Cambridge Massachusetts Building Expert Directory

Court Rejects Efforts to Limit Scope of Judgment Creditor’s Direct Action Under Insurance Code Section 11580

May 01, 2019 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Ins. Co. of St. of PA v. Amer. Safety Indemnity Co. (No. B283684, filed 3/1/19) (“ICSOP”), a California appeals court rejected one insurer’s efforts to limit the scope of another insurer’s direct action as a judgment creditor under Insurance Code section 11580(b)(2). In ICSOP, homeowners filed a claim in arbitration against their general contractor alleging damages from subsidence. While the arbitration was pending, the general contractor filed suit against the grading subcontractor seeking indemnity and contribution. The complaint attached the homeowners’ complaint in arbitration pleading damages of $2.3 million, and alleged that the subcontractors had a duty to indemnify for those damages. The arbitrator awarded the homeowners $1.1 million. The general contractor was insured by plaintiff ICSOP, which paid the arbitration award. A default judgment was entered against the grading subcontractor for $1.5 million, that included both the arbitration award plus $356,340 for the general contractor’s attorney’s fees. American Safety insured the grading subcontractor but refused to indemnify ICSOP. ICSOP then sued American Safety on the default judgment, pursuant to Insurance Code section 11580(b). The trial court granted summary judgment for ICSOP and the appeals court affirmed. Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Read the court decision
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Home Buyer May Be Third Party Beneficiary of Property Policy

July 19, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The Oklahoma Supreme Court reversed the trial court's grant of summary judgment to the insurer, finding that the purchaser may have third party beneficiary rights under the seller's property policy. Hensley v. State Farm Fire & Cas. Co., 2017 Okla. LEXIS 59 (June 20, 2017). In May 2000, Hensley sold his property and a mobile home located thereon to Douglas using a contract for deed. The contract for deed required Douglas to keep the premises insured, and the monthly payments made by Douglas to Hensley included the premiums. Hensley had a policy with State Farm on the property. Hensley continued to make the premium payments and the policy continued to be renewed. Further, State Farm was informed of the change in the property's status. 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

Unbilled Costs Remain in Tutor Perini's Finances

October 23, 2018 — Scott Van Voorhis – Engineering News-Record
Tutor Perini is struggling to shake off long-running concerns over the hundreds of millions in unbilled costs that have been on the contractor’s balance sheet for years. The Sylmar, Calif.-based construction giant reported more than $1 billion in unbilled costs or receivables at the end of the second quarter, up by more than $100 million from the start of the year, according to the company’s federal filings. That was $100 million higher than at the end of 2016, when the amount was $832 million. Read the court decision
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Reprinted courtesy of Scott Van Voorhis, ENR
ENR may be contacted at ENR.com@bnpmedia.com

Tishman Construction Admits Cheating Trade Center Clients

December 17, 2015 — Erik Larson – Bloomberg
Tishman Construction Corp., builder of One World Trade Center in New York’s financial district, admitted to an overbilling scheme spanning a decade and agreed to pay $20 million in restitution and penalties. The scam included the World Trade Center project, the renovation of the landmark Plaza Hotel on 5th Avenue and the expansion of the Javits Convention Center in Manhattan, the U.S. Attorney’s Office in Brooklyn, New York, said Thursday. Read the court decision
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Reprinted courtesy of Erik Larson, Bloomberg

Surety’s Several Liability Under Bonds

March 20, 2023 — David Adelstein - Florida Construction Legal Updates
When a payment or performance bond is issued on behalf of its bond-principal, the surety is jointly and severally liable with its bond-principal. This means the surety has several liability under the bond, i.e., you don’t need to pursue the principal of the bond to pursue liability under the bond, which is a separate written intrument. Thus, if you are claiming damages of $500,000, by way of example, you can sue both the principal and surety under the bond, you can ONLY sue the principal under the bond (which is rarely practical), or you can ONLY sue the surety under the bond (which, oftentimes, is very practical). In many instances where I am pursuing a bond claim on behalf of a client, particularly a payment bond claim, I only sue the surety and do not sue the bond-principal unless there are certain strategic reasons in doing so. This is because of the surety’s several liability under the bond and there may be solvency issues with the principal or contractual reasons that, strategically, make much more sense to exclude the principal from the action. In MJM Electric, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2023 WL 2163087 (M.D.Fla. 2023), an electrical subcontractor was hired to perform electrical work by the prime contractor. The prime contractor had a payment bond. The project was delayed for two years. The electrical subcontractor claimed the prime contractor failed to compensate it for significant delays and out of scope work. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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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In Supreme Court Showdown, California Appeals Courts Choose Sides Regarding Whether Right to Repair Act is Exclusive Remedy for Homeowners

August 10, 2017 — Garret Murai - California Construction Law Blog
Earlier, we wrote about an appellate court split concerning the Right to Repair Act (Civil Code sections 895 et seq.) which applies to construction defects in newly constructed residential properties including single-family homes and condominiums (but not condominium conversions) sold after January 1, 2003. The California Court of Appeals for the Fourth District, in Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, held that the Right to Repair Act does not provide the exclusive remedy when pursing claims for construction defects involving “actual” property damage (e.g., a defectively constructed roof causing actual physical damage due to water intrusion as opposed to a defectively constructed roof that while constructed improperly does not cause actual physical damage). However, the California Court of Appeals for the Fifth District, in McMillin Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132, which is currently pending before the California Supreme Court, held that the Right to Repair Act does in fact provide the exclusive remedy when pursuing claims for construction defects whether they involve “actual” property damage or merely “economic” damages. For homeowners, they would prefer the option of pursuing remedies under either or both the Right to Repair Act (which includes detailed pre-litigation procedures and statutory construction standards) or under common law claims such as negligence (which do not include pre-litigation procedures and have more flexible standards of care). The California Court of Appeals for the Third District has now thrown its hat into the ring . . . on the side of McMillan. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

When Can Customers Sue for Delays?

September 18, 2023 — Scott L. Baker - Los Angeles Litigation Blog
Construction projects are subject to many internal and external factors. Due to this, delays are not an uncommon occurrence. Whether delays are the result of bad weather conditions or supply chain issues, contractors and their clients cannot control every aspect of the project. Delay issues are very common construction disputes. Therefore, new and experienced contractors alike need to know when their clients may have a reason for a delay claim. 2 particular types of delays that pose a risk Common obstacles that contractors faced during the height of the COVID-19 global pandemic involved supply chain issues. The lack of materials put various projects on hold across California and the country. This widespread issue was out of contractors’ and clients’ control, meaning they were excusable delays. Read the court decision
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Reprinted courtesy of Scott L. Baker, Baker & Associates
Mr. Baker may be contacted at slb@bakerslaw.com

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