Seattle Washington Building Expert Directory

Properly Trigger the Performance Bond

January 04, 2018 — David Adelstein - Florida Construction Legal Updates
Originally Published by CDJ on January 5, 2017 A performance bond is a valuable tool designed to guarantee the performance of the principal of the contract made part of the bond. But, it is only a valuable tool if the obligee (entity the bond is designed to benefit) understands that it needs to properly trigger the performance bond if it is looking to the bond (surety) to remedy and pay for a contractual default. If the performance bond is not properly triggered and a suit is brought upon the bond then the obligee could be the one materially breaching the terms of the bond. This means the obligee has no recourse under the performance bond. This is a huge downside when the obligee wanted the security of the performance bond, and reimbursed the bond principal for the premium of the bond, in order to address and remediate a default under the underlying contract. A recent example of this downside can be found in the Southern District of Florida’s decision in Arch Ins. Co. v. John Moriarty & Associates of Florida, Inc., 2016 WL 7324144 (S.D.Fla. 2016). Here, a general contractor sued a subcontractor’s performance bond surety for an approximate $1M cost overrun associated with the performance of the subcontractor’s subcontract (the contract made part of the subcontractor’s performance bond). The surety moved for summary judgment arguing that the general contractor failed to property trigger the performance bond and, therefore, materially breached the bond. The trial court granted the summary judgment in favor of the performance bond surety. Why? Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

KF-103 v. American Family Mutual Insurance: Tenth Circuit Upholds the “Complaint Rule”

May 12, 2016 — Adria Robinson – Colorado Construction Litigation
In Colorado, the “complaint rule” requires insurance carriers to provide a defense to its insured when the allegations contained in the complaint allege any set of facts that may fall within an insurance policy. Some insurers have pushed back on this rule arguing that it may cause an insurer to exercise its duty to defend although the underlying facts ultimately do not fall within the policy. In KF 103-CV, LLC v. American Family Mutual Insurance Company, 2015 WL 6517782, the Tenth Circuit of the United States Court of Appeals upheld the complaint rule. In its decision, the Tenth Circuit cited several Colorado state court rulings recognizing the courts’ intent to incentivize insurers to defend policies that may facially fall within the terms of the policy. Where there is uncertainty about coverage, the Tenth Circuit cited a Colorado Supreme Court case stating, “[t]he appropriate course of action for an insurer who believes that it is under no obligation to defend, is to provide a defense to the insured under the reservation of its rights.” Read the court decision
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Reprinted courtesy of Adria Robinson, Higgins, Hopkins, McLain & Roswell, LLC
Ms. Robinson may be contacted at robinson@hhmrlaw.com

Colorado Nearly Triples Damages Caps for Cases Filed in 2025, Allows Siblings to File Wrongful Death Claims

July 22, 2024 — Amy Johnson - Lewis Brisbois
Denver, Colo. (June 13, 2024) - On June 3, 2024, Colorado Governor Jared Polis signed HB24-1472 to increase the damages caps for personal injury and wrongful death claims. The law nearly triples the amounts available to plaintiffs, which will continue to increase for inflationary adjustments beginning in 2028 and every two years thereafter. These new damages caps affect not only claims that accrue in 2025 and beyond, but they also change the caps for any civil cases filed on or after January 1, 2025. This law was enacted as a compromise to a ballot measure that would have removed any cap on damages. The new caps are as follows:

The cap on noneconomic damages for personal injuries will be $1.5 million.
The cap on noneconomic damages for wrongful death will be $2.125 million.

Plaintiffs are likely to delay filing new actions through the rest of 2024 as long as they are not up against a statute of limitations deadline. Read the court decision
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Reprinted courtesy of Amy Johnson, Lewis Brisbois
Ms. Johnson may be contacted at Amy.Johnson@lewisbrisbois.com

Construction Litigation Roundup: “Who Needs Them”

August 28, 2023 — Daniel Lund III - Lexology
Who needs them? So argued a surety pursuing recovery under its general agreement of indemnity when the indemnitors urged a Louisiana federal court to dismiss the surety’s complaint for failure to join various allegedly required parties as defendants in the litigation. As part of its court action, the surety moved for preliminary injunction to enforce its collateral security rights. In response thereto, the indemnitors informed the court that if the injunction were to be granted, the indemnitors would “be forced to sell assets that are encumbered by security interests senior to those held by” the surety. In connection therewith, the indemnitors demanded that the other creditors be joined in the action or the lawsuit dismissed. The indemnitors also urged that the public project owner be joined as a party because the surety was seeking proceeds from the project that were still in the possession of the project owner. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

A License to Sue: Appellate Court Upholds Condition of Statute that a Contracting Party Must Hold a Valid Contractor’s License to Pursue Action for Recovery of Payment for Contracting Services

June 21, 2017 — Omar Parra & Jesse M. Sullivan - Haight Brown & Bonesteel LLP
California Business & Professions Code section 7031(a) requires a party to have contractor’s license in order to maintain an action for compensation for services performed for which a contractor’s license is needed. In Phoenix Mechanical Pipeline, Inc. v. Space Exploration Technologies Corp., No. B269186 (2017 WL 2544856) (Cal. Ct. App. June 13, 2017), the Court of Appeal for the Second Appellate District considered the scope of this statute in denying, in part, Phoenix Mechanical Pipeline, Inc.’s (“Phoenix Pipeline”) appeal of a trial court ruling granting Space Exploration Technologies Corporation’s (“SpaceX”) demurrer to Phoenix Pipeline’s second amended complaint, without leave to amend. Phoenix Pipeline filed the underlying lawsuit for, among other claims, breach of contract and breach of the duty of good faith and fair dealing arising from an agreement with SpaceX for Phoenix Pipeline to perform various plumbing, concrete removal and electrical services. Phoenix Pipeline alleged SpaceX paid for such services from 2010 to October 2013, but failed to pay Phoenix for services performed from October 2013 to August 2014, totaling just over $1,000,000. According to Phoenix Pipeline, this work was performed pursuant to a series of invoices, which constituted individual agreements between SpaceX and Phoenix Pipeline. Reprinted courtesy of Omar Parra, Haight Brown & Bonesteel LLP and Jesse M. Sullivan, Haight Brown & Bonesteel LLP Mr. Parra may be contacted at oparra@hbblaw.com Mr. Sullivan may be contacted at jsullivan@hbblaw.com Read the court decision
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White and Williams Announces Partner and Counsel Promotions

February 19, 2024 — White and Williams LLP
PHILADELPHIA–White and Williams LLP is pleased to announce the promotion of the following attorneys: Paul A. Briganti, Patrick A. Haggerty, Timothy (T.J.). Keough, Randy J. Maniloff, and Eric A. Sauter. All five attorneys have been promoted to the Firm’s partnership. The Firm has also promoted Michael L. DeBona, Lynndon K. Groff, and Susan J. Zingone from Associate to Counsel. “All of our new Partners and Counsel enrich the firm both internally and externally. They have demonstrated a deep commitment to providing our clients with best-in-class service and through their dedication and leadership earned elevation to partner and counsel at White and Williams,” said firm Managing Partner Tim Davis. “We look forward to their many continued successes and contributions to the Firm.” Paul A. Briganti practices out of the Philadelphia office and represents national and international insurance companies in coverage disputes and complex commercial litigation. He has significant experience litigating and advising clients on issues arising under various lines of coverage, including general liability, cyber, D&O, employers liability, commercial auto and homeowners. In addition, Paul is an editor of the firm’s Complex Insurance Coverage Reporter newsletter and a regular pro bono volunteer with the Senior Law Center. He received his J.D. from Villanova University School of Law. Read the court decision
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Reprinted courtesy of White and Williams LLP

New York Appellate Court Expands Policyholders’ Ability to Plead and Seek Consequential Damages

February 27, 2019 — Michael S. Levine & Joshua S. Paster - Hunton Andrews Kurth
In a huge win for policyholders, a New York appellate court, in D.K. Property, Inc. v National Union Fire Insurance Company of Pittsburgh, Pa., held that an insured need not provide a detailed factual description or explanation for why consequential damages are recoverable at the pleading stage. Rather, an insured’s complaint must only (i) specify the types of consequential damages claimed; and (ii) allege that those damages reasonably were contemplated by the parties prior to contracting. Here, D.K. Property’s building was damaged as a result of construction on an adjoining building, and it timely filed a claim with National Union under a policy that covers “direct physical loss or damage to” the building. National Union neither paid the claim nor disclaimed coverage. Instead, according to D.K. Property, National Union made unreasonable and increasingly burdensome information demands over a three-year period, which it alleges was a “tactic” to make pursuing the claim so expensive that D.K. Property would abandon the claim. As a result of the delay, D.K. Property alleges the structural damage to its building has worsened. Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Joshua S. Paster, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Paster may be contacted at jpaster@HuntonAK.com Read the court decision
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Colorado Court of Appeals Finds Damages to Non-Defective Property Arising From Defective Construction Covered Under Commercial General Liability Policy

December 20, 2012 — HEIDI GASSMAN, HIGGINS, HOPKINS, MCLAIN & ROSWELL
The recently decided case of Colorado Pool Systems, Inc. v. Scottsdale Insurance Company (Colo. Ct. App. 10CA2638, October 25, 2012), confirms that absent specific exclusions in the policy, a commercial general liability (“CGL”) policy covers damages to non-defective property arising from a builder’s own defective workmanship. Colorado Pool Systems, Inc. (“Colorado Pool”) was hired as a subcontractor to install a swimming pool at Founders Village Pool and Community Center (“Founders Village”) in Castle Rock, Colorado. After the concrete shell of the pool was placed, some of the rebar frame was found to be too close to the surface. Founders Village demanded that Colorado Pool remove and replace the pool, and Colorado Pool contacted its insurance carrier, Scottsdale Insurance Company (“Scottsdale”), with which Colorado Pool held a CGL policy. After inspecting the pool, Scottsdale’s claims adjuster stated that the insurance policy would cover losses associated with removing and replacing the pool. Read the court decision
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Reprinted courtesy of Heidi Gassman, Higgins, Hopkins, McLain & Roswell, LLC.
Ms. Gassman can be contacted at gassman@hhmrlaw.com

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