FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Insurer's Denial of Coverage to Additional Insured Constitutes Bad Faith

May 21, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The insurer's unreasonable denial of a defense and indemnity to a lessor/additional insured was found to be in bad faith. Seaway Props. v. Fireman's Fund Ins. Co., 2014 U.S. Dist. LEXIS 55998 (W.D. Wash. April 22, 2014). Seaway leased restaurant space to Ciao Bella Food, LLC. In January 10, 2010, the underlying plaintiff was on her way to the restaurant when she attempted to step down from a concrete platform between the building parking lot and the entrance to the restaurant. Seaway's lease gave Ciao Bella the right to use the common areas, including the parking lot, but did not grant Ciao Bella exclusive control over the common areas. The plaintiff suffered injuries and claimed both Ciao Bella and Seaway were liable. Seaway's lease required Ciao Bella to maintain a CGL policy and to name Seaway as an additional insured. Ciao Bella did so by securing a policy with Fireman's Fund. Fireman's Fund had notice of the plaintiff's claim by November 2010. Seaway demanded in March 2012 that Fireman's Fund indemnify and defend it. In September 2012, two years after it first learned of the plaintiff's injury, Fireman's Fund denied coverage, asserting that Seaway was not an insured under the policy. 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

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NY Is Set To Sue US EPA Over ‘Completion’ of PCB Removal

June 25, 2019 — Mary B. Powers - Engineering News-Record
New York state intends to sue the U.S. Environmental Protection Agency for issuing a certificate to General Electric Co. affirming the company completed its $1.7-billion cleanup of about 40 miles of the upper Hudson River, contaminated with PCBs from two former factories. State Attorney General Letitia James said April 11 that a December state study showed elevated PCB levels in river sediment and concentrations in fish, which were not recovering at the rate EPA anticipated. Read the court decision
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Reprinted courtesy of Mary B. Powers, ENR
ENR may be contacted at ENR.com@bnpmedia.com

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How to Prepare for Potential Construction Disputes Resulting From COVID-19

August 24, 2020 — Helga A. Zauner & Sonia Desai - Construction Executive
Every industry has been affected by the COVID-19 pandemic, and construction is no exception. While construction work was deemed essential in some places, it has been limited only to pandemic-related projects in others. In the current climate, construction companies face a myriad new challenges, including concerns about health and safety, delays resulting from employee illnesses, supply chain disruptions and increased prices for materials, as well as contract delays or cancellations by concerned contract owners. Contractors must keep their employees safe and institute what could be costly best-practice measures, while facing potential claims from employees if they get sick due to a company’s perceived lack of response to the dangers of the coronavirus. Stakeholders in the construction process need to prepare for potential disputes and understand their rights and responsibilities. This includes understanding applicable clauses in construction contracts and subcontractor agreements as well as business interruption clauses and other provisions in insurance contracts. Stakeholders may need to seek professional counsel to help them understand their rights and responsibilities in potential disputes. Reprinted courtesy of Helga A. Zauner & Sonia Desai, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Ms. Zauner may be contacted at helga.zauner@weaver.com Ms. Desai may be contacted at sonia.desai@weaver.com Read the court decision
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Cold Weather Causes Power Blackouts, Disruptions on Jobsites

February 22, 2021 — Autumn Cafiero Giusti - Engineering News-Record
A February cold snap in the central U.S. has created record power demand, resulting in outages from Texas to North Dakota and contractors bracing for delays and damage from weather impacts. Reprinted courtesy of Autumn Cafiero Giusti, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Construction Defect Claim Did Not Harm Homeowner, Court Rules

September 30, 2011 — CDJ STAFF

The Minnesota Court of Appeals has ruled in Creswell v. Estate of Howe, a case in which a woman bought a home and then sued the seller’s estate, both sets of real estate agents, and the homeowner’s association over construction defects. A district court ruled against her, granting summary judgment to the other parties.

After buying a townhome “as is,” Catherine Creswell claims to have shared a thought with her agent that the homeowners association was, in the words of her agent, “trying to hide something.” Later, Creswell found that a few days before her closing, the board had discussed problems with “roofs, siding and soundproofing of the townhomes.” The court noted that “it was clear from the documents that appellant [Creswell] received that the association had known about various construction defects for many years, some of which affected [her] unit.”

Creswell initially sued the estate, the man who negotiated the sale for his mother’s estate, the real estate companies and the agents involved, the homeowners association, and four board members. Later she sued for punitive damages, dropped a claim for interference with contractual relations, and dismissed her claims against the individual board members. The court dismissed all of Creswell’s claims awarding costs to those she sued.

The appeals court has affirmed the decision of lower court, noting that Creswell “did not provide us with any argument why the district court erred in dismissing her unjust-enrichment, breach of contract, or rescission claims against the various respondents.” Nor did she provide evidence to support her claims of “breach of duty, fraud, and violation of consumer protection statutes.”

The court noted that Creswell could not sue the homeowners association over the construction defects because she “failed to prove that she was damaged by the association’s nondisclosure.” The court noted that “there are no damages in this case,” as Creswell “was never assessed for any repairs, she had not paid anything out-of-pocket for repairs, and she has presented no evidence that the value of her individual unit has declined because of the alleged undisclosed construction defects.”

The court granted the other parties motion to dismiss and denied Creswell’s motion to supplement the record. Costs were awarded to the respondents.

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Don’t Assume Your Insurance Covers A Newly Acquired Company

February 19, 2019 — Patrick M. McDermott & Michael S. Levine - Hunton Insurance Recovery Blog
The Supreme Court of Virginia’s decision yesterday finding no coverage for fire damage to a building is a cautionary tale for companies acquiring other companies. Erie Ins. Exch. v. EPC MD 15, LLC, 2019 WL 238168 (Va. Jan. 17, 2019). In that case, Erie Insurance issued a property insurance policy to EPC. The policy covered EPC only and did not cover any subsidiaries of EPC. EPC then acquired the sole member interest in Cyrus Square, LLC. Following the acquisition, fire damaged a building that Cyrus Square owned. EPC sought coverage under its property insurance policy. Because the policy did not cover Cyrus Square, EPC argued that a provision extending coverage to “newly acquired buildings” applied, contending that EPC had newly acquired Cyrus Square’s building by virtue of becoming the sole member interest in the LLC. Based on the law relative to LLCs and its interpretation of the policy, the Supreme Court of Virginia ruled against EPC. It found that although EPC had acquired Cyrus Square, it had not “newly acquired” the building and so the “newly acquired buildings” coverage extension did not apply. Reprinted courtesy of Patrick M. McDermott, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth Mr. McDermott may be contacted at pmcdermott@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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Courts Take Another Swipe at the Implied Warranty of the Plans and Specifications

December 15, 2016 — John P. Ahlers – Ahlers & Cressman PLLC
Implied warranties are warranties created by law, legislation, or courts. In the construction industry, one of the most prominent implied warranties is that owners who provide plans and specifications to their contractors impliedly warrant the adequacy of their plans and specifications.[i] That implied warranty had its beginning in the 1918 US Supreme Court decision of U.S. v. Spearin[ii] and is, therefore, popularly known as the Spearin Doctrine. Under the Spearin Doctrine, if the contractor completes the work in accordance with the owner’s plans and specifications, but there is a deficiency or failure, the owner, not the contractor, is responsible. When the owner breaches its implied warranty, in most instances, the contractor is entitled to additional compensation for extra work performed, delays experienced, and other additional expense or loss occasioned by the warranty breach. A recent case demonstrates that this implied warranty is not “immunity.” The contractor must still act reasonably and diligently, particularly when the contract provisions so require. In the recent Fifth Circuit case of Dallas/Ft. Worth International Airport v. INet Airport Systems,[iii] the court, despite the implied warranty that existed, did not grant the contractor summary judgment on claims involving admitted plan deficiencies, since factual issues existed regarding the contractor’s cooperation and participation in the solution to the defects. Read the court decision
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Reprinted courtesy of John P. Ahlers, Ahlers & Cressman, PLLC
Mr. Ahlers may be contacted at jahlers@ac-lawyers.com

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Sweat the Small Stuff – Don’t Overlook These Three (3) Clauses When Negotiating Your Construction Contract

April 08, 2024 — Bill Shaughnessy - ConsensusDocs
Reviewing and understanding the terms of your construction contract before signing on the dotted line (ideally with counsel involved) is an obvious best practice – whether you are owner, general contractor, design-professional or down-tier subcontractor or supplier. Typically, during this review process, parties pay closest attention to terms relating to price, scope, schedule, insurance, indemnification, and damages. And rightfully so, as these are just some of the most fundamental and important clauses of any construction contract. But during this review and understanding process, parties often overlook and fail to fully review and understand several notably important contract provisions (other than the examples above) which can have just as significant an impact on the project and even unintended consequences once construction starts. This article discusses three (3) of these often-overlooked provisions which should also be carefully reviewed to ensure the project runs smoothly and to avoid unintended consequences or even disputes (and litigation) during construction:

1. Incorporation by reference clause;
2. Order of precedence or higher standard clause; and
3. Choice of law clause.

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Reprinted courtesy of Bill Shaughnessy, Jones Walker LLP (ConsensusDocs)
Mr. Shaughnessy may be contacted at bshaughnessy@joneswalker.com

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