CGL Insurer’s Duty To Defend Broader Than Duty To Indemnify And Based On Allegations In Underlying Complaint
April 10, 2019 —
David Adelstein - Florida Construction Legal UpdatesThe duty to defend an insured with respect to a third-party claim is broader than the duty to indemnify the insured for that claim. The duty to defend is triggered by allegations in the underlying complaint. However, an insurer is only required to indemnify its insured for damages covered under the policy. A recent case example demonstrating the duty to defend is broader than the duty to indemnify can be found in Southern Owners Ins. Co. v. Gallo Building Services, Inc., 2018 WL 6619987 (M.D.Fla. 2019).
In this case, a homebuilder built a 270-unit condominium project where the units were included in 51-buildings. Upon turnover of the condominium association to the unit owners, the condominium association served a Florida Statutes Chapter 558 Notice of Construction Defects letter. There was numerous nonconforming work spread out among various subcontractor trades including nonconforming stucco work. The homebuilder incurred significant costs to repair defective work and resulting property damage, and relocated unit owners during repairs. The homebuilder then filed a lawsuit against implicated subcontractors. One of the implicated subcontractors was the stucco subcontractor.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Why Ethiopia’s $5 Billion Dam Has Riled Its Neighbors
September 12, 2022 —
Samuel Gebre & Fasika Tadesse - BloombergEthiopia has been at loggerheads with downstream neighbors Egypt and Sudan for years over a $5 billion mega-dam it’s building on the Nile River. A third phase of filling a 74 billion cubic-meter (2.6 trillion cubic-foot) reservoir behind the Grand Ethiopian Renaissance Dam was completed in August, a process that’s reignited tensions. Egypt has described the unilateral action as a violation of international law and its foreign minister, Sameh Shoukry, wrote to the United Nations Security Council in July, reiterating its objections and accusing Ethiopia of derailing attempts to resolve the standoff.
1. Why is the dam so significant?
The Nile is the most important source of fresh water in a largely arid region that is very vulnerable to drought and climate change and is experiencing rapid population growth. Egypt relies on the 4,000-mile-long river for as much as 97% of its supply, and much of eastern Sudan’s population depends on it for survival. Ethiopia is counting on a 5,150-megawatt hydropower plant on its new dam to help supply electricity to the 60% of its population that don’t have access, and sustain its manufacturing industries. The plant began generating power in 2022, some of which will be sold to neighboring countries.
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Samuel Gebre, Bloomberg and
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A Court-Side Seat: Clean Air, Clean Water, Citizen Suits and the Summer of 2022
November 01, 2022 —
Anthony B. Cavender - Gravel2GavelThis is a selection of significant environmental and regulatory law cases decided by the federal courts after the Supreme Court’s 2021 Term concluded.
The U.S. Court of Appeals for the DC Circuit
National Association of Broadcasters v. Federal Communications Commission
On July 12, 2022, the DC Circuit held that an order of the FCC requiring radio broadcasters to follow a prescribed five-step process to verify the identity of program sponsors was not authorized by the Communications Act. According to the court, the FCC “decreed a duty that the statute does not require, and that the statute does not empower the FCC to impose.” Here, the agency failed to identify the statutory authority it needed to authorize the issuance of such an order. While certainly not as significant as the Supreme Court’s ruling in West Virginia v. EPA, decided only a few days before this decision was released, it is a strong reminder that the courts want to know if a challenged rule is authorized by law.
Humane Society of the U.S., et al., v. U.S. Department of Agriculture
On July 22, 2022, the court decided a case involving the steps the Administrative Procedure Act and the Federal Register Act require to be taken before a final agency rule is legally promulgated. Customarily, when there has been a change in Presidential administrations, the incoming administration “quietly” withdraws rules awaiting Federal Register publication without much ceremony. The majority of this panel agreed that public notice should have been provided to the regulated community to comment on the new administration’s action to pull back a new rule which had been made available for public inspection before Federal Register publication that would have strengthened the protections afforded “show horses,” as now required by law. The court noted that “it seems clear that filing with the Federal Register constituted promulgation of a regulation even though publication may not occur until a later date.” Circuit Judge Rao filed a strong dissent. “By cutting off agency discretion at public inspection, the majority imposes judicial burden on agency procedures that conflicts with circuit precedent, the statutory framework and a longstanding regulation permitting withdrawals prior to publication.” There could be a further review of this unique ruling.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
There Is No Sympathy If You Fail to Read Closely the Final Negotiated Construction Contract
February 28, 2022 —
David Adelstein - Florida Construction Legal UpdatesWhen an opinion in a case starts with, “Unlike some motions, not even the most ingenious lawyers could make this one complicated,” you know you are in for an interesting read. This was how the opinion started in U.S. f/u/b/o Hambric Steel and Fabrication, Inc. v. Leebcor Services, LLC, 2022 WL 345636 (M.D. GA. 2022), which concerns a Miller Act payment bond dispute between a subcontractor and prime contractor on a federal construction project.
As demonstrated below, the moral of this case is in fact simple. Read what you sign BEFORE you sign! No ifs, ands, or buts. Failure to do so will garner very little sympathy.
This case dealt with a prime contractor arguing that the subcontractor pulled the wool over its eyes by surreptitiously altering the final negotiated redlined contract between the parties. In particular, the prime contractor claimed that the dispute resolution provision was supposed to include a Virginia venue provision. However, the subcontractor “fraudulently” changed this provision to make it a Georgia venue provision after the final contract had been agreed to during the negotiation. Yet, it is undisputed that the executed contract between the parties included a Georgia venue provision.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Design, Legal and Accounting all Fight a War on Billable Hours After the Advent of AI
June 10, 2024 —
Jeff Yoders - Engineering News-RecordBillable hours have long been the professional services standard by which architects, engineers, lawyers and accountants all get paid. But What if that effort wasn’t from human toil at all? Artificial Intelligence is already chipping away at the venerable billable hours business model, completing in just minutes or seconds tasks that would take humans hours. As these tools grow more efficient and accurate, many firms are having to reevaluate how they allocate their resources, and project delivery practices may have to evolve as well.
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Jeff Yoders, Engineering News-Record
Mr. Yoders may be contacted at yodersj@enr.com
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Agree First or it May Cost You Later
May 08, 2023 —
Bill Wilson - Construction Law ZoneBusiness relationships often begin before parties execute a written agreement containing the terms and conditions by which the relationship will be governed. With little more than a Letter of Intent (“LOI”) or Letter of Award (“LOA”) one party is typically pressured to begin investing time and money to start preliminary work on a project. If such LOI or LOA contains nothing more than an agreement to agree later, the performing party should minimize its investment until the later agreement is executed. A recent court decision in New York confirmed the danger to the performing party under “agreement to agree” provisions.
In Permasteelia North America Corp. v. JDS Const. Group, LLC, 2022 WL 2954131 (N.Y. Sup. CT. 7/22/22), the plaintiff subcontractor allegedly performed $1.9 million worth of preliminary work under nothing more than a LOA with an agreement to agree provision. Issues arose, and the parties never entered any later written agreement. The general contractor refused to pay the plaintiff anything for its preliminary work. In response, the plaintiff filed suit against the general contractor asserting four counts: foreclosure of its lien, breach of contract, unjust enrichment, and account stated. All four counts were based on an alleged oral “handshake deal” for subcontract work for the project. The general contractor’s LOA stated that neither party would be bound “unless and until the parties actually execute a subcontract.” During discovery, the plaintiff admitted that neither party intended to enter into any contract until its potential terms were negotiated, reduced to writing, and signed. Moreover, the plaintiff only offered one set of meeting minutes and a few project agendas to support its alleged “handshake deal.” Once these necessary undisputed facts were confirmed, the defendant moved for summary judgment on all four counts.
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
A Court-Side Seat: May Brings Federal Appellate Courts Rulings and Executive Orders
June 29, 2020 —
Anthony B. Cavender - Gravel2GavelHere are a few interesting new rulings from the federal appellate courts.
COURT ORDERS
Like a Good Neighbor …? —
State of Maryland v. EPA
On May 19, 2020, the D.C. Circuit decided a Clean Air Act case involving the use of the “Good Neighbor Provision” of the Act, which is triggered when one state has a complaint about emissions generated in a neighboring upwind state that settle in the downwind state. Here, Maryland and Delaware filed petitions with EPA seeking relief from the impact of emissions from coal-fired power plants that allegedly affect their states’ air quality. EPA largely denied relief, and the court largely upheld the agency’s use and interpretation of the Good Neighbor Provision. The opinion is valuable because of its clear exposition of this complicated policy.
A Volatile Underground Issue —
Wayne Land and Mineral Group v. the Delaware River Basin Commission
Also on May 19, 2020, the U.S. Court of Appeals for the Third Circuit issued a ruling involving the Delaware River Basin Commission. Established in 1961, the Commission oversees and protects the water resources in the Basin. Not long ago, the Executive Director of the Commission, citing a rule of the Commission, imposed very strict limitations on fracking operations in the Basin. This decision has been very controversial with the Third Circuit opining that the Commission’s authority to regulate fracking operations—thought to be a province of state authority—was not clear-cut. In this case, three Pennsylvania state senators filed motions to intervene in the case, but the lower court rejected their request. The Third Circuit has directed the lower court to take another look at their standing to participate in this litigation. This is a volatile issue in Pennsylvania.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Will Superusers Future-Proof the AEC Industry?
May 13, 2019 —
Aarni Heiskanen - AEC BusinessDesign professionals who leverage tools and technology and, at the same time, have people skills, are essential to the future of the industry. They are Superusers, the protagonists of the latest book by Randy Deutsch.
Randy Deutsch is an architect, educator, workshop leader, writer, and international keynote speaker. I had a chance to interview him about his book, Superusers: Design Technology Specialists and the Future of Practice.
First, I was curious to know why he chose this topic for his fourth book. He explains: “Right now, it made a lot of sense to focus on the individual, not focus on collaboration and building teams, and really define what each individual team member should be.”
Who Are Superusers?
IT, technology, and tool specialists are typically experts in a relatively narrow field. Designers, especially architects, must have a wider perspective. Superusers are design technologists; liaisons between business needs and technology solutions. They demonstrate certain skillsets and mindsets.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
