Who Pays for the Owner's Non-Payment? by Tim Ross    Contingent payment clauses (“CPC’s”), or “pay-if-paid” clauses, have become commonplace in the Texas construction industry.  If properly written, they make payment from an owner to a general contractor a “condition precedent” to the general contractor’s obligation to pay its subcontractors, thereby shifting the risk of an owner’s non-payment to the subcontractors.    In 2007, the Texas Legislature attempted to narrow the use of CPC’s by enacting the Contingent Payment Clause Statute (now located in Chapter 56 of the Texas Business & Commerce Code) (the “Statute”), which recognizes the enforceability of CPC’s but provides a series of exceptions to their enforcement.  One such exception prohibits enforcement of a CPC if the owner’s non-payment to a general contractor is due to the general contractor’s contractual obligations not being met, unless the non-payment is due to the subcontractor’s failure to meet its contractual requirements.  Seems simple enough, right? ...Read more

Change Orders and Claims  by Mike Schiff     “If opportunity doesn’t knock, build a door.” - Milton Berle “Wise words, Mr. Berle, but who pays for the door?” - Mike Schiff Another January is upon us; the time of year when everyone’s mind is on changes. For those in construction, however, change of a different type presents a year-round concern. With this in mind, let’s talk about change orders.  It’s no stretch to say our construction attorneys see change order provisions litigated more than any other contractual clause. While every case is different, these disputes typically arise from commonplace scenarios... Read more

Austin Ordinance Banning Short Term Rentals Ruled Unconstitutional by Mahek Bhojani and Katie Gourley   Over 10,000 properties in Austin advertise as short term rentals. While short term rentals have long been a reality, platforms like AirBnB, VRBO, and HomeAway have popularized them further. City lawmakers are responding by regulating such short term rentals. However, it has proven difficult to pass laws that strike an even balance between resident concerns and property owners’ rights.     In February 2016, Austin City Council passed an ordinance banning short term rentals of non-homestead residential properties by 2022. In addition to other provisions, the ordinance banned all assembly, including gatherings for weddings or similar group activities after 10p.m. and prohibited groups of more than six unrelated individuals or ten related adults from property use at any time... Read more

Do I Have to Provide Paid Sick Leave? by Tony Stergio    In February 2018, the City of Austin passed an ordinance requiring employers to provide up to 64 hours of paid sick leave (1 hour for every 30 hours worked) to employees working in the city limits of Austin for as little as two (2) weeks per year. The cities of San Antonio and Dallas soon followed, passing similar ordinances for employees working within those city limits. Numerous organizations challenged the ordinance in court and asked the Texas Legislature to pass a statewide measure barring such municipal ordinances. The Legislature, however, adjourned in May 2019, without taking any action on these ordinances. Because the Legislature will not reconvene until January 2021, it will be up to the courts to determine whether the ordinances are enforced or struck down.   The following is a summary of the status of these ordinances so employers with employees in these cities can take appropriate action... Read more

How Does Alta Mesa Ruling Affect Future Gathering Agreements by Patrick Kelly    Oil and gas producers and midstream operators routinely enter into gathering agreements. Typically, a producer dedicates all of its production to an operator in return for the building and maintaining of a pipeline system for the benefit of both parties. Building and maintaining this pipeline system requires surface easements, which have become a feature of gathering agreements.  Recently, a critical question regarding the treatment of gathering agreements in bankruptcy arose in Alta Mesa Holdings LP, et al v. Kingfisher Midstream LLC, et al. The United States Bankruptcy Court for the Southern District of Texas was tasked with determining whether a producer could use its Chapter 11 bankruptcy case to reject gathering agreements... Read more

Don't Trash Where You Splash by Matthew Cire    On December 3, 2019, a federal judge approved a historic $50 million settlement agreement between plastics manufacturer Formosa, and Diana Wilson. The settlement is the largest in U.S. history involving a private citizen's lawsuit against an industrial polluter under the Clean Water Act – a federal statute that regulates the discharge of pollutants into the nation's surface waters.   Diane Wilson, a retired shrimper and environmental activist, sued Formosa in July 2017, alleging it had illegally discharged thousands of plastic pellets and other pollutants into Lavaca Bay and Cox Creek, about halfway between Houston and Corpus Christi. The legal nonprofit group Texas Rio Grande Legal Aid (“TRLA”) represented Wilson and an environmental group that later joined Wilson in the lawsuit... Read more

1/30  AM sponsors AGC Houston Annual Business Meeting 1/30  ACRP Economic Update 1/30  AM sponsors Austin RBI Gala 2/5   Construction Technology and Innovation Conference 2/6   AM sponsors RECA KnockOut Night 2/11 AM Sponsors AGC Houston Sporting Clays Tournament 2/13 Elaine Howard is a featured speaker at Houston Business Leader Forum 2/19 ABC Central Texas Economic Forecast 2/19 AM Sponsors NAIOP Broker of the Year Award 2/20 Manny Schoenhuber and Tony Stergio present to German American Chambers of Commerce 2/26 ACRP Kick-off to Cook Off 2/27 Ben Westcott partners with BKD for CLE Risk Management Seminar (RSVP here)