Seattle Washington Building Expert Directory

What Contractors Can Do to Address Rising Material Costs

August 23, 2021 — Garret Murai - California Construction Law Blog
From lumber to used cars to pastrami sandwiches, prices are rising. This past month, at a town hall meeting in Cincinnati, Ohio, President Biden acknowledged that inflation was increasing, responding to a question from a restaurant owner about labor shortages, “I think your business and the tourist business is really going to be in a bind for a little while.” Although construction companies typically don’t work in the same small margins that restaurants do, labor shortages and material price increases have nevertheless impacted the construction industry. According to a recent report by Cumming, the cost of construction materials from lumber to steel to gypsum have gone up over the last 12 months, in some cases nearly double: For contractors entering into construction contracts and those performing work under existing contracts, the increasing cost of materials and shortage of labor creates challenges, some of which can be addressed through contractual provisions and the framework of those contracts. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Montana Supreme Court Tackles Decade-Old Coverage Dispute Concerning Asbestos Mineworker Claims

December 20, 2021 — Patricia B. Santelle & Paul A. Briganti - White and Williams
On November 23, 2021, the Montana Supreme Court issued an almost unanimous decision in National Indemnity Company v. State of Montana, a ten-year-old coverage dispute arising from claims against the State of Montana alleging it had failed to warn of asbestos dust conditions at vermiculite mining and milling operations in and around Libby, Montana (the Libby Mine) run by W.R. Grace & Company and its predecessors. Affirming in part and reversing in part rulings by the trial court that culminated in a $98 million judgment against the State’s CGL insurer from 1973 to 1975, the court addressed issues including the duty to defend/estoppel, the number of occurrences, “trigger of coverage,” and, in a case of first impression, allocation under Montana law. Whether the Insurer Breached the Duty to Defend Depended Upon the Timeframe The court looked at whether (1) the insured provided sufficient information to bring the claims within the possibility of coverage under the subject policy and (2) the insurer gave “the necessary substance to” fulfilling its duty to defend at four points in the relevant timeframe:

The insurer did not breach its duty at the time the State initially tendered the Libby Mine claims because the State defended the claims through its self-insurance program, hired its own counsel, managed the litigation, made its own defense decisions, and took the position with the insurer that the matter was “under control” and “nothing was left to be done[.]”

Reprinted courtesy of Patricia B. Santelle, White and Williams and Paul A. Briganti, White and Williams Ms. Santelle may be contacted at santellep@whiteandwilliams.com Mr. Briganti may be contacted at brigantip@whiteandwilliams.com Read the court decision
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U.S. Homeowners Are Lingering Longer, and the Wait Is Paying Off

July 28, 2018 — Jeremy Hill - Bloomberg
Homeowners in the U.S. are holding on to their houses longer than they have in at least 18 years, and when they do sell, they’re reaping gains that haven’t been seen since before the housing crisis. Those who sold in the second quarter did so after owning their homes for an average of 8.09 years, the longest stretch since Attom Data Solutions started tracking the statistic in 2000. The wait appears to be paying off: Second-quarter sellers recorded gains averaging $58,000 -- the most since the third quarter of 2007. Read the court decision
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Reprinted courtesy of Jeremy Hill, Bloomberg

Force Majeure Under the Coronavirus (COVID-19) Pandemic

March 08, 2021 — Lindsay T. Watkins - Ahlers Cressman & Sleight PLLC
As COVID-19 disrupts work and life as we know it, the question many contractors have is what protections are available against the inevitable project impacts and delays? Generally, construction contracts require a contractor to timely perform work until project completion or potentially face damages (liquidated or actual) and possible termination. When events occur, however, that are beyond our control (such as a national pandemic), it is important to review and understand what contract provisions or avenues are available for potential relief. 1. Review Your Contract For A Force Majeure Provision. A “force majeure” contract provision is commonly included in construction contracts, service agreements, purchase orders, etc. It typically covers events or conditions that can be neither anticipated nor controlled. These provisions, however, will vary greatly from contract to contract and may not include the language “force majeure” but rather may be included in general delay or impact clauses. For example, some common provisions include:

Washington State Department of Transportation Clause (2018 Standard Specifications for Road, Bridge and Municipal Construction): The Contractor shall rebuild, repair, restore, and make good all damages to any portion of the permanent or temporary Work occurring before the Physical Completion Date and shall bear all the expense to do so, except damage to the permanent Work caused by: (a) acts of God, such as earthquake, floods, or other cataclysmic phenomenon of nature, or (b) acts of the public enemy or of governmental authorities; or (c) slides in cases where Section 2-03.3(11) is applicable; Provided, however, that these exceptions shall not apply should damages result from the Contractor’s failure to take reasonable precautions or to exercise sound engineering and construction practices in conducting the Work.

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Reprinted courtesy of Lindsay T. Watkins, Ahlers Cressman & Sleight PLLC
Ms. Watkins may be contacted at Lindsay.Watkins@acslawyers.com

Three-Year Delay Not “Prompt Notice,” But Insurer Not “Appreciably Prejudiced” Either, New Jersey Court Holds

November 04, 2019 — Anthony L. Miscioscia and Timothy A. Carroll - White and Williams LLP
In Harleysville Preferred Insurance Company v. East Coast Painting & Maintenance, LLC, 2019 U.S. Dist. LEXIS 135295 (D.N.J. Aug. 12, 2019) (East Coast Painting), the U.S. District Court for the District of New Jersey held that an insurer, which received notice of a bodily injury accident three years after it happened, was not “appreciably prejudiced” by such late notice, even as the court acknowledged notice three years later did not satisfy the policy’s “prompt notice” condition. The court also held that the policy’s “Operational Exclusion,” which excluded coverage for bodily injury arising out of the operation of “cherry pickers and similar devices,” did not apply because the accident arose out of the use of a “scissor lift,” which is not a device similar to a cherry picker. East Coast Painting arose out of a Queens, New York bridge-painting project, during which an employee of the insured, East Coast Painting and Maintenance LLC was injured while “standing on a scissor lift mounted to the back of a truck,” owned and operated by East Coast. The employee sued various project-related entities which, in turn, joined East Coast as a defendant. East Coast sought coverage under its business auto policy, and the insurer agreed to defend the insured under a reservation of rights. The insurer subsequently sought a declaration that it did not owe coverage based on, among other things, the policy’s “Operational Exclusion,” and the insured’s failure to satisfy the policy’s “prompt notice” condition. The insurer moved for summary judgment on both of those bases, but the court in East Coast Painting denied the motion. As for the insurer’s “prompt notice” defense, the court in East Coast Painting concluded that, the insured’s notice to the insurer was not prompt because it did not receive notice until three years after the accident. But, the court added, the inquiry does not end there. “[T]his Court must determine whether [the insurer] was appreciably prejudiced by that delay.” Reviewing the facts, the court held that the insurer was not “appreciably prejudiced,” even though during the three-year delay the lift truck was “not properly maintained” or “in the same condition it was at the time of the Accident.” The court observed that the insurer had “ample other evidence with which it can defend itself,” such as experts who inspected the lift truck and opined about the cause of the accident.” [Emphasis added.] Further, “there are multiple contemporaneous accident reports,” “a list of the East Coast employees on site at the time,” “photographs of the lift truck and its location when [the employee] was injured,” and “depositions of [the employee] and others regarding the events at issue.” Thus, the court held, the insurer was not prejudiced and summary judgment was inappropriate. Reprinted courtesy of Anthony L. Miscioscia, White and Williams LLP and Timothy A. Carroll, White and Williams LLP Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com Mr. Carroll may be contacted at carrollt@whiteandwilliams.com Read the court decision
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Arctic Roads and Runways Face the Prospect of Rapid Decline

July 19, 2021 — Tony Frangie Mawad - Bloomberg
Melting permafrost across Arctic regions has already caused highways to buckle and homes to sink. A new study conducted in the north of Alaska helps explain why rising temperatures are hitting roads, airports and other infrastructure particularly hard. Researchers who monitored temperatures and melting near Prudhoe Bay on Alaska’s North Slope documented how the thawing of frozen ground beneath a highway tended to spread laterally to the side of the road, with the melting process accelerated by snow accumulations and puddling. Those interactions led to more rapid thawing than in areas of undisturbed permafrost. Researchers also found that melting in their test area, alongside a highway that runs atop permafrost, followed a two-phase process — a gradual initial thaw, followed by an accelerated process once warming exceeded a critical point. Read the court decision
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Reprinted courtesy of Tony Frangie Mawad, Bloomberg

Agreement Authorizing Party’s Own Engineer to Determine Substantial Compliance Found Binding on Adverse Party

August 30, 2021 — Garret Murai - California Construction Law Blog
When it comes to resolving construction disputes it’s a bit like the “31 Flavors” of Baskin Robins. There’s a flavor for nearly everyone. From mediation, to arbitration, to litigation, to dispute resolution boards (DRBs), to the architect as the “initial decision maker” under AIA contracts, parties and their counsel have developed numerous ways to resolve disputes on construction projects, including by expert review. But if you’re going to agree to a dispute resolution procedure, make sure it’s one you can live with, because if you don’t, it’s often going to be too late to go back to the proverbial drawing board as the parties in the next case discovered. The Coral Farms Case In December 2010, a mudslide impacted three properties in San Juan Capistrano, California. One of the properties was owned by Coral Farms, L.P., another by Paul and Susan Mikos, and the third by Thomas and Sonya Mahony. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Sometimes You Get Away with Unwritten Contracts. . .

January 20, 2020 — Christopher G. Hill - Construction Law Musings
I have spoken often regarding the need for a well written construction contract that sets out the “terms of engagement” for your construction project. A written construction contract sets expectations and allows the parties to the contract to determine the “law” of their project. An unwritten “gentleman’s agreement” can lead to confusion, faulty memories, and more money paid to construction counsel than you would like as we lawyers play around in the grey areas. One other area where the written versus unwritten distinction makes a difference is in the calculation of the statute of limitations. In Virginia, a 5 year statute of limitations applies to written contracts while a 3 year statute of limitations applies to unwritten contracts. This distinction came into stark relief in the case of M&C Hauling & Constr. Inc. v. Wilbur Hale in the Fairfax, Virginia Circuit Court. In M&C Hauling, M&C provided hauling services to the defendant through a subcontract with Hauling Unlimited in 2014, the last of which was in July. M&C provided over 2000 hours of hauling and provided time tickets (that were passed to Mr. Hale on Hauling Unlimited letterhead and signed by Mr. Hale or his agent) and an invoice stating the price term of $75.00 per hour. No separate written contract between M&C and Hauling Unlimited or Mr. Hale existed. 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

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