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UPDATE: Chief Executive Magazine, Best & Worst States for Business (May 2014) — In the 10th annual survey of CEOs, over 500 CEOs across the U.S. graded states with which they were familiar on a variety of measures, including the tax and regulatory regime, the quality of the workforce and the quality of the living environment. Texas continues its 10-year historical position as the best state overall.

Downtown Austin is buzzing with hotel construction and other development activities, as recently recognized by the New York Times in its article Austin, Tex., Stands Out in Hotel Recovery That Has Hugged Coasts (Oct. 1, 2013) and, more recently, the Austin Business Journal in its article Fairmont Austin Developer names general contractor; project appears on track (Mar. 18, 2014). austin.jpg

There are reportedly numerous hotel and other projects currently under construction and in the planning phase in downtown Austin.

The New York Times article highlighted hotel projects under construction and other projects in the pipeline:

“A $300 million JW Marriott hotel, the biggest JW Marriott in the country and the city’s biggest hotel at 1.2 million square feet, is under construction on a full block near the Capitol. Developers broke ground on a Westin over the summer and a $350 million Fairmont will be going up a few blocks away.

Eight hotels containing almost 4,000 rooms are scheduled to open across Austin within the next three years, making the Texas capital one of the most active markets in the country for new hotel construction.”

It noted that, although developers across the nation may be “skittish,” delaying new hotels “until the economy returns to health, and financing does, too,” in Austin, “developers aren’t that wary.”

In turn, the Austin Business Journal recently confirmed that developer Manchester Texas Financial Group LLC has announced that it has awarded Hunt Construction Group the $247 million construction contract for development of the Fairmont Austin downtown. It reported that “[t]he total value of the 47-story project to be built at Cesar Chavez and Red River streets is $370 million.” Characterizing Austin as a “robust hospitality market,” it confirmed that “[d]owntown Austin is buzzing with hotel construction activity.” It highlighted projects under construction and in the pipeline as well:

“In addition to the JW Marriott Austin, the Westin Downtown Austin also is under construction along with Hotel Van Zandt in the Rainey Street District. The status of construction of the proposed Hotel Zaza at 401 Guadalupe St. is unknown at this time. Several other boutique hotels have been announced, mostly around Rainey Street and in East Austin.”

Downtown Austin Alliance’s webpage identifies other planned and under construction projects:

  • Republic Square, Phase II – Planned
  • Travis County DA Office Building – Planned
  • Texas PTA – Planned
  • Holiday Inn Hotel – Mixed Use Project – Planned
  • New Travis County Civil & Family Courthouse – Planned
  • Texas Public Policy Foundation Office Building – Planned
  • Gables Republic Park/Hotel Zaza – Planned
  • Dell Medical School & Teaching Hospital At UT Austin – Planned
  • Mexic-Arte Museum – Planned
  • Waterloo Park Tower – Planned
  • Episcopal Church National Archives – Planned
  • Trinity Place – Planned
  • 416 Congress – Planned
  • 5th and Brazos – Planned
  • West Campus Apartments – Under Construction
  • Hyatt Ballroom and Parking Structure – Under Construction
  • Capitol Studios – Under Construction
  • Colorado Tower – Under Construction
  • Stubb’s Green Building – Under Construction
  • Waller Creek Flood Diversion Tunnel – Under Construction
  • IBC Bank Plaza – Under Construction
  • New Central Library – Under Construction

Additional Sources: Austin Business Journal, Hotel Van Zandt breaks ground on Rainey Street (Aug. 22, 2013)

Photo: Stuart Seeger, Austin Texas Lake Front – Creative Commons

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Pillsbury attorneys Robert L. Wallan, and Alyson R. Parker published today their advisory titled Shamrock Shake: St. Patrick’s Day Earthquake in Los Angeles Is a Reminder to Check Your Property Insurance Policy on the heels of a 4.4-magnitude earthquake that shook L.A. County out of bed at 6:25 a.m. on St. Patrick’s Day. The Advisory reminds everyone to be informed about their current and future residential or commercial earthquake insurance coverage.

Additional Resources: Insurance and the Polar Vortex: Recovering Losses from the Big Chill of 2014

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On Thursday, March 13, a California Court of Appeal found substantial evidence that State Farm General Insurance Co. (State Farm) had a duty to defend North Counties Engineering Inc. (North Counties) under a policy that included products-completed operations coverage notwithstanding that the policy also included a professional services exclusion. The Court, in North Counties Engineering Inc. v. State Farm General Insurance Co., Case No. A133713, ordered State Farm to cover North Counties’ defense costs in two lawsuits filed in 2004 in connection with construction of a dam that had been completed in 1999 for Lolonis Winery (Lolonis). It reversed the trial court’s order granting State Farm’s motion for a directed verdict and, among other things, reconfirmed that the insurer “owes a broad duty to defend its insured against claims that create a potential for indemnity” and “any doubt ‘as to whether the facts give rise to a duty to defend is [to be] resolved in the insured’s favor.'” On remand, judgment will be entered confirming that State Farm had a duty to defend North Counties.

The Lawsuits

In 2004, the State of a California filed suit against Lolonis alleging that construction of the Lolonis dam caused damage to downstream tributaries and potential erosion in nearby waterways (People of the State of California ex rel. California Regional Water Quality Control Board v. Lolonis Vineyards, Inc. Lolonis Winery, in turn, filed a cross-complaint against North Counties and others involved in the design and construction of the dam asserting claims for breach of contract, negligence, indemnity, and declaratory relief. Lolonis later filed a second action against North Counties and the others for breach of contract, express/implied warranty, and negligence (Lolonis Vineyards, Inc. v. North Counties Engineering Co.).

State Farm initially refused North Counties’ claim under its policy. It later came to light that, in its claim activity log, State Farm included May 7, 2004 as the date of loss rather than the date of loss set forth in the underlying actions, which was1997 through 1999. The 2000 version of the policy included a Products-Completed Operations Liability Exclusion endorsement. In contrast, the 1997 through 1999 versions of the policy included in the “Coverage and Limits” coverage for “Products-Completed Operations” in the amount of $2,000,000.

In 2007, State Farm changed its coverage position, confirming that it would provide a defense from September 5, 2007 forward, and also pay its Cumis counsel, under a reservation of rights. It refused, however, to reimburse North Counties for more than $500,000 in costs incurred before it confirmed it would cover the defense. North Counties then filed the North Counties Action seeking unreimbursed defense costs .

Trial Court Sides With State Farm in North Counties Action
After extensive discovery, State Farm and North Counties proceeded to a 22-day jury trial. Thereafter, the trial court granted State Farm’s motion for a directed verdict, purportedly “based on ‘the circumstances as they existed at the time of [North Counties’] initial tender, including the facts reasonably available to State Farm at that time and State Farm’s evaluation of such facts.'” The order concluded that “as a matter of law, the only work at issue in the underlying actions relating to [North Counties] was their performance of professional services–including any labor or contracting work,” which was subject to the policies’ professional services exclusion. Judgment for State Farm was entered the same day as the order, and North Counties timely filed its appeal.

Court of Appeal Reverses the Trial Court’s Order in North Counties Action
Duty to Defend
The Court of Appeal reconfirms that an insurer “owes a broad duty to defend its insured against claims that create a potential for indemnity.” It explained that such a duty “exists whenever the lawsuit against the insured seeks damages on any theory that, if proved, would be covered by the policy,” and that the insurer’s obligation to provide a defense “is excused only when ‘the third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.'” Its duty may exist “even when it ultimately has no obligation to indemnify, either because no damages are awarded in the underlying action or because the actual judgment is for damages not covered by the policy.” Ultimately, it emphasized that “any doubt ‘as to whether the facts give rise to a duty to defend is resolved in the insured’s favor.'”

Substantial Evidence of Duty to Defend
The Court went on to find that the trial court’s approach to the motion for a directed verdict was erroneous because it was not “looking to determine whether there was any evidence that might support a conclusion that there was a duty to defend, but rather [it was] looking only for evidence — indeed, even inferences from evidence — that there was not.” The Court identified illustrations evidencing the trial court’s erroneous approach, including its emphasis on North Counties’ “expertise,” and its conclusion that it apparently should have had errors and omissions coverage. Ultimately, it found that “[t]he law requires a trial court in ruling on State Farm’s motion … to look for any evidence that might support appellants, and draw all inferences in their favor. The court here acted 180 degrees contrary. And reached the wrong conclusion,” finding that there was evidence supporting State Farm’s duty to defend.

Coverage was Not Precluded by the Professional Services Exclusion
The Court ultimately rejected State Farm’s primary argument that the professional services exclusion precluded coverage. State Farm argued that “[t]he availability of liability benefits is scrutinized in light of the insurance contract as a whole, the allegations of the underlying complaints in their entirety, the universe of facts as they existed at the time of tender, and ‘common sense.'” The Court found, however, that neither case cited supported State Farm’s theory that “allegations in the underlying complaints must be looked at in ‘their entirety.'” “The ‘professional services’ exclusion is not the panacea State Farm would have it, certainly not when analyzed under the appropriate standard: ‘narrowly against the insurer.'”

It found it important that, during their testimony, three of State Farm’s own claims personnel admitted that the pertinent policy information — the declarations pages in existence before 2000 — demonstrated that State Farm had a duty to defend. It found “much more evidence that supported a possible duty to defend, including the fact that once the proper declarations page was located and reviewed, State Farm agreed to defend.”

It also focused on North Counties’ many roles in the construction of the dam. It found that “[t]here were many allegations, and much evidence, without the language of the exclusion, including that damages were sought for ‘negligence in the construction of the dam,’ and as the ‘direct result of negligent construction by [North Counties]’.” It further found that “there was evidence of something other than professional services was acknowledged by State Farm’s counsel.” According to the Court, the professional services exclusion did not preclude the potential for coverage under the existing facts.

It rejected State Farm’s secondary argument that there was no coverage, making several observations about the products-completed operations provision. It noted several times where State Farm referred to it as “coverage,” and that it “was referred to on the pertinent declarations page(s) as protection offered under the policy, with its own separate limits of $2,000,000.” Ultimately, it left open the question whether the products-completed operations coverage rendered the policy ambiguous, as North Counties’ contended, or not, as State Farm contended, finding that “it certainly complicated the situation, as have similar policy provisions.”

It ended it analysis by observing that none of the cases relied on by State Farm “involve such exclusion in the context of a policy that also has [products-completed operations] coverage.” Prior to the Court’s ruling, there were no California cases that dealt with a professional services exclusion and products-completed operations coverage where there was a potential conflict about coverage.

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CalChamber recently announced that workshops will be conducted throughout the state by the Governor’s Office of Business and Economic Development (GO-Biz)taxes.jpg to help businesses to learn how to apply the new California Competes Tax Credit. This credit is an income tax credit available to businesses–both large and small–that want to relocate to or stay and grow in California. GO-Biz expects to begin accepting applications during the first quarter of 2014. For more information on the California Competes Tax Credit read GO-Biz Finalizes Proposed California Competes Tax Credit Regulations.

California Competes Tax Credit workshops are scheduled for the following dates and locations:

Sacramento: Wednesday, March 19
New City Hall 915 I Street, Council Chambers Sacramento, CA 95814 9 am-10 am
Redding: Wednesday, March 19
Redding Council Chambers 777 E. Cypress Avenue Redding, CA 96001 5 pm -6 pm
Fairfield: Thursday, March 20
City of Fairfield 2490 Hilborn Road #108
Fairfield, CA 94533 9 am-10 am
Oakland: Thursday, March 20
Oakland City Hall Council Chamber 1 Frank H. Ogawa Plaza Oakland, CA 94612 1:30 pm -2:30 pm
Salinas: Thursday, March 20
Salinas City Rotunda 200 Lincoln Avenue Salinas, CA 93901 6 pm to 7 pm
Fresno: Friday, March 21
2331 Fresno Street Fresno, CA 93721 10:30 am-11:30 am
Stockton: Friday, March 21
56 S Lincoln St Stockton, CA 95203 3 pm-4 pm
Los Angeles: Tuesday, March 25
200 N. Spring Street 27th Floor – Tom Bradley Rm Los Angeles, CA 90012 1:30 pm -2:30 pm
Ontario: Wednesday, March 26
2500 S. Archibald Ave, Rm. 2 Ontario, CA 91761 10 am-11 am
Anaheim: Wednesday, March 26
201 S. Anaheim Blvd Gordon Hoyt Conference Room Anaheim, CA 92805 1:30 pm-2:30 pm
San Diego: Thursday, March 27th
402 West Broadway, Ste. 1000 San Diego, CA 92101 10 am-11 am
San Francisco: Friday, March 28
235 Montgomery Street, Ste. 760 San Francisco, CA 94104 10 am-11 am

California Competes Tax Credit online webinars are scheduled for the following dates:

Wednesday March 19
1 pm-2 pm Register Here

Tuesday, April 1
11 am-noon Register Here

Photo: TaxCredits.net – Creative Commons

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Today’s post is for anyone who has ever looked around their house and imagined how much more fun it could be made for their pet with just a little time, money, and effort. Yes, today’s post is for me, I admit it.

Beginning with perhaps the least extravagant and easiest do-it-yourself project, from Ilana DeBare at Berkeleyside, we have the “catio”, an outdoor enclosure designed to let cats enjoy being outside while keeping the cats (and the neighborhood birds) safe. Lest you think this is just another Berkeley phenomenon, check out “Catios offer cats a secure way to enjoy the outdoors” from Michelle Spitzer at the Associated Press.

Laura Moss over at mother nature network has some great photos of tiny homes for feral cats designed by New York architects (including a time machine!).

Giving dogs their due, Janet Eastman’s article at the Oregonian on “unleashing pet designs,” includes some creative ideas for dog owners. Dogwash tunnel anyone? No? Then Beth J. Harpaz of the Associated Press has some more down-to-earth tips on pet-friendly furniture here at “Pet-owner challenge: buying new furniture.”

And finally, check out the amazing house in Margot Peppers’ Daily Mail article about a “purr-fect paradise.” My favorite part is the shark-mouth hideaway in the bathroom.

From everybody here at G2G, have a great weekend!

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UPDATES: Sacramento Business Journal, Sacramento Republic FC adds to ownership roster (Oct. 6, 2014); The Sacramento Bee, Sacramento’s new soccer stadium will be named after Bonney Plumbing (Apr. 21, 2014); The Sacramento Bee, Five questions to ponder as Republic FC begins its inaugural season (Mar. 28, 2014); Sacramento Business Journal, Work begins on soccer stadium (Mar. 18, 2014); 2014 Season Tickets Deposits

Inaugural game at Hughes Stadium on Saturday, April 29, 2014: Cal Republic FC.jpg

It was recently confirmed that the Cal Expo Board of Directors voted unanimously for the agreement between Ovations Fanfare LLC (Ovations), a food service company that is a subsidiary of national sports and entertainment giant Comcast Spectacor, soccer ball.jpgand Cal Expo to construct an 8,000-seat multi-use sports facility. Sacramento Republic FC, the recently formed professional soccer team, will be one of the groups hosting its home matches at the facility.

The facility will be located on the California State Fair grounds, approximately 2 miles from downtown Sacramento. It “will feature a soccer-specific full pitch or field with dimensions for international soccer (120 x 80 yards), and serve as the home pitch for the Sacramento Republic FC soccer club. Plans include using it for other events such as concerts as well.

Construction of the facility is expected to take 2 to 3 months. Although the USL PRO schedule includes 14 home matches, the Sacramento Republic FC’s first five games are away games, starting with a March 29 game in Los Angeles against LA Galaxy II. The Sacramento Republic FC’s home opener versus the Harrisburg City Islander is scheduled for April 26. If the facility has not been completed by then, a few home games may be played at Hughes Stadium at Sacramento City College.

It was reported that Ovations “will operate the stadium for the Republic” and “will pay rent of whichever is more: 20 percent of revenue or $75,000 annually, until the $3 million investment is recouped.” When it has recovered its investment, the facility will be owned by Cal Expo.

Additional Resources: Sacramento Business Journal, Cal Expo board approves stadium for Sacramento Republic (Feb. 28, 2014); Sacramento Republic FC, Cal Expo Multi-Use Facility Update and Its Impact (Feb. 28, 2014); The Sacramento Bee, Tentative deal reached to build Cal Expo soccer stadium (Feb. 20, 2014); KCRA, Sacramento professional soccer team reveals name (Jul. 18, 2013)

Photo: Matt Rickard, Taken Apr. 29, 2014; Jarrett Campbell, Taken Mar. 28, 2007 – Creative Commons

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Today, Pillsbury attorney Ray Sweigart posted his advisory titled English Contract Law: Your Word May Still be Your Bond. The advisory discusses English law on oral contracts and the English courts’ willingness to find that binding contracts have been made despite the lack of a final writing and signature.

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Construction is set to begin in April on a highway bypass south of College Station, Texas. But a group of ancient oak trees sits near the site where the road will run. The Texas Department of Transportation (“TxDOT”) intended to remove four of the trees, each 200 to 300 years old, which stood in the way of the planned bypass. And the safety of the nearby trees, including a massive 500 year-old oak tree thought to be one of the oldest trees in Texas, could not be guaranteed.

But community outcry has forced the TxDOT to reassess. For nearly 150 years, Regina McCurdy and her family have owned the land on which the ancient oak trees sit. The last 7 of those years, she and her family have been fighting with the TxDOT to save the trees.

It appears their pleas in favor of nature were finally heard. Last week, the TxDOT decided to redesign the road. The new design will use a narrower median to allow the road to be built around the oak trees. According to John Barton, TxDOT Deputy Director, it is an “urban design in a rural setting.” Additionally, an arborist will monitor the trees during the construction process to ensure their survival.

Now THAT is sustainable design.

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Not surprisingly, after the cyber-attacks that occurred at a couple (or perhaps few) large retailers over the holidays there has been much discussion about the need to ramp up efforts to protect against such attacks. According to a Guide entitled Cybersecurity in the Golden State that was recently issued by California Attorney General Kamala D. Harris, “[i]n just the first three months of 2013, there were more than one billion Cyberattacks,” and “[i]n 2012, 50 percent of all targeted attacks were aimed at businesses with fewer than 2,500 employees.” It might surprise you, but according to the Guide, “[s]ecurity threats can be broadly categorized in to the following categories:

1. Social Engineering Scams 2. Network Braches 3. Physical Breaches 4. Mobile Breaches

The Guide is directed at small businesses to assist them in protecting against cyber-attacks and data breaches. It outlines recommendations for “businesses to help protect against and respond to the increasing threat of malware, data breaches and other cyber risks.” More specifically, a “cyber-attack” (aka “cyber-warfare” or “cyber-terrorism”) is generally understood to include “any type of offensive maneuver employed by individuals or whole organizations that targets computer information systems, infrastructures, computer networks, and/or personal computer devices by various means of malicious acts usually originating from an anonymous source that either steals, alters, or destroys a specified target by hacking into a susceptible system.” Examples of cyber-attacks include installing spyware on a personal computer or mobile device.

A “data breach” (aka an “unintentional information disclosure,” “data leak” or “data spill”) is generally is understood to be “the intentional or unintentional release of secure information to an untrusted environment.” “Secure information” includes sensitive, protected or confidential data. Incidents range from attacks by “black hats with the backing of organized crime or national governments to careless disposal of used computer equipment or data storage media.” A data breach occurs when secure information is “copied, transmitted, viewed, stolen or used by an individual unauthorized to do so.” A data breach may involve financial information, personal health information, “personally identifiable information,” trade secrets of corporations or intellectual property.

The Guide offers practical steps to minimize cyber-attack and data breach vulnerabilities:

  • Assume You’re a Target
  • Lead by Example
  • Map and Encrypt Your Data
  • Encrypt Your Data
  • Bank Securely
  • Defend Yourself
  • Educate Employees
  • Be Password Wise
  • Operate Securely
  • Plan for the Worst

The Guide is reported to have been prepared as part of a collaborative effort between the California Attorney General’s office, CalChamber and Lookout, a mobile security company.

Additional Resources: CalChamber

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Not only is the government out to sting contractors (as noted by G2G’s Amy Pierce here), now Hollywood is too. Rima Suqi’s New York Times interview, “Getting Contractors to Man Up” (subscription required if you’ve used up your free articles) notes that SpikeTV has a new show about bad apple contractors. Hosted by Adam Carolla (who you may remember from “Loveline” and “The Man Show”), the show is geared toward helping homeowners who have hired contractors whose work has been sub-par. The show lures unsuspecting contractors to a decoy house on the premise of providing a bid, and then surprises them with a camera crew. The contractors are then offered a choice–fix the work under the show’s supervision, return the money they were paid by the homeowner, or face a court battle with the homeowner in which the show will assist the homeowner. Not surprisingly, according to the interview, most contractors choose to finish the job.

“To Catch a Contractor” premieres this Sunday, March 9, at 10 p.m./9 p.m. Central. You can find out more about the show at Spike TV’s site here. Am I the only one hoping at least one contractor will choose the court option?