Publications Archives

By: Kyle D. Kring

On January 18, 2018, the California Supreme Court issued an extremely important ruling for the residential construction industry in McMillin Albany LLC v. Superior Court, No. S229762 (Cal. Jan. 18, 2018). The state high court held that S.B. 800 (commonly known as the "Right to Repair Act") is the exclusive remedy not just for economic loss, but also for property damage, arising from construction defects in original construction, stand-alone homes. In so holding, the Court found that the Legislature clearly and unequivocally intended to reshape the rules governing construction defect actions when it enacted S.B. 800.

S.B. 800 requires parties to engage in an informal process that begins with written notice from the homeowner to the builder of the allegations that the construction falls shorts of the standards required by the Right to Repair Act. The builder then has a right to inspect, test, and cure the alleged defects or to pay the homeowner compensation in lieu of making repairs. If the homeowner goes outside of these procedures in bringing a civil action, the builder can move the court for a stay of that action until the homeowner has complied with these requirements. 

By: Paul T. McBride

On November 7, 2017, Judge David Brown of the Sacramento County Superior Court ruled that an intervenor insurance carrier may not file a cross-complaint in a construction defect lawsuit. While this ruling is not binding precedent, if upheld on appeal it will affect the rights of intervening insurance carriers, and so merits discussion.

Background- Effect of Corporate Suspension

California Revenue & Taxation Code §23301 provides for suspension of a California corporation's "rights, powers, and privileges" for nonpayment of taxes. Once it is suspended, a corporation is prohibited from taking any actions; it can neither prosecute nor defend lawsuits. Gar-Lo, Inc. v. Prudential Sav. & Loan Assn. (1974) 41 Cal.App.3d 242. Since it cannot defend a lawsuit, it is a comparatively simple matter to take a default judgment against a suspended corporation, provided it is properly served. Once a default judgment is entered against a suspended corporation, it may be enforced, i.e. collected, against its insurance carrier, pursuant to California Insurance Code §11580(b)(2), assuming the judgment creditor can prove the damages encompassed by the judgment are covered by the policy of insurance.

By: Kyle D. Kring

While the California state minimum wage is set to increase on January 1, 2018, many cities and counties throughout the state will increase their minimum wage rates on July 1, 2017. Employers should be well aware of the changes and make sure they are in compliance with state, county and local ordinances.

California State Minimum Wage

The current California state minimum wage rate is set at $10.00/hour for employers with 25 employees or less and $10.50/hour for employers with 26 employees or more. Until January 1, 2022 the minimum wage will increase every year beginning January 1, 2018. The next increase will see the minimum wage for employers with 25 employees or less rise to $10.50/hour and $11.00/hour for employers with 26 employees or more.

For more details and to see a schedule for minimum wage rates in California from 2017-2023, visit the California Department of Industrial Relations page.

By: Kyle D. Kring

While some employers are alleging that AB 1513 is unconstitutionally vague and an improper retroactive application of California rest break laws, at least two large farmers are contending that they were improperly excluded from using the AB 1513 affirmative defense to their advantage to resolve past rest break claims.

The Court of Appeals for the Ninth Circuit recently held that two large farmers' "complaint states a plausible claim for relief under the Equal Protection Clause, but fails to state a plausible claim that AB 1513's carve-outs amount to a Bill of Attainder." The equal protection claim was remanded to district court for further proceedings. As to the Bill of Attainder claim, the court ruled that plaintiffs were not individually punished by AB 1513, which is a necessary element of a bill of attainder.