Seattle Washington Building Expert Directory

Re-Thinking the One-Sided Contract: Considerations for a More Balanced Approach to Contracting

November 21, 2022 — William Underwood - ConsensusDocs
Construction projects can be inherently risky – often there are multiple parties (owners, architects, engineers, contractors, subcontractors, consultants, vendors, government officials, sureties, insurers, and many others), unforeseen site conditions, tangled supply chains, acts of God, inadequate funding, site safety matters, and a whole host of other issues that can make even a relatively straight-forward job complex. Parties necessarily want to minimize their individual risk to the greatest extent possible on construction projects. And to do so, they may seek to push as much risk as possible onto the other side through one-sided terms in their construction contract. But is an entirely one-sided contract the best way to mitigate risk? In many instances, the answer is no. Every contract is different – and many considerations should be taken into account when drafting and negotiating contracts – but entirely one-sided can often have unintended consequences and create risks that otherwise might not exist in a contract that allocates and balances risk more equally across the parties. This article reviews several considerations (although it is not an exhaustive list) for avoiding one-sided contracts, including some of the benefits created through the use of equitable contract clauses. And for context, some examples of one-sided contract clauses include no relief for other contractor/owner-caused delays; no relief for force majeure events; no relief for unforeseen site conditions; and broad form indemnification clauses (i.e. one party assumes the obligation to pay for another party’s liability even if the other party is solely at fault). Again, this is a non-exhaustive list, and many other standard contract provisions can be altered to become one-sided. But the general premise of a “one-sided contract clause” is that it shifts all risk, obligation, and liability to one party. And this article examines why that might not be the best idea. Read the court decision
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Reprinted courtesy of William Underwood, Jones Walker LLP
Mr. Underwood may be contacted at wunderwood@joneswalker.com

Arguing Cardinal Change is Different than Proving Cardinal Change

April 05, 2021 — David Adelstein - Florida Construction Legal Updates
The cardinal change doctrine has become a popular doctrine for a contractor to argue under but remains an extremely difficult doctrine to support and prove. Arguing cardinal change is one thing. Proving cardinal change is entirely different. As shown below, this is a doctrine with its origins under federal government contract law with arguments extending outside of the federal government contract arena. For this reason, the cases referenced below are not federal government contract law cases, but are cases where the cardinal change doctrine has been argued (even though these cases cite to federal government contract law cases). A party argues cardinal change to demonstrate that the other party (generally, the owner) materially breached the contract based on the cardinal change. In reality, a party argues cardinal change because they have cost overruns they are looking to recover and this doctrine may give them an argument to do so. But it is important to recognize the distinction between raising it as an argument and the expectation that this (difficult doctrine to prove) will carry the day. 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

Nevada Supreme Court to Decide Fate of Harmon Towers

June 28, 2013 — CDJ STAFF
The Nevada Supreme Court started hearings on Tuesday, June 4 over the fate of Harmon towers. MGM Resorts is hoping to obtain permission from the court to tear down the tower, which they claim could collapse should an earthquake strike Las Vegas. Perini Corp, the builder, wants the building to remain standing in order to support their claim that the building’s flaws are through design and not construction errors. KLAS quoted one of Perini’s lawyers claiming that MGM had pursued a media strategy to prejudice potential jurors against the contractor. “CityCenter hired Cedric and Bunting to place advertisements with the media to win the hearts and minds of the community and to convince the public pretrial that Perini was, quote, ‘scum of the earth.’” If the Supreme Court gives the go-ahead, demolition would begin soon. Still pending, is the $500 lawsuit over the allegations of construction defects. Read the court decision
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Improperly Installed Flanges Are Impaired Property

February 16, 2016 — Tred R. Eyerly – Insurance Law Hawaii
Answering certified questions from the Fifth Circuit, the Texas Supreme Court found there was no coverage for flanges that leaked after installation. U. S. Metals, Inc. v. Liberty Mutual Group, Inc., 2015 Texas LEXIS 1081 (Dec. 4, 2015). U. S. Metals sold Exxon 350 custom-made, stainless steel, weld-neck flanges for use in refineries. Testing after installation showed the flanges leaked and did not meet industry standards. Exxon decided to replace the flanges to avoid risk of fire and explosion. For each flange, this involved stripping the temperature coating and insulation, cutting the flange out of the pipe, removing the gaskets, grinding the pipe surfaces smooth for re-welding, replacing the flange and gaskets, welding the new flange to the pipes, and replacing the temperature coating and insulation. The replacement process delayed operation of the diesel units for several weeks. Exxon sued U.S. Metal for over $6 million as the cost of replacing the flanges and $16 million as damages for lost use of the diesel units during the process. U.S. Metals settled with Exxon for $2.2 million and then sought indemnification from its liability insurer, Liberty Mutual. 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

Small Airport to Grow with Tower

October 25, 2013 — CDJ STAFF
The city Hammond, Louisiana is finding that their airport just keeps getting busier. Mayson Foster, the mayor of Hammond noted that the city now has “various types of aircraft ranging from blimps, regional jets, smaller private planes, helicopters and other aircraft using the airport.” Spartan Construction Company has made a successful $1.6 million bid to build the tower. Funding will come from the sale of 17 acres of land near the airport. Air traffic at the Northshore Regional Airport is expected to increase after the tower becomes operational. Read the court decision
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Design Professionals Owe a Duty of Care to Homeowners

July 09, 2014 — Stephen A. Sunseri - Gatzke Dillon & Ballance LLP
Today, the California Supreme Court, in Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (Jul. 3, 2014, S208173) __Cal.4th__ [2014 WL 2988058], held that architects owe a duty of care to future homeowners of residential buildings, particularly if they act as principal architects on a project, and are not subordinate to any other design professional. Until now, design professionals were rarely held liable, if at all, for third-party claims for design deficiencies. In Beacon, architectural and engineering firms provided sole design services for The Beacon residential condominium project, a 595 unit project located in San Francisco. The condominiums were initially leased after construction, but were eventually sold to individual owners. The design firms claimed their role was limited to only providing design recommendations to the project's owner, who ultimately controlled and directed which design elements to construct. Not long after completion of the project, the homeowners' association sued the design firms (among others) for construction defects and damages related to alleged water infiltration, inadequate fire separations, structural cracks, and other purported safety hazards. The claims included allegations under SB 800 (the "Right to Repair Act," Civil Code §895, et seq.) and common law negligence theories. The design firms demurred to the complaint, which the trial court sustained. On appeal, however, the Court of Appeal reversed the trial court's ruling, concluding that the design firms owed a duty of care to third parties. The Supreme Court affirmed. Historically, liability for deficient goods and services hinged on whether there is a contractual relationship between a buyer and seller. However, the Supreme Court recognized that in certain circumstances a contractual relationship is not required. In its ruling, the Supreme Court relied on fifty year old precedent, Biankanja v. Irving (1958) 49 Cal.2d 647. In Biankanja, the California Supreme Court outlined several factors to determine whether a duty of care is owed to non-contracting third parties. Although Biankanja analyzes many factors, emphasis was placed placed on whether a purported harm was foreseeable by a defendant's conduct and how close of a connection there is between that conduct and an injury. Here, the Court recognized that even though the design firms did not actually build the project, they did conduct weekly inspections, monitored contractor compliance, altered design elements when issues arose, and advised the owners of any nonconforming work. In applying the Biankanja factors to these circumstances, the Supreme Court determined the homeowners were intended beneficiaries of the design work and the design firms' primary role in the project bore a close connection to the alleged injuries. As a result, the Supreme Court held that the allegations in the complaint were sufficient and, if proven, establishes the defendants owed a duty of care to the homeowners' association. Interestingly, the Supreme Court sidestepped the issue of whether SB 800 was intended to exclusively capture design defects in its scope, even though the Court indicated it may. Nevertheless, the Supreme Court's ruling is significant. The case will affect how design professionals allocate risk on future residential projects, perhaps by raising design prices or insuring around the liability exposure. The likely outcome, however, is that design professionals are now targets in construction defect lawsuits. Read the court decision
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Reprinted courtesy of Stephen A. Sunseri, Gatzke Dillon & Ballance LLP
Mr. Sunseri may be contacted at ssunseri@gdandb.com

World's Longest Suspension Bridge Takes Shape in Turkey

November 29, 2021 — Aileen Cho - Engineering News-Record
It was a long-standing dream—not only of Ersin Arıoğlu, but of a nation. Could a suspension bridge someday cross the Dardanelles Strait in Turkey and provide another link between Europe and Asia? “To build a highway suspension bridge over the Çanakkale Strait has been on the agenda of the Turkish Ministry of Public Works for the last 20 years,” Arıoğlu, co-founder of contractor Yapi Merkezi, wrote in a technical paper. That was in 1994. Reprinted courtesy of Aileen Cho, Engineering News-Record Ms. Cho may be contacted at choa@enr.com Read the full story... Read the court decision
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New York Assembly Reconsiders ‘Bad Faith’ Bill

May 31, 2021 — Copernicus T. Gaza, Robert S. Nobel, Craig Rokuson, Eric D. Suben - Traub Lieberman
The New York State Assembly is considering A07285, which creates a private right of action for bad faith “if the insurer unreasonably refuses to pay or unreasonably delays payment without substantial justification.” The bill was first introduced in 2013 but was reintroduced on May 3, 2021 and has received some recent attention. According to the bill, an insurer acts unreasonably when it (among other things):

Fails to provide the claimant with accurate information regarding policy provisions relating to the coverage at issue; or
Fails to effectuate in good faith a prompt, fair, and equitable settlement of a claim or portion of a claim and where the insurer failed to reasonably accord at least equal or more favorable consideration to its insured's interests as it did to its own interests, and thereby exposed the insured to a judgment in excess of the policy limits or caused other damage to a claimant; or
Fails to provide a timely written denial of a claimant's claim, or portion thereof, with a full and complete explanation of such denial, including references to specific policy provisions wherever possible; or
Fails to act in good faith by compelling such claimant to initiate a lawsuit to recover under the policy by offering substantially less than the amounts ultimately recovered in such suit; or
Fails to timely provide, on request of the policy holder or the policy holder's representative, all reports or other documentation arising from the investigation of a claim; or
Refuses to pay a claim without conducting a reasonable investigation prior to such refusal.

Reprinted courtesy of Copernicus T. Gaza, Traub Lieberman, Robert S. Nobel, Traub Lieberman, Craig Rokuson, Traub Lieberman and Eric D. Suben, Traub Lieberman Mr. Gaza may be contacted at cgaza@tlsslaw.com Mr. Nobel may be contacted at rnobel@tlsslaw.com Mr. Rokuson may be contacted at crokuson@tlsslaw.com Mr. Suben may be contacted at esuben@tlsslaw.com Read the court decision
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