The “Pay When Paid” Clause in California Construction—Strategies as the Battle Continues
August 03, 2026 —
William L. Porter - Porter Law GroupIt is well known in California Construction circles that the “Pay If Paid” clause is illegal in this state. There is a great distinction, though, between this clause and a similar clause, known as a “Pay When Paid” clause. A pay if paid clause allows a contractor to tell a subcontractor that if the contractor is unpaid for the subcontractor’s work, then the contractor has no legal obligation to pay the subcontractor, ever. For a great variety of reasons, the California Supreme Court, in the case of Wm. R. Clarke Corp v. Safeco Ins. Co. of America (1997) 15 Cal.4th 882, declared this type of clause illegal in California Construction.
Although the pay if paid clause is illegal in California, the pay when paid clause is still perfectly legal and is found in many subcontracts that contractors issue to their subcontractors. The pay when paid clause allows a contractor to delay paying its subcontractors until the dispute between the contractor and the property owner over payment has been resolved and the contractor is paid by the property owner. Although seemingly reasonable (since it merely delays payment until the contractor is paid by the owner, thereby providing a funding source to pay subcontractors), significant problems still arise.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Real Estate & Construction News Roundup (8/12/26) – Data Center Momentum Increases, Multifamily Construction Projects Decline, CRE Returns as Top Investor Preference
September 01, 2026 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, office vacancies fall, fair housing advocacy groups sue HUD, foreign buyers reduce purchases of U.S. residential real estate, and more!
- After a brief slowdown to begin the summer, data center construction planning momentum picked up in July, again shining as the brightest sector in building. (Zachary Phillips, Construction Dive)
- The number of finished multifamily construction projects declined last year — welcome news for multifamily operators eager to work through the recent supply wave — and a record share of new apartments were high-density. (Julie Strupp, Multifamily Dive)
- Fair housing advocacy groups sued the U.S. Department of Housing and Urban Development, claiming the agency’s funding restructuring drastically reduces their ability to receive funds from the Fair Housing Initiatives Program. (Ryan Kushner, Multifamily Dive)
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Pillsbury's Construction & Real Estate Law Team
$10.5M Settlement Ends George Washington Bridge Debris Liability Fight
September 15, 2026 —
Bryan Gottlieb - Engineering News-RecordA $10.5-million settlement that recently came to light has ended a six-year legal fight over whether a truck part that may have been lying on the George Washington Bridge roadway for more than 10 minutes was there long enough for the Port Authority of New York and New Jersey to have found and removed it before it caused a catastrophic accident.
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Bryan Gottlieb, Engineering News-RecordMr. Gottlieb may be contacted at
gottliebb@enr.com
GRSM Defeats Class Certification in Precedent-Setting HOA Management Case
September 15, 2026 —
Gordon Rees Scully MansukhaniGordon Rees Scully Mansukhani Partners Fletcher Alford and Kevin Liu and Associate Jigar Desai secured a favorable outcome on behalf of an HOA management company in a precedent-setting class action before the U.S. District Court for the Eastern District of California, obtaining denial of the plaintiff’s motion for class certification and dismissal without prejudice of the three claims at issue.
The plaintiff alleged that the defendant received earnings credit payments from a bank in exchange for maintaining HOA deposit accounts and failed to disclose the arrangement to its HOA clients. The plaintiff sought more than $40 million in damages, asserting five claims: (1) breach of contract for failing to act in class members’ best interests by not disclosing the alleged earnings credit arrangement; (2) violation of California’s Unfair Competition Law (UCL) based on alleged violations of California Civil Code §§ 5375, 5375.5, and 5380; (3) breach of fiduciary duty based on the alleged undisclosed arrangement; (4) violation of the UCL for unfair business practices arising from the alleged nondisclosure; and (5) unjust enrichment. The plaintiff sought class certification under Federal Rule of Civil Procedure 23(b)(2) and 23(b)(3) only as to its second, third, and fourth causes of action.
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Gordon Rees Scully Mansukhani
Voluntary Dismissal of an Indemnity Claim Does Not Make the Subcontractor a “Prevailing Party,” Washington Court of Appeals Holds
September 21, 2026 —
Margarita Kutsin - Ahlers Cressman & Sleight PLLCIn
King County v. Walsh Construction Company II, LLC, No. 86503-0-I (Wash. Ct. App. Aug. 4, 2025), an unpublished decision from Division I of the Washington Court of Appeals, the Court affirmed the denial of a subcontractor’s request for prevailing-party attorney fees under an indemnity clause after the general contractor voluntarily dismissed its indemnity claims. Because the indemnity claim was no longer live and no determination of fault had occurred, the Court held that the trial court did not err in denying the request. ACS represented Walsh, the general contractor, in securing the denial of the fee request at the trial court that the Court of Appeals affirmed.
A Pass-Through Indemnity Claim That Ended Before Fault Was Decided
The dispute arose out of a public works contract under which King County hired Walsh Construction Company II, LLC (“Walsh”) to construct and install a conveyance pipeline. After the pipeline broke, King County sued Walsh for breach of contract and warranty, expressly identifying both Walsh and its subcontractor, Mears Group Inc., (“Mears”) as responsible. Walsh tendered defense and indemnity to Mears under the subcontract.
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Margarita Kutsin, Ahlers Cressman & Sleight PLLCMs. Kutsin may be contacted at
margarita.kutsin@acslawyers.com
White and Williams LLP Secures Trio of Cyber Coverage Wins
May 12, 2026 —
Gabriel Darwick & Sean Elman - White and Williams LLPThree weeks, three jurisdictions, three cyber wins.
White and Williams picked up the first victory on March 9, 2026, in the United States District Court for the Western District of Texas, where the court granted summary judgment to their client enforcing a Cyber Crime Loss sublimit. See Perry & Perry Builders, Inc. v. Cowbell Cyber and Obsidian Specialty Ins. Co., 2026 U.S. Dist. LEXIS 49409 (E.D. Tex. Mar. 9, 2026). In Perry, the insured was deceived into transferring money intended for a vendor to an unintended third party. The insurer acknowledged that the loss was covered and paid the insured the policy’s Cyber Crime Loss sublimit. Discontent with a single sublimit, the insured argued that because it wired the money to the fraudster in separate transfers, it was entitled to a second Cyber Crime Loss sublimit.
Reprinted courtesy of
Gabriel Darwick, White and Williams LLP and
Sean Elman, White and Williams LLP
Mr. Darwick may be contacted at darwickg@whiteandwilliams.com
Mr. Elman may be contacted at elmans@whiteandwilliams.com
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Ahlers Cressman & Sleight leads in recognized Construction Litigation Attorneys
September 01, 2026 —
Ahlers Cressman & Sleight PLLCAhlers Cressman & Sleight is pleased to announce its leading recognition in the 2026 Washington Super Lawyers magazine. With ten members named, ACS has more recognized Construction Litigation attorneys than any other firm on the 2026 Washington Super Lawyers list, compared to three at the next closest firm. Two ACS members were also recognized on the 2026 Washington Rising Stars list.
Super Lawyers selects these recognized lawyers by using a patented multiphase selection process. First, lawyers enter the candidate pool by being nominated by their peers or by being identified by managing partner surveys, third-party feedback, or the Super Lawyersresearch team. Next, Super Lawyersconducts an independently researched evaluation using twelve indicators of professional achievement and peer recognition: verdicts/settlements, transactions, representative clients, experience, honors/awards, special licenses/certifications, position within a law firm, bar and/or professional activity, pro bono and community service, scholarly lectures/writings, education/employment background, and other outstanding achievements. Then, candidates with the highest point totals serve on a Blue Ribbon panel, evaluating other candidates within their primary practice area. Finally, only 5% of attorneys are selected for the Super Lawyers list, and 2.5% of attorneys are selected for the Rising Stars list. More information about the Super Lawyers Selection Process can be found
here.
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Ahlers Cressman & Sleight PLLC
Rogue AI — Is Your Company Prepared?
September 28, 2026 —
Michael S. Levine - Hunton Insurance Recovery BlogThe recent wave of "rogue AI" incidents should be a wake-up call for every business leader and risk manager paying attention.
Recent accounts document a sobering reality: AI systems from multiple leading AI developers have each escaped controlled testing environments and caused real-world harm—compromising outside infrastructure, exploiting third-party vulnerabilities, and even canceling another person's reservation to help a user jump a waitlist. These aren't hypotheticals from a sci-fi movie. They happened this summer.
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Michael S. Levine, Hunton Andrews Kurth LLPMr. Levine may be contacted at
mlevine@hunton.com
