CALPASC Director of Risk Management Bruce Wick, and CALPASC Board member Brian Chien of Kenyon Plastering were on a panel telling the reality about the reduced defense and indemnity obligations of subcontractors due to the passage of AB 758 in 2005; and AB 2738 in 2008. 

Also participating on the panel was attorney Bob Closson, who authors CALPASC's amicus briefs to the appellate courts in California. Rounding out the panel was Tom Zimmermann, outside general counsel for Pacific Communities; and Justice Mark Gibbons of the Nevada Supreme Court. The panel outlined the following issues.

1. The two bills significantly change the defense and indemnity requirements of subcontractors. Many at the conference were ignorant of these changes.
2. There is a path builder's lawyers can take to resolve a case that is reasonable and fair, which it is also the law, now.
3. The Additional Insured endorsements always impact the discussion, but the panel showed how the A/I issue can be resolved without the chaos and confusion that currently goes on.
4. Key questions were raised during the panel, that gave attendees a realistic understanding of how defense and indemnity obligations will be reduced going forward.
5. One key point that subcontractors need to be aware of is the difference it can make for resolving a CD case if they are sued directly by plaintiff; along with the builder.  

CALPASC held a webinar for members on June 12, 2017, that is available for members to replay. There is lots of detail in the webinar that came from the latest information at West Coast Casualty. If you weren't able to attend the webinar, we strongly recommend you contact David Murillo, CALPASC Executive Director; to replay it. His email is dmurillo@calpasc.org.

There were also some strange vibes surrounding the conference.

1. Some of the presentations could have been repeated word for word from 2003. It appears that some in the construction defect litigation industry are not prepared for the changes that are coming.
2. Some attorney firms are seeing the reduction in CD cases resulting from the great recession of 2008-2014. The CD industry should be seeing far fewer CD cases being filed, due to far less homes or other structures being built in that period. 

Previously, Division Three of the Fourth Appellate District decided in Liberty Mutual v. Brookfield that plaintiffs had their choice of filing SB 800 or strict liability. A subsequent decision by Fifth Appellate District court issued a very different ruling in McMillin Albany v. Superior Court. That particular ruling reviewed the Liberty Mutual decision and clearly showed how it came to the wrong conclusion. The McMillin court clearly decided that SB 800 is the exclusive remedy for construction defect claims in new for sale residential construction. The result now is two conflicting appellate rulings on SB 800 and strict liability.

McMillin Albany was appealed to the state Supreme Court, which agreed to hear the case. Briefs must be filed by mid-August, 2016, after which the court will set for oral argument. Following that, the court will rule, but likely not until mid to late 2017.  

SACRAMENTO, Calif., Oct. 10, 2013 /PRNewswire/ -- On October 9, the California Department of Industrial Relations (DIR) and theOrange County District Attorney (OCDA) announced the indictment of Sourin Babayan, owner of SDB Construction, on 42 felony counts. A majority of the counts were attributed to taking employees' money and "recording a false and forged instrument" on public works projects as well as sentencing enhancements for property damages and/or loss of more than $65,000, leading to a possible conviction of more than 57 years in prison. Following the announcement,

Brad Diede, Executive Director, California Professional Association of Specialty Contractors (CALPASC) issued the following statements:

"The fast and efficient coordination between DIR's Division of Labor Standards Enforcement (DLSE) and the OCDA is exactly what's needed to catch and prosecute underhanded contractors.

"Unfortunately, stealing from employees and coercing them to remain silent isn't that uncommon in the construction underground economy, which is why these perpetrators must be brought to justice.

"Swift indictment of Babayan by OCDA's Donde McCament, Deputy District Attorney of the Insurance Fraud Unit, and Elaine Noce, Investigator from the Public Works Unit, is to be commended and supports CALPASC's focus of leveling the playing field in the construction industry.

"The work of the California Labor Commissioner Julie A. Su, DLSE and OCDA reinforces our message that blatant dishonesty will not be tolerated, and unscrupulous subcontractors will be held accountable."

Todd W. Golden, President, Sprinkler Fitters U.A. Local 709, issued the following statement:

"This is a widespread epidemic and prime example of the problems associated with public works fraud. People must open their eyes and stop this from continuing. We are dedicated to bringing these violators to justice. We must protect the livelihoods of the hardworking men and women affected by these types of violations."

John Upshaw, Executive Director, California American Fire Sprinkler Association, issued the following statement:

"Chronic offenders from the fire sprinkler industry must be stopped. This is a life safety industry, and workers need to be trained in recognized state and federal training regimens that keep the workers' welfare a priority and also maintain fire sprinkler installation performance standards."

SOURCE California Professional Association of Specialty Contractors (CALPASC)