Real Estate & Construction News Roundup (5/22/24) – Federal Infrastructure Money, Hotel Development Pipelines, and Lab Space Construction
June 17, 2024 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, Virginia’s governor signs two bills into law, $929 billion in outstanding commercial mortgages come due, banks prepare for delinquencies related to office space, and more!
- Demand for lab space is set to ramp up, with market activity expected to increase in the coming months. (Joe Burns, Construction Dive)
- Federal infrastructure money is keeping the country’s infrastructure woes from getting worse, but that progress will be lost when that funding ends. (Julie Strupp, Construction Dive)
- In the first quarter of 2024, several major hotel companies saw their revenues down—or lower than expected—but their development pipelines were up. (Jenna Walters, Hotel Dive)
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Pillsbury's Construction & Real Estate Law Team
Maui Wildfire Cleanup Could Cost $1B and Take One Year
September 18, 2023 —
James Leggate - Engineering News-RecordHawaii Gov. Josh Green and Sen. Brian Schatz (D-Hawaii) have estimated at $1 billion the cost of cleanup after the Maui wildfires—which started Aug. 8 and killed at least 115 people and destroyed more than 2,200 structures. Officials planning the rebuilding of the parts of West Maui
devastated by the wildfires are emphasizing safety and residents’ wishes over speed.
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James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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Plan Ahead for the Inevitable Murphy’s Law Related Accident
August 06, 2019 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday here at Construction Law Musings, we welcome back Melissa Dewey Brumback. Melissa (@melissabrumback) is a construction attorney and partner in the firm Ragsdale Liggett, PLLC in Raleigh. Melissa has spent over a decade representing engineers and architects, advising them on contract proposals to limit risks, and defending them when litigation does arise. She is the author of the award-winning Construction Law in North Carolina a blog dedicated to the A/E community. Melissa is rated AV, the best rating of the Martindale Hubbell lawyer rating system, is a certified LEED Green Associate, and serves as President of the RL Mace Universal Design Institute. She is also signed up to take a cruise this summer with her family (!).
The recent cruise ship fiasco, in which thousands were stranded at sea for an entire week with no running water or toilet facilities, visibly brought to mind the old axiom to “Be Prepared.” As Chris likes to say, Murphy was an optimist.
What does this have to do with your construction company? Plenty. Since time is money and a downed project extremely expensive, you should plan in advance for likely emergency situations. Some things to consider:
1. Emergency Contacts: Do you only have a cell number for your key project manager? You should have at least two ways to reach all key employees and subcontractors, as well as owner representatives and the designers of record. Consider that in a large emergency, sometimes entire cell phone towers are out of commission from overuse. A land line comes in awfully handy in such a situation.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Three's a Trend: Second, Fourth and Ninth Circuits Uphold Broad "Related Claims" Language
February 23, 2016 —
Greg Steinberg – White and Williams LLPThe hallmark of a claims-made insurance policy is that the policy only provides coverage for claims that are “first made” during the policy period. As noted by the Texas Supreme Court, “for the insurer, the inherent benefit of a claims-made policy is the insurer's ability to close its books on a policy at its expiration and thus to attain a level of predictability unattainable under standard occurrence policies.”[1]
To ensure this “level of predictability,” claims-made insurance policies contain provisions stating that all “Related Claims” will be treated as a single claim deemed first made at the time the earliest of such claims was made. The “Related Claims” provision is an issue that comes up time and again – claims can span years, especially in the context of regulatory investigations, which often culminate in enforcement proceedings and litigation. This inevitably leads to disputes regarding whether later claims can be related back to the earlier claim, an issue that becomes even thornier when different insurers participate on different policy years.
Over time, case law on “Related Claims” has been mixed and somewhat inconsistent, with each case tending to hinge on its own unique set of facts, making it difficult to identify a clear standard for determining whether claims are related. However, three recent decisions out of the Second, Fourth and Ninth Circuits show that courts are increasingly deferring to the plain language of the policy and applying these provisions broadly.
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Greg Steinberg, White and Williams LLPMr. Steinberg may be contacted at
steinbergg@whiteandwilliams.com
Utility Contractor Held Responsible for Damaged Underground Electrical Line
October 11, 2017 —
Brett M. Hill - Ahlers & Cressman, PLLCThe Washington State Court of Appeals recently addressed an excavation contractor’s responsibilities under the Underground Utilities Damage Prevention Act (UUDPA), RCW 19.122. That statute was enacted in 2011 and imposed certain statutory duties on parties involved with projects requiring excavation.
In this case, Titan Earthworks, LLC contracted with the City of Federal Way to perform certain street improvements including installation of a new traffic signal. During the process of excavating for the traffic signal, Titan drilled into an energized underground Puget Sound Energy power line. PSE sought damages from Titan and Titan sued the City of Federal Way.
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Brett M. Hill, Ahlers & Cressman, PLLCMr. Hill may be contacted at
bhill@ac-lawyers.com
Another Colorado Construction Defect Reform Bill Dies
May 07, 2014 —
Beverley BevenFlorez-CDJ STAFFColorado construction defects reform Senate Bill 220 died when “Senate President Morgan Carroll, D-Aurora, declined to call a second committee to hear” the bill, according to Ed Sealover writing for the Denver Business Journal. Sen. Carroll declared that the “bill backers” did not incorporate any of the “suggestions she or House Speaker Mark Ferrandino had given them.”
“SB 220 would have required condo-unit owners to submit to alternative-dispute resolution such as arbitration or mediation if the unit developer required it,” Sealover reported. “And it would have required that a majority of members of a homeowners association agree to file a lawsuit, a standard significantly larger than the two-person bar that now must be met.”
Bill Cosponsor Sen. Mark Scheffel, R-Castle Rock, “believes litigation reform” will become “an election issue and” that it “has strong momentum heading into the 2015 session.”
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New York Restrictions on Flow Through Provision in Subcontracts
August 14, 2023 —
Bill Wilson - Construction Law ZoneMost subcontracts include a flow through provision (also called flow down and incorporation clauses) stating that the subcontractor and contractor are bound by the same obligations as set forth in the prime contract between the contractor and owner. Many jurisdictions interpret such provisions narrowly, as illustrated in a recent case out of New York. In Amerisure Insurance Company v. Selective Insurance Group, Inc., 2023 WL 3311879, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s interpretation of a flow through clause in a construction subcontract. The Amerisure case involved a dispute over insurance coverage for a personal injury to a subcontractor’s employee on a construction project. The owner of the project sought defense and indemnity from the general contractor (GC) and its insurance company, who in turn sought coverage for the owner as an additional insured under the subcontractor’s policy. The GC based its argument for coverage on the flow through provision in the subcontract.
The prime contract required the GC to procure commercial liability insurance including the owner as an additional insured for claims caused by the GC’s negligent acts or omissions. The subcontract likewise required the subcontractor to procure commercial general liability insurance but required only that the GC be named as an additional insured. However, the subcontract also included a flow through clause, binding the subcontractor to the terms of the prime contract and assuming toward the GC all the obligations and responsibilities that the GC assumed toward the owner. However, the subcontract did not expressly require that the subcontractor name the owner as an additional insured, and in order for the owner to qualify as an additional insured under the subcontractor’s insurance policy, the subcontractor must have agreed in the subcontract to name the owner as an additional insured.
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
Infrared Photography Illuminates Construction Defects and Patent Trolling
October 01, 2013 —
CDJ STAFFReuben Saltzman, a home inspector in the Minneapolis area wrote a piece for the Star Tribune in which he discussed the use of infrared photography in home inspections. Lack of insulation and water intrusion show up clearly on infrared photography where there is not yet any visible damage.
Moist or cold areas show up as darker than their surroundings. Mr. Saltzman included one photo with his article in which the problem shows up as a hot spot: a carpet installer had covered over a floor register.
Mr. Saltzman’s use of infrared photography may be in danger, as he recently learned that a Mississippi firm has actually taken out a patent on using infrared photography for home inspections.
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