FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Construction Termination Part 2: How to Handle Construction Administration When the Contractor Is Getting Fired

August 01, 2023 — Melissa Dewey Brumback - Construction Law in North Carolina
If you’ve been working as a design professional for any length of time, you know that you must be a chameleon on the construction project. You need to “step into the skin” of both the Owner and the Contractor to determine who is at fault, and who should pay. You are usually the Initial Decision Maker (IDM), and so you have a duty under the AIA documents to act fairly and impartially in making those decisions. See AIA B101§3.6.2.4. Even if you are not under an AIA contract, you still have that duty if you are the IDM or handling construction administration for the project. More often than not, however, it will be the owner asking you to support its termination of the contractor “for cause.” Should you do so? Read the court decision
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Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett
Ms. Brumback may be contacted at mbrumback@rl-law.com

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Language California Construction Direct Contractors Must Add to Subcontracts Beginning on January 1, 2022, Per Senate Bill 727

December 20, 2021 — William L. Porter - Porter Law Group
Senate Bill No. 727, Imposing Liability on Contractors for Wage Claims of Subcontractor Employees: California Senate Bill 727 was approved by the Governor on September 27, 2021. The new Act amended Labor Code Section 218.7 and added a new section 218.8 to the Labor Code. Both Labor Code sections impose on “direct contractors” in the construction industry (defined by Civil Code 8018 as “a contractor that has a direct contractual relationship with an owner”) liability for the wage violations of their subcontractors and sub-subcontractors at any tier when working on California private construction projects. Specifically, new Section 218.8 expands the liability of direct contractors for wage claims of the employees of subordinate subcontractors on projects for contracts executed beginning on January 1, 2022. The liability of the direct contractor under Labor Code 218.8 will include “any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor.” Specifically included as listed liabilities of the direct contractor are: “any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor.” Read the court decision
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Reprinted courtesy of William L. Porter, Porter Law Group
Mr. Porter may be contacted at bporter@porterlaw.com

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Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts

July 13, 2020 — Ted R. Gropman & Cindy J. Lee - ConsensusDocs
On April 17, the California Court of Appeal decided Crosno Construction, Inc. v. Travelers Casualty & Surety Company of America,1 effectively narrowing the scope of enforceable “pay-when-paid” provisions in construction subcontracts to the extent the subcontractor seeks recovery against a general contractor’s payment bond surety. Although the Crosno case involved a public works project, the rationale and holding should apply with equal force to private works projects. Basing the bulk of its decision on the Wm. R. Clarke Corp. v. Safeco Insurance Co.2 case, the court found that an open-ended “pay-when-paid” provision in a subcontract is not enforceable against a subcontractor that seeks to recover on a public works payment bond claim. This article discusses the Crosno decision and the implications for contractors on both sides of the contract moving forward. Brief Case Summary In Crosno, general contractor Clark Bros., Inc. contracted with the North Edwards Water District (the District) to build an arsenic removal water treatment plant. Clark hired steel storage tank subcontractor Crosno Construction, Inc. to build and coat two steel reservoir tanks. Clark and Crosno’s subcontract included a “pay-when-paid” provision, which stated that Clark would pay Crosno within a “reasonable time” of receiving payments from the owner, but “in no event less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment.” After Crosno completed its work, a dispute arose between Clark and the District, and the District withheld payment from Clark (including the monies earmarked for Clark’s subcontractors). Clark sued the District for payment, and Crosno filed its own action against Travelers Casualty and Surety Company of America, the surety on Clark’s statutory public works payment bond, for recovery of the unpaid subcontract balance. Travelers rejected Crosno’s bond claim as premature, invoking the “pay-when-paid” subcontract language and pointing to Clark’s pending payment action against the District. The issue on appeal was whether the “pay-when-paid” provision in the subcontract blocked Crosno from recovering under the payment bond from Travelers while Clark’s lawsuit against the District was still pending. Reprinted courtesy of Ted R. Gropman, Pepper Hamilton LLP and Cindy J. Lee, Pepper Hamilton LLP Mr. Gropman may be contacted at ted.gropman@troutman.com Ms. Lee may be contacted at cindy.lee@troutman.com Read the court decision
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South Carolina Supreme Court Requires Transparency by Rejecting an Insurer’s “Cut-and-Paste” Reservation of Rights

February 16, 2017 — Theresa A. Guertin & H. Scott Williams - Saxe Doernberger & Vita, P.C.
In a decision rendered on January 11, 2017, the Supreme Court of South Carolina reminded policyholders that they are entitled to an explanation of any and all grounds upon which their insurer may be contesting coverage in a reservation of rights letter. Specifically, in Harleysville Group Insurance v. Heritage Communities, Inc. et al., 1 the court found that an insurer’s reservation of rights, which included a verbatim recitation of numerous policy provisions that the court identified as the “cut-and-paste” method, was insufficient to reserve its rights to contest coverage. In 2003, Heritage Communities, Inc. (“Heritage”), a parent company of several corporate entities engaged in developing and constructing condominium complexes from 1997 to 2000, was sued by multiple property owners’ associations. The lawsuits sought actual and punitive damages against Heritage as a result of alleged construction defects, including building code violations, structural deficiencies, and significant water intrusion. During the period of construction, Heritage was insured by Harleysville Group Insurance (“Harleysville”) under several primary and excess general liability insurance policies. Reprinted courtesy of Theresa A. Guertin, Saxe Doernberger & Vita, P.C. and H. Scott Williams, Saxe Doernberger & Vita, P.C. Ms. Guertin may be contacted at tag@sdvlaw.com Mr. Williams may be contacted at hsw@sdvlaw.com Read the court decision
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Replevin Actions: What You Should Know

November 08, 2021 — Craig H. O'Neill - White and Williams LLP
A contractor client of White and Williams recently found itself in a prickly situation. They had default terminated a subcontractor on a major commercial project and withheld payment to that subcontractor on an outstanding invoice as permitted under the terms of the subcontract until the project was completed. Clearly irate over being terminated, the subcontractor walked-off of the project with thousands of dollars’ worth of project materials and equipment that had been paid for by the owner. While on some projects this may amount to nothing more than an annoyance or inconvenience, in this case it was a significant problem because some of the wrongfully removed materials were custom manufactured overseas and not easily replaceable. The client therefore needed to take immediate action to retrieve the stolen materials so that the project would not be delayed. Specifically, it needed to file a replevin action against the subcontractor. A replevin action is a little known but powerful area of the law. In its simplest terms, replevin is a procedure whereby seized goods may be provisionally restored to their owner pending the outcome of an action to determine the rights of the parties concerned. The requirements of a replevin action differ by jurisdiction. For example, in Pennsylvania, the Rules of Civil Procedure devote an entire section to replevin actions and spell out in precise detail the steps that must be taken. While you should be sure to strictly comply with the rules in your jurisdiction, here are a few general points to keep in mind:

• Where to File: A replevin action is typically commenced by filing a complaint in the appropriate jurisdiction. Generally speaking, it is best to file the action in the jurisdiction where the improperly seized materials are being held. If that location is unknown, you can also typically file the action in the jurisdiction where the project is located.

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Reprinted courtesy of Craig H. O'Neill, White and Williams LLP
Mr. O'Neill may be contacted at oneillc@whiteandwilliams.com

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Location, Location, Location—Even in Construction Liens

October 28, 2015 — Craig Martin – Construction Contractor Advisor
We all know the importance of filing a construction lien within 120 days of your last work. Nebraska Construction Lien Act, § 52-137. But, equally, if not more important is filing the construction lien on the correct property. Often times on a construction project, the exact address of the project may not be known. And, if there are a few buildings going up on the same general site, it is difficult to determine which property or building address you are working on. Sometimes you can look at the contract. For example, the AIA family of documents lists the address on the first page. But, what if the wrong address is listed? What if the wrong owner is listed? Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

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Summary Findings of the Fourth National Climate Assessment

January 02, 2019 — Anthony B. Cavender - Gravel2Gavel
On November 23, the latest National Climate Assessment, Fourth National Climate Assessment (NCA4), was released by the U.S. Global Research Program, as required by the Clean Air Act. The Assessment, comprising three volumes and 1600 pages, contains some rather bleak findings which the Report usefully summarizes. Here’s a description of these findings. 1. Communities. The report states that “climate change creates new risks and exacerbates existing vulnerabilities in communities across the United States.” In particular, “more frequent and intense extreme weather and climate-related events” will continue to damage infrastructure , ecosystems and social systems. However, “global action” to significantly cut greenhouse gas emissions can substantially reduce these risks. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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Mexico's Richest Man Carlos Slim to Rebuild Collapsed Subway Line

November 01, 2021 — The Associated Press - Bloomberg
Mexico City (AP) -- Mexico’s richest man reached an agreement with Mexico City authorities Wednesday to rebuild or reinforce an elevated subway line that collapsed in May, killing 26 people. Telecom and construction magnate Carlos Slim said his Grupo Carso’s construction subsidiary would pay the cost of rebuilding the span that collapsed, and reinforcing other parts of the elevated line to meet higher standards in a city plagued with severe earthquakes. Grupo Carso said in a statement to the country’s stock market that the outlay did not constitute any admission of responsibility for the collapse, and would not “materially affect” the company’s business. Read the court decision
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Reprinted courtesy of Bloomberg

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