In the weeks leading up to the ABA Forum on the Construction Industry’s annual meeting in Scottsdale, Arizona, a number of construction attorneys and I were feverishly reviewing submissions for this year’s Construction Law Update.  The document is a compilation of cases and legislation affecting the construction industry.  The updates are provided throughout the year by attorneys all over the country.

The following are examples of the types of information that you will find in the Construction Law Update: Cases and Legislation Affecting the Construction Industry (2010-2011):

  • ARKANSAS: In Crumpacker v. Gary Reed Constr. Inc., 2010 Ark. App. 179, __ S.W.3d __ (Ark. App. 2010), the Crumpackers filed suit against Gary Reed Construction alleging that it had breached the implied warranty of habitability. Although this case does not represent a drastic change in Arkansas construction law, it provides a clear understanding of the facts required of a plaintiff in order to pursue a breach of implied warranty of habitability claim.
  • CALIFORNIA: Assembly Bill modifying California Civil Code Sections 3084 and 3146. Assembly Bill 457 modifies California’s mechanic’s lien statutes with new notice requirements. The new law requires that a mechanic’s lien and Notice of Mechanic’s Lien now be served on the owner of the property, or on the construction lender or original contractor if those parties cannot be served. A proof of service affidavit must be completed and signed by the person serving the Notice of Mechanic’s Lien and would be included as part of the mechanic’s lien. The lien is unenforceable if it is not properly served according to the new statute. [NOTE: The legislation was scheduled to go into effect on January 1, 2011.]
  • GEORGIA:  The Georgia Constitution was amended in 2010 to implement the Georgia Restrictive Covenants Act, O.C.G.A. § 13-8-50, et. seq., which dramatically changed the law regarding restrictive employment covenants in Georgia. In addition to providing express guidance to employers as to which types of covenants are enforceable (previous guidance had come only through caselaw), the Act allows courts to “blue pencil”, or edit, otherwise unenforceable restrictive covenants to make them enforceable. The new statute is effective January 1, 2011.
  • TENNESSEE: In Ray Bell Construction Co., Inc. v. State, No. E2009-01803-COA-R3-CV, 2010 Tenn. App. LEXIS 737 (Tenn. Ct. App. Nov. 24, 2010), the Tennessee Court of Appeals affirmed the claims commissioner’s award of $2.5 million to the plaintiff. The case concerned an alleged breach of contract involving the incentive clause of a Tennessee Department of Transportation (“TDOT”) road construction contract. Before the Claims Commission, TDOTargued that the contract language was clear in prohibiting an extension, alteration, or amendment of the incentive clause. The Claims Commission disagreed and found that the plaintiff was entitled to a modification of the incentive provision based on admissible parol evidence. Agreeing with the Claims Commission, the Court of Appeals held that “a definite latent ambiguity exist[ed] for which parol evidence not only [was] admissible, but frankly,absolutely necessary in both understanding and deciding the issues in this case.”

There are updates from all over the country.  In addition, we have included references to recent federal regulations and administrative rulings that affect the construction industry. If you would like a copy of the Construction Law Update, please send me an email.