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.
Mail Call: Court Rules that Little Miller Act Twenty-Day Notices Must Be Sent by Registered or Certified Mail
***UPDATE – 7/15/2016***
The Court of Appeals’ decision in in Cemex Construction Materials South, LLC v. Falcone Bros. & Assoc., Inc., 237 Ariz. 236 (App. 2015), which is the subject of this post from May 2015, will cease being good law on August 6, 2016. The case was legislatively overruled by HB 2268, which was signed into law by Governor Ducey on May 12, 2016 and will become effective on August 6, 2016. My post on the effects of HB 2268 and its overruling of the Cemex decision can be found here.
Arizona Court of Appeals Addresses “Owner-Occupant” Lien Protection in Marco Crane & Rigging Co. v. Masaryk
It is well-established that the primary purpose of Arizona’s mechanics’ lien statutes is to protect laborers and materialmen by insuring payment of their accounts. United Metro Materials, Inc. v. Pena Blanca Properties, L.L.C., 197 Ariz. 479, 484, 4 P.3d 1022, 1027 (App. 2000). But not all laborers and materialmen are protected under the statutes.
With regard to residential work involving “owner-occupants,” for instance, only contractors having a direct contract with the “owner-occupant” have lien rights. This exception, of which subcontractors that perform residential work are hopefully aware, was the subject of the recent Court of Appeals decision in Marco Crane & Rigging Co. v. Masaryk, 236 Ariz. 448, 341 P.3d 490, (App. 2014). Specifically, the court was asked to examine whether “owner-occupant” status was lost because an owner transferred title to her home to her limited liability company after the subcontractor’s lien was recorded and a foreclosure lawsuit filed.
The Rare Cardinal Change
A “cardinal change” has nothing to do with the football team, the baseball team, or, for that matter, the bird. It is, instead, an important legal concept for contractors to understand. Where applicable, the cardinal change doctrine puts limits on the amount of changed work or extra work that can be ordered under the changes clause of a construction contract. I recently dealt with the doctrine in connection with my practice. Here are the basics.
Cardinal Changes Defined.
A Lesson on Pay-if-Paid Clauses
Not too long ago, I litigated a case that turned on the enforceability of a pay-if-paid clause. The very good attorneys on the other side argued that the clause at issue was enforceable, such that it excused their general contractor client’s failure to pay. I argued, on behalf of my subcontractor client, that the provision was unenforceable. The trial court agreed with me on summary judgment, which led to a very favorable settlement for my client.
So what was wrong with the clause the parties were fighting over? Among other things, I argued that it did not comply with the requirements set forth in L. Harvey Concrete, Inc. v. Agro Const. & Supply Co., 189 Ariz. 178, 939 P.2d 811 (App. 1997). L. Harvey is the seminal Arizona case on pay-if-paid clauses. It holds that pay-if-paid provisions are enforceable if they meet the following three requirements: