FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Arbitration is Waivable (Even If You Don’t Mean To)

February 16, 2016 — Christopher G. Hill – Construction Law Musings
Be careful with how you act with arbitration clauses in your contracts. If you are not careful in how you act to enforce these clauses, you could find yourself stuck in court whether you like it or not. As I stated in a recent update to a post last month, the Fourth Circuit Court of Appeals recently weighed in on the issue of a contractor’s waiver of its rights to arbitration under a contract. Briefly, the facts of Forrester v. Penn Lyon Homes, et. al., No. 07-2171 are as follows. The Forrester’s sued Penn Lyon and its warranty company alleging among other things a breach of express warranty based upon a warranty contract containing a mandatory arbitration clause. Instead of immediately alleging an affirmative defense based upon the arbitration clause, the defendants removed the case to federal court and litigated for 18 months before raising the arbitration defense for the first time. The 4th Circuit (correctly in my opinion) affirmed the lower court and held that the defendants defaulted their right to arbitration because of their actions in defense of the court action and the prejudice to the plaintiffs caused by those actions. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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When Is Mandatory Arbitration Not Mandatory?

August 19, 2015 — Christopher G. Hill – Construction Law Musings
I have discussed my views on mandatory mediation in construction contracts at other places here at Musings and also discussed how the contract is king here in Virginia. A recent Charlottesville, Virginia Circuit Court case combined these two concepts to allow a subcontractor to proceed straight to litigation despite various ADR provisions in the contract between it and the general contractor. In ProBuild v. DPR & Continental Casualty, the Court looked at a series of ADR steps that were to be followed in the contract between the parties in order to allow DPR, the general contractor to require arbitration as opposed to litigation. The Court considered the surety’s motion to stay the litigation against it pending arbitration between ProBuild and DPR. In ProBuild, the Court looked at a contractual provision that provided certain steps to be followed in the event of a dispute, starting with a notice of dispute, followed by negotiation, followed by mediation should the disputing party request it, and in the event that mediation was tried and failed, the disputing party or general contractor could require arbitration. The Court determined that ProBuild, the subcontractor, was the disputing party under the contract, had pursued unsuccessful formal negotiations and that neither ProBuild nor DPR requested mediation. The Court then held that because unsuccessful mediation was a prerequisite to required arbitration and because mediation was never pursued, the mandatory arbitration clause did not apply. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Creeping Incrementalism in Downstream Insurance: Carriers are Stretching Standard CGL Concepts to Untenable Limits

October 17, 2023 — Eric M. Clarkson - Saxe Doernberger & Vita
In the construction sector, the importance of closely vetting downstream parties’ insurance has never been more critical. The markets have been hardening with no seeming end in sight and carriers are looking for any way to get an edge. Owners and general contractors need to be on the lookout for ever broader carrier-specific expansions of standard insurance provisions that are perilous for risk transfer. We are seeing more and more terms that go against the intent of ISO standard which is what is almost universally required in construction contracts. One area where carriers are deviating from standard concepts is within pre-existing injury or damage exclusions in Commercial General Liability (“CGL”) policies. It is almost a universal requirement that downstream parties provide additional insured coverage to owners and general contractors on ISO form CG 00 01. Generally, ISO standard language provides coverage for sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage. One of the few main requirements to trigger coverage is that the injury or damage must occur during the policy period. Over the years, ISO standard language has evolved to exclude injury or damage if an insured or certain persons knew that it had occurred before the policy period. Additionally, injury or damage is deemed to have been known to have occurred under certain circumstances. Read the court decision
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Reprinted courtesy of Eric M. Clarkson, Saxe Doernberger & Vita
Mr. Clarkson may be contacted at EClarkson@sdvlaw.com

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New Hampshire’s Statute of Repose for Improvements to Real Property Does Not Apply to Product Manufacturers

April 22, 2019 — Gus Sara - The Subrogation Strategist
In United Services Automobile Association v. Broan-Nutone, LLC, No. 218 2017 CV 01113, [1] the Superior Court of Rockingham County, New Hampshire recently considered whether the eight-year statute of repose for improvements to real property applied to the manufacturer of a ceiling ventilation fan that was installed in the property during its original construction. The court held that New Hampshire’s statute of repose did not apply to the manufacturer because it was not involved in incorporating its product into the property. In 2012, Chad St. Francis purchased a home in Northwood, New Hampshire. The home was originally constructed in 2008, at which time a Broan-Nutone ceiling ventilation fan was installed in the first-floor bathroom. In 2016, a fire occurred at the home. United Services Automobile Association (USAA) provided property casualty insurance for the home and paid Mr. St. Francis for the damage. In 2017, USAA filed a subrogation lawsuit against Broan-Nutone, alleging that its ceiling fan caused the fire due to a design defect within the product. Broan-Nutone filed a motion for summary judgment on grounds that USAA’s action was barred by New Hampshire’s statute of repose for improvements to real property. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams LLP
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Steven Cvitanovic to Present at NASBP Virtual Seminar

January 13, 2017 — Steven M. Cvitanovic - Haight Brown & Bonesteel LLP
Partner Steven Cvitanovic will speak at the National Association of Surety Bond Producers (NASBP) Virtual Seminar on Tuesday, January 31 at 11:00 A.M. PST. The presentation will provide a brief overview of risks covered by traditional insurance products, and will then expand on significant exposures arising from a contractors operations/contracts that are not covered by traditional insurance. The session will provide examples of these non-traditional risks and strategies to mitigate them. Read the court decision
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Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com

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NJ Court Reaffirms Rule Against Coverage for Faulty Workmanship Claims and Finds Fraud Claims Inherently Intentional

September 20, 2021 — Anthony L. Miscioscia & Frank J. Perch, III - White and Williams LLP
Awarding summary judgment to an insurer under both liability and directors & officers (D&O) coverage parts, a New Jersey trial court reaffirmed the principle that claims of defective workmanship without resulting “property damage” are not covered under a general liability policy, and further dismissed claims for fraud and breach of fiduciary duty, finding that such claims were inherently intentional and do not state a covered “occurrence.” In Velez v. AR Management Company, et al., 2021 N.J. Super. Unpub. LEXIS 1675 (Law Div. Bergen Co. Aug. 10, 2021), owners of a condominium unit rebuilt after a fire sued the condominium association, several association board members, the association’s property management company and the general contractor for the reconstruction work. The owners’ suit alleged faulty workmanship and incomplete repairs. In addition, the owners asserted fraud and breach of fiduciary duty claims against the management company, alleging conflicts of interest and self-dealing between the management company and the general contractor, which had common ownership. In a third-party complaint, the management company sought coverage from the condo association’s liability and D&O insurer. The court dismissed the D&O coverage claim, noting that the management company was not a director or officer or otherwise entitled to insured status for the D&O coverage part. Reprinted courtesy of Anthony L. Miscioscia, White and Williams LLP and Frank J. Perch, III, White and Williams LLP Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com Mr. Perch may be contacted at perchf@whiteandwilliams.com Read the court decision
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Attorneys’ Fees and the American Arbitration Association Rule

September 09, 2024 — Bill Wilson - Construction Law Zone
A common question from clients, when a dispute arises on a construction project, is whether they can recover their attorney’s fees from the other side if they pursue a case and win. More often than not, such fees are not recoverable. As a general rule (commonly known as the “American Rule”), each party to a dispute must bear their own attorney’s fees unless there is some statutory provision or contractual agreement between the parties allowing otherwise. Since most construction disputes involve claims for breach of contract and/or negligence, no realistic statutory provision often allows for attorney’s fees. Many construction contracts do not typically provide a prevailing party the right to collect attorney’s fees from the other side. However, even if the American Rule applies, there may be another path to recovering attorney’s fees if the parties agree to arbitrate their dispute under the American Arbitration Association (AAA) rules. Reprinted courtesy of Bill Wilson, Robinson & Cole LLP Mr. Wilson may be contacted at wwilson@rc.com Read the full story... Read the court decision
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Brooklyn Atlantic Yards Yields Dueling Suits on Tower

September 03, 2014 — Erik Larson – Bloomberg
Forest City Ratner Cos., the initial developer of Brooklyn’s $4.9 billion Atlantic Yards project surrounding Barclays Center arena, exchanged lawsuits with the Swedish construction firm Skanska AB (SKAB) over claims of design flaws and delays in building a stalled residential tower. The lawsuits, filed today in Manhattan state court, focus on a contract for the 34-floor “modular” residential high-rise building under construction next to the arena for the National Basketball Association’s Brooklyn Nets that opened in 2012 as the centerpiece of the former rail yard and a symbol of the New York borough’s resurgence. Skanska, a Stockholm-based firm that has grown to become New York’s second-largest building contractor, seeks at least $50 million in damages for changes to the building that were made without consultation, according to its complaint. Brooklyn-based Forest City Ratner blames Skanska for the project’s problems, citing “tens of millions of dollars” in cost overruns caused by a lack of skill and a failure to adhere to terms of the 2012 contract. Read the court decision
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Reprinted courtesy of Erik Larson, Bloomberg
Mr. Larson may be contacted at elarson4@bloomberg.net

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