

Contractors and project owners should be aware of the recent increase in enforcement activity by the U.S. Environmental Protection Agency at construction sites across the country.

Storm water runoff at construction sites was a particular target of EPA enforcement and compliance activity in 2008. Violations involved all types of projects, including retail, manufacturing and commercial/residential developments.

Nailing Down Fundamental Insurance Coverage Issues in Builder's Risk Policies

By Amy J. Fink
Howrey LLP

Construction projects involve a substantial risk of accidental destruction or damage to structures, equipment and materials located onsite. In the construction business, "time is money." Therefore, time is of the essence in obtaining indemnification of losses so that funds are immediately

10 Tips for a Successful Arbitration

By Ben Riley
Howrey LLP

As courts rely more heavily on ADR processes to resolve cases and as lawyers steer their clients away from jury trials, business trial lawyers increasingly find themselves in arbitration forums. While presenting a case in a hot, interior conference room may not measure up to the courtroom sce

Hardware and Software Can Be Bundled in Bid Package When Sound Reason Is Shown, U.S. Court Holds

By W. Samuel Niece
Howrey LLP

The U.S. Court of Appeals for the Federal Circuit has affirmed a decision upholding an agency's bid package that bundled (or merged) both hardware and software maintenance for a government computing system into a single procurement. CHE Consulting, Inc. v. United States, No.

More State Supreme Courts Join Majority Holding that CGL Insurance Covers Damage to Contractor's Work Caused by Subs

By David T. Dekker and Stephen D. Palley
Howrey LLP

and Douglas Green
Marsh, Inc.

Construction defect litigation is a concern for everyone involved in the construction process. If history is any guide, current economic conditions will le

California's Public Works Shutdown: How to Evaluate Your Legal Options

By Aaron R. Gruber
Howrey LLP

The California Pooled Money Investment Board has voted to cut off funding for $3.8 billion in public works construction projects in California.

The State Treasurer's office posted a list of the affected projects on the Web.

Strict New Ethics and Reporting Requirements Imposed on Federal Contractors

By Laura Kent and Andrew D. Ness
Howrey LLP

A significant amendment to the Federal Acquisition Regulation (FAR) that will affect all government contractors took effect on December 12, 2008. Contractors with federal government contracts of more than $5 million and with perform

Howrey Acquires Thelen Construction Law Practice and This Web Site

Howrey LLP

Howrey LLP has acquired most of the Construction Practice of San Francisco-based Thelen LLP.

As part of the transaction, Howrey also acquired ownership of this Web site, www.ConstructionWebLinks.com.

The bulk of the new Howrey construction team will be located in San Francisco a

Sub's Failure to Explain Low Labor Productivity Bars Claim for Constructive Acceleration

Howrey LLP

Murdock & Sons Construction, Inc. was the masonry subcontractor for construction of a maximum security state prison in Terre Haute, Indiana. Goheen General Construction, Inc. was general contractor. Murdock bid $1,629,825 for the masonry work. The only other two bids for that work exceeded $2.4 million.

The project was very dense with ma

Overview of New U.S. Law Aimed at Fixing Mortgage Meltdown

Howrey LLP

While HERA is not a particularly bold-sounding acronym, this new law is in fact a bold and sweeping piece of federal legislation intended to ameliorate the consequences of the unprecedented mortgage meltdown and to ensure that no such meltdown occurs again. The breadth and scope of the Housing and Economic Recovery Act of 2008 or HERA (Public Law 110-289)

Court Delays Disclosure of Contract Proposals Under Public Records Act Until Negotiations Are Complete

By Benjamin D. Heath
Howrey LLP

The City of Los Angeles Department of Airports issued a request for proposals for the lease of a parcel of land at Van Nuys Airport that included hangers, buildings and a fuel farm. Under the RFP, the city would select the successful proposer based on a variety of criteria, including

Contractor's Employee Intentionally Demolished Part of House, but Damage Is Covered by Insurance

By Peter K. Zweighaft
Howrey LLP

Owners hired the contractor to perform demolition work. In separate meetings with the contractor's president and vice president, the owners explained that the scope of work included the removal of: 1) the carport attached to the owners' house

Laches Defense Bars Destruction of Condos for Copyright Violation, U.S. Court Holds

Howrey LLP

The plaintiffs, Detroit area real estate developers, worked with an architectural firm to design a "twelve-plex" condominium building that maximized space utilization in its projects. The fronts and backs of the buildings were identical so there was no "back" of a building. Each building contained 12 units, and each unit had direct indoor access

Project Files, Bids, Contractor Budgets Can Be Trade Secrets, California Court Holds

By Joanna Rosen
Howrey LLP

Richard Foust was a project manager for San Jose Construction, Inc. In early 2004, he was in charge of 18 projects in pre-construction stages and two projects under construction. In mid-March, Foust expressed his unhappiness at San Jose to the president of S.B.C.C., Inc., a competitor. F

Florida Developer Allowed to Sue for Bad Faith; Surety Failed to Obtain Independent Investigation

Howrey LLP

The developer of a shopping center declared the contractor in default for poor workmanship during construction, including structural defects and building code violations. The developer gave written notice of the default to the surety and demanded that the surety take action in accordance with the terms of the performance bond within five business days. Th

Drywaller, Estimator Were Properly Allowed to Give Expert Testimony, U.S. Appeals Court Rules

By Laura Bourgeois
Howrey LLP

Royal International Drywall and Decorating, Inc. employed tapers as part of installing drywall in tract housing. Royal entered into a collective bargaining agreement with their union. Royal agreed to compensate the employees based on hours worked rather than on the usual piece-work

Washington State Agency Changes Position and Is Estopped from Enforcing Prevailing Wage Law by Supreme Court

Howrey LLP

In deciding the applicability of a prevailing wage law to truck drivers delivering materials to a construction project, the Washington Supreme Court equitably estopped the state's Department of Labor and Industry from enforcing penalties against suppliers that had relied in good faith on the department's prior interpretation of the act.

Private Financing of Infrastructure in California: Overview of PPP Opportunities and Challenges

By W. Samuel Niece
Howrey LLP

California historically has relied on public monies to finance its infrastructure. The demand for infrastructure has increased dramatically as the state's population has increased. However, the availability of public revenues to fund infrastructure has not kept pace.

U.S. Supreme Court Clarifies Proof Needed to Impose False Claims Act Liability on Subcontractors

Howrey LLP

The U.S. Navy contracted in 1985 with two shipbuilders to build a fleet of guided missile destroyers according to the Navy's baseline drawings and military standards. The shipyards contracted with Allison Engine Co., Inc. to build the generator sets that supply electrical power to the destroyers. Allison Engine subcontracted with the General Tool Co.

Owner's Oral Promise to Pay Subcontractor Enforced by Massachusetts Court

Howrey LLP

National Amusements, Inc. contracted with Old Colony Construction Co. to build a movie theater complex. Old Colony subcontracted a significant amount of the work to Central Ceilings, Inc.

The original project completion date was June 28, 2000. Because of groundwater problems, the completion date was extended by the owner to September 3

Bankrupt Sub's Claim Against General Contractor Is a Non-Core Proceeding and Must Be Arbitrated, U.S. Court Holds

Howrey LLP

The U.S. Court of Appeals for the 11th Circuit has ruled that an adversary proceeding by a debtor subcontractor against a general contractor was a "non-core" proceeding under the Bankruptcy Code and that the adversary proceeding was subject to the parties' arbitration agreement.

The Court of Appeals further held that even if the adversa

Prequalification in Government Construction Contracts: How It Works, How Disputes Are Resolved

By W. Samuel Niece
Howrey LLP


Relationship Between Prequalification and Responsibility

U.S. Court Permits Quantum Meruit Claims for Work Not Controlled by Contract

Howrey LLP

In two recent decisions by the U.S. Court of Appeals for the 8th Circuit, the court held that plaintiffs may recover on a quantum meruit claim even when there is a contract between the parties so long as the work performed was not controlled by the contract.


Steel Fabrication

Florida, South Carolina Supreme Courts Hold that Contractors' CGL Policies Cover Damages Arising from Subs' Defective Work

By Laura Thomson
Howrey LLP

In recent decisions, the Supreme Courts of Florida and South Carolina re-addressed earlier decisions involving coverage under general contractors' CGL policies for damage resulting from subcontractors' defective work.

In June, the Florida Supreme Court withdrew its prior o

Freely Negotiated Wholesale Energy Contracts Are Presumed to Be Enforceable Unless They Seriously Harm Public Interest, U.S. Supreme Court Holds

Howrey LLP

In a decision arising out of the 2000-2001 Western energy crisis, the U.S. Supreme Court has ruled that when the rates included in a wholesale power sale agreement were freely negotiated between the buyer and the seller, the Federal Energy Regulatory Commission (FERC) is required to presume that the rate meets the "just and reasonable" standard under the Fe

Materials in New Home Constitute Interstate Commerce, So Federal Arbitration Act Controls, California Court Holds

By Peter K. Zweighaft
Howrey LLP

The buyer purchased a home from the seller pursuant to a real estate purchase agreement that contained an arbitration provision. The buyer ignored the arbitration clause and filed a lawsuit against the seller claiming that a leak from a negligently installed underground pipe damaged

Party Cannot Be Compelled to Participate in, Pay for Mediation, California Court Holds

Howrey LLP

Jeld-Wen, Inc. was uninsured and was a cross-defendant in a multi-party construction defect case involving more than $500,000 in damage claims.

The San Diego County Superior Court deemed the case to be complex under judicial case management standards, issued a case management order, assigned a mediator to conduct up to 100 hours of mediatio

Federal Contractors Must Use E-Verify to Check Employee Work Status, President Bush Orders

Howrey LLP

President Bush has issued an amended Executive Order making the E-Verify program mandatory for U.S. employers that enter into contracts with the federal government.

E-Verify is the latest incarnation of the Basic Pilot/Employment Eligibility Verification Program initiated in 1997 to allow employers to voluntarily check the employment verifica

Under New Rule, Federal Contractors Can Lose Out on Projects, Be Debarred for Tax Delinquencies

By Aaron R. Gruber
Howrey LLP

The Federal Acquisition Regulation (FAR) has been amended to make tax delinquencies grounds for declaring bidders non-responsible and for debarment and suspension from federal contracting.

The amendments, effective May 22, 2008, are the result of a study entitled

AIA Issues Stopgap Amendment to Its A312 Payment Bond After Complaints by Sureties

By William DeVan
Howrey LLP

In response to court decisions interpreting its A312-1984 payment bond and the reaction of sureties to those court decisions, the American Institute of Architects has issued an amendment to the bond form as "a stopgap measure to address the immediate concerns of the sureties" until AIA can

LLCs, Though Legally Canceled, Still Face Construction Defect Suits - but Cannot Sue Subs

Howrey LLP

Three cases decided by the Washington Court of Appeals offer a cautionary tale to limited liability companies (LLCs) and their members as they seek to manage the risks of construction defect litigation.

Each case concerned the rights and liabilities of LLCs and their members after cancellation of the LLC's existence, either by the LLC or by

Contractual Agreement to Submit Construction Disputes to Referee Is Enforceable, California Court Holds

By Eric Casher
Howrey LLP

A home buyer and the developer of a new subdivision entered into a real estate purchase contract for the purchase of a home. The contract contained a provision requiring judicial appointment of a referee for binding (and not advisory) resolution of all disputes arising under the agreement.

Contractor that Failed to Take Field Measurements Is Liable to Sub, Idaho Supreme Court Holds

Howrey LLP

An Idaho subcontractor was awarded additional compensation for extra work it performed after encountering site elevations at the jobsite that differed from those shown on the plans and specifications provided by the general contractor. The Idaho Supreme Court held that the construction contract, which included the American Institute of Architects' A201

Revised AIA Contracts: An Overview of the Changed Terms and New Approaches

Howrey LLP

The American Institute of Architects has released the latest versions of many of its most widely used form documents, including the Owner/Contractor agreement forms and related general conditions and the owner/architect agreement forms. The AIA periodically revises its most popular form documents, generally on a 10-year cycle. The revisions are significan

Surety's Suit Against Virginia DOT Barred by Sovereign Immunity

By Todd J. Wagnon
Howrey LLP

In a case arising out of a surety's claim against the Virginia Department of Transportation, the Virginia Court of Appeals held that because there was not a direct contractual relationship between the surety and the state, the surety's suit was barred by sovereign immunity.

$2 Million in Punitive Damages Assessed Against Insurer for Mishandling Subcontractor's Claim

By Brienne Wesolek
Howrey LLP

A general contractor entered into a contract with the United States Forest Service to construct an underground stream profile viewing chamber at Taylor Creek near South Lake Tahoe. The general contractor subcontracted with a glass company to supply and install glass panels in the v

U.S. Supreme Court Limits Grounds for Reviewing Arbitration Awards Under FAA

Howrey LLP

The U.S. Supreme Court has ruled that §§10 and 11 of the Federal Arbitration Act provide the exclusive grounds for vacating and modifying arbitration awards for parties seeking expedited review under the FAA.

Contractual arbitration agreements providing for judicial review broader than the grounds in the FAA are not enforceable under the FAA

Surety Can Recover from Principal for Reasonable, Good Faith Payment Even Though Claim Was Not Covered by Bond

Howrey LLP

A subcontractor agreed to provide concrete paving work on a highway repair project in North Carolina. A surety issued a performance and payment bond on behalf of the subcontractor for the project. During the project, a heavy equipment repair company filed a claim with the surety to collect past due amounts for repairs the company made to equipment the sub

Homeowner Whose Roof Failed May Sue Shingle Manufacturer Under Federal Consumer Protection Law

Howrey LLP

A California Court of Appeal has found that shingles purchased by a homeowner as part of a lump sum contract for the re-roofing of his home were "consumer products" covered by the federal Magnuson-Moss Warranty Act. The law allows consumers to sue manufacturers of defective goods although consumers purchased the goods from retailers and not directly from m

ERISA Allows Individuals to Sue for Profits Lost in Defined Contribution Plans, U.S. Supreme Court Holds

Howrey LLP

The U.S. Supreme Court has held in that an individual participant in a 401(k) plan can sue under the Employee Retirement Income Security Act (ERISA) for lost-profits damages caused by the plan administrator's alleged breach of fiduciary duty. LaRue v. DeWolff, Boberg & Associates, Inc., 128 S.Ct. 1020 (2008).

James LaRue was a participa

New California Laws for 2008 Expand Design-Build Contracting, Tighten Environmental Rules, Limit Indemnity in Homebuilding, Add Notary Requirements

Edited By Clark T. Thiel
Howrey LLP


DESIGN-BUILD

All California Counties Now May Use Design-Build Contracting

Public Contracts Code §20133 was amended to allow all 58 Califor

Uncooperative Sub's Side Deal with Owner Costs It $500,000 in Punitive Damages

By Peter Zweighaft
Howrey LLP

A general contractor agreed to install an energy management system at a hospital. The contractor engaged a subcontractor to perform HVAC work, which comprised about 40 percent of the projects. The owner was to make 10 installment payments of $148,475 each to the contractor for a total

Government Cannot Eliminate Performance Options Set Out in Project Specs, Federal Circuit Holds

Howrey LLP

A government contractor was awarded a $14.3 million fixed price contract to construct a vehicle maintenance plant. The contract's specifications allowed the contractor to choose between two different materials - polystyrene rigid insulation or precast concrete -- for the project's fiber void retainers under grade beams. The specifications referred the cont

U.S. Court Rejects Constitutional Claims by Contractor Denied Public Works Contract

Howrey LLP

The Puerto Rico Public Housing Authority awarded Celta Construction Co. a contract to restore a public housing project. Plaintiff Miguel Redondo-Borges was Celta's president. Five months later, the housing authority annulled the bid award because it had determined that Redondo-Borges (and, therefore, Celta) was a "nonresponsible bidder." As a nonresponsi

Because Contract Incorporates Federal Arbitration Act, Court Cannot Compel Litigation as California Law Allows

By Brienne Wesolek
Howrey LLP

After owners discovered mold contamination in their home, their insurers hired a remediation contractor. The owners entered into a contract for remediation and repair work on the home with the contractor.

After the work was completed, the owners sued the contractor for negli

Compensation Plan in Which Stock Can Be Forfeited Is Upheld by California Court

Howrey LLP

A California Court of Appeal has upheld a compensation plan even though participants forfeited the stock and the money used to buy it if they were discharged or voluntarily terminated within two years. Schachter v. Citigroup, Inc., -- Cal.App.4th -- , 2008 WL 162244 (2008).

The plan was designed to encourage the retention of high-leve

California Homeowner Subject to Suit by Unlicensed Contractor for Injuries Suffered on the Job

By Eric Casher
Howrey LLP

A homeowner hired his neighbor, an unlicensed roofing contractor, to replace the roof on his house. The parties agreed on a set price, and the roofer immediately began work. After only four hours of work, the roofer fell from the roof and was injured.

The roofer filed a personal

Standard CGL Policies Provide Coverage for Sub's Construction Defects, Florida Supreme Court Holds

By Stephen Palley and Laura Thomson
Howrey LLP

In a much-anticipated decision, the Florida Supreme Court has confirmed that a subcontractor's faulty workmanship can constitute an accident and thus be an "occurrence" under a post-1986 commercial general liability (CGL) policy.

Court Decisions Prompt Sureties to Require Modifications to A312 Payment Bonds

By William DeVan
Howrey LLP

A recent series of court decisions has prompted several major sureties to require modifications to the American Institute of Architect's A312 Payment Bond before issuing new payment bonds using the form. Courts in Maryland, Virginia and Florida have held that a surety's failure to deny a cl

Federal Appeals Court Threatens Sanctions for Baseless Challenges to Arbitration Awards

Howrey LLP

A federal appeals court has warned that those who insist on challenging arbitration awards may face sanctions.

The U.S. Court of Appeals for the 11th Circuit wrote that Congress enacted the Federal Arbitration Act (FAA) in order to reduce congestion in the courts while still allowing parties a separate, independent avenue to resolve their dis

In Truck Driver Case, Court Clarifies Burdens for Establishing Claims and Defenses Under ADA

Howrey LLP

The U.S. Court of Appeals for the 9th Circuit, sitting en banc, has overruled in part its holding in Morton v. United Parcel Service, Inc., 272 F.3d 1249 (9th Cir. 2001) regarding the showing an employer must make when asserting an affirmative defense to an American with Disability Act claim. In addition, the court clarified each party's respective

CGL Policy Covers Damage Caused by Defective Construction, Federal Court Holds

By Michael S. McNamara
Howrey LLP

The U.S. Court of Appeals for the 4th Circuit has ruled that under Maryland law, defective construction is not an occurrence triggering coverage under a standard form commercial general liability insurance policy but that damage to a contractor's nondefective work caused by a subcontrac

Nuclear Power - Dawn of a New Life? Interest Revives, but Challenges Remain

By Kevin O'Brien
Howrey LLP


Introduction

Almost 25 years ago, the nuclear power industry appeared headed for extinction. Beset by unprecedented construction cost overruns, unpredictable regulatory review processes, uncertain investment return, constructed plants that never came on-

California Supreme Court OKs Alternative Employee Expense Reimbursement Plans

Howrey LLP, 01/07/2008 12:00 PM

Howrey LLP

The California Supreme Court has held in that employers may offer employees lump-sum reimbursement for work-related expenses, even "in the form of increases in base salary or... in comm