Not only is the government out to sting contractors (as noted by G2G's Amy Pierce here), now Hollywood is too. Rima Suqi's New York Times interview, "Getting Contractors to Man Up" (subscription required if you've used up your free articles) notes that SpikeTV has a new show about bad apple contractors. Hosted by Adam Carolla (who you may remember from "Loveline" and "The Man Show"), the show is geared toward helping homeowners who have hired contractors whose work has been sub-par. The show lures unsuspecting contractors to a decoy house on the premise of providing a bid, and then surprises them with a camera crew. The contractors are then offered a choice--fix the work under the show's supervision, return the money they were paid by the homeowner, or face a court battle with the homeowner in which the show will assist the homeowner. Not surprisingly, according to the interview, most contractors choose to finish the job.
"To Catch a Contractor" premieres this Sunday, March 9, at 10 p.m./9 p.m. Central. You can find out more about the show at Spike TV's site here. Am I the only one hoping at least one contractor will choose the court option?
One of the first tactical lessons most litigators learn is not to overstate your position. Another lesson is to always remain civil, even in the face of an un-civil opponent. These lessons are sometimes difficult for young lawyers, brimming with aggression, to digest. Most of the time when one of those lawyers inserts unfortunate language in a brief--say, openly mocking the opponent's argument--cooler heads prevail and a sage senior lawyer excises the offending language.
"There are good reasons not to call an opponent's argument "ridiculous," which is what State Farm calls Barbara Bennett's principal argument here. The reasons include civility; the near-certainty that overstatement will only push the reader away (especially when, as here, the hyperbole begins on page one of the brief); and that, even where the record supports an extreme modifier, "the better practice is usually to lay out the facts and let the court reach its own conclusions." Big Dipper Entm't, L.L.C. v. City of Warren, 641 F.3d 715, 719 (6th Cir.2011). But here the biggest reason is more simple: the argument that State Farm derides as ridiculous is instead correct."
Ouch. Whatever feeling of satisfaction that lawyer had when he wrote "ridiculous" in his brief must have felt worlds away when he read that opinion.
There's another lesson here: Always carefully review defined terms in your insurance policy. In Bennett, "The question presented is whether Bennett was an "occupant" of the Fusion--as that term is defined by State Farm's policy--at the time she was on the vehicle's hood. If she was, then she is entitled to coverage for the injuries she sustained there; if not, then not." The policy defined "occupying" as "in, on, entering or alighting from." Since Mrs. Bennett was "on" the car, she was "occupying" it as defined by the policy.
One last lesson for insureds: Don't give up too easily. It would have been very easy for Mrs. Bennett to hang her head when State Farm denied her claim because she was on the hood, and wasn't an "occupant" of the car. But she stuck with it and pressed her case. Good for her.
You'd be surprised at how often we find mistakes at the beginning of projects that, if not caught, would put most of a client's insurance coverage at risk. Clients frequently ask us to review their controlled insurance programs (often referred to as "CIPs" or "Wrap-Ups") before implementing them. Brokers do much of the heavy lifting in structuring these programs, but many of our clients like to have coverage attorneys review them for some nuances that lawyers who litigate coverage issues will pick out. The issues get pretty esoteric, but some esoteric issues can be worth a lot of money. Lately, I've been seeing one particular type of exclusion in Wrap-Ups that, if it remained and were enforced, could jeopardize much of the coverage the client thought they were buying in the Wrap-Up: a "Cross-Suits" exclusion.
Under a Wrap-Up, the owner (under an "Owner Controlled Insurance Program or "OCIP") or general contractor (under a Contractor Controlled Insurance Program or "CCIP") and all contractors and subcontractors of every tier are named insureds under certain project insurance, typically general liability and workers compensation. When properly administered, a Wrap-Up program can increase project savings, reduce litigation, provide more complete coverage for completed operations, increase Minority and Women Business Enterprise participation, among other benefits.
But Cross-Suits Exclusions are children of a different type of insurance set-up, a more traditional program where individual contractors and subcontractors buy their own insurance and some are required to make others additional insureds. This exclusion precludes coverage for claims brought by one insured against another insured. A typical Cross Suits Exclusion provides: "This insurance does not apply to: . . . Suits brought by one insured against another insured." These would, for example, avoid the "moral hazard" of a parent company suing its own subsidiary to trigger liability coverage.
But in a Wrap-Up, this doesn't make any sense. Remember, in a Wrap-Up, the owner, general contractor and all subcontractors are all named insureds. So a Cross-Suits exclusion would bar coverage for any liability the general contractor may have to the owner for losses arising from it or its subcontractors negligence. That's a significant part of the coverage that an owner would want its contractor to have on a GL policy. If a Cross-Suits exclusion remained and were enforced, the only liabilities covered would be to third parties--parties that have nothing to do with the project.
A similar limitation is created when a Cross Suits Exclusion is included in a CCIP. Although in that circumstance there may be coverage for a contractor's liability to the owner (if the owner is not a named insured), contractors will not be able to trigger coverage for their own losses arising from the negligence of another contractor/subcontractor on the project. For example, the general contractor will not be able to trigger the Wrap-Up program for losses it incurs as a result of its subcontractors' negligence.
This is just an example of an exclusion that plainly doesn't belong in a Wrap-Up program, but that we've seen almost inserted in them recently. Make sure to have a reputable broker review your programs before implementing them and consider investing a small amount to have a coverage attorney review it. Prior planning prevents poor performance.
Recently a California Court of Appeal affirmed a superior court's judgment and order confirming that the City of San Leandro (City) had not abused its discretion by waiving a bid defect and awarding the public project contract to that bidder. The court, in Bay Cities Paving & Grading, Inc. v. City of San Leandro, Case No. A137971 (Jan. 28, 2014), rejected Bay Cities Paving & Grading, Inc.'s (Bay Cities) contention that the City improperly awarded the contract to Oliver Desilva, Inc. dba Gallagher & Burk (hereafter G&B) because G&B inadvertently omitted the first page of its bid bond, a bond required by the contract specifications. The court found that the City had before it the information needed to determine that G&B had satisfied the bid bond requirement when it concluded that G&B was the lowest responsible bidder.
Star Equipment, Ltd., Manatt's, Inc., and Short's Concrete Cutting Co. recently secured a victory in the Iowa Supreme Court when the Court, in Star Equipment, Ltd., v. State of Iowa, Iowa Department of Transportation, Case No. 12-1378 (Jan. 31, 2014), reversed the district court's ruling on the scope of remedies available to subcontractors under Iowa Code § 573.2 for unpaid work. For the state projects, the Iowa Department of Transportation (IDOT) had waived the requirement of a construction surety bond because the general contractor qualified as a Targeted Small Business (TSB). Ruling in favor of the subcontractors, the Court construed Section 573.2 "as a waiver of sovereign immunity that allows subcontractors to recover from IDOT the unpaid balances TSBs owe for work on public improvements." It went on to rule that the subcontractors, as prevailing parties, are eligible, in the district court's discretion, to recover their reasonable attorneys' fees from IDOT.
Recently I've come across a number of articles reporting on what I will refer to as the "bliss" factor for employees, measuring, for example, happiness with their current career path, with the city in which they work, etc. CareerBliss has published a number of bliss lists, evaluating what it considers to be the "key factors" which affect work happiness, including, for example: "one's relationship with their boss and co-workers, their work environment, job resources, compensation, growth opportunities, company culture, company reputation, their daily tasks, and job control over the work that they do on a daily basis" to come up with an overall "bliss rating" or "bliss score." A number of you with careers in the construction industry have reported that you are blissfully happy.
Co-head of Pillsbury's Energy Industry team Rob James and project finance partner Philip Tendler recently published 2014 Project Finance - United States. In it, they discuss collateral, how security interests are perfected and prioritized, liens, and enforcement of collateral. In addition, they touch on bankruptcy, foreign exchange, remittances, repatriation, offshore and foreign currency accounts, foreign investment and ownership restrictions, insurance, and natural resources. They conclude with a section on financing of recent public-private partnership (PPP) transactions in the United States.
Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through - Project Finance 2014 (published in August 2013; contributing editor Phillip Fletcher, Milbank, Tweed, Hadley & McCloy LLP).
Where is everyone going and why? In its recently-published article titled The States People Are Fleeing in 2014, Forbes discusses United Van Lines' -- the big St. Louis-based moving company -- 37th Annual Migration Study of where Americans are moving. United Van Lines analyzed "a total of 125,000 moves across the 48 continental states and the District of Columbia in 2013 and came up with a picture of migration patterns across the U.S."
You can never be 100% sure of what you will find below the surface when you begin excavating on a construction project. But I'm willing to bet construction workers in Seattle, Washington never anticipated finding a very rare 10,000 year old mammoth tusk.
An employee of a plumbing subcontractor uncovered the tusk with a shovel and immediately stopped digging to contact the general contractor. The amateur archeologist's boss said "it was more exciting than the time they found a jar of money someone had buried in a backyard."
Privacy has and continues to be a hot topic in California and across the nation. On February 13, 2014, the California Office of the Attorney General confirmed that the "[c]ontinuous videotaping surveillance of truck drivers during their on-the-job driving does not constitute a misdemeanor under [California] Labor Code section 1051 where the video file is inspected by a third party and used as a basis for discipline by the driver's employer, provided that the third party is an agent of the driver's employer who is videotaping and inspecting the file for the sole benefit of the driver's employer, and that the file is furnished only to the driver's employer." The practice of using video cameras to continuously record the actions of a truck or bus driver is not uncommon in the commercial and municipal transportation industry. Such footage is often used by the employer for training or disciplinary purposes.
Is a licensed contractor in good standing in State A permitted to offer to contract for or to perform work requiring a contractor's license in State B? A number of states have reciprocity agreements with each other pursuant to which a contractor license applicant holding a contractor's license in good standing in a comparable classification in State A (recognized by the licensing agency as a reciprocity state) may have the trade portion of the written licensing exam waived in State B. Even with reciprocity, the license applicant generally must comply with all of State B's other licensing requirements, including submitting a license application and passing the law portion of the written licensing exam. What this could mean is that even though the contractor is properly licensed in State A, the contractor is not properly licensed in State B.