Insurer Must Defend and Indemnify Construction Defect Claims Under Iowa Law
February 23, 2017 —
Tred R. Eyerly – Insurance Law HawaiiApplying Iowa law, the federal district court found that the insurer had to defend and indemnify construction defect claims for damage to property caused by the insured's subcontractors. Van Der Weide v. Cincinnati Ins., 2017 U.S. Dist. LEXIS 4469 (N.D. Iowa Jan. 12, 2017).
Van Der Weide contracted with Bouma & Company, Inc. to construct a house in 1996. Before construction began, Bouma purchased a CGL policy and a separate umbrella policy from Cincinnati, which were in effect from January 30, 1996 to January 30, 1999.
Bouma used various subcontractors to build the home, including Elkato Masonry, which did the brick veneer and masonry work. The house was completed in February 1998 and Van Der Weide moved in during August 1998.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Lucky No. 7: Seventh Circuit Court of Appeals Issues Pro-Policyholder Decision Regarding Additional Insured Coverage for Upstream Parties
November 02, 2020 —
Daniela Aguila - Saxe Doernberger & VitaIn Scottsdale Ins. Co. v. Columbia Ins. Group, Inc,1 the Seventh Circuit Court of Appeals recently held that a subcontractor’s insurer was obligated to defend and indemnify the project owner’s insurer for damages associated with the subcontractor's employee's personal injury lawsuit where the underlying complaint alleged negligence by the additional insureds. The case cements the notion that under Illinois law, one can significantly benefit from the facts presented in third party complaints as a basis for additional insured coverage.
Rockwell Properties (“Rockwell”) was the project owner, along with Prairie Management & Development (“Prairie”), the general contractor, on a construction project in Chicago. Prairie subcontracted HVAC services to TDH Mechanical (“TDH”). When an employee of TDH Mechanical sustained serious injuries performing work at a construction site, a suit was lodged against Rockwell and Prairie in state court. The lawsuit did not bring any claims against TDH but instead alleged that both Rockwell and Prairie had negligently failed to supervise the subcontractors’ work on-site, thus contributing to the worker’s injuries.
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Daniela Aguila, Saxe Doernberger & VitaMs. Aguila may be contacted at
dag@sdvlaw.com
2023’s Bank Failures: What Contractors, Material Suppliers and Equipment Lessors Can Do to Protect Themselves
May 15, 2023 —
Garret Murai - California Construction Law BlogIt has been a tumultuous year for the banking industry. Since the beginning of this year the industry has seen the collapse of Silicon Valley Bank and Signature Bank, the shotgun marriage between failing Credit Suisse and USB, and, most recently, the collapse of First Republic Bank this past week and its purchase by JP Morgan Chase. Indeed, according to the New York Times, these three bank failures cum bailouts alone were bigger than the 25 banks that collapsed during the financial crises of 2008 and some are concerned that it is just the beginning.
This, of course, has impacted the stock market, with Forbes reporting that the banking industry lost more than $300 billion in market value as of the end of March. However, it also raises concerns regarding liquidity on construction projects.
While the failing banks have either been bought out by other banks or shored up by the federal government, which, in the case of Silicon Valley Bank and Signature Bank, involved the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve stepping into to protect depositors by
guaranteeing deposits in excess of the current FDIC limit of $250,000, there continues to be concerns over access to cash. This can impact construction projects in several ways.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Association Bound by Arbitration Provision in Purchase-And-Sale Contracts and Deeds
January 11, 2022 —
David Adelstein - Florida Construction Legal UpdatesWhen an association files a lawsuit pertaining to matters of common interest, the lawsuit is typically filed as a class on behalf of the owners that make up the association (i.e., the association’s members). How do you deal with an arbitration provision that is included in an owner’s purchase-and-sale agreement or recorded in the deed? The recent opinion in Lennar Homes, LLC v. Martinique at the Oasis Neighborhood Association, Inc., 47 Fla. L. Weekly D15c (Fla 3rd DCA 2021) dealt with this exact issue with a homeowner’s association ruling that the association was required to arbitrate its latent construction defect claims against the developer (homebuilder).
In this case, a community in Miami consisted of 26 townhouse buildings. There was a broad arbitration provision in each owner’s purchase-and-sale agreement that included disputes relating to property damage. Further, with each closing, a special warranty deed was recorded that included a nearly identical arbitration provision.
The association became aware of latent defects relating to the exterior walls of the buildings and filed a lawsuit against the developer (homebuilder). The developer moved to compel the dispute to arbitration which was denied by the trial court because there was no specific agreement between the association and the developer that required arbitration and the lawsuit dealt with matters that the association was obligated to maintain.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Update: Where Did That Punch List Term Come From Anyway?
December 21, 2016 —
Duane Craig – Construction InformerI’ve often wondered just where the term “punch list” came from, and I’ve found a few sources that seem to make sense, while others not so much.
Enter the Realm of Conjecture and Opinion
One person claims it came from the telephone installer process of “punching down” terminals on a block. That seems a bit of a stretch though. A blog writer said it had to do with the term ‘punch’ since it means to “punch something up” as in fix it.
Another blog writer thought it had something to do with a long forgotten practice. Apparently subcontractors used to each have their own hole punches that would punch a hole with a shape unique to them. They would use these punches to indicate they had corrected the deficiency that was their responsibility.
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Duane Craig, Construction InformerMr. Craig may be contacted at
dtcraig@constructioninformer.com
Get Your Contracts Lean- Its Better than Dieting
January 13, 2020 —
Brian Perlberg, Esq. - ConsensusDocsI recently took the AGC Lean Construction Educations Program Units 1-7. After studying diligently, I’m happy to say that I passed the exam and earned my CM-Lean credential. Surprisingly, this makes me the first attorney to earn this distinction out of over 1,200 CM-Lean holders. So why is a construction attorney learning about lean? After all, this was my first exam in 20 years since I took the bar.
Well, according to McKinsey Global Institute, construction actually became less productive from 1995 through 2009. When it comes to efficiency, construction still lags significantly behind the manufacturing sector and the overall economy. Construction contracts – what we sign and the way in which we negotiate them, or lack thereof – is a principal reason why construction productivity is stagnant.
Contracting under an integrated lean project delivery method (ILPD) and incorporating Lean construction tools is the most powerful means to increase efficiency and add-value to owners. Owners are the client’s end-users of construction projects. ConsensusDocs has taken a leadership role in publishing the first standard ILPD contract which is an integrated form of agreement (IFOA). The ConsensusDocs 300 Integrated Project Delivery (IPD™) provides an off-the-shelf solution to contract utilizing lean tools. Not every owner can or is comfortable using an IPD approach. Consequently, ConsensusDocs produced the ConsensusDocs 305 Construction Lean Construction Addendum last year to provide an option for contracting for lean on Construction Management at-Risk and design-build projects. Some people call this approach IPD-lite or IPD’ish. Some disfavor such terms, because those terms have been used loosely on projects that aren’t very Lean.
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Brian Perlberg, Esq., Executive Director and Senior Counsel of ConsensusDocsConsensusDocs may be contacted at
support@consensusdocs.org
Architecture, Robotics, and the Importance of Human Interaction – An Interview with Prof. Kathrin Dörfler
September 21, 2020 —
Aarni Heiskanen - AEC BusinessWe sat down with Professor Kathrin Dörfler of the Technical University of Munich (TUM) in advance of WDBE 2020. We discussed the importance of innovation and how her research focuses on the need for practical and productive solutions when it comes to on-site support.
Digital and technical innovation plays an essential role in optimizing the modern built environment. Now leading the Augmented Fabrication Lab (AFAB) in TUM, Professor Kathrin Dörfler quickly saw the need for practical solutions early in her career.
The Importance of ‘Need’
“I’m originally an architect,” she says. “I studied digital art and architecture and my tendency to go toward digital fabrication came from this proximity to computational design and the need to use robots for fabrication. There was no other way to build the things you created in your virtual space without using machinery.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Employee or Independent Contractor? New Administrator’s Interpretation Issued by Department of Labor Provides Guidance
August 04, 2015 —
Tanya Salgado – White and Williams LLPThe question of whether a worker should be classified as an independent contractor or an employee is fraught with confusion and misunderstanding for many businesses. Compounding the problem is the fact that there are a number of different tests used to determine employee status, which vary by jurisdiction and by the particular law in question. For example, the Internal Revenue Service uses the common law rules which focus on the degree of control and independence exercised by the worker. In contrast, the United States Department of Labor uses the “economic realities” test which focuses on whether the worker is economically dependent on the employer.
In an effort to help combat the confusion over proper worker classification, the United States Department of Labor (DOL) has issued a new Administrator’s Interpretation that provides a detailed explanation of the test used by the DOL to determine if a worker has been misclassified as an independent contractor. The DOL enforces the Fair Labor Standards Act (FLSA), which mandates that employees (but not independent contractors) be paid minimum wage and overtime. When a business misclassifies non-exempt workers as independent contractors, and those workers are not paid the minimum hourly wage for their labor, or are not paid overtime when they work more than 40 hours in a workweek, this violates the FLSA.
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Tanya Salgado, White and Williams LLPMs. Salgado may be contacted at
salgadot@whiteandwilliams.com