FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Policy Sublimit Does Not Apply to Business Interruption Loss

December 02, 2015 — Tred R. Eyerly – Insurance Law Hawaii
Refusing to give the sublimit in a flood policy an expansive reading, the court found that the sublimit did not apply to business interruption loss. Federal-Mogul Corp. v. Ins. Co. of Pa., 2015 U.S. Dist. LEXIS 137394 (E.D. Mich. Oct. 8, 2015). The insured's facility in Thailand was damaged by flood. The parties stipulated that the insured suffered a loss of $64,500,000, which included $39,406,467 in property damage and $25,093,533 in time element loss (i.e., economic loss due to an inability to operate normally). The insurer paid $30 million, stating that the High Hazard flood zone provision in the policy limited the amount owed under the policy. The insured argued the High Hazard sublimit applied only to physical loss or damage caused by the flood, and not to time element loss. Therefore, the insured was entitled to judgment on its time element loss claim for $29,093,533. The insurer argued it was entitled to judgment as a matter of law because the High Hazard sublimit applied to all loss caused by flood, including time element loss. 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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Illinois Supreme Court Holds That the Implied Warranty of Habitability Does Not Extend to Subcontractors

March 04, 2019 — Michael J. Ciamaichelo - The Subrogation Strategist
The implied warranty of habitability allows a homeowner to recover damages for latent defects that interfere with the intended use of a home. In Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, 2018 Ill. LEXIS 1244 (2018), the Supreme Court of Illinois held that buyers of new homes cannot assert claims for breach of the implied warranty of habitability against subcontractors involved in the construction of the homes because the subcontractors have no contractual relationship with the homeowners and the damages are purely economic. As the court explained, the implied warranty of habitability is a creature of contract (not tort) and, therefore, only exists when there is contractual privity between the defendants and the homeowners. In Sienna, a group of condominium unit owners alleged that their new homes contained latent construction defects and asserted claims against the various parties involved in the construction and sale of the homes, including claims against the defendant subcontractors for breach of the implied warranty of habitability. The plaintiffs contracted with the property developer to purchase the homes, but the plaintiffs had no contractual relationship with the subcontractors involved in the construction of the homes. The Sienna court, overturning the decisions of the trial court and the appellate court, granted the subcontractors’ joint motion to dismiss the plaintiff’s claims for the implied warranty of habitability because the plaintiffs had no contractual relationship with the subcontractors and the damages were purely economic. Read the court decision
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Reprinted courtesy of Michael J. Ciamaichelo, White and Williams LLP
Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com

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House Passes Bill to Delay EPA Ozone Rule

June 09, 2016 — Pam Hunter McFarland – Engineering News-Record
The U.S. House of Representatives voted 234-177 on June 8 to postpone implementation of the Obama administration’s more stringent 2015 ozone regulations by at least eight years. Read the court decision
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Reprinted courtesy of Pam Hunter McFarland, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com

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As Climate Changes, 'Underwater Mortgage' May Take on New Meaning

August 20, 2014 — James Tarmy – Bloomberg
Looking to buy a house? That’s great, unless you’re in your 20s and 30s and regularly read climate reports. They tend to project dramatic changes to the climate over the next 50 years, and given that current life expectancy is hovering around 80, we’ll likely be around to see it. So. If you’re looking to settle down for the long haul, where’s the best place to do it? Great Plains? You're looking at higher temperatures and more demand for water and energy. The Southeast, perhaps? The region may suffer from (at least) 60 days with 95-plus degree weather by 2070, according to the 2014 National Climate Assessment. Read the court decision
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Reprinted courtesy of James Tarmy, Bloomberg

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Real Estate & Construction News Round-Up (08/17/22) – Glass Ceilings, Floating Homes and the Inflation Reduction Act

September 12, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up features the construction industry’s latest happenings: the Inflation Reduction Act, women shattering the glass ceiling, eco-friendly floating homes, and more.

• The Inflation Reduction Act contains approximately $5 billion for programs to accelerate the construction industry’s shift toward green building materials. (Julie Strupp, Construction Dive)
• According to a new analysis from consultancy Rider Levett Bucknall, the speed of growth for construction costs has only gotten faster. (Erik Sherman, Globe St.)
• Record vacancies in the construction industry has created the opportunity for women to step into what’s previously been an all-male business. (Craig Torres & Maria Paula Mijares Torres, Bloomberg)
• A midlife crisis hits office buildings, with the late-30s/early-40s stable of office product accounting for about a third of the national market today. (Commercial Observer)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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CGL Insurer’s Duty To Defend Broader Than Duty To Indemnify And Based On Allegations In Underlying Complaint

April 10, 2019 — David Adelstein - Florida Construction Legal Updates
The duty to defend an insured with respect to a third-party claim is broader than the duty to indemnify the insured for that claim. The duty to defend is triggered by allegations in the underlying complaint. However, an insurer is only required to indemnify its insured for damages covered under the policy. A recent case example demonstrating the duty to defend is broader than the duty to indemnify can be found in Southern Owners Ins. Co. v. Gallo Building Services, Inc., 2018 WL 6619987 (M.D.Fla. 2019). In this case, a homebuilder built a 270-unit condominium project where the units were included in 51-buildings. Upon turnover of the condominium association to the unit owners, the condominium association served a Florida Statutes Chapter 558 Notice of Construction Defects letter. There was numerous nonconforming work spread out among various subcontractor trades including nonconforming stucco work. The homebuilder incurred significant costs to repair defective work and resulting property damage, and relocated unit owners during repairs. The homebuilder then filed a lawsuit against implicated subcontractors. One of the implicated subcontractors was the stucco subcontractor. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Famed NYC Bridge’s Armor Is Focus of Suit Against French Company

January 18, 2021 — Joel Rosenblatt - Bloomberg
French construction giant Vinci SA faces allegations it’s partly to blame for the degradation of the armor installed on New York City’s Kosciuszko Bridge to protect against terrorist attacks and accidents. Hardwire LLC, a Baltimore company that bid unsuccessfully on the project, previously sued one of its former executives for allegedly stealing its proprietary technology for bridge armor so he could win the contract. On Tuesday, Hardwire sought permission to add two units of Vinci to the suit, which claims damages of more than $40 million. The armor is “splitting, delaminating, and is in danger of falling off,” causing a “clear and present danger,” according to the proposed revised complaint filed in federal court in Maryland. The separation “leaves significant vulnerabilities for the bridge cable.” Read the court decision
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Reprinted courtesy of Joel Rosenblatt, Bloomberg

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Comparing Contracts: A Review of the AIA 201 and ConsensusDocs - Part I

March 22, 2018 — Michael Sams and Amanda Cox – Construction Executive, A publication of Associated Builders and Contractors. All Rights Reserved.
Here’s a helpful comparison of and analysis of some important contract sections in the AIA 201 (2007 and 2017 versions) and ConsensusDocs (2014 and 2017 versions). While not intended to be all inclusive, this summary comparison of the contract documents will run as a three-part series. Part I covers Financial Assurances, Design Risk, Project Management and Contract Administration. Part II will cover Schedule/Time, Consequential Damages/LDs, Claims and Disputes/ADR. Part III will cover Insurance and Indemnification and Payment. FINANCIAL ASSURANCES

• What assurances are there that the owner can pay for the project?

• The Contractor should have the right to request and obtain proof that the Owner has funding sufficient to pay for the Work. The provision should also provide that the Contractor may terminate the Contract if the Owner refuses to allow a review of funding documents, or should the Contractor reasonably determine that the Owner does not have sufficient funds to pay for the Work.

Relevant Sections:

• A201 2007 Section 2.2.1; 2017 Section 2.2.1-2.2.2 A201

• 2014 & 2017 ConsensusDocs 200: Section 4.2

AIA:

• Section 2.2.1 A201 2007 & 2017: Both editions require the Owner, upon Contractor’s written request, to provide, “reasonable evidence that the Owner has made financial arrangements to fulfill the Owner’s obligations under the Contract.” Thereafter, the Contractor may only request such evidence if (1) the Owner fails to make payments; (2) a change in the Work materially changes the Contract Sum; or (3) the Contractor identifies in writing a reasonable concern regarding the Owner’s ability to make payment when due. If the Owner does not comply, the Contractor may stop work.

• Additionally, A201 2017 Section 2.2.2 awards costs to the Contractor for demobilization and remobilization.

Reprinted courtesy of Michael Sams , Kenney & Sams and Amanda Cox, Kenney & Sams Mr. Sams may be contacted at mpsams@KandSlegal.com Ms. Cox may be contacted at ajcox@KandSlegal.com Read the court decision
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