Gravel2Gavel Construction & Real Estate Law Blog

The Sacramento Ronald McDonald House recently broke ground on a project to double the capacity of its housing facility located at 49th Street on the U.C. Davis Medical Center campus with a $6 million expansion. The expansion will add 20 bedrooms to the existing 18 bedroom facility, and add a kitchen, dining area, indoor playroom and fitness facilities. The 18,000 square foot expansion was made possible from a variety of fundraising efforts.

There are a total of 11 Ronald McDonald’s Houses in California. Reportedly, McDonald’s funds approximately 16% of the financial needs, which includes donating $0.15 for each McFlurry sold.

Additional Source: Sacramento Ronald McDonald’s House will double capacity in $6 expansion; Ronald McDonald House Charities

On April 11, 2014, Mississippi Governor Phil Bryant signed into law Senate Bill 2622, enacting a construction lien law to protect contractors, subcontractors, materialmen, registered architects and professional engineers, and registered land surveyors. Compliance with the new law is imperative to avoid forfeiture of your right to a lien claim and to maintaining an enforceable lien.

For example, the new law contemplates that a lien claim may be forfeited as follows:

“Upon the written request of the property owner by registered or certified mail or statutory overnight delivery, the contractor shall furnish to the owner a complete list of all subcontractors and materialmen and upon written request from the contractor, all subcontractors shall provide the same information. If the contractor or subcontractor willfully fails or refuses to furnish the list or to give the information to the owner or contractor within a reasonable time, he shall thereby forfeit his right to a lien under this article. Similarly, if the contractor or subcontractor fails to pay any materialman or subcontractor in direct privity with him in accordance with any contract, subcontract or purchase order specifically requiring him to do so, he shall thereby forfeit his right to a lien under this article.”

In addition, no lien claim will be permitted in favor of any contractor or subcontractor who is not licensed, as required by law, or who contracts with any contractor or subcontractor who is not licensed, as required by law. And to be filed and recorded, the lien claim must have the required language.

The new law also provides a form Interim Waiver and Release Upon Payment, Waiver and Release Upon Final Payment, Affidavit of Nonpayment, Notice of Contest of Lien, and Pre-lien Notice to Owner. In addition, the lien claim must be “in substance” as follows:

“A.B., a mechanic, contractor, subcontractor, materialman, machinist, manufacturer, registered architect, registered forester, registered land surveyor, registered professional engineer, or other person (as the case may be) claims a lien in the amount of (specify the amount claimed) on the building, structure, house, factory, mill, machinery, or railroad (as the case may be) and the premises or real estate on which it is erected or built, of C.D. (describing the houses, premises, real estate, or railroad), for satisfaction of a claim which became due on (specify the date the claim was due, which is the same as the last date the labor, services or materials were supplied to the premises) for work performed or labor, services provided (or whatever the claim may be).

THIS CLAIM OF LIEN EXPIRES AND IS VOID ONE HUNDRED EIGHTY (180) DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF A PAYMENT ACTION IS NOT FILED BY THE CLAIMANT WITHIN THAT TIME PERIOD.

NOTICE TO OWNER OF PROPERTY: You have the right to contest this claim of lien pursuant to Mississippi law.”

Important deadlines include, for example:

• 10 Days — As to single-family residential construction only and a subcontractor, materialman or design professional not in privity with the owner, providing the owner a pre-lien written notice at least 10 days before filing a lien claim of lien, which can be evidenced by any reliable means of delivery
• 30 Days — For any person having a right to a lien claim who does not have privity of contract with the contractor, or, if there is no contractor, with the owner, and is providing labor, services or materials for the improvement of property, within 30 days following the first delivery of labor, services or materials to the property, the person shall give a written notice to the contractor, or, if there is no contractor, to the owner, either by e-mail with a confirmed receipt, registered or certified mail, or statutory overnight delivery setting forth the following: (a) The name, address, and telephone number of the person providing labor, services or materials; (b) The name and address of each person at whose instance the labor, services or materials are being furnished; (c) The name of the project and location of the project to which labor, services or materials are provided; and (d) A description of the labor, services or materials being provided and, if known, the contract price or anticipated value of the labor, services or materials to be provided
• 90 Days — Filing for recording the lien claim in the office of the clerk of the chancery court of the county where the property is located within 90 days after the claimant’s last work performed, labor, services or materials provided, the furnishing of architectural services, or the furnishing or performing of surveying or engineering services
• 2 Days Later — Sending, no later than 2 business days after the lien claim is filed of record, a true and accurate copy of the lien claim by registered by registered or certified mail or statutory overnight delivery to the owner of the property or, if the owner’s address cannot be found, the contractor, as the agent of the owner; if the property owner is an entity on file with the Secretary of State’s office, sending a copy of the claim of lien to the entity’s address or the registered agent’s address shall satisfy this requirement.
• 2 Days Later — If the lien claimant is not the contractor, sending a copy of the claim of lien within 2 business days by registered or certified mail or statutory overnight delivery to the contractor or to the contractor’s registered agent
• 90 Days/180 Days — Filing a lien claim payment action within 180 days from the date of filing for recording the lien claim – the owner may shorten the time for filing the lien claim payment action to 90 days by it, its agent, its contractor or its contractor recording in the chancery clerk’s office a notice of contest of lien, as required by law, along with proof of delivery to the lien claimant
• Same Time as Lien Claim Payment Action — Filing a lis pendens notice with the commencement of a lien claim payment action

The new law is worth a careful read now.

On June 30, 2014, the US Court of Appeals for the Fifth Circuit reversed the lower court’s determination that the State of Texas’ administration of its water management authority under state law violated the Endangered Species Act (ESA) by “taking” whooping cranes, a protected species under the ESA, by failing to ensure that adequate supplies of freshwater flowed into the river serving the Aransas National Wildlife Refuge, located along the Texas coast. To remedy the situation, the lower court ordered the state officials to refrain from approving or granting new water permits until the State of Texas persuaded the court that such permits will not take whooping cranes in violation of the ESA. The case is The Aransas Project v. Shaw.

The appeals court held that the lower court utilized an erroneous standard of proof, in that it failed to follow the foreseeability and proximate cause requirements for ESA liability described in the 1995 Supreme Court decision in Babbitt, Secretary of the Interior v. Sweet Home Chapter of Communities for a Great Oregon. The case is significant because it describes the standard of proof that must be met in many ESA-taking cases when the link between a government action (usually a permitting decision) and the taking of a threatened or endangered species ~ the Fifth Circuit described the whooping crane as “a majestic bird that stands five feet tall and has a wingspan of more than eight feet” ~ must be established utilizing these proximate cause factors. In this case, the connection between permitting actions, the water usage of hundreds of licensed users and the impact of a historic drought was too remote to establish liability for the state. The appeals court also ruled that the injunction issued by the lower court was an abuse of discretion and must be reversed.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Anthony Cavender, the author of this blog.

Additional Sources: Unofficial Transcript of Oral Argument Aug. 8, 2013

Photo: USFWSmidwest, Whooping crane (Federally endangered) pair feed and rest at Patokah River National Wildlife Refuge in Indiana on their migration south, Taken Nov. 22, 2010 – Creative Commons

Evidently everyone does have an App, except me. OSHA’s Heat Safety Tool App enables workers and supervisors to calculate the heat index for their worksite. Based on the heat index, the App displays a risk level to outdoor workers and access via a “click” to reminders about the protective measures that should be taken at that risk level to protect workers from heat-related illness-reminders. Remember that the industries most affected by heat-related illness include construction; trade, transportation and utilities; agriculture; building, grounds maintenance; landscaping services; and support activities for oil and gas operations.

OSHA encourages employers to establish a complete heat illness prevention program to prevent heat illness, and reminds employees to Water, Rest, Shade to prevent heat related illness and fatalities:

• Drink water every 15 minutes, even if you are not thirsty
• Rest in the shade to cool down
• Wear a hat and light-colored clothing
• Learn the signs of heat illness and what to do in an emergency
• Keep an eye on fellow workers
• “Easy does it” on your first days of work in the heat to enable yourself to get use to it

It also warns that every year, thousands of workers become sick from exposure to heat, and some even die. Exposure to heat can manifest as a heat rash, heat cramps, heat exhaustion and heat stroke; heat stroke requires immediate medical attention and can result in death. These conditions are preventable ~ Water, Rest, Shade. Be safe!!!

Additional Sources: U.S. Department of Commerce, National Oceanic and Atmospheric Administration, Heat Wave: A Major Summer Killer; Welcome to OSHA’s Campaign to Prevent Heat Illness in Outdoor Workers; OSHA Compliance Issues: Correcting Common Health And Safety Program Deficiencies At Remediation Sites; OSHA Technical Manual (OTM) Section III: Chapter 4; Cal/OSHA Issues 2nd High Heat Advisory to Employers with Outdoor Workers

Photo: Hey Paul Studios, Outside, Taken Aug. 5, 2012 – Creative Commons

Today, the California Department of Industrial Relations (DIR) announced that it has approved implementation of the 2014/15 Alternative Security Program (ASP), which it boasts that this “first-in-the-nation, innovative program” “frees $7.54 billion in working capital and provides self-insured California businesses greater financial flexibility.”

All employers in California are required to have workers’ compensation insurance to protect themselves and workers, and to minimize the impact of work-related injuries and illnesses. Meeting California’s requirement that all employers in California have workers’ compensation insurance can be done either by buying an insurance policy, or through obtaining authority from DIR’s Office of Self Insurance Plans (OSIP) to self-insure the employer’s workers’ compensation liabilities.

OSIP reports Self Insurance by the Numbers – 2013 Annual Report Statistics as follows:

• $177 Billion total self-insured payroll
• 4 Million CA Workers covered by self-insurance
• 1 in 4 CA Workers is covered by self-insurance
• 9,849 CA Employers are active self-insurers

The ASP, which is operated by the non-profit California Self Insurers’ Security Fund with the DIR, provides financial guarantees to replace security deposits required to collateralize self-insured workers’ compensation liabilities. Otherwise, if an employer is self-insured, it is required to maintain a deposit to collateralize its risk in an amount equal to estimated liabilities as determined by an actuary, e.g., cash, letters of credit, surety bonds or securities. An ASP member’s cash or line of credit is freed up, enabling them to invest these monies into its business.

Additional Source: DIR News Release No. 2014-56, California’s Alternative Security Program Frees $7.5 Billion in Working Capital for Businesses (Jul. 2, 2014); Office of Self Insurance Plans

The Seattle Public Utilities (SPU) and Department of Planning and Development (DPD) are reportedly working together to increase recycling and salvage rates in the hopes of achieving Seattle’s landfill diversion goals — to divert 70%of construction and demolition waste from landfills by 2020. Because certain materials are easy to either salvage or recycle, Seattle is banning asphalt paving, brick, concrete, metal, cardboard, and new gypsum scrap from being sent to a landfill for disposal within the City of Seattle. SPU has set up a facility certification program identifying qualified receiving and recycling facilities for recovering targeted construction materials for recycling and subsequent use.

Starting July 1, 2014, for all construction projects with a work area greater than 750 square feet a Waste Diversion Report with be required as part of the building permit application, and for demolition projects and construction and alteration projects that include demolition, where the area of work is greater than 750 square feet, a Deconstruction and Salvage Assessment will also be required. The DPD reminds everyone that these requirements have been in effect since the 2012 Seattle Building Code was adopted in late December 2013.

DPD’s website confirms that if a Waste Diversion Plan & Deconstruction & Salvage Assessment is not included with the application for a building permit, the completed form can be emailed to DPD at any time during the review process. For technical questions about the Deconstruction Salvage Assessment and/or the Waste Diversion Plan, you can email the SPU.

Additional Source: New Requirements for Construction and Demolition Waste; Recycling Required for Construction and Demolition Projects

Photo: Bala Sivakumar, Seattle Summers, Taken Aug. 14, 2010 – Creative Commons

On May 24, 2011, the Virginia Soil and Water Conservation Board adopted final stormwater management regulations (Virginia Stormwater Management Program (VSMP) Permit Regulation). The date for statewide local government implementation of stormwater management programs is July 1, 2014.

As required by of the Code of Virginia, local governments will become the VSMP authorities, except that the Virginia Department of Environmental Quality (DEQ) will maintain oversight of local programs to ensure compliance with all applicable state regulations. While the local jurisdiction will administer the VSMP, developers/contractors will continue to obtain VSMP General Permit for Discharges of Stormwater from Construction Activities (VSMP Permits) coverage from the state by filing a registration statement online using the state’s ePermitting system; the VSMP Permit will continue to be the vehicle for monitoring compliance with the Virginia Stormwater Management Act.

Importantly, the new regulations include a grandfathering provision, which contemplates that state regulations and local ordinance allow for projects to proceed through construction under the old technical criteria for stormwater management if one of several circumstances applies:

• Projects for which plan approval status has been received by July 1, 2012 or before, but for which no VSMP permit is obtained before July 1, 2014 — (A) Documentation may take the form of a locality approved plan, plat, zoning approval, or other approved document determined permissible under the localities ordinance; (B) Any modification to said locality-approved document may call into question the eligibility of the project to be grandfathered; and (C) Construction must be complete by June 30, 2019.
• Projects with government bonds or public debt financing before July 1, 2012.
• Projects that obtain2009 VSMP permit coverage before July 1, 2014 have two 5-year permit cycles (until June 30, 2024) to be completed, if permit coverage is maintained.

If a project does not qualify under the grandfathering clause, the project will required to meet the new regulations regardless of the stormwater management practices shown on the approved plan.

Additional Sources: July 1, 2014: Stormwater Regulations; Virginia Department to Environmental Quality; Virginia Stormwater Management Program (VSMP) Frequently Asked Questions (FAQ)