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Ambiguity Kills in Construction Contracting

May 27, 2019 — Christopher G. Hill - Construction Law Musings
Well, I’m back and hope to have a more consistent publishing schedule moving forward. I appreciate the continued readership through what has been a busy time for my solo construction practice over the last couple of months. Now, back to our program. . . Here at Construction Law Musings, I have often beaten the drum of a solid contract that leaves as little as possible to chance or the dreaded “grey areas” where we construction lawyers like to make money. An example of the issues that can arise from ambiguity can be found in a case from 2017 in the Western District of Virginia, W.C. English, Inc. v. Rummel, Klepper & Kahl, LLP et al In this case, English, a general contractor, entered into a contract for Quality Assurance (QA) functions with RK&K, the defendant, on a contract English entered into with the Virginia Department of Transportation (VDOT). Needless to say, because this would not be a post at Musings otherwise, there were issues with the QA performed by RK&K leading to additional costs for English to correct certain work that did not comply with the contract documents between VDOT and English. English sued for breach of contract based upon a term sheet, signed by the parties, from RK&K that required RK&K to indemnify English for claims by VDOT that related to RK&K’s work (the English Term Sheet). RK&K moved to dismiss the complaint based upon a different term sheet, also signed by the parties, which stated that RK&K could not be held responsible for English’s failure to perform pursuant to the contract documents (the RK&K Term Sheet). 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

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What to Do Before OSHA Comes Knocking

December 19, 2018 — Parker Rains - Construction Executive
Every year, the U.S. Occupational Safety and Health Administration (OSHA) inspects workplaces around the country for safety and occupational hazards. In 2017 alone, OSHA conducted 32,408 inspections – more than half of which were unprogrammed inspections. There are six reasons OSHA might come knocking on the door. They are (in order of priority):

1. imminent danger situations;
2. severe injuries and illnesses;
3. worker complaints;
4. referrals;
5. targeted inspections; and
6. follow-up inspections.

Reprinted courtesy of Parker Rains, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Rains may be contacted at prains@fbbins.com

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Consumer Prices Rising as U.S. Housing Stabilizes: Economy

June 18, 2014 — Jeanna Smialek and Shobhana Chandra – Bloomberg
Consumer prices rose in May by the most in more than a year, showing U.S. companies are gaining some pricing power as the economy strengthens, and the homebuilding industry stabilized after a first-quarter swoon. The cost of living increased 0.4 percent, the biggest advance since February 2013, according to Labor Department data released today in Washington. Other figures showed builders broke ground on 1 million homes at an annualized rate after 1.07 million in April, the best two-month reading since late 2013. The reports will be welcome news to Federal Reserve policy makers meeting today and tomorrow as the pickup in inflation lessens the threat of a prolonged drop in prices that hurts economic growth. Central bankers are projected to continue scaling back their bond-buying program, while an increase in interest rates is delayed until well into 2015. Ms. Smialek may be contacted at jsmialek1@bloomberg.net; Ms. Chandra may be contacted at schandra1@bloomberg.net Read the court decision
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Reprinted courtesy of Jeanna Smialek and Shobhana Chandra, Bloomberg

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Architect Blamed for Crumbling Public School Playground

January 22, 2014 — Beverley BevenFlorez-CDJ STAFF
The city School Construction Authority (SCA) in Staten Island, New York, wants Ennead Architects to pay them $1.4 million to repair the playground at the Jerome Parker Educational Complex, according to Silive.com. Ennead Architects, based out of Manhattan, designed the William J. Clinton Presidential Center, and is currently working on the Vietnam Veterans Memorial Education Center in Washington, D. C. In the suit, as reported by Silive.com, SCA alleges, “the pavement has progressively cracked, buckled, become uneven and created pools of standing water, all presenting a safety hazard.” Silive.com stated that “an Ennead spokeswoman did not immediately return a telephone call” when asked to comment. Read the court decision
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Reprinted courtesy of

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Does “Faulty Workmanship” Constitute An Occurrence Under Your CGL Policy?

January 08, 2024 — David Adelstein - Florida Construction Legal Updates
There is nothing more scintillating than an insurance coverage dispute, right? Well, some folks would agree with this sentiment. Others would spit out their morning coffee in disagreement. Regardless of where you fall in the spectrum, they are always important because maintaining insurance is a NECESSARY part of business, particularly in the construction industry. The ideal is to have insurance that covers risks you are assuming in the performance of your work. Sometimes, insurance coverage disputes provide valuable insight, even in disputes outside of Florida. Recently, the Western District of Kentucky in Westfield Insurance Co. v. Kentuckiana Commercial Concrete, LLC, 2023 WL 8650791 (W.D.KY 2023), involved such a dispute. While different than how Florida would treat the same issue, it’s still noteworthy because it sheds light into how other jurisdictions determine whether “faulty workmanship” constitutes an “occurrence” under a commercial general liability (CGL) policy. 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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How One Squirrel Taught us a Surprising Amount about Insurance Investigation Lessons Learned from the Iowa Supreme Court

April 03, 2019 — Graham C. Mills - Newmeyer & Dillion
A recent decision issued by the Iowa Supreme Court, City of West Liberty, Iowa v. Employers Mutual Casualty Company, highlights the importance for a policyholder to investigate a loss fully so that a wide range of evidence can be gathered and presented to show why there is coverage. The facts of City of West Liberty are a little unusual, but its lesson is not limited to Iowa insurance law; the issues litigated in this case show the value of investigating what caused a loss regardless of whether the loss occurred in California, Iowa, or elsewhere. Background on the Case City of West Liberty involved an insurance coverage dispute between a municipality owned electrical power plant and its insurance company. The dispute arose from a single adventurous squirrel who climbed onto an outdoor electrical transformer, touching two different parts of the power plant: a portion of the steel frame and a bare cable clamp. In doing so, the squirrel created a “conductive path,” in the words of the Iowa Supreme Court, between the high voltage clamp and the grounded frame. The path, once created, caused significant damage to the transformer and other electrical equipment at the city’s power plant. The city submitted a claim for the resulting damage, but the insurance company denied it. The insurer denied based on an exclusion in the insurance policy for property damage “caused by arcing or by electrical currents other than lightning.” According to the insurance company, the squirrel had no role in causing the damage; all of the damage resulted from arcing, which was excluded from coverage. The ensuing lawsuit focused upon whether the squirrel had a role in causing the damage. If yes, then there would be coverage according to Iowa insurance law; when a loss results from two causes, one of which is covered and the other is not, then there is coverage if the loss occurs from the covered cause. Due to this legal standard, the city contended that, apart from the arcing causing any damage, the squirrel caused the damage too. Because the insurance policy provided protection against mischievous actions performed by squirrels, the city contended that it was entitled to coverage, even if the excluded arcing contributed to the same damage too. Unfortunately, for the city, the Iowa Supreme Court rejected that argument, finding instead that the property damage resulted only from the arcing, which was excluded from coverage. In reaching its conclusion, the court absolved the squirrel of any wrongdoing, finding that it did not cause any of the property damage. Read the court decision
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Reprinted courtesy of Graham C. Mills, Newmeyer & Dillion
Mr. Mills may be contacted at graham.mills@ndlf.com

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Coverage Doomed for Failing Obtain Insurer's Consent for Settlement

January 22, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The Fourth Circuit affirmed the district court's determination that there was no duty to indemnify after the insured settled without consent of the insurer. Perini/Tompkins Joint Venture v. ACE American Ins. Co., 2013 U.S. App. LEXIS 24865 (4th Cir. Dec. 16, 2013). The insured, a joint venture, was hired as manager for the construction of a $900 million hotel and convention center. OCIP and excess policies were obtained through ACE. The project was also insured by a Builders Risk Policy through Factory Mutual Insurance Company. During construction, a rod eroded, causing the atrium to collapse. Substantial property damage occurred and the completion of the project was delayed for several months. 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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Governor Inslee’s Recent Vaccination Mandate Applies to Many Construction Contractors and their Workers

September 13, 2021 — Brett M. Hill - Ahlers Cressman & Sleight PLLC
This month Governor Jay Inslee enacted COVID vaccination requirements that apply to certain construction contractors and their workers in Washington state. Inslee’s vaccine proclamation becomes effective October 18, 2021 and requires construction contractors, subcontractors, and their workers to be fully vaccinated to perform work onsite on certain covered projects. The following are types of covered projects where the vaccine mandate applies:

1. State agencies: All contractors working at projects for Washington state agencies (including WSDOT, DES, DNR, etc.) if the work is required to be performed in person and onsite, regardless of the frequency or whether other workers are present. The vaccine mandate applies to indoor and outdoor settings and there is no exemption even if social distancing requirements can be met.
2. Education/Higher Education/Child Care: All contractors performing work onsite for K-12, higher education (community colleges, technical colleges, and 4-year universities), child care and other facilities where students or persons receiving services are present. New and unoccupied projects are exempt but it does apply to public and private projects.
3. Medical facilities: All contractors performing work at a “healthcare setting” where patients receiving care are present. “Healthcare setting” is defined as any public or private setting that is primarily used for the delivery of in-person health care services to people. “Healthcare setting” includes portions of a multi-use facility, but only the areas that are primarily used for the delivery of health care, such as a pharmacy within a grocery store. Additional information is on the state’s Q&A page.

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Reprinted courtesy of Brett M. Hill, Ahlers Cressman & Sleight PLLC
Mr. Hill may be contacted at brett.hill@acslawyers.com

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