Alarm Cries Wolf in California Case Involving Privette Doctrine
May 06, 2019 —
Garret Murai - California Construction Law BlogIt’s one of the most quoted phrases in legal history: “Shouting fire in a [crowded] theater.”
It comes from the U.S. Supreme Court’s landmark 1919 decision in Schenck v. U.S. and has come to stand for the proposition that not all speech, in particular dangerous speech, is protected by the First Amendment.
The next case also involves a false alarm. But not of the First Amendment kind.
In Johnson v. The Raytheon Company, Inc., California Court of Appeal for the Second District, Case No. B281411 (March 8, 2019), a false alarm investigated by maintenance engineering staff led to a Privette Doctrine claim against a property owner when a ladder on which the maintenance staff was standing slipped on wet flooring.
Johnson v. Raytheon
Lawrence Johnson worked as a maintenance engineer for ABM Facilities Services, Inc. ABM was hired by Raytheon Company, Inc. to staff the control room at one of Raytheon’s facilities in Southern California. Among other things, control room staff monitored water cooling towers owned by Raytheon to ensure that the water in the cooling towers were maintained at minimum levels.
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Garret Murai, Wendel, Rosen, Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Maximizing Contractual Indemnity Rights: Components of an Effective Provision
December 02, 2015 —
William Kennedy – White and Williams LLPTort law is aimed at providing compensation to the victims of negligence. Tort law encourages plaintiffs to cast a wide net, pursuing claims or suits against not only those whose fault seems manifestly primary, but also against defendants whose causal exposure is minimal, against those whose exposure is purely by operation of law. As discussed in the first installment of this series, "Maximizing Contractual Indemnity: Problems with Common Law," three common law principles – vicarious liability, joint and several liability, and common law indemnity – cause some parties to pay in excess of their actual degree of causal fault. Contractual indemnity can remedy that harsh result.
Part Two: Components of an Effective Provision
Properly composed, “broad form” contractual indemnity provisions permit an Indemnitee to shift the full range of financial consequences from tort exposure, including civil damages, defense fees, expert fees, and litigation expenses. Such contracts permit indemnity even where the underlying damage was incurred due to a degree of negligence or fault on the part of the Indemnitee. Such contracts can also allow an Indemnitee to shift to the Indemnitor the risk of loss for someone from whom the Indemnitor would otherwise be immune from suit (e.g., the Indemnitor’s employees). A well-written contract can even convert an entity which is an Indemnitor as to one party (e.g., a general contractor which has to indemnify a property owner) into an Indemnitee as to another party (e.g., a subcontractor) for the very same risk.
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William Kennedy, White and Williams LLPMr. Kennedy may be contacted at
kennedyw@whiteandwilliams.com
Flood Sublimit Applies, Seawater Corrosion to Amtrak's Equipment Not Ensuing Loss
November 10, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe insurers were granted summary judgment on three issues regarding Amtrak's claim for damages caused by Hurricane Sandy. Amtrak v. Aspen Sec. Ins. Co., 2016 U.S. App. LEXIS 16074 (2nd Cir. Aug. 31, 2016).
Hurricane Sandy caused flooding which damaged two of Amtrak's tunnels under the East and Hudson Rivers. Seawater from the flooding caused extensive damage to equipment in the tunnels. The district court granted summary judgment to the insurers on the following issues: (1) the damage caused by an inundation of water in the tunnels was subject to the policies' $125 million flood sublimit; and (2) the corrosion of equipment after Amtrak pumped out the seawater was not an "ensuing loss" and therefore was also subject to the flood sublimit.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Subcontractors Have a Duty to Clarify Ambiguities in Bid Documents
August 19, 2015 —
Craig Martin – Construction Contractor AdvisorSeveral months ago, I wrote about an escalator subcontractor that sued a general contractor, demanding payment for work completed based on approved shop drawings. The trial court agreed with the subcontractor, but the general contractor appealed. Ten months later, the Court of Appeals reversed, finding that the subcontractor had a duty to bring to the general contractor’s attention major discrepancies or errors they detect in the bid documents.
“The subcontractor failed to disclose ambiguities in the plans and must suffer the peril.”
Construction Difficulties
The subcontractor installed 32 inch escalators throughout the project, but the plans called for 40 inch escalators. The general contractor and subcontractor could not reach agreement on how the dispute should be resolved. The subcontractor sued the general to get paid for replacing the escalators and the general sued to subcontractor for concessions it had to pay to the owner.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Liquidating Agreements—Bridging the Privity Gap for Subcontractors
September 03, 2015 —
Craig Martin – Construction Contractor AdvisorWhat is a subcontractor to do when the owner has demanded additional work, but has refused to pay for it? Typically, a subcontractor cannot sue the owner because the subcontractor doesn’t have a contract with the owner. Perhaps the subcontractor and general contractor should enter into a liquidating agreement through which the general contractor can pursue the claim on behalf of the subcontractor.
Liquidating agreements bridge the privity gap between owners and subcontractors who sustain damages because of the others actions. Liquidating agreements or pass-through agreements grant the general contractor a release of its liability to the subcontractor after the general contractor prosecutes the subcontractor’s pass-through claim against the owner and gives the subcontractor any recovery.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Caterpillar Said to Be Focus of Senate Overseas Tax Probe
March 26, 2014 —
Richard Rubin and Jesse Drucker - BloombergA U.S. Senate investigative panel is examining Caterpillar Inc. (CAT) and whether the company improperly avoided U.S. taxes by moving profits outside the country, said three people familiar with the inquiry.
The Senate’s Permanent Subcommittee on Investigations will hold a hearing in early April, said two of the people. They spoke on condition of anonymity before an official announcement.
Rachel Potts, a spokeswoman for Caterpillar, declined to comment. Two staff members for the subcommittee declined to comment.
In 2009, Daniel Schlicksup, an employee who had worked on tax strategy, alleged in a lawsuit in federal court that Caterpillar used a “Swiss structure” to shift profits to offshore companies and avoid more than $2 billion in U.S. taxes. He also alleged that Caterpillar used a “Bermuda structure” involving shell companies to return profits to the U.S. without paying required taxes.
Mr. Rubin may be contacted at rrubin12@bloomberg.net; Mr. Drucker may be contacted at jdrucker4@bloomberg.net
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Richard Rubin and Jesse Drucker, Bloomberg
Tarriffs, a Pandemic and War: Construction Contracts Must Withstand the Unforeseeable
May 16, 2022 —
Brett Moritz, Adrian Bastianelli III & Adam Handfinger - Construction ExecutiveSince the tariffs on steel and the first wave of the COVID-19 pandemic, the construction industry has been reeling from the impact of material shortages and price increases, labor shortages, breakdowns in the supply chain and the inflationary effect of these issues. Unfortunately, the war in Ukraine has only exacerbated the situation.
International conflicts can constrain supply, resulting in delays and price increases for contractors, subcontractors and suppliers. The disruption caused by the war is expected to be particularly acute due to the role that Russia and Ukraine play in the world economy and the effect of the economic sanctions that have been imposed on Russia by the United States and other countries. Russia controls approximately 10% of the global copper reserves and is estimated to produce about 10% of the world’s nickel supply. It also provides at least 30% of Europe’s oil and natural gas. Ukraine is a significant source of raw materials, such as iron. Thus, the war will cause significant shortages and price increases to the global construction industry. There are already reports of delays and cost increases for commodities such as nickel, aluminum, copper and—most importantly—steel, which have resulted in impacts to construction costs and schedules. Suppliers are especially sensitive to the volatile markets caused by these conditions. Some are insisting on automatic price increases in their purchase orders.
All of this, not to mention the anticipation of what may come next, points to the necessity for a new paradigm to achieve a successful project. It is more important today than ever that owners, contractors, subcontractors and suppliers reasonably address the economic and time impacts of these unforeseeable events in preparing contracts for future work and in administering existing contracts. Otherwise, the risk of a default on more than one level may put projects in jeopardy, to no one’s benefit.
Reprinted courtesy of
Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Only Two Weeks Until BHA’s Texas MCLE Seminar in San Antonio
April 28, 2014 —
Beverley BevenFlorez-CDJ STAFFThere are just two weeks remaining to sign up for Bert L. Howe & Associate’s inaugural Texas MCLE seminar, “THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION.” This activity will be presented on Friday, May 9th at noon in BHA’s San Antonio offices, located at 17806 IH 10, Suite 300, San Antonio, TX 78256. There is no cost for attendance at this seminar and lunch will be provided.
This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.0 credit hours, of which 0.0 credit hours will apply to legal ethics/professional responsibility credit. The seminar will be presented by Don MacGregor, general contractor and project manager.
Water intrusion through doors, windows and roofing systems, as well as soil and foundation-related movement, and the resultant damage associated therewith, are the triggering effects for the vast majority of homeowner complaints today and serve as the basis for most residential construction defect litigation. The graphic and animation-supported workshop/lecture activity will focus on the residential construction process from site preparation through occupancy, an examination of associated damages most often encountered when investigating construction defect claims, and the inter-relationships between the developer, general contractor, sub trades and design professionals. Typical plaintiff homeowner/HOA expert allegations will be examined in connection with those building components most frequently associated with construction defect and claims litigation.
The workshop will examine:
* Typical construction materials, and terminology associated with residential construction
* The installation process and sequencing of major construction elements, including interrelationship with other building assemblies
* The parties (subcontractors) typically associated with major construction assemblies and components
* An analysis of exposure/allocation to responsible parties.
Attendance at THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION seminar will provide the attendee with:
* A greater understanding of the terms and conditions encountered when dealing with common construction defect issues
* A greater understanding of contractual scopes of work encountered when reviewing construction contract documents
* The ability to identify, both quickly and accurately, potentially responsible parties
* An understanding of damages most often associated with construction defects, as well as a greater ability to identify conditions triggering coverage
Course #: 901290467 / Sponsor #: 14152.
To register for the event, please email Don MacGregor at dmac@berthowe.com. If you have any questions, please feel free to contact Don at (210) 540-9017 (office) or (714) 713-4956 (cell).
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