Seattle Washington Building Expert Directory

No Coverage for Defects in Subcontrator's Own Work

February 11, 2019 — Tred R. Eyerly - Insurance Law Hawaii
Damage to the concrete floor installed by the insured subcontractor was not property damage and thus not covered under the insured's CGL policy. Kalman Floor Co. v. Old Republic Gen. Ins. Corp., 2019 U.S. Dist. LEXIS 3319 (D. Colo Jan. 8, 2019). In 2007, Kalman Floor Co. was subcontracted to construct over 158,000 square feet of concrete flooring for a cold storage facility. The concrete floor was completed in late 2008. In late 2009, the contractor notified Kalman that pockmarks, or "pop-outs," were visible on the concrete flooring. The only damage to tangible property in the facility caused by the pop-outs was the concrete flooring itself. On January 31, 2009, Old Republic issued a general liability policy to Kalman for one year. The policy excluded for damage to "your work," defined as "work or operations performed by you or on your behalf." Old Republic denied coverage for damage to the concrete floor. Kalman sued, seeking a declaration that the exclusions did not bar coverage. 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

Daily Reports – The Swiss Army Knife of Project Documentation

June 08, 2020 — Christopher A. Henry - ConsensusDocs
Project “Daily Reports” are some of the most important, yet overlooked aspects of a construction project. These reports serve many beneficial roles such as holding parties accountable to their obligations, providing the basis for an as-built schedule, recording manpower, documenting site conditions, and recording any other important and relevant information that happened on the job site that day. Daily reports can also provide information to help with claims or disputes that may arise in the future, such as noting weather delays, providing backup for future delay claims, and providing information to dispute claims made against your company. Finally, daily reports also serve as a useful communication tool during the project and a source of real time information for parties that want to know how the work is commencing on a day to day basis. Because daily reports are the “Swiss army knife” of project documentation, it is extremely important that a contractor puts for its best effort when creating them. It is no secret that a construction project can become more chaotic as the schedule progresses. Unfortunately, when that is the case, the effort put into creating these reports drops off and sometimes the responsibility of creating such reports is thrown aside altogether. I can speak from experience. Prior to entering the practice of law, I was a project engineer for a general contractor in Atlanta. As an engineer in the field, one of my many responsibilities was to enter the daily reports. Based off this experience, below are some thoughts on how to prepare useful daily reports. 1. Check the contract. The contract you entered may set forth specific requirements for the daily reports, such as where to file them, the required format, and specific information that must be included. Complying with contractual requirements is necessary for a successful project. One word of caution for subcontractors, a subcontract will often incorporate the prime contract. If that is the case, be sure to check the prime contract for any specific language relating to daily reports. Read the court decision
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Reprinted courtesy of Christopher A. Henry, Jones Walker LLP
Mr. Henry may be contacted at chenry@joneswalker.com

Florida’s Third District Court of Appeal Suggests Negligent Repairs to Real Property Are Not Subject to the Statute of Repose

June 29, 2017 — Nicole Rodolico, Esq. - Florida Construction Law News
Florida’s Third District Court of Appeal (“Third District”) recently addressed the applicable statute of limitations for repairs under Section 95.11, Florida Statutes, including the issue of whether a repair constitutes an improvement to real property. In Companion Property & Casualty Group v. Built Tops Building Services, Inc., No. 3D16-2044, 2017 Fla. App. LEXIS 6584 (Fla. 3d DCA May 10, 2017) (“Companion”), the Third District ruled that the trial court erred in finding that a subrogation action arising out of an alleged defective roof repair was time-barred because the statute of limitations had run. On February 8, 2016, Companion Property & Casualty Group (“Companion”) filed its complaint against a building services company, Built Tops Building Services, Inc. (“Built Tops”), for negligent repair of its insured’s roof. Companion alleged that the defective roof repair was performed on November 21, 2006. Companion further alleged that as a result of Built Tops’ work, the insured suffered water damage to the condominium building on February 9, 2012. Built Tops moved to dismiss the action on the basis that the applicable four-year statute of limitations had run on Companion’s claim, which Built Tops argued accrued on the date the repair was performed, November 21, 2006. The trial court granted the motion to dismiss. Read the court decision
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Reprinted courtesy of Nicole Rodolico, Cole, Scott & Kissane, P.A.
Ms. Rodolico may be contacted at nicole.rodolico@csklegal.com

Illinois Joins the Pack on Defective Construction as an Occurrence

December 16, 2023 — Anna M. Perry - Saxe Doernberger & Vita, P.C.
Illinois joins the majority of states finding “property damage that results inadvertently from faulty work can be caused by an ‘accident’ and therefore constitute an ‘occurrence’.” The Illinois Supreme Court’s ruling in Acuity v. M/I Homes of Chicago, LLC1 (“Acuity v. M/I Homes”) is the first high court ruling in Illinois on this critical coverage issue for contractors. M/I Homes of Chicago, LLC (“M/I Homes”) constructed a townhome development. After completion, water entered the townhomes resulting in interior water damage. The townhome owners’ association filed suit against M/I Homes alleging it, or its subcontractors, caused the damage because it used defective materials, conducted faulty workmanship, and failed to comply with applicable building codes (the “Underlying Action”). Read the court decision
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Reprinted courtesy of Anna M. Perry, Saxe Doernberger & Vita, P.C.
Ms. Perry may be contacted at APerry@sdvlaw.com

Following Pennsylvania Trend, Federal Court Finds No Coverage For Construction Defect

December 08, 2016 — Tred R. Eyerly – Insurance Law Hawaii
Bound by Pennsylvania law, the federal district court found there was no coverage for defects in the installation of a roof. State Farm Fire & Cas. Co. v. Kim's Asia Constr., 2016 U.S. Dist. LEXIS 138915 (E.D. Pa. Oct. 5, 2016). Kim's Asia Construction contracted to remove and dispose of Powerline Imports, Inc.'s roof, and then install a new roof. After completion of the project, Powerline sued, alleging that Kim's Asia's negligent construction of the roof caused the roof to leak, even in minor rain storms. Kim's Asia made additional repairs, but the leaks continued. Powerline had to hire a new contractor to remove and dispose of the roof and install another roof. Powerline then sued Kim's Asia. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

The Relevance and Reasonableness of Destructive Testing

August 17, 2017 — David Adelstein - Florida Construction Legal Updates
Destructive testing is a routine investigatory procedure in construction defect disputes. The destructive testing is necessary to determine liability (causation), the extent of damage, and the repair protocol. Destructive testing is designed to answer numerous questions: Why did the building component fail? Was the building component constructed incorrectly? What is the magnitude of the damage caused by the failure? What specifically caused the damage? What is the most effective way to fix the failure and damage? There are different iterations to the same questions, but in many instances, destructive testing is necessary to answer these questions. Claimants sometimes prohibit destructive testing. Of course, destructive testing is intrusive. In many instances, it is very intrusive. But, this testing is a necessary evil. Without this testing, how can a defendant truly analyze their potential exposure and culpability? They need to be in a position to prepare a defense and figure out their liability. This does not mean destructive testing is warranted in every single construction defect dispute. That is not the case. However, to say it is never warranted is irrational. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at Dadelstein@gmail.com

HB 20-1046 - Private Retainage Reform - Postponed Indefinitely

May 04, 2020 — David M. McLain – Colorado Construction Litigation
On Tuesday, February 18th, the Colorado House Business Affairs & Labor Committee voted 10-0 to postpone indefinitely House Bill 1046. If it had been enacted, HB 1046 would have required, for all for all construction contracts of at least $150,000:

A property owner to make partial payments to the contractor of any amount due under the contract at the end of each calendar month or as soon as practicable after the end of the month;
A property owner to pay the contractor at least 95% of the value of satisfactorily completed work;
A property owner to pay the withheld percentage within 60 days after the contract is completed satisfactorily;
A contractor to pay a subcontractor for work performed under a subcontract within 30 calendar days after receiving payment for the work, not including a withheld percentage not to exceed 5%;
A subcontractor to pay any supplier, subcontractor, or laborer who provided goods, materials, labor, or equipment to the subcontractor within 30 calendar days after receiving payment under the subcontract; and
A subcontractor to submit to the contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment to the subcontractor for the work.

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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell
Mr. McLain may be contacted at mclain@hhmrlaw.com

What You Need to Know About “Ipso Facto” Clauses and Their Impact on Termination of a Contractor or Subcontractor in a Bankruptcy

September 12, 2022 — Martha B. Chovanes & Laurie A. Stanziale - ConsensusDocs
While contractor bankruptcies have long been an issue in the construction industry, in the aftermath of COVID-19 and the resultant labor, material and supply-chain delays, contractor bankruptcies are of even greater concern. Many construction contracts attempt to protect the upstream party from a bankruptcy filing of its contractor or subcontractor by providing for an automatic right to terminate a contract, referred to as “ipso facto” clauses. However, such clauses are generally unenforceable as bankruptcy laws, specifically Section 365(e) of Title 11 of the United States Code, protect the party filing for bankruptcy (the “Debtor”) from unilateral termination of the contract by the non-Debtor party. What is an “Ipso Facto” clause? An ipso facto clause is a provision in an agreement which permits its termination by one party due to the bankruptcy, insolvency or financial condition of the other party. Reprinted courtesy of Martha B. Chovanes, Fox Rothschild LLP (ConsensusDocs) and Laurie A. Stanziale, Fox Rothschild LLP (ConsensusDocs) Ms. Chovanes may be contacted at mchovanes@foxrothschild.com Ms. Stanziale may be contacted at lstanziale@foxrothschild.com Read the court decision
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