"On Second Thought"
October 28, 2024 —
Daniel Lund III - LexologyRehearing requests are seldom granted by courts, and when they are, there’s usually something uniquely compelling in the request and the granting.
So is the case in a matter involving monies deposited in the registry of the federal court in New Orleans related to work performed on cleanup after Hurricanes Maria and Irma in the U.S. Virgin Islands. The party depositing monies – which represented subcontract sums paid to it by the general contractor – held back several hundred thousand dollars based on withholding provisions in the various contracts in play. The Court was tasked with evaluating not only a pay-when-paid provision in the subcontract of the claiming party, but also incorporation of the terms of a higher tiered contract which allowed for the withholding.
The Court initially granted summary judgment allowing the monies to be withheld. However, on request for rehearing, it was pointed up that while monies could be retained for purposes of covering attorney’s fees and costs related to litigation initiated by the plaintiff subcontractor’s vendors, there was a particular process for that withholding – and an assertion that the process was not followed.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Mitsui Fudosan Said to Consider Rebuilding Tilted Apartments
October 28, 2015 —
Katsuyo Kuwako – BloombergMitsui Fudosan Co., Japan’s biggest developer, is considering rebuilding an apartment complex in Yokohama after one of the four buildings started to tilt, according to a person familiar with the situation.
Kiyotaka Fujibayashi, president and chief executive officer of Mitsui Fudosan Residential Co., on Thursday explained the plans to residents, according to the person, who asked not to be named because the information is private. Another option the company is studying is buying back the apartments from the residents at a price higher than what they had paid, the person said. The project was sold in 2006.
Mitsui Fudosan is the latest developer to come under scrutiny for defects at residential projects in the Tokyo area. Mitsubishi Estate Co., Japan’s biggest developer by market value, said last year it would rebuild a residential complex in the upscale Aoyama neighborhood after finding faults. Also last year, Sekisui House Ltd. said it would reconstruct a residential complex that was being built by Taisei Corp. after finding some columns were missing reinforcing metals.
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Katsuyo Kuwako, Bloomberg
Subcontractor Not Estopped from Enforcing Lien Not Listed In Bankruptcy Petition
March 01, 2017 —
Chadd Reynolds – Autry, Hanrahan, Hall & Cook, LLPIn Stock Building Supply, Inc. v. Platte River Insurance Co.,[1] the Court of Appeals dealt with issues of judicial estoppel, bankruptcy, retroactive application of statutory lien amendments, and the full payment defense.
The owner, Madison Retail-Suwanee, LLC (“Madison”) hired Cannon/Estapa General Contractors, Inc. (“Cannon”) to be the general contractor for the construction of a shopping center (“the Project”). Cannon subcontracted with Stock Building Supply (“Stock”) to supply labor, materials, and services for the Project. Cannon failed to complete the project and Madison had yet to pay Cannon the full contract price. In 2007, Stock timely filed a lien on the Project and obtained a judgment against Cannon for the amount due under the subcontract. Platte River Insurance Company (“Platte”), the surety, issued a bond to discharge Stock’s lien. Consequently, Stock pursued an action against Platte to collect the judgment in the amount of $93,865.27.
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Chadd Reynolds, Autry, Hanrahan, Hall & Cook, LLPMr. Reynolds may be contacted at
reynolds@ahclaw.com
#10 CDJ Topic: Carithers v. Mid-Continent Casualty Company
December 30, 2015 —
Beverley BevenFlorez-CDJ STAFFCraig Martin of
Lamson Dugan and Murray, LLP on his
Construction Contractor Advisor blog used the Carithers case to demonstrate how “[w]hen you are involved in construction litigation, you have battles on several fronts, including those against subcontractors, owners, insurers and the court. Shoring up your defenses on each of these fronts is imperative, or you may lose the battle or, worse yet, the war.” Martin discusses the various “battle fronts” including the “Claim Against Contractor,” “Where Are You Litigating,” “Claim Against Insurance Company,” and “Damages.”
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In the article, “Duty to Defend Construction Defect Case Affirmed, Duty to Indemnify Reversed In Part,” attorney
Tred R. Eyerly also covered the Carithers case. Eyerly explained, “Determining whether there was coverage for the damages awarded required the court to decide which trigger applied. Examining the policy language, the court determined that property damage occurred when the damage happened, not when the damage was discovered or discoverable. Therefore, the district court did not err in applying the injury in fact trigger.”
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Pending Sales of Existing Homes in U.S. Decline for Eighth Month
March 31, 2014 —
Shobhana Chandra – BloombergContracts to purchase previously owned U.S. homes unexpectedly fell in February for an eighth straight month, a sign of further weakness in the industry.
The index of pending home sales decreased 0.8 percent after a 0.2 percent drop the prior month that was previously reported as a gain, figures from the National Association of Realtors showed today in Washington. The median forecast of 39 economists surveyed by Bloomberg called for a 0.2 percent rise.
Colder-than-normal weather probably played a role in discouraging prospective buyers faced with rising mortgage rates, higher prices and limited supply of cheaper properties. At the same time, the Realtors group said buyer traffic is stabilizing, which may help spur demand as temperatures warm.
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Shobhana Chandra, BloombergMs. Chandra may be contacted at
schandra1@bloomberg.net
Potential Problems with Cases Involving One Owner and Multiple Contractors
January 27, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Matthew Devries’ blog, Best Practices Construction Law, problems can arise in a case with one owner and multiple contractors: “Increasingly, two or more contractors may each have a separate contract with the owner for different portions of the work on a single project.”
The problems occur when contractor responsibilities or storage sites become entangled, “for example, from one contractor’s storage of materials on a site where the other has work to perform, or from one contractor’s failure to progress with work that is preliminary to the other’s work.”
Devries adds that in “addition to claims against the other contractor, claims may also be made against the owner for failure to coordinate the work.”
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No Coverage for Construction Defect Claim Only Impacting Insured's Work
January 08, 2024 —
Tred R. Eyerly - Insurance Law HawaiiIn a coverage dispute between two insurers over a claim for damages caused by faulty workmanship, the court found there was no right to equitable contribution or indemnity. Travelers Prop. Cas. Co. of Am. v. Mallcraft, Inc., 2023 Cal. Super. LEXIS 67568 (Cal. Super. Ct. Sept. 15, 2023).
Mallcraft was the general contractor for a building project and was sued for construction defects. Travelers was an additional insured under a policy issued to a subcontractor, KitCor. Travelers defended Mallcraft in an arbitration. Travelers sought equitable contribution and equitable indemnity from Hartford, Mallcraft's insurer.
Mallcraft and Travelers stiulated to a judgment agianst Mallcraft for all costs Travelers incurred in the arbitration. Travelers' insured, KitCor, was not implicated in the construction defect claims against Mallcraft. The judgment set forth findings, including the fact that the underlying plaintiff never made any claim that KitCor perfomred work on the project or casued property damage.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Be Careful When Requiring Fitness for Duty Examinations
October 21, 2015 —
Craig Martin – Construction Contractor AdvisorFitness for Duty examinations can be an important part of an employer’s hiring and retention protocol. The Nebraska Supreme Court recently clarified when an employer may require applicants and employees to undergo fitness for duty examinations. In Arens v. Nebco, Inc., the court ruled that an employer must have a legitimate, nondiscriminatory reason for its demand that a current employee submit to a fitness for duty examination.
In this case, Lenard Arens suffered two significant injuries over the course of his 25 years of employment with Nebco. The second injury, a closed head injury, limited the type of work he could do and required written instructions due to short term memory loss. Arens was assigned to drive tractor-trailer trucks. Several years after returning to work, Arens had two minor accidents with his truck within a matter of days. Arens supervisor required him to undergo fitness for duty examination. Arens failed the fitness for duty examination and was terminated. Arens filed suit, claiming that Nebco discriminated against him by making him take a fitness for duty test.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com