Most are familiar with California’s harsh penalty for unlicensed contractor work. California Business and Professions Code Section 7031 (Section 7031) bars any recovery for compensation for work performed by an unlicensed contractor under any theory of recovery “regardless of the merits of the cause of action.” Cal. Bus. and Prof. Code § 7031(a). It is well-established that subcontractors are covered by Section 7031 from recovering from owners and general contractors if not properly licensed. See Cal. Bus. and Prof. Code § 7026. However, in Kim v. TWA Construction, Inc., 78 Cal.App.5th 808 (2022), the California Court of Appeal, in a matter of first impression, expanded the effect of Section 7031(a) to bar a licensed general contractor recovering from an owner for work completed by an unlicensed subcontractor.

Continue Reading CA Court of Appeal Affirms Bar on Recovery of Licensed General Contractor for Work Performed by Its Unlicensed Subcontractor

Taylor Morrison of Tex. Inc. v. Caballero, No. 01-20-00800-CV, 2022 Tex. App. LEXIS 1870, 2022 WL 839429 (Mar. 22, 2022)

Gary and Kelley Caballero contracted to purchase a new home to be constructed by Taylor Woodrow and Taylor Morrison of Texas, Inc. (Taylor). The contract contained an agreement to arbitrate any disputes with the American Arbitration Association (AAA) under the Federal Arbitration Act (FAA).

Continue Reading Texas Court of Appeals Enforces Arbitration Agreement Provision Delegating Issues of Arbitrability to Arbitrator

The Economic Loss Doctrine and its various analogues (e.g., the Independent Duty Rule and the Gist of the Action Doctrine) vary in form and application, but each is a judge-made rule serving one principle: If a party seeks the same economic losses for breach of contract and breach of a common law tort duty, courts must bar the tort claim to prevent a duplicative, windfall recovery. Most frequently, the Economic Loss Doctrine bars negligence claims. Its outer bounds begin with intentional torts, and most jurisdictions do not apply the Economic Loss Doctrine to fraud claims.

Continue Reading Fraud as an Exception to the Economic Loss Doctrine: Changing Trends in Colorado and Tennessee

Construction and Energy Practices Honored With National Awards

Law360 has named two Troutman Pepper practices among its Practice Groups of the Year for 2021. The firm achieved the national recognition for both its Construction and Energy practices. According to Law360, 91 firms submitted nearly 900 nominations for the awards, which “honor the law firms behind the litigation wins and major deals that resonated throughout the legal industry in the past year.”

Construction Group of the Year

“We are excited to be recognized nationally for our work in the construction space,” said Mike Subak, who leads the firm’s Construction Practice Group. “Our team advises industry leaders on both their largest projects as well as their day-to-day details, and the work is incredibly rewarding.”
Continue Reading Law360 Recognizes Troutman Pepper Practices as 2021 Practice Groups of the Year

This article summarizes the current landscape in Pennsylvania and California as COVID-19 restrictions are lifted, and highlights important considerations for employers in the construction industry in relation to vaccines and navigating a post-mask mandate world.

Continue Reading COVID-19 and Remobilization: Returning to the Construction Site Without Mandated COVID-19 Restrictions

The Army Corps of Engineers denied a construction permit for Alaska’s Pebble Mine project to proceed in accordance with the Clean Water Act (CWA).[1] Excavation of Pebble Mine — a sprawling depository of gold, copper, and molybdenum — would discharge fill material and dredge into U.S. waterways.

The project’s developers applied for a permit under the CWA, requiring the Army Corps to assess the project’s potential impact on nearby bodies of water. When project-produced dredge and fill threaten unavoidable adverse impacts on waterways, projects may not proceed without appropriate mitigation measures.
Continue Reading Another Major Project Halted Under the Clean Water Act

Gov. Wolf’s businesses closure orders and the business waiver process recently came under fire from the Western District of Pennsylvania Federal Court and the Pennsylvania Auditor General Eugene DePasquale. Gov. Wolf’s prior orders forced nearly all activities of the construction industry to cease in-person operations.
Continue Reading Governor Wolf’s Life-Sustaining Business Orders and Waiver Process Under Fire

On September 14, the U.S. Court of Appeals for the Third Circuit addressed the perennially thorny issue of whether the courts or arbitrators retain the authority to resolve questions involving the enforceability of arbitration agreements. In MZM Construction Company, Inc. v. New Jersey Building Laborers Statewide Benefits Funds,[1] the Third Circuit held that the courts must decide questions of arbitrability in cases where a party challenges the validity of the underlying contract that contains the arbitration agreement — even when the putative arbitration agreement refers these questions to the arbitrators. The court’s decision highlights the complexities associated with the enforcement of arbitration clauses and the limits to a party’s ability to compel arbitration.
Continue Reading Not So Severable After All: Third Circuit Lets Courts Determine Arbitration Agreement Existence When Underlying Contract’s Validity Is Challenged

Albert Bates and R. Zachary Torres-Fowler were published in gar insight with their article, “GAR Know How Construction Arbitration.”

This chapter summarizes issues commonly raised during international construction arbitrations seated in the United States or governed by U.S. laws. This chapter should be a useful resource for those seeking to better understand the

Albert Bates, Jr. and Danielle J. Volpe were published in Mealey’s International Arbitration Report with their article, “Zooming Ahead: Challenges and Considerations for Virtual International Arbitration Proceedings in the Wake of COVID-19 Pandemic.”

Danielle Volpe is a former associate of Troutman Pepper who recently became the General Counsel of Posillico Construction.