Columbus Ohio Building Expert Directory

Risk-Shifting Tactics for Construction Contracts

February 24, 2020 — Nate Budde - Construction Executive
Anyone who has worked in the construction industry is familiar with the financial risks involved. With thin margins, cash flow issues and the litany of potential claims and damages that can arise, contractors need to be able to manage that risk properly. There is the right way of going about it, and there's a wrong way. Unfortunately, the wrong way (which involves using leverage and shifting risk to other parties) is the more prevalent approach. There are different contractual tactics employed by owners and general contractors alike to shift financial risk to other parties. Why is construction so financially risky? There are a few different reasons there is so much risk involved. First and foremost, the construction payment chain itself is inherently risky. Owners and lenders release project funds and trust that the money will reach everyone on the job. But that can’t happen unless each link in the payment chain passes payment to the next. That's a lot of trust for an industry that's not particularly known for it. Another reason is how construction projects begin. Upfront payment is rare in this industry. This leads to floating the initial costs, extending credit and potentially borrowing money to do so. And those who typically bear this burden, lower-tier subs and suppliers, are the least equipped for that level of risk. Reprinted courtesy of Nate Budde, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Budde may be contacted at nate@levelset.com

New York Appellate Division: Second Department Contradicts First Department, Denying Insurer's Recoupment of Defense Costs for Uncovered Claims

March 01, 2021 — Jasjeet K. Sahani - Saxe Doernberger & Vita, P.C.
New York law has historically allowed insurers to recoup defense costs paid on behalf of an insured if there is ultimately no coverage for the underlying action, provided that the insurer reserved its rights to seek reimbursement. On December 30, 2020, the New York Appellate Division, Second Department declined to follow this longstanding principle in American Western Home Insurance Co. v. Gjonaj Realty & Mgt. Co.,1 by holding that the insurer was not entitled to recoup defense costs, even where it was determined that the claim was not covered under the insurance policy. In American W. Home Ins. Co., the insureds were named as defendants in an underlying personal injury action. More than four years after the accident, and a $900,000 default judgment against the insureds, they tendered the lawsuit to their commercial general liability insurer, American Western Home Insurance Company (“American”). American denied coverage based on untimely notice, but after the default judgment was subsequently vacated, it agreed to defend the underlying action subject to a reservation of rights. The reservation of rights specifically reserved American’s right to deny coverage if the vacatur of the default judgment against the insureds was reversed. Further, American reserved its right to recover the costs of defending the underlying litigation. Read the court decision
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Reprinted courtesy of Jasjeet K. Sahani, Saxe Doernberger & Vita, P.C.
Mr. Sahani may be contacted at JSahani@sdvlaw.com

The COVID-19 Impact: Navigating the Legal Landscape’s New Normal

July 27, 2020 — Amanda Mathieu - Lewis Brisbois
While most of the country has been at a standstill since March, you might be wondering, what about my lawsuit or my administrative charge? For the past couple of months, most litigation cases have largely been put on pause in the courts and at administrative agencies. However, as we adjust to what is clearly a new normal in both our lives and the legal landscape as we know it, cases will begin to pick up speed again, albeit with new strategies and challenges to keep in mind. As courts begin to reopen, judges are emphasizing in many jurisdictions that criminal cases will take priority in an effort to attend to constitutionally required timelines. Nevertheless, it will remain just as important as before the pause button was hit to keep cases moving forward. This ramp up period presents a unique opportunity for clients and attorneys to invest meaningful time into investigating and developing defenses to claims while the court system and related case pace remains slowed. Read the court decision
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Reprinted courtesy of Amanda Mathieu, Lewis Brisbois
Ms. Mathieu may be contacted at Amanda.Mathieu@lewisbrisbois.com

Worker’s Compensation Exclusivity Rule Gets “Trumped” by Indemnity Provision

October 27, 2016 — Garret Murai – California Construction Law Blog
Sorry, I couldn’t help myself with the title. The next case, Aluma Systems Concrete Construction of California v. Nibbi Bros., Inc., California Court of Appeals for the First District, Case No. A145734 (August 16, 2016), discusses the interplay between indemnity provisions and the worker’s compensation exclusivity rule. The worker’s compensation exclusivity rule generally provides that worker’s compensation insurance is the exclusive remedy of employees for injuries or death arising out of the course and scope of their employment. In the Aluma case, the California Court of Appeals, addressed what happens when a subcontractor’s employees are injured on a project, sue the general contractor, and the general contractor, pursuant to an indemnity provision in its subcontract, tenders the claim to the subcontractor whose worker’s compensation insurance has already paid the employees. 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

Builder Must Respond To Homeowner’s Notice Of Claim Within 14 Days Even If Construction Defect Claim Is Not Alleged With The “Reasonable Detail”

June 05, 2017 — Richard H. Glucksman & David A. Napper - CGDRB News & Publications
On February 10, 2017, California’s Fourth District Court of Appeal held that if a builder fails to acknowledge receipt of a homeowner’s Notice of Claim within 14 days, as required by the Right to Repair Act (“SB800”), specifically California Civil Code §913, the homeowner is released from the requirements of SB800 and may proceed with the filing of a lawsuit. In Blanchette v. Superior Court, Blanchette owned 1 of 28 homes constructed by GHA Enterprises, Inc. (“GHA”). On February 2, 2016, Blanchette served GHA with notice of a claim, setting forth the alleged defects in all 28 homes. On February 23, 2016, GHA responded that the construction defects were not alleged with sufficient “reasonable detail” as required by Civil Code §910. In response, Blanchette asserted that GHA’s response was untimely and thus excused him and the other homeowners from any obligations under SB800. The trial court found for the builder, GHA, holding that Blanchette’s Notice of Claim lacked detail sufficient to trigger GHA’s obligations under SB800. Blanchette appealed the ruling. Reprinted courtesy of Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and David A. Napper, Chapman Glucksman Dean Roeb & Barger Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com Mr. Napper may be contacted at dnapper@cgdrblaw.com Read the court decision
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Hawaii Supreme Court Finds Subcontractor Has No Duty to Defend Under Indemnity Provision

July 14, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The Hawaii Supreme Court vacated the decision of the Intermediate Court of Appeals [see prior post here] and determined that a subcontractor did not have a duty to defend the developer upon tender under an indemnify provision in the parties' contract. Arthur v. State of Hawaii, 2016 Haw. LEXIS 155 (June 27, 2016). A simplified version of the detailed facts and procedural history follows. The case involved the wrongful death of Mona Arthur. Mona typically gardened on the hillside behind her home. She would cross a concrete drainage ditch and climb over a two-foo-high chain length fence to reach the hillside. Mona was found lying in a concrete ditch with severe head injuries, which ultimately led to her death. Her husband and estate sued for her wrongful death. Claims were asserted for negligence in failing to build a fence higher than two feet, which would have prevented Mona from having access to the garden. Defendants included the Department of Hawaiian Home Lands; Kamehameha Investment Corporation ("KIC"), the developer; Design Partners, Inc., the architect; Coastal Construction Company, the general contractor; and Sato and Associates, the civil engineer. The second amended complaint sought punitive damages against KIC. 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

Steel Makeover Under Way for Brooklyn's Squibb Footbridge

January 13, 2020 — Tom Stabile - Engineering News-Record
Brooklyn Bridge Park’s Squibb Bridge has 127 fewer years of existence than the borough’s iconic East River span, but the pedestrian crossing got lots of New York City attention since it was first opened in 2013 after being shut down twice—once for excessive “bounciness” and again due to rotting wood. Now its reconstruction, hopefully for good, is anything but a straightforward operation. Tom Stabile, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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The Business of Engineering: An Interview with Matthew Loos

July 15, 2019 — Aarni Heiskanen - AEC Business
Matthew Loos is an experienced project manager in the civil engineering industry. He works as a project engineer at Jones|Carter in Fort Worth, Texas. In this interview, we discuss Matt’s new book, The Business of Engineering. It is not very common that an engineer writes a non-technical book. What inspired you to do so? Have you ever gotten an idea stuck in your head that you just couldn’t let go of? A time when you couldn’t go to sleep because the idea was consistently begging for your attention? That’s what happened to me. The idea for this book hits me right before bed, as most good ideas do. I couldn’t go to sleep after the idea struck me. I spent half of the night writing the chapters of this book in my mind. I had been thinking about the idea of engineering and how it relates to other career fields, even the non-technical ones. I was disenchanted with the trifling number of classes I took that prepared me for the business world. These were the initial thoughts that eventually led me down the road into thinking about engineering as a profession going forward. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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