Vanity Fair magazine asked a panel of 52 experts to pick the world's five most important post-1980 architectural works. The Guggenheim Museum in Bilbao, Spain by design architect Frank Gehry (below) topped the list. And there's a slide show of the others in the top 21.
Photo: Peter Knaup
Welcome to the second article in a three-part series on Illinois surety bonds, compliments of guest author Danielle Rodabaugh. Danielle is a principal for SuretyBonds.com and is discussing the three basic types of construction bonds:
● Performance bonds
● Payment bonds
Today we will explore performance bonds.
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Wrongful Contract RepudiationCan you sue the FDIC for wrongful repudiation of a contract? This was a question during a presentation on contract repudiation I gave last week. At least one set of borrowers and guarantors seem to be trying to answer that question.
Christopher Frye and companies he controls borrowed money from, and guaranteed repayment to, the New Frontier Bank in Greely, Colorado. After the bank failed and the FDIC was appointed as receiver, the FDIC repudiated those loans with hundreds of thousands of dollars in as yet undisbursed funds. The result: no more funding.
The borrowers and guarantors (collectively here all together, the "borrowers") sought repudiation damages through the FDIC administrative claims process. Receiving an unsatisfactory decision, they sued the US government in the United States Court of Federal Claims by filing this complaint (PDF).
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We've talked about statues of repose and how they affect construction projects in the past. Well Melissa Dewey Brumback at Construction Law in North Carolina just published a superlative statute of repose piece: Statute of Repose: Putting your Risk to Bed. I like Melissa's work so much, especially how she compares a statute of repose to a statute of limitation, that I have to mention it here and urge you to read it too. Enjoy!
Photo: The Repose by Aleksandra Nowak 2008
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Welcome to the first in a three-part series on surety bonds in Illinois compliments of guest author Danielle Rodabaugh. Danielle is a principal for SuretyBonds.com and will be discussing the three basic types of construction bonds:
Today we're starting with bid bonds.
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For the first time since Madonna still had an American accent and Jerry Jones last owned a Super Bowl contender, the FDIC is suing former officers and directors of a failed bank seeking damages for pre-failure mismanagement. Odds are this won't be the last; process servers will be busy knocking on more doors.
The FDIC's complaint (PDF) focuses on former officers and directors in IndyMac's Homebuilder Division alleging that the President and CEO, and two successive Chief Lending Officers, breached their respective fiduciary duties of care to the bank by approving loans they shouldn't have approved. The FDIC asks for damages from four individual defendants. Specifically, the FDIC alleges that IndyMac Homebuilder Division executives:
Hat tips to Peter Christensen at the Appraiser Law blog and Kevin LaCroix at the D&O Diary for their pieces and announcing this lawsuit and providing their analysis.
Unions representing construction workers around Chicago are on strike. Union representatives from the Chicago Laborers' District Council and the Union of Operating Engineers Local 150 met yesterday with representatives of the Mid-America Regional Bargaining Association negotiating on behalf of construction companies. The deadlock continued today as negotiators did not reach an agreement to end the strike. They plan to meet again on Friday and resume efforts to end the strike.
Meanwhile numerous projects stand idle, from public projects like work on the Eisenhower Expressway to school renovations in Naperville and office renovations and build-outs downtown.
So how does the strike affect project participants like contractors, owners, material suppliers, architects, and engineers?
It all depends on the what the contract for each affected project says.
What do your contracts say about strikes:
Have you recently considered these things and other strike related concerns? Are your contracts prepared to provide the kinds of answers you'd hope they provide?
Loss-Sharing Agreements are one of the principal features when the FDIC takes over a failed bank. Loss-Sharing Agreements have an air of mystery about them, something almost approaching a contemporary urban legend in the public consciousness. To dispel some of the confusion surrounding Loss-Sharing Agreements, the FDIC explains how they work in multiple media, including videos and print articles. Scroll down for two of the most helpful examples....
The FDIC produced this video about Loss-Sharing Agreements for the general public:
More technical are articles like the recently published FDIC Loss-Sharing Agreement: A Primer (PDF) in the FDIC's newsletter Supervisory Insights. Though the target audience is banking regulators and examiners, it's invaluable also for anyone interested in the nuts and bolts of how a Loss-Sharing Agreement works, including accountants, financial advisers, and consultants who advise banks on buying assets from failed bank receiverships and managing them under a Loss-Sharing Agreement.
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If you've been around construction contracts or architects agreements for a while, you've heard someone mention "subrogation." So what exactly is subrogation and how does it work?
Subrogation is pretty simple, yet it defies clear explanation. Here's one attempt:
Subrogation is a method whereby one who had involuntarily paid a debt of another succeeds to the rights of the other with respect to the debt paid
Hugh??
OK, maybe subrogation is one of those things better explained by example.
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There are new developments in the saga of Krahl Construction. Recently, one of the owners Krahl provided work to sued what is now Krahl's estate under the company's assignment for the benefit of creditors. The owner's complaint (PDF) alleges that:
1. Krahl over-billed the owner by more than $3M to build a data center on the west side of Chicago
2. Krahl used white out to alter subcontractors' invoices before submitting them to the owner for payment under an AIA A111+ A201 cost-plus with guaranteed maximum price contract
But the most eye-catching allegation: this owner, suspecting that Krahl over-billed them, tipped off law enforcement. Perhaps that set things in motion for the dramatic search of Krahl's offices, seizure of the company's records, and closure a few days later back in January 2010?
Yesterday, the US Supreme Court ruled that when (a) there's a dispute over whether the arbitration provision in a contract is enforceable, and (b) the contract says that the arbitrator should decide that question, then the arbitrator will decide that question. As the lawyers say: if the contract says so, the arbitrator decides questions of arbitrability and whether the dispute is arbitrable.
In Rent-A-Center, West, Inc. v. Jackson (PDF), an employee sued his former employer for racial discrimination. They had a contract providing that any employee claims related to his employment must be submitted exclusively to arbitration, not to a court. The contract also said the arbitrator, not a judge, should decide any questions about whether to enforce the arbitration terms of the contract.
To make a long story short, in a 5-4 vote, the Justices agreed that under the Federal Arbitration Act, the contract in this case should be enforced as written. So, they sent the case back to the arbitrator to decide whether the employee's discrimination claims should be heard, and ultimately decided, in arbitration or in court. A principal reason for the Justices' decision: the employee attacked the entire contract for being "unconsionable," not just the arbitration provision or the part referring arbitrability disputes to the arbitrator.
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Back in Mechanics Lien Priority: Contractor vs. Lender - Part 3 we talked about step 1 in the workflow of deciding priority, and dividing foreclosure sale money, between (a) a Lender's mortgage and (b) the mechanics liens of two Perfected Contractors. Initially, priority goes to whoever got there first. In LaSalle Bank, N.A. v. Cypress Creek 1, LP (PDF), the Lender initially won priority because they recorded their mortgage before either Perfected Contractor (a) contracted with the Owner or (b) started work on the project.
Now for step 2: changing priority based on "enhancement" to the project. Specifically, giving partial priority to the Perfected Contractors because their work added value to the project that, presumably, helped fetch a higher price at the foreclosure sale.
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Back in Mechanics Lien Priority: Contractor vs. Lender - Part 2 we talked about the backstory of the LaSalle Bank, N.A. v. Cypress Creek 1, LP (PDF) decision: who was involved, what started the dispute, what was at stake, and how the first judge hearing the case decided. Now it's time to talk about the appeals court judges' decision and why they decided the way they did. This won't be easy or brief. So we'll break it into a series of several posts.
The Perfected Contractors first asked the appeals court judges to grant each of their perfected mechanics liens full priority over the Lender's mortgage. Requested result: the Perfected Contractors get paid in full from the foreclosure sale money before the Lender gets a penny. Naturally, the Lender opposed this.
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Construction Law Musings publisher and Richmond, Virginia construction lawyer Chris Hill recently granted me the honor of writing a guest post about the EPA's new lead paint Renovation, Repair and Painting Rule (PDF) at his blog.
Compliance with this rule is critical for anyone doing renovation, repair, or painting work on a building built before 1978, especially if it's a home, school, or commercial facility likely to be frequented by children six and under (e.g., day care). So head over to Construction Law Musings for the lead paint guest post. Then stick around a while. Browse the many other good things Chris has there and subscribe to Construction Law Musings.
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In our quarterly newsletter yesterday, my firm published When the FDIC Takes Over a Failed Bank: Business Pitfalls and Opportunities. It's a brief introduction to how the FDIC taking over a bank affects:
The newsletter also includes additional articles that will interest you too, among them:
Construction Law Today is a legal blog about construction contracts, disputes, finance, and the people whose job it is to deal with them.More...
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