An Upward Trend in Commercial Construction?
March 28, 2012 —
Melissa Brumback, Construction Law in North CarolinaYear-end economic indicators demonstrate that private commercial construction may be increasing in 2012, primarily as demand grows for new projects built in the United States.
According to an article in Businessweek, the Architecture Billings Index held at 52 in December, indicating a modest expansion in the market. The American Institute of Architects said that the commercial and industrial component of the number climbed to 54.1 in December, the highest in 10 months.
The monthly survey of U.S.-based architecture firms is one of the main indicators of nonresidential construction, and these numbers suggest that modest improvement may be on the horizon.
The information is confirmed by data from the Census Bureau that shows that spending on lodging, office, commercial and manufacturing buildings grew 8.2 percent in November to $9.2 billion from a year ago. These types of commercial and industrial projects are historically canaries in the mine and are usually the first part of the industry to improve as the economy expands.
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Reprinted courtesy of Melissa Dewey Brumback of Ragsdale Liggett PLLC. Ms. Brumback can be contacted at mbrumback@rl-law.com.
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Contractor’s Claim for Interest on Subcontractor’s Defective Work Claim Gains Mixed Results
April 27, 2020 —
John J. Gazzola, Associate, Pepper Hamilton LLP - ConsensusDocsThis case concerns calculation of a damages award to a general contractor, Skanska USA Building, Inc., on its claim for breach of contract against its masonry subcontractor, J.D. Long Masonry, Inc., arising from Long’s faulty construction of a masonry façade at a medical research facility in Baltimore. When the façade collapsed and Long failed to repair it, Skanska hired a replacement subcontractor, C.A. Lindman, to remediate Long’s defective work and filed suit against Long to recover the resulting damages. After the court granted Skanska’s motion for summary judgment as to liability, Skanska moved for summary judgment on the issue of damages, relying on the indemnification provision of the subcontract to seek compensatory damages, pre- and post-judgment interest, and litigation fees. In the subcontract, Long agreed to indemnify and hold Skanska harmless from all claims, losses, costs and expenses, including attorneys’ fees, arising before or after completion of Long’s work, caused by, arising out of, resulting from, or occurring in connection with Long’s performance of the work or breach of the subcontract.
The court first applied the terms of this provision to award Skanska compensatory damages, holding that Skanska was, as a matter of law, entitled to recover the amount of the Lindman subcontract and general conditions incurred to supervise remediation of Long’s work. The court, however, denied Skanska’s claim for pre-judgment interest on the entirety of these damages. Skanska asserted that it was entitled to pre-judgment interest on the full award, calculated from the date on which it first paid Lindman. The court disagreed, explaining that, under Maryland law, a claimant is entitled to an award of pre-judgment interest as of right only when the amount due is certain, definite and liquidated by a specific date prior to judgment. The court reasoned that, because much of the Lindman subcontract value was composed of later-executed change orders, an award of pre-judgment interest could not be uniformly calculated back to the date of Skanska’s first payment to Lindman. And moreover, because Skanska continued to withhold sums due to Lindman pending resolution of certain issues, awarding Skanska pre-judgment interest on amounts it had not yet paid would result in a “windfall” to Skanska because there was no “use of income” loss to be compensated.
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John J. Gazzola, Pepper Hamilton LLPMr. Gazzola may be contacted at
gazzolaj@pepperlaw.com
Hawaii Federal District Court Grants Preliminary Approval of Settlement on Volcano Damage
September 13, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court granted preliminary approval of the class action settlement reached on behalf of insureds who suffered property damage due to the 2018 Kilauea eruption on the Big Island. Aquilina v. Certain Underwriters at Lloyd's London, 2021 U.S. Dist. LEXIS 152614 (D. Haw. Aug. 13, 2021).
After destruction of their homes due to lava flow, plaintiffs sued various insurers and agents as a putative class action. Plaintiffs claimed they purchased surplus lines policies brokered and underwritten by various defendants. The policies each contained an exclusion for the peril of lava flow, which plaintiffs claimed rendered them worthless or unsuitable given that their properties were located in a high-risk lava zone.
Plaintiffs alleged that defendants breached obligations under the Hawaii Surplus Lines Act, which required that surplus lines insurers conduct a diligent search for other available coverage before placing a homeowner with surplus lines coverage. Plaintiffs alleged defendants should have advised them of the availability of lava-damage coverage through the Hawaii Property Insurance Association (HPIA), a statutorily created association of admitted insurers established in part in response to Kilauea's eruption patterns, which made the private insurance market less likely to Insure certain high-risk areas.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Insurer Must Defend Where Possible Continuing Property Damage Occurred
January 13, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe California Court of Appeal overturned the trial court's issuance of summary judgment based upon the possibility of continuing property damage during the insurer's policy period. Tidwell Enters. v. Fin. Pac. Ins. Co., 2016 Cal. App. LEXIS 1038 (Cal. Ct. App. Nov. 29, 2016).
Financial Pacific insured Greg Tidwell, Tidwell Enterprises, Inc. and Tidwell Enterprises Fireplace Division (Tidwell) under CGL policies issued between March 2003 and March 2010. In 2006 or 2007, Tidwell installed a fireplace in a home. On November 11, 2011, 20 months after the end of the last policy period of Financial Pacific's coverage, the home owned by Kendall Fox, was damaged by fire. Fox was insured by State Farm. State Farm's attorney advised Tidwell of the fire, and Tidwell forwarded the information to Financial Pacific.
State Farm hired an investigator who reported that the fire was caused by the installation of an "unlisted shroud at the top of the chimney chase". This prevented the fireplace from drafting properly, resulting in overheating of the fireplace and heat transfer to the surround wood framing members. This resulted in the ignition of the framing members at the sides, top and bottom of the fireplace. State Farm sent the report to Financial Pacific.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Trump Abandons Plan for Council on Infrastructure
August 17, 2017 —
Mark Niquette - BloombergPresident Donald Trump will not move forward with a planned Advisory Council on Infrastructure, a person familiar with the matter said Thursday.
The infrastructure council, which was still being formed, would have advised Trump on his plan to spend as much as $1 trillion upgrading roads, bridges and other public works. Its cancellation follows Trump’s announcement Wednesday that he was disbanding two other business advisory panels.
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Mark Niquette, Bloomberg
Consult with Counsel when Preparing Construction Liens
April 13, 2017 —
David Adelstein – Florida Construction Legal UpdatesAll too often entities prepare their own construction liens. Sure, it is an effective way to save a few bucks. No doubt about it. But, by doing so, you are (i) not relying on advice of counsel that is important when it comes to lien preparation and (ii) not relying on strategy that goes along with the preparation of a lien. When you are liening, the reason you are doing so is because you have not been paid. You therefore want to collateralize your nonpayment against the real property—the leverage of a construction lien. This is a very beneficial statutory tool if implemented correctly, so it only makes sense to do it “strategically” right.
A construction lien is a statutory form. So, how hard can it be? Filling out the “form” is not hard, however, there is legal significance to the information and amounts included in a lien. For instance:
- There is significance to the amount you are liening. Are you liening for disputed change order work? Are you liening for amounts unrelated to base contract work?
- There is significance to the final furnishing date. Are you liening within 90 days of performing base contract work unrelated to punchlist or warranty work?
- There is significance to date the Notice to Owner was served (if you are not in privity with the owner). Was the Notice to Owner served within 45 days of initial furnishing?
- There is significance to the legal description identified in the lien. Are you liening the right property based on the type of project you are working on?
- There can even be significance to the initial furnishing date. Assuming you are the general contractor, what was your initial furnishing date in comparison with when the Notice of Commencement was recorded? If you are not a general contractor, when was the initial furnishing date in comparison with when you served the Notice to Owner?
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
UK Construction Output Rises Unexpectedly to Strongest Since May
March 27, 2023 —
Lucy White - BloombergUK construction industry output grew for the first time in two months in February, boosting hopes that the economy may avoid a prolonged recession.
A rebound in commercial and civil engineering work helped to compensate for continued gloom in the housing market, where buying activity has been depressed by higher mortgage rates and the cost-of-living crisis.
The closely-watched Construction Purchasing Managers’ Index from S&P Global and the Chartered Institute of Procurement and Supply jumped to 54.6 in February, up from 48.4 a month earlier and the highest since May 2022.
It was the first time in three months that activity was above the crucial no-change level of 50. Economists had expected a decline.
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Lucy White, Bloomberg
TOP TAKE-AWAY SERIES: The 2023 Fall Meeting in Washington, D.C.
November 13, 2023 —
Marissa L. Downs & Jennifer M. Kanady - The Dispute ResolverOver 500 construction lawyers, experts, and consultants descended on Washington last week for the Forum’s 2023 Fall Meeting. Newly minted Forum Chair John Cook and Program Coordinators Catherine Delorey and Brian Zimmerman put together a stellar program focused on navigating government construction. For this installation of the post-meeting post, I'm teaming up with guest contributor, Jennifer Kanady, to bring you 10 of our top take-aways from this unique program.
10. Contracting with the government is replete with risk that could easily trap the unwary. Nobody likes to be taken advantage of. But hell hath no fury like the U.S. Government scorned. Erin Cannon-Wells and Aaron Silberman, gave a (truly) delightful, Indiana-Jones-inspired presentation on the regulations that can doom the unwitting contractor who is less than perfectly forthright in its dealings. The government has created financial incentives for members of the public to report your company’s violations as part of a qui tam action. When you consider the number of potential whistleblowers in the bidding process and the contracting chain, a qui tam action would seem more likely than not. Add to that the sanctions contractors might face for even innocent errors either by their own companies or their downstream subs, and government contracting begins to sound increasingly like the Temple of Doom. Oh, and in case you were only focused on affirmative claims, beware the “reverse false claim” which is concealing information that would rightfully entitle the government to a credit…
Reprinted courtesy of
Marissa L. Downs, Laurie & Brennan, LLP and
Jennifer M. Kanady, FAC Services, LLC
Ms. Downs may be contacted at mdowns@lauriebrennan.com
Ms. Kanady may be contacted at JKanady@facfin.com
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