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Volume 5 - Number 08 | February 19, 2007
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EDITOR'S NOTES
In the aftermath of Hurricanes Katrina and Rita, Louisiana has experienced a surge of complaints from home and business owners against unlicensed contractors performing shoddy work. As we learn in one of the issues of this week’s first case, even if the property owner knowingly hires a contractor without proper state licensing, it does not exempt the contractor from following the letter of the law. While the intentions of this contractor were probably honorable, its failure to adhere to the state licensing laws proved its demise.
In Louisiana, all construction projects totaling $50,000 or more require a licensed contractor to oversee the work (even if the contractor qualifies for the reciprocity agreement Louisiana maintains with five other states). If you plan to bid on an out-of-state project, check with that state to ensure you fulfill the requirements for licensing.
In the second case, a California appellate court axes an attachment order against a subcontractor that successfully argued that the exact issue in dispute had not yet been addressed and therefore precluded the order. The final case is an update on a case we covered a year ago—time runs out before a government contractor files papers on a settlement on a project that was terminated for convenience.
We conclude this week’s issue with the second half of an analysis by Warner Consulting experts Mark Anderson and John Livengood on the problems of an as-planned schedule on an ever-changing project.
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ASSIGNMENT OF INSURANCE PROCEEDS DID NOT ALTER CONTRACTOR’S STATUS
State licensing requirements supersede an unlicensed contractor’s argument that the project owner knew of its unlicensed status at the onset of the contract in a Hurricane Katrina rehabilitation project. Further, the owner’s initial agreement to assign insurance payouts to the contractor as project payment did not change the contractor’s status to project owner.
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ATTACHMENT ORDER NOT VALID ON BREACH OF CONTRACT SUIT
By Hanna Lee Blake
An appellate court cancels a contractor’s attachment order against its terminated subcontractor in a breach of contract suit. The order is not valid unless the exact issue has already been litigated in a separate action. The collateral estoppel doctrine cannot apply, the court rules.
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