Construction Law Blog
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John P. Ahlers and Paul R. Cressman, Jr. are pleased to announce that they are presenting at The Seminar Group’s upcoming 22nd Annual Washington Construction Law Seminar on September 17th and 18th, 2015 at the Grand Hyatt Hotel in Seattle.
In Waltz v. Tanager Estates Homeowner’s Association, Division III of the Washington Court of Appeals addressed a lawsuit brought by homeowners, the Waltzes, against their Homeowners Association (“HOA”) and individual members of the Board of the HOA. 332 Wn. App. 85, 332 P.3d 1133 (August 19, 2014). The Waltzes sought to remodel their home, but their remodeling plans were rejected by the HOA Board. The Waltzes brought suit against the HOA and the individual Board members. The trial court found that the Board members were not grossly negligent in the performance of their duties and, thus, were not liable to the Waltzes. The Waltzes appealed.
The Veterans Benefit Act of 2003 established a procurement program for Service-Disabled Veteran-Owned Small Business (“SDVOSB”) concerns. This program provides that contracting officers may restrict competition to SDVOSB, and award a sole source or set aside contract where certain criteria are met. The Small Business Administration (“SBA”) then issued rules establishing a SDVOSB Concern Program. The SBA’s program establishes the criteria to be used in federal contracting to determine service disabled veteran status, business ownership and control requirements, and guidelines for establishing sole source and set aside procurement opportunities in protest and appeal procedures (see Code of Federal Regulations (“CFR”) 13 CFR § 125.8-125.10).
Litigating and arbitrating construction cases is extremely expensive. By the time the procedural rules are complied with and the discovery process is done, even the smallest of construction cases with the most cost-conscious legal counsel will run $300,000. Larger construction cases are vastly more costly. For example, the 2012 King County Bright Water Tunneling dispute (VPFK v. King County) cost taxpayers over $10 million in attorneys’ fees alone. For more information, read our blog article, King County Scores a $155.8 Million Victory Against Contractor on Brightwater Tunneling Project.
Construction has started at Boeing’s $1 billion 777X Wing Plant in Everett after months of site preparation. When the new wing building is complete in 2016, workers will start fabricating the central parts of the 777X’s new carbon composite wings. The building will be the largest single structure under construction in Washington this year. At its peak, construction will employ 1,200 people, and consume 31,000 tons of steel and 17,000 tons of concrete.
A recent Southern District of New York ruling addressed the issue of public access to arbitration awards. The case involved a motion to confirm an arbitration award and a joint request from the parties to “seal” various documents relating to the arbitration. Sealing of court records prevents public access and ensures the proceedings remain confidential.
The Washington Limited Liability Company Act (the “Current Act”) was first adopted in 1994. It has been revised several times in order to address specific issues, most recently in the 2014 Regular Session of the Legislature. The Current Act has not been the subject of comprehensive review and revision since its original enactment. The experiences of other states, and the experiences of business attorneys in Washington, have shown that the Current Act should be updated and modernized. The bill pending in the current legislative session was developed under the auspices of the Washington State Bar Association Business Law Section and is intended to make the Limited Liability Company Act more flexible and user-friendly, and to eliminate or modify provisions that create unnecessary problems for business people forming and operating LLCs.
The basic features of the proposed legislation are summarized in a memorandum from the Business Law Section and Partnership and LLC Law Committee, which is available here. The legislative history and the entire proposed bill is available here.
When analyzing liens related to tenant improvements performed pursuant to a contract between a tenant and contractor, we are frequently asked whether the lien attaches just to the tenant’s leasehold interest (i.e., the value of the lease) or whether the lien can also attach to the landlord’s fee interest in the real estate where the leased premises are located. Landlords want protection from liens, whereas contractors want lien rights against both the leasehold interest and the landlord’s fee interest in the property because liening the fee interest will likely place additional pressure on the tenant to resolve the lien and because the fee interest typically provides greater security. Washington’s lien statute and several cases provide guidance.
As construction lawyers, we rarely have an opportunity to dabble in the area of immigration law, but immigration affects contractors. For example, the SkyRise Tower (“SkyRise”) stands at the center of Biscayne Bay in Miami, and is being financed by foreign investors who have at least $500,000 to fund the project. Similar to the Statue of Liberty, SkyRise will be the gateway to U.S. Citizenship – not for the tired, poor, and huddled masses, but for rich foreign investors seeking a green card.
State and local infrastructure banks are again in the spotlight with the State Transportation and Infrastructure Financing Innovation Act (“STIFIA”), which Representatives Richard Hanna (R-NY) and Janice Hahn (D-Calif.) recently introduced into Congress. The concept of state infrastructure banks has been around for many years. These banks work to provide loans, construction debt financing, or lines of credit for infrastructure projects in various local areas. STIFIA is designed to amend a federal highway bill already in effect: the Moving Ahead for Progress in the Twenty-First Century Act (known as “MAP-21”). STIFIA would put the projects and their financing in the hands of state and local governments, which are more familiar with the needs and priorities in those areas than the federal government.