Unmanned aircraft systems (“UAS”), which are commonly referred to as drones, are becoming increasingly less expensive and easier to operate. As a result, these aircraft are being used more frequently for both recreational and business purposes. The construction industry is at the forefront of commercial drone use. In fact, just last week, Fortune published an article entitled, “The Construction Industry is in Love with Drones.”
Drones are being used by contractors for a variety of purposes, which mostly center around improving efficiency. These uses include: (1) monitoring progress; (2) surveying sites; (3) inspecting structures; and (4) providing aerial overviews of completed projects. The speed, frequency, and economical manner in which drones can furnish contractors with an accurate understanding of job site progress is, by itself, enough to ensure that drones are only going to become more prevalent on construction projects.
Beginning August 6, 2016, Arizona law on independent contractor employment relationships changed for most industries when A.R.S. § 23-1601 went into effect. Section 23-1601 (which is the byproduct of House Bill 2114) is a new statute that allows certain businesses and workers to create a rebuttable presumption of a lawful independent contractor relationship by: (1) having the worker execute a statutorily prescribed Declaration of Independent Business Status; and (2) the business acting in a manner substantially consistent with the Declaration. But general contractors and subcontractors need to be aware that, for all intents and purposes, § 23-1601 does not apply to their businesses. This important limitation has gone unmentioned in the multiple publications/articles I have read on this new law, which is why I am writing this post.
In May 2015, I authored a post addressing the Arizona Court of Appeals’ then-recent decision in Cemex Construction Materials South, LLC v. Falcone Bros., Inc., 237 Ariz. 236 (App. 2015). My post can be found here. The Cemex decision will, however, cease being good law next Saturday. The case was legislatively overruled by House Bill 2268, which was signed into law by Governor Ducey on May 12, 2016 and will become effective on August 6, 2016.
As a reminder, Cemex upended the longstanding construction industry practice of mailing preliminary twenty-day notices on Little Miller Act projects via first class mail with a certificate of mailing. This had been done as a cost saving measure because: (1) Arizona’s mechanic’s lien statute requiring twenty-day notices—A.R.S. § 33-992.01—expressly provides in Subsection (F) that the notices may be provided by “first class mail sent with a certificate of mailing;” and (2) the Little Miller Act section requiring 20-day notices in certain instances—A.R.S. § 34-223(A)—incorporated by reference a significant portion of § 33-992.01. Nevertheless, Cemex held that this industry practice did not comply with § 34-223(A). Specifically, the Court found that the mailing provisions of § 33-992.01(F) were excluded from § 34-223(A), such that Little Miller Act 20-day notices were required to “to be served by registered or certified mail,” like Little Miller Act ninety-day post-completion notices.
It has been several months since I last published a blog entry. My term as the President of the Scottsdale Bar Association and a particularly busy period in my practice have recently left too few hours in the day for blogging. But now that my term has ended, I intend on resuming my regular posts. In light of my time away, I thought it only fitting that this post cover some aspect of delay. I will, therefore, address in this post the often controversial “no-damages-for-delay” clause.
The plain language of Arizona Revised Statute § 32-1153 has long prohibited unlicensed contractors from filing lawsuits to collect payment for unlicensed work. The statute “conditions…claim[s] for unpaid work on licensure ‘when the contract sued upon was entered into and when the alleged cause of action arose.'” Crowe v. Hickman’s Egg Ranch, Inc., 202 Ariz. 113, 115, 41 P.3d 651, 653 (App. 2002).
But what happens when a licensed contractor performs both work for which he is licensed and work for which he is not licensed on a construction project? Is the contractor precluded as a matter of law from seeking to recover for the work performed pursuant to his license because he performed the unlicensed work? The Arizona Court of Appeals recently addressed this issue in Chavira v. Armor Designs of Delaware, Inc., 356 P.3d 334 (App. 2015).