Seattle Washington Building Expert Directory

No Damages for Delay May Not Be Enforceable in Virginia

January 08, 2024 — Christopher G. Hill - Construction Law Musings
Anyone who reads Construction Law Musings with any regularity (thank you by the way) knows that the contract is king in most instances here in Virginia. Any commercial construction subcontractor in Virginia is likely also very familiar with so-called “no damages for delay” clauses in construction contracts. These clauses essentially state that a subcontractor’s only remedy for a delay caused by any factor beyond its control (including the fault of the general contractor), after proper notice to the general contractor, is an extension of time to complete the work. However, in 2015 the Virginia General Assembly passed a change in the law that precluded the diminishment of any right to claims for demonstrated additional costs prior to payment. This left open the question as to which types of “diminishment” would be barred by the statute. The recent case out of the Eastern District of Virginia federal court, Strata Solar LLC v. Fall Line Construction LLC, added a bit of clarity. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Fire Consultants Cannot Base Opinions on Speculation

May 20, 2019 — Christopher Konzelmann - The Subrogation Strategist
Larsen v. 401 Main St. Inc., 302 Neb. 454 (2019), involved a fire originating in the basement of the Quart House Pub (Pub) in Plattsmouth, Nebraska that spread to and damaged Plattsmouth Chiropractic Center, Inc., a neighboring business. Fire investigators could not enter the building because the structure was unsafe and demolished. The chiropractic center nevertheless sued the Pub alleging that its failure to maintain and replace basement mechanical equipment caused ignition. To prove its claim, the plaintiff retained a mechanical engineer who reviewed documents and concluded that the fire “originated from a failure of one of the items of mechanical equipment located in the area of the [basement] boiler.” Importantly, however, the consultant could not determine the root cause of the fire, could not eliminate the possibility that the fire originated in a compressor, and could not rule out the building’s electrical service as the ignition source because it was outside his area of expertise. The consultant nevertheless found that the fire most likely would not have occurred if the Pub had regularly serviced and replaced the equipment when needed. Read the court decision
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Reprinted courtesy of Christopher Konzelmann, White and Williams LLP
Mr. Konzelmann may be contacted at konzelmannc@whiteandwilliams.com

Bad Faith Claim For Independent Contractor's Reduced Loss Assessment Survives Motion to Dismiss

January 28, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The insured's bad faith claim based upon the insurer's alleged use of an independent contractor to assess the amount of loss in order to lower the amount paid survived a motion to dismiss. Williamson v. Chubb Indem. Ins. Co., 2013 U.S. Dist. LEXIS 178022 (E.D. Pa. Dec. 19, 2013). The insureds' home was damaged. Chubb, their insurer, retained an independent contractor, Eastern Diversified Services (EDS) to assess the amount of loss. EDS estimated the loss to be $193,270.43, and Chubb paid this amount. Chubb's standard practice was to conduct damage estimates itself using an estimating program called Symbility. EDS used a different program with a data base creating lower payments for loss. When this was brought to Chubb's attention, Chubb refused to recalculate the plaintiff's estimate. 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

Homebuyers Aren't Sweating the Fed

December 17, 2015 — Rani Molla – BloombergGadfly
Home prices are escalating, but the culprit isn't the Federal Reserve. The Fed is expected to raise its benchmark rate for the first time since 2006, meaning mortgage rate hikes are likely to follow. Small mortgage-rate increases and, by extension, incrementally higher monthly mortgage payments, usually won't undermine sales because buyers aren't sensitive to small payment changes. Mortgage rates, still at historic lows, have already baked in an expected rate increase of 25 basis points, according to PwC Real Estate Advisory Leader Mitch Roschelle. The National Association of Home Builders Chief Economist David Crowe agrees, adding that the housing market could even digest a cumulative 50 basis point hike by the end of 2016. The real stress in the housing market is coming from somewhere else: labor shortages. Read the court decision
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Reprinted courtesy of Rani Molla, BloombergGadfly

MTA’S New Debarment Powers Pose an Existential Risk

July 15, 2019 — Steven M. Charney, Gregory H. Chertoff & Paul Monte - Peckar & Abramson, P.C.
The normal project and contractual risks faced by contractors, consultants and suppliers to the Metropolitan Transportation Authority are considerable. A new law and regulations mandating that the MTA debar contractors, consultants and suppliers for unexcused schedule and cost overruns creates a new and unfair existential risk. The new law, Public Authorities Law Section 1279-h, slipped into the New York State budget bill and passed without public comment, was enacted on April 12, 2019. Implementing regulations were issued on June 5, 2019, and mandate that the MTA debar contractors (defined to include consultants, vendors and suppliers) if they: (1) fail to achieve substantial completion of their contractual obligations within 10% of the adjusted contract time; or (2) present claims for additional compensation that are denied in an amount that exceeds the total adjusted contract amount by 10% or more.[1] To say that your business and your livelihood are at risk is not an overstatement. The MTA umbrella includes the New York City Transit Authority, MTA Capital Construction, Bridges & Tunnels, Long Island Railroad and Metro North, among others. A debarment by one of these authorities will lead to a debarment by all of them, and then to a debarment by all New York State agencies and authorities,[2] and possibly debarment across state lines. Public and major private owners, as part of their RFP and procurement processes, routinely inquire regarding a bidding contractor’s debarment history. The risk is to new contracts and, because the MTA has decided to give retroactive effect to the law and regulations, to contracts that are already ongoing (even though these risks could not have been considered, priced or agreed to by contractors or their sureties). Reprinted courtesy of Peckar & Abramson, P.C. attorneys Steven M. Charney, Gregory H. Chertoff and Paul Monte Mr. Charney may be contacted at scharney@pecklaw.com Mr. Chertoff may be contacted at gchertoff@pecklaw.com Mr. Monte may be contacted at pmonte@pecklaw.com Read the court decision
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ASCE Statement on Calls to Suspend the Federal Gas Tax

June 27, 2022 — Tom Smith, Executive Director, American Society of Civil Engineers (ASCE)
WASHINGTON, D.C. – ASCE strongly opposes the recent announcement from the Biden Administration to suspend the current 18.4 cents-per-gallon federal gasoline tax for three months. Even at the same modest figure of 18 cents per gallon for over 25 years since 1993, the motor fuel tax has represented a reliable federal revenue source for communities to fix and modernize their network of roads, bridges, and transit systems. Suspending the gas tax would result in the loss of billions in revenue from the Highway Trust Fund (HTF), significantly diminishing much of the progress made in the Bipartisan Infrastructure Law at a time when Americans expect improvements to the nation's roads, bridges, and transit systems. Replacing this lost revenue with funds from other sources is not a viable long-term solution and sets a damaging precedent. Encouraging states to follow suit will compound this bad idea and further exacerbate our nation's infrastructure funding challenges. Our transportation system, including roadways, bridge spans, and transit networks, can't rely on novel, unpredictable funding. Further, there is little guarantee that motorists will see any real relief at the pump. Gas holidays aren't price controls; the manager at the gas station still gets to set their price. Oil producers have benefited significantly in the past from previous state-level gas tax holidays. There is no mechanism to ensure that these "savings" are passed on to consumers, but there is a virtual guarantee of disrupting transportation dollars and the HTF. While it sounds like an enticing solution when pocketbooks are strained, Congress knows that a variety of factors, including plain supply and demand, affect the prices that people see at fuel stations. Now is the time to build on the momentum of the Bipartisan Infrastructure Law which, for the first time in decades, takes significant steps to revitalize our nation's aging infrastructure, improve public safety, strengthen our economy, and deliver well-paying jobs. Read the court decision
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Partner Jason Taylor and Senior Associate Danielle Kegley Successful in Appeal of Summary Disposition on Priority of Coverage Dispute in the Michigan Court of Appeals

December 11, 2023 — Jason Taylor & Danielle K. Kegley - Traub Lieberman
In this appeal brought before the Michigan Court of Appeals, the appellate court ruled in favor of Traub Lieberman’s insurance carrier client (the “Carrier” or “Client”), affirming an award of summary disposition in favor of the Carrier in a coverage lawsuit. The coverage lawsuit involved a priority dispute between the Carrier and another insurer over which company’s policy had responsibility to cover the defense of their mutual insured, a heating and cooling contractor (the “Insured”) in an underlying lawsuit alleging carbon monoxide poisoning. The Carrier issued a contractor’s pollution liability policy and the other insurer issued a commercial general liability policy to the Insurer. Both the Carrier and the other insurer filed cross-motions for summary disposition in the trial court on the priority of coverage issue. The trial court granted the Client’s motion, holding that the CGL carrier was the primary insurer based on the language in the policies’ “other insurance” clauses. The trial court rejected the CGL carrier’s argument to apply the “total policy insuring intent” or “closest to the risk” tests—tests which Michigan courts have not adopted. Specifically, the court rejected the CGL carrier’s argument that the Client’s contractor’s pollution liability policy was more specifically tailored to the loss in the underlying lawsuit. The trial court also rejected CGL carrier’s alternative argument that the “other insurance” clauses in the policies were irreconcilable, requiring a pro rata allocation based on the respective limits of the policies. Reprinted courtesy of Jason Taylor, Traub Lieberman and Danielle K. Kegley, Traub Lieberman Mr. Taylor may be contacted at jtaylor@tlsslaw.com Ms. Kegley may be contacted at dkegley@tlsslaw.com Read the court decision
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Taking Advantage of New Tax Credits and Prevailing Wage Bonuses Under the Inflation Reduction Act for Clean Energy Construction Projects

September 02, 2024 — Abby Bello Salinas, Jennifer Harris & Sahara Mokhtari - ConsensusDocs
Introduction: IRA Boosts U.S. Construction Industry On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law.[1] The IRA marked a legislative milestone for clean energy in the United States in part by providing funding mechanisms for clean energy infrastructure projects. This new emphasis on green projects has already created a surge of opportunities across the construction industry—the Internal Revenue Service (“IRS”) estimates that IRA clean energy projects will create over 1.5 million jobs over the next decade.[2] But what can contractors do to take advantage of IRA incentives to reduce costs, build a reliable workforce, and gain a competitive advantage in the new infrastructure landscape created by the ever-increasing number of IRA-related projects? The IRS Final Rule, 89 FR 53184 (29 CFR 1), effective August 26, 2024, provides some guidance by outlining the increased credits and deductions available to taxpayers that satisfy the criteria under the IRA, such as prevailing wage and registered apprenticeship requirements. Reprinted courtesy of Abby Bello Salinas, Peckar & Abramson, P.C., Jennifer Harris, Peckar & Abramson, P.C. and Sahara Mokhtari, Georgetown Law Class of 2025 Ms. Salinas may be contacted at asalinas@pecklaw.com Ms. Harris may be contacted at jharris@pecklaw.com Read the court decision
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