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Arizona Construction Law Practice Manual, 2nd Ed. 2011

Course Number: PUB146-126
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    Business Basics

    1.1  Business Formation and Entity Selection

    1.2  Licensing

    1.3  Obtaining Surety Bonds

    1.4  Insurance

    1.5  Sales Taxation of Contracting

    1.6  Payroll Taxes and the Risk of Personal Liability

    1.7  Construction Accounting

    1.8  Employment and Immigration

    1.9  Labor Law

    1.10  Bank Financing of Contractors and Construction Projects


    Bidding and Contract Formation

    2.1  Competitive Bidding Process

    2.2  Minority Contracting

    2.3  Construction on Indian Reservations


    Construction Law Issues

    3.1  Risk Avoidance

    3.2  2007 AIA Consensus Documents Comparison

    3.3  Termination

    3.4  Dust Ordinances

    3.5  Bankruptcy

    3.6  Indemnification

    3.7  Architects and Engineers

    3.8  Arizona’s Economic Loss Rule

    3.9  Construction Warranties

    3.10  Equitable Subrogation


    Getting Paid

    4.1  Construction Claim Introduction

    4.2  Prompt Payment Act

    4.3  Surety Claims

    4.4  Mechanics’ Liens Claims

    4.5  Stop Notice Claims

    4.6  Unjust Enrichment Claims

    4.7  Claims Against Public Entities

    4.8  Administrative Claims Act Compliance

    4.9  Federal Contracts and Claims


    Mediation, Arbitration, Litigation, Registrar of Contractors

    5.1  Mediation

    5.2  Suing and Arbitrating

    5.3  Plaintiff-Contractor Case Development

    5.4  Preparing the Owner’s Defense

    5.5  Experts

    5.6  E-Discovery

    5.7  Attorneys’ Fees

    5.8  Construction Defect Litigation

    5.9  Registrar of Contractors’ Proceedings



    6.1  Multiple Representations

    6.2  Engagement Letters

    6.3  Former Clients

    6.4  Spoliation

    6.5  Ex-Parte Communication with Former Employees


    7.1 Arizona’s Most Important Construction Law Appellate Decisions

    Shawn Aiken
    William "Wink" A. Ames
    Mr. Ames is an Associate in Risk Management and an Associate in Fidelity and Surety Bonding and has been an active force in the Arizona construction community for many years. He received his B.S. in civil engineering from University of California, Berkley in 1955. As a specialist in the area of surety bonding and construction insurance, Mr. Ames has sought to promote professionalism and growth among students, contractors and his peers in order to benefit the industry that he has served for so long. His exceptional commitment to the construction industry is best evidenced by his participation, for many years, in a wide variety of its associations. In addition, he has served on the executive committee for Arizona State University’s Del E. Webb School of Construction and has been admitted to its Hall of Fame. He is also a life director of the Arizona Builders; Alliance and the treasurer of the Arizona Chapter, Associated General Contractors of America.
    Mark E. Barker
    Mr. Barker is a partner with Jennings, Haug & Cunningham, LLP. His practice includes suretyship, construction law, as well as general and civil litigation. He is a graduate of the University of Arizona (B.S., 1981 and J.D., 1984). He is admitted to practice in the state and federal courts of Arizona. Mr. Barker is a member of the Arizona State Bar, and has served as chairman of the Executive Council of the State Bar of Arizona Construction Law Section.
    Guy W. Bluff
    John Burnside
    David Cantelme
    Richard Cobb
    Pat Derdenger, Partner
    John L. Dillingham
    Mr. Dillingham is a 1972 graduate of the United States Naval Academy. He received his J.D from Boston College of Law, cum laude, in 1980. From 1980 to 1982 he was a member of the law firm of Gallagher & Kennedy. Since that time, he has either been a solo practitioner or a principal in a small firm practice. Mr. Dillingham is a member of the Maricopa County and American Bar Associations, State Bar of Arizona, Arizona Trial Lawyers Association and the Association of Trial Lawyers of America. His primary areas of practice are construction and commercial litigation, personal injury litigation and other civil litigations. He practices at both the trial and appellate levels
    Wayne Ducharme
    Robert O. Dyer
    Mr. Dyer received his B.A. in 1971 from Stanford University and his J.D. in 1974 from the University of Utah. He then clerked for the Honorable F. Henri Henriod, Utah Supreme Court. He is a former chairman of the Construction Law Section of the State Bar of Arizona. He is also a member and vice chair of the Fidelity and Surety Committee, Tort and Insurance Practice Section of American Bar Association. Mr. Dyer is an author of several construction law publications: The Allocation of Recoveries Between Employer and Surety in Fidelity Bond Cases, 1998 Surety Claims Institute; Summary Judgment Motions in Fidelity Coverage Litigation - Workable or Not?, Tort and Insurance Practice Section, American Bar Association (1998); Ethical Considerations to Multiple Representation in Construction and Surety Bond Litigation, The Construction Lawyer (1997); Recent Innovations in Public Works ADR, 1995 Wiley Construction Law Update; Fiduciary Bonds, 1994 Fidelity and Surety Trial Practice Program on Miscellaneous Bonds, International Association of Defense Counsel; A Comparison: Arizona Mechanic’s and Materialmen’s Lien Law, California Mechanic’s and Materialmen’s Lien Law, Uniform Construction Lien Law, 1990 Annual Convention, State Bar of Arizona; Ethics in Litigation, Maricopa County Bar Assoc. Seminar (1990); Contributing Editor, Arizona Construction Law, State Bar of Arizona.
    Brian Flaherty
    P. Douglas Folk, Member
    Ruth Franklin
    Ruth Franklin is of counsel at the firm of HOLDEN WILLITS PLC with a focus on providing Alternative Dispute Resolution services in complex commercial and construction matters. Ruth’s career as an ADR professional encompasses over 18 years of experience working as mediator, sole arbitrator and the chairperson of panel arbitrations. She has created custom ADR processes to address the individualized needs of the parties and also works within the corporate environment creating training programs for managers and employees to gain the benefits of the ADR process. Ruth Franklin is the current Chair of the ADR Section of the State Bar. She is a professional civil engineer licensed in Arizona and California as well as an attorney admitted to the Arizona, California and Utah bars.
    Richard A. Friedlander
    Mr. Friedlander is a partner in the Phoenix law firm of Mariscal, Weeks, McIntyre & Friedlander, P.A., and co-chairs the construction law department of the firm. His practice emphasizes civil litigation in complex commercial, real estate, and construction areas. He also practices in the area of dispute resolution in both the court system and through arbitration, mediation, and other ADR proceedings, and he frequently lectures to professional organizations (including the State Bar of Arizona, State Universities) on topics concerning civil litigation and construction dispute resolution. Mr. Friedlander received his B.A. degree from the University of California at Berkeley and a J.D. degree from Northwestern University School of Law. He is admitted to practice in Arizona and Illinois, United States District Courts for the Northern District of Illinois and District of Arizona, the Ninth Circuit Court of Appeals, and the United States Supreme Court. Mr. Friedlander is a member of the Forum Committee on the Construction Industry of the American Bar Association, the Fidelity and Surety Law Committee and Section of Public Contract Law of the American Bar Association, the State Bar of Arizona Construction Law Section, and the Panel of Arbitrators for the American Arbitration Association. He is trained mediator and has also served on various occasions as a judge pro tem of both the Superior Court of Arizona and the Arizona Court of Appeals, acted a Special Bar Counsel for the Arizona State Bar, and has been an active member and chairman of the Arizona State Bar Ethics Committee and the Hearing Committee of the Disciplinary Commission of the Arizona Supreme Court.
    Roxanne Gallagher
    Janis Gallego
    Scott H. Gan, Attorney
    Mr. Gan has been partner at Mesch Clark & Rothschild since 1986. A former assistant public defender, he has been practicing law since 1980. Mr. Gan is the chairman of the firm’s appellate section. He also practices in the firm’s bankruptcy section and is a frequent lecturer on appellate and bankruptcy matters. In 2002, Mr. Gan was recognized as one of the top 50 pro bono attorneys in the State of Arizona.
    Frances J. Haynes
    Ms. Haynes is of counsel in Lewis and Roca’s Construction Group. Her practice emphasizes providing legal advice to businesses on commercial law issues. Ms. Haynes also has experience in all facets of the construction process, including negotiation and documentation of construction agreements and litigating construction claims, warranty and liquidated damages issues. She has represented private enterprises and public entities on commercial law and procurement law matters. Ms. Haynes regularly counsels clients on avoiding litigation or arbitration by utilizing client-oriented contract documents and resolving disputes outside of litigation when possible. She practices in all Arizona state and federal courts. Ms. Haynes received her B.A., cum laude, from the University of Texas in 1981 and her J.D. from the University of Texas School of Law in 1984. Ms. Haynes was the first woman chair of the construction law section of the State Bar of Arizona. Active in the construction law section of the Arizona state bar, Ms. Haynes has served as an officer of the section from 1989 through 1990, from 1991 to 1992 and recently completed a three-year board term. She has been a member of the committee responsible for construction-related continuing legal education and has been a panelist and presenter at the annual Arizona state bar construction law seminar. In addition, Ms. Haynes has spoken to various industry organizations, such as the Arizona Builder’s Alliance (formerly the Arizona Building Chapter of the Association of General Contractors), the American Subcontractors Association, the National Association of Women Construction Business Owners and the National Association of Credit Managers. She also frequently serves as a speaker at Maricopa County Bar Association and State Bar of Arizona seminars. Topics have included contract interpretation, UCC issues, arbitration and mediation of legal disputes, legal issues facing general contractors and subcontractors, the bid process, the estimating process and related disputes, bid protests and legal problems, claims against public entities and licensing of contractors in the State of Arizona including legal ramifications of non-compliance. Ms. Haynes is a member of the Maricopa County Bar Association, the American Bar Association and the American Subcontractors Association.
    Scott Holcomb
    Michael J. Holden
    Mr. Holden is a member of the Phoenix law firm of Holden Brodman PLC. A 1980 graduate of Duke Law School, he has concentrated his practice for over 22 years in the areas of construction and surety law, representing primarily owners, contractors, subcontractors, material suppliers and sureties. Mr. Holden is a frequent author and speaker on a wide range of construction issues. He co-wrote “Developments In Change Order Law,” 1999 Wiley Construction Law Update (Aspen Law and Business, 1999), “Recent Caselaw Developments in West Region,” 1998 Wiley Construction Law Update (Aspen Law and Business, 1998), as well as the “Arizona Chapter,” 50 States Public Construction Contracting (Wiley 1996). Mr. Holden helped draft the 1992 and 1998 amendments to the Arizona mechanics’ and materialmens’ lien laws, and he was one of the primary authors of Arizona’s revolutionary private sector prompt payment law that was enacted in 2000. He was the founder and first chair of the Arizona State Bar Construction Law Section, and is currently a member of the Arizona Builders’ Alliance Legal Advisory Council; the American Subcontractors Association of Arizona (Chair, Legal Advisory Council 1993-98, and Board of Directors 1994-95, 2000-01); and the American Bar Association Construction Forum Committee and Fidelity and Surety Law Committee.
    Thomas Irvine
    Stephen E. Jackson
    Mr. Jackson is a partner with the Phoenix law firm of Warner Angle Hallam Jackson & Formanek. His main areas of practice include construction law, commercial litigation, real estate law, and commercial transactions. He received his A.B. in 1970 and his J.D. in 1973, both degrees from Indiana University. He was admitted to practice in Arizona in 1973, in Indiana in 1974, and U.S. Court of Military Appeals in 1977. He is also a member of the Maricopa County and American Bar Associations, State Bar of Arizona and Arizona Bar Foundation.
    Michael R. King
    Mr. King is a founding partner of Gammage and Burnham. His practice emphasizes bankruptcy and creditors’ rights, commercial litigation, real estate, construction, general business organization, commercial lending, commercial transactions, and estate planning and probate. He received both his B.A. in 1975 from the University of Arizona and his J.D from University of Arizona School of Law in 1979. Mr. King is a member of the State Bar of Arizona and active member of its real estate, construction and bankruptcy law sections. He is also a fellow of the Arizona Bar Foundation. Other membership affiliations include the American Bar Association and Maricopa County Bar Foundation.
    Kent A. Lang
    Stanley Lubin
    Sharon Moyer
    Rina K. Rai
    John G. Ryan
    Mr. Ryan practices primarily in commercial litigation. His commercial litigation and business practice has involved a variety of disciplines, including securities, construction law, product liability and contracts. Mr. Ryan joined Fennemore Craig in 1976 after practicing with White & Case in New York and is currently a partner at the Phoenix firm of Ryan Woodrow & Rapp, PLC. He is a fellow of the Arizona Bar Foundation, a judge pro tem and a former director of the Arizona Association of Defense Counsel. Mr. Ryan is co-author of Construction Law and Mechanics’ Liens in Arizona. He has also authored several articles on construction and litigation-related issues. He is a member of the Maricopa County, Arizona State, New York State and American bar associations. Mr. Ryan received his B.A. in 1967 from St. Thomas College, an STB in 1969 from the Gregorian University in Rome, Italy, and his J.D. in 1974 from Fordham University. He is admitted to practice in the state and federal courts in New York and Arizona, including the Second and Ninth Circuit Courts of Appeal.
    Lynda C. Shely
    Lynda C. Shely, of The Shely Firm, PC, provides ethics and risk management advice to lawyers and law firms. She also assists lawyers in responding to initial Bar charges. Prior to opening her own firm, she was the Director of Lawyer Ethics for the State Bar of Arizona for ten years. Lynda has received awards from the State Bar of Arizona for her contributions to Law Related Education Projects, Outstanding Leadership in Continuing Legal Education, and she was selected as Member of the Year in 2007. She is a member of the ABA Center for Professional Responsibility’s Strategic Planning Committee. She currently chairs the State Bar’s UPL Advisory Opinion Committee, and serves on the Professionalism Committee, the Consumer Information and Education Task Force, and the State Bar Convention Committee. Lynda was the 2008-2009 President of the Scottsdale Bar Association. She also teaches professional responsibility at the Phoenix School of Law and ASU. Prior to moving to Arizona, Lynda was an intellectual property associate with Morgan, Lewis & Bockius in Washington, DC. Lynda received her BA from Franklin & Marshall College in Lancaster, PA and her JD from The Catholic University in Washington, DC. She may be reached at 480-905-7237;
    Sharon B. Shively
    Ms. Shively practices at the law firm of Sacks Tierney. She received her B.A. from the University of South Florida in 1973, her M. Ed, in 1974 and Ed. S in 1975 from University of Georgia, and her J.D., magna cum laude, in 1983 from the Arizona State University (Order of the Coif) and served as the managing editor of the Arizona State Law Journal, 1982-83. She clerked for Judge William C. Canby, U.S. Court of Appeals, Ninth Circuit, 1983-84. She is judge pro-tempore in Maricopa County Superior Court. Ms. Shively is a recipient of the Faculty Women’s Association Distinguished Achievement Award, 1983 and Arizona State University Alumni Association, Outstanding Graduate Award, 1983. Ms. Shively was admitted to practice in the state and federal courts of Arizona in 1983. She is author of Comment, Book Banning in Public Schools: Don’t Tinker With Tinker, 1982 ARIZONA STATE LAW JOURNAL 939.
    James J. Sienicki
    Mr. Sienicki is a partner at the Phoenix law firm of Snell & Wilmer. He received his M.A. in Business Management in 1977 from Central Michigan University and his J.D. Order of the Coif in 1983 from the University of Kansas School of Law in 1983. Since 1983 he has represented owners, developers, general contractors, subcontractors, suppliers, design professionals and lenders in litigation, negotiations, arbitration and mediation matters involving public and private projects. His main areas of practice include creditors’ rights, UCC, bankruptcy, contract., lease, personal injury defense, and aviation litigation. He is also a panel member of the American Arbitration Association and is an experienced arbitrator and mediator of construction disputes. In addition, Mr. Sienicki has spoken to various industry organizations, such as the Arizona Builder’s Alliance, Arizona Masonry Contractors, Arizona Consulting Engineers Association, AIA Arizona, including the State Bar of Arizona and a host of other professional associations. He is a member of the Arizona Builders’ Alliance Legislative Committee; American Bar Association Forum on the Construction Industry; American Bar Association Public Contracts Section; State Bar of Arizona Construction Law Section and Trial Practice Sections; Arizona Masonry Guild, Inc.; Arizona Consulting Engineers Association.
    David C. Tierney
    Mr. Tierney is a trial attorney in commercial practice and has been a partner in the Scottsdale firm of Sacks Tierney P.A. since 1974. Mr. Tierney received his B.A. degree from Brandeis University and his J.D. degree from Harvard Law School in 1965. He was Clerk to Justice Reardon, Massachusetts Supreme Court; a Peace Corps volunteer (still fluent in Spanish); and former chairman of the Governor’s Task Force on Computers in Education. Mr. Tierney is the Chairman of the Board of Trustees for Risk Management (self-insurance for Maricopa County), a founding member of the Rumpole Inn of Court, and a past Chairman of the State Bar Construction Law Section, the Chairman of the Irish American Cultural Institute Chapter in Phoenix, the past Treasurer of the Arizona Coalition for Tomorrow, and the Chairman/Treasurer of the Restorative Justice Resources Council, Inc. In October 1998, he received the “Hon Kachina” Award for volunteer service to the community.
    E. Jeffrey Walsh
    Mr. Walsh is a 1976 graduate of the University of Notre Dame and a 1979 graduate of the University of Pittsburgh School of Law. A business litigator, his practice is concentrated in construction law, real estate litigation, contracts, and general corporate and business trial and appellate work. He serves as the general counsel for the Arizona Builders’ Alliance, Arizona’s largest organization representing commercial building contractors, and as a commercial and construction arbitrator with the American Arbitration Association. Mr. Walsh has lectured and written extensively on trial practice, construction law, negotiation and alternative dispute resolution.
    Julianne Wheeler
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