SWB Assists Real Estate Clients in Current Economy

With SWB at their side, firm real estate clients are finding opportunities in this changing economic environment.

SWB Helps Real Estate Clients

SWB attorneys actively represent real estate developers, lenders, investors, and others in all aspects of the acquisition, development, financing, leasing, and disposition of commercial, medical, and multi-family projects. Here are just some of the more recent real estate deals we are working on for our clients:

  • Representing investor in development of $100 million hotel project in Denton, Texas.
  • Representing investor in development of $100 million hotel project in Louisville, Kentucky.
  • Representing developer in sale of $7.0 million in commercial real estate located in Flower Mound, Texas for development of retail property.
  • Representing developer in acquisition of $5.9 million of real estate in Oklahoma City, Oklahoma for development of office building and multi-family projects.
  • Representing developer in acquisition of $5.0 million of real estate in Arlington, Texas for development of national brand hotel.
  • Representing developer in sale of $2.0 million of commercial real estate located in Roanoke, Texas to Texas-based hospital system.
  • Representing investor in the acquisition of brewery in Keller, Texas.

SWB’s Real Estate Practice Group handles a broad spectrum of real estate transactions, from complex commercial real estate developments to luxury residential real estate sales. Now more than ever, our focus on efficiency and cost-effectiveness translates to value maximation for firm clients and provides flexibility on deal structure in this changing economic environment.

Don’t forego deals because of transactional costs, contact us today.


Carlisle A. Braun is a value-added business attorney who regularly serves as outside general counsel for midsize and small businesses, particularly in the real estate, franchising and hospitality industries. Mr. Braun is often the first call when companies encounter business issues with legal implications. Acting as a strategic advisor, Mr. Braun provides timely and on-demand legal counsel in order to execute and implement progressive solutions for his clients’ businesses.

 

SWB Closes Real Estate Deals for Clients

Attorneys at Saunders, Walsh & Beard represent developers, lenders, investors, and others in real estate transactions. 

SWB Closes Real Estate Deals

Here are just some of the more recent real estate deals we’ve closed for our clients

  • Represented developer in $5.5 million acquisition of real estate located in San Antonio, Texas for multifamily high-rise development on the Riverwalk
  • Represented developer in $10 million acquisition of real estate located in Tyler, Texas for development of multifamily project
  • Represented real estate lender in providing more than $4 million in debt refinancing secured by a portfolio of West Texas real estate, machinery, and equipment
  • Represented investor in sale of $8 million in residential real estate located in Southlake, Texas for construction of luxury homes
  • Represented investor in sale of $2.75 million in commercial real estate located in Flower Mound, Texas for development of retail property
  • Represented developer in $4 million acquisition of a construction company in Fort Worth, Texas

SWB’s Real Estate Practice Group handles a broad spectrum of real estate transactions, from complex commercial real estate developments to luxury residential real estate sales. Our approach focuses on efficiency and value maximation for the client, minimizing transactional costs by not overworking or overstaffing the deal.

Contact us today if your real estate deals need lower transactional costs. We welcome the opportunity to discuss how we can maximize your value on the next deal.


Carlisle A. Braun is a value-added business attorney who regularly serves as outside general counsel for midsize and small businesses, particularly in the real estate, franchising and hospitality industries. Mr. Braun is often the first call when companies encounter business issues with legal implications. Acting as a strategic advisor, Mr. Braun provides timely and on-demand legal counsel in order to execute and implement progressive solutions for his clients’ businesses

 

Texas Supreme Court | Eight Corners Rule

Texas Supreme Court Recognizes Northfield-like Exception to Eight Corners Rule

Almost 20 years ago I stood before a panel of the U.S. Fifth Circuit Court of Appeals, arguing for an exception to what is commonly referred to among Texas insurance practitioners as the “eight-corners” rule. The eight-corners rule provides that in determining whether an insurer has a duty to defend its insured, courts are limited to considering only the factual allegations within the four corners of the plaintiff’s pleading and the terms of the insurance policy. If the allegations in the pleading, taken as true, potentially support a claim covered by the policy, the insurer has a duty to defend its insured.

In Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004), I argued to the Fifth Circuit that Texas law should permit courts to consider extrinsic evidence in determining the duty to defend under certain circumstances. The Fifth Circuit subsequently issued an opinion, offering its “Erie guess” that the Texas Supreme Court would not recognize an exception to the eight-corners rule. In doing so, however, the Court opined that if Texas’ highest court were to recognize such an exception, it would apply only “when it is initially impossible to discern whether coverage is potentially implicated and when the extrinsic evidence goes solely to a fundamental issue of coverage which does not overlap with the merits of or engage the truth or falsity of any facts alleged in the underlying case.” Northfield, 363 F.3d at 531. In Texas insurance jurisprudence, this has come to be known as the “Northfield exception” to the eight-corners rule.

Despite the Fifth Circuit’s adherence to a strict eight-corners approach, some courts in Texas began applying the Northfield exception, whereas others declined to do so. This division among the courts prompted the Fifth Circuit to certify to Texas’ highest court the question of whether the Northfield exception is permissible under Texas law.

Today the Supreme Court answered that question in the affirmative, adopting a Northfield-like exception to the “eight corners” rule. See Monroe Guaranty Ins. Co. v. BITCO General Ins. Corp., No. 21-0232 (Tex. Feb. 11, 2022). In Monroe Guaranty, although the Court made clear that it was not abandoning the eight-corners rule, the Court went on to state:

But if the underlying petition states a claim that could trigger the duty to defend, and the application of the eight-corners rule, due to a gap in the plaintiff’s pleading, is not determinative of whether coverage exists, Texas law permits consideration of extrinsic evidence provided the evidence (1) goes solely to an issue of coverage and does not overlap with the merits of liability, (2) does not contradict facts alleged in the pleading, and (3) conclusively establishes the coverage fact to be proved.

Op. at 15.

While the Court’s new rule looks very similar to the Northfield exception, it is actually more beneficial to insurers in that the extrinsic evidence need not relate to a “fundamental” issue of coverage. The evidence can relate to other facts bearing upon coverage, such as the date on which property damage occurs. This aspect of the Court’s decision will therefore have a significant impact in construction defect cases. The Court also made clear that the coverage fact at issue need not be the subject of a stipulation and can be established by other forms of proof. But the evidence must conclusively establish the fact.

The Texas Supreme Court’s holding today in Monroe Guaranty is a big win for the insurance industry. While it took almost 20 years for the Texas Supreme Court to finally address whether the Northfield exception constituted Texas law, Texas insurers will no doubt find that the Court’s decision was well worth the wait.


Alex Beard has 30 years of experience representing individuals and businesses, with a practice focusing on liability insurance coverage, property damage insurance, and civil appeals. He has extensive experience with liability insurance claims and enjoys analyzing coverage issues under numerous types of insurance, including commercial general liability, commercial auto, and life. He has handled over 100 appeals and original proceedings throughout Texas’ 14 intermediate appellate courts, the Texas Supreme Court, and U.S. Fifth Circuit Court of Appeals.

Overview of 2022 Changes to Texas Lien Law

Texas Lien Law Changes

Changes to Mechanic’s and Materialman’s Liens Law Effective January 1, 2022

Major changes to Chapter 53 of the Texas Property Code go into effect on January 1, 2022.  On June 15, 2021, Governor Abbott signed into law House Bill 2237, which makes sweeping changes to the primary source of law for lien and bond claims in Texas.  The following is an overview of the changes that will have the greatest impact on contractors, subcontractors, and the attorneys who represent them.

Applicability of Changes

It is important to note that, while the changes go into effect on January 1, 2022, these changes apply only to an original contract entered into on or after the effective date.  Therefore, it will be especially important for subcontractors and suppliers to obtain a copy of the original contract between the owner and the prime contractor.  The date on which the original contract was entered into will dictate the appliable law.  Even if the subcontractor’s contract was signed after January 1, 2022, if the original contract pre-dates January 1, 2022, then the old law will apply.

Changes to Terminology

It is evident from the changes made that the legislature intended to simplify Chapter 53 to make it more accessible to the layman and to take away some of the technical requirements that often made the difference between a valid and an invalid lien.  Only time will tell whether these goals were achieved.  To that end, some defined terms were added, some were changed, while others were combined.  The following are just a few of the changes to words and phrases used in Chapter 53:

  • “Improvement” – under the old version of the Act, the various things that qualified as “improvements” were somewhat scattered throughout the Act. The revision broadens the term, makes its use more consistent throughout the Act, and puts the entire definition in one location.
  • “Prosecution of the work” has replaced “performance of the work.”
  • “Consumption” has been replaced by “use” – For example: “Material” means all or part of the material, machinery, fixtures, or tools ordered and delivered for incorporation or use. Since the definition of “material” includes “machinery” or “tools,” the word “use” is more appropriate than “consumption.”
  • “Purported original contractor” – the sham contract provision of Chapter 53 has been simplified by defining the term “purported original contractor.”
  • “Retainage,” “retain,” “reservation” and “reserved funds” – the word “reserve” has replaced “retain” and “withhold” throughout the Act, as those two phrases had been used inconsistently. Also, “retainage” has been changed to “reservation” or “reserved funds,” when referring to the funds withheld by the owner.  However, a claimant still has a “claim for unpaid retainage.”  This was probably done to address uses of the term that were inconsistent with the statutory definition:  “Retainage” means an amount representing part of a contract payment that is not required to be paid to the claimant within the month following the month in which labor is performed, material is furnished, or specially fabricated material is delivered.

Substantive Changes

While the changes in terminology may be largely academic, there are quite a few substantive changes that will have an impact on perfecting and enforcing lien claims.  The following changes will have the greatest impact:

  • Delivery of Notice – Under the original Act, all notices had to be delivered in person or sent via certified mail to be effective. Under the revised Act, notices can be sent via certified mail or “any other form of traceable, private delivery or mailing service that can confirm proof of receipt.”  However, certified mail will remain the preferred method, because it is effective upon “depositing or mailing.”
  • Deadlines Extended by Weekends and Holidays – While the overwhelming majority of the deadlines established under Chapter 53 land on the 15th day of the month, those deadlines were often shortened when the 15th landed on a weekend or holiday. Under the revised Act, any deadline that falls on a weekend or holiday is extended to include the next business day.
  • Licensed Professionals and Landscapers – A licensed professional (architect, engineer, or surveyor) no longer has to have a direct contractual relationship with the owner in order to have lien rights. This revision grants lien rights to consultants, such as HVAC designers, who previously did not have the ability to file a lien.  In addition, landscapers are no longer required to have a written contract in order to assert a lien claim.
  • Subcontractor’s Retainage Lien Claims
    • The Intent to Lien Notice – a claim for retainage can be included, wholly or partially, in the standard 3rd-month notice. However, if the claim is purely retainage and no prior notices have been sent, a subcontractor must provide notice of an intent to file a retainage lien by the 30th day after the date the claimant’s contract is complete, terminated, or abandoned, or the 30th day after the date the original contract is complete, terminated or abandoned, whichever is earlier.  There is also a new standardized form for this notice.
    • The Lien Affidavit – The deadline for a subcontractor to file a retainage lien claim has been reduced from four months after the completion of the project to three months. A subcontractor claiming a lien for retainage must file a lien affidavit by the 15th day of the third month after the month in which the original contract was completed, terminated, or abandoned.
  • 2nd Tier Subcontractors Have One Less Notice to Send – Under the original Act, 2nd Tier Subcontractors, those subcontractors and suppliers who contract with a subcontractor, had to send notice to the original contractor by the 15th day of the second month after each month during which work was performed. Under the revised Act, this is no longer a requirement.  The 2nd Tier Subcontractors just have the 3rd-month notice requirement; there is no 2nd-month notice.  In short, all subcontractors, regardless of tier, now have the same notice obligations.
  • Standardized Notice – Claimants no longer have to carefully read through a list of information that must be included in an intent to lien notice. The revised Act provides a standard form that must be used.  It is important to note that the new standard form requires the claimant to identify the “type of labor or materials provided,” which is information that was not previously required to be included in an intent to lien notice, just the lien affidavit.
  • One-Year Statute of Limitations – The original statute of limitations to foreclose on a mechanic’s lien was one (1) year for residential projects and two (2) years for commercial projects. Now, it is one (1) year regardless of whether the project is commercial or residential.  This is a very significant change for commercial contractors.  The Act now reads, “Suit must be brought to foreclose the lien not later than the first anniversary of the last day a claimant may file the lien affidavit….”  A foreclosure suit that is barred by limitations cannot be revived by a suit that is solely brought to discharge the lien on the basis that the limitations have expired.

Minor Changes

There were a handful of changes worth mentioning, but which should not have a significant impact.

  • Summary Motion to Remove Invalid or Unenforceable Lien – The notice of hearing requirement has been extended from 21 days to 30 days, and the claimant is entitled to expedited discovery of relevant information.
  • Requirements for Residential Contracts and Lien Claims – The statutory disclosures for contracts involving improvements to residential homesteads, and the language that must be included in an intent to lien notice for a residential project, have been revised to reflect the changes in defined terms (discussed above). While the old disclosures are substantially similar to the new versions, residential contractors will need to update their forms.
  • Lien Waivers No Longer Have to be Notarized – In an effort to reduce subcontractors’ costs, lien waivers no longer have to be notarized.

The changes made to Chapter 53 by HB 2237, when they go into effect, should make things easier for lien claimants.  The changes that will have the biggest effect on lien claimants is the required standardized notice forms and the reduced statute of limitations.  Once the industry fully adopts the standardized notices, the transition should be largely complete.  For our readers’ convenience, the new and revised forms can be found below.

2022 – Intent to Lien Notice – 3rd Month Notice
2022 – Notice of Claim for Unpaid Retainage
2022 – Residential Construction Contract Disclosures
2022 – Statutory Notice Language for Residential Liens
Lien Waivers
Lien Waiver- Conditional Final
Lien Waiver- Conditional Final Lien Waiver- Conditional Progress Payment
Lien Waiver- Unconditional Final
Lien Waiver- Unconditional Progress Payment

Jacob D. Thomas is a civil litigation and board-certified construction lawyer helping individuals and businesses with their legal needs since 2003. Mr. Thomas was named a Texas Rising Star from 2015-2018 and a Texas Super Lawyer in 2020 and 2021. With his experience, knowledge, and skill, Jacob competently guides his clients through the complex legal system. Whether the situation calls for a hard-nosed fighter or a subtle negotiator, Jacob tailors his approach to each case based upon the particular needs of the client.

CONGRATULATIONS TO OUR 2021 TEXAS SUPER LAWYERS!

Saunders, Walsh & Beard is proud to announce J. Brantley Saunders, Mark A. Walsh, Alexander N. Beard, Lewis L. Isaacks, David N. Kennedy, and Jacob D. Thomas as Texas Super Lawyers for 2021.

 

Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected through a multi-phased process including independent research, peer nominations, and peer evaluations. Each year, no more than 5% of the lawyers in Texas are selected by the research team at Super Lawyers to receive this honor. To learn more, visit https://www.superlawyers.com/about/selection_process.html