Construction

Simon Mazzola has over fifteen years of experience in construction. He represents owners, subcontractors, general contractors, suppliers, architects, and engineers in a wide variety of public and private construction matters. This includes contract negotiation, collective bargaining, workforce issues, indemnity claims, insurance issues, mechanics liens, stop notice actions, bond claims, claims for additional compensation, liability for construction activities, delay claims, impact claims, inefficiency claims, prompt payment, and construction defect claims.

Our construction litigation experience includes numerous large scale, multimillion dollar, multiparty cases. We have extensive experience in delivering superior results in complex construction litigation. Our approach is thorough, focused, and successful.

Indemnity – Indemnity is the obligation of one party to protect another from claims or losses. Nearly all construction agreements contain an indemnity provision and it is one of the most important sections of the contract. It changes comparative fault, where each party is responsible for the harm it caused, and replaces it with a system where the contractual indemnity governs responsibility for losses. The law with regard to indemnity in the construction industry is complex and has been evolving over the past decade. Indemnity provisions should be carefully negotiated to achieve the intended outcome for each particular matter.

Preliminary Notice – A preliminary notice is the gateway to the enhanced recovery rights available to contractors and design professionals in California. In order to file a mechanics lien, stop notice, or bond claim, contractors and design professionals must first serve a preliminary notice. The preliminary notice was overhauled in 2012, resulting in new procedures and a new form that requires notice to the owner of the affected property. It is no longer referred to as the 20-Day Preliminary Notice. Careful attention should be paid to when and how the preliminary notice is used as it affects the validity of a mechanics lien, bond claim or stop payment notice.

Mechanics Liens – A mechanics lien is a right given to contractors, laborers, design professionals, and material suppliers to secure payment for their services by attaching the property with a lien. It is recorded against the property to ensure payment. A mechanics lien can force the sale of the property if payment is not made. The rules, procedures, and forms relating to mechanics liens were significantly updated in 2011 and 2012 and must be consulted prior to taking action. Mechanics liens may be recorded on private property, but cannot be recorded against a public works project.

Stop Payment Notices – Similar to a mechanics lien, a ‘stop notice’ gives contractors, laborers, design professionals, and material suppliers enhanced rights to secure payment for their services on a work of improvement. While a mechanics lien secures the real property that was improved, a stop notice applies to undisbursed construction funds held by the owner or lender. It requires the appropriate party to withhold payment of a sum of money until the stop notice is resolved. A stop notice is typically the appropriate remedy on a public works project, but a bond claim may also be appropriate. The rules, procedures, and forms relating to stop notices were significantly updated in 2011 and 2012 and must be consulted prior to taking action.

Bond Claims – Construction projects may involve a performance and/or payment bond. A performance bond ensures the project is completed. A payment bond ensures that subcontractors, suppliers, and others are paid. Both bonds allow creditors some level of protection if the project is not completed or if sums are unpaid. A bond claim is one of the available collection remedies in a construction dispute.

Conditional and Unconditional Waiver and Release Forms – The conditional waiver is a method of acknowledging progress payments during the life of a construction project. An unconditional waiver confirms that money was received and the contractor is paid through a specified date, with certain exceptions. There are different forms that should be used for final payment. On July 1, 2012, the procedures and forms required for conditional and unconditional waivers changed in significant ways. Owners and general contractors should regularly insist that they receive all appropriate conditional and unconditional waiver forms throughout the life of a construction project.

Prevailing Wage Projects – The prevailing wage is the amount due for construction of a public works project for a particular trade in a given locale. Federal government construction projects are primarily governed by the Davis-Bacon Act. State government construction projects are primarily governed by the California Labor Code. Contractors working on these projects are required to submit certified payrolls attesting to their compliance with payment of the appropriate prevailing wage.

Construction Defects – When construction is not performed properly, it can lead to construction defects. This is true for small private projects as well as large public works projects. We are experienced in litigating construction defect claims on behalf of owners, contractors, subcontractors, and architects and engineers. These cases require an attention to detail, tenacity, and knowledge of construction that uncommon in the average practitioner. We pride ourselves in investigating and litigating these matters effectively.

Multiparty construction defect cases are handled differently than other litigation cases. They may be subject to arbitration or the court may designate them as complex litigation. These cases often use a discovery referee and/or a special master. This office is has successfully pursued and defended many construction defect claims in these settings.

Claims for Inefficiency, Delay, and Impacts – Some large construction projects require much greater levels of labor and materials than were anticipated to properly complete the work. Those additional costs often fall onto the contractors. When the difference is significant enough, it is important to understand the cause of the cost overruns. Were they the result of a “bid bust,” unforeseen conditions, impacts caused by changes in the work, or unclear plans? The answer to those questions determines who should ultimately bear the responsibility for the additional costs. Properly documenting problems helps to ensure that an accurate record is made about the true causes of delays, impacts, and inefficiencies. We advise clients how to pursue and defend against claims of this nature.

Unlicensed Contractor Issues – With few exceptions, all persons and entities that perform construction in California are required to be licensed by the California Contractor State License Board. Unlicensed contractors are subject to discipline, fines, penalties, and the disgorgement of all sums paid to them.

Self Insured Retention (SIR) – One way for construction contractors to manage their costs is to use a SIR in their insurance policies. By doing so, the contractor agrees to be responsible for the amount of the SIR before the insurance carrier is obliged to respond. A SIR is effectively a very large deductible that can range from $5,000 to $150,000 or more. Companies that use SIRs recognize the need to manage their litigation costs. As a result, they need an experienced construction attorney who understands their objectives and knows how to manage litigation successfully and cost-effectively. We have significant experience with clients that use SIRs and have obtained many substantial results on their behalf.

Extra Work and Change Orders – A Change Order is an amendment to a construction agreement. It typically covers additional work requested by the owner or other work required by the conditions. A change order must specify: 1) the scope of work encompassed by the order, 2) the amount to be added or subtracted from the contract sum, and 3) the effect the change order will have on the progress payments or the substantial completion date. Change Orders should be agreed to in writing before the work commences.

Custom Home Projects and Remodels – When a homeowner undertakes a significant remodeling project or hires a contractor to build a custom home, there are a number of important protections he or she should require from the contractor. Checking a contractor’s license status and references are just the beginning. The California Business and Professions Code requires important safeguards in construction contracts, yet often these requirements are not followed. Homeowners should have a contract prepared for them that protects their interests, requires reasonable procedures and protections, and helps to ensure the project they want is the same one the contractor has agreed to build. Hiring an experienced construction attorney to assist and advise the homeowner in this process is a sound decision that pays important dividends.

Unfair Competition Claims (Business and Professions Code Section 17200) – Construction disputes often involve claims of unfair competition. A claim of unfair competition can range from the failure to pay compensation when it is due to the violation of a competitor’s trade secrets, such as a misappropriated customer list or a confidential business method. We have successfully brought and defended numerous claims of unfair competition.

Collective Bargaining Agreements (CBAs) – Employers that have a union workforce face an additional layer of workplace rules and laws. The rights of a unionized workforce differ, at some times significantly, from the rights of the typical at-will employee. We provide advice and litigation services to construction companies with a unionized workforce, including collective bargaining, progressive discipline, and compliance with ERISA issues.

Taft-Harley - ERISA Trust Funds – Union employers in the construction industry are required to make health and welfare contributions to Taft-Harley trust funds. Those Trust Funds are governed in part by the Employee Retirement Income Security Act (ERISA). Frequently employers sign agreements with multiple unions such as the Carpenters, Cement Masons, Laborers, Operating Engineers, and Plumbers, to name a few. Doing so requires the employer to accurately track the number of hours worked by their employees and timely remit the contributions to the Trust Funds.

Trust Funds have broad rights when it comes to verifying the accuracy of an employer’s contributions and can audit the employer’s records to ensure they have collected the required contributions. Simon Mazzola was a management-side attorney to some of the Bay Area’s Construction Trust Funds for a number of years and brings a wealth of experience in dealing with these issues.