“An umbrella of liability”: Arizona Court of Appeals Sets Aside Industrial Commission Decision for not Evaluating the Liability of Each Contractor in a Workers’ Compensation Claim

Who is responsible for payment of a workers’ compensation claim arising from framing work that has been subcontracted at least 4 times on a residential construction project?  That is the question that Division One of the Arizona Court of Appeals recently tackled in Meno’s Construction, LLC v. Industrial Commission of Arizona, No. 1 CA-IC 18-0041 and 1 CA-IC 18-0042 (Consolidated).  The Court ultimately set aside the Industrial Commission of Arizona’s underlying decision that only two of the relevant subcontractors were responsible.  In doing so, the Court held that the administrative law judge (the “ALJ”) below “did not evaluate the liability of each contractor and subcontractor made party to [the] workers’ compensation claim,” in violation of the “umbrella of liability” concept for statutory employers contemplated by Arizona’s Workers’ Compensation Act. read more

Not So Fast: Arizona Supreme Court Rolls Back Recent Expansion of Common Law Indemnification Claims

Just over a year ago, I authored a post on the Arizona Court of Appeals decision in Hatch Development, LLC, et al. v. Sol’s Construction Co., Inc., 240 Ariz. 171 (App. 2016), which addressed the concept of common law indemnification.  Just recently, however, the decision in Hatch Development was abrogated by the Arizona Supreme Court’s opinion in KnightBrook Ins. Co., v. Payless Car Rental System, Inc., 243 Ariz. 422 (2018).

The Abrogated Hatch Development Decision

In Hatch Development, homeowners sought indemnification from their contractor for damages suffered by a neighbor due to a defectively installed  sewer system.   The court ultimately ruled in the homeowners’ favor, holding that a common law “duty to indemnify may arise in at least two alternative circumstances:  First, when the party seeking indemnity has ‘extinguished an obligation owed by the party from whom it seeks indemnification,’ or second, when the indemnity defendant is ‘at fault.’”  The court noted that the first circumstance was grounded in Restatement (First) of Restitution § 76.  Conversely, the second circumstance, on which the Court’s decision turned, was predicated on Restatement (First) of Restitution § 78(b)(ii), which provides, in pertinent part, that a party is entitled to indemnification where: (1) he or she makes a payment on an obligation; (2) the obligation arises because of the fault of the indemnity defendant; and (3) the payment is made with the justifiable belief that the obligation was owed. read more

They’re Here: AIA Rolls Out 2017 Updates to Contract Documents

The American Institute of Architect’s (“AIA”) Contract Documents are among the most widely used form agreements in construction.  For purposes of keeping up with critical court decisions and industry trends, the AIA reviews and amends its core documents every ten years.  2017 marked a decade since the last updates, and like clockwork the AIA has released revised versions of its documents over the course of this year.    Several months ago, the AIA released new versions of 14 documents, including its flagship agreements for the design-bid-build delivery model.  And just recently, the AIA has released 20 additional new documents relating primarily to the scope of architects’ services. read more

November 2016 Public Bid Awards

bid-resultsThis post is the first installment of new a monthly series highlighting notable awarded bids and contracts for Arizona public construction projects.  I know that it is helpful for my practice to keep track of new projects around the state.  So, without any further adieu, here is a list of some of the public projects awarded in or about November, 2016:

november-2016-bid-results

Drone On: FAA Adopts New Regulations Governing the Use of Drones in Construction

img_0510Unmanned 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. read more