FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Suing the Lowest Bidder on Public Construction Projects

September 17, 2015 — Craig Martin – Construction Contractor Advisor
The California Court of Appeals has allowed the second lowest bidders on public construction projects to sue the lowest bidder where it appears that the lowest bidder was only the lowest because it paid its employees less than the established prevailing wage. This is a novel theory for recovery, but may provide for an opportunity to challenge improperly low bids. Background Between 2009 and 2012, American Asphalt outbid two asphalt companies on 23 public works projects, totaling nearly $15 million. The two asphalt companies sued American Asphalt alleging that they were the second lowest bidder all 23 construction projects and they would have been the lowest had American Asphalt paid its employees the required prevailing wage. Importantly, the municipality awarding the contracts was not sued by the second lowest bidders. Instead, the second lowest bidders alleged that American Asphalt intentionally interfered with a business expectancy and sought damages from American Asphalt, specifically the profit that they lost by not performing these contracts. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

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Florida Chinese drywall, pollution exclusion, “your work” exclusion, and “sistership” exclusion.

May 26, 2011 — CDCoverage.com

In Auto-Owners Ins. Co. v. American Building Materials, Inc., No. 8:10-CV-313-T-24-AEP (M.D. Fla. May 17, 2011), insured drywall supplier ABM was sued by general contractor KB Homes seeking damages because property damage to houses built by KB Homes using defective Chinese drywall supplied by ABM. ABM’s CGL insurer Auto-Owners defended ABM under a reservation of rights and filed suit against ABM and KB Homes seeking a judicial declaration of no to duty to defend or indemnify ABM against the KB Homes lawsuit. On cross motions for summary, the federal district trial court directed entry of judgment in favor of ABM and KB Homes and against Auto-Owners, holding that Auto-Owners had a duty to defend and indemnify ABM against the KB Homes lawsuit.

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California Case Adds Difficulties for Contractors & Material Suppliers

August 20, 2014 — Beverley BevenFlorez-CDJ STAFF
Garret Murai in his California Law Blog declared that “things just got a lot tougher for contractors and material suppliers in the Golden State.” In his blog, Murai analyzed the recent case Golden State Boring & Pipe Jacking, Inc. v. Eastern Municipal Water District, Case No. E054618 (July 23, 2014), in which “the California Court of Appeals for the Fourth Appellate District found that a subcontractor’s public works payment bond claim was time barred because its stop payment notice was served ‘before’ a notice of completion was recorded.” Murai explained the importance of the ruling and how it changed the status quo: “Whereas before, it was commonly understood that you could serve a stop payment notice ‘during’ construction (after all, that was the point wasn’t it, to stop construction funds before they are paid out), now you may have only have a 30 day window (probably less) to serve a stop notice within 30 days after a notice of completion or notice of cessation is recorded.” Read the court decision
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How Will Artificial Intelligence Impact Construction Litigation?

September 12, 2023 — Patrick McKnight - The Dispute Resolver
In the first half of 2023, artificial intelligence (“AI”) caught the public’s imagination. Attorneys have not been immune from the fever-pitch of commentary regarding the possible applications. While early adopters have had varying degrees of success, commentators have proposed various potential impacts on construction projects and disputes. This article discusses potential areas where AI can assist in preventing and resolving disputes from the pre-bid stage through project completion and close-out. What is AI? Artificial intelligence entered the popular zeitgeist accompanied by both optimistic and pessimistic predictions about the future. Internet searches on AI exploded in December 2022, reflecting a rapid and widespread public interest in the topic. The term “AI” itself is often loosely used to refer to a machine or computer software with the ability to conduct machine learning.[1] Whereas “automation” is the simple process of computing inputs, artificial intelligence refers to the ability to learn without additional programming from a human being. Now, increased computing power is finally helping some of the potential applications of this technology come into focus. Nonetheless, artificial intelligence is still maturing and is subject to “hallucinations” where the technology essentially generates erroneous nonsense. Read the court decision
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Reprinted courtesy of Patrick McKnight, Fox Rothschild LLP
Mr. McKnight may be contacted at pmcknight@foxrothschild.com

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When “Substantially Similar” Means “Fundamentally Identical”: Delaware Court Enforces Related Claim Provision to Deny D&O Coverage for Securities Class Action

August 10, 2021 — Geoffrey B. Fehling, Lawrence J. Bracken II & Lorelie S. Masters - Hunton Andrews Kurth
A company faces two class action lawsuits—filed by different plaintiffs, complaining of different allegedly wrongful conduct, asserting different causes of action subject to different burdens of proof, and seeking different relief based on different time periods for the alleged harm. Those facts suggest the suits are not “fundamentally identical,” but that is what a Delaware Superior Court recently concluded in barring coverage for a policyholder seeking to recover for a suit the court deemed “related” to an earlier lawsuit first made outside the policy’s coverage period. First Solar Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. N20C-10-156 MMJ CCLD (Del. Super. Ct. June 23, 2021). The decision, which is not on all fours with some of the authority upon which it relies, underscores the inherent unpredictability of “related” claim disputes and need for careful analysis of the policy language against the factual and legal bases of the underlying claims. Underlying Shareholder Class Actions and D&O Claims Shareholders of solar panel manufacturer First Solar sued the company and its directors and officers in a class action lawsuit (the “Smilovits Action”) for the class period April 2008 to February 2012. The Smilovits Action asserted federal securities violations arising from First Solar’s alleged misrepresentations about the company’s business strategies, product design, financial strength, and ability to offer solar electricity at comparable rates to conventional energy producers (i.e., achieving “grid parity”), artificially inflated stock price, insider trading, manipulation of solar power metrics, and violations of GAAP accounting standards. First Solar submitted a claim to its D&O insurer, National Union, which provided coverage for the Smilovits Action and exhausted the policy. Reprinted courtesy of Geoffrey B. Fehling, Hunton Andrews Kurth, Lawrence J. Bracken II, Hunton Andrews Kurth and Lorelie S. Masters, Hunton Andrews Kurth Mr. Fehling may be contacted at gfehling@HuntonAK.com Mr. Bracken may be contacted at lbracken@HuntonAK.com Ms. Masters may be contacted at lmasters@HuntonAK.com Read the court decision
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Colorado “property damage” caused by an “occurrence” and exclusions j(5) and j(6) “that particular part”

August 11, 2011 — CDCoverage.com

In Continental Western Ins. Co. v. Shay Construction, Inc., No. 10-cv-02126 (D. Col. July 28. 2011), general contractor Milender White subcontracted with insured Shay for framing work.   Shay in turn subcontracted some of its work to others.  When Shay?s subcontractors filed suit against Shay and Milender White seeking payment for their work, Milender White cross-claimed against Shay for breach of contract alleging that,Milender White notified Shay during construction that some of Shay?s work was defective and that when Shay repaired its defective work, it damaged work performed by others.  Shay’s CGL insurer Continental Western filed suit against Milender White and Shay seeking a judicial declaration of no coverage.  The federal district trial court granted Continental Western?s motion for summary judgment.



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Fatal Crane Collapse in Seattle Prompts Questions About Disassembly Procedures

July 09, 2019 — Jeff Rubenstone - Engineering News-Record
A tower crane being dismantled collapsed Saturday, April 27 in Seattle, killing four people, including two ironworkers on the crane and two bystanders on the street below. The jobsite, located in a Google office development in Seattle's bustling South Lake Union neighborhood, is adjacent to a busy intersection where traffic had not been blocked off during the crane’s disassembly. It is the first fatal crane accident in the Puget Sound region since a crane collapse in Bellevue, Wash., in 2006 that killed one person. Read the court decision
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Reprinted courtesy of Jeff Rubenstone, ENR
Mr. Rubenstone may be contacted at rubenstonej@enr.com

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Show Me the Money: The Good Faith Dispute Exception to Prompt Payment Penalties

March 13, 2023 — Garret Murai - California Construction Law Blog
California has a number of prompt payment penalty statutes on the books. Among them is Civil Code section 8800 which requires project owners on private works projects to pay progress payments to direct contractors within 30 days after demand for payment pursuant to contract or be subject to prompt payment penalties of two percent (2%) per month on the amount wrongfully withheld. Like California’s other prompt payment penalty statutes, however, there is an important carve out: If there is a good faith dispute between the project owner and the direct contractor the project owner may withhold up to 150% of the dispute amount and not be subject to prompt payment penalties. And that, my friends, is a higher-tiered party’s “get out of jail free” card. In a case of first impression, the 1st District Court of Appeals, in Vought Construction Inc. v. Stock (2022) 84 Cal.App.5th 622, examined whether a project owner’s claim for liquidated damages constitutes a good faith dispute under Civil Code section 8800. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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