It Has Started: Supply-Chain, Warehouse and Retail Workers of Essential Businesses Are Filing Suit
June 22, 2020 —
Robert G. Devine, James Burger & Douglas Weck - White and Williams LLPSupply-chain businesses that are appropriately characterized as “essential” have remained open for the delivery of critical supplies while everyone else has been told to close up shop and stay home. Now essential-business employees are contracting COVID-19 and filing suit. Following up on our earlier piece — “Is a Violation of a COVID-19 Order the Basis For Civil Liability?” — it is important to recognize that government directives, oftentimes couched as “recommendations,” can come to define what it means to provide a reasonably safe workplace that protects employees from COVID-19. While common law negligence defenses consider the reasonableness of conduct, these directives will likely become the standard.
The cases that have been filed are overwhelmingly premised upon the timeless negligence construct. The negligence construct, simply put, imposes a duty to act as a reasonable person would under the circumstances. Nonetheless, while the negligence construct lives in the ordinary world of “reasonableness,” infection-control guidance lives in the rapidly developing world of the science of COVID-19. Guidance on seemingly basic questions, such as the methods of transmission (e.g., personal contact, mucus membrane only, airborne transmission) or even the virus’s shelf life on different surfaces, of particular interest packaging and material handling equipment, can change by the day. All of this provides challenges for the supply-side business looking to protect its workforce.
Reprinted courtesy of White and Williams LLP attorneys
James Burger,
Robert Devine and
Douglas Weck
Mr. Burger may be contacted at burgerj@whiteandwilliams.com
Mr. Devine may be contacted at deviner@whiteandwilliams.com
Mr. Weck may be contacted at weckd@whiteandwilliams.com
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Construction Litigation Roundup: “How Bad Is It?”
September 25, 2023 —
Daniel Lund III - LexologyHow bad is it?
“Not that bad,” said an Illinois federal court to a surety which was complaining that its subcontract performance bond terms had not been satisfied by the obligees on the bonds (the general contractor and the building owner).
In response to $3.6 million demand by the obligees on the performance bond, the surety filed an action in federal court in Illinois seeking to have the court declare that the surety had no further obligation on its performance bond. The surety urged that the obligees had not fulfilled the prerequisite requirements in the bond to make a claim on the bond (which, although the court never identified the bond form, was a bond form that closely resembled the AIA A312-2010 performance bond).
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
California Appeals Court Remands Fine in Late Completion Case
November 18, 2011 —
CDJ STAFFThe California Court of Appeals in Stanislaus County has reversed the decision of the lower court in Greg Opinski Construction Inc. v. City of Oakdale. The earlier court had awarded the city of judgment of $54,000 for late completion, $3,266 for repair of construction defects and interest, and $97,775 in attorneys’ fees. The late completion of the project was due to actions by the City of Oakdale, however, the court rejected Opinski’s argument that the California Supreme Court decision in Kiewit did not allow this, as his contract with the city established a procedure for claiming extensions.
The appeals court noted that the Kiewit decision has been “criticized as an unwarranted interference in the power of contracting parties to shift the risk of delays caused by one party onto the other party by forcing the second party to give the first notice of any intention to claim an extension of time based on delays caused by first.” They cited Sweet, a professor at Boalt Hall, UC Berkeley’s law school, that Kiewit “gutted” the “provision that conditions the contractor’s right to claim an extension of time for delays beyond his control.”
Further changes in California law in response to the Kiewit decision lead to the current situation which the court characterized as “if the contractor wished to claim it needed an extension of time because of delays caused by the city, the contractor was required to obtain a written change order by mutual consent or submit a claim in writing requesting a formal decision by the engineer.”
Opinski also argued that the lower court misinterpreted the contract. The Appeals court replied that “Opinski is mistaken.” He cited parts of the contract regarding the increase of time, but the court rejected these, noting that “an inability to agree is not the same as an express rejection.”
The court also rejects Opinski’s appeal that “the evidence the project was complete earlier than September 30, 2005, is weightier than the evidence to the contrary,” which they describe as “not a winning appellate argument.” The court points out that the role of an appeals court is not to reweigh the evidence, but to determine “whether the record contains substantial evidence in support of the judgment.”
The court did side with Opinski on one question of the escrow account. They rejected most of his arguments, repeating the line “Opinski is mistaken” several times. They decided that he was mistaken on the timing of the setoff decision and on whether the city was the prevailing party. However, the appeals court did find that Opinski was not liable for interest on the judgment.
The appeals court rejected the awarding of prejudgment interest to the city as the funds from which the judgment was drawn was held in an escrow account. The court noted that the city had access to the funds and could “access the funds when it determined that Opinski had breached the contract.” The appeals court noted that the judgment exhausted the escrow balance and remanded the case to the lower court to determine the amount own to Opinski.
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The Devil is in the Details: The Texas Construction Trust Fund Pitfalls Residential Remodelers (and General Contractors) Should Avoid
December 26, 2022 —
Rochelle Cabe & Roni Most - Kahana FeldA tale of Texas Construction Trust Account woe. You’re a contractor running a business doing interior remodels for clients in a major metropolitan Texas area. You sign up clients with a contract developed by our friends at LegalZoom and get your team to work. Three months into your remodeling project with Mr. and Mrs. “you thought they were happy” Clients, you get this letter:
“Consistent with the requirements of §162.006 and §162.007 of the Texas Property Code, Mr. and Mrs. “you thought they were happy” Clients demand a full and complete accounting of all funds you have received from any source relating to this project.”
What should you do? Should you ignore it? Should you respond? Fear sets in, you call your crew, and you stop the work. Mr. and Mrs. “you thought they were happy” Clients become Mr. and Mrs. “irate and angry” Clients and they sue you alleging breach of fiduciary duty, breach of contract, and perhaps fraud.
Reprinted courtesy of
Rochelle Cabe, Kahana Feld and
Roni Most, Kahana Feld
Ms. Cabe may be contacted at rcabe@kahanafeld.com
Mr. Most may be contacted at rmost@kahanafeld.com
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Additional Insured Secures Defense Under Subcontractor's Policy
October 14, 2013 —
Tred Eyerly — Insurance Law HawaiiThe court determined there were sufficient allegations in the underlying complaint and third party complaints to raise a duty to defend for the additional insured. Ill. Emcasco Ins. Co. v. Waukegan Steel Sales, 2013 Ill. App. LEXIS 624 (Ill. Ct. App. Sept. 13, 2013).
Waukegan was named as an additional insured under subcontractor I-MAXX Metalworks, Inc.'s policy with Emcasco. An employee of I-MAXX, John Walls, was injured on the job site and sued Waukegan. The complaint alleged Waukegan was negligent in failing to property manage, operate and maintain the premises.
I-MAXX had a policy with Emcasco which named Waukegan as an additional insured. The coverage was limited, however, to the additional insured's vicarious liability as a result of the insured's conduct.
Emcasco refused to defend Waukegan because the allegations of direct negligence against Waukegan were excluded by the vicariously liability provision.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Attorneys' Fee Clauses are Engraved Invitations to Sue
April 19, 2021 —
David M. McLain – Colorado Construction LitigationAs we start another trip around the sun, hopefully you are in the process of updating your form contracts, including purchase and sale agreements and express written warranties. Because the law and litigation landscape continually changes, it is a good practice to periodically update the forms you use in order to give yourself a fighting chance if and when the plaintiffs' attorneys come knocking on your door. As you engage in this process, I hope that you will take a critical look at whether your contracts include a prevailing party attorneys' fees clause and, if so, whether you should leave it in there.
In Colorado, parties are entitled to recover attorneys' fees only if provided for by statute or by contract. Historically, plaintiffs' attorneys relied on two statutes, the Colorado Consumer Protection Act and Colorado's Statutory Interest statute, to recover attorneys’ fees in construction defect cases. In 2003, the Colorado legislature capped treble damages and attorneys' fees under the Colorado Consumer Protection Act at $250,000, effectively restricting plaintiffs' attorneys from relying on the CCPA to recoup their attorneys' fees, especially in large cases. In 2008, the Colorado Supreme Court issued its decision in Goodyear v. Holmes, stating that plaintiffs can only claim prejudgment interest under Colorado's Statutory Interest statute, in cases where they have already spent money on repairs, not when they are suing for an estimate of what repairs will cost in the future. Without either the CCPA or the prejudgment interest statute to recover attorneys' fees, plaintiffs' attorneys most often now rely on the prevailing party attorney fee clause in contracts between the owner and builder, or in the declaration of covenants, conditions and restrictions in situations where a claim is prosecuted by an HOA.
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David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
The Montrose Language Interpreted: How Many Policies Are Implicated By A Construction Defect That Later Causes a Flood?
March 17, 2011 —
Shaun McParland BaldwinThe Court of Appeals of Indiana recently addressed the “Montrose” language added to the CGL ISO form in 2001 in the context of a construction defect claim where a fractured storm drain caused significant flooding a year after the drain was damaged. The insuring agreement requires that “bodily injury or “property damage” be caused by an occurrence and that the “bodily injury or “property damage” occur during the policy period. The Montrose language adds that the insurance applies only if, prior to the policy period, no insured knew that the “bodily injury or “property damage” had occurred in whole or in part. Significantly, it also states that any “bodily injury” or “property damage” which occurs during the policy period and was not, prior to the policy period known to have occurred, includes a continuation, change or resumption of that “bodily injury” or “property damage” after the end of the policy period.
In Grange Mutual Cas. Co. v. West Bend Mut. Ins. Co., No. 29D04-0706-PL-1112 (Ct. App. IN March 15, 2011), http://www.ai.org/judiciary/opinions/pdf/03151109ehf.pdf, Sullivan was the General Contractor for a school construction project. Its subcontractor, McCurdy, installed the storm drain pipes. One of the storm pipes was fractured in 2005 while McCurdy was doing its installation work. More than a year later, the school experienced significant water damage due to flooding. It was later discovered that the flooding was due to the fractured storm drain. Sullivanrsquo;s insurer paid $146,403 for the water damage. That insurer brought a subrogation claim against McCurdy and its two insurers: West Bend and Grange. West Bend had issued CGL coverage to McCurdy while the construction was ongoing, including the date in which the storm pipe was fractured. Grange issued CGL coverage to McCurdy at the time of the flooding. Those two carriers jointly settled the subrogation claim and then litigated which insurer actually owed coverage for the loss. Significantly, the loss that was paid included only damages from the flooding, not any damages for the cost of repairing the pipe.
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Reprinted courtesy of Shaun McParland Baldwin of Tressler LLP. Ms Baldwin can be contacted at sbaldwin@tresslerllp.com
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Residential Construction: Shrinking Now, Growing Later?
August 17, 2011 —
CDJ STAFFJim Haugey, the Chief Economist for Reed Construction Data noted that new residential construction spending fell 0.2% in June and a slightly larger drop of 0.5% in residential remodeling. While economic growth is still low, Haugey states that homebuilders have “record low inventories.” He forecasts a shrinkage of 1.5% in 2011, followed by about 20% growth in 2012.
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