Cambridge Massachusetts Building Expert Directory

Hovnanian Increases Construction Defect Reserves for 2012

January 06, 2012 — CDJ STAFF

In their fourth quarter earnings call, executives of Hovnanian Enterprises made some projections for investors, covering the company’s plans for 2012. During the call, Ara K. Hovnanian, the firm’s CEO, discussed their reserves to meet construction defect claims. The firm does an annual actuarial study of their construction defect reserves.

Mr. Hovnanian noted that there have been no changes for the past several years, but this year they are increasing their reserves by about $6.3 million. Additionally, the firm has added $2.5 million to their legal reserves. Mr. Hovnanian stated “we do not anticipate that changes of this magnitude will be recurring as we look forward to 2012.”

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Survey: Workers Lack Awareness of Potentially Hazardous Nanomaterials

December 11, 2018 — Scott Van Voorhis – Engineering News-Record
Microscopic nanoparticles are part of the mix in nearly 600 construction products. The particles add strength, durability and other desired characteristics. Read the court decision
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Reprinted courtesy of Scott Van Voorhis, ENR
ENR may be contacted at ENR.com@bnpmedia.com

Man Pleads Guilty in Construction Kickback Scheme

November 06, 2013 — CDJ STAFF
Mark M. Palombaro, a former vice president at Simon Property Group, a development firm, has plead guilty to receiving $766,000 from the head of a construction firm in payback for the projects. Robert E. Crawford at Fox Chapel then overbilled for these projects, which were located in Seattle, Washington and Laguna Beach, California, in order that he and Mr. Palombaro would profit. The total value of the projects, overbilling included, was $15 million. The two men settled a civil suit brought by Simon Property Group by paying $3.3 million. Mr. Crawford plead guilty in June. He admitted to bribing Mr. Palombaro. Read the court decision
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One Word Makes All The Difference – The Distinction Between “Pay If Paid” and “Pay When Paid” Clauses

April 06, 2016 — David A. Harris – Haight Brown & Bonesteel LLP
Payment clauses in California construction contracts are often complex and multi-layered. This is especially true in contracts between general contractors and their subcontractors. The general does not want to pay the subs until it receives funding from the owners. The subs, of course, want their progress and final payments as soon as possible. Up until 1997, two different payment provisions were used in California contracts to manage payments by a general to its subcontractors. The first was called a “pay if paid” clause, and provided a contractor did not have to pay its subcontractors for work performed unless the subcontractor was first paid by the owner of the project. The second was the “pay when paid clause.” It required subcontractors to be paid for their work after the general was paid by the owner, or within “a reasonable time” after the subcontractors finished their work if the owner did not pay the general. Read the court decision
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Reprinted courtesy of David A. Harris, Haight Brown & Bonesteel LLP
Mr. Harris may be contacted at dharris@hbblaw.com

ICE Said to Seek Mortgage Role Through Talks With Data Service

August 06, 2014 — Matthew Leising, Jesse Hamilton and Jody Shenn – Bloomberg
Intercontinental Exchange Inc. (ICE), best known for energy trading and its control of the New York Stock Exchange, is engaged in negotiations that would give it a foothold in the $9.4 trillion U.S. mortgage market. ICE is in early stage talks to form a partnership with Mortgage Electronic Registration Systems Inc., which documents the ownership and resale of about half of U.S. home loans, according to a person familiar with the matter, who asked to not be identified because the discussions are private. The Atlanta-based exchange owner has been gauging demand for derivatives that enable investors to bet on defaults by U.S. homeowners, Bloomberg News reported in May. ICE, which earns most of its revenue by owning one of the world’s largest derivatives markets, has recently expanded into new businesses such as equity trading with its 2013 purchase of NYSE Euronext and the administration of interest-rate benchmarks. Mr. Leising may be contacted at mleising@bloomberg.net; Mr. Hamilton may be contacted at jhamilton33@bloomberg.net; Ms. Shenn may be contacted at jshenn@bloomberg.net Read the court decision
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Reprinted courtesy of Matthew Leising, Jesse Hamilton and Jody Shenn, Bloomberg

Certificates of Insurance May Confer Coverage

December 30, 2019 — Brett M. Hill - Ahlers Cressman & Sleight PLLC
Certificates of insurance are a common tool used in the construction industry to provide proof of insurance coverage. The legal effect of certificates of insurance has been a source of debate in Washington. Insurance companies have argued that certificates of insurance are “informational only” and do not alter the terms of the applicable insurance policy. Insurance companies have taken the position that if a certificate of insurance provides for coverage that is different than what the policy provides, the insurance company is only bound to provide what the policy provides. The Washington State Supreme Court weighed in on this issue in an opinion issued on October 10, 2019, and held that an insurance company is bound by the terms of its certificate of insurance – even if it conflicts with the policy. In T-Mobile USA, Inc. v. Selective Insurance Company of America, Selective’s agent issued a certificate of insurance to “T-Mobile USA, Inc., its subsidiaries and affiliates” and stated that those entities were “included as additional insured” under the policy. The certificate of insurance was issued by Selective’s agent when T-Mobile’s contractor purchased an insurance policy from Selective for a cell tower project. The contractor’s agreement for the project was with T-Mobile Northeast – not T-Mobile USA. The contract between T-Mobile Northeast and the contractor stated that T-Mobile Northeast would be an additional insured. The Selective insurance policy stated that any third party would automatically be an additional insured if the contractor was required to name the third party as an additional insured. The contract did not provide that T-Mobile USA would be an additional insured. A property owner damaged by the cell tower project sued T-Mobile USA. T-Mobile USA tendered the claim to Selective. Selective denied the claim because the contract between the contractor and T-Mobile Northeast did not require the contractor to name T-Mobile USA as an additional insured. Read the court decision
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Reprinted courtesy of Brett M. Hill, Ahlers Cressman Sleight PLLC
Mr. Hill may be contacted at brett.hill@acslawyers.com

Have the Feds Taken Over Arbitration?

September 25, 2023 — Christopher G. Hill - Construction Law Musings
All of us in construction have run into mandatory arbitration clauses in our contracts. These clauses are more or less desirable based upon the size of project and other factors that will provide a topic for another post here at Musings or in my class at Solo Practice University (and likely both). In drafting and considering the usefulness of these clauses, make sure that you keep in mind that the Federal Arbitration Act applies to actions in federal court. In short, the FAA gives parties to a contract containing an arbitration clause the absolute right to a stay of a law suit pending arbitration. While this seems obvious, a recent U. S. Supreme Court decision expanded the universe of people that can demand such a stay. In Arthur Andersen LLP v. Carlisle, et. al., the Court stated that any person who is allowed to enforce a contract under state law can obtain such a stay. In short, if a person can make an argument that they have some sort of right to enforce a contract’s terms, that person can get a stay, at least until a court says otherwise. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Ortega Outbids Pros to Build $10 Billion Property Empire

March 19, 2014 — Jesse Drucker – Bloomberg
Amancio Ortega Gaona, already the world’s fourth-richest person based on the success of his Zara fashion retail stores, has quietly amassed a real estate empire worth as much as $10 billion and is emerging as a formidable competitor for prime properties from London to Beverly Hills. Relying on all-cash offers, he has outbid the world’s biggest institutional funds and professional property investors, such as Tishman Speyer Properties LP. “He’s at the very highest levels of high net worth investment and competing with some of the biggest sovereign wealth funds for the primest properties in the market,” said Joseph Kelly, director of market analysis for Real Capital Analytics in London, a real estate research firm. Read the court decision
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Reprinted courtesy of Jesse Drucker, Bloomberg
Mr. Drucker may be contacted at jdrucker4@bloomberg.net

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