Congress Considers Pandemic Risk Insurance Act to Address COVID-19 Business Interruptions Losses
May 18, 2020 —
Richard W. Brown & Andres Avila - Saxe Doernberger & Vita, P.C.The draft legislation, entitled the Pandemic Risk Insurance Act of 2020 (“PRIA”), would establish a Federal Pandemic Risk Reinsurance Fund and Program (the “Program”), that is intended to provide a system of shared public and private compensation for business interruption (“BI”) losses resulting from a pandemic or outbreak of communicable disease. PRIA, in its current draft form, is modeled after and in many ways mirrors the Terrorism Risk Insurance Act that was enacted to address catastrophic losses resulting from acts of terrorism.
PRIA effectively mandates that participating insurers provide coverage for any business interruption loss resulting from an outbreak of infectious disease or pandemic that is declared an emergency or major disaster by the President and certified by the Secretary of Treasury (the “Secretary”) as a public health emergency. PRIA would be triggered in the case of certified public health emergencies upon the aggregate industry insured losses exceed $250 million dollars, and include an annual aggregate limit capped at $500 billion dollars. The draft bill provides that the Secretary would administer the Program and pay the Federal share of compensation for insured losses, which would be 95% of losses in excess of an applicable insurer annual deductible, once the Program is triggered. The compensation would benefit those insurers that elect to participate in the Program in exchange for a premium paid by the participating insurer for reinsurance coverage under the Program.
Reprinted courtesy of
Richard W. Brown, Saxe Doernberger & Vita, P.C. and
Andres Avila, Saxe Doernberger & Vita, P.C.
Mr. Brown may be contacted at rwb@sdvlaw.com
Mr. Avila may be contacted at ara@sdvlaw.com
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Construction Contract’s Scope of Work Should Be Written With Clarity
March 06, 2023 —
David Adelstein - Florida Construction Legal UpdatesThe scope of work section in your construction contract should never be overlooked. In numerous instances, it is overlooked which leads to a dispute as to the precise nature of the scope of work. This dispute could be the result of an ambiguity in the scope of work section. Or it could be the result of an omission. Or it could be the result of a lack of clarification. Or it could be the result of not properly reviewing and vetting the scope of work section. This is a section—whether included in the body of your contract or attached as an exhibit—you absolutely, positively want clarity. Otherwise, you are potentially setting yourself up for a future dispute that could include (i) an additional work / change order dispute, (ii) an incomplete work dispute, or (iii) a failure to properly perform your work dispute. These are all disputes you want to avoid, and many times can avoid, by going through and negotiating the scope of work section to bring clarity to this section. Remember, clarity is a positive. Ambiguity or uncertainty is a negative.
An example of such an avoidable scope of work dispute can be found in All Year Cooling and Heating, Inc. v. Burkett Properties, Inc., 2023 WL 2000991 (Fla. 4th DCA 2023). Here, an air conditioning contractor was hired to install six new split air conditioning systems. The scope of work provided that there were currently “two split systems that are currently existing, working perfectly and are not to be replaced as part of this contract.” The property manager claimed the air conditioning contractor was required to bring these two existing split air conditioning systems up to code as the contract provided that notwithstanding anything to the contrary, the contractor “will certify and shall ensure that all split systems in the building, upon completion of all the work, will be fully compliant with all codes and regulations and shall be responsible for any costs relates to the implementation and/or remediation of same.”
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Florida extends the Distressed Condominium Relief Act
June 17, 2015 —
Beverley BevenFlorez-CDJ STAFFThe Distressed Condominium Relief Act had been poised to expire on July 1st, but has now been extended by two additional years by the Florida legislature, the National Review reported. The act was Part VII of the Condominium Act in 2010, and has been previously extended twice. According to the National Review, “This Legislation attempted to allay the fears of potential investors about incurring developer liability in connection with the purchase of bulk units. The Act created a shield in favor of bulk purchasers from such potential liability, especially construction defects liability.”
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The World’s Largest 3D-Printed Neighborhood Is Here
March 20, 2023 —
Todd Woody - BloombergAmid the tech boom-fueled sprawl in Austin, Texas, Wolf Ranch at first appears to be another colorfully named but architecturally unimaginative suburban subdivision. Until, that is, you turn a corner and stumble across giant robots building homes resembling waves frozen in concrete.
This 100-house addition to the 2,500 homes planned for Wolf Ranch is called “the Genesis Collection,” and as the world’s largest 3D-printed community, it is indeed sui generis. A collaboration between Lennar Corp., the US’s second-biggest home builder, and 3D-printing startup Icon, Genesis represents perhaps the most significant innovation in residential construction in decades. If it can scale, 3D-printed construction promises to deliver energy-efficient homes that can be built faster and more affordably, in novel designs and with minimal waste. The concrete structures are also more resilient to increasingly intense climate-driven hurricanes, wildfires and heat waves.
“I think we'll look back and say this was a pretty pivotal moment in the history of construction,” says Jason Ballard, Icon’s cowboy hat-wearing co-founder and chief executive officer. “I do think 3D printing and robotic construction are necessary to end the global housing crisis.”
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Todd Woody, Bloomberg
Eighth Circuit Affirms Finding of Bad Faith, Award of Costs and Prejudgment Interest
October 25, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe Eighth Circuit affirmed the district court's finding of bad faith and award to the insured of taxable costs and prejudgment interest. Selective Ins. Co. v. Sela, 2021 U.S. App. LEXIS 26062 (8th Cir. Aug. 30, 2021).
The insured suffered two hail storms that damaged his home. In 2010, the first storm caused over half a million dollars in loss. Before submitting a claim to his original insurer or beginning any repairs, the insured secured a new policy with Selective. The policy did not exclude pre-existing damage, it did preclude coverage if the insured "willfully and with intent to defraud, concealed or misrepresented any material fact or circumstance relating to the insurance."
Before issuing the policy, Selective appraised the property and assigned a $1.6 million value to the home. The insured then filed a claim with his original insurer and received $510,787.23 for actual cash value of his loss. Neither the terms of this settlement nor this new policy with Selective required the insured to repair all of the 2010 damage.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Owners and Contractors Beware: Pennsylvania (Significantly) Strengthens Contractor Payment Act
June 13, 2018 —
Wally Zimolong – Supplemental Conditions Yesterday, Governor Tom Wolf signed into law House Bill 566 which make major changes to Pennsylvania’s Contractor and Subcontractor Payment Act. Owners and General Contractors that fail to take head of the changes could face significant financial consequences.
The Pennsylvania Contractor and Subcontractor Payment Act, known as CAPSA or simply the Payment Act, was passed into law in 1994. The intent was “to cure abuses within the building industry involving payments due from owners to contractors, contractors to subcontractors, and subcontractors to other subcontractors.” Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d 497, 500 (Pa. Super. Ct. 2009). In reality, abuses still occurred. While the Payment Act purportedly dictated a statutory right to payment within a certain amount of time and imposes stiff penalties for failure make payment, including 1% interest per month, 1% penalty per month, and reasonable attorneys fees, the language of the Payment Act left recalcitrant contractors with wiggle room. Particularly, the Payment Act allowed owners and higher tier subcontractors to withhold payment “deficiency items according to the terms of the construction contract” provided it notified the contractor “of the deficiency item within seven calendar days of the date that the invoice is received.” 73 P.S. Section 506. The problem was that the Payment Act did not expressly state where the notice must be in written, what it must say, and what happened if notice was not given.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Do Construction Contracts and Fraud Mix After All?
October 27, 2016 —
Christopher G. Hill – Construction Law MusingsOn several occasions here at Construction Law Musings, I’ve discussed the fact that, with a few exceptions, fraud claims and written construction contract based claims do not mix. One of the exceptions to the so called “economic loss rule” that would seem to preclude both fraud and contract claims in the same lawsuit is where fraud is used to induce the contract in the first place. This exception would only apply where an independent duty, wholly outside of the duties created by the contract, is properly plead and proven to the court. For the same reason, namely a separate duty outside of the contract, the Virginia Consumer Protection Act (“VCPA”) may allow for an exception that would allow a cause of action under this statute.
Up until recently, the courts of Virginia have used these exceptions sparingly. However, the recent Loudoun County, VA Circuit Court opinion in Interbuild, Inc. v. Sayers (opinion also found at Virginia Lawyers Weekly) may signal a broadening of these exceptions. In the Interbuild case, the Court considered a claim for fraud in the inducement and breach of the VCPA. The basic facts plead by the plaintiffs were that Interbuild induced them into the contract through statements that it had been an established business since 1981, the project did not require a building permit, it had obtained all necessary subcontractor prices and would provide full-time project supervision, the project would be completed within 16 weeks, 4000 PSI concrete would be used for the project and that the project would be located in the agreed-upon area depicted and that they reasonably relied on these representations in deciding to enter into the contract to build their recreational facility.
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Christopher G. Hill, The Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Virtual Jury Trials of Construction Disputes: The Necessary Union of Both Sides of the Brain
May 17, 2021 —
John Dannecker - Construction ExecutiveBart Smith is the Senior Project Manager for Simply Best, a general contracting firm. He has been assigned to serve as the liaison with outside counsel in a lawsuit against Holly’s Harleys, a project owner who contracted with Best for the construction of a motorcycle showroom. Best filed suit in federal court for additional project costs it incurred, which it contends were caused by the specification of incompatible materials by Holly’s design firm.
The coronavirus pandemic is still raging as the trial date approaches. Courthouse facilities are closed so civil trials are conducted using remote technology, if they occur at all. Bart negotiated the prime contract with Holly’s, and he regrettably allowed Best’s binding arbitration and jury trial waiver clauses in the prime contract to be deleted. Bart worries about how the intricacies of Best’s case can be adequately explained to a jury in a remote trial. His concern approaches panic when Best’s trial counsel explains how the trial will be conducted with none of the parties—their attorneys, the judge, the witnesses or the jury—present in the same location.
Reprinted courtesy of
John Dannecker, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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