RNG Obtains Total Defense for General Contractor Client Against Subcontractor Extra Work and Change Order ClaimsPosted March 26, 2018 News
RNG Obtains Total Defense
RNG Obtains Total Defense
Most contractors are familiar with the Eichleay formula, undoubtedly the most common method of calculating home office overhead damages on construction projects in the United States. Nonetheless, it is not uncommon for a California contractor or construction attorney pursuing such claims to be met with cries of “Eichleay has never been approved by a California appellate court!” from the other side. A December 30, 2015 decision from the Sixth Appellate District should finally silence such cries, and confirm that Eichleay is the method for calculating home office overhead damages in California.
At the end of last year’s legislative session, the Governor signed into law SB 854, which mandates several changes in public contracting and prevailing wage laws which take effect in 2015. The Governor also signed AB 1939, which creates a private right of action for a contractor to recover from a private "hiring party" the added labor costs, penalties and legal fees resulting from the failure to pay prevailing wages if the hiring party, owner or developer failed to advise the contractor that the project was subject to the prevailing wage law.
RNG represented hospital design/build contractor HBE Company and performance bond sureties Travelers and CNA in this dispute with Kaiser Foundation Hospitals relating to the design and construction of a $300 Million Kaiser hospital.
One year ago this week, RNG was founded by Chris Rogers, David Nemeth and Mike Germain based on a mission of providing superior, innovative and cost effective legal services to the construction industry.
On September 28, 2014, the California Legislature enacted Assembly Bill (“AB”) 1897, which created California Labor Code section 2810.3. The new law holds companies accountable for violations of workers’ rights committed by their labor suppliers.
During the spring of 2013, I wrote extensively about the likely return of heightened scrutiny by the government in the field of the federal False Claims Act. The following summary presents a highlight of that lengthier treatment.
Michael D. Germain, Partner
California Civil Code sections 9356 and 9558 and the courts interpreting them have always permitted a rightful claimant to file a proper Stop Notice at any time during the project so long as all other administrative and legal procedures have been satisfied. Recently, however, the California Court of Appeals in a case titled Golden State Boring & Pipe Jacking, Inc. v. Eastern Municipal Water District tossed a sizeable rock into the proverbial calm pond – and, predictably, the waves are starting to hit shore.