Another Reminder to ALWAYS Show up for Court
July 20, 2020 —
Christopher G. Hill - Construction Law MusingsI have discussed the need to always respond to a lawsuit on multiple occasions here at Construction Law Musings. However, I keep reading cases where the defendant fails to appear either by pleading or in person. Such action is never a good idea as demonstrated once again in the case of Balfour Beatty Infrastructure, Inc. v. Precision Constr. & Mgmt. Group, LLC, a case out of the Eastern District of Virginia.
The basic facts are not a surprise and are taken from the magistrates report that was adopted by the District Court. Balfour Beatty and Precision entered into a subcontract for some electrical work at a project located in Loudoun County. The subcontract included an attorney fees provision and provided for liquidated damages for late performance and the typical damages for default. The project began in July of 2016 with substantial completion July 5, 2018. Precision failed to supply sufficient manpower and sent a letter to Precision stating the same. After an agreement between the parties regarding supplementation by Balfour Beatty and to the accompanying back charge, Balfour Beatty informed Precision by letter that it would be liable for any liquidated damages. The Owner began assessing liquidated damages and Balfour Beatty subsequently terminated the subcontract and discovered defective work by Precision.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Product Defect Allegations Trigger Duty To Defend in Pennsylvania
August 31, 2020 —
Stacy M. Manobianca - Saxe Doernberger & VitaThe Third Circuit Court of Appeals recently concluded, in Nautilus Insurance Co. v. 200 Christian Street Partners, LLC., that a duty to defend is triggered when product-related allegations are pled in connection with a claim for defective construction.
In Nautilus, the coverage dispute arose out of two independent underlying lawsuits in which homeowners alleged that the homes built by 200 Christian Street Partners (“Christian Street”) were defectively constructed. Christian Street tendered the claim to its insurer, Nautilus Insurance Co. (“Nautilus”), for defense and indemnity.1
Nautilus filed a lawsuit in the United States District Court for the Eastern District of Pennsylvania, seeking a declaration that it was not obligated to defend Christian Street in the underlying actions.2 Specifically, Nautilus asserted that it was not required to provide a defense in the underlying actions because Pennsylvania law does not consider faulty workmanship to constitute an “occurrence” and, therefore, to trigger the policy’s insuring agreement and the insurer’s duty to defend.3
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Stacy M. Manobianca, Saxe Doernberger & VitaMs. Manobianca may be contacted at
smm@sdvlaw.com
Architect Sues over Bidding Procedure
November 13, 2013 —
CDJ STAFFThe city of Louisville, Ohio is being sued by an architect who claims that city officials split projects into parts in order to circumvent state laws on public bidding. Rodney Meadows, the architect who filed the suit, also claims he is not motivated by any interest in working for the city. “I wouldn’t want to work with them,” he said. Nor is he seeking damages in the suit.
The project at contention is Louisville’s renovations of an existing building for the Police Department. The city has spent $328,692 on the renovations, but state law says that projects costing more than $25,000 or $50,000 (depending on other matters) must be put out for public bidding.
But city officials contend they haven’t broken the law. “A significant amount of work was done by our own people,” said E. Thomas Ault, the Louisville city manager.
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Standard of Care
December 16, 2019 —
Jay Gregory - Gordon & Rees Construction Law BlogOne of the key concepts at the heart of Board complaints and civil claims against a design professional is whether or not that design professional complied with the applicable standard of care. In order to prevail on such a claim, the claimant must establish (typically with the aid of expert testimony) that the design professional deviated from the standard of care. On the other side of the coin, to defend a design professional against a professional malpractice claim, defense counsel attempts to establish that – contrary to the claimant’s allegations – the design professional, in fact, complied with the standard of care. Obviously, it becomes very important in such a claim situation to determine what the standard of care is that applies to the conduct of the defendant design professional. Often, this is easier said than done. There is no dictionary definition or handy guidebook that identifies the precise standard of care that applies in any given situation. The “standard of care” is a concept and, as such, is flexible and open to interpretation. Traditionally, the standard of care is expressed as being that level of service or competence generally employed by average or prudent practitioners under the same or similar circumstances at the same time and in the same locale. In other words, to meet the standard of care a design professional must generally follow the pack; he or she need not be perfect, exemplary, outstanding, or even superior – it is sufficient merely for the designer to do that which a reasonably prudent practitioner would do under similar circumstances. The negative or reverse definition also applies, to meet the standard of care, a practitioner must refrain from doing what a reasonably prudent practitioner would have refrained from doing.
Although we have this ready definition of the standard of care, in any given dispute it is practically inevitable that the parties will have markedly different opinions as to: (1) what the standard of care required of the designer; and (2) whether the defendant design professional complied with that requirement. The claimant bringing a claim against a design professional typically will be able to find an expert reasonably qualified (at least on paper) who will offer an opinion that the defendant failed to comply with the standard of care. It is just as likely that the counsel for the defendant design professional will be able to find his or her own expert who will counter the opinion of the claimant’s expert and maintain that the defendant design professional, in fact, complied with the standard of care. What’s a jury to think?
The concept of standard of care is intertwined with the legal concept of negligence. In the vast majority of law suits against design professionals, a claimant (known as the plaintiff) will assert a claim for negligence against the design professional now known as the defendant.1 As every first year law student learns while studying the field of “Torts,” negligence has four subparts. In order for a defendant to be found negligent, the claimant must establish four elements: (1) duty; (2) breach; (3) causation; and (4) damages. In other words, to establish a claim against a defendant design professional, a plaintiff must demonstrate that the defendant owed the plaintiff a duty of care but breached that duty and, as a result, caused the plaintiff to suffer damages.
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Jay Gregory, Gordon & Rees Scully MansukhaniMr. Gregory may be contacted at
jgregory@grsm.com
A New AAA Study Confirms that Arbitration is Faster to Resolution Than Court – And the Difference Can be Assessed Monetarily
June 05, 2017 —
John P. Ahlers - Ahlers & Cressman PLLCThere has been a perception among some litigators that arbitration is more expensive than court due to several factors. Among them:
- The “upfront” costs are higher in that filing fees for arbitration exceed those in court. Arbitrators are paid, whether hourly or a flat rate, and the three arbitration panels can become very expensive.
- Some arbitration clauses preserve statutory discovery rights, basically defeating the advantage of a simplified arbitration process. Discovery wars are extremely expensive. Depositions are the most costly of discovery, and in arbitration, as opposed to court, depositions are limited or do not exist.
- Some arbitration clauses integrate the statutory rules of civil procedure, making arbitration almost equivalent to litigation. These types of clauses do the parties no favors.
These notions are all dispelled in a recent American Arbitration Association (AAA) study comparing the length of time in court, based on published federal court statistics, to the length of time in arbitration, based on data from the AAA. The study demonstrates that federal courts take much longer to resolve cases by trial and appeal than arbitration by AAA.
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John P. Ahlers, Ahlers & Cressman PLLCMr. Ahlers may be contacted at
jahlers@ac-lawyers.com
Breaking the Impasse by Understanding Blame
January 13, 2020 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday (on a Thursday) here at Construction Law Musings, Victoria Pynchon (@vickiepynchon) joins us for the 4th time. Victoria is an attorney-mediator with ADR Services, Inc. in Century City; an arbitrator with the American Arbitration Association in Los Angeles, California; and, a negotiation consultant and trainer world-wide. Victoria co-founded She Negotiates Training and Consulting in 2010 and writes for ForbesWoman at its She Negotiates blog. She is the author of one of my favorite books on conflict resolution, A is for A*@!#, the Grownups’ ABC’s of Conflict Resolution reviewed at Musings here.
First Let’s Talk About Anger
Please raise your hand if your clients — corporate clients — are angry about the burdens of litigation. Irritated with the document “demands” and interrogatories. Frustrated about the e-discovery. Ticked off at the way opposing counsel asks them questions as if they’re lying. Hot under the collar about the mounting attorneys’ fees and the distance between the day suit was filed and the probable day on which a trial might eventually be scheduled. Simmering about the time the litigation consumes, time they’d prefer to be spending doing their actual jobs — planning for and implementing business strategies for a profitable future instead of fighting about the unprofitable past.
And we’re not even talking about your clients’ anger at the defendant who has stolen their intellectual property or stopped worked at the construction site or refused to release the remaining funds in the construction loan account. And if you believe that powerful people in highly successful and profitable businesses do not fear that litigation might hurt their careers, think again.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Waiver of Subrogation and Lack of Contractual Privity Bars Commercial Tenants’ Claims
May 08, 2023 —
Melissa Kenney - The Subrogation StrategistIn United States Automatic Sprinkler Corporation v. Erie Insurance Exchange, et al., No. 2SS-CT-264, 2023 Ind. LEXIS 105, the Supreme Court of Indiana (Supreme Court) reversed an order of the trial court that denied a motion for summary judgment filed by a sprinkler contractor. At issue was whether commercial tenants – one who contracted with the sprinkler contractor and others who did not – could recover for their respective property damages. The court held that under the contract’s subrogation waiver and agreement to insure, the contracting tenant waived its insurer’s rights to recover through subrogation. With respect to the non-contracting tenants, who sought to recover only property damages, the court held that the absence of contractual privity barred their recovery.
The case centered around a sprinkler system that malfunctioned and flooded the Sycamore Springs Office Complex (Landlord), causing extensive property damage to four commercial tenants. Surgery Center, one of the four tenants, requested permission from the Landlord to install a sprinkler system inside the building. Landlord agreed, in exchange for Surgery Center agreeing to be solely responsible for maintaining the sprinkler system. Surgery Center hired United States Automatic Sprinkler (Automatic Sprinkler) to both install and conduct periodic inspection and testing of the sprinkler system. The contract terms outlined the scope of work to be performed by Automatic Sprinkler and the work was limited to the inspection and testing of the sprinkler system. Although repairs and emergency services were excluded from the contract, each could be performed upon the request and authorization of Surgery Center for an additional cost. The contract also contained certain risk allocation provisions including a waiver of subrogation and an agreement to insure.
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Melissa Kenney, White and Williams LLPMs. Kenney may be contacted at
kenneyme@whiteandwilliams.com
Insurer’s Optional Appeals Process Does Not Toll Statute of Limitations Following Unequivocal Written Denial
September 22, 2016 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Vishva Dev, M.D., Inc. v. Blue Shield of Cal. (No. B270094, filed 8/31/16), a California appeals court confirmed that the unequivocal denial of a claim, in whole or in part, commences the running of the statute of limitations for suit on the claim, notwithstanding the insurer’s offer to reconsider on new or additional evidence.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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