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E-News for February 6, 2015
Dear Members and Friends:
Condo Shakedown - It is an all-too-common scenario
in California construction: Nine and a half years after
completion of a major California construction project,
immediately before the 10-year “statute of repose” for
suing on “latent” construction defects expires, a lawsuit
claiming damages for “recently discovered” latent
construction defects is filed.
The property owner sues the contractor for the alleged
defects. The direct contractor sues all its subcontractors
for indemnity and defense. The attorneys spontaneously
generate. Experts proliferate. Claimed defects are extrapolated. Four or five years later, after a few
dozen attorneys earn a small fortune in fees, the insurance companies make payments. Attorneys collect
more fees. The owners take what remains. They repair nothing... and buy vacation homes……See Our
LAST PAGE to learn how one project got around all this
Fun Stuff and Workshops at the Exchange!
Here is the current list of what is coming up in February and March
Most Workshops are Free for members and their employees.
California Lien Law 3/11/15
Construction Contracts 3/18/15
Small Claims Court 4/1/15
Beginning Contractor 3/25/15
First Aid and CPR – TBA Get the sign up forms in this issue!
Fun Things on the Way
More theatre – Join your fellow members and bring your friends to three
theatre events!
Phantom of the Opera
Sign up now to make sure you get tickets!
Sign up flyer in this issue Deadline 2/5/2015
Matilda Sign up now to make sure you get tickets!
Sign up flyer in this issue Deadline2/5/2015
Office Space at the Exchange – Bright, Sunny Friendly 375 sf of full service
office at the Exchange. Good location and includes, custodial, utilities and
everything except telephone and internet. Call us at 650-591-4486.
Donate to Second Harvest Food Bank – The Exchange is a drop off
point for your Second Harvest Food Donations – Stop by and put them
in the container in our lobby!
You Can Join – The Exchange is welcoming new
members – Plans online, business assistance, discounted insurance,
networking trips and a lot more. The Exchange is the best business
association investment you can make – and its tax deductible for most
businesses. Call Tom at 650-591-4486 for more info.
Follow us on Twitter at: https://twitter.com/PBX101E
Not just for kids! It’s a good way to keep up with things at the Exchange. If you don’t have
Twitter, you should get it on your cellphone. It gives you brief messages and if you are
interested in the topic, you can download from the source by tapping a link. If you are not interested, just
ignore it. The good part about Twitter is that it is non-invasive. You can review it in an instant from
anywhere and ignore what you don’t want to see.
Come See Us! We are open 7:30 AM to 4:30 PM on weekdays – stop by and see us
at 735 Industrial Road in San Carlos (between Holly and Whipple) We are a nonprofit, member run association dedicated to helping contractors, subcontractors,
suppliers, designers and others in the construction industry. We have been doing this
since 1945.
Sincerely,
Tom McGinley
Executive Director
---------------------------------------------------------------------------------------------------------------------------Classified Ads for Members – If you are a member you can run a brief classified ad in this
newsletter for free (circulation 1176 weekly). These can be ads for equipment for sale /
wanted or for help wanted or other “stuff”.
Send your ad to: [email protected] and please use Microsoft Word format
Receive up to $150 credit when you open a new
charge account at Hayward in Redwood City. Easy as
1-2-3-4...
February 2015 Event Schedule
Redwood City
$150 - EASY AS 1-2-3-4
Ask at the store how to make this happen.
H
Every Tuesday 7 a.m. Free Pan Dulce and Cafe’ de Olla
(Mexican pastries and coffee)
Every Wednesday 7 a.m. to 10 a.m. Free Product
Knowledge Seminars:
2/4
Weatherization Partners (Tyvek)
2/11 Henkel
2/18 Feeney Cable Rail
2/25 Prosoco
Every Thursday $50 giveaway
Every Saturday 8 a.m. Free Pan Dulce and Cafe’ de Olla
(Mexican pastries and coffee)
1. Drop off a completed Credit Application to 1775 East
Bayshore Rd., Redwood City. Or download the Credit
Application at www.haywardlumber.com or pick up the
application at the Redwood City location.
2. Receive a $50 credit to your account when opened*.
3. Receive another $50 credit to your account when you
spend $100 or more in the next billing cycle*.
4. Receive a third $50 credit to your account when
you spend another $100 or more in the following billing
cycle*.
*•
•
•
•
•
•
•
This offer applies to new accounts only
Each $50 credit expires 30-days after issuance
Account must be opened by February 28, 2015
Must attach coupon to new application quality
Account must be in good standing and not past due
Account will be opened on approved credit
No cash value
Full details available at www.haywardlumber.com and at
the Redwood City location.
FER
THIS OF O
ST
APPLIE
S
COUNT
NEW AC Y!
ONL
Bring in this
card and
be entered in a
special
$100 Drawing!
JOIN US FOR FREE FOOD AND
PRODUCT KNOWLEDGE SEMINARS
Your Connection to the Industry...
Contractor ProView h
f Supplier ProView
ProView is how the entire construction industry
will see – AND connect – with companies like yours when they search
thebluebook.com. It provides all the information decision-makers need
about your company in one complete, convenient format.
ProView quickly brings your projects or products to life with a dynamic
full-color, image gallery! It’s also equipped with a personalized, portable
URL so you can feature it in all of your marketing communications.
Don’t have a website? ProView oﬀers a powerful solution that includes:
Get your company connected to the industry
today with a Blue Book Network ProView.
800-431-2584 | www.thebluebook.com
• Complete Company Information/Branding
• Geographical Areas Serviced
• Recently Completed Projects
• Full-Color Photo Gallery of Your Projects/Products
• Email Links for Information and PreQual Requests
• Links to Specs, BIM, CAD and other “Related Files”
• Name Brands and Products Installed/Supplied
• Trade Associations, Memberships & Govt. Certifications
Peninsula Builders Exchange and ARC Document Solu ons has partnered up to oﬀer a discounted price on prints for Peninsula Builders Exchange Members! If you place your order though Peninsula Builders Exchange it will be $4.50 a sheet up to 24” x 36”! If you would like to place an order please email Andrea at an‐
drea@construc onplans.org with the name of the project and what pages you want (Phone orders will not be accepted). If you have your own set of drawings you’d like printed please a ach that file with what pages you’d like. You’ll be no fied when your order is ready. Orders should be ready to be picked up at the ARC of your choice in 24 hours. C.H.A.S.E.
Need Help With Safety?
Need Help With Safety and Environmental
Issues? The Safety Resource for Peninsula
Builders Exchange Members is C.H.A.S.E.
C.H.A.S.E. President Bill Sanborn is the regional expert on Construction
Health and Safety Issues. If you need safety advice please give him a
call!







Safety Plans (IIPP)
Construction Safety Related Training
Cal-OSHA Paperwork
Citation Defense
Environmental Issues
Employee Safety and Exposure
Ergonomics
Call Bill Sanborn at:
408-374-9565
can save you between
$1,500 - $7,500*
*based on loan amount and state
Peninsula Builders Exchange members are now eligible to save an
exclusive 0.25% discount off the price of a construction loan!
loan!
Given an A+ overall
institution health rating!
Call us at 855-330-3200
Holds one of the highest capital ratios in the banking industry.
Savings-focused institution founded in 1990.
YOUR UNIQUE
DISCOUNT CODE
V64LPP17
Save up to $2,500 with a loan amount of $1,000,000!
Pre-Construction Lot
Financing
Rate
Indicative Pricing
Pricing w ith your
discount
8.00%
8.00%
6 m onth
1 point
0.75 point
9 m onth
1.5 points
1.25 points
1 additional point
1 additional point
Each Three (3) Month
Extension Fee
Residential Speculative
Construction Loan
Indicative Pricing
Pricing w ith your
discount
7.500%
7.50%
1.5 points
1.25 points
12 m onth (364 day) Term
2 points
1.75 points
18 Month Term
3 points
2.75 points
1 additional point
1 additional point
Rate
9 Month Term
Each Three (3) Month
Extension Fee
“A Tradition of Service”
Colorado Federal Savings Bank 855-330-3200 [email protected]
Rev. 10/2013
Version 1
Three Cards One Invoice
With this “Freedom” card you can
•
•
•
•
•
•
Control Fueling Settings
Shop for the Best Street Price
Charge Maintenance and repairs
Use almost any gas station
Manage your account online
NO FEES
With this “Cardlock” card you can
•
•
•
•
•
•
Control Fueling Settings
Fuel oversized trucks
Use high-flow pumps
Use unattended sites
Manage your account online
NO FEES
With this “Retail” card you can
•
•
•
•
•
•
Control Fueling Settings
Shop for the Best Street Price
Charge Maintenance and repairs
Charge Hotel Stays
Manage your account online
NO FEES
Michael Nathan
(510) 376-4700
[email protected]
Need A Conference Room?
Member Benefit
Members are welcome to use the Exchange conference
room free of charge. Weekdays from 7:30 until 4:30 just
call ahead and reserve your time slot. Seats about 18
comfortably.
650-591-4486
Office for Rent – 375 sf Full Service at the Exchange
We have good offices for your business! - 375 square feet of full service carpeted office, including
utilities, janitorial, Free mail and Package Receipt and Free conference room use, Copier, Lunch Room
and Parking right outside the door
375 sf available Now, sunny, clean and carpeted,
The building has a good mix of small businesses including accountants and software.
Good, friendly, quiet building near 101, downtown San Carlos, Oracle, 24 Hour Fitness and train station
with lots of parking. Coffee room and copier on site.
This is a nice small business friendly environment and a good place to work. Good for any small business.
.
Services Provided & Included:
Utilities
Janitorial
Mail & Package Receipt
Free use of Conference Room
Copier Coffee Room/Lunch Room
24 Hour Access
We rent this office with full service which includes janitorial, all utilities and free conference room use.
This is a Gross lease, which means you pay one price ONLY the monthly amount -- You do not pay any
extras for taxes, insurance, maintenance, etc. that are in the typical "net" (NNN or NN) lease. Just add
telephone and internet if you want them from ATT or Comcast (both in the building) and you are good
to go .
For an unbeatable price call Tom or Leslie or Andrea at 650-591-4486.
New Law Requires Free Plan Sets:
AB 2036 is a new law which requires that government agencies
provide digital plans to local builders
exchanges when requested.
We, as members of GSBE and in conjunction with the
AGC, sponsored this legislation because many
jurisdictions were withholding plans from our
exchange and some were even trying to charge for
digital copies sent by email. Many jurisdictions also
use “blueprint services” as the sole method of
distribution – which forces contractors to buy printed
sets of digital plans. This is good legislation for our members and we are beginning
our campaign to make the various state and local agencies aware of the new law,
and also asking them to provide us with plans.
Over the next several weeks Andrea will contact many local jurisdictions and
make a special effort to reach those small water districts and school districts
which often go unnoticed. If there are any public agency projects you would
like us to get a set of plans for, please contact Andrea at 650-591-4486 and we
will request them under AB 2036.
We at the Exchange recommend Planswift as the best digital take off
program for small to medium sized contractors. We have arranged with
Palnswift to give our members a two week trial with telephone support. If
you are curious about digital takeoff software – this is the best way to find
out if it is right for you.
To get your free trial please use the following link:
www.Planswift.com/Requesttrial/?AID=247
Health Insurance Answers You Can Trust
 Need help in understanding how to get decent
coverage?
 Want to see if you will benefit from the 2014
changes?
 Will an HSA work for my insurance needs?
 Will health insurance help retain employees?
 Can I position my income for a insurance subsidy?
 How can I get “guaranteed issue” if I have health
problems?
 Which carrier should I choose?
 Plan Administration and Paperwork? – Just leave it to
Us!
Call Todd Taylor, our preferred Health Insurance Person for straight
forward answers you can trust. Todd has helped over 100 members!
650-594-5933 408-358-7502
Choose from any of the following plans:
Kaiser-Convenient & one close location for all of
your health care needs
Anthem Blue Cross & Blue Shield - Largest
selection of plans & largest PPO networks in the state
Health Net-great alternative carrier to the Blues with
competitive plans
Health Insurance Answers You Can
Trust!
408-358-7502 or 650-594-5933
Winner of 9 Tony Awards® including Best Musical! From Trey Parker and Ma Stone, the creators of South Park, comes a new Broadway musical called “the best musical of this century” (Ben Brantley, The New York Times) and “the monster hit Broadway’s been desperate for” (Michael Riedel, New York Post). The Book of Mor‐
mon follows a pair of mismatched Mormon boys sent on a mission to a place that’s about as far from Salt Lake City as you can get. Described by Jon Stewart of The Daily Show as “a crowning achievement, so good it makes me angry” and by Entertainment Weekly as “the funniest musical of all me,” see it now or find yourself asking, “Dear God, how do I get ckets?” (Village Voice). Contains explicit language. Wednesday, May 6th, 2015 at 8pm Orpheum Theatre 1192 Market St, San Francisco, California 94102 Orchestra Seats $100.00 Per Ticket. Deadline for ckets Thursday January 22nd, 2015 or un l ckets sellout Yes, Please reserve______Seat(s) for The Book of Mormon My Check for $__________($100.00 each) is included. Name:_________________________________________________________________________________________ Company Name:_________________________________________________________________________________ Address:________________________________________________________________________________________ Telephone:___________________________Email:______________________________________________________ Please return with payment to: Peninsula Builders Exchange, 735 Industrial Road, Suite 100, San Carlos CA 94070 Ques ons call: 650‐591‐4486 ar
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Please reserve ____ seats for the Construction Contracts Seminar. (*Please arrive on Ɵme to avoid disrupƟng the seminar*)
Check for $ _________(Free for members & their employees on payroll, $70.00 Non-member per person) is enclosed or
Visa/MC/AE Card # ____________-___ _________ - ___________ - ___________ Exp. ______/ ______ CVV ________
Attendee(s) (Please Print)_____________________________________________________________________________
Company Name: ____________________________________________________________________________________
Address:____________________________________________________________________________________________
Phone:___________________________________Email________________________________________________________
Mail or Fax (Credit Card only) with Payment to:
Peninsula Builders Exchange, 735 Industrial Road, Suite 100, San Carlos, CA 94070-3314
Phone: 650-591-4486 Fax: 650-591-8108
Spring 2015 Workshops &
Events Schedule
California Lien Law – Protect your rights to payment. 3/11/2015 9:00AM until about
Noon Members FREE – Non Members $70
Construction Contracts – Understand what you sign. 3/18/2015 9:30AM until about
11:30AM Members FREE – Non Members $70
Small Claims Court – Prepare and win your case. 4/1/2015 9:30AM until about
11:30AM Members FREE – Non Members $70
Beginning Contractor – Lots new this year, find out what you need to know.
3/25/2015 9:30AM until about Noon. Members FREE – Non Members Free (see flyer for detail)
Book of Mormon – Theatre – The best show in decades! See it!
Tickets by 1/22/15 $100.00each Show 5/8/2015 Check payment only for theatre events
Matilda – Theatre – A play by based off Roald Dahl’s book – Really good!
Tickets by 2/5/15 $65.00 each Show 8/12/2015 Check payment only for theatre events
Phantom of the Opera – Theatre – Over 800 members and their employees can’t be
wrong! See it! Tickets by 2/5/15 $86.00 each Show 9/23/2015 Check payment only for theatre events
Please reserve __________ seats for ___________________________On ____ / _____ / _______
Use one form for each workshop or event. (Don’t forget to keep a copy of your form!)(*Please arrive on time to avoid disrupting the seminar*)
Check for $ _________ is enclosed or Charge $________ to Credit Card (All Seminars are Free to Members)
Visa/MC/AE Card # ____________-___ _________ - ___________ - ___________ Exp. ______/ ______ CVV ________
Attendee(s) (Please Print) ____________________________________________________________________________
Company Name: ___________________________________________________________________________________
Address: __________________________________________________________________________________________
Phone: ___________________________________Email____________________________________________________
Mail or Fax (credit card only) with Payment to:
Peninsula Builders Exchange,
735 Industrial Road, Suite 100, San Carlos, CA 94070-3314
Phone: 650-591-4486 Fax: 650-591-8108
Free for Exchange Members

You will learn about the NEW changes that come into eﬀect July 1st, 2012 
California has excellent Lien Laws to protect sub and general contractors, but there are things you MUST do BEFORE trouble arises. 
A orney Cathleen Curl explains how contractors and suppliers can use their Lien Law Rights. It’s easy if you follow a few simple steps to protect your rights and get paid! Morning Seminar at the Exchange Wednesday March 11th, 2015 9:00 am un l 12 noon *Please arrive on me to avoid disrup ng the seminar* Cost per person: Free for members and their employees on payroll $70.00 non‐members Please reserve _____seats for the Lien Law Seminar Members and Their Employees on Payroll are Free but please let us know who’s coming Check for $______($70.00 non‐member per person) is enclosed or Visa/MC/AE Card # ______‐______‐______‐______ Exp. ____/____ CVV ____ Signature:________________________________________________________________________________ Name of A endee(s): (Please Print)____________________________________________________________ Company Name:___________________________________________________________________________ Address:______________________________________________ Zip Code____________________________ Phone:______________________________Email___________________________________________________ Mail or Fax (Credit Card Only) With Payment to: Peninsula Builders Exchange, 735 Industrial Road, Suite 100, San Carlos, CA 94070‐3314 Phone: 650‐591‐4486 FAX: 650‐591‐8108 THE STORYTHE STORY
“WELCOME TO THE DELIRIOUSLY AMUSING, MALEVOLENT, HEARTWARMING, HEAD-SPINNING WORLD OF MATILDA THE MUSICAL. YOU WON’T WANT TO LEAVE.” –
BLOOMBERG NEWS
Winner of 50 international awards, including the Tony Award®, and
one of the biggest hits on Broadway, MATILDA THE MUSICAL is
the story of an extraordinary little girl who, armed with a vivid imagination and a sharp mind, dares to take a stand and change her
own destiny.
Rolling Stone calls the show “hands down the BEST MUSICAL of
the season.” Based on the beloved novel by Roald Dahl, MATILDA
continues to thrill sold-out audiences of all ages on Broadway and
in London’s West End.
The Wall Street Journal says, “The makers of MATILDA have done
the impossible – triumphantly! It is smart, sweet, zany and stupendous fun.”
“ONCE IN A BLUE MOON, A SHOW COMES OUT BLAZING AND RESTORES YOUR FAITH
IN BROADWAY. MATILDA THE MUSICAL IS THAT
SHOW.” NEW YORK POST
“MATILDA IS THE BEST MUSICAL SINCE THE LION KING!”
– TIME MAGAZINE
“THE BEST FAMILY MUSICAL IN YEARS.” – CHICAGO TRIBUNE
Wednesday August 12th, 2015at 8:00pm Orpheum Mezzanine at 1192 Market St, San Francisco, California 94102 Deadline for ckets Thursday February 5th, 2015 Yes, Please reserve______Seat(s) for MaƟlda the Musical
My Check for $__________($65.00 each) is included.
Name:_________________________________________________________________________________________
Company Name:_________________________________________________________________________________
Address:________________________________________________________________________________________
Telephone:___________________________Email:______________________________________________________
Please return with payment to:
Peninsula Builders Exchange, 735 Industrial Road, Suite 100, San Carlos CA 94070
There are 9 reasons why companies belong to the Exchange:
1. Problem Solving – we help you solve business problems
2. Staff help – You may know everything – but how about the people who work for
you? We are here to help them also.
3. Social contacts – Work with, travel with and learn from others in your Exchange.
4. Power in Numbers. Hundreds in San Mateo County and Thousands in the State
through GSBE.
5. Training and Assistance – Your existing managers, foremen and field people need
to work safer, smarter and more profitably . We do construction industry training.
6. Relationships – We all help each other.
7. Projects and Plans on-line – Over 2700 projects for you to bid in the last year.
8. Discount on State Fund Worker’s Comp for Firms that qualify.
9. Levels of Participation – You have the opportunity for all levels of participation
from trips to exotic locations and calling in your questions and problems for on the
spot help. Or you can just use the on-line plans; safety and business training and
updates on industry news and legislation. You decide how much participation you
want.
Fill out the attached membership application and make your company a part of our
construction community today!
Membership Application Fax To: 650‐591‐8108 Peninsula Builders Exchange 735 Industrial Road #100 San Carlos, CA 94070 650 ‐591‐4486 [email protected] Firm Name ___________________________________________________________________________ Telephone _____________________ Fax _______________________ Email _______________________ Name of Owner. ________________________________________________________ Contact Person ____________________________ Title _________________________ Business Address ______________________________ City & Zip ________________________________ Mailing Address _______________________________ City & Zip ________________________________ Email _________________________________________ Website _______________________________ Type of Business _________________________________________________________________ Contractor’s License # ____________________________ Classification ______________________ Membership Statement: This applicant, upon acceptance for membership in the Exchange agrees to abide by all rules and by‐laws of the Exchange. The Peninsula Builders Exchange is a non‐profit, member run association dedicated to improving standards and communications within the construction industry. We have been assisting contractors, sub contractors and suppliers since 1945. Visa / MC ____________/ ____________/ ______________/ _____________ Exp. Date ____________ Name on Card: ___________________________________________ VIN Number _________________ Authorized Signature: ______________________________________________ Date: _____________ Referred By: ________________________________________________________________________ Application Fee of $100 Annual Dues: $400 (Total $500) please include with application Visit us on the internet: www.ConstructionPlans.org www.ConstructionAssistant.com www.ConstructionFinder.com Peninsula Builders Exchange, 735 Industrial Road #100, San Carlos CA 94070 650‐591‐4486(v) 650‐591‐8108(f) [email protected] New Contractor Seminar
How to get a successful start as a
sub or general contractor!
Building the project is the easy part for starting-out
contractors – it’s the other stuff that takes up time and makes problems! This short free
seminar will get you started out right to make your business successful! Learn about:

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




Bidding
Finding customers
Insurance
Bookkeeping
Managing growth
Banks, lines of credit and bonding
Employees
You have to wear many more hats than just your hard hat! This is a great overview of what
you need to do to be successful! This seminar is FREE but it is limited to all Exchange
Members plus non-member contractors who have gotten their license after 1/1/2011.
Please fill out the enclosed form and let us know you are coming!
At the Exchange, Wednesday, March 25th, 2015 From 9:30 AM until About Noon
The Peninsula Builders Exchange is a Community Based, Non-Profit, Member run association dedicated to
improving conditions in the construction industry. We serve contractors, subcontractors and suppliers. We have
been doing this since 1945
Free to all Exchange Members plus New Contractors with license issued after 1/1/2011, but Please let us
know you are coming!
Please reserve __________ seats in the New Contractor Seminar on Wednesday, 3/25/2015
Name: (Please Print) ____________________________________________________________
Company Name: _____________________________________________________________
Email:
____________________________________________________________________
Phone: _____________________________________________________________________
Mail or Fax to Peninsula Builders Exchange, 735 Industrial Road, San Carlos, CA 94070-3314
Phone: 650-591-4486 Fax: 650-591-8108
Hailed as “Stunning, intense and spectacular” by the Sunday Ex‐
press, this produc on features a brilliant new design by Paul Brown, costumes by the much missed Maria Björnson, a new staging by Laurence Connor – di‐
rector of the recent acclaimed 25th anniversary celebra on at the Royal Albert Hall – and new choreography by Sco Ambler. The produc on is overseen by Ma hew Bourne and Cameron Mackintosh. September 23rd, 2015 at 8:00pm Orpheum Mezzanine at 1192 Market St, San Francisco, California 94102 Deadline for ckets Thursday February 5th, 2015 Yes, Please reserve______Seat(s) for The Phantom of the Opera My Check for $__________($86.00 each) is included. Name:_________________________________________________________________________________________ Company Name:_________________________________________________________________________________ Address:________________________________________________________________________________________ Telephone:___________________________Email:______________________________________________________ Please return with payment to: Peninsula Builders Exchange, 735 Industrial Road, Suite 100, San Carlos CA 94070 Ques ons call: 650‐591‐4486 Cathleen Curl Seminars
mall Claims Court
Morning Seminar at the Exchange
Wednesday, April 1st, 2015
9:30 am to 11:30am
*Please arrive on Ɵme to avoid disrupƟng the seminar*
Cost per person:
Free for members & their employees
on payroll
$70.00 non members
• Prepare your case
• Courtroom Presentation
Construction Attorney
Cathleen Curl shows you
how to prepare and win a
• What should be included
case in small claims court.
• What to Avoid
An excellent way to collect
• Serving the other party
those smaller debts
• Actual forms for you to use
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Defeating the Ten-Year Statute of Repose
For Latent Construction Defects
It is an all-too-common scenario in California
construction: Nine and a half years after
completion of a major California construction
project, immediately before the 10-year
“statute of repose” for suing on “latent”
construction defects expires, a lawsuit
claiming damages for “recently discovered”
latent construction defects is filed. The
property owner sues the contractor for the
alleged defects. The direct contractor sues all
its subcontractors for indemnity and defense. The attorneys spontaneously generate.
Experts proliferate. Claimed defects are extrapolated. Four or five years later, after a few
dozen attorneys earn a small fortune in fees, the insurance companies make payments.
Attorneys collect more fees. The owners take what remains. They repair nothing... and buy
vacation homes.
Perhaps a cynical view, but there are many in the construction defect world who would
reach a similar conclusion. The question is: How can you defeat this seemingly inevitable
chain of events? Under a case known as Brisbane Lodging L.P. v. Webcor Builders, Inc. 216
Cal.App 4th 1249 (2013) there may be hope. California Code of Civil Procedure sections
337.1 and 337.15 grant a 10-year “statute of repose” for bringing claims for “latent”
construction defects. These statutes allow a lawsuit for such claimed defects to be filed in
court up until ten years after the project has been completed. Latent defects are generally
defined as those which are “not apparent by reasonable inspection” (CCP §337.15(b)). It is
extremely common for such claims to be filed immediately before this 10-year deadline
expires. When the lawsuit is brought, the cash register begins to ring.
In Brisbane v. Webcor the California Court of Appeal determined that sophisticated parties
(e.g. represented by counsel, negotiations took place, etc.) may contractually limit the time
periods for filing a lawsuit to less than 10 years. In that case, the court held that a clause in
the AIA form A201 construction contract, Art. 13.7.1.1, which provided that all causes of
action relating to the work would accrue from the date of substantial completion of the
project, was enforceable. This effectively limited the statute of limitations to four years for
breach of contract (CCP 337), rather than ten years under the statute of repose (CCP 337.15)
The useful contract language is as follows:
“As to acts or failures to act occurring prior to [substantial completion], any applicable
statute of limitations shall commence and run and any alleged cause of action shall be
deemed to have accrued in any and all events not later than such date of [substantial
completion]”
The project in the case was the construction of a hotel. The hotel owner discovered
previously unknown underground plumbing problems five years after the project was
completed. The owner filed a lawsuit relying on the fact that because the defect was
underground, “not apparent by reasonable inspection” and therefore “latent”, it had 10
years to bring suit. The Court of Appeal disagreed, ruling that because the owner and
contractor negotiated their contract freely in an arms-length transaction, even utilizing the
assistance of counsel to do so and because the parties were sufficiently sophisticated, the
above contractual language meant that the 10 year statute of repose for the delayed
discovery of latent defects would not apply. Instead, the 4-year statute of limitations for
written contracts would apply. The action was therefore time barred because it was brought
more than four years after completion.
The message from the case is clear. In California, the 10 year statute of repose for the
discovery of latent construction defects can be defeated. First, include a clause in the
contract like that found in AIA A201 Art. 13.7.1.1. Next, make sure that the parties engage in
negotiation of the contractual terms, even to the extent of both sides having their legal
counsel review the contract and negotiate changes. Finally, make sure that the quality of the
construction is sufficient to keep you out of court for four years following completion of the
work. After these four years the contractor might just be home free.
Article written by The Porter Law Group, Inc. in Sacramento, California, 2015. The firm
can be reached by phone at (916) 381-7868.