Cambridge Massachusetts Building Expert Directory

How to Mitigate Lien Release Bond Premiums with Disappearing Lien Claimants

May 20, 2019 — Scott MacDonald - Ahlers Cressman & Sleight PLLC
It is one of those dreaded business situations that plagues the construction industry, especially in times of economic downturn—what to do when a lower-tier entity files a lien against a property then disappears. It has happened to countless owners, general contractors, subcontractors, and even some particularly unlucky sub-tier subcontractors and suppliers. Here is how it arises: a project is moving along, then performance or payment issues arise, and a company that is over extended or unwilling to continue work stops performance, walks off the job, and files a lien against the property for whatever amounts were allegedly unpaid. Often, the allegedly unpaid sums were legitimately withheld due to a good faith dispute over payment/performance, and it is not unusual for the defaulting entity to not be entitled to any of the sums claimed in the lien. Regardless, the lien stays on the property, and pressure is applied from the “upstream” entities to the party who contracted with the defaulting entity to “deal” with the lien. Oftentimes, a contract will require the parties to “deal” with a lien by obtaining a lien release bond (“release bond”). For those lucky enough to not have encountered this issue, a release bond is a nifty statutory device whereby a surety agrees to record a release bond for the full claimed amount of the lien, with the release bond substituting in for the liened property, effectively discharging the property from liability under the lien. In other words, the lien is released from the property and attaches to the release bond. If the lien claimant recovers on its lien, it is technically satisfied by the surety providing the release bond (or the party who agrees to indemnify and defend the release bond). In exchange for delivering the release bond, the surety demands yearly premiums be paid on the release bond amount Read the court decision
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Reprinted courtesy of Scott MacDonald, Ahlers Cressman & Sleight PLLC
Mr. MacDonald may be contacted at scott.macdonald@acslawyers.com

How Many Bridges Does the Chesapeake Bay Need?

August 03, 2022 — Ethan McLeod - Bloomberg
Steve Kline, a 7th-generation Marylander, knows well the vacation tradition of driving across the twin spans of the Chesapeake Bay Bridge for trips to the beach resort of Ocean City. His grandfather, an ironworker, helped build the bridge’s first span, which opened in 1952. He’s also very familiar with another seasonal rite: wading through the infamous miles-long traffic backups that last from Memorial Day through the end of summer. But Kline, president of the nonprofit Eastern Shore Land Conservancy, is not on board with the state’s proposed multibillion-dollar fix — a new 4.3-mile-long crossing, to be built alongside the two current spans of the Bay Bridge. In April, the Maryland Transportation Authority (MDTA) announced it had received federal approval to use this route for a potential new, wider bridge that would be likely to eventually replace its older siblings, addressing the notorious summer bottlenecks for decades to come. And on June 10, at a press conference held near the bridge’s eastbound ramp, Maryland Governor Larry Hogan announced that he would commit $28 million in bridge toll revenue to fund the second phase of an environmental impact study on the idea. Read the court decision
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Reprinted courtesy of Ethan McLeod, Bloomberg

Buyer's Demolishing of Insured's Home Not Barred by Faulty Construction Exclusion

June 21, 2017 — Tred R. Eyerly - Insurance Law Hawaii
Loss of the insured's home caused by a renter who demolished the home was covered under the homeowner's policy. Fisher v. Garrison Prop. & Cas. Ins. Co., 2017 Idaho LEXIS 143 (Idaho May 26, 2017). The insured, Shammie L. Fisher, entered a Purchase Agreement to sell her home to Ron Reynoso. The purchase of the property was contingent upon Reynoso obtaining financing. Before completing the purchase, he would lease the property. The Agreement stated, "Buyer intends to make certain improvements to the property upon possession, with the intent to sell the property for a profit." Within two months of renting the property to Reynoso, Fisher learned that he had demolished the entire house down to the foundation. He then ceased work and left. Fisher made a claim under her policy, but Garrison Property and Casualty Insurance Company denied coverage based upon the exclusion for faulty, inadequate or defective work. When Fisher sued, the trial court granted summary judgment to Garrison. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Beware of Statutory Limits on Change Orders

February 18, 2015 — Craig Martin – Construction Contractor Advisor
While change orders are always part of construction projects, it’s important to know whether a public agency is limited on how much it can increase the scope of the work through change orders. A contractor in Virginia found out the hard way that the state agency did not have the authority to increase the scope of the project and thus the contractor could not collect for the extra work. In Carnell Construction Corp. v. Danville Redevelopment & Housing Authority, the contractor was hired by the housing authority to prepare a site for construction. The project did not go well and both sides blamed the other for delays and increased costs. After being removed from the project, the contractor sued the housing authority for, among other things, breach of contract. The jury awarded the contractor a total of $915,000 for the housing authority’s failure to pay for extra work and improper removal. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

Unpredictable Power Surges Threaten US Grid — And Your Home

April 08, 2024 — Naureen S Malik - Bloomberg
Paul LeBlanc was barefoot when he stepped outside that morning. He was taking the trash out when he saw the red glow of flames engulfing a nearby home. A former firefighter, LeBlanc grabbed his shoes before racing across the street. He smashed a window, then rushed inside. The only person believed to be home was a teenage boy who had already escaped, luckily with just minor burns. Alarms blared “fire” loudly, again and again, blasting from homes through the area. “I’ve been in buildings without protection before — I just wanted to make sure no one was stuck in there,” said LeBlanc, who spent more than three decades as a firefighter before retiring. The damage to the Alonge family’s four-bedroom home built in the early 1800s was so bad they haven’t been able to return since the blaze in June. The source of the conflagration in Waltham, Massachusetts, came from a facility about 2 miles west of the home. An electric substation, which had been dealing with a rodent infestation, had a sudden, unstable surge in voltage. Read the court decision
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Reprinted courtesy of Naureen S Malik, Bloomberg

Singer Ordered to Deposition in Construction Defect Case

December 30, 2013 — CDJ STAFF
The pop singer Rihanna has sued the former owners of her Los Angeles home and the firm that inspected it before her purchase alleging water intrusion problems that were supposed to be fixed before close of escrow. The lawsuit was filed under the singer’s legal name, Robyn Fenty. According to Gregory Pyfrom, the attorney for LaRocca Inspection Associates, he has tried to depose her over the last two years, without success. He is seeking $7,500 in compensation to his clients for the singer’s failure to schedule a deposition. Rihanna’s attorney, Miles Cooley, described this as “a smear campaign,” and claims that the parties had agreed not to depose her “until after the matter was mediated.” Mr. Cooley says that mediation has been delayed by Mr. Pyfrom’s vacation plans. LaRocca Inspection Associates has countersued Rihanna, claiming that if she had alerted them earlier to problems they would have performed an additional inspection. The judge in the case has now ordered that the parties agree to a date on which to depose Ms. Fenty. Read the court decision
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The Peak of Hurricane Season Is Here: How to Manage Risks Before They Manage You

September 21, 2020 — Vincent E. Morgan - Construction Executive
The Atlantic hurricane season runs from June 1 to Nov. 30, but it peaks sharply during August, September and October. The latest forecasts predict this will be one of the most active seasons in history, in terms of frequency and severity, though it is always important to remember that even a single hurricane or tropical storm making landfall can still be a devastating event. Hurricanes pose unique risks to the construction industry ranging from project and labor force disruptions to concerns about the availability and price of construction materials. This is even more true this year, which requires merging hurricane preparedness and response plans with the realities of COVID-19. Because hurricanes cannot be avoided, preparing for them is the only way to manage these risks. Ensuring the personal safety and wellbeing of affected individuals is the first priority. After that, here are some key issues, and suggestions for handling them, that may help guide construction companies through the storm. SITE PROTECTION Construction contracts often place responsibility for site protection on contractors. Where those duties exist, failing to properly carry them out can lead to enormous losses that then turn into liability claims. This could be anything from removing materials that can become projectiles, covering exposed ventilation shafts, and sealing electrical conduits to ensuring that key equipment such as generators and pumps can remain functional in a storm. One way to approach it is to imagine sustained 100-mph winds and relentless water, and then make sure preparedness efforts are likely to survive that kind of test. This is not the time for guessing. It is far better to go through a rigorous analytical process now than in a courtroom years later. Reprinted courtesy of Vincent E. Morgan, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Surety Bond Now a Valid Performance Guarantee for NC Developers (guest post)

June 09, 2016 — Melissa Dewey Brumback – Construction Law in North Carolina
Welcome summer days! Today we have a guest post by Todd Bryant, president and founder of Bryant Surety Bonds. He is a surety bonds expert with years of experience in helping contractors get bonded and start their business. While design professionals generally don’t have to deal with performance bonds directly, they are often at the front lines of advising owners as to various Requests for Proposals submitted by hopeful contractors. In that spirit, be sure to read how the new law changes security requirements. Take it away, Todd! Last year wrapped up with some good news for North Carolina subdivision developers: House Bill 721 confirmed that construction bonds are, in fact, a viable form of performance guarantee. Previous legislation was ambiguous on this point, but the new bill– which took effect last October– sought to clear up the confusion. Although the new rules have been in effect for eight months, there’s been scant coverage of the changes, and what they mean for developers. Read the court decision
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Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC
Ms. Brumback may be contacted at mbrumback@rl-law.com

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