Fairfield Connecticut Building Expert Directory

Reconciling Prompt Payments and Withholding of Retention Payments

March 30, 2016 — Eric J. Rollins, Esq. – Newmeyer & Dillion, LLP
It is common in California for the owners of a project to make monthly payments to a contractor for work as it is completed, but withhold a certain percentage as a guarantee of future satisfactory performance. Contractors almost always pass these withholdings on to their subcontractors. Unsurprisingly, disputes can arise regarding when the withheld retentions must be paid. Civil Code section 8814, subdivision (a), states that a direct contractor must pay each subcontractor its share of a retention payment within ten days after receiving all or part of a retention payment. However, an exception exists -- a direct contractor may withhold from the retention paid to a subcontractor an amount not in excess of 150 percent of the estimated value of the disputed amount, whenever a “good faith dispute exists between the direct contractor and a subcontractor.” (See Cal. Civ. Code, § 8814, subd. (c).) The problem with the statute is that it offers no help in defining a “good faith dispute,” and the California courts have historically not provided much guidance either. Can a “good faith dispute” be any dispute between the contracting parties, e.g., a dispute regarding change orders, mismanagement, etc.? Or must the dispute relate specifically to the retention? Unfortunately for California litigants, the answer may depend on the appellate district in which the parties find themselves. Read the court decision
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Reprinted courtesy of Eric J. Rollins, Esq., Newmeyer & Dillion, LLP
Mr. Rollins may be contacted at eric.rollins@ndlf.com

NY Appeals Court Ruled Builders not Responsible in Terrorism Cases

January 13, 2014 — Beverley BevenFlorez-CDJ Staff
In a ruling on a case related to the September 11, 2001 attacks, New York federal appeals court stated that builders and developers could not be held responsible for losses linked to terrorism, Reuters reports. Circuit Judge Rosemary said the building “would have collapsed regardless of any negligence ascribed by plaintiffs' experts.” Scott Sweeney writing for the Schinnerer's RM Blog explained, “This decision should make it harder for constructors and designers to be held responsible for damages resulting from major acts of terrorism and unforeseeable events that can be nearly impossible to prepare for.” Read the full story at Reuters... Read the full story at Schinnerer's RM Blog... Read the court decision
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Reprinted courtesy of

As Fracture Questions Remain, Team Raced to Save Mississippi River Bridge

September 06, 2021 — Jim Parsons - Engineering News-Record
"How is this bridge still standing?” That was the initial reaction of Aaron Stover, Michael Baker International’s vice president and regional bridge practice lead, as he first studied images of a fractured tie beam that forced the May 11 emergency shutdown of the I-40/Hernando de Soto Bridge between Tennessee and Arkansas. Discovered by chance earlier in the day during MBI’s routine above-deck inspection, the fracture on the bridge’s eastbound span affected nearly half the cross-section of a 26-in. by 33-in. welded girder supporting one of the 50-year-old structure’s 900-ft-long, 100-ft-high arched navigation spans across the Mississippi River. Reprinted courtesy of Jim Parsons, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Kumagai Drops Most in 4 Months on Building Defect: Tokyo Mover

June 11, 2014 — Kathleen Chu and Kevin Buckland - Bloomberg
Kumagai Gumi Co. (1861), a Japanese construction company, fell the most in four months after saying an apartment complex it had built has defects. The shares dropped 5.7 percent to 264 yen at the close of trading in Tokyo, the biggest decline since Feb. 4. Construction flaws in supporting pillars were found in the building completed in March 2003 in Yokohama City, south of Tokyo, the company said in a statement through the stock exchange today. The residents have been asked to relocate to temporary shelters and further investigation is required, it said. “This is a big negative for Kumagai’s reputation and it may hurt the company’s future earnings,” said Yoji Otani, an analyst at Deutsche Bank AG in Tokyo. The latest defect comes after Mitsubishi Estate Co. (8802) said in March it will rebuild a residential complex, constructed by Kajima Corp. (1812), in central Tokyo, after defects were found. Mitsui Fudosan Co. (8801) said it would repair some parts of an apartment building in Kawasaki City after the builder Shimizu Corp. (1803) found cracks in the concrete of some columns in April. Ms. Chu may be contacted at kchu2@bloomberg.net; Mr. Buckland may be contacted at kbuckland1@bloomberg.net Read the court decision
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Reprinted courtesy of Kathleen Chu and Kevin Buckland, Bloomberg

Courthouse Reporter Series: Louisiana Supreme Court Holds Architect Has No Duty to Safeguard Third Parties Against Injury, Regardless of Knowledge of Dangerous Conditions on the Project

July 31, 2024 — Stu Richeson - The Dispute Resolver
In Bonilla v. Verges Rome Architects, 2023-00928 (La. 3/22/24); 382 So.3d 62, the Louisiana Supreme Court held because the terms of the agreement between the architect and the public owner did not give the architect responsibility for the means and methods of construction or for safety on the project, the architect did not have a duty to safeguard third parties against injury, regardless of whether the architect may have had knowledge of dangerous conditions on the project. In Bonilla, the City of New Orleans entered into a contract for the renovation of a building owned by the city. The city also entered into an agreement with Verges Rome Architects (“VRA”) to serve as the project architect. The general contractor on the project subcontracted the demolition work to Meza Services, Inc. (“Meza”). An employee of Meza was injured while attempting to demolish a “vault” on the project. The vault was a ten-foot by ten-foot cinderblock room with a nine-foot-high concrete slab ceiling located on the second floor of the building. The walls of the vault had been partially demolished when one of the employees of Meza was directed by his supervisor to stand on the ceiling of the vault with a jackhammer to continue the demolition. Shortly after beginning the task, the vault structure collapsed and caused the employee to suffer significant injury. Read the court decision
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Reprinted courtesy of Stu Richeson, Phelps
Mr. Richeson may be contacted at stuart.richeson@phelps.com

When is an Indemnification Provision Unenforceable?

September 06, 2021 — Christopher G. Hill - Construction Law Musings
Virginia Code Sec. 11-4.1 makes indemnification provisions in construction contracts that are so broad as to indemnify the indemnitee from its own negligence unenforceable. Of course, this begs the question as to what language of indemnification provisions make them unenforceable. A case from the City of Chesapeake Virginia Circuit Court examined this question. In Wasa Props., LLC v. Chesapeake Bay Contrs., Inc., 103 Va. Cir 423 [unfortunately I can’t find a copy to which to link], Wasa Properties (“Wasa”) hired Chesapeake Bay Contractors (“CBC”) to perform utility work at Lake Thrasher in the Tidewater area of Virginia. Wasa then alleged that CBC breached the contract and caused over $400,000 in damages due to incorrectly installed water lines. Wasa used the following indemnification language as the basis for its suit:

To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and his agents and employees from and against all claims, damages, losses, and expenses, including but not limited to attorney’s fees arising out of or resulting from the performance of the Work.

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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Mandatory Energy Benchmarking is On Its Way

April 22, 2019 — Christopher G. Hill - Construction Law Musings
We have discussed the issue of benchmarking and energy reporting on several occasions here at Musings. As the January 18, 2010 issue of ENR Magazine discusses, now cities and states are getting on board in a big way. Washington, D.C. began requiring building owners to use the EPA Energy Star Portfolio Manager tool on January 1, 2010 and New York City passed a similar measure in December. The D.C. law is the first to require mandatory public disclosure of energy performance. Such disclosure will create a public database of energy performance data. While I understand that this data and its reporting will create energy accountability in a way that non-disclosure of this data would not, the possibilities for misuse or uses that impact the construction world abound. This energy reporting is a step beyond that of the LEED program in that the data is not just reported to the USGBC, but to a public database. As such, the ease of access will impact contracts and contractors in an even bigger way than the USGBC requirements. 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

Insurer’s Broad Duty to Defend in Oregon, and the Recent Ruling in State of Oregon v. Pacific Indemnity Company

January 02, 2024 — Keith Sparks - Ahlers Cressman & Sleight PLLC
Oregon law mandates a broad duty to defend, requiring insurers to provide legal representation to their policyholders whenever there is a potential for coverage under the policy. The significance of this broad interpretation means that an insurer has a duty to defend an insured even in situations where the alleged facts only imply a covered claim, and even in situations where the underlying claim is ultimately not covered by the policy. The insurer’s duty to defend is triggered if the allegations of the complaint, reasonably interpreted, could result in the insured being held liable for damages covered by the policy. This is referred to as the “four-corners” rule; it is also sometimes referred to as the eight-corners rule (for the four corners of the complaint plus the four corners of the policy). Oregon’s adoption of a broad interpretation of the duty to defend affirmatively places the onus on insurers to err on the side of coverage. This broad duty to defend is based on the principle that an insured should not have to bear the expense of defending a lawsuit that the insurer may ultimately have to pay for. The duty to defend is also important because it helps ensure that insureds have access to legal representation when faced with a lawsuit. Read the court decision
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Reprinted courtesy of Keith Sparks, Ahlers Cressman & Sleight PLLC
Mr. Sparks may be contacted at keith.sparks@acslawyers.com

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