California Assembly Bill 2738

RAYMOND MEYER
2008-10-01 16:49:14
Construction Law and Litigation

California Assembly Bill 2738, which amends and add to CC 2782, was created to reform problems associated with defense obligations under residential construction contracts, and to reform the huge exposures under poorly designed wrap insurance programs that threaten trade contractors' solvency.

On September 29, 2008, California Governor Arnold Schwarzeneggar signed California Assembly Bill 2738 into law to become effective January 1, 2009.

Assembly Bill 2738 will likely reduce the defense costs of lawsuits filed against trade contractors in construction defect claims. It also will ensure that builder-controlled insurance policies are fair and equitable and include adequate limits to protect trade contractors and consumers in construction defect situations. The highlights of this new legislation are as follows:

• For Wrap Commencing Construction after January 1, 2009 for Residential Construction (a limited number of these items apply to public works projects)
• Disclosure Prior to Signing Contract of the calculation of any credit or compensation for premium required by the subcontractor
• Indemnification for sole negligence is unenforceable
• Indemnification for reimbursement of insurance or defense costs for claims unrelated to your scope of work is     unenforceable
• Sub Contractor owes no defense or indemnity obligation unless the GC provides written tender of the claim including all documentation that they have regarding the claim.  This must includes the subs scope of work at which point the sub can     1) defend the claim with counsel of his choice 2) share in defense and judgment of the claim with proper allocation to the     parties involved in the loss including the GC. There are time limits and penalties for not complying for both the Sub and GC
• Contract must disclose the insurance premium credit or compensation required by the subcontractor – failure to do so results in the participant not being legally bound by the bid
• Contract must disclose the policy limits
• Contract must disclose the scope of policy coverage
• Contract must disclose the policy term
• Contract must disclose basis upon which the deductible or occurrence is triggered by the insurance carrier
• Contract must disclose if the policy covers more than one work of improvement, the number of units, if any, indicated on the application for the insurance policy
• Contract must disclose a good faith estimate of the amount of available limits remaining under the policy as of the date indicated in the disclosure from the insurer.
• Upon written request of the participant a copy of the policy must be given.  If the policy is not available the binder including coverage terms can be provided.  The participant can show this to their broker and legal counsel but no other 3rd parties.      Their broker and legal counsel cannot show this to another 3rd party.

A copy of the Enrolled Version of AB 2738 can be found on the Internet at here.

Gay Divorce - The Next Issue for California

NICOLE WHYTE
2008-09-08 13:44:20
Family

California will soon see its first gay divorce. One of the first lesbian couples married under California's "Marriage Cases" has filed for dissolution, according to the Fresno Bee. Family law attorneys in general have been curious to see how gay dissolution will proceed. We at Bremer Whyte Brown &O'Meara have been educating ourselves on possible issues these spouses will face during the process.

Most of the issues surround jurisdiction. Many states will not honor gay divorce, and if a couple is married in California but later establishes residency in another state that does not honor gay marriage, they likely will be unable to divorce. Their only option would be for one spouse to return to California or another state that recognizes gay marriage, re-establish residency, and then file for divorce there. This would be costly and time consuming; however, the law does not presently provide for another option.

Currently, Federal tax laws and other regulations may be incompatible with gay divorce. For example, upon dissolution, the spouses must divide their assets. In a traditional divorce, the parties can complete inter-spousal transfer deeds without incurring capital gains. The federal tax laws do not recognize this type of transfer between gay spouses, and therefore they may incur significant capital gains. In addition, there is the problem of spousal support. For heterosexual couples, the expense is deductible by the payor. This is not true for gay couples, according to the American Bar Association.

The solutions to these issues will vary depending on each case. Some such solutions involve overpayment of child support as an equalization payment for other items. Another solution might be innovative trust or Marital Settlement Agreement provisions. Over time, these creative solutions will develop into new functions every family lawyer in California must know while the law of the nation evolves.

Celebrity Divorce

NICOLE WHYTE
2008-09-08 13:43:29
Family

In a recent celebrity divorce splashed across the headlines, Christie Brinkley fought for her divorce proceedings to be made public, against the wishes of her soon-to-be ex-husband and her childrens’ counsel. Why would anyone want their dirty laundry aired out across national headlines? Maybe its anger, revenge, or simply a feeling of having nothing to hide, but at Bremer Whyte Brown & O’Meara, we considered how a similar case in California would be treated.

The California version of the Brinkley case would look very different from the New York case. California is a no-fault divorce state whereas New York recognizes divorces based on fault-based criteria. Because of the need to find fault to allow the granting of a divorce in New York, Brinkley’s divorce case was plagued with accusations of Peter Cook’s infidelity, obsession with internet porn, and secret supplying of a mistress with thousands of dollars. In addition, the child custody evaluator’s report was widely quoted by both attorneys in the media.

In California, none of these topics would be admissible unless they happened right in front of the children. The legislature in California has declared that public policy of the state is to ensure that each child's health, safety, and welfare be the court's primary concern. Specifically, in Marriage of Wellman, 104 CA3d 992, 164 CR 148, the court held that a Party's sexual conduct is not relevant in awarding custody unless there is compelling evidence that it has a significant bearing on the child's welfare. Additionally, the 730 evaluator is to file his written confidential report with the court which must be served on the parties or their attorneys. It is so strictly protected, it cannot be photocopied.

It seems that celebrities in California struggle for the very privacy Brinkley fought off during her divorce. Judges in California have been requested to seal alimony agreements, child custody and support agreements and close court rooms. Most recently, Britney Spears, a regular in the media spotlight, requested her alimony agreement and child custody agreement sealed, and all hearings were held in a closed courtroom.