Court Holds Discretionary Immunity Protects Governmental Entity from Tort Liability in Accepting or Rejecting Bids for Public Works Projects

The Nevada Supreme Court held recently that a Boulder City engineer's requirement that a low-bidding general contractor replace a particular subcontractor before the City would accept the bid was an action falling under discretionary immunity and precluded liability against the City for tortious interference of the subcontractor's contract.  City of Boulder City v. Boulder Excavating, Inc., 124 Nev. Adv. Op. 65 (Sept. 11, 2008).  Over a period of several years, Boulder Excavating, Inc. ("BEI"), as a general contractor, secured several accepted bids with Boulder City for public works projects.  In 2000, however, a dispute between BEI and Boulder City over a road construction project occurred and was resolved by protracted arbitration proceedings, after which both parties claimed to have prevailed.

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Posted by Anthony Golden at 6:40 AM | Email Post
Categories: Construction | Nevada

Contractor's License is Intangible Personal Property that is Subject to a Claim for Conversion

In M.C. Multi-Family Dev. v. Crestdale Assoc., 124 Nev. Adv. Op. No. 77 (Oct. 2, 2008), the Nevada Supreme Court concluded that a contractor's license is the personal property of the entity or individual named on the license.  Therefore, it is subject to a claim of conversion if another entity or individual exercises "wrongful dominion" over the license.  The qualifying employee of Walter Homes, Ltd. used Walter Homes' contractor's license to develop real property under a separate company, Crestdale Associates, Ltd., without the permission of the majority interest owners of Walter Homes.  During trial, after the plaintiff's case in chief, the district court entered a directed verdict against the plaintiff's conversion claim.  The district court found that Crestdale Associates had not "taken" the license.

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Posted by Anthony Golden at 6:37 AM | Email Post
Categories: Construction | Nevada

Contractor Liability Under Implied Warranties in Residential Construction

The Arizona Supreme Court recently ruled that homeowners (and homeowner associations on behalf of homeowners) may sue residential homebuilders on an implied warranty of workmanship and habitability even if the homebuilder was not also the vendor of the homes and the homebuilder had no other direct relationship with the homebuyer. See The Lofts at Fillmore Condominium Assoc. v. Reliance Commercial Construction, No. CV-07-0416-PR (Ariz. filed Aug. 19, 2008) (http://www.supreme.state.az.us/opin/pdf2008/ACV070416PR.pdf).

How does this work in Nevada?
Nevada has not addressed the situation at issue in Arizona's Lofts at Fillmore case where the homebuilder was not also the vendor or a joint venturer with the vendor of the homes. The Nevada Supreme Court, however, has held that where a homebuilder is a joint venturer with the vendor, both the homebuilder and the vendor are jointly and severally liable to the homebuyer for breach of the implied warranty of habitability. See Radaker v. Scott, 109 Nev. 653, 855 P.2d 1037 (1993).

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Posted by Anthony Golden at 1:16 PM | Email Post
Categories: Construction | Habitability | Implied Warranty | Workmanship

Contractors Must use E-Verify to Verify Workers Employment Eligibility for all Future Federal Contracts

On June 6, 2008, President Bush issued an Executive Order amending Executive Order 12989, which directs all Federal departments and agencies to require contractors, as a condition of each future federal contract, to agree to use an electronic employment eligibility verification system (designated by the Secretary of Homeland Security) to verify the employment eligibility of: (1) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (2) all persons assigned by the contractor to perform work within the United States on the federal contract.

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Posted by Anthony Golden at 1:07 PM | Email Post | 0 comments
Categories: E-Verify | Economic Loss Doctrine | Federal Contractors

Nevada Supreme Court Decides Enforceability of Contractual Lien Waiver Provisions

The Nevada Supreme Court recently addressed two issues of concern to contractors and owners: (1) the enforceability of lien waiver provisions, and (2) the enforceability of pay-if-paid provisions. Lehrer McGovern Bovis, Inc. v. Bullock Insulation, Inc., 124 Nev. Adv. Op. 39 (June 2008), is the latest saga from the Venetian mechanics' lien lawsuits. The case involved the owner and general contractor attempting to foil a subcontractor's lien foreclosure and breach of contract claims by asserting a lien waiver provision and a pay-if-paid provision in the subcontract agreement. The Court declared that Nevada's public policy "favor[s] contractors' rights to secured payment for labor, materials, and equipment furnished." Based on this policy, the Court struck down both the lien waiver provision and the pay-if-paid provision. The subcontract agreement at issue predated the legislative amendments to the mechanics' lien statutes, NRS Chapter 108, requiring specific forms for lien waivers and predated the amendments to NRS Chapter 624, which created Nevada's prompt payment statutes. Although not at issue, the Court thought it necessary to state, without explanation or analysis in what will become known as the infamous Footnote 33, that the amendments to Chapter 624 creating the prompt pay statutes, "make pay-if-paid provisions entered into subsequent to the Legislature's amendments unenforceable."

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Posted by Anthony Golden at 1:14 PM | Email Post
Categories: Construction | Lien | Nevada | Waiver

Does NRS Chapter 40 Apply to Completed Blueprints for an Unfinished Residence?

The quick answer is "No". In Pankopf v. Peterson, ___ Nev. ___, 175 P.3d 910 (2008), the Pankopfs entered into a contract with Peterson for residential design and drawing services for a personal residence. Peterson provided blueprints for a personal residence, and excavation for the residence’s construction began. The plans failed to identify the types of trees that would be planted on the site as required by the Pankopf’s homeowner’s association, and the excavation process was halted. According to the Pankopfs, a number of deficiencies in Peterson's work ultimately prevented them from building their residence. The Pankopfs brought suit against Peterson, alleging that Peterson's plans contained numerous design defects, mistakes, omissions, and inaccuracies that prevented them from constructing the residence. Peterson subsequently filed a motion to dismiss under NRCP 12(b)(5), arguing that the Pankopfs failed to comply with certain requirements set forth in NRS Chapter 40 that applied in constructional defect cases. The Pankopfs argued that they did not make a claim for relief based on any constructional defect within the scope of NRS Chapter 40.

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Posted by Jeffrey Steffen at 8:58 AM | Email Post
Categories: Blue Prints | Constructional Defects | NRS Chapter 40

Court Defines New Residence and Addresses Buyer Waivers of Constructional Defect Claims

In Westpark Owners’ Association v. Eighth Judicial District Court, ___ Nev. ___, 167 P.3d 421 (2007), the Court addressed three (3) issues concerning NRS Chapter 40 (constructional defects): i) the definition of “residence”; ii) the definition of “new”, in the context of a residence; and iii) the effect of a general waiver of constructional defects in a sales contract. Westpark Associates, LLC (“Westpark”) purchased a partially completed condominium project out of bankruptcy, and completed an additional 108 units, but due to market conditions decided to lease the 108 units as apartments, and did so from 1997 through 2003. Westpark started selling the units to the general public, and each contract required the buyer to waive “any” possible construction defect claims. The converted condo owners began experiencing problems with their units, and the Westpark Owners’ Association (the “Association”) served Westpark with a formal Chapter 40 notice.

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Posted by Jeffrey Steffen at 8:56 AM | Email Post
Categories: Constructional Defects | Nevada | NRS Chapter 40