Construction Law Update

May 25 , 2006 ; Issue 12

Highlight Article

Update on Kirk Crawford V. Weather Shield Manufacturing, Inc.

(Review Granted by California Supreme Court)

By Nina D. Klawunder, Esq.

The high Court wants to send a message and perhaps put to rest, once and for all, the circumstances under which a subcontractor must fulfill its agreement to pay the defense costs of a developer.

On May 24, 2006, the California Supreme Court granted review of Kirk Crawford v Weather Shield Manufacturing, Inc., 136 Cal. App. 4th 304 (January 31, 2006). As such, at present, the case is superceded and no longer a viable authority for the proposition that a subcontractor will be required to pay for the defense costs of a general contractor related to claims arising out of the subcontractor’s work, even though the subcontractor is ultimately found not to be negligent.

The issue to be briefed and argued is limited to whether or not a contract under which a subcontractor agreed “to defend any suit or action” against a developer “founded upon” any claim “growing out of the execution of the work” requires the subcontractor to provide a defense to a suit against the developer even if the subcontractor was not negligent.

While the ultimate decision is unknown, the fact that review has been granted is, at the very least, a positive step in the right direction for subcontractors. In the meantime, subcontractors should continue to ensure that from now on their contracts state that their negligence is a condition precedent to their duty to defend.

Kring & Chung continues to act in concert with various trade contractor organizations in monitoring the case and providing the Court with information and briefs regarding the subcontractor perspective. Please watch for regular updates on this and other legal issues which impact trade contractors.

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Nina D. Klawunder, Esq. is a partner of Kring & Chung, LLP. Ms. Klawunder specializes in serving the legal needs of the construction industry. For more information or with questions regarding this article, please contact Ms. Klawunder at (949) 261-7700.

** The information contained herein is for informational purposes only and should not be relied upon in reaching a conclusion in a particular area. The legal principles discussed herein were accurate at the time this article was authored but are subject to change with time. Applicability of these same legal principles may differ substantially in individual situations. Please consult an attorney before making a decision in a particular area using only the information provided in this article.

Kring & Chung, LLP is one of California’s fastest growing full-service law firms. With over forty attorneys, the firm practices business, corporate and securities, construction, real estate, labor & employment, insurance, estate planning and family law. The construction department of the firm serves the construction industry in relation to construction and design defect litigation, mechanic’s liens, stop notices, construction bonds, public works construction disputes, change orders, bid protests and delay claims.
 

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