SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

California Fears El Nino's Dark Side Will Bring More Trouble

September 17, 2015 — Brian K. Sullivan – Bloomberg
A group of drought experts gathered in California this week, and it wasn’t long before the conversation turned to El Nino. They weren’t touting it as the savior that will end the state’s four-year drought. Instead, they were looking at a darker scenario where the weather-changing phenomenon adds another year of dryness in the north while ravaging the south with floods. “What do you say when the governor asks you what to do? ‘You prepare for flood and drought because there is a possibility you can get both,”’ said Mike Anderson, state climatologist. Read the court decision
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Reprinted courtesy of Brian K. Sullivan, Bloomberg

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Subcontractors Must be Careful Providing Bonds when General Contractor Does Not

April 05, 2017 — Christopher G. Hill – Construction Law Musings
After I wrote the title to this post, I thought, “Well, that says it all, doesn’t it?” I also considered the fact that for those that read this construction law blog on a regular basis, I am likely stating the obvious. I then thought about the fact that there can be confusion regarding the purpose of bonds versus insurance. Couple this with the fact that Murphy was an optimist, and I thought this would be a good reminder. Bonds and insurance have one fundamental difference between them. When your construction company buys insurance, that insurance is meant to protect your company. When your company provides a payment and/or performance bond, that bond is there not to protect your company but to protect everyone else on the job and the project itself. Where insurance will pay for your company’s qualifying errors so that that money does not come out of the bottom line, a bond contract will have an indemnification agreement whereby anything paid by the surety will then be reimbursed by you and your company dollar for dollar (as opposed to just the premium). Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Business Interruption, Food Spoilage Claims Resulting from Off Premise Power Failure Denied

June 02, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The insurer denied the insured restaurant's claim for food spoilage and loss of business income when a flood elsewhere caused a power outage. N. Spy Food Co., LLC v. Tower Nat'l. Ins., 2016 N.Y. Misc. LEXIS 1033 (N.Y. Sup. Ct. March 22, 2016). Tower denied the claim based on an investigation which revealed that the claims resulted from an off premises power failure. The utility company verified that the cause of the power failure was due to flood, a cause excluded under the policy. The food loss and business interruption, therefore, did not result from direct physical loss or damage by a covered cause, justifying the denial of the claim. 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

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Arbitration—No Opportunity for Appeal

October 22, 2014 — Craig Martin – Construction Contractor Advisor
Last week I presented to the Great Plains Chapter of the American Society of Professional Estimators on arbitration and litigation. Some of the questions related to the difficulty of appealing an arbitrator’s decision. A Florida appellate court recently confirmed this difficulty. In Village at Dolphin Commerce Center, LLC v. Construction Service Solutions, LLC, a contractor filed an arbitration claim against the owner to get paid for its work. The owner claimed that the contractor could not maintain the claim to get paid because the contractor was not licensed. Apparently, there is a law in Florida that a contractor unlicensed at the time of the contract cannot maintain an action in Florida for unpaid work. 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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New Jersey Appellate Decision Reminds Bid Protestors to Take Caution When Determining Where to File an Action

March 13, 2023 — Brian Glicos & Nicholas J. Zaita - Peckar & Abramson, P.C.
On February 21, 2023, the New Jersey Appellate Division held that University Hospital is not a “state administrative agency” and, therefore, the Appellate Division does not have original jurisdiction to determine the merits of an action commenced by an unsuccessful bidder to challenge the award of a contract. In re Protest of Contract for Retail Pharmacy Design, Constr., Start-up & Operation, Request for Proposal No. UH-P20-006, A-1667-20, 2023 WL 2125002 (N.J. Super. Ct. App. Div. Feb. 21, 2023). Pursuant to Rule 2:2-3(a)(2) of New Jersey’s Rules of Court, final decisions or actions of any state administrative agency or officer may be appealed directly to the Appellate Division as of right. Accordingly, where an unsuccessful bidder chooses to challenge the award of a contract issued by, for example, the New Jersey Department of Transportation, the unsuccessful bidder must file its action directly with the Appellate Division. On the other hand, where an unsuccessful bidder wishes to challenge a contract award made by a local municipality (among a slew of other public entities), the Superior Court Law Division maintains original jurisdiction over the dispute. Reprinted courtesy of Brian Glicos, Peckar & Abramson, P.C. and Nicholas J. Zaita, Peckar & Abramson, P.C. Mr. Glicos may be contacted at bglicos@pecklaw.com Mr. Zaita may be contacted at nzaita@pecklaw.com Read the court decision
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California Statutes Authorizing Public-Private Partnership Contracting

February 01, 2022 — Robert A. James & Shade Oladetimi - Gravel2Gavel Construction & Real Estate Law Blog
Public-private partnerships are often cited as a key pathway to restoring and enhancing the nation’s infrastructure. They can be challenging arrangements to structure. (As a result of the pandemic, they have even suffered the indignity of having their “PPP” acronym coopted by the Paycheck Protection Program. With apologies to Small Business Administration practitioners, we use “PPP” in this article to refer to the infrastructure tool.) One gating condition to setting up a PPP is identifying the authority for a public entity to use a contracting method that does not run afoul of the general requirements that (i) works of improvement be let to the lowest responsive bid by a responsible bidder and (ii) design services be awarded through a qualifications-based selection process. Integrated forms of project delivery that vest in a single concessionaire multiple design, construction, financing, operation, maintenance and entrepreneurial roles must find an exception to any applicable background rules. Reprinted courtesy of Robert A. James, Pillsbury and Shade Oladetimi, Pillsbury Mr. James may be contacted at rob.james@pillsburylaw.com Ms. Oladetimi may be contacted at shade.oladetimi@pillsburylaw.com Read the court decision
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Condo Association Settles with Pulte Homes over Construction Defect Claims

November 06, 2013 — CDJ STAFF
The Springton Point Condominium Association has settled its construction defect claims against Pulte Homes for $5.6 million. The residents of the 152-unit condominium community alleged a variety of defects which led to water intrusion, as well as a variety of other problems, including defective fire sprinkler systems and missing insulation. Pulte filed lawsuits against its subcontractors on the project, however all but one of these were settled before the case went to trial. The lawsuit started in 2007, with Pulte adding the subcontractors in 2009. On October 25, a jury had been selected, but the case settled before opening statements. Read the court decision
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Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

September 30, 2011 — CDJ STAFF

The California Court of Appeals has ruled in the case of Allied Framers, Inc. v. Golden Bear Insurance Company. Allied had been sued in a construction defect case and its primary insurer had become insolvent. Coverage for Allied’s defense was paid for by the California Insurance Guarantee Association through June 8, 2006. When warned that CIGA’s involvement was ending, Allied notified Golden Bear, which declined to provide coverage.

In the matters that followed, Golden Bear claimed that Allied had not exhausted its $1 million in primary insurance. Allied then showed that $1 million had already been paid out in the case. A few months thereafter, Golden Bear offered a $500,000 settlement on behalf of Allied which was rejected. Thereafter, Golden Bear hired new counsel to defend Allied. Golden Bear received, but allegedly did not pay, invoices Allied sent from their former counsel. Golden Bear finally settled the construction defect case for $2 million.

Allied’s original counsel sued Allied for payment. Golden Bear declined coverage. Allied then claimed that Golden Bear liable on several counts, arising from its failure to settle the construction defect action earlier than it did and its failure to pay Allied’s counsel. Golden Bear demurred, arguing that Allied had now exhausted is coverage with the $2 million settlement. The lower court sustained Golden Bear’s demurrer, dismissing Allied’s complaints.

The appeal court reviewed Allied’s seven complaints and sustained most of them. However, the court did reverse the trial court’s order in regard to Allied’s complaint that Golden Bear breached an implied covenant of good faith and fair dealing. The appeals court was not convinced that Golden Bear properly evaluated the settlement demand in the underlying construction defect case. The court found three other ways in which Golden Bear’s actions might show bad faith, in refusing to pay defense fees “after promising [Allied] such costs would be paid in full,” “failing to advise Allied about ‘actual or potential negative consequences of agreeing to the proposed settlement,’” and that their choice of counsel “failed to protect [Allied’s] interests in the negotiation.”

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