Real Estate & Construction

By: Christian Fernandez

Liquidated damages provisions in commercial and residential real estate contracts play a vital role when a transaction goes south, and should be given careful consideration when negotiating a real estate contract. Liquidated damages may be referred to in a variety of ways, such as “earnest money,” a “good-faith deposit,” or a “non-refundable deposit,” but each typically denote a negotiated amount of money that a seller is entitled to retain should a buyer breach a purchase and sale agreement. The purpose of liquidated damages is to provide the parties with certainty when actual damages arising from a breach
Continue Reading Liquidated Damages: Too High and It’s a Penalty. Too Low and You’re Out of Luck.

By: Ben Reeves

The Arizona Supreme Court recently clarified that a judgment lien does, in fact, attach to the proceeds of the sale of a homestead property. See In re McLauchlan. In sum, if the sale of a home produces more than the homestead exemption amount, then a judgment creditor can collect from those excess sale proceeds.

A few prior decisions held that a judgment could NOT recover any proceeds from the sale or foreclosure of a homestead property. See In re Rand, and Pac. W. Bank v. Castleton. These decisions are now effectively overruled.
Continue Reading The Arizona Supreme Court Confirms that Judgment Liens Attach to Homestead Property

By Rick Erickson

Our clients probably spend significant time, money and effort refining and updating their contract provisions covering indemnification and the duty to defend claims arising on their projects. But they should also consider spending an appropriate and adequate amount of time, money and effort when sending notices, or “tenders,” to enforce those critical provisions. Tenders demanding defense and indemnity are strictly interpreted based on what the contract documents require. Getting tenders wrong can result in losing one of the most significant risk-shifting tools in the contract. It can also be a monumental mistake if insurance coverage for indemnification
Continue Reading Don’t Be Lazy with Your Tenders

For a business of any size, a single hack could threaten the entire company. Precautionary measures can help protect you from financial calamity.

The headlines about rising costs and interests rates are everywhere. But what about the rising costs of scams?

By now, you probably heard a story of someone you know falling for an e-mail scheme and sending money overseas. But unlike the schemes of old, people are not falling for the “Nigerian prince” promising riches. Instead they are victims of schemes that look more like identity theft. How do you know that the person reading the e-mails you
Continue Reading Hackflation: A real business threat that is not going away soon

The Arizona Supreme Court rules that a homebuilder cannot contract its way out of its obligations under the implied warranty doctrine.

  • See:

    Court Reaffirms Contract Requirement in Implied Warranty Breach

    ,” by Mike Thal, March 2015

Despite the courts’ repeated reaffirmation of that doctrine, at least one homebuilder tried to use its sales contract to escape its implied warranty obligations. That strategy was shot down in September 2022, when the Arizona Supreme Court, in

Zambrano v. M & RC II LLC

,

sent back for trial a homebuyer’s lawsuit that the Court ruled had been dismissed in error.

Background
Continue Reading Implied warranty protection overrules a conflicting contract provision

As with any contract, understand your potential obligations when entering into an equipment lease.

While one of the leased cranes was in Sepesy’s possession, its telescopic boom was damaged, making the crane inoperable.

The damaged crane was stored for some time at Sepesy’s property before a towing company was hired to transport the damaged crane to a repair company. After loading the crane and leaving Sepesy’s yard, the tow truck driver drove into a ditch, flipping the trailer and damaging the crane’s exterior.

The crane was eventually repaired and returned to service, but only after more than 14 months of
Continue Reading Risks of equipment leasing for contractors

Properly drafted contractual provisions can be among your construction business’s best allies.

  • limit risks

  • increase the costs and decrease the rewards for those who bring groundless claims

  • defend your business from costly lawsuits.

Before you invest time in drafting a contract, remember that some jobs just aren’t worth the risk. Customers who want you to build the impossible – overnight, on a very tight budget – will be trouble. If you think the customer is destined to be unhappy, you are probably right. Walk away. The profit you might make on the project is tiny compared to what you could
Continue Reading Contractors: A good construction contract reduces risk, boosts profits

In its September 2022 issue,

Phoenix

magazine has listed Lang & Klain litigation attorneys

Bill Klain

and

Mickell Summerhays

among its “Top Lawyer” selectees for 2022.

The magazine made its selections from voting conducted among Phoenix-area attorneys.
Continue Reading Bill Klain, Mickell Summerhays are Phoenix magazine "Top Lawyer" selectees

In its September 2022 issue,

Phoenix

magazine has listed Lang & Klain litigation attorneys

Bill Klain

,

Jamie Hanson

and

Mickell Summerhays

among its “Top Lawyer” selectees for 2022.

The magazine made its selections from voting conducted among Phoenix-area attorneys.
Continue Reading Klain, Hanson, Summerhays are Phoenix magazine "Top Lawyer" selectees

By: Ben Reeves

Recent research I did on a case led me to the conclusion that Arizona law recognizes foreign litigation (i.e., a lawsuit filed outside of Arizona) as a justification for the recording of a lis pendens against real property located within Arizona. See TWE Retirement Fund Trust v. Ream, 198 Ariz. 268 (Ct. App. 2000). Apparently, there’s some debate about whether foreign litigation can support a local lis pendens. See Boca Petroco, Inc. v. Petroleum Realty II, 285 Ga. 487 (Ga. 2009). As noted in the TWE case, Arizona’s lis pendens statute (A.R.S. 12-1191)
Continue Reading Can I Recorda Lis Pendens in Arizona if the Lawsuit is filed Another Jurisdiction?

By: Ben Reeves

Over the last few years, the Arizona Court of Appeals wrestled with the question of who should receive the excess proceeds from a foreclosure sale.  We’ve blogged about some these past unreported decisions here and here.  Those decisions, somewhat inexplicably, required excess sale proceeds to be paid to senior creditors.  As we noted at the time, these unreported (and non-precedential) decisions did not seem to make much sense in the context of debtor/creditor rights.  Thankfully, a reported opinion finally sets the record straight.  Excess sale proceeds should be paid downstream. 

In Tortosa Homeowners Assoc. v. Garcia,
Continue Reading HOA Foreclosure Excess Sale Proceeds Go to Owner

On a residential project, even a minor

ROC discipline

against your

contractor’s license

can trigger a

Recovery Fund award

and a second license suspension.

By

Andrew Wenker

If the Recovery Fund makes a payment,

the license will automatically be suspended again

until the licensee has repaid the Recovery Fund, with interest. If the contractor does not incur costs at the outset to resolve the underlying complaint, it will inevitably do so at the end if it wants to continue in construction.

This creates a real hardship for contractors that have to generate income in order to repay the Recovery Fund
Continue Reading ROC license suspensions and Recovery Fund awards