Cambridge Massachusetts Building Expert Directory

Reporting Requirements for Architects under California Business and Professions Code Section 5588

December 22, 2019 — Jordan Golden - Gordon & Rees Construction Law Blog
Below is an overview of the changes to California Business and Professions Code Section 5588 and its effect on the reporting requirements, for architects, in the construction industry. Section 5588 Prior to 2005 Legislative Changes Section 5588 of the California Business and Professions Code sets forth the reporting requirements for many business professionals including architects. Since 1979, Section 5588 has required architects and their insurers to report to the California Architect Board (the Board) “any settlement or arbitration award in excess of five thousand dollars ($ 5,000) of a claim or action for damages caused by the license holder’s fraud, deceit, negligence, incompetency, or recklessness in practice.”1 The language of the code section left open for interpretation the question of what types of settlement claims must be reported to the Board. Thus, in 2004, the Attorney General of the State of California published an opinion stating that a reportable settlement includes “any agreement resolving all or part of a demand for money which is based upon an insured architect’s alleged wrongful conduct.”2 He then went on to conclude that the only qualifications placed on the term “claim” for purposes of Section 5588 is that “(1) the demand be premised on the license holder’s alleged ‘fraud, deceit, negligence, incompetency, or recklessness in practice,’ and (2) the value of the claim, as measured by the settlement amount or arbitration award, exceeds $5,000.”3 Read the court decision
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Reprinted courtesy of Jordan Golden, Gordon & Rees Scully Mansukhani

Insurer Rejecting Construction Defect Claim Must Share in Defense Costs

March 02, 2020 — Tred R. Eyerly - Insurance Law Hawaii
One insurer, who accepted the tender of defense in a construction defect case, successfully moved for summary judgment against the second insurer, who denied the insured's tender. Interstate Fire & Cas. v. Aspen Ins. UK Ltd., 2019 N.Y. Misc. LEXIS 5800 (N.Y. Sup. Ct. Oct. 25,2019). Standard Waterproofing Corporation was hired by the construction manager, G Builders, to perform waterproofing work as part of condominium conversion project. After the project was completed,the condominium occupants experienced water damage in their units. The Condominium Board retained an engineer who reported numerous issues of water infiltration relating to Standard's work. The Condominium Board filed suit against the construction manager, who filed a third party complaint against Standard. Standard tendered to four different insurers, including plaintiff Interstate and defendant Aspen. Interstate agreed to defend, while Aspen and the other two insurers declined. Aspen argued there were no allegations of an occurrence resulting in property damage during its policy periods. Interstate filed for declaratory relief against Aspen and Standard. 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

Ambiguity in Insurance Policy will be Interpreted in Favor of Insurance Coverage

July 19, 2017 — David Adelstein - Florida Construction Legal Updates
An ambiguity in an insurance policy–after reading and interpreting the policy as a whole–will be construed against an insurer. This means an ambiguity will be construed in favor of insurance coverage (for the benefit of the insured) as opposed to against insurance coverage. This does not mean that every insurance policy contains an ambiguity. This also does not mean a court will interpret plain and ordinary words contrary to their conventional meaning or definition. But, as we all know, insurance policies are not the easiest of documents to decipher and ambiguities do exist relating to a particular issue or circumstance to the benefit of an insured. An insured that is dealing with specific insurance coverage issues should make sure they are working with counsel that looks to maximize insurance coverage, even if that means exploring ambiguities that will benefit an insured based on a particular issue or circumstance. An example of an ambiguity in an insurance policy relating to a particular issue that benefitted an insured can be found in the Florida Supreme Court decision of Government Employees Insurance Co. v. Macedo, 42 Fla. L. Weekly S731a (Fla. 2017). This case involved an automobile accident and the interpretation of an automobile liability policy. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at Dadelstein@gmail.com

Taylor Morrison v. Terracon and the Homeowner Protection Act of 2007

June 11, 2014 — Buck Mann – Colorado Construction Litigation
On January 30, 2014, the Colorado Court of Appeals decided the case of Taylor Morrison of Colorado, Inc. v. Bemas Construction, Inc. and Terracon Consultants, Inc. 2014WL323490. The case addressed a substantial issue of Colorado constitutional law, as well as a variety of procedural issues of potential importance to construction litigation attorneys. Of particular interest is the question of whether the provisions of the 2007 Homeowner Protection Act (“HPA”) are limited in application to contracts between residential homeowners and construction professionals, or whether they have broader application between commercial construction professional parties as well. As discussed below, the Court of Appeals stated that it would not answer the question, and then, separately, implied that the statute might only apply to homeowner transactions – with the resulting exclusion of commercial transactions. However, after its analysis, it left the actual decision of that issue to a future court in a later case. The factual background for the case involved claims of breach of a contract for soils engineering by Terracon Consultants, Inc. (“Terracon”) and negligent excavation work by Bemas Construction, Inc. (“Bemas”). Plaintiff was Taylor Morrison of Colorado (“Taylor Morrison”), the developer and general contractor for a residential subdivision called Homestead Hills. After it constructed many homes, Taylor Morrison began to receive complaints of cracking drywall resulting from foundation movement and it made repairs at significant expense. Taylor Morrison then filed suit against Terracon and Bemas in connection with their respective roles in the original construction. Read the court decision
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Reprinted courtesy of Buck Mann, Higgins, Hopkins, McLain & Roswell, LLC
Mr. Mann may be contacted at mann@hhmrlaw.com

Value in Recording Lien within Effective Notice of Commencement

August 03, 2020 — David Adelstein - Florida Construction Legal Updates
Construction lien priority is no joke! This is why a lienor wants to record its construction lien within an effective notice of commencement. A lien recorded within an effective notice of commencement relates back in time from a priority standpoint to the date the notice of commencement was recorded. A lienor that records a lien wants to ensure its lien is superior, and not inferior, to other encumbrances. An inferior lien or encumbrance may not provide much value if there is not sufficient equity in the property. Plus, an inferior lien or encumbrance can be foreclosed. An example of the importance of lien priority can be found in the recent decision of Edward Taylor Corp. v. Mortgage Electronic Registration Systems, Inc., 45 Fla.L.Weekly D1447b (Fla. 2d DCA 2020). In this case, a contractor recorded a notice of commencement for an owner. While an owner is required to sign the notice of commencement that the contractor usually records, in this case, the owner did not sign the notice of commencement. Shortly after, the owner’s lender recorded a mortgage and then had the owner sign a notice of commencement and this notice of commencement was also recorded. When there is a construction lender, the lender always wants to make sure its mortgage is recorded first—before any notice of commencement—for purposes of priority and has the responsibility to ensure the notice of commencement is recorded. Here, the lender apparently did not realize the contractor had already recorded a notice of commencement at the time it recorded its mortgage. 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

“Time Is Money!” In Construction and This Is Why There Is a Liquidated Damages Provision

February 01, 2022 — David Adelstein - Florida Construction Legal Updates
In construction, the adage “Time is Money!” rings true for all parties involved on a project. This includes an owner of a project that wants a project completed on time, i.e., by a substantial completion date. While substantial completion is often defined as when an owner can use a project for its intended purpose, this intended purpose typically equates to beneficial occupancy (in new construction) and other factors as identified in the contract. The best mechanism for an owner to reinforce time and the substantial completion date is through a liquidated damages provision (also known as an LD provision) that includes a daily monetary rate for each day of delay to the substantial completion date. A liquidated damages provision is not designed, and should NEVER be designed, to serve as a penalty because then it would be unenforceable. Instead, it should be designed to reasonably compensate an owner for delay to the substantial completion date that cannot be ascertained with any reasonable degree of certainty at the time the contract is being negotiated and executed. (Liquidated damages are MUCH easier to prove than actual damages an owner may incur down the road.) As an owner, you don’t really want to assess liquidated damages because that means the project is not substantially completed on time. And, in reality, a timely completed and performing project should always be better and more profitable than a late and underperforming project. However, without the liquidated damages provision, there isn’t a great way to hold a contractor’s feet to the fire with respect to the substantial completion date. 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

Meet the Forum's In-House Counsel: RACHEL CLANCY

November 16, 2023 — Jessica Knox - The Dispute Resolver
Company: Lobar, Inc. Email: rachel.clancy@lobar.com Website: www.lobar.com College: York College of Pennsylvania (Bachelor of Science in Marketing, 2001) Graduate School: Florida Institute of Technology (MBA in Acquisition and Contract Management, 2004) Law School: Penn State University, Dickinson School of Law (JD 2007) States Where Company Operates/Does Business: Headquarters are in Dillsburg, PA; construction projects located in Pennsylvania, Maryland, New York, and West Virginia Q: Describe your background and the path you took to becoming in-house counsel. A: Before law school, I spent three years as a Contract Specialist writing construction contracts for the Department of Defense, Naval Facilities Command in New Jersey. I had no idea I'd eventually find my way back to construction. After law school, I spent five years in the business department of a local law firm handling corporate formations, a variety of commercial contracts, and learning some real estate law. After another four years in-house with a data and marketing company in Harrisburg, I accepted my current position with Lobar, where I've been for the last seven years. Read the court decision
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Reprinted courtesy of Jessica Knox, Stinson LLP
Ms. Knox may be contacted at jessica.knox@stinson.com

Contractor’s Coverage For Additional Insured Established by Unilateral Contract

November 18, 2011 — Tred R. Eyerly - Insurance Law Hawaii

The contractor was covered as an additional insured under the subcontractor’s policy even though the parties had never actually signed an agreement to add the contractor to the policy. Evanston Ins. Co. v. Westchester Surplus Lines Ins. Co., 2011 U.S. App. LEXIS 20081 (9th Cir. Oct. 3, 2011).

The policies held by Bellevue Master, the general contractor, required it to be an additional insured under any subcontractor’s liability policy. Northwest Tower Crane Services was a subcontractor. Bellevue Master LLC, faxed a message that Northwest could continue to be a subcontractor on the project if it complied with Bellevue Master’s insurance requirements. Northwest contacted its insurance broker and requested an insurance certificate be issued to Bellevue Master so that it would be an additional insured under Northwest’s policy.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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