Claim on Lien Bond Rejected
The mechanics lien statute gives an Owner the option of discharging a lien against its property by purchasing a bond normally in the amount of 150% of the lien. See RCW 60.04.161.
The Owner in this case purchased such a bond, and thereby cleared title for the sale of its property. The lien claimant (DBM Consulting) thereafter went to trial against the Owner on its breach of contract claim and won a verdict of roughly $68,000 plus legal fees and interest.
Verdict in hand, the lien claimant turned to the bond surety and demanded payment. Rejecting the claim, Division 1 held that the lien claimant failed to obtain judgment against the bond as well as the Owner. For that reason, the lienability of the construction work and the validity of the lien were not litigated -- and any attempt to litigate that issue now would be barred by res judicata.
The lesson? The bond stands in for the real estate but does not eliminate the claimant's burden of proving the same elements that would need to be established without the bond -- i.e., timeliness of the lien, coverage of the lien statute, validity of lien notice, etc.
Copy of opinion also available here Download file
Best Value Procurement - Part 2
Following up on Wednesday's entry, here's another example of how technical merit in a proposal -- this one for the replacement of the collapsed highway bridge in Minnesota -- lead to the award of the contract to the more expensive bidder.
Wither the AIA?
ConsensusDocs seeks to dislodge the standard AIA contract forms & become the new industry standard.
Is anyone using these forms yet? If so, how is it going?
Technical Flaws Cause Low Bidder's Proposal to be Rejected
For a good example of how the low bidder can nonetheless be denied contract award due to proposal flaws in the context of a best value procurement, check out this recent case involving a dredging job on the Columbia River.
New Crane Safety Rules Proposed by L&I
L&I has issued its new proposed crane operator & certification rules for public comment.
Why Construction Law Is More Satisfying than Real Estate Law
This of course would never happen to a construction law treatise...
"Drive Time" Compensable Under Minimum Wage Act
Yesterday, the Supreme Court held that "drive time" -- the time spent by employees driving company trucks from home to the first jobsite of the day and back home after the last jobsite of the day -- must be paid under the Minimum Wage Act.
Copy of opinion also available here Download file
Electricians Win Prevailing Wage Dispute on McCaw Hall Project
In this classification dispute over the rate of pay for certain electricians, the Court of Appeals examines the ins & outs of how L&I drafts new proposed regulations. Not exactly a scientific process, to say the least. In any event, given the remedial purpose of the Act, it is not surprising the Court sided in favor of paying the electricans the higher of the two possible rates.
Copy of opinion also available here Download file
Neuro Architecture
Ceiling height affects how you think.
That, and other insights on the connection between architecture and neurology, found here.
Bad Faith by Insurer Waives Coverage Defenses
In this case handed down yesterday, the Supreme Court held that a contractor's insurer was responsible for a $1.3 million settlement because it had waived its "your work" exclusion coverage defense by engaging in bad faith conduct.
The owner and insured/contractor were in a dispute and had scheduled an arbitration with the AAA. The insurer had retained defense counsel under a reservation of rights and had filed a dec action to contest coverage. So far, so good.
On the eve of the arbitration, however, the carrier served the arbitrator with a subpoena seeking to compel discovery of the grounds relied on by the arbitrator for whatever award the arbitrator eventually entered. In a cover letter, the carrier explained that its purpose was in part to obtain proof on whether its "your work" exclusion defense was valid.
The Supreme Court found this conduct to be in bad faith because the insured at that time was attempting to prove just the opposite -- that its work was not defective and did not result in harm to the project. By elevating its monetary interest in proving a coverage defense over the right of the insured to a strong defense on the merits of the claim, the Court held the carrier had committed bad faith.
After also deciding that the carrier had failed to rebut the Butler presumption of harm and that the $1.3 million settled reached by the parties on the 6th day of the hearing was reasonable, the Court affirmed judgment against the insurance company.
Copy of opinion also available here Download file
Oregon Update -- Legislative Developments
Click here for a handy summary of new laws affecting the construction industry in Oregon from the recently concluded Legislative session.
Court Dismisses Indemnity Claim Against Boeing
While it doesn't exactly break any new legal ground, this case summarizes & applies the doctrine that an employer's waiver of workers compensation immunity -- a big issue in any construction agreement -- must be explicit and in writing.
When a Boeing employee sued the City of Algona for personal injury sustained on its property, the City sought to obtain indemnity from Boeing under a 1992 letter agreement under which the property in question was developed. The Court held that Boeing's promise to repair damage to the development fell short of an explicit promise to waive workers compensation immunity, and therefore dismissed the City's indemnity claim.
Copy of opinion also available here Download file
New Greenhouse Gas Emission Rules Effective October 15
Beginning October 15, developers and public agencies with new construction projects in King County will be required to provide an estimate of greenhouse gas emissions resulting from the project. Details with worksheet and SEPA compliance checklist here.