2020s Most Read Construction Law Articles
January 25, 2021 —
ConsensusDocs2020 was . . . well . . . well it was memorable. Among many other things, construction was recognized as essential and ConsensusDocs published industry firsts in addressing prefabricated construction and lean for design-build, as well as 8 comprehensively revised performance and payment bonds. We also saw unprecedented readership of our construction law newsletter. As we celebrate the end of 2020 and wish you a happy new year, we continue a new a tradition of recognizing the below most read construction law articles of the year.
The ConsensusDocs Team.
5.
Level 10 Construction v. Sea World LLC: Can Force Majeure Save Sea World?
By:
Jamey B. Collidge Associate,
Troutman Pepper.
4.
The Designer’s Pre-bid Standard Of Care In A Design-Build Project
By:
Joshua A. Morehouse Associate,
Peckar & Abramson P.C. Read the court decisionRead the full story...Reprinted courtesy of
Supreme Court of Idaho Rules That Substantial Compliance With the Notice and Opportunity to Repair Act Suffices to Bring Suit
July 31, 2018 —
Lian Skaf - The Subrogation StrategistIn Davison v. Debest Plumbing, Inc., 416 P.3d 943 (Ida. 2018), the Supreme Court of Idaho addressed the issue of whether plaintiffs who provided actual notice of a defective condition, but not written notice as stated in the Notice and Opportunity to Repair Act (NORA), Idaho Code §§ 6-2501 to 6-2504, et. seq., substantially complied with the act and if the plaintiffs’ notice was sufficient to bring suit. Section 6-2503 of the NORA states that, “[p]rior to commencing an action against a construction professional for a construction defect, the claimant shall serve written notice of claim on the construction professional. The notice of claim shall state that the claimant asserts a construction defect claim against the construction professional and shall describe the claim in reasonable detail sufficient to determine the general nature of the defect.” Any action not complying with this requirement should be dismissed without prejudice. The court held that the defendant’s actual notice of the defect was sufficient to satisfy the objectives of the NORA and, thus, the plaintiffs’ action complied with the NORA.
In Davison, Scott and Anne Davison hired general contractor Gould Custom Builders (Gould) to remodel a vacation home in McCall, Idaho. Gould subcontracted out the plumbing work to Debest Plumbing (Debest). This work included installing a bathtub. When the Davisons arrived at their home for the first time on July 25, 2013, they noticed a leak from the subject bathtub. The Davisons contacted Gould and, the next morning, Gil Gould arrived with a Debest employee to inspect the home. In addition to inspecting the home, the Debest employee repaired the leak and helped Gould remove some water-damaged material.
Read the court decisionRead the full story...Reprinted courtesy of
Lian Skaf, White and Williams, LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Federal Magistrate Judge Recommends Rescission of Policies
February 12, 2024 —
Craig Rokuson - Traub LiebermanIn the recent case of Union Mut. Fire Ins. Co. v. 142 Driggs LLC, 2023 U.S. Dist. LEXIS 220393, Magistrate Judge Lois Bloom of the United States District Court for the Eastern District of New York recommended granting the insurer's default judgment and holding that of three policies issued to 142 Driggs LLC ("Driggs") be rescinded ab initio.
Driggs had represented on its insurance applications that it did not provide parking to anyone other than itself, tenants, and its guests at the subject insured premises. However, Union Mutual learned that Driggs had been renting out three garages to non-tenants. Second, Driggs represented that the mercantile square footage was around 1,000 square feet, when in actuality, it was larger than allowed under the policies.
Union Mutual provided underwriting guidelines in connection with its default motion, which state that "parking provided for anyone other than the insured, tenants and their guests," presents an "unacceptable risk." The guidelines also state that answering yes to any "preliminary application questions (which presumably included those regarding mercantile square footage and parking) is an "unacceptable risk." The court held that these guidelines supported a finding that Driggs made material misrepresentation and that Union Mutual relied on these misrepresentations in issuing the policies. The court, as such, recommended that the policies at issue be rescinded from inception.
Read the court decisionRead the full story...Reprinted courtesy of
Craig Rokuson, Traub LiebermanMr. Rokuson may be contacted at
crokuson@tlsslaw.com
NY Pay-to-Play Charges Dropped Against LPCiminelli Executive As Another Pleads Guilty
June 06, 2018 —
Mary B. Powers & Debra K. Rubin - Engineerings News-RecordThe former president of New York contractor LPCiminelli—the firm that has been at the center of an alleged pay-to-play scheme playing out since 2016 when he and two other executives were indicted—got a reprieve as federal prosecutors said they were dropping all charges against him, including wire fraud, conspiracy to commit wire fraud and making false statements to federal agents, according to a June 1 court filing.
Reprinted courtesy of
Mary B. Powers, ENR and
Debra K. Rubin, ENR
Ms. Rubin may be contacted at rubind@enr.com
Read the court decisionRead the full story...Reprinted courtesy of
Re-Thinking the One-Sided Contract: Considerations for a More Balanced Approach to Contracting
November 21, 2022 —
William Underwood - ConsensusDocsConstruction projects can be inherently risky – often there are multiple parties (owners, architects, engineers, contractors, subcontractors, consultants, vendors, government officials, sureties, insurers, and many others), unforeseen site conditions, tangled supply chains, acts of God, inadequate funding, site safety matters, and a whole host of other issues that can make even a relatively straight-forward job complex. Parties necessarily want to minimize their individual risk to the greatest extent possible on construction projects. And to do so, they may seek to push as much risk as possible onto the other side through one-sided terms in their construction contract.
But is an entirely one-sided contract the best way to mitigate risk? In many instances, the answer is no. Every contract is different – and many considerations should be taken into account when drafting and negotiating contracts – but entirely one-sided can often have unintended consequences and create risks that otherwise might not exist in a contract that allocates and balances risk more equally across the parties.
This article reviews several considerations (although it is not an exhaustive list) for avoiding one-sided contracts, including some of the benefits created through the use of equitable contract clauses. And for context, some examples of one-sided contract clauses include no relief for other contractor/owner-caused delays; no relief for force majeure events; no relief for unforeseen site conditions; and broad form indemnification clauses (i.e. one party assumes the obligation to pay for another party’s liability even if the other party is solely at fault). Again, this is a non-exhaustive list, and many other standard contract provisions can be altered to become one-sided. But the general premise of a “one-sided contract clause” is that it shifts all risk, obligation, and liability to one party. And this article examines why that might not be the best idea.
Read the court decisionRead the full story...Reprinted courtesy of
William Underwood, Jones Walker LLPMr. Underwood may be contacted at
wunderwood@joneswalker.com
Fifth Circuit Requires Causal Distinction for Ensuing Loss Exception to Faulty Work Exclusion
August 29, 2022 —
Avery J. Cantor & William S. Bennett - Saxe Doernberger & VitaIn Balfour Beatty v. Liberty Mutual Ins. Co., the 5th Circuit Court of Appeals provided valuable insight on coverage available through ensuing loss exceptions to faulty work and design exclusions in builder’s risk insurance policies. In Balfour Beatty, the Court held that, in order to establish coverage through an ensuing loss exception, the ensuing loss must be causally distinct from the original excluded loss.1
Balfour Beatty, serving as general contractor for construction of a commercial office building in Houston, Texas, subcontracted with Milestone for steelwork on the project. As part of this work, Milestone welded a 2-inch metal plate to external tubing on the eighteenth floor of the building. While welding the plate in place, welding slag fell down the side of the building, damaging exterior glass windows on the floors below.
Balfour Beatty and Milestone, along with the developer, sought coverage for the damage to the windows under their builder’s risk policy, issued by Liberty Mutual. Liberty Mutual denied coverage, claiming that the damage was excluded by the policy’s “Defects, Errors, and Omissions” exclusion. The insureds sued, arguing that the ensuing loss exception to this exclusion would carve back coverage because the damage to the windows constituted an “ensuing loss.”
Reprinted courtesy of
Avery J. Cantor, Saxe Doernberger & Vita and
William S. Bennett, Saxe Doernberger & Vita
Mr. Cantor may be contacted at ACantor@sdvlaw.com
Mr. Bennett may be contacted at WBennett@sdvlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
A New Statute of Limitations on Construction Claims by VA State Agencies?
March 27, 2019 —
Christopher G. Hill - Construction Law MusingsI have discussed the Hensel Phelps case and the potential issues caused by both poorly drafted indemnity clauses and the lack of a statute of limitations applicable to the Commonwealth of Virginia and its agencies in 2017. New legislation (supported by various contractor groups including my friends at the AGC of Virginia) has been proposed for the 2019 General Assembly session that seeks to address at least part of this issue. While the indemnity provisions of your construction contracts can be addressed by careful drafting with the help of an experienced construction attorney, the proposed legislation (found in HB1667) seeks to address the statute of limitations issue.
The proposed legislation is described as follows:
Provides that no action may be brought by a public body on any construction contract, including construction management and design-build contracts, unless such action is brought within five years after substantial completion of the work on the project and that no action may be brought by a public body on a warranty or guarantee in such construction contract more than one year from the breach of that warranty, but in no event more than one year after the expiration of such warranty or guarantee. The bill also limits the time frame during which a public body, other than the Department of Transportation, may bring an action against a surety on a performance bond to within one year after substantial completion of the work on the project.
Read the court decisionRead the full story...Reprinted courtesy of
The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Illinois Court Assesses Factual Nature of Term “Reside” in Determining Duty to Defend
October 30, 2023 —
James M. Eastham - Traub LiebermanIn State Farm Fire & Cas. Co. v. Guevara, 2023 IL App (1st) 221425-U, P2, the Illinois First District Court of Appeals addressed an insurance carrier’s duty to defend under a homeowners insurance policy. The underlying suit stemmed from an alleged injury suffered at a residence located in Berwyn, Illinois and owned by named insured Luz Melina Guevara, a defendant in the suit. After Guevara tendered the suit, State Farm filed a complaint for declaratory judgment seeking a declaration that it had no duty to defend or indemnify Guevara because Guevara did not “reside” at the insured premises.
The policy defined the "insured location" as the "residence premises," and residence premises was defined as "the one, two, three or four-family dwelling, other structures, and grounds or that part of any other building; where you reside and which is shown in the Declarations." In response to the underlying lawsuit, Guevara had filed an answer and affirmative defenses in which Guevara denied the allegation that "At all relevant times, [Guevara] resided in Berwyn, Cook County, Illinois." Guevara admitted that she owned the Berwyn property but denied that she "resided in, maintained and controlled the property". The declaratory judgment complaint alleged (among other things) that, based on admissions by Guevara in her answer, the Berwyn residence was not an "insured location" under the State Farm policy. State Farm moved for summary judgment at the trial court level on this ground and summary judgment was granted in State Farm’s favor. An appeal ensued wherein the parties disagreed as to whether there is a genuine issue of material fact that, under the language of the policy, State Farm had no duty to defend because the Berwyn property was not an "insured location" because she did not "reside" there.
Read the court decisionRead the full story...Reprinted courtesy of
James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
