CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Understand and Define Key Substantive Contract Provisions

March 23, 2020 — Phillip L. Sampson Jr. & Richard F. Whiteley, Construction Executive
The following contract provisions should be clearly understood before undertaking any construction project commences. Force Majeure Often referred to as an “Act of God,” a force majeure is an event, typically beyond the parties’ control, that prevents performance under a contract. To determine if a contractor need a force majeure clause in its contract, it should ask whether there may be instances where events beyond the contractor’s control could impact its contractual performance? If so, it will want this clause. Courts currently treat force majeure as an issue of contractual interpretation, focusing on the express language in the contract. Consequently, the scope and applicability of a force majeure clause depends on the contract’s terms. Using broad language in a force majeure clause may help protect against unforeseen events. But to the extent possible, parties should describe with particularity the circumstances intended to constitute a force majeure. The law relating to force majeure also fairly consistently provides that parties cannot avoid contractual obligations because performance has become economically burdensome. Courts have refused to apply force majeure clauses where an event only affects profitability. Recent attempts to categorize tariffs on construction materials as a force majeure have failed. Unless a tariff or tax is specifically listed as a force majeure event, it is unlikely to constitute a force majeure because it only affects profitability. Reprinted courtesy of Phillip L. Sampson Jr. & Richard F. Whiteley, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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How Artificial Intelligence Can Transform Construction

February 22, 2021 — Jeff Rubenstone - Engineering News-Record
Artificial intelligence and machine-learning algorithms have struggled to make sense of chaotic construction jobsites, but recent years have seen industry firms build the vast data lakes and analytics systems necessary for these machines to provide useful advice on how to plan, schedule and execute projects. In some cases, these AI advisors have become a standard part of some firms’ project delivery methods. But it’s still a challenge to convince construction professionals to listen to these AI advisors, and there are emerging questions of how risk will be allocated once algorithm-driven decisions start to steer projects. Reprinted courtesy of Jeff Rubenstone, Engineering News-Record Mr. Rubenstone may be contacted at rubenstonej@enr.com Read the full story... Read the court decision
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Toll Brothers Snags Home Builder of the Year Honors at HLS

May 13, 2014 — Beverley BevenFlorez-CDJ STAFF
Builder magazine named Toll Brothers as their Builder of the Year during their Housing Leadership Summit in Laguna Niguel, California, according to Big Builder: “The Builder of the Year, BUILDER’s highest honor each year, is recognized for its excellence in successful business strategy, its achievements, and its corporate leadership.” “The company’s up-market price-point, lifestyle segmentation positions, and its best-of-breed execution set it apart from competitors in production home building and development as one of housing’s most powerful and promising brands,” BUILDER editorial director John McManus said while presenting the award, as quoted by Big Builder. “Toll Brothers one day will be a globally recognizable luxury housing and hospitality trademark along the lines of Four Seasons or Ritz-Carlton.” Read the court decision
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Motion to Dismiss COVID Claim Granted in Part, Denied in Part

February 06, 2023 — Tred R. Eyerly - Insurance Law Hawaii
The insurer's motion to dismiss the insured's claim for business losses due to COVID-19 was granted in part, denied in part. SRL v Zurich Am. Ins Co., 2022 U.S. Dist. LEXIS 210058 (N.D. Ill. Nov. 21, 2022). Excelsior owned and managed the Westin Excelsior Rome, a luxury hotel in Rome. The hotel suffered business income losses with the onset of the pandemic.While the hotel was not forced to close, its bookings decreased to virtually nothing. The Excelsior's complaint alleged that the COVID-19 virus was present in and around the hotel as multiple guests and at least six employees tested positive for COVID-19. It further alleged that the virus attached to interior property and was in the air. Excelsior was insured under a commercial property policy issued by Zurich. The court agreed there was no direct physical loss because no structure suffered damage. Among the coverages under the policy, however, was a "Cancellation of Bookings" provision. Zurich agreed there was coverage under this provision, but argued that Excelsior had already reached its annual limit for Cancellation of Bookings claims. 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

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Florida “Property Damage” caused by an “Occurrence” and “Your Work” Exclusion

July 23, 2014 — Scott Patterson - CD Coverage
In J.B.D. Construction, Inc. v. Mid-Continent Casualty Co., * Fed.Appx. *, 2014 WL 3377690 (11th Cir. 2014), claimant property owner Sun City contracted with insured general contractor J.B.D. for the construction of a fitness center. The fitness center was to be physically connected to an existing Sun City building. J.B.D. utilized subcontractors for some of the work. Shortly after completion, leaks developed in the fitness center’s roof, windows and doors which J.B.D. attempted to fix. After Sun City refused to make the final contract payment, J.B.D. sued Sun City for contract amounts owed. Sun City counterclaimed for the construction defects, alleged damage to the fitness center and other property. J.B.D. tendered defense of the counterclaim to its CGL insurer Mid-Continent. After Mid-Continent failed to agree to defend, J.B.D. settled with Sun City, paying Sun City $182K. Following several demands from J.B.D. for reimbursement of defense costs and the settlement amount, Mid-Continent tendered the defense costs minus a deductible. J.B.D. then sued Mid-Continent for breach of duties to defend and indemnify. On cross motions for summary judgment, the federal district trial court entered judgment for Mid-Continent, finding no duties to defend or indemnify. On appeal, the Eleventh Circuit reversed on the duty to defend while affirming on the duty to indemnify. Applying Florida law, the court first held that the defective work, including the defective installation of the fitness center’s windows, doors, and roof, did not constitute “property damage.” Thus, the costs to repair or replace the defective work did not constitute damages because of “property damage.” The court next held that, while damage to other portions of the fitness center would constitute “property damage” caused by an “occurrence,” all such “property damage” fell within the “your work” exclusion. Read the court decision
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Reprinted courtesy of Scott Patterson, CD Coverage

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Real Estate & Construction News Round-Up (03/01/23) – Mass Timber, IIJA Funding, and Distressed Real Estate

March 13, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up explores how Infrastructure Investment and Jobs Act (IIJA) funding is being deployed, mass timber is on the rise as decarbonization efforts continue, and commercial real estate remains distressed.

• With a flurry of high-profile projects, mass timber is gaining traction. (Jeffrey Steele, Commercial Property Executive)
• Commercial real estate is experiencing high levels of distress, with multiple owners defaulting on loans across the country. (Ted Glanzer, The Real Deal)
• Even with the recent downturn in cryptocurrency value, the metaverse real estate market is expected to continue to grow. (The Real Deal)

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

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Owner Bankruptcy: What’s a Contractor to Do?

February 28, 2018 — Troy R. Covington and Stephen M. Parham - Construction Executive Magazine
Bankruptcy of the owner or developer of a real estate construction project can be very unsettling to contractors. But a declaration of bankruptcy by the developer, in and of itself, does not constitute a breach of contract such that the contractor can stop working. Contract provisions providing that the contract is terminated if a party becomes insolvent or files for bankruptcy are generally unenforceable. Partially-performed construction contracts are executory contracts, meaning that the obligations of the parties to the contract have not yet been fully performed. The Bankruptcy Code allows a bankruptcy trustee (in a Chapter 7 dissolution case) or the debtor-in-possession (in a Chapter 11 reorganization case) either to assume or to reject an executory contract. A debtor-in-possession has until the time of the confirmation of its plan of reorganization to decide if it will assume or reject the contract. The contractor may ask the bankruptcy court to require the debtor-in-possession to make a decision on the contract sooner, but the court will most likely give the debtor-in-possession a fair amount of time to make the decision. Reprinted courtesy of Troy R. Covington and Stephen M. Parham, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Covington may be contacted at sparham@bloomparham.com Mr. Parham may be contacted at tcovington@bloom-law.com Read the court decision
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Does a Broker Forfeit His or Her Commission for Technical Non-Compliance with Department of Real Estate Statutory Requirements?

September 14, 2020 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog
In a recent Arizona Court of Appeals case, CK Revocable Trust v. My Home Group Real Estate LLC, 2020 WL 4306183 (7/28/2020), the Court of Appeals addressed the distinction between “substantive” and “technical” statutory requirements for real estate broker commission agreements. The Court explained that failure to comply with a substantive requirement would preclude the broker from recovering a commission, but failure to comply with a technical requirement would not. As examples of such substantive requirements, the Court identified the statutory requirement that the broker be licensed at the time the claim for commission arose, and the statutory requirement that the listing agreement be signed by both the broker and the client. Read the court decision
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Reprinted courtesy of Kevin J. Parker, Snell & Wilmer
Mr. Parker may be contacted at kparker@swlaw.com

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