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).
My very first post for this blog (which is nearly two years old) covered the Arizona Court of Appeals’ decision in RSP Architects, Ltd. v. Five Star Development Resort Communities, LLC, 306 P.3d 93, 232 Ariz. 436 (App. 2013). In RSP Architects, the court held that Arizona’s private sector prompt payment laws (A.R.S. § 32-1129 et seq.) do not apply to architectural service contracts. While this remains the case, Arizona design professionals recently scored a victory on the prompt payment front. The Arizona Design Professional Prompt Pay Act (the “Act”) was created earlier this year when Governor Ducey signed H.B. 2336 into law. The Act, which went into effect on July 3, 2015, establishes requirements for promptly paying “design professionals” performing work on state, county, and municipal construction projects. For purposes of the Act, “design professional services” are defined as “architect services, engineer services, land surveying services, geologist services or landscape architect services or any combination…” thereof.
Alternative dispute resolution clauses are common in construction contracts. Often, these clauses require arbitration under the American Arbitration Association’s (“AAA”) Construction Industry Arbitration Rules (the “Construction Rules”). It is, therefore, important for those in the industry to know that the Construction Rules have undergone significant revisions, which became effective on July 1, 2015.
The rule changes are intended to make arbitration more efficient and economical. The following are some of the highlights:
The A-Team was one of my favorite TV shows when I was a kid. As fans of the show know, Colonel Hannibal Smith’s signature line was, “I love it when a plan comes together.” Unfortunately, as those in construction know, owner-furnished plans and specifications do not always “come together.” In other words, they can be defective. In these situations, a contractor’s mere adherence to the plans and specifications can lead to an unsatisfactory project outcome. The Arizona Supreme Court first addressed this issue in Kubby v. Crescent Steel, 105 Ariz. 459, 466 P.2d 753 (1970), where it adopted what is commonly known as the Spearin Doctrine.