Seattle Washington Building Expert Directory

Prevailing Payment Bond Surety Entitled to Statutory Attorneys’ Fees Even if Defended by Principal

January 09, 2023 — Garret Murai - California Construction Law Blog
For contractors involved in California public works projects the scenario is not uncommon: The general contractor awarded the public works project is required to obtain a payment bond for the benefit of subcontractors and suppliers and the payment bond surety issuing the payment bond requires the general contractor to defend and indemnify the surety from and against any claims against the payment bond. In Cell-Crete Corporation v. Federal Insurance Company, 82 Cal.App.5th 1090 (2022), the 4th District Court of Appeal examined whether a payment bond surety, who prevails in a claim against the payment bond, is entitled to statutory attorneys’ fees when the party actually incurring the attorneys’ fees was the general contractor, pursuant to its defense and indemnity obligations, as opposed to the surety itself. The Cell-Crete Case General contractor Granite Construction Company was awarded a public works contract issued by the City of Thermal known as the Airport Boulevard at Grapefruit Boulevard and Union Pacific Railroad Grade Separation Project. We’ll just call it the “Project.” Subcontractor Cell-Crete Corporation entered into a subcontract with Granite for lightweight concrete and related work. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

No Coverage for Contractor's Faulty Workmanship

July 10, 2018 — Tred R. Eyerly - Insurance Law Hawaii
The Kentucky Supreme Court determined there was no coverage for the contractor's faulty workmanship in digging the existing basement of a building to make it deeper. Martin v. Acuity, 2018 Ky. LEXIS 188 (Ky. April 26, 2018). Martin Elias/Properties, LLC (MEP) purchased an older home to renovate and resell for profit. MEP hired Tony Gosney to renovate and expand the basement. Gosney agreed to dig the existing basement deeper, pour new footers and pour a new concrete floor. While performing his work, Gosney failed to support the existing foundation adequately before digging around it. Within days, the old foundation began to crack and eventually the entire structure began to sag. Gosney stopped work and notified his insurer, Acuity. 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

Construction Law Alert: Builder’s Alternative Pre-litigation Procedures Upheld Over Strong Opposition

April 01, 2014 — Steven M. Cvitanovic and Whitney L. Stefko - Haight Brown & Bonesteel, LLP
Last week, the Court of Appeal, Fifth Appellate District, was tasked with evaluating the enforceability of provisions in home purchase contracts containing alternative pre-litigation procedures which differ from the standard Right to Repair Act procedures. The Court of Appeal, in McCaffrey v. Superior Court of Fresno, et al. ultimately upheld the contractual provisions, and in overturning the trial court's decision, preserved the rights of builders to contract around certain requirements set forth in the Right to Repair Act. The McCaffrey Group, Inc. constructed single-family homes in a Fresno development. Plaintiffs consisted of 24 homeowners within the development who brought suit against McCaffrey for construction defects in their homes. The homeowners were comprised of three categories: (1) the original purchasers who bought their homes from McCaffrey before January 1, 2003 and had a 2001 version of McCaffrey's contract; (2) the original purchasers who bought their homes from McCaffrey on or after January 1, 2003 and signed a 2003 version of McCaffrey's contract; and (3) the subsequent purchasers who did not buy their homes directly from McCaffrey, but purchased their homes subject to either the 2001 or 2003 version of McCaffrey's home purchase agreement. Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and Whitney L. Stefko, Haight Brown & Bonesteel LLP Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com Read the court decision
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2018 Update to EPA’s “Superfund Task Force Report”

September 04, 2018 — Anthony B. Cavender - Gravel2Gavel
The U.S. Environmental Protection Agency (EPA) recently released its Superfund Task Force Recommendations 2018 Update (the Update). The Superfund Task Force was established by former EPA Administrator Scott Pruitt to “provide recommendations on an expedited timeframe on how the agency can restructure the cleanup process, realign incentives of all involved parties to promote expeditious remediation, reduce the burden on cooperating parties, incentivize parties to remediate sites, encourage private investment in cleanups of sites and promote the revitalization of properties across the country.” Over the years, thousands of sites have been listed on EPA’s National Priority List (NPL) of Superfund sites, but the process by which listed sites are cleaned up and finally removed from the NPL has been agonizingly slow. The process is governed by the National Contingency Plan rules. The Update states that, as of July 3, 2018, there are 1,346 sites listed on the NPL, and overall, 399 sites have been removed from the NPL. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Cyber Thieves Phish Away a $735K Payment to a Minnesota Contractor

May 06, 2024 — Richard Korman - Engineering News-Record
The contractor's project manager asked for money due, $735,000 under Payment Application 13, to be sent by the owner electronically. "Hi Rick," the project manager, whose first name is Jalen, wrote in an email dated Aug. 15. "Can we have payments remitted electronically as we currently have numerous uncleared checks on hold?" Reprinted courtesy of Richard Korman, Engineering News-Record Mr. Korman may be contacted at kormanr@enr.com Read the full story... Read the court decision
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The Risks and Rewards of Sustainable Building Design

July 25, 2021 — Caroline A. Harcourt & Adam Weaver - Gravel2Gavel
The shift towards a “greener” environment has resulted in cities and states implementing electrification mandates, which will have a major impact on both current and future building design. Currently, most commercial and residential end users are already all-electric. However, there are some exceptions, such as space and water heating, that use a significant amount of energy. Several states, including California and New York, have cities that have introduced legislation requiring new construction to be all-electric. This means, for example, using electricity for heating rather than fossil fuels such as natural gas. Mandate or not, building owners and developers should consider the risks and rewards of an all-electric design. General Rewards

Reaching Climate Goals: As part of the Clean Energy Plan, as described in a previous post, President Biden has created a goal for the United States of achieving a carbon pollution-free American utility sector by 2035. Because residential and commercial building account for 40 percent of energy consumption in the United States, all-electric building designs will help governments and businesses reach the ambitious climate goals that have been set for the coming years.

Reprinted courtesy of Caroline A. Harcourt, Pillsbury and Adam Weaver, Pillsbury Ms. Harcourt may be contacted at caroline.harcourt@pillsburylaw.com Mr. Weaver may be contacted at adam.weaver@pillsburylaw.com Read the court decision
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Court of Appeals Finds Additional Insured Coverage Despite “Care, Custody or Control” Exclusion

September 30, 2019 — Garret Murai - California Construction Law Blog
When things go wrong on a construction project it’s often a scramble of finger pointing. In McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company, Case No. D074219 (June 5, 2019), the California Court of Appeals for the 4th District considered whether an additional insured exclusion, excluding “property in the care, custody or control of the additional insured,” precluded a duty to defend by an insurer. McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company McMillin Homes Construction, Inc. was the developer and general contractor on a residential project known as Auburn Lane in Chula Vista, California. McMillin subcontracted with Martin Roofing Company, Inc. to perform roofing work. Under the subcontract, Martin was required to obtain commercial general liability insurance naming McMillin as an additional insured. The commercial general liability insurance policy secured by Martin was issued by National Fire and Marine Insurance Company. As is typical, the policy covered “property damage” and “personal injury” arising out of an “occurrence” during the policy period. McMillin was covered as additional insured under ISO endorsement form CG 20 09 03 97. 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

The U.S. Tenth Circuit Court of Appeals Rules on Greystone

November 18, 2011 — Derek J. Lindenschmidt, Higgins, Hopkins, McLain & Roswell, LLC

On November 1, 2011, the Tenth Circuit Court of Appeals ruled on the certified question of whether property damage caused by a subcontractor’s faulty workmanship is an “occurrence” for purposes of a commercial general liability (CGL) insurance policy. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., No. 09-1412 (10th Cir. Nov. 1, 2011), the Tenth Circuit determined that because damage to property caused by poor workmanship is generally neither expected nor intended, it may qualify under Colorado law as an occurrence and liability coverage should apply. Id. at 2.

The short history of the Greystone case is as follows. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., 649 F. Supp. 2d 1213 (D. Colo. 2009), two contractors and one of their insurers brought an action against a second insurer after the second insurer refused to fund the contractors’ defense in construction defect actions brought by separate homeowners. Id. at 1215. The U.S. District Court for the District of Colorado, relying on General Sec. Indem. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), granted summary judgment in favor of the second insurer on the basis that the homeowners’ complaints did not allege accidents that would trigger covered occurrences under the second insurer’s policies. Id. at 1220. Notably, the Greystone, General Security, and other similar decisions prompted the Colorado General Assembly to enact C.R.S. § 13-20-808, which was designed to provide guidance for courts interpreting perceived coverage conflicts between insurance policy provisions and exclusions. The statute requires courts to construe insurance policies to favor coverage if reasonably and objectively possible. C.R.S. § 13-20-808(5).

The Tenth Circuit began its analysis by determining whether C.R.S. § 13-20-808, which defines the term “accident” for purposes of Colorado insurance law, would have a retroactive effect, and thereby settle the question before the court. The Tenth Circuit gave consideration to several Colorado district court orders issued since the enactment of C.R.S. § 13-20-808 which have suggested that the statute does not apply retroactively, including Martinez v. Mike Wells Constr., No. 09cv227 (Colo. Dist. Ct., Mar. 1, 2011), and Colo. Pool. Sys., Inv. V. Scottsdale Ins. Co., No. 09cv836 (Colo. Dist. Ct., Oct. 4, 2010). The Tenth Circuit also attempted to ascertain the General Assembly’s intent behind the term “all insurance policies currently in existence...” Greystone, No. 09-1412, at 12. The Tenth Circuit determined that the General Assembly would have more clearly stated its intentions for the term if it was supposed to apply retroactively to expired policies, rather than those still running. Id. at 12-13. Ultimately, the Tenth Circuit decided that C.R.S. § 13-20-808 did not apply retroactively, but noted that “the retrospective application of the statute is not necessarily unconstitutional.” Id. at 9, 11-14. As such, the Tenth Circuit advised that it was required to decide the question presented in the appeal under the principles of Colorado insurance law. Id. at 15.

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Reprinted courtesy of Higgins, Hopkins, McLain & Roswell, LLC. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com

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