Construction Employment Rose in 38 States from 2013 to 2014
March 19, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Associated General Contractors of America (AGC) reported that 38 states experienced construction job growth from January 2013 to January 2014, and 27 states showed gains from December 2013 to January 2014. AGC stated that “the fact so many states added construction jobs for the year and month despite harsh winter conditions in many parts of the country is a sign that demand appears to be recovering.”
Kansas ranked first in the “12-month gain or loss” category with a 10.7% gain. Wyoming came in last with a -5.9% over a 12-month period. However, if examining a one-month period (between December 2013 and January 2014), Idaho showed the highest growth with a 5.8% gain, while Vermont was ranked 51 at -5.5%.
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Insurer’s “Failure to Cooperate” Defense
November 14, 2018 —
David Adelstein - Florida Construction Legal UpdatesThe “failure to cooperate” defense is a defense an insurer may raise when its insured fails to cooperate with it in the defense of the claim against the insured. If an insurer takes this position, it will typically be denying both defense and indemnification obligations, meaning the insured could be forfeiting coverage that otherwise exists through his/her/its failure to cooperate with the insurer. This defense by the insurer is not absolute as recently explained by the Fourth District in Barthelemy v. Safeco Ins. Co. of Illinois, 43 Fla.L.Weekly D2379a (Fla. 4th DCA 2018) discussing the elements of this failure to cooperate defense.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Recent Amendments and Caselaw Affecting the Construction Industry in Texas
April 19, 2022 —
Frederick H. Wen - Gordon Rees Scully Mansukhani, LLPHere are some recent Texas legislative amendments and Texas Supreme Court cases from the past year concerning the construction industry in Texas.
1) Recent Legislative Amendments Concerning the Construction Industry:
a) The Texas Legislature throws a “Spear” in the Lonergan Doctrine to reduce general/subcontractor liability for owner-provided plans and specs:
Forty-nine out of the fifty states follow the Spearin Doctrine under which owners warrant the accuracy and sufficiency of owner-provided plans and specs in construction contracts. On the other hand, for over a century, Texas has followed the Lonergan Doctrine under which, absent contractual language to the contrary, a general contractor/subcontractor, instead of the owner, bears the risk of deficiencies in owner-provided design documents, once they started construction. Texas Senate Bill 219, which went into effect on September 1, 2021, finally changed that and brought Texas in line with the rest of the country, with a few exceptions.
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Frederick H. Wen, Gordon Rees Scully Mansukhani, LLPMr. Wen may be contacted at
fhwen@grsm.com
COVID-19 and Mutual Responsibility Clauses
June 01, 2020 —
Joseph M. Leone - ConsensusDocsAs everyone knows, there is a tremendous amount of uncertainty in the construction industry due to the COVID-19 pandemic. Schedules, productivity, safety processes, and seemingly everything else are being affected. In these difficult times, most contractors are making every effort to work together to solve the problems caused by COVID-19. But what happens when differences arise between project owners, contractors, and subcontractors as to the effect of COVID-19 on a project? One party may want to continue pushing the schedule, others may want to slow down, or, more likely, not be able to keep up with the original schedule because of some reason related to COVID-19. As between a prime contractor and a subcontractor, a mutual responsibility clause can provide some clarity or, unfortunately, depending on how the subcontract is written, confusion.
Almost all subcontracts have a clause which flows down the prime contractor’s obligations on a project to the subcontractor as applicable to the subcontractor’s work. Known as “flow-down” clauses, this clause works in one direction; obligations of the prime contractor “flow-down” to the Subcontractor. A mutual responsibility clause, in essence, works in both directions. The subcontractor is required to perform its obligations consistent with the prime contractor’s obligations to the owner and the subcontractor is granted the same rights against the prime contractor which the prime contractor has against the owner. Obligations flow down and rights flow up. The rights and obligations flowing through the prime contractor include, the obligation to perform the work in accordance with the plans and specifications, the obligation to meet the schedule constraints in the prime agreement, and the right to extensions of time and change orders to the extent the prime contractor obtains the same.
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Joseph M. Leone, Drewry Simmons Vornehm, LLP Mr. Leone may be contacted at
jleone@dsvlaw.com
Assignment of Construction Defect Claims Not Covered
April 20, 2017 —
Tred R. Eyerly - Insurance Law HawaiiAssignment of insurance proceeds as part of a settlement against the subcontractor for faulty workmanship was not covered under the CGL policy in accordance with Illinois law. Allied Prop. & Cas. Ins Co v. Metro North Condominium Assoc., 2017 U.S. App. LEXIS 4107 (7th Cir. March 8, 2017).
Metro North Condominium Association hired a developer to build a condominium. The developer used CSC Glass to install the building's windows. CSC installed the windows defectively, causing the building to sustain significant water damage following a rain storm.
Metro North sued the developer, who turned out to be insolvent. Metro North amended its complaint to add a claim against CSC for breach of the implied warranty of habitability. Metro North eventually dismissed its lawsuit in exchange for an assignment of CSC's policy with Allied and payment of any right to $700,000 worth of insurance coverage. The settlement specified that it was not intended to compensate Metro North for the cost of repairing or replacing CSC's defectively installed windows, but rather for the damage to the remaining parts of Metro North's condominium.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
City of Birmingham Countersues Contractor for Incomplete Work
March 12, 2014 —
Beverley BevenFlorez-CDJ STAFFBack in December of 2013, WVTM News reported that Chris Woods, a contractor, filed a lawsuit against the City of Birmingham, Alabama, demanding $1.5 million for the West Police Precinct and two other projects he had been contracted on. However, “Birmingham claimed Woods was fired for not completing projects on time and other contract breaches.”
On March 7th, WVTM News reported that the City of Birmingham has filed a counterclaim against Woods, alleging that he “owes $1.2 million for incomplete work.” The city listed his “inability to meet specific construction deadlines and finish either project on time as factors for his termination.” Woods, however, blamed the city for delays, citing multiple design changes requested by Birmingham.
The city’s counterclaim also alleged that “Star Insurance Company, ‘identified major, numerous defects in the work that Woods had performed prior to the termination of the West Precinct Project.’”
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Quick Note: Insurer’s Denial of Coverage Waives Right to Enforce Post-Loss Policy Conditions
November 02, 2017 —
David Adelstein - Florida Construction Legal UpdatesThere is ostensibly a big difference between an insurance carrier DENYING coverage and simply asking for additional information, as permitted under the post-loss conditions of a property (first-party) insurance policy, right? Typically, the answer is yes and there is a big difference. If an insured refuses to comply with post-loss conditions under their insurance policy, they are shooting themselves in the foot (in most cases) by giving the insurer an out when it comes to coverage. If an insurance carrier denies coverage, however, the insurance carrier cannot then require its insured to comply with post-loss conditions in the property insurance policy.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
California Supreme Court Endorses City Authority to Adopt Inclusionary Housing Ordinance
August 04, 2015 —
Garret Murai – California Construction Law BlogThe following post was written by my partner Neal Parish on the California Supreme Court’s recent (and surprising) new decision which eases the way for local governments to adopt inclusionary housing ordinances, to the chagrin of residential housing developers.
On June 15, 2015, in a decision that came as a surprise to many observers, the California Supreme Court unanimously rejected a challenge to San Jose’s inclusionary housing ordinance which had been filed by the California Building Industry Association (CBIA) and supported by the Pacific Legal Foundation. The Court disagreed with CBIA’s position, which claimed that jurisdictions must first show a nexus between new market-rate residential development and the need for affordable housing before adopting any inclusionary housing requirement. The Court instead held that in adopting an inclusionary housing ordinance the City needs to simply demonstrate a real and substantial relationship between the ordinance and the public interest, and further held that the ordinance did not represent a taking of developers’ property interests.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com