A Lesson on Pay-if-Paid Clauses

pay-if-paid clausesNot 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: read more

Arizona’s Transaction Privilege Tax Simplification Legislation Isn’t So Simple

photoI will preface this post by saying that I am neither an accountant nor a tax attorney.  If you have specific questions or concerns about Arizona’s new transaction privilege tax laws, please talk to your accountant.

Having said that, I hope everyone in the construction industry is aware that, effective January 1, 2015, Arizona’s transaction privilege tax (“TPT”) laws changed substantially for contractors. These changes are the result of a “TPT Simplification Bill,” signed by Governor Brewer in 2013 and amended in 2014. read more

Changes To Arizona’s Anti-Deficiency Statutes That Affect Developers And Spec Home Builders

DSC_1975Arizona Revised Statutes §§ 33-729 and 33-814 are commonly referred to as Arizona’s “anti-deficiency statutes.”  In certain circumstances they prevent a lender from pursuing a borrower for a deficiency when, through a foreclosure or trustee’s sale, a  property is sold for less than the amount owed to the lender. Specifically, borrowers have been exempt from deficiency judgments so long as the following criteria are met:

1)  the property in question is 2.5 acres or less; read more

State Laws Restricting Recovery by Unlicensed Contractors do not Apply to FEDERAL Miller Act Claims

As matter of first impression, the Ninth Circuit Court of Appeals recently held in Technica LLC ex rel. U.S. v. Carolina Cas. Ins. Co., 749 F.3d 1149 (9th Cir. 2014) that state laws preventing unlicensed contractors from recovering for unpaid work do not apply to actions under the federal Miller Act.

In Technica, a sub-subcontractor on a federal project in California filed suit for payment under the Miller Act against the general contractor and its surety.  The trial court concluded that because the sub-subcontractor was not a licensed contractor as required by California law, it was precluded from pursuing its Miller Act claim for payment.  The particular licensing statute at issue in Technica was California Business and Professions Code § 7031(a), which provides in part that: read more

Basic Rule 310 Dust Control Training Now Available Online

dustThe Maricopa County Air Quality Department has just announced that it is now offering Basic Rule 310 Dust Control training classes online.  Online classes are available to those seeking new certifications and those looking to renew their certifications.

Basic Rule 310 certification is required for water truck and water-pull drivers on any site.  It is also required for site superintendents or designated on-site representatives on projects that disturb between 1 and 5 acres of surface area. read more