Does the Miller Act Trump Subcontract Dispute Provisions?
May 16, 2018 —
Christopher M. Horton - Smith CurrieAll general contractors performing public building or public works contracts with the federal government must be familiar with the Miller Act. It is a requirement for doing business with the federal government. Pursuant to the Miller Act, a general contractor entering into a public building or public works contract with the federal government must furnish a payment bond in an amount equal to the contract price, unless the contracting officer determines that it is impractical to obtain a bond in that amount and specifies an alternative bond amount.
Miller Act payment bonds guarantee payment to certain subcontractors and suppliers supplying labor and materials to contractors or subcontractors engaged in the construction. As a result, subcontractors have an avenue of relief should they not get paid for work done on the project. Specifically, subcontractors have a right to bring an action against the surety within 90-days after the date on which the person did or performed the last labor or furnished or supplied the last of material for which the claim is made. Any such action must be brought no later than one year after the date on which the person did or performed the last labor or furnished or supplied the last of material. 40 United States Code § 3133.
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Christopher M. Horton, Smith CurrieMr. Horton may be contacted at
cmhorton@smithcurrie.com
LA’s $1.2 Billion Graffiti Towers Put on Sale After Bankruptcy
June 04, 2024 —
John Gittelsohn - BloombergFor sale: Steel skeletons of three towers in downtown Los Angeles, erected by a Chinese developer that spent $1.2 billion before running into financial troubles.
The site, called Oceanwide Plaza, became famous this year when graffiti artists covered the 49-floor-tall structures. Now, the property is going on the market, with lenders and other creditors needing about $400 million to recoup their money.
The brokerage Colliers and advisory firm Hilco Real Estate have been hired to market and handle a sale of the property, subject to bankruptcy court approval, according to a statement.
“We are determined to run a disciplined and orderly process to identify the right developer to finish the project in time for the 2028 Summer Olympics,” said Mark Tarczynski, an executive vice president at Colliers.
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John Gittelsohn, Bloomberg
Insurer's Refusal to Consider Supplemental Claim Found Improper
June 17, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Eleventy Circuit reversed the district court's finding that the insurer had properly rejected the insured's supplemental claim. Great Lakes Ins. SE v. Concourse Plaza A Condomiium Association, Inc., 2024 U.S. App. LEXIS 8958 (11th Cir. April 15, 2024).
On September 10, 2017, Hurrican Irma struck Concourse Plaza's building, causing wind and water damage. Great Lakes sent a adjuster to inspect the property. The adjuster found damages to the building were $31,035.21, well below the policy's deductible. Accordingly, Great Lakes advised that the net amount of the claim was zero.
Concourse Plaza responded on September 4, 2020, just shy of three years after the cliam accured. Concourse Plaza disputed the damages estimate, but did not include a competing estimate. The letter said an estimate was being prepared and Great Lakes should consider the letter as notice of the intent to pursue additional benefits for the loss pursuant to the policy's notice provisions and Florida law.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Rainwater Collecting on Rooftop is not Subject to Policy's Flood Sublimits
October 15, 2024 —
Tred R. Eyerly - Insurance Law HawaiiResponding to a certified question from the First Circuit, the Supreme Judicial Court of Massachusetts determined that rainwater collecting on the insureds' rooftop and causing interior damage was not "flood" as defined in the policy and subject to sublimits. Zurich Am. Ins. Co. v. Medical Properties Trust, Inc., 2024 Mass. LEXIS ___ (Mass. July 23, 2024).
A severe thunderstorm caused heavy rain and strong winds which damaged a hospital. The hospital was owned by Medical Properties Trust, Inc. (MPT) and leased to Steward Health Care System LLC (Steward). Ground water accumulated and flooded the basement. Rainwater also accumulated on the hospital's parapet roofs and on the second-story courtyard, and eventually seeped through the parapet roofs and courtyard to the hospital's upper floors, causing damage to the building and property within.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Show Me the Money: The Good Faith Dispute Exception to Prompt Payment Penalties
March 13, 2023 —
Garret Murai - California Construction Law BlogCalifornia has a number of
prompt payment penalty statutes on the books. Among them is Civil Code section 8800 which requires project owners on private works projects to pay progress payments to direct contractors within 30 days after demand for payment pursuant to contract or be subject to prompt payment penalties of two percent (2%) per month on the amount wrongfully withheld. Like California’s other prompt payment penalty statutes, however, there is an important carve out: If there is a good faith dispute between the project owner and the direct contractor the project owner may withhold up to 150% of the dispute amount and not be subject to prompt payment penalties. And that, my friends, is a higher-tiered party’s “get out of jail free” card.
In a case of first impression, the 1st District Court of Appeals, in
Vought Construction Inc. v. Stock (2022) 84 Cal.App.5th 622, examined whether a project owner’s claim for liquidated damages constitutes a good faith dispute under Civil Code section 8800.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
West Coast Casualty Promises Exciting Line Up at the Nineteenth Annual Conference
March 28, 2012 —
CDJ STAFFWest Coast Casualty has announced the lineup for the annual WCC Construction Defect Seminar. This year’s seminar will be the nineteenth anniversary, and it will be held on May 17th and 18th, 2012 in Anaheim, California. They are the largest construction defect event in the world and this year’s seminar will again bring the top people in the field to address many of the current issues and where the construction defect community will be going in the future.
The event, anticipated to be even larger than prior years, will have numerous panels and presentations on the current state of construction defect litigation. Among the topics that will be presented are “Arbitrate? Let’s See You Make Me!” “Defending Construction Defect Failure Mechanisms?An Expert’s Perspective,” and “Current Trends in Effectively Handling SB800 Cases.”
Speakers at the event will include judges, lawyers, and representatives of the insurance industry. One event, “Meet Your Judges, A Candid Discussion on Construction Defect Claims and Litigation from the Bench?” will include judges from five states, including the Honorable Nancy M. Saitta, Chief Justice of the Nevada Supreme Court, the Honorable Clifton Newman of the South Carolina Circuit Court, and the Honorable Rex Heeseman of the Los Angeles County Superior Court.
Daniel A. Berman, Esq. and Stephen Henning, Esq. will be talking on the topic of “Social Networking Sites: Strategies, Ethical Pitfalls, and Practice Pointers for Litigating and Winning Your Construction Defect Case.” Mr. Berman is a Founding and Managing Partner of Wood, Smith, Henning & Berman LLP. He has been named a Southern California Super Lawyer for eight consecutive years. Mr. Henning is a Founding Partner of Wood, Smith, Henning & Berman, LLP and Fellow of the Litigation Counsel of America. Mr. Henning will also be one of the presenters on the panel “Important Court Decisions Impacting Construction Defect Claims.”
The panel “Why Do We Need to Know Certain Things and How Decisions Are Made” will be presented by important figures in the construction claims industry, including Phyllis Modlin, Todd Schweitzer, Teresa D. Wolcott, and Lee Wright. Ms. Modlin is a Construction Defect Claims Supervisor responsible for nationwide claims for Markel Corporation. Mr. Schweitzer is an Assistant Vice President of Major Case for Construction Defect and Professional Liability Claims Services at Zurich North America. Ms. Wolcott is the National Product Manager for Construction Defect Claims within the Construction Claims Organization at Travelers Insurance. Mr. Wright is an Assistant Vice President and Senior Claims Consultant for XL Specialty Insurance.
The event will also include a Science and Technology Fair in which exhibitors will be presenting technological problem solving and decision making as they relate to resolving ongoing construction and post construction-defect related issues while reducing costs for all those involved in claims and litigation. The fair is dedicated to these novel applications of science and technology that benefit the construction defect community but are not yet commonly available. This will be the third time the Construction Defect Seminar will include a Science and Technology Fair.
Sessions at the event are approved for MCLE credit in Arizona, California, Colorado, Illinois, Maine, Minnesota, New York, Ohio, and Pennsylvania. MCLE credits vary by state; attendees can obtain up to 10.25 hours of credit in Arizona, California, Maine, and New York. Applications for several other states are still pending. Additionally, the event is also worth continuing education credits with the Florida Department of Insurance and for Registered Professional Adjusters. West Coast Casualty has applications pending for adjuster continuing education in an additional thirty-six states.
West Coast Casualty recommends this event for anyone involved in construction or construction defect claims, whether they are a claims adjuster, a member of a homeowner board, a judge, a property manager, a construction claims attorney, a general contractor, or anyone else with an interest in this area. The event typically has more than 1,600 attendees. Those interested can register online.
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As Fracture Questions Remain, Team Raced to Save Mississippi River Bridge
September 06, 2021 —
Jim Parsons - Engineering News-Record"How is this bridge still standing?”
That was the initial reaction of Aaron Stover, Michael Baker International’s vice president and regional bridge practice lead, as he first studied images of a fractured tie beam that forced the May 11 emergency shutdown of the I-40/Hernando de Soto Bridge between Tennessee and Arkansas. Discovered by chance earlier in the day during MBI’s routine above-deck inspection, the fracture on the bridge’s eastbound span affected nearly half the cross-section of a 26-in. by 33-in. welded girder supporting one of the 50-year-old structure’s 900-ft-long, 100-ft-high arched navigation spans across the Mississippi River.
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Jim Parsons, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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Better Building Rules Would Help U.K.'s Flooding Woes, CEP Says
January 06, 2016 —
Jill Ward – BloombergTighter construction restrictions and incentives to build outside flood-prone areas would minimize damage to the U.K. economy from heavy rain and rising water levels, according to the Centre for Economic Performance.
Thousands of families across northern England and Scotland have evacuated their homes or been left without power in recent weeks, while KPMG LLP estimated the economic loss in December was more than 5 billion pounds ($7.3 billion). While low-lying areas are more likely to be hit by large-scale floods, businesses and homes don’t tend to move to safer locations, according to the CEP’s analysis of data from 2003 to 2008.
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Jill Ward, Bloomberg
