Portland-Area Consumer Price Index Discontinued

Many local commercial leases use the Portland-area consumer price index (“CPI”) to calculate periodic rent adjustments. That index was discontinued in 2018.  For commercial landlords and tenants whose leases rely on the now-discontinued Portland-area CPI, discussing how to handle rent adjustments now can prevent tension later.

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Improving a Typical 1031

Section 1031 of the U.S. Internal Revenue Code provides real estate investors the opportunity to sell existing real property investments, reinvest the proceeds into the acquisition of qualified, like-kind replacement property, and defer recognition of capital gains realized from the sale to a later disposition, subject to time constraints and other regulations. Such a qualified like-kind exchange, more commonly known as a “1031 Exchange,” can be beneficial to investors holding appreciated investment properties that may otherwise be subject to a large tax liability at the time of sale. But to be able to completely defer tax on disposition, the replacement property must have a total fair market value equal to or greater than that of the relinquished property, and the investor must completely reinvest the sale proceeds into the replacement property, thereby limiting investors’ options. An improvement exchange, however, can provide investors more qualifying options to fully defer tax and the benefit of acquiring the “perfect” replacement property. Continue Reading

Condo Lien Gone Wrong: Summary Lien Procedure used Successfully to Challenge Excessive Condo Lien

ServPro filed a single lien on a condo for water damage remediation work in the amount of $183,945.09 but did not allocate proportionally the amount of its billing among the 20 units impacted. This mistake illustrates the difficulties in getting a lien filed correctly on a condo and the consequences of doing it wrong.

Pursuant to RCW 60.04.081, the condo owner filed a motion to seek to have the lien invalidated. Finding it both frivolous and clearly excessive, the court released the lien, leaving ServPro with no recovery. Not wanting to get skunked, ServPro appealed. The Court of Appeals determined the lien must be reduced but not completely released (down but not out) based on lien method utilized when filed. Continue Reading

Supreme Court to Take Up Protection of Confidential Information Provided to the Government

On January 11, the United States Supreme Court announced it accepted the Food Marketing Institute’s cert petition to review the Eighth Circuit’s decision in Food Marketing Institute v. Argus Leader Media, representing the latest development toward resolving a conundrum we have described before—how to protect confidential and trade secret information provided to the government in light of public disclosure laws.

This will be an important case for government contractors—and anyone else providing information to the federal government—to watch. If the Supreme Court agrees with the Eighth Circuit’s standard, it will become harder to prevent disclosure of confidential information to competitors when dealing with the federal government.

Read more about it on our firm blog, IP Law Trends.


Oregon’s 2019 Cap and Invest Legislation

Speaking today at a seminar sponsored by the University of Oregon, Senator Michael Dembrow and Representative Karin Power stated that they intend to introduce cap and invest legislation by the end of this month. The system is aligned with the Western Climate Initiative, the members of which include California and Quebec.

The general idea is to set a limit on carbon emissions from certain sectors of the economy, including power generation and transportation. Regulated entities in those sectors will be required to obtain carbon emission allowances for their emissions. The overall total of allowances will decline each year in accordance with Oregon’s carbon reduction goals. It appears that some allowances will be given to the regulated entities and the remainder will be auctioned. Initially, regulated entities will be able to satisfy up to 8 percent of their allowances using carbon offsets.

Revenue from the auctions will allocated into four general areas: greenhouse gas reduction projects, adaptation strategies, carbon sequestration, and transition assistance. The focus of transition assistance is to help people and companies adjust to the reduced-carbon economy.

Governor Brown has proposed that a new agency be formed to implement the legislation. The “Oregon Climate Authority” would consolidate some existing climate change programs at Ecology, Energy, and the PUC and take responsibility for implementing the cap and invest program.

Senator Dembrow hopes to have a bill-signing ceremony on April 22, 2019.

Proposition 65—Under Construction

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, otherwise known as Proposition 65, continues to be amended to address errors and omissions in the original regulations. Proposition 65 applies to all businesses in the chain of commerce in California and requires all businesses to provide a “clear and reasonable” warning before knowingly and intentionally exposing any individual in California to one of nearly 1,000 listed chemicals. While Proposition 65 has been on the books for more than three decades, the regulations have never been clear as to how an upstream business, such as a manufacturer or distributor, is to provide the mandated warning to the final consumer through the chain of commerce. On November 16, 2018, California’s Office of Environmental Health Hazard Assessment (OEHHA) proposed amending the regulation to help clarify this process. But OEHHA’s proposed amendment falls short of the stated goal. Continue Reading

James Walker Recognized on the Daily Journal of Commerce Oregon “Phenoms and Icons” 2018

Miller Nash Graham & Dunn LLP construction attorney James Walker was recognized as a 2018 Phenom by the Daily Journal of Commerce Oregon (DJC Oregon) on December 13 in Portland, Oregon. DJC Oregon’s newest award program honors local building industry’s longtime leaders while recognizing the up-and-coming professionals expected to share the future of architecture, engineering, construction, development, transportation, energy, and sustainability in the region. Click here to read the press release.

Washington Supreme Court Upholds Strict Interpretation of Contractual Notice Provisions: Failure to Immediately Give Notice of Claim a Complete Bar to Recovery

Nova, a public works contractor, filed a claim for breach of the covenant of good faith and fair dealing, based entirely on the City’s untimely and repeated rejection of submittals to perform culvert work in Olympia. The Supreme Court held that the contractor was barred from seeking damages because it failed to give written notice of protest “immediately” when the rejections occurred rather than waiting until the City terminated the contract. Under Section 1-04.5 of the contract (adopted from the WSDOT standard specifications), the contractor is required to “immediately” file a written notice of protest to preserve any claims related to rejection of such submittals, including claims for expectancy or consequential damages.

Failure of the contractor to “immediately” file such a written notice of protest following rejection of its submittals, regardless of actual notice by the City, bars the claim under the rule set forth in Mike M Johnson in the 2003 case. Interesting side note, the Washington Court of Appeals had carved out an exception to the harsh result of the Mike M Johnson rule and allowed the contractor to proceed with its breach claims since they were based on expectancy and consequential damages, not for the cost of work performed. The Supreme Court reversed and once again affirmed that no notice means no claim, leaving the contractor without a leg to stand on.

Nova Contracting Inc. v. City of Olympia, Case No. 94711-2 (Sept. 27, 2018).

Get Trained on New Requirements for Bidding on Public Works Contracts

Washington’s “responsible bidder” law already imposes significant requirements on contractors bidding on public works contracts: for instance, bidders must obtain certain types of industrial insurance, maintain records of wages and components used in construction, and must not have committed more than one prevailing wage violation in the past five years. Now, a new law will also require contractors to undergo training on public works and prevailing wage requirements in order to become eligible to bid on public contracts.

On March 23, 2018, Governor Jay Inslee signed SSHB 1673 into law, amending Washington’s current “responsible bidder” statute to add a new requirement that bidders on public works projects “have received training on the requirements related to public works and prevailing wage” and designate at least one person to be trained on these requirements. The bill requires the Department of Labor and Industries (L&I) to develop a curriculum for this training, which can be provided either by L&I itself or by a third-party training provider whose course has been approved by L&I. For its part, L&I has already created a web page which lists some of the qualifying in-person courses available to contractors.

Fortunately, the requirements of SSHB 1673 don’t go into effect until July 1, 2019, so aspiring public contractors have time to receive the required training. In addition, bidders with significant public contract experience are grandfathered in: the training requirements don’t apply to contractors who have completed at least three public works projects and have maintained a valid Washington business license for at least three years. But businesses that don’t meet these criteria are advised to complete the applicable training requirements as soon as possible—once the law goes into effect next summer, what you don’t know about public works and prevailing wage laws can hurt you.