Seattle Washington Building Expert Directory

N.J. Appellate Court Confirms that AIA Construction Contract Bars Insurer's Subrogation Claim

September 10, 2019 — Saxe Doernberger & Vita, P.C.
On April 4, 2019, the Appellate Division of the New Jersey Superior Court confirmed that the waiver of subrogation provision in a commonly used form construction contract, American Institute of Architects (AIA) form A201 — 2007 General Conditions of the Contract for Construction, precluded an insurer’s claims against a subcontractor. In Ace American Ins. Co. v. American Medical Plumbing, Inc., the court considered Ace American Insurance Company’s (Ace) subrogation claim against a plumbing subcontractor who was allegedly responsible for a water main leak that caused approximately $1.2 million in damages to Ace’s insured, Equinox Development Corporation (Equinox). In March 2012, Equinox entered into a contract with Grace Construction Management Company, LLC (Grace) to build the “core and shell” of a new health club. Equinox and Grace used AIA form A201 for their contract. Grace then hired American Medical Plumbing, Inc. (American) as a plumbing subcontractor for the project. In April 2013, the water main failed, flooding the health club. Read the court decision
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Reprinted courtesy of Saxe Doernberger & Vita, P.C.
Saxe Doernberger & Vita, P.C. may be contacted at coverage@sdvlaw.com

Thoughts on New Pay if Paid Legislation

March 28, 2022 — Christopher G. Hill - Construction Law Musings
Recently, the Virginia General Assembly closed its session having passed legislation essentially banning “pay if paid” clauses in construction contracts, both public and private. Assuming that Governor Youngkin signs the bill into law on or before his deadline of April 11, 2022, the following new requirement will be grafted into any Virginia construction contract:

Such contract shall require such higher-tier contractor to pay such lower-tier subcontractor within the earlier of (i) 45 days of the satisfactory completion of the portion of the work for which the subcontractor has invoiced or (ii) seven days after receipt of amounts paid by the owner to the general contractor or by the higher-tier contractor to the lower-tier contractor for work performed by a subcontractor pursuant to the terms of the contract.

This is the main operative language (the 45-day payment requirement is also applied to project owners), but the legislation also imposes certain other notice duties upon both the owner and any higher-tier contractor on a construction project. Interestingly, the legislation does not include a provision making it only effective for those contracts entered into after its effective date. More on that later. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Facts about Chinese Drywall in Construction

September 10, 2014 — William M. Kaufman – Construction Lawyers Blog
Most of us have heard that there are problems with Chinese drywall, but do not really know what specifically is wrong with it when it comes to construction in the United States. Let’s begin with a brief overview about why Chinese drywall came to be used in the United States in the first place. Chinese drywall was first imported into the United States beginning in 2001. Most of the homes that have Chinese drywall were built between 2001 and 2008. During the construction boom, Chinese drywall was being imported into the U.S. partly due to the shortage of American-made drywall as a result of several hurricanes that devastated Florida in 2004-2005, and the damage caused by Hurricane Katrina. Hundreds of millions of pounds of Chinese drywall were imported into the United States during that time period. While this is only a fraction of the percentage of drywall used in American homes, the problem has been concentrated in certain regions of the country, mostly the South. So what is the problem with Chinese Drywall? To understand it, we must first explore what constitutes drywall. Drywall is a building material made of a gypsum-based sheet of plaster covered with heavy paper on both sides. Drywall is also referred to as plasterboard or sheetrock. Testing of Chinese drywall has found unusually high instances of pyrite. There is speculation that the pyrite oxidation results in sulfur compounds being released by the drywall during periods of high heat and humidity. The combination of high temperatures and humidity is ripe for bringing out problems associated with Chinese drywall. That is why most cases associated with Chinese drywall are found in the Southeastern United States. Reports show that homeowners typically complain of corroding copper in their homes, and a rotten egg odor emanating from copper surfaces that, in turn, turn black and exhibit a powdery ash type substance. Experts opine that this is a result of a reaction of the copper with hydrogen sulfide. Much of wiring or piping found in homes is made of copper. Exposure to Chinese drywall can result in nose bleeds, headaches, coughs, upper respiratory or sinus problems, rashes, and difficulty breathing. There have also been cases reported of pets dying due to exposure to Chinese drywall. Reprinted courtesy of William M. Kaufman, Lockhart Park LP Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com Read the court decision
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Attempt to Overrule Trial Court's Order to Produce Underwriting Manual Fails

April 25, 2022 — Tred R. Eyerly - Insurance Law Hawaii
After being ordered by the trial court to produce its underwriting manual, the insurer's writ of certiorari to quash the order was denied by the Florida Court of Appeals. People's Trust Ins. Co. v. Foster, 2022 Fla. App. LEXIS 542 (Fla. Ct. App. Jan. 26, 2022). The insured sued after his claim for damage caused by a water pipe in his home that leaked. In discovery, the insurer refused to produce its underwriting manual. Ruling on a motion to compel, the trial court ordered that the manual be produced. The insurer appealed. On appeal, the insurer argued its underwriting manual was categorically prohibited in breach of contract cases until and unless bad faith litigation commenced. Although courts had quashed the premature discovery of insurers' business practices, claims files, underwriting files, underwriting manuals, and the like in breach of contract actions, there was no categorical legal rule prohibiting discovery of underwriting manuals in breach of contract cases, especially if they were relevant. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc.

January 18, 2021 — Michael Velladao - Lewis Brisbois
In St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc., ----Cal.App.5th--- (November 23, 2020), the California First District Court of Appeal reversed the trial court's entry of judgment in favor of SBC Insurance Services ("SBC") regarding a claim for water damage sustained by a residence owned by St. Mary & John Coptic Church ("St. Mary") under property coverage afforded by a policy issued by Philadelphia Indemnity Insurance Company ("Philadelphia"). The policy was procured by SBC on behalf of St. Mary. Philadelphia denied coverage of the claim based on the vacancy exclusion in its policy, but entered into a settlement and loan receipt agreement, whereby St. Mary gave Philadelphia the right to control litigation in St. Mary’s name against SBC or third parties who might be liable for the loss in exchange for a loan of money to repair and remediate the damage sustained by the residence. The loan was to be repaid out of any recovery made against SBC or third parties. After a bench trial, the trial court found in favor of SBC and held that the vacancy exclusion was ambiguous. Essentially, the exclusion did not apply to the time period prior to the time St. Mary purchased the residence, such that the 60-day vacancy requirement could not be satisfied. The trial court reasoned that since St. Mary did not have an insurable interest in the property before it purchased the property, the 60-day requirement did not include the period before such residence was purchased and St. Mary held an insurable interest. The parties’ dispute arose of out of the Pope of the Coptic Church requesting St. Mary to purchase a home to be used as his papal residence in the Western United States. St. Mary also intended to use the home as a residence for visiting bishops. The home was purchased on May 28, 2015. As part of the purchase, SBC placed the home under St. Mary’s commercial policy, rather than purchasing a separate homeowner’s policy for the residence. Subsequently, the home sustained water damage due to a broken pipe. The water damage was discovered on July 24, 2015, 57 days after the inception of the Philadelphia policy and the loss. St. Mary tendered the property loss to Philadelphia, which denied coverage of the claim based on the reasoning that the home had been vacant for 60 consecutive days prior to the loss. Subsequently, St. Mary filed suit against SBC after securing the loan receipt agreement with Philadelphia based on the argument that the vacancy exclusion barred coverage of the claim and SBC breached its duty of care by not securing the proper coverage of the home. The trial court entered judgment in favor of SBC finding that the vacancy exclusion did not apply to bar coverage of the loss, such that SBC did not breach its duty of care owed to St. Mary as its broker. Read the court decision
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Reprinted courtesy of Michael Velladao, Lewis Brisbois
Mr. Velladao may be contacted at Michael.Velladao@lewisbrisbois.com

Detroit Craftsmen Sift House Rubble in Quest for Treasured Wood

March 19, 2015 — Chris Christoff and Alexandra Mondalek – Bloomberg
(Bloomberg) -- Detroit’s 70,000 abandoned homes are proving to be a trove for entrepreneurs who recycle century-old lumber, glass and brick into everything from terrariums to $4,500 guitars. “It’s like a treasure hunt,” said Craig Varterian, executive director of Reclaim Detroit, a nonprofit group that’s stripped and sold materials from almost 70 demolished homes. Floorboards and joists of early 20th century maple, walnut, hickory, fir and even chestnut are prized for their density and fine grain. As Detroit ramps up demolitions of vacant dwellings, Mayor Mike Duggan plans a reclamation center in a city-owned building to keep tons of rubble out of landfills and create jobs and merchandise. Recycling would become a centerpiece of the city’s blight-removal effort, which is struggling to maintain funding. Reprinted courtesy of Chris Christoff, Bloomberg and Alexandra Mondalek, Bloomberg Mr. Christoff may be contacted at cchristoff@bloomberg.net Ms. Mondalek may be contacted at amondalek@bloomberg.net Read the court decision
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Builders Arrested after Building Collapses in India

July 01, 2014 — Beverley BevenFlorez-CDJ STAFF
Deaths from a building collapse in Chennai, India is currently at nineteen, while forty-two people have been rescued, according to the New York Times, and “40 others are feared trapped in the debris,” reported BBC News. The Chennai police arrested six people, “including the partners of the construction company, the architect and the structural engineer, and charged them with criminal negligence in connection with the building collapse there,” according to P. Subramniam, a Chaennai police officer, as quoted by the New York Times. "It appears they have not adhered to approved plans,” Tamil Nadu Chief Minister J Jayalalithaa told BBC News. “The building appears to have serious structural defects." Building collapses are frequent in India, and most are “blamed on lax safety and substandard materials,” reported BBC News. The New York Times pointed out that “municipal authorities rarely condemn buildings even when they appear to have dangerous defects.” Regardless, “even unsafe buildings attract people who want to live in them because the competition for shelter is fierce among millions of city residents.” Read the full story, New York Times... Read the full story, BBC News... Read the court decision
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New Safety Standards Issued by ASSE and ANSI

March 28, 2012 — Melissa Brumback, Construction Law in North Carolina

The American National Standards Institute (ANSI) and the American Society of Safety Engineers (ASSE) have recently announced their approval of two new safety standards to enhance construction site safety.

The two new standards, which are set to take effect during June 2012, are the ANSI/ASSE A10.1-2011 Pre-Project and Pre-Task Safety and Health Planning for Construction and Demolition Operations, and the ANSI/ASSE A10.26-2011 Emergency Procedures for Construction and Demolition Sites.

The new A10.1-2011 standard was designed to assist construction owners, contractors, and designers by ensuring that safety and health planning were standard parts of their pre-construction planning. It is also intended to help owners of construction sites to establish a process for evaluating constructor candidates with regard to their safety and health performance planning.

The A10.26 standard applies to emergency situations, including fires, collapses, and hazardous spills. The standard deals with emergency rescue, evacuation, and transportation of injured workers, and also plans for coordinating with emergency medical facilities ahead of potential disasters.

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Reprinted courtesy of Melissa Dewey Brumback of Ragsdale Liggett PLLC. Ms. Brumback can be contacted at mbrumback@rl-law.com.

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