Construction Contractors Must Understand Retainage In 2021
May 24, 2021 —
Ed Williams - Construction ExecutiveRetainage has become a vital part of the contracting and construction process. If defined precisely, retainage is a practice of withholding a particular percentage of the payment until the project is delivered.
However, the practice can turn to be a challenge for small contractors, as it is laid over a lack of trust in the potential and abilities of a contractor, which might cause financial downtime at the later stages of the project when contractors need to pay bills.
Since 2020 proved to be a tough year for the entire construction industry, project owners, general contractors and construction firms new to the industry must understand what exactly retainage is. It is equally important for small contractors and subcontractors to understand the right way to manage the retainage.
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Ed Williams, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Texas City Pulls Plug on Fossil Fuels With Shift to Solar
March 19, 2015 —
Christopher Martin – Bloomberg(Bloomberg) -- A city in the heart of the oil state of Texas is set to become one of the first communities in the U.S. to wean its residents off fossil fuels.
The municipal utility in Georgetown, with about 50,000 residents, will get all of its power from renewable resources when SunEdison Inc. completes 150 megawatts of solar farms in West Texas next year. The change was announced Wednesday.
It will be the first city to completely embrace clean power in the state, which is the biggest U.S. producer and user of natural gas. More will follow as municipalities seek to insulate themselves from unpredictable prices for fossil fuels, said Paul Gaynor, SunEdison’s executive vice president of North America. Burlington, Vermont, made a similar move with its purchase of a hydroelectric plant last year.
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Christopher Martin, BloombergMr. Martin may be contacted at
cmartin11@bloomberg.net
Bad Faith and a Partial Summary Judgment in Seattle Construction Defect Case
February 10, 2012 —
CDJ STAFFThe US District Court of Washington has issued a ruling in the case of Ledcor Industries v. Virginia Surety Company, Inc. Ledcor was the builder of a mixed-use real estate project in Seattle called the Adelaide Project. Ledcor purchased an insurance policy from Virginia Surety covering the project. After the completion of the project, Ledcor received complaints of construction defects from the homeowners, which they forwarded to Virginia Surety.
Virginia Surety denied coverage on several grounds. Absent any lawsuit, Virginia claimed that there was “not yet any duty to defend or indemnify.” Further, as the policy commenced ten days after work on the project was substantially completed, Virginia cited a provision in the policy that excluded coverage for damage that occurred before the policy began. As problems included water intrusion, Virginia noted an exclusion for fungal damage. Finally, Virginia noted that it was not clear whether damage was due to Ledcor’s own actions.
The homeowners sued over the construction defects. Ledcor settled these suits before trial. In this, they were defended by, and settlements were paid by American Home, another of Ledcor’s insurers. Ledcor claims that Virginia Surety acted in bad faith by denying coverage and by its failure to investigate the ongoing nature of the work at the project.
The judge determined that Virginia Surety acted in bad faith when it invoked the fungus exclusion. Virginia noted that fungal damage “‘would have been’ referenced in the list of construction defects,” however, the HOAs claimed only “water stains” and “water damage,” and made no mention of mold or fungus. The court found that Virginia Surety “was not entitled to deny coverage simply because it may have suspected that mold or fungus damage existed.” The court noted that further proceedings would be needed to determine what portion of the settlement Virginia is obligated to pay.
The court found that there were matters of fact to be determined on the further issues in the case. The judge wrote that although Virginia acted in bad faith in invoking the fungus exclusion, it still had to be determined if they were in breach of contract by failing to defend Ledcor. Ledcor still needs to show that the damages claimed by the HOA were due to work actually covered by Virginia Surety.
Ledcor made an additional claim that Virginia Surety violated Washington’s laws concerning the insurance industry. Here, the court noted that the improper exclusion for fungus issues “constitutes a per se unfair trade practice.” Six other claims were made under this law. The court found that Virginia Surety did not misrepresent “pertinent facts or insurance policy provisions.” It also issued its denial letter promptly, satisfying the fifth provision. However, Virginia Surety did violate the second provision, in that it failed “to acknowledge and act reasonably promptly upon communications with respect to claims.” Two other issues could not be determined.
Judge Martinez’s decision granted a summary judgment to Ledcor on the issue of bad faith. An additional summary judgment was granted that Virginia Surety violated Washington’s Insurance Fair Conduct Act. Judge Martinez did not grant summary judgment on any of the other issues Ledcor raised.
Read the court’s decision…
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Tech Focus: Water Tech Getting Smarter
June 05, 2023 —
Pam McFarland - Engineering News-RecordIn early December 2021, the Denver International Airport made headlines across the U.S. after a hot water pipe broke a month before a major terminal expansion project was expected to complete. The scalding water spilled on floors and across the airport concourse, causing $50 million in damage and a nine-month delay to the project.
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Pam McFarland, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com
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Newmeyer Dillion Attorneys Named to 2020 Southern California Rising Stars List
June 22, 2020 —
Newmeyer DillionProminent business and real estate law firm Newmeyer Dillion is pleased to announce that partner Eric Rollins and associates Jason Moberly Caruso and Richard Protzmann have been selected to the 2020 Southern California Rising Stars list by Super Lawyers. Each year, no more than 2.5 percent of the lawyers in the state are selected to receive this honor. The attorneys will be recognized in the June 2020 issues of Super Lawyers Magazine, Los Angeles Magazine and Orange Coast Magazine.
Eric Rollins, a partner in the Newport Beach office, provides legal counsel in a diverse array of practice areas with a focus on business, real estate, construction, insurance, and entertainment law. In his more than ten years at the firm, Eric has litigated and resolved hundreds of matters in both state and federal court through negotiation, mediation, arbitration, and trial. This is his third year as a Rising Star honoree.
Jason Moberly Caruso is an associate in the Newport Beach office. Jason's practice focuses on various aspects of "contaminated sites" environmental legal work, complex litigation, and appellate matters. This is the fifth consecutive year Jason has been honored.
Richard Protzmann is an associate in the Newport Beach office. Richard's practice focuses on focuses his practice on areas of business litigation, eminent domain, environmental law, zoning and land use, and general real estate litigation. This is the first year Richard has been selected.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The patented selection process evaluates candidates on 12 indicators of peer recognition and professional achievement, resulting in a comprehensive, credible and diverse listing of exceptional attorneys. The Rising Stars list is developed using the same selection process except candidates must be either 40 years old or younger, or have been in practice for 10 years or less.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's operations, growth, and profits. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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2018 Spending Plan Boosts Funding for Affordable Housing
April 11, 2018 —
Emily Bias – Gravel2Gavel Construction & Real Estate Law BlogOn March 23, President Trump signed into law the Consolidated Appropriations Act, 2018, a $1.3 trillion spending package that includes a 12.5% increase in low-income housing tax credit allocations over the next four years, along with funding increases for several affordable housing programs. This is welcome news to affordable housing developers who have been facing funding gaps as a result of reductions in the corporate tax rate under the Tax Cuts and Jobs Act enacted in late 2017, which led to reduced pricing from equity investors.
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Emily Bias, Pillsbury Winthrop Shaw Pittman LLPMs. Bias may be contacted at
emily.bias@pillsburylaw.com
“Based On”… What Exactly? NJ Appellate Division Examines Phrase and Estops Insurer From Disclaiming Coverage for 20-Month Delay
August 20, 2019 —
Anthony L. Miscioscia and Timothy A. Carroll - White and Williams LLPOn May 28, 2019, the New Jersey Superior Court, Appellate Division examined the phrase “based on” in an assault-and-battery exclusion, finding that the phrase means “to make, form, or serve as the foundation of any claim, demand or suit.” C.M.S. Investment Ventures, Inc. v. American European Insurance Company, No. A-2056-17T3, 2019 N.J. Super. Unpub. LEXIS 1215, at *8-9 (N.J. Super. Ct. App. Div. May 28, 2019) (CMS). The CMS case is also notable because the Appellate Division held that a 20-month delay in disclaiming coverage was unreasonable and therefore warranted estoppel.
In CMS, the insured was allegedly warned by its tenant about a faulty ground-floor window that failed to lock properly. Afterward, an intruder broke into the tenant’s apartment and sexually assaulted the tenant, who sued the insured on a premises liability claim. Before she filed suit, the tenant sought payment from the insured’s CGL insurer directly. The insurer denied coverage based on the assault-and-battery exclusion and closed the file, but never informed the insured. Later, the tenant sued the insured, which sought a defense and indemnity from its insurer, which again denied coverage based on the exclusion. The insured then sought a declaration of coverage on grounds that the exclusion was ambiguous, and the insurer “was estopped from denying coverage, because it waited [20] months to inform CMS of its coverage decision.” The trial court ruled in the insured’s favor which led to the appeal in CMS.
Reprinted courtesy of
Timothy Carroll, White and Williams LLP and
Anthony Miscioscia, White and Williams LLP
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Mr. Carroll may be contacted at carrollt@whiteandwilliams.com
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Ninth Circuit Court Weighs In On Insurance Coverage For COVID-19 Business Interruption Losses
October 11, 2021 —
Rondi J. Walsh - Newmeyer DillionOn October 1, 2021, the Ninth Circuit Court of Appeals ruled on a trio of cases involving COVID-19 business interruption losses, in a series of written opinions with results favoring the insurers. Despite the slate of wins for insurers in this round of cases, these rulings are limited to cases where policyholders either did not allege the presence of COVID-19 on their premises causing “physical alteration” of the property itself, or had a virus exclusion in their policy, or both. This leaves room for future cases potentially ruling in favor of coverage where the insureds allege the presence of coronavirus on the premises, and that there was a detrimental physical alteration of the property as a result. To date, the Ninth Circuit has not ruled on such a situation.
RULING 1: Mudpie v. Travelers Casualty Insurance Co. of America
The Ninth Circuit first considered a proposed class action brought by a children’s store operator, Mudpie. Mudpie sought business income and extra expense coverage from Travelers after California and local authorities issued shutdown orders impacting Mudpie’s operations due to COVID-19. (Mudpie, Inc. v. Travelers Casualty Insurance Company of America, Case No. 20-16858, --- F.4th --- (9th Cir. Oct. 1, 2021).) Travelers denied coverage, asserting that the claim did not involve “direct physical loss of or damage to” property “caused by or resulting from a covered Cause of Loss.” Travelers also denied coverage under language excluding “loss or damage caused by or resulting from any virus…that induces…physical distress, illness or disease.” Applying California law, the trial court agreed with Travelers on both accounts.
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Rondi J. Walsh, Newmeyer DillionMs. Walsh may be contacted at
rondi.walsh@ndlf.com
