FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Supreme Court Rejects “Wholly Groundless” Exception to Question of Arbitrability

February 06, 2019 — Justin Fortescue - White and Williams LLP
In newly appointed Supreme Court Justice Brett Kavanaugh’s first opinion, the United States Supreme Court held that the “wholly groundless” exception to arbitrability, which some federal courts had relied on as justification to decide questions of arbitrability over the express terms of a contract, was inconsistent with the Federal Arbitration Act and Supreme Court precedent. Based on this decision, where a contract delegates the question of arbitrability to an arbitrator, courts must respect the parties’ contract and refer the question to the arbitrator. Schein v. Archer & White, 586 U.S. __ (2019). In Schein, Archer & White brought a lawsuit against Henry Schein alleging violations of federal and state antitrust laws and seeking both monetary damages and injunctive relief. The relevant contract between the parties contained an arbitration provision that provided:

“Any dispute arising under or related to this Agreement (except for actions seeking injunctive relief . . .) shall be resolved by binding arbitration in accordance with the arbitration rules of the American Arbitration Association.”

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Reprinted courtesy of Justin Fortescue, White and Williams LLP
Mr. Fortescue may be contacted at fortescuej@whiteandwilliams.com

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Homeowners Not Compelled to Arbitration in Construction Defect Lawsuit

January 06, 2012 — CDJ STAFF

A California appeals court has ruled that developers cannot enforce CC&Rs in a case where a developer cited an arbitration clause it had inserted into the CC&R. The homeowners are alleging construction defect and wished to sue the developer who claimed a right to this under the CC&Rs.

The Marina del Rey Argonaut reports that particular appeal dealt only with whether the developer could compel arbitration. The underlying construction defect issues will subsequently have to be determined at trial.

The attorney for the homeowners’ association, Dan Clifford, noted that “arbitration has to be agreed to by both parties.” The covenant was drafted by the developer and in addition to requiring arbitration, it had a clause that it could not be amended without the consent of the developers. The court ruled that CC&Rs “can be enforced only by the homeowners association, the owner of a condominium or both.”

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Out of the Black

May 30, 2022 — John Drentlaw - Construction Executive
Even if you previously weren’t familiar with the term “black swan event,” you’ve likely become intimately familiar with what one looks like over the past two years. Coined by author Nassim Taleb in his book The Black Swan: The Impact of the Highly Improbable, the term refers to a rare, unpredictable event—perhaps, say, a pandemic—that has an extreme impact. “Extreme” certainly seems to be an accurate description of the impact that the COVID-19 pandemic has had on the construction industry, at nearly every level. The Commercial Construction Index (CCI) fell from 74 to 56 during Q2 2020 and remained statistically unchanged through Q3 of that year. Recovery has been slow, with the CCI remaining eight points below pre-pandemic levels through the end of 2021. Prices for raw materials such as lumber and steel have been extremely volatile, reaching historic highs and dramatic lows. March and April of 2020 alone saw 1.1 million jobs disappear from the industry—roughly half as many jobs as were lost throughout the entire Great Recession (although many of these jobs have since returned). While the industry has persevered through what should be the worst of these effects, many contractors and project owners are now wondering: How can we predict the next black swan event? Reprinted courtesy of John Drentlaw, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Designer of World’s Tallest Building Wants to Turn Skyscrapers Into Batteries

July 31, 2024 — Will Wade - Bloomberg
The architecture firm that designed the world’s tallest building is considering ways to build skyscrapers that can store energy using gravity. Skidmore, Owings & Merrill LLP has developed a series of prototype designs that use electric motors to elevate massive blocks, creating potential energy that can be converted into electricity when the blocks are lowered. The designs are based on technology developed by partner Energy Vault Holdings Inc. as an alternative to lithium-ion batteries and other types of chemical cells. They are seeking developer partners interested in offsetting greenhouse gas pollution from buildings, which the United Nations estimates are responsible for almost 40% of global emissions. The concept is similar to widely used pumped hydroelectric plants. Energy Vault completed its first major project this month near Shanghai, a stand-alone storage system that can supply as much as 25 megawatts of power for four hours. Other companies are testing new types of gravity storage systems, including ones using abandoned oil wells and mines. Read the court decision
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Reprinted courtesy of Will Wade, Bloomberg

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Be Careful How You Terminate: Terminating for Convenience May Limit Your Future Rights

January 19, 2017 — Brett M. Hill - Ahlers & Cressman, PLLC Blog
Many construction contracts contain a termination clause that allows a contractor to be terminated either for convenience or for cause. Termination for convenience and termination for cause clauses have been discussed previously on the blog here, here and here. The distinction between a termination for convenience or for cause is an important one. If a contractor is terminated for convenience, the rights of the party who has terminated the contractor for convenience could be limited in the future. This is specifically true as to any defects in the terminated contractor’s work that are discovered after the termination for convenience. This issue was addressed in an Oregon Court of Appeals case where a general contractor attempted to recover costs incurred in correcting a terminated subcontractor’s work after the subcontractor was terminated for convenience. Shelter Prods. v. Steel Wood Constr., Inc., 257 Or. App 382 (2013). In that case, the subcontractor sued the general contractor for its termination expenses. The general contractor asserted an offset/backcharge claim for damages incurred by the general contractor in correcting the subcontractor’s defective work. The general contractor had incurred the costs after it had terminated the subcontractor. The general contractor did not notify the subcontractor that its work was defective and did not give the subcontractor an opportunity to cure before the repairs were completed. Read the court decision
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Reprinted courtesy of Brett M. Hill, Ahlers & Cressman, PLLC
Mr. Hill may be contacted at bhill@ac-lawyers.com

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California Court of Appeal Vacates $30M Non-Economic Damages Award Due to Failure to Properly Apportion Liability and Attorney Misconduct During Closing Argument

February 08, 2021 — Krsto Mijanovic, Peter A. Dubrawski, Arezoo Jamshidi & Catherine M. Asuncion - Haight Brown & Bonesteel LLP
On January 20, 2021, the California Court of Appeal, Second District, Division Six (Ventura), in Plascencia v. Deese (B299142), vacated a $30 million non-economic damages award in a highway fatality case because: (1) the award did not properly apportion non-economic damages among everyone at fault in violation of Proposition 51; and (2) the amount of the award appeared to have been influenced by plaintiffs’ counsel’s misconduct and prejudicial remarks during closing argument. In Plascencia, the plaintiffs sued several defendants for the wrongful death of their daughter arising from a highway fatality accident. All the defendants settled or were dismissed before trial except the trucking defendants. The highway fatality was caused when one defendant driver made an illegal U-turn on a highway as she left another defendant’s fruit stand. The plaintiffs’ daughter swerved to avoid the U-turn driver, lost control of her car, and crashed into the back of the trucking defendants’ diesel tractor-trailer. The truck driver had parked the truck on the side of the highway near the fruit stand, which the trucking defendants’ expert conceded fell below the standard of care. Reprinted courtesy of Krsto Mijanovic, Haight Brown & Bonesteel LLP, Peter A. Dubrawski, Haight Brown & Bonesteel LLP, Arezoo Jamshidi, Haight Brown & Bonesteel LLP and Catherine M. Asuncion, Haight Brown & Bonesteel LLP Mr. Mijanovic may be contacted at kmijanovic@hbblaw.com Mr. Dubrawski may be contacted at pdubrawski@hbblaw.com Ms. Jamshidi may be contacted at ajamshidi@hbblaw.com Ms. Asuncion may be contacted at casuncion@hbblaw.com Read the court decision
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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

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Tarriffs, a Pandemic and War: Construction Contracts Must Withstand the Unforeseeable

May 16, 2022 — Brett Moritz, Adrian Bastianelli III & Adam Handfinger - Construction Executive
Since 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. Read the court decision
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