Under Construction - December 2013


Letter from the Editor

by James J. Sienicki

Welcome to our final issue of Under Construction in 2013. We hope your year has been filled with health, happiness, peace and prosperity. We thank you for your readership, and we continue to appreciate the opportunities we have to serve our clients and communities.

Bill Poorten opens this issue with a discussion of the effects of Arizona’s recently revised anti-indemnification statutes regarding state, county and city public construction projects and the effect of these revised statutes on the use of insurance to shift risk to an insurance company. In the next article, Eric Spencer reviews and analyzes a recent decision by the Arizona Court of Appeals in Weitz Co. v. Heith, which held that aside from one exception applicable to the original lender who provides funding, subsequent lenders who provide funding after a construction project commences can no longer piggyback off an original lender’s lien priority under the doctrine of “equitable subrogation.”  The Court held that the lien statute alone controls priority.

In our third article, Jeff Singletary and Colin Higgins discuss California’s recently enacted Senate Bill 238, which now permits counties to enter construction manager at-risk agreements for construction projects over $1 million. This is a significant change since California counties were previously limited to the traditional design-bid-build delivery method and the “lowest responsible bidder” system.  Mark Morris and Jeremy Stewart follow with a review of Utah’s black letter law governing third-party beneficiary status in construction contracts and discuss a recent Utah case that demonstrates how unintended third-party beneficiaries may be created through flow down clauses in subcontracts or subconsultant agreements. In our final article, Dan Frost discusses the effective use of Critical Path Method Scheduling which was again emphasized in a relatively recent case, Metcalf Construction Co. v. U.S., in which the U.S. Court of Federal Claims looked to the Critical Path Method in determining the allocation of damages in a somewhat complicated delay claim.

If you have any questions or comments about any of these articles, please feel free to contact me. I also enjoy hearing about topics you would like us to address in future editions.  In 2014, we will sometimes address important construction topics and show how the different states in which our construction attorneys are admitted—Arizona, California, Colorado, Nevada, New Mexico and Utah—treat these topics differently.  Hoping that 2014 is your best year ever!

Happy Holidays!

Jim Sienicki

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