Looking to send a strong message to employers who fail to provide a safe workplace, the Departments of Labor and Justice (DOL and DOJ, respectively) are teaming up to investigate and prosecute worker endangerment violations, namely, violations of the Occupational Safety and Health Act (OSH Act), the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), and the Mine Safety and Health Act (MINE Act). Under a new worker endangerment initiative announced on December 17, federal investigators and prosecutors will look to possible environmental crimes committed by companies in conjunction with workplace safety violations in order to seek felony convictions and enhanced penalties available under federal environmental laws. With the DOJ’s additional focus on holding individual corporate wrongdoers accountable, corporate executives could find themselves criminally and civilly liable for their roles in such crimes.
When conditions are encountered on a construction project that are contrary to the information provided to bidders, the parties’ contract should provide a roadmap for how the parties ought to proceed. When the parties’ contract is silent on the issue, the price of contracting increases, uncertainty arises, and the likelihood of disputes increases.
For over a decade, we’ve safely assumed that the economic loss rule does not bar typical homeowners (i.e., individuals who buy a home as their primary residence) from bringing negligence claims for alleged construction defects. But a new decision from the Colorado Supreme Court suggests that the “homeowner exception” to the economic loss rule protects only “subsequent homeowners” and does not apply to the original home purchasers. S K Peightal Engineers, LTD v. Mid Valley Real Estate Solutions V, LLC, 2015 CO 7.
On December 9, 2014, a three-member panel of the Civilian Board of Contract Appeals (“CBCA”) ruled that Kiewit-Turner, a Joint Venture (“KT”), could rightfully stop work on the Aurora VA hospital project. Kiewit-Turner, a Joint Venture v. Dept. of Veterans Affairs, CBCA 3450. When KT notified the Department of Veterans Affairs (“VA”) that it would indeed stop work, the media picked up the story, but the headlines mostly focused on the contractor’s decision to stop work. This article explores the CBCA’s ruling and what it says about a contractor’s right to stop work when the projected cost of the work greatly exceeds the contract price.
In addition to addressing the propriety of a property description, the boundaries of blanket liens, and the appropriateness of apportionment, in August of 2014, a division of the Court of Appeals held that lien claimants need not serve a new notice of intent before recording an amended lien where the only amendment is the amount of the lien. Sure-Shock Electric, Inc. v. Diamond Lofts Venture, LLC, 2014 COA 111.
Colorado’s Homeowner Protection Act (the “HPA”) protects homeowners by voiding any contractual provision that would result in the waiver of a homeowner’s rights under the Construction Defects Action Reform Act. C.R.S. § 13-20-806(7)(a). But some have argued that this same law should also void certain waivers and releases in agreements between construction professionals working on residential projects. Recently, the Colorado Court of Appeals was faced with, but did not decide, this issue.
In Colorado, the economic loss rule bars torts claim in cases where the defendant’s duty arises from a contract and only economic damages are sought. See Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000). There is one notable exception: The economic loss rule does not bar negligence claims brought by homeowners regarding the construction of residential properties. See Park Rise Homeowners Ass’n v. Res. Constr. Co., 155 P.3d 427, 430 (Colo. App. 2006). This is because home builders have an obligation to act without negligence in the construction of a home, independent of contractual obligations. Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041, 1042 (Colo. 1983).
Today, in Tarco, Inc. v. Conifer Metropolitan District, 213 COA 60, a division of the Colorado Court of Appeals held that a general contractor’s failure to provide the bond required by C.R.S. § 38-26-106 on a public works project does not necessarily bar the general contractor from brining a claim against the owner for payment. Still, failing to obtain the requisite bond is risky.
In Byerly v. Bank of Colorado, et al., 2013 COA 35, a division of the Colorado Court of Appeals held that the value of a general contractor’s mechanic’s lien is always limited to the contract price, even where the owner has not filed the contract with the clerk and recorder’s office. Thus, the language in C.R.S. § 38-22-101(3) providing that “such persons shall have a lien for the value thereof” when the contract is not filed applies only to subcontractors and material suppliers. As such, the general contractor’s mecanics’ lien recorded for the “value” of the general contractor’s work instead of the amount allowed under its contract was excessive.
Reversing a Court of Appeals’ decision, the Supreme Court of Colorado has held that capital infusions by an LLC’s manager to keep the LLC afloat are not trust funds, even when the sole purpose of the LLC is to develop a single project. Furthermore, the Court reiterated that there is nothing wrong with a contractor having only a single bank account.