Court Narrowly Interprets “Faulty Workmanship” Provision
March 28, 2018 —
Jeffrey J. Vita and Thersa A. Guertin – SDV BlogIn a recent victory in their home state of Connecticut, Saxe Doernberger & Vita partners,
Jeffrey Vita and
Theresa Guertin, representing owner-developer 777 Main Street, LLC, overcame a summary judgment motion filed by Liberty Mutual Fire Insurance Company. The Connecticut Superior court refused to adopt the insurer’s broad interpretation of the “faulty workmanship” exclusion in an all-risk builders’ risk insurance policy.
In 2014, 777 Main Street, LLC began renovations on the 27-story former Hartford National Bank building in downtown Hartford, converting the property from an office building to a mixed residential and commercial space. During the renovation, a subcontractor hired to perform the cleaning the concrete façade of the building accidentally over-sprayed the cleaning material onto the property’s windows. The subcontractor’s attempts to clean the overspray further damaged the structural integrity and cosmetic look of the windows. As a result, the owner was forced to replace over 1,800 windows, costing millions.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Guertin may be contacted at tag@sdvlaw.com
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Indemnitor Owes Indemnity Even Where Indemnitee is Actively Negligent, California Court Holds
June 15, 2017 —
Garret Murai - California Construction Law BlogIndemnity provisions are one of the most fought over provisions in design and construction contracts. But while parties generally understand the intent behind indemnity provisions — that one party (the “indemnitor”) agrees to indemnify (and often defend as well) another party (the “indemnitee”) from and against claims that may arise on a project — few understand how they are actually applied.
In a recent Court of Appeals decision, Oltmans Construction Company v. Bayside Interiors, Inc. (March 30, 2017), Case No. A147313, the California Court of Appeals for the First District examined an indemnity provision and its “except to the extent of” provision whereby a subcontractor agreed to indemnify (and defend) a general contractor from claims arising on a project “except to the extent of” the general contractor’s active negligence or willful misconduct and whether such language either: (1) bars a general contractor from seeking indemnity where the general contractor was actively negligent; or (2) simply bars a general contractor from seeking indemnity where the general contractor was actively and solely negligent, thereby, requiring a subcontractor to indemnify the general contractor where the negligence of another party may have also contributed to the injury or damage.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Strategy for Enforcement of Dispute Resolution Rights
May 30, 2018 —
Whitney Judson - Smith CurrieArbitration and litigation each offer their own benefits and drawbacks to litigants looking to resolve a construction dispute. A careful analysis of these benefits and drawbacks may be helpful in determining whether to avoid or pursue either dispute resolution process. Arbitration is oftentimes regarded as the more economically feasible dispute resolution option and is therefore attractive to many construction dispute litigants. Although arbitration may prove to be less expensive than litigation in the long run, some litigants may prefer to file a case in court because the upfront filing fees in litigation are less expensive than the filing fees of arbitration.
Litigants may also prefer the decision makers of one process for dispute resolution over another. Arbitrators in a construction dispute oftentimes have a background in the construction industry, whereas a judge or jury may not. Strategy may dictate whether the preferable decision maker should have experience within the construction industry or be free of any construction industry knowledge and possible biases. The finality of decisions may also be a reason to strategically choose one dispute resolution process over another. Arbitration decisions are overturned only under very narrow and specific circumstances. The losing party in litigation however, has a right to appeal decisions to a higher court and has more options for recourse when the findings of the court are not supported by the evidence or the law.
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Whitney Judson, Smith CurrieMs. Judson may be contacted at
wtjudson@smithcurrie.com
Existing U.S. Home Sales Rise to Second-Highest Since 2007
October 28, 2015 —
Victoria Stilwell – BloombergSales of previously owned U.S. homes rebounded in September to the second-highest level since February 2007, the latest sign that the recovery in residential real estate will support growth in the world’s largest economy.
Closings on existing homes, which usually occur a month or two after a contract is signed, climbed 4.7 percent to a 5.55 million annualized rate, the National Association of Realtors said Thursday. The increase was entirely due to a jump in purchases of single-family dwellings.
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Victoria Stilwell, Bloomberg
Structural Failure of Precast-Concrete Span Sets Back Sydney Metro Job
February 23, 2017 —
Chris Webb - Engineering News-RecordA key component of Australia’s biggest public transport infrastructure project—Sydney’s $6.3-billion Metro North West—is the subject of a
critical and detailed technical report describing how an elevated viaduct span failed at a stitch joint between two precast segments during construction last September. Project officials say the affected span, which did not suffer a progressive collapse, has since been removed and its replacement fast-tracked to avoid further delays. Little additional detail was provided.
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Chris Webb, ENRENR may be contacted at
ENR.com@bnpmedia.com
Application of Set-Off When a Defendant Settles in Multiparty Construction Dispute
January 05, 2017 —
David Adelstein – Florida Construction Legal UpdatesThe defense of set-off is an important defense in construction disputes, particularly multiparty disputes. For more information on this defense, please check out this
article as it explains the application of set-off in civil disputes in detail.
The issue of set-off will come up in a multiparty dispute when a plaintiff settles with one or more of the defendants. The remaining defendant(s) wants the benefit of that settlement to set-off and reduce any judgment against it. An example of this scenario can be found in Escadote I Corp. v. Ocean Three Limited Partnership, 42 Fla. L. Weekly D23a (Fla. 3d DCA 2016).
In this case, an owner of a condominium unit sued the condominium association, the developer, and the general contractor for water intrusion and mold infestation. The claim against the condominium association was the only claim that entitled the owner to attorney’s fees pursuant to its lawsuit (thus, attorney’s fees were isolated to only that claim against the association). During trial, the owner settled with the association. In entering a settlement, the owner smartly allocated the settlement amount such that $500 was allocated to its principal damages and $374,500 was allocated to its attorney’s fees. The owner then obtained a jury verdict against the contractor and developer for approximately $2M, jointly and severally, and the contractor and developer wanted the entire $375,000 settlement amount with the association to be set-off from the $2M verdict. The trial court set-off the entire $375,000 from the jury verdict when entering judgment. The appellate court reversed.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dma@katzbarron.com
Las Vegas Harmon Hotel to be Demolished without Opening
May 22, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Architectural Record, the Harmon Hotel, part of the CityCenter hotel-casino-entertainment complex on the Las Vegas Strip in Nevada, “is being razed without ever opening.” MGM Resorts International will be demolishing “the unfinished 27-floor, oval-shaped tower following a protracted legal battle with its contractor, Tutor Perini Corp., over building defects.”
Demolition is expected to cost $11.5 million, while the “incomplete construction” had cost $279 million. Problems for the hotel began after the discovery “that reinforcing steel was improperly installed on 15 building floors during construction.” Architectural Record reported that a third-party inspector “had falsified 62 daily reports between March and July of 2008 stating that things were okay when they were not. The findings prompted a temporary project shut-down and eventual building redesign.”
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The “Builder’s Remedy” Looms Over Bay Area Cities
February 20, 2023 —
Allan C. Van Vliet, Cara M. MacDonald, Robert G. Howard & Robert C. Herr - Gravel2Gavel Construction & Real Estate Law BlogCities in the San Francisco Bay Area are frantically working to finalize their state-mandated “housing elements” in their General Plans by the January 31, 2023, deadline imposed by the California Department of Housing and Community Development (HCD). For Bay Area cities like San Francisco, Oakland, San Jose and Berkeley, the plans must be approved by HCD
on or before January 31, 2023. California municipalities have extra incentive to get their housing elements approved this year, because the failure to meet the deadline may subject them to a remedy known as
the “builder’s remedy.”
The failure of cities in California to adopt and implement adequate housing elements as part of their General Plans has contributed to the state’s serious housing affordability crisis. The “builder’s remedy” incentivizes cities to meet housing element deadlines, because failure to do so could cause cities to lose control over certain land use entitlement decisions for projects that include housing under the state’s Housing Accountability Act (HAA).
Reprinted courtesy of
Allan C. Van Vliet, Pillsbury,
Cara M. MacDonald, Pillsbury,
Robert G. Howard, Pillsbury and
Robert C. Herr, Pillsbury
Mr. Van Vliet may be contacted at allan.vanvliet@pillsburylaw.com
Ms. MacDonald may be contacted at cara.macdonald@pillsburylaw.com
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Mr. Herr may be contacted at robert.herr@pillsburylaw.com
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