Construction Litigation Blog
Homeowners Beware—Make Sure That All Contractors, Sub-Contractors, and Material Supply Companies Are Paid
By Patty League
Homeowners who pay a contractor for construction work, including landscaping, may be held financially liable if the contractor fails to pay the subcontractors and material supply companies who also worked or provided product for your project. According to California law, subcontractors and material suppliers who are not paid by the contractor are able to record [...]
Supervisors of Companies May Now be Held Personally Liable in Wage & Hour Cases
By Iman Reza
The Importance of Complying with California Wage and Hour Laws The California Supreme Court expanded the definition of “employer” to include supervisors who “exercise control over the wages, hours or working conditions” or “suffer or permit to work” their employees (Martinez v. Combs (2010) 49 Cal.4th 35). Yes, that means supervisors of companies may now [...]
Tips To Avoid LLC License Application Delays
By Patty League
According to the California Contractors State License Board (CSLB), its Licensing division has processed about three dozen limited liability company (LLC) license applications; to date, five licenses have been issued. The LLC business classification became authorized to hold a California contractor license beginning January 1, 2012. The causes for the high rejection rate, include two [...]
Bonded Protection for Subcontractors and Material Suppliers
In California, a general contractor must file a payment bond on all public works projects over $25,000. Payment bonds are a form of guarantee ensuring that a subcontractor or supplier will be reimbursed for costs incurred on a public works project, including interest and attorney’s fees if a lawsuit becomes necessary. In the event a [...]
When Does Insurance Cover Faulty Workmanship?
Usually, commercial general liability (“CGL”) policies do not cover a contractor for property damage due to the contractor’s own faulty workmanship. As one California court summarized: “Generally liability policies … are not designed to provide contractors … with coverage against claims their work is inferior or defective…. Rather liability coverage comes into play when the [...]
CMU Ensures Prevailing Wage on Public Works Projects
Effective January 1, 2012, contractors working on public works construction projects in California must now comply with new regulations of the Division of Labor Standards Enforcement’s (DLSE) Compliance Monitoring Unit or “CMU.” DSLE is a division of the Department of Industrial Relations. The CMU was created to monitor and enforce prevailing wage requirements on public [...]
Subcontractor Protection in Federal Projects—Miller Act
By Patty League
The Miller Act protects persons who have furnished labor or materials to contractors engaged in the construction, alteration, or repair of any public building or public work of the United States. Prior to 1894, the agreements or contracts that the U.S. Government awarded to direct contractors rarely had clauses that required the direct contractor to [...]
Limited Liability Companies (LLCs) Can Now Be Licensed California Contractors!
By Iman Reza
Based on the passing of SB 392 in 2010, the Contractors State License Board can now process applications by LLCs for contractor’s licenses. However, you should know that there are some additional requirements for an LLC to obtain a contractor’s license. For example, the LLC application must include as Personnel of Record all directors, [...]
Bankruptcy Can Take A Toll On A Mechanics Lien Claim
Generally, once a mechanics lien is recorded, a lien claimant must file an action to foreclose on the lien within 90 days of the recording date. If a claimant fails to file an action within that time period, his or her lien rights are automatically forfeited. But what happens if a mechanics lien is recorded [...]
Do I Get a Second Chance Under California’s New Mechanics Lien Law?
Under California’s existing mechanic’s lien laws, a contractor must record a claim of lien either (i) within 90 days of the completion of work or (ii) within certain specified days after the owner records a notice of completion or cessation (60 days for direct contractors, 30 days for all others). The contractor then has another [...]
Lien Claimants May Stand Strong in the Face of Anti-Slapp Actions
A recent California case reinforces the principle that project owners are prevented from suing mechanic lien claimants for slander of title simply because a claim is later found to be non-meritorious (lacking sufficient evidence). In Alpha & Omega Development, LP v. Whillock Contracting, Inc., 200 Cal.App.4th 656 (2011) a project owner sought slander damages against [...]
New Law Affecting California Employers (Effective January 2012)
Labor Code Section 2810.5 (AB 469) requires employers to issue a notice to all new non-exempt employees effective January 1, 2012. The notice should contain all of the following information: “At the time of hiring, an employer shall provide each employee a written notice, in the language the employer normally uses to communicate employment-related information [...]
You Say Mechanic’s Lien, We Say Mechanics Lien
By Patty League
The big buzz and concern in the construction industry are the new laws, some of which have already taken effect and the balance or bulk taking effect July 1, 2012. The complete Mechanic’s Lien Law has been recodified under Senate Bill 189. By the way, that apostrophe I used in the word Mechanic’s that we’ve [...]
The Participating Owner — Leased Responsibility
Under California law, contractors and materialmen may record a mechanics’ lien against real property when improvements are made “at the instance” of the owner or his agent. But what happens if the improvements are made “at the instance” of a landlord’s tenant and the tenant is later unable to pay? Generally, if the property is [...]
Reading the Tea Leaves on California Supreme Court’s Upcoming Meal and Rest Break Decision
California employers’ policies regarding when workers take meal and rest breaks have been the subject of much litigation affecting many industries, including the construction industry. Regardless of whether an employer took measures to make meal and rest breaks available to employees, plaintiffs’ lawyers argued that the employer did not go far enough – that the [...]
Preliminary Notices — The Devil is in the Details
By Iman Reza
In order for a subcontractor or material supplier (who does not have a contractual relationship with a general contractor on a public works project) to collect unpaid invoices through a stop notice or payment bond, they must have served the general contractor and the owner (public agency) with a timely Preliminary 20-Day Notice (“Notice”) [1]. [...]
Like Many in California, Construction Laws Receive a Face-Lift
By Patty League
As many of you construction fans know, Governor Schwarzenegger signed into law Senate Bill 189 (“SB 189”) in 2009. Many may be wondering, “What in the world is this?” Well, the answer is simple: SB 189 is a comprehensive face-lift regarding the filing and enforcement of mechanic’s liens and stop notices. It presents noteworthy and [...]
“Stuff You Already Know”
When my youngest daughter was about five years old, I recall one morning I gave her some parental “advice” about something. While my “advice” has been long forgotten by all parties concerned, my wife and I will never forget her response. She looked up with some frustration from her breakfast and asked me, “Are you [...]
Don’t Stamp Out Your Lien Rights!
Over the past few months, proof of service affidavits have come across my desk bearing signatures that were obviously the product of a rubber stamp. In fact, one “signature” was stamped in block letters. Clearly, the purpose of the stamped signatures is to streamline the preparation and service of the preliminary notices and reduce writer’s cramp.
Beyond the Scope — Introduction to Construction Litigation Blog
In less than one year, the current mechanic’s lien laws that provided contractors and materialmen remedies in California for the past 100-plus years will undergo the biggest overhaul since the 1870s. And new legal minefields will continue to crop up due to the courts’ interpretations of the state’s licensing scheme and other statutes.
