FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Using the Prevention Doctrine

April 22, 2019 — David Erhart - Gordon & Rees Construction Law Blog
The following scenario happens regularly in the construction industry. A contractor on a project reaches out to a subcontractor to perform work. Excited about the prospect of performing the work, the subcontractor signs a contract and puts it nose to the grindstone. After dutifully completing the work the subcontractor turns to the contractor and asks to be paid. But, the contractor refuses saying that there is a provision in the subcontract that says the contractor is only obligated to pay the subcontractor if the contractor receives payment from the owner. So the contractor has completed the work, but has no money to show for it. One potential remedy for a subcontractor in this situation is the use of the prevention doctrine. “Under the prevention doctrine, ‘if a promisor prevents or hinders fulfillment of a condition to his performance, the condition may be waived or excused.’” Cox v. SNAP, Inc., 859 F.3d 304, 308 (4th Cir. 2017) (quoting Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 7171, 725 (4th Cir. 2000)). “Put simply, ‘where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure.’” Haddon Hous Assocs v. United States, 711 F.3d 1330, 1338 (Fed. Cir. 2013) (quoting Restatement (Second) of Contracts § 245; Williston, § 39:4). Read the court decision
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Reprinted courtesy of David Erhart, Gordon & Rees Scully Mansukhani
Mr. Erhart may be contacted at derhart@grsm.com

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Construction Defects #10 On DBJ’s Top News Stories of 2015

December 10, 2015 — Beverley BevenFlorez-CDJ STAFF
The Denver Business Journal’s top 15 news stories of 2015 covers the “Battle Over Construction Defects.” Some developers and other groups have blamed the lack of condominium development in Denver and other Colorado cities on the state’s defect laws. After a construction-defects reform bill failed to pass the Colorado Legislature, several cities passed construction defect-related ordinances, according to the Denver Business Journal: “In November the Denver City Council voted 12-1 to approve an ordinance aimed at making it harder to file class-action lawsuits over construction defects within the city.” Read the court decision
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Nevada Supreme Court Holds That Insureds Can Use Extrinsic Evidence to Prove Duty to Defend

February 28, 2022 — Bethany L. Barrese - Saxe Doernberger & Vita
The recent Nevada Supreme Court ruling in Zurich American Insurance Company v. Ironshore Specialty Insurance Company1 benefits insureds seeking to establish an insurer’s duty to defend. As a matter of first impression, the court clarified that insureds have the burden to prove that an exception to a policy exclusion applies in order to trigger the insured’s duty to defend. However, while the policyholder may use extrinsic evidence to establish the insurer’s duty to defend, the insurer may not use extrinsic evidence to deny that duty. The facts of the underlying claim are set in the 2000s when the insured subcontractors worked to build thousands of homes in Nevada. The subcontractors were insured by Zurich American Insurance Company (“Zurich”) during that period. After the homes were complete, the subcontractors switched from Zurich to Ironshore Specialty Insurance Company (“Ironshore”). Between 2010 and 2013, homeowners brought claims against the subcontractors alleging that the properties were damaged due to construction defects. The subcontractors tendered the claims to Zurich as the insurer at the time of construction. Zurich then sought defense and indemnification from Ironshore. Ironshore denied coverage under a “continuing and progressive” policy exclusion, claiming that the property damage occurred due to faulty work that predated the Ironshore policy. Notably, an exception to the exclusion applied if “sudden and accidental” property damage occurred within the Ironshore policy period. Given that the underlying lawsuits did not include specific allegations describing when or how the property damage occurred, Ironshore and Zurich disagreed on whether the exception to the exclusion was triggered.. Read the court decision
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Reprinted courtesy of Bethany L. Barrese, Saxe Doernberger & Vita
Ms. Barrese may be contacted at BBarrese@sdvlaw.com

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Construction Litigation Roundup: “Builder’s Risk Indeed”

October 24, 2023 — Daniel Lund III - Lexology
A contractor for a hotel in Seattle was tasked with constructing the hotel utilizing premanufactured modular hotel rooms. The modular unit portion of the project was the subject of a $15.8 million subcontract between the general contractor and the manufacturer. The manufacturer was also responsible to the GC for shipping and installing the modular units. Shipping was to be “DDP,” or “Delivery Duty Paid” – which, according to a New York federal court, “is an international shipping term meaning that the seller assumes all responsibilities and costs for delivering property to the named place of destination, including export and import clearance, fees, duties, and taxes.” Additionally, per the subcontract, the manufacturer was responsible for “ensur[ing] all modular units [were] covered, secured[,] and protected from damage during the shipping process….” The modular units were shipped from Poland to Seattle. In the shipping process, the units spent some time in the Port of Everett in Washington state, where the units sustained water damage while sitting in port. A related damage claim made by the subcontractor against the general contractor’s builder’s risk policy. On the face of the policy, the policy covered subcontractors as “additional insured” parties, covered all manner of materials and the like to be used on the project, and would provide that coverage in the process of transporting the materials insofar as “inland or coastal waters” were concerned. Yet, the builder’s risk insurer refused to cover the claim for the damages to the modular units which occurred while sitting in port in Everett. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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Contract Provisions That Help Manage Risk on Long-Term Projects

June 29, 2020 — Jason Lambert - Construction Executive
Few things can dampen the thrill and promise of a newly closed construction deal than the realization that it could quickly become a losing proposition for the contractor depending on economic and other conditions. In an era of instant information, constantly adjusting markets and political extremes, projects that start under one set of assumptions or conditions can occur or conclude under much different ones. While no one has a crystal ball, there are contractual provisions that can provide clear guidance in the face of many “what ifs” that can arise in construction. One of the chief concerns a contractor should have in a project lasting more than a few months is what impact price increases will have on the profitability of the job. On a true cost-plus project, this may be of little concern, but on any project with a limitation on costs or a guaranteed maximum price, contractors should insist on a procedure to revisit the limitation or price if certain conditions change. This can be as simple as allowing the contractor to receive an upward adjustment in the price if costs increase by more than a certain percentage. It can be as complicated as requiring multiple new bids and disclosures to the property owner, architect or project manager and allowing approval of new suppliers or subcontractors to limit cost increases to the cheapest increase. The protection—and certainty—to the contractor though, comes from having a process in the contract to address cost increases, whether it is simple or complex. Reprinted courtesy of Jason Lambert, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Lambert may be contacted at Jason.lambert@dinsmore.com

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KY Mining Accident Not a Covered Occurrence Under Commercial General Liability Policy

December 04, 2018 — Phillip A. Perez - Saxe Doernberger & Vita, P.C.
In Am. Mining Ins. Co. v. Peters Farms, LLC,1 the Kentucky Supreme Court ruled that a mining error was not a covered accident under a commercial general liability insurance policy. The central issue was whether an insured mining company’s unauthorized removal of minerals from a neighboring property was an “occurrence” that unintentionally caused “property damage” as defined by the mining company’s commercial general liability policy (“CGL Policy”). Read the court decision
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Reprinted courtesy of Phillip A. Perez, Saxe Doernberger & Vita, P.C.
Mr. Perez may be contacted at pap@sdvlaw.com

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Cliffhanger: $451M Upgrade for Treacherous Stretch of Highway 1 in British Columbia

July 31, 2023 — Aileen Cho - Engineering News-Record
Rugged Construction | Part Three of an ENR Series Winding along the edges of steep slopes deep in the eastern forests of British Columbia, a stretch of Highway 1 offers stunning vistas for commuters and visitors as they traverse Kicking Horse Canyon. But the 70-plus-year-old two-lane highway also has been susceptible to rockfalls, avalanches and traffic accidents involving both humans and wildlife. Reprinted courtesy of Aileen Cho, Engineering News-Record Ms. Cho may be contacted at choa@enr.com Read the full story... Read the court decision
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Review of Recent Contractors State License Board Changes

February 27, 2023 — Alexander Moore - Kahana Feld
California’s Contractors State License Board (CSLB) was established in 1929 to protect California residents through licensing and regulating contractors working in the state. Today, the CSLB licenses approximately 290,000 contractors, utilizing forty-four different classifications. Each licensing classification specifies the type of contracting work permitted by that classification. The CSLB website (www.cslb.ca.gov) contains a wealth of information for contractors and non-contractor consumers alike. Consumers can use the website’s features to check the history and business information of contractors, searching via license number, business name, or individual name. License applicants can use the website for instructions and forms for the application process. Contractors can use the website for renewals, regulations, and various resources. One the CSLB’s most important roles is assisting contractors with keeping track of the multitude of state regulations, and periodic changes thereto, that apply to those in the construction trades. The CSLB posts periodic Industry Bulletins which provide helpful guidance and reminders of important construction topics. At year end, the CSLB issues a bulletin to update licensees of the changes to California Law that will become effective on the first of January in the coming year. Below are four of the more interesting and impactful statutory changes. Read the court decision
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Reprinted courtesy of Alexander Moore, Kahana Feld
Mr. Moore may be contacted at amoore@kahanafeld.com

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