Kiewit-Turner Stops Work on VA Project—Now What?
December 31, 2014 —
Craig Martin – Construction Contractor AdvisorThe Kiewit-Turner joint venture created to build the VA’s hospital near Denver stopped work on December 10 after the Civilian Board of Contract Appeals ruled that the VA breached the contract. Kiewit-Turner claims that the VA owes it over $100 million on the project. And, given the appeals board’s recent ruling entirely against the VA, the claim may get some traction.
This project has been plagued with problems from the beginning. One strange aspect of the project is the VA’s apparent unwillingness to incorporate value engineering or require the architects to redesign the project to fit within the budget. The latest budget was $582M, while the latest projections show that the project will cost more than $1 billion to complete.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Third Circuit Court of Appeals Concludes “Soup to Nuts” Policy Does Not Include Faulty Workmanship Coverage
December 11, 2018 —
Timothy Carroll - White and Williams LLPEarlier this month, in Frederick Mutual Insurance Company v. Hall, the U.S. Court of Appeals for the Third Circuit concluded that coverage for faulty workmanship claims is “simply not the kind of coverage insurance agents and insurance companies expect to provide” to construction industry professionals “unless the insured explicitly requests such coverage.” 2018 U.S. App. LEXIS 31666, at *9 (3d Cir. Nov. 8, 2018). In Hall, a stone masonry contractor was sued by its customer for causing over $350,000 in property damage resulting from “substandard and defective work” performed on the customer’s residence. The insurer sought a declaration that it owed neither a defense nor indemnity for those damages because, under Pennsylvania law, the policy did not cover property damage caused by faulty workmanship.
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Timothy Carroll, White and Williams LLPMr. Carroll may be contacted at
carrollt@whiteandwilliams.com
Virtual Mediation – How Do I Make It Work for Me?
December 21, 2020 —
Adrian L. Bastianelli, III & Jennifer Harris - Peckar & Abramson, P.C.Mediation took the construction industry by storm in the late 1980’s and has become a staple for resolving construction claims. Today, most construction contracts, including the ConsensusDocs, require mediation as a condition precedent to binding dispute resolution, whether it be arbitration or litigation. As a result, many construction executives have spent long hours sitting in conference rooms trying to reach resolution with their counterpart through mediation in order to avoid the alternative – costly arbitration or litigation that often produces an unsatisfactory result.
While many businesses have foreclosed the possibility of meeting in person due to the COVID-19 pandemic, the contractual requirements for mediation remain. Thus, in most cases, in-person or live mediation is no longer an option; however, attorneys and mediators have developed a virtual process to replace the live process. With a new process comes many questions: Does the virtual process work? What are the best practices and pitfalls for virtual mediation? Will virtual mediation continue when COVID-19 fades away? How do I make virtual mediation work for me? The answers to these questions and more are discussed below.
Reprinted courtesy of
Adrian L. Bastianelli, III, Peckar & Abramson, P.C. and
Jennifer Harris, Peckar & Abramson, P.C.
Mr. Bastianelli may be contacted at abastianelli@pecklaw.com
Ms. Harris may be contacted at jharris@pecklaw.com
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Falls Requiring Time Off from Work are Increasing
January 14, 2015 —
Beverley BevenFlorez-CDJ STAFFThe Safety News Alert reported that while “overall occupational injuries that require time off from work” have decreased, other injuries, such as falls, have increased, according to findings from the Bureau of Labor Statistics (BLS) annual report.
“The rate of falls on the same level increased to 15.4 in 2013 from 14.8 in 2012, with increases in construction, wholesale trade, and transportation and warehousing,” Safety News Alert wrote. Furthermore, “Incidence rates and counts for private sector heavy and tractor-trailer truck drivers and food preparation workers increased in 2013.”
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SB 939 Proposes Moratorium On Unlawful Detainer Actions For Commercial Tenants And Allows Tenants Who Can't Renegotiate Their Lease In Good Faith To Terminate Their Lease Without Liability
June 01, 2020 —
Rhonda Kreger – Newmeyer DillionSB 939 is currently working its way through the Senate Judiciary Committee. The legislation would impose new obligations on landlords, and provide protections for commercial tenants who meet specified criteria. SB 939 would impose a moratorium on eviction of those qualified commercial tenants while emergency COVID-19 orders are in effect. Any eviction actions commenced after the date of the emergency COVID-19 order, but before the adoption of SB 939, would be void and unenforceable. The Senate Judiciary Committee has scheduled a hearing for SB 939 on May 22, 2020, at 9:00 a.m.
Who qualifies as a commercial tenant under SB 939?
To qualify under this legislation, a commercial tenant must be a business that operates primarily in California. The commercial tenant must be a small business, nonprofit, an eating or drinking establishment, place of entertainment, or performance venue. Publicly traded companies or any company owned by, or affiliated with a publicly traded company, do not qualify. The commercial tenant must have experienced a decline of at least 40 percent monthly revenue, either as compared to two months before the emergency COVID-19 order, or other local government shelter-in-place orders took effect, or as compared to the same month in 2019. If the commercial tenant is an eating or drinking establishment, place of entertainment, or performance venue, the commercial tenant must also show a decline of 25 percent or more in capacity due to social or physical distancing orders or safety concerns, and show that it is subject to regulations to prevent the spread of COVID-19 that will financially impair the business when compared to the period before the emergency COVID-19 order or other local shelter-in-place orders took effect.
What eviction actions are prohibited while emergency COVID-19 orders are in effect?
If adopted, SB 939 would add Section 1951.9 to the Civil Code. This section would make it unlawful to terminate a tenancy, serve notice to terminate a tenancy, use lockout or utility shutoff actions to terminate a tenancy or otherwise evict a tenant of commercial real property, including a business or nonprofit, during the pendency of the COVID-19 emergency order proclaimed by Governor Newsome on March 4, 2020. Exceptions apply if a tenant poses a threat to the property, other tenants or a person, business or other entity. Any violations of this eviction prohibition would be against public policy and unenforceable.
Any eviction started after proclamation of the state of emergency but before the effective date is deemed void, against public policy and is unenforceable.
Does SB 939 impose new penalties or remedies?
Any landlord who harasses, mistreats or retaliates against a commercial tenant to force the tenant to abrogate the lease would be subject to a fine of $2,000 for each violation. Further, any such violation would be an unlawful business practice and an act of unfair competition under Section 17200 of the Business and Professions Code and would be subject to all available remedies or penalties for those actions under state law.
When is a commercial tenant required to pay unpaid rent due to COVID-19?
If a commercial tenant fails to pay rent during the emergency COVID-19 order, the sum total of the past due rent must be paid within 12 months following the date of the end of the emergency proclamation, unless the commercial tenant has successfully negotiated an agreement with its landlord to pay the outstanding rent at a later date. Nonpayment of rent during the state of emergency cannot be used as grounds for eviction. Notwithstanding lease terms to the contrary, landlords may not impose late charges for rent that became due during the state of emergency.
Are landlords required to provide notice of protections adopted under SB 939?
Landlords would be required to provide notice to commercial tenants of the protections offered under SB 939 within 30 days of the effective date. SB 939 does not preempt local legislation or ordinances restricting the same or similar conduct which impose a more severe penalty for the same conduct. Local legislation or ordinances may impose additional notice requirements.
Does SB 939 impose new protections for commercial tenants when negotiating lease modifications?
If enacted, SB 939 would permit commercial tenants to open negotiations for new lease terms, and provide commercial tenants the ability to terminate the lease if those negotiations fail. A commercial tenant who wishes to modify its commercial lease, may engage in good faith negotiations with its landlord to modify any rent or economic requirement regardless of the term remaining on the lease. The commercial tenant must serve a notice on the landlord certifying that it meets the required criteria, along with the desired modifications.
If the commercial tenant and landlord do not reach a mutually satisfactory agreement within 30 days, then within 10 days, the commercial tenant may terminate the lease without any liability for future rent, fees, or costs that otherwise may have been due under the lease by providing a written termination notice to the landlord. The commercial tenant would be required to pay previously due rent, in an amount no greater than the sum of the following: (1) the actual rent due during the emergency COVID-19 order, or a maximum of three months of the past due rent during that period, and (2) all rent incurred and unpaid during a time unrelated to the emergency COVID-19 order through the date of the termination notice. The payment is due within 12 months from date of the termination notice. The commercial tenant would be required to vacate the premises within 14 days of the landlord's receipt of the termination notice. Upon service of the notice, any lease, and any third party guaranties of the lease would terminate. If the landlord and commercial tenant reach an agreement to modify the lease, the commercial tenant would not have the option to later terminate the lease under this provision.
When is the next Senate Judiciary Committee Meeting for SB 939?
The Senate Judiciary Committee set a hearing for SB 939 on May 22, 2020 at 9:00 a.m. The Senate will livestream the hearing on its website at www.sen.ca.gov. Public comments or testimony may be submitted in writing to the Judiciary Committee by emailing Erica.porter@sen.ca.gov. Alternatively, the public may participate via telephone during the public comment period. Any changes to the Judicial Committee schedule may be found at: https://www.senate.ca.gov/calendar.
Newmeyer Dillion continues to follow COVID-19 and its impact on your business and our communities. Feel free to reach out to us at NDcovid19response@ndlf.com or visit us at www.newmeyerdillion.com/covid-19-multidisciplinary-task-force/.
Rhonda Kreger is Senior Counsel on Newmeyer Dillion's transactional team at our Newport Beach office. Her practice focuses on all aspects of commercial real estate law, with a particular emphasis on the representation of residential developers, merchant builders and institutional investors. You can reach Rhonda at rhonda.kreger@ndlf.com.
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Five Issues to Consider in Government Contracting (Or Any Contracting!)
September 02, 2024 —
David Adelstein - Florida Construction Legal UpdatesThe appeal of Appeals of – Konecranes Nuclear Equipment & Services, LLC, ASBCA 62797, 2024 WL 2698011 (May 7, 2024) raises interesting, but important, issues that should be considered. In this case, the government (in a supply contract) procured four portal cranes from the claimant. After an initial test of one of the cranes failed, the government refused to accept delivery even after the issue was addressed by the claimant. The government did not accept the manner in which the claimant addressed the issue and would only accept cranes if the claimant employed “an unnecessary alternative solution [that] caused further delay and increased [claimant’s] costs.” On appeal, it was determined the government’s decision to delay delivery based on its demand for the alternative solution was not justified, i.e., constituted a breach of contract. Below are five issues of consideration in government contracting, or, for that matter, any contracting.
Issue #1- Patently Ambiguous Specifications
The government argued that the specifications were patently ambiguous and because the claimant failed to inquire regarding the ambiguous specifications prior to performance, its interpretation of the ambiguous specifications should govern. The contractor countered that the specifications were unambiguous and it met the specifications.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Court Denies Insurers' Motions for Summary Judgment Under All Risk Policies
June 05, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found that the insurers could not escape coverage by summary judgment under their all risk policies. Eagle Harbour Condo Assoc'n v. Allstate Ins. Co., 2017 U.S. Dist. LEXIS 54761 (W.D. Wash. April 10, 2017).
Eagle Harbour Condominium Association sued several of its insurers who denied coverage for hidden water damage. Various insurers provided coverage from 1988 to 2015.
The Association asserted that wind-driven rain and inadequate construction allowed water to penetrate the buildings' sheathing and framing, causing decades of deterioration and decay, until the damage was exposed to view in August 2014. The insurers claimed that the loss resulted from poor decisions in constructing and inadequately maintaining a stucco building in the wet and windy Pacific Northwest. The Association argued that the policies did not explicitly exclude damage caused by wind-driven rain, so there was coverage.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Beverly Hills Voters Reject Plan for Enclave's Tallest Building
November 10, 2016 —
James Nash – BloombergA costly battle over development in Beverly Hills, California, ended with voters rejecting a hotel owner’s proposal to combine two planned condominium towers into a single building that would have loomed over the wealthy Southern California enclave.
With 44 percent in support and 56 percent against, Beverly Hills voters turned down plans by Beny Alagem, who owns the Beverly Hilton and is building an adjacent 170-room Waldorf Astoria, to develop a single 26-story tower next to the hotels, instead of eight- and 18-story buildings that were approved by the city council and a voter referendum in 2008. Alagem’s plan sets aside the remaining 1.7 acres (0.7 hectares) for a public park and gardens.
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James Nash, Bloomberg
