Seattle Washington Building Expert Directory

Construction Defect Claim not Barred by Prior Arbitration

October 28, 2015 — Beverley BevenFlorez-CDJ STAFF
According to Stan Martin of Commonsense Construction Law LLC, the Appellate Court of Connecticut ruled in favor of the owner of a twenty-two building development in a construction defect suit despite the contractor’s objection “that the lawsuit was barred by doctrines of res judicata or collateral estoppel.” When issues of “construction and alleged defects” arose in 1996, the “contractor eventually filed for arbitration, seeking the contract balance.” The contractor was awarded $82,812.81. During the arbitration, “no claims for defective construction were advanced.” Read the court decision
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Wilke Fleury Secures Bid Protest Denial

March 16, 2020 — Wilke Fleury LLP
After the City of Vacaville, following a sealed bid process, awarded a significant well drilling contract to Roadrunner Drilling & Pump Company, second-place bidder Nor-Cal Pump and Well Drilling filed a protest with the City on January 30, claiming that Roadrunner’s bid failed to meet certain requirements of the proposed contract. Roadrunner hired Wilke Fleury to defend the bid protest. After Wilke Fleury partner Dan Baxter transmitted a letter to the City explaining why the disgruntled bidder’s protest was factually and legally unsupported, the City—a mere nine days after receiving Dan’s letter—rejected the bid protest, and maintained its award of the project to Roadrunner as the lowest responsive and responsible bidder. Wilke Fleury LLP Read the full story... Read the court decision
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If a Defect Occurs During Construction, Is It an "Occurrence?"

February 12, 2024 — Brendan J. Witry - The Dispute Resolver
Establishing insurance coverage for construction defects is almost as important as establishing liability in the underlying construction defect litigation itself. The risk to the defendant contractor of defending a construction claim can place significant burdens on a contractor’s operations and an uninsured judgment might even put the contractor out of business. For owners, suing a contractor for construction defects can become academic if there is no prospect of insurance coverage; obtaining a $1 million judgment against a contractor with limited assets would be a pyrrhic victory. Commercial General Liability (CGL) carriers are obligated to defend claims that potentially fall within the coverage granted by the policy.[1] When presented with a claim, CGL insurers typically have three options: (1) assume the defense without reservation; (2) assume the defense asserting defenses to coverage, and depending on the state, reserving the right to recover defense costs if it later determines there is no duty to defend; or (3) deny the claim outright and seek a declaratory judgment holding that the insurer has no duty to defend or indemnify. An insurer may deny the claim outright and not seek a declaratory judgment, but does so at its peril because it can expose the insurer to significant liability if the insured later shows the insurer in fact had a duty to defend. Read the court decision
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Reprinted courtesy of Brendan J. Witry, Laurie & Brennan LLP
Mr. Witry may be contacted at bwitry@lauriebrennan.com

Close Enough Only Counts in Horseshoes and Hand Grenades

March 08, 2021 — Garret Murai - California Construction Law Blog
In State Farm General Insurance Company v. Oetiker, Inc., Case No. B302348 (December 18, 2020), a manufacturer sued in subrogation action under the Right to Repair Act almost got away. Almost. The Oetiker Case James and Jennifer Philson’s home was substantially completed, and a notice of completion was recorded, in 2004. In 2016, the Philsons tendered a claim to their homeowner’s insurance carrier, State Farm General Insurance Company, after their home experienced significant water damage due to a defective stainless steel ear clamp. In 2018, after paying the Philson’s claim, State Farm filed a subrogation action against the manufacturer of the ear clamp, Oetiker, Inc. State Farm’s complaint, which included causes of action for negligence, strict products liability and breach of implied warranty, alleged that the home was “damaged by a water leak from the failure of a defective stainless steel ear claim on a water PEX fitting” and that the ear clamp was “defective when it left the control of [Oetiker].” Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Construction Firms Complain of Missed Payments on Redevelopment Project

December 11, 2013 — CDJ STAFF
Firms working on the Quincy Center redevelopment project in the Boston area are claiming that the developer has been slow to pay. Street-Works Development says that Twining Properties, a partner in the development, is in the process of paying off $1.9 million owed to construction companies. The project was put on hold when it was determined that funds were not available to build the initially planned 15-story, steel-framed apartment building as part of a residential, retail, and office complex. The residential portion will now be a 6-story, wood-framed building. One of the contractors has taken the first steps to placing a lien on another property owned by Street-Works. Read the court decision
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Illinois Supreme Court Rules Labor Costs Not Depreciated to Determine Actual Cash Value

November 19, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The Illinois Supreme Court determined that a homeowner insurer may not depreciate labor costs in calculating actual cash value (ACV) after a loss under the policy. Sproull v. State Farm Fire and Casualty Co., 2021 Ill. LEXIS 619 (Ill. Sept. 23, 2021). Plaintiff was insured under a homeowner's policy that provided replacement cost coverage for structural damage. Under the policy, the insured would initially receive an ACV payment but then could receive replacement cost value (RCV) if repairs or replacement were completed within two years and the insurer was timely notified. The policy did not define "actual cash value." Plaintiff suffered wind damage to his residence and timely submitted a property damage claim to State Farm. The adjuster determined that the building sustained a loss with RCV of $1711.54. In calculating ACV, State Farm began with the RCV and then subtracted plaintiff's $1000 deductible and an additional $394.36, including taxes, for depreciation. Plaintiff thus received an ACV payment of $317.18. Plaintiff claimed that he was underpaid on his ACV claim because State Farm depreciated labor, which is intangible and thus not subject to wear, tear, and obsolescence. Further, labor should not have been depreciated because it was not susceptible to aging or wearing and its value did not diminish over time. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Common Law Indemnification - A Primer

April 12, 2021 — Brian F. Mark - Hurwitz & Fine, P.C.
“Common law indemnification is generally available ‘in favor of one who is held responsible solely by operation of law because of his relationship to the wrongdoer.’” McCarthy v. Turner Constr., Inc., 17 N.Y.3d 369, 375 (2011), quoting Mas v. Two Bridges Assocs., 75 N.Y.2d 680, 690 (1990). What is Common Law Indemnification and Who Can Assert it? Indemnification, in general terms, is the right of one party to shift a loss to another and may be based upon an express contract or an implied obligation. Bellevue S. Assoc. v. HRH Constr. Corp., 78 N.Y.2d 282 (1991). Based on a separate duty owed the indemnitee by the indemnitor, common law indemnification, or implied indemnification, permits one who was compelled to pay for the wrong of another to recover from the wrongdoer the damages paid to the injured party. D’Ambrosio v. City of New York, 55 N.Y.2d 454, 460 (1982); Curreri v. Heritage Prop. Inv. Trust, Inc., 48 A.D.3d 505, 507 (2d Dept. 2008). The premise of common law indemnification is vicarious liability, defined as “liability that a supervisory party (such as an employer) bears for the actionable conduct of a subordinate or associate (such as an employee) based on the relationship between the two parties” Black’s Law Dictionary (11th ed. 2019). Common law indemnification “reflects an inherent fairness as to which party should be held liable for indemnity.” McCarthy, 17 N.Y.3d at 375. It is a restitution concept which permits shifting the loss because, to fail to do so, would result in the unjust enrichment of one party at the expense of the other. Mas, 75 N.Y.2d at 680, 690; Kingsbrook Jewish Medical Center v. Islam, 172 A.D.3d 1342, 1343 (2d Dept. 2019). Read the court decision
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Reprinted courtesy of Brian F. Mark, Hurwitz & Fine, P.C.
Mr. Mark may be contacted at bfm@hurwitzfine.com

DoD Issues Guidance on Inflation Adjustments for Contractors

August 15, 2022 — Jennifer Harris & Abby Salinas - ConsensusDocs
The Department of Defense (“DoD”) recently issued a memorandum to contracting officers (“COs”) guiding the use of economic price adjustment (“EPA”) clauses to address inflation-related cost increases. The memorandum, entitled Guidance on Inflation and Economic Price Adjustments, comes as the year-over-year inflation rate rose to 8.6% in May, and contractors with fixed-price contracts seek ways to recover their rising costs. EPA clauses allow the parties to mitigate cost risks that present themselves as a result of circumstances beyond the contractor’s control, e.g., inflation and supply chain price fluctuations. Generally, an EPA clause will dictate that the Government bear the cost risk up to a mutually agreed-upon ceiling. EPA clauses apply to the cost portion of a contract, but do not normally apply to the profit. DFARS PGI 216.203-4. Memorandum: No CO Authority to Grant Contractual Relief Absent an EPA Clause The memorandum states that absent an existing EPA clause, COs do not have the authority to provide contractual relief for unanticipated inflation under a firm-fixed-price contract. Reprinted courtesy of Jennifer Harris, Peckar & Abramson, P.C. (ConsensusDocs) and Abby Salinas, Peckar & Abramson, P.C. (ConsensusDocs) Ms. Harris may be contacted at jharris@pecklaw.com Read the court decision
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SEATTLE WASHINGTON BUILDING EXPERT DIRECTORY AND CAPABILITIES