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Real Estate & Construction News Round-Up (11/03/21)

December 06, 2021 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
Amenity-rich buildings become a key focus in enticing employees back into the office, supply chain links are strained by a lack of storage capacity in warehouses and port areas, green lease signings are on the uptick, and more.

• In an effort to draw employees back into the office and retain talent in a tight labor market, businesses are spending more than ever on upscale workspaces, paying high rents for modern, amenity-rich buildings. (Peter Grant, The Wall Street Journal)
• As sustainability and ESG factors become increasingly important, net-zero carbon commitments are emerging as the next big “must-have” for commercial real estate owners, as more than 100 businesses and organizations have signed on to the World Green Building Council’s Net Zero Carbon Buildings Commitment, which seeks to decarbonize the buildings sector by 2050 and get halfway there by 2030. (Elsa Wenzel, GreenBiz)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Withdrawal of an Admission in California May Shift Costs—Including Attorneys’ Fees—Incurred in Connection with the Withdrawal

January 24, 2018 — Tony Carucci – Real Estate Litigation Blog
Under California Code of Civil Procedure section 2033.300, a court may permit a party to withdraw an admission made in response to a request for admission upon noticed motion. The court may only do so, however, “if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and that the party who obtained the admission will not be substantially prejudiced in maintaining that party’s action or defense on the merits.” Cal. Code Civ. Proc. § 2033.300(b). The court may also “impose conditions on the granting of the motion that are just, including, but not limited to . . . (2) An order that the costs of any additional discovery be borne in whole or in part by the party withdrawing or amending the admission.” Cal. Code Civ. Proc. § 2033.300(c). Read the court decision
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Reprinted courtesy of Tony Carucci, Snell & Wilmer
Mr. Carucci may be contacted at acarucci@swlaw.com

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Traub Lieberman Partner Eric D. Suben Obtains Federal Second Circuit Affirmance of Summary Judgment in Insurer’s Favor

April 10, 2023 — Eric D. Suben - Traub Lieberman
In the underlying action, a property owner hosting a motorcycle rally was sued after a motorcycle collided with an auto near the entrance to the premises, injuring the cyclists. The cyclists sued the property owner, among others, alleging failure to supervising traffic on the adjoining roadway. The property owner tendered the claim under its CGL policy, which was endorsed with an “absolute auto exclusion,” precluding coverage for claims “arising out of or resulting from the ownership, maintenance, use or entrustment to others of any…auto.” The CGL insurer disclaimed coverage based on the endorsement. In the ensuing coverage litigation, Traub Lieberman represented the insurer, and moved for summary judgment arguing that the “absolute auto exclusion” was dispositive of coverage on the facts alleged, citing case law from New York state courts enforcing similar exclusions to preclude coverage for multi-vehicle accidents. The insured argued in opposition that the outcome should be controlled by Essex Insurance Company v. Grande Stone Quarry, LLC, 82 A.D.3d 1326, 918 N.Y.S.2d 238 (3rd Dep’t 2011), in which the court declined to apply such exclusion in the case of a single-vehicle accident caused by a dangerous condition of the insured’s premises. The federal district judge disagreed with the insured’s argument in this regard, granting Traub Lieberman’s motion for summary judgment in favor of the insurer. Read the court decision
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Reprinted courtesy of Eric D. Suben, Traub Lieberman
Mr. Suben may be contacted at esuben@tlsslaw.com

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Prevailing Payment Bond Surety Entitled to Statutory Attorneys’ Fees Even if Defended by Principal

January 09, 2023 — Garret Murai - California Construction Law Blog
For contractors involved in California public works projects the scenario is not uncommon: The general contractor awarded the public works project is required to obtain a payment bond for the benefit of subcontractors and suppliers and the payment bond surety issuing the payment bond requires the general contractor to defend and indemnify the surety from and against any claims against the payment bond. In Cell-Crete Corporation v. Federal Insurance Company, 82 Cal.App.5th 1090 (2022), the 4th District Court of Appeal examined whether a payment bond surety, who prevails in a claim against the payment bond, is entitled to statutory attorneys’ fees when the party actually incurring the attorneys’ fees was the general contractor, pursuant to its defense and indemnity obligations, as opposed to the surety itself. The Cell-Crete Case General contractor Granite Construction Company was awarded a public works contract issued by the City of Thermal known as the Airport Boulevard at Grapefruit Boulevard and Union Pacific Railroad Grade Separation Project. We’ll just call it the “Project.” Subcontractor Cell-Crete Corporation entered into a subcontract with Granite for lightweight concrete and related work. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Does Article 2 of the Uniform Commercial Code Impact Your Construction Project?

November 07, 2022 — Chris Cazenave - ConsensusDocs
The Uniform Commercial Code (UCC) is a set of statutes governing commercial transactions. Every state has adopted the UCC or some version of it. Understanding when and how the UCC applies to construction contracts is important because it can affect the agreement’s terms. Article 2 of the UCC applies to the sales of goods, which the UCC defines very broadly to mean “all things (including specialty manufactured goods) which are movable . . . other than money in which the price is to be paid . . . .” UCC § 2-105. For the construction industry, UCC Article 2 governs most, if not all, purchases of materials and equipment installed or incorporated into the project. As a result, contractors and subcontractors should be familiar with the circumstances under which Article 2 may apply and how it may affect the project. This article provides a brief overview of when Article 2 may affect your construction project and why it matters. The article also generally covers the UCC’s potential effects on the applicable statute of limitations, implied warranties, and when the obligation to make the payment arises. Read the court decision
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Reprinted courtesy of Chris Cazenave, Jones Walker LLP (ConsensusDocs)
Mr. Cazenave may be contacted at ccazenave@joneswalker.com

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Nevada State Senator Says HOA Scandal Shows Need for Construction Defect Reform

November 13, 2013 — CDJ STAFF
A Nevada State Senator sees the ongoing HOA scandal as a sign that the state’s construction defect laws need to be revised. State Senator Mike Schneider says that the law “is flawed and actually makes it too easy to do what these folks have done.” What these folks have done has, of course, lead to a number of indictments and guilty pleas in federal court. One problem that Senator Schneider points to in current Nevada construction defect law is that homeowner attorneys get 40% of any settlement, sometimes leaving homeowners without sufficient funds to repair the defects. “It’s gotten out of hand. We pay some outrageous costs and fees in this cases.” Read the court decision
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Reprinted courtesy of

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Insurance Client Alert: Mere Mailing of Policy and Renewals Into California is Not Sufficient Basis for Jurisdiction Over Bad Faith Lawsuit

January 28, 2015 — Valerie A. Moore and Christopher Kendrick – Haight Brown & Bonesteel LLP
In Greenwell v. Auto-Owners Ins. Co. (No. C074546, filed 1/27/15), a California appeals court held that the use of a mailing address to send policies and renewals into California did not support jurisdiction for a California resident's bad faith lawsuit against a Michigan insurer over property coverage for a fire loss to a building in Arkansas. In Greenwell, the insured was a California resident engaged in real estate investment. He purchased an apartment building in Little Rock, Arkansas. Using the services of an insurance broker in Little Rock, he purchased a package of general liability and commercial property insurance for the building from Auto-Owners Insurance Company, a Michigan insurer not licensed in California. The policy listed the insured's business address in California, the policy was mailed there, and renewed three times via the insured's California address. Reprinted courtesy of Valerie A. Moore, Haight Brown & Bonesteel LLP and Christopher Kendrick, Haight Brown & Bonesteel LLP Ms. Moore may be contacted at vmoore@hbblaw.com, Mr. Kendrick may be contacted at ckendrick@hbblaw.com Read the court decision
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Forethought Is Key to Overcoming Construction Calamities

February 10, 2020 — Mitch Cohen - Construction Executive
Without warning, an under-construction structure in the southern United States suffered a catastrophic collapse. The tragedy resulted in the death of several people. As a result, engineering and construction post-collapse forensics experts engaged in an 18-month investigation. Those involved in the design and build project included the general contractor hired by the owner, a prime engineer, a consulting peer-review engineer and a prime structural design firm supported by a sub-consulting structural engineer. Although significant cracking was noticed several weeks before the failure, no one sounded the alarm or deemed the cracking worthy of corrective action. In their findings, forensic experts found the collapse resulted from the combined failure of the general contractor, engineers and even the owner, who all failed to shut down the work once the cracking reached unacceptable levels and/or take the appropriate actions needed to secure the public safety and mitigate the risk. This was even after the general contractor requested that the engineer-of-record and design manager assess the structure’s extreme cracking. Consequently, the choice to not seriously investigate the crack or seek an independent peer review to design a rectification plan contributed directly to the tragedy. This is typically referred to within the industry as a “negligent professional design error.” Reprinted courtesy of Mitch Cohen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Cohen may be contacted at mitch.cohen@rtspecialty.com

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