SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Contractor's Agreement to Perform Does Not Preclude Coverage Under Contractual Liability Exclusion

January 31, 2014 — Tred R. Eyerly – Insurance Law Hawaii
In a much anticipated decision, the Texas Supreme Court ruled that a general contractor who agrees to perform its work in a good and workmanlike manner does not "assume liability" for damages arising out of its defective work so as to trigger the Contractual Liability Exclusion. Ewing Constr. Co., Inc. v. Amerisure Ins. Co., 2014 Tex. LEXIS 39 (Tex. Jan.17, 2014). Ewing signed an agreement with the School District to serve as general contractor to renovate and build additions to a school, including tennis courts. After construction was completed, the tennis courts started flaking, crumbling, and cracking. The School District filed suit, alleging breach of contract and negligence. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Show Me the Money: The Good Faith Dispute Exception to Prompt Payment Penalties

March 13, 2023 — Garret Murai - California Construction Law Blog
California has a number of prompt payment penalty statutes on the books. Among them is Civil Code section 8800 which requires project owners on private works projects to pay progress payments to direct contractors within 30 days after demand for payment pursuant to contract or be subject to prompt payment penalties of two percent (2%) per month on the amount wrongfully withheld. Like California’s other prompt payment penalty statutes, however, there is an important carve out: If there is a good faith dispute between the project owner and the direct contractor the project owner may withhold up to 150% of the dispute amount and not be subject to prompt payment penalties. And that, my friends, is a higher-tiered party’s “get out of jail free” card. In a case of first impression, the 1st District Court of Appeals, in Vought Construction Inc. v. Stock (2022) 84 Cal.App.5th 622, examined whether a project owner’s claim for liquidated damages constitutes a good faith dispute under Civil Code section 8800. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Is the Event You Are Claiming as Unforeseeable Delay Really Unforeseeable?

September 26, 2022 — David Adelstein - Florida Construction Legal Updates
Is the item or event you are claiming as an unforeseeable, excusable delay really unforeseeable? This is not a trick question. Just because your construction contract identifies items or events that constitute unforeseeable, excusable delay does not mean those items can be used as a blanket excuse or crutch for the contractor. That would be unfair. For instance, it is not uncommon for a construction contract to list as unforeseeable, excusable delay the following events or items: “(i) acts of God or of the public enemy, (ii) act of the Government in either its sovereign or contractual capacity, (iii) acts of another Contractor in the performance of a contract with the Government, (iv) fires, (v) floods, (vi) epidemics, (vii) quarantine restrictions, (viii) strikes, (ix) freight embargoes, (x) unusually severe weather, or (xi) delays of subcontractors or suppliers at any tier arising from unforeseeable causes beyond the control and without the fault or negligence of both the Contractor and the subcontractors or suppliers.” See, e.g., F.A.R. 52.249-10(b)(1). While the itemization of excusable delay may be worded differently, the point is there may be a listing as to what items or events constitute excusable delay. An excusable delay would justify additional time and, potentially, compensation to the contractor. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Ex-Pemex CEO Denies Allegations of Involvement in Brazil Scandal

April 13, 2017 — Carlos M Rodriguez & Juan Pablo Spinetto - Bloomberg
ormer Petroleos Mexicanos Chief Executive Officer Emilio Lozoya denied participating in an alleged bribery scheme involving Brazilian construction company Odebrecht SA in Mexico, after Veja magazine reported the executive was mentioned in connection with an ongoing corruption probe. "I haven’t requested nor have I received illegal money," Lozoya said in an emailed response to questions by Bloomberg News on Wednesday. "I reiterate my interest in having this matter investigated and penalties issued, but without dishonoring and defaming without proof along the way." In a report this week, Brazilian magazine Veja cited court documents suggesting the former Pemex CEO allegedly requested a $5 million illegal payment to Odebrecht, Latin America’s biggest construction company, to obtain benefits in Mexico. Veja says it based its reporting on portions of a plea-bargain agreement between prosecutors and a former top executive at Odebrecht. The allegations are part of a three-year, sweeping corruption probe in Brazil known as Operation Carwash. Reprinted courtesy of Carlos M Rodriguez, Bloomberg and Juan Pablo Spinetto, Bloomberg Read the court decision
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Insurers Subrogating in Arkansas Must Expend Energy to Prove That Their Insureds Have Been Made Whole

July 30, 2019 — Michael J. Ciamaichelo - The Subrogation Strategist
Arkansas employs the “made whole” doctrine, which requires an insured to be fully compensated for damages (i.e., to be “made whole”) before the insurer is entitled to recover in subrogation.[1] As the Riley court established, an insurer cannot unilaterally determine that its insured has been made whole (in order to establish a right of subrogation). Rather, in Arkansas, an insurer must establish that the insured has been made whole in one of two ways. First, the insurer and insured can reach an agreement that the insured has been made whole. Second, if the insurer and insured disagree on the issue, the insurer can ask a court to make a legal determination that the insured has been made whole.[2] If an insured has been made whole, the insurer is the real party in interest and must file the subrogation action in its own name.[3] However, when both the insured and an insurer have claims against the same tortfeasor (i.e., when there are both uninsured damages and subrogation damages), the insured is the real party in interest.[4] In EMC Ins. Cos. v. Entergy Ark., Inc., 2019 U.S. App. LEXIS 14251 (8th Cir. May 14, 2019), EMC Insurance Companies (EMC) filed a subrogation action in the District Court for the Western District of Arkansas alleging that its insureds’ home was damaged by a fire caused by an electric company’s equipment. EMC never obtained an agreement from the insureds or a judicial determination that its insureds had been made whole. In addition, EMC did not allege in the complaint that its insureds had been made whole and did not present any evidence or testimony at trial that its insureds had been made whole. After EMC presented its case-in-chief, the District Court ruled that EMC lacked standing to pursue its subrogation claim because “EMC failed to obtain a legal determination that its insureds had been made whole . . . prior to initiating this subrogation action.” Thus, the District Court granted Entergy Ark., Inc.’s motion for judgment as a matter of law and EMC appealed the decision. Read the court decision
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Reprinted courtesy of Michael J. Ciamaichelo, White and Williams LLP
Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com

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Beyond the Flow-Down Clause: Subcontract Provisions That Can Expose General Contractors to Increased Liability and Inconsistent Outcomes

December 10, 2024 — Phillip L. Parham III - ConsensusDocs
Flow-down clauses in construction subcontracts—blanket clauses providing that some or all of the terms and conditions in the prime contract between the general contractor and the property owner apply equally between the subcontractor and general contractor—are an important component to managing risk for a general contractor and reducing the likelihood of disputes with either/both the owner and subcontractor. Put simply, flow-down provisions can provide continuity between the general contractor’s obligations to the owner and the subcontractor’s obligations to the general contractor. Properly drafted, flow-down clauses reduce the general contractor’s risk by ensuring that the subcontractor is legally bound to meet the owner’s objectives for the project in the same way as the general contractor. But relying on blanket flow-down clauses, alone, to protect the general contractor is like a soldier going into battle with nothing but a helmet, leaving significant other areas exposed and unprotected. In other words, a general contractor should look beyond just a singular, blanket flow down of terms to ensure its bases are properly covered. Accordingly, this article goes beyond the blanket flow-down clause and highlights several key subcontract provisions where inconsistent obligations among the subcontractor, general contractor, and owner expose the general contractor to increased liability and inconsistent outcomes. Specifically, this article will examine disputes resolution clauses, liquidating provisions, notice provisions, and termination provisions. However, this article will not provide a deep examination of these clauses, nor does it highlight every potentially relevant clause. Rather, it focuses on these select clauses to highlight important issues associated with flow-down provisions. Read the court decision
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Reprinted courtesy of Phillip L. Parham III, Jones Walker LLP
Mr. Parham may be contacted at pparham@joneswalker.com

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Angelo Mozilo Speaks: No Regrets at Countrywide

September 03, 2014 — Max Abelson – Bloomberg
Six years after he lost control of the largest mortgage lender in the U.S., and days after news that the U.S. Attorney’s Office in Los Angeles plans to sue him, the Countrywide Financial Corp. founder is baffled by a new effort to punish him, proud of past triumphs and incensed by criticism. “You’ll have to ask those people, ‘What do you have against Mozilo, what did he do?’” he said in a 30-minute call with Bloomberg News before Labor Day, one of his few interviews since the firm’s downfall. “Countrywide didn’t change. I didn’t change. The world changed.” Interviews with Mozilo, 75, and three friends show what retirement looks like for a chief executive officer linked to the worst financial crisis since the Great Depression. Remaining out of public view like Lehman Brothers Holdings Inc.’s Richard Fuld or Jimmy Cayne of Bear Stearns Cos., Mozilo has submitted plans for Old West-style offices in California, taught students in Italy about finance, invested in a building in the Arizona desert that houses a Taco Bell and written about his life so that his grandchildren will “know the truth.” Read the court decision
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Reprinted courtesy of Max Abelson, Bloomberg
Mr. Abelson may be contacted at mabelson@bloomberg.net

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Congratulations to Haight Attorneys Selected for the 2024 Edition of Best Lawyers and Best Lawyers: Ones to Watch

September 11, 2023 — Haight Brown & Bonesteel LLP
Best Lawyers and Best Lawyers: Ones to Watch – 2024 Edition Best Lawyers 2024 Edition

• Bruce Cleeland
• Peter Dubrawski
• Denis Moriarty
• Theodore Penny

Best Lawyers: Ones to Watch 2024 Edition

• Frances Brower
• Kyle DiNicola
• Kristian Moriarty
• Arezoo Jamshidi
• Josh Maltzer
• Philip McDermott
• Patrick McIntyre
• Annette Mijanovic
• Kathleen Moriarty
• Bethsaida Obra-White

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Reprinted courtesy of Haight Brown & Bonesteel LLP

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