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San Mateo Construction Law Blog

Eleventh Circuit Court of Appeals defines Structural Damage as Damage to a Building's Structural Integrity. Hegel v. First Liberty Ins. Corp., (11th Cir. Feb. 27, 2015) 2015 WL 821146

The Hegels had a homeowner's insurance policy with First Liberty for their Spring Hills, Florida residence. That policy insured against "Sinkhole Loss" as an exception to the policy's exclusion for damage caused by earth movement. Under the policy, "Sinkhole Loss means structural damage to the building, including the foundation, caused by sinkhole activity. The policy, however, did not define the term "structural damage."

New Requirement that All Contractors and Subcontractors Bidding on Public Works Projects Be Register with the Department of Industrial Relations

As a result of the passage of Senate Bill (SB) 854, significant changes were made to Cal. Labor Code §1771.1 and §1725.5. All licensed contracts who work on or intend to work on public works projects must be registered with the California Department of Industrial Relations. Beginning March 1, 2015, all contractors were required to register with Department of Industrial Relations in order to bid on public works projects or be listed in a bid proposal. As of April 1, 2015, only contractors who have registered with the Department of Industrial Relations will be eligible to be awarded a public works contract, even if the project did not go out to bid.

Prejudgment Interest is Set at 7% on a Mechanic's Lien Claim Against Non-Contracting, Innocent Owners

In a recent case, Palomar Grading & Paving, Inc. v. Wells Fargo Bank, N.A. et al., Court of Appeal (2014 S.O.S. 4573) the appeal court held that "We determine it is the constitutional default rate that should apply to prejudgment interest on a mechanic's lien as applied to noncontracting, innocent owners."  California's constitutional default rate for prejudgment interest is 7%. 

The Subletting and Subcontracting Fair Practices Act goes into Effect on July 1, 2014

As our earlier post and emails have indicated, last year Governor Brown signed into law a new twist to The Subletting and Subcontracting Fair Practices Act (Act). The change goes into effect on July 1, 2014. If you are a contractor submitting a bid to a public entity for a California public works project will be required to include the contractor license number of each subcontractor you have listed.

It's the Result that Matters...

A recent California decision, Relentless Air Racing, LLC v. Airborne Turbine LTD. Partnership, 2014 DJDAR 57 (Cal. App. 2d Dist., Dec. 31, 2013), states that a judgment creditor does not have to demonstrate wrongful intent by alter ego parties when attempting to add them as additional judgment debtors on a judgment.

The Right to Repair Act is not the Exclusive Remedy When Actual Damages are Present

The California Legislature enacted S.B. 800 (aka the "Right to Repair Act") in 2002 to provide builders, subcontractors, product manufacturers and design professionals an opportunity to repair construction defects before a new homeowner initiated court proceedings. S.B. 800 applies to construction defects identified in new residential construction and was an effort by the Legislature to reduce construction defect lawsuits.

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