Construction Law Blog
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The American Society of Civil Engineers (“ASCE”) has calculated that an additional $1.6 trillion should be spent on infrastructure by 2020. ASCE gives our crumbling infrastructure a failing grade (D). For seven years, this blog has been tracking and reporting on the sorry state of our infrastructure.
Washington courts have rejected subcontractors' contentions that a general contractor's mere use of their bids constitutes an "acceptance" of the subcontractor's bid and that the incorporation of the subcontractor's bid into the prime contractor's price to the owner constitutes an enforceable contract. Examining three Washington cases on this subject provides some insights on how the courts might view a general contractor's listing of a subcontractor in its bid as an act of "acceptance."
A basic principle of construction law is that one who furnishes plans and specifications for a project impliedly warrants that the plans and specifications are workable and sufficient. A long line of Washington cases has recognized this rule.
A bill that would extend a key tax break to tens of thousands of short sale sellers who sold their homes in 2014 for less than they owed on their mortgages was passed by the House and the Senate in late December, 2012. The last-minute one-year extension of the Mortgage Debt Forgiveness Act, which expired December 31, 2013, was included in the Tax Increase Prevention Act of 2014 that was signed into law by President Obama on December 16, 2014. Short sale advocates and real estate groups have been lobbying hard all year to help homeowners who sold their home through a short sale avoid a devastating tax bill, which they likely could not afford.
This is Part II of a two part blog on Construction Bankruptcy issues. For Part I, click here.
The Bankruptcy Code is Federal law. Bankruptcy courts are part of the federal (not state) judiciary system. Lien and bond claim law, however, can involve federal or state law. Federal bankruptcy intersects state lien and bond law when a participant in a construction project goes broke. As with anything else, there are winners and losers when someone on a construction project goes bankrupt. The goal is to take the available action to protect yourself. The winners are the ones who get out of the project before the bankruptcy occurs, obtain a security interest for their claims, or swiftly assert their available rights once the bankruptcy petition is filed. The losers are generally the ones who become unsecured creditors in the bankruptcy estate. Unsecured creditors share in whatever meager assets remain in the bankruptcy estate after secured creditors and administrative fees are paid.
In Washington, general contractors are primarily responsible for compliance with the Washington Industrial Safety and Health Act of 1973 ("WISHA"), even when it comes to the conduct of their subcontractors. If a subcontractor commits a violation, the Washington Department of Labor and Industries ("L&I") may still issue a general contractor a citation. The Board of Industrial Insurance Appeals - the quasi-judicial administrative body charged with reviewing L&I citations - has found a limited exception to a general contractor's "primary responsibility," but only if the general contractor has a safety program that is effective in practice and the violation was the result of unpreventable misconduct.
Minimum Wage Increases in 20 States: On January 1, 2015, employers in 20 states and the District of Columbia, as well as those who perform work on federal contracts and subcontracts, will see an increase in the minimum wage. In nine states which make adjustments to keep up with rising inflation (i.e. Washington), the increase is automatic. In 11 other states and the District of Columbia, the minimum wage is being raised as a result of new laws approved by the legislatures or by vote of referendum. To assist you in determining which states have raised the minimum wage and what the minimum wage is in those states, the U.S. Department of Labor provides an interactive map and state-by-state report (available here), which employers can use to determine the applicable minimum wage in a state. Also, as previously reported in this blog (available here), the new minimum wage for federal contractors and subcontractors is $10.10 as a result of an interim final rule issued on December 15, 2014.
OSHA Reporting Requirements: Beginning January 1, 2015, employers covered by the Occupational Safety and Health Administration ("OSHA") are required to report all work-related fatalities within eight hours, and all inpatient hospitalizations, amputations and losses of an eye within 24 hours. Previously, employers were required to report all workplace fatalities and when three or more workers were hospitalized in the same incident. Employers may report these serious incidents to OSHA by calling the nearest OSHA area office during normal business hours (list available here); calling the 24-hour OSHA hotline at 1-800-321-OSHA (6742); or reporting online here.
Construction contractors and subcontractors with contracts covered by the Wage Rate Requirements (Construction) Statute (formerly known as the Davis-Bacon Act) will be required to pay employees no less than $10.10 per hour. The Federal Acquisition Regulatory Council on December 15, 2014 published an Interim Final Rule and request for comments on a proposed rule to implement Executive Order 13658, which President Obama issued on February 12, 2014. The Rule establishes a new minimum wage covering services in construction contracts of $10.10 per hour, which will be adjusted annually by the Department of Labor. The Rule does not excuse a contractor’s non-compliance with any applicable federal or state prevailing law or any applicable or municipal ordinance establishing a minimum wage higher than the minimum wage established by the Executive Order.
As previously reported, the Harmon Tower, a new unfinished building located on the Las Vegas strip purportedly had such substantial structural defects that it was slated to be demolished. Read our previous blog post here. Seattleites are well-acquainted with new buildings being razed before their time. The McGuire Building, a 25-story apartment in Belltown built in 2001, was taken apart piece-by-piece in 2011 and 2012 due to corroding post-tension rods throughout the concrete structure.