Assignment of Construction Defect Claims Not Covered
April 20, 2017 —
Tred R. Eyerly - Insurance Law HawaiiAssignment of insurance proceeds as part of a settlement against the subcontractor for faulty workmanship was not covered under the CGL policy in accordance with Illinois law. Allied Prop. & Cas. Ins Co v. Metro North Condominium Assoc., 2017 U.S. App. LEXIS 4107 (7th Cir. March 8, 2017).
Metro North Condominium Association hired a developer to build a condominium. The developer used CSC Glass to install the building's windows. CSC installed the windows defectively, causing the building to sustain significant water damage following a rain storm.
Metro North sued the developer, who turned out to be insolvent. Metro North amended its complaint to add a claim against CSC for breach of the implied warranty of habitability. Metro North eventually dismissed its lawsuit in exchange for an assignment of CSC's policy with Allied and payment of any right to $700,000 worth of insurance coverage. The settlement specified that it was not intended to compensate Metro North for the cost of repairing or replacing CSC's defectively installed windows, but rather for the damage to the remaining parts of Metro North's condominium.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Rio de Janeiro's Bursting Real-Estate Bubble
September 17, 2015 —
Juan Pablo Spinetto & Peter Millard – BloombergAt opposite ends of downtown Rio de Janeiro, projects tied to Donald Trump and Eike Batista-- one a billionaire-turned-politician, the other Brazil’s most famous ex-billionaire -- have come to represent the city’s real estate bust.
The 23-story Serrador building, a granite-and-glass art deco tower near Rio’s Santos Dumont airport, has sat empty since Batista’s failed empire of commodities companies abandoned it last year. Four miles away, in the city’s gritty port district, an ambitious office project that Trump lent his name to is still nothing more than a weed-filled lot about a year after construction was slated to begin.
Reprinted courtesy of
Juan Pablo Spinetto, Bloomberg and
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Adaptive Reuse: Creative Reimagining of Former Office Space to Address Differing Demands
March 27, 2023 —
Cait Horner, Allan C. Van Vliet & Adam J. Weaver - Gravel2Gavel Construction & Real Estate Law BlogEmpty office buildings downtown. A housing shortage in almost every major market. Is there a way to address both issues at once by converting historic but underutilized office buildings into apartments and condos in city centers? It’s an idea that has been discussed, and in some cities, implemented in recent years. But while the idea seems simple enough—repurpose existing office space for residential and mixed-use projects—there are some real challenges limiting the feasibility of large-scale office to residential conversion.
The commercial real estate market is facing an uncertain future. Even as some companies have started requiring that their workers return to the office, many continue to operate under their hybrid or fully remote working models, which companies may commit to permanently. And while some big cities have seen office occupancy levels increase in the past few months (CBRE notes that Austin and Houston both saw occupancy levels above 60% in January, up around 25% from 2022 levels), the ongoing impact of COVID-19 and uncertainty in the global financial markets are keeping many office buildings empty in major cities around the country. Those tenants who are returning to the office are focusing their search for office space on high-quality, sustainable, amenity-filled spaces to entice workers to return to the office. This flight to quality leaves some older and, in many cases, architecturally relevant, office buildings behind. As a result, there are growing opportunities for the potential adaptive reuse of these existing underutilized structures.
Reprinted courtesy of
Cait Horner, Pillsbury,
Allan C. Van Vliet, Pillsbury and
Adam J. Weaver, Pillsbury
Ms. Horner may be contacted at cait.horner@pillsburylaw.com
Mr. Van Vliet may be contacted at allan.vanvliet@pillsburylaw.com
Mr. Weaver may be contacted at adam.weaver@pillsburylaw.com
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Application of Set-Off When a Defendant Settles in Multiparty Construction Dispute
January 05, 2017 —
David Adelstein – Florida Construction Legal UpdatesThe defense of set-off is an important defense in construction disputes, particularly multiparty disputes. For more information on this defense, please check out this
article as it explains the application of set-off in civil disputes in detail.
The issue of set-off will come up in a multiparty dispute when a plaintiff settles with one or more of the defendants. The remaining defendant(s) wants the benefit of that settlement to set-off and reduce any judgment against it. An example of this scenario can be found in Escadote I Corp. v. Ocean Three Limited Partnership, 42 Fla. L. Weekly D23a (Fla. 3d DCA 2016).
In this case, an owner of a condominium unit sued the condominium association, the developer, and the general contractor for water intrusion and mold infestation. The claim against the condominium association was the only claim that entitled the owner to attorney’s fees pursuant to its lawsuit (thus, attorney’s fees were isolated to only that claim against the association). During trial, the owner settled with the association. In entering a settlement, the owner smartly allocated the settlement amount such that $500 was allocated to its principal damages and $374,500 was allocated to its attorney’s fees. The owner then obtained a jury verdict against the contractor and developer for approximately $2M, jointly and severally, and the contractor and developer wanted the entire $375,000 settlement amount with the association to be set-off from the $2M verdict. The trial court set-off the entire $375,000 from the jury verdict when entering judgment. The appellate court reversed.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dma@katzbarron.com
Client Alert: Court Settles Conflict between CCP and Rules of Court Regarding Demurrer Deadline Following Amended Complaint
August 20, 2014 —
R. Bryan Martin and Kristian B. Moriarty - Haight Brown & Bonesteel LLPIn Carlton v. Dr. Pepper Snapple Group, Inc. (No. E056566, filed 8/14/2014), The Court of Appeal, Fourth Appellate District, held a demurrer was timely filed in compliance with California Code of Civil Procedure (“CCP”) section 471.5, despite being filed after the 10-day filing period prescribed in California Rule of Court 3.1320(j).
This case appears to settle the conflict that existed between the CCP and the Rules of Court as to the timing of demurrers following amendments to Complaints. Prior to this case, the validity of Rule of Court 3.1320(j)(2) was unclear as it arguably conflicted with CCP Section 471.5, which requires defendants to “answer” an amended complaint within 30 days after service. At the same time, it was not clear that CCP Section 471.5 applied to amendments after a demurrer had been sustained, and it was even more unclear whether the statutory 30-day period to “answer” an amended complaint foreclosed the shorter 10-day period prescribed under Rule of Court 3.1320(j)(2) for a demurrer or motion to strike.
On July 15, 2011, Plaintiff filed a Complaint against Dr. Pepper Snapple Group, Inc. (“Dr. Pepper”) and others. On October 24, 2011, Plaintiff filed a First Amended Complaint (“FAC”). Dr. Pepper demurred to the FAC on various grounds. On January 5, 2012, the trial court sustained the demurrer in part, and overruled it in part. The Court granted Plaintiff 30 days to amend the FAC.
Reprinted courtesy of
R. Bryan Martin, Haight Brown & Bonesteel LLP and
Kristian B. Moriarty, Haight Brown & Bonesteel LLP
Mr. Martin may be contacted at bmartin@hbblaw.com, Mr. Moriarty may be contacted at kmoriarty@hbblaw.com
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DHS Awards Contracts for Border Wall Prototypes
September 20, 2017 —
Engineering News-RecordThe Dept. of Homeland Security has awarded eight contracts to companies to develop prototypes for the Trump administration’s proposed wall along sections of the nearly 2,000-mile U.S.-Mexico border. The contracts are divided evenly between concrete and nonconcrete options. DHS’s Customs and Border Protection agency didn’t specify what sort of materials would be used in the nonconcrete barriers.
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Engineering News-RecordENR staff may be contacted at
ENR.com@bnpmedia.com
WSDOT Seeks Retraction of Waiver Excluding Non-Minority Woman-Owned Businesses from Participation Goals
September 28, 2017 —
Lindsay K. Taft - Ahlers & Cressman PLLCIf you are a regular reader of our blog, you will likely recognize that our firm has been actively involved and concerned with the results of Washington State Department of Transportation’s (“WSDOT”) Disparity Study, which impacts both Disadvantaged Business Enterprises (“DBE”) and general contractors who bid on federally-funded projects with DBE goals. On June 1, 2017, WSDOT implemented a “waiver”, which excluded Caucasian women-owned firms (“WBEs”) from qualifying for Condition of Award DBE Goals on federally-funded projects. This drastic action was the result of WSDOT’s highly criticized 2012 Disparity Study conducted by BBC Research & Consulting of Denver, Colorado, which concluded non-minority women-owned firms do not face “substantial disparities” in the federally-funded transportation contracting market.
BBC’s study was criticized for a number of reasons, but most concerning was BBC’s flawed and unreliable statistical methodology that did not accurately represent true marketplace conditions. See Ahlers & Cressman letter of January 9, 2014 and Associated General Contractors of Washington article. For example, BBC’s results showed both decreasing WBE availability and availability vastly out of range with other states (e.g., the availability of women-owned construction firms in Washington was just 1.5% compared to 11.96% in Oregon). Nevertheless, based on this flawed BBC study and BBC’s assertion that women-owned firms did not face disparities, WSDOT sought and on June 1, 2017 was granted a waiver precluding general contractors from counting WBE firms towards their DBE goals on federally funded public works projects.
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Lindsay Taft, Ahlers & Cressman PLLCMs. Taft may be contacted at
ltaft@ac-lawyers.com
Why Clinton and Trump’s Infrastructure Plans Leave Us Wanting More
September 15, 2016 —
Garret Murai – California Construction Law BlogIt’s hard not to pick up your newspaper (or, more likely, your smart phone) and not get caught up reading about Donald Trump’s latest “did he really say that” statement or about the “less than personal” personal email account of Hillary Clinton.
But which candidate is better suited to bridge America’s nearly $1.5 trillion infrastructure gap? Clinton the veteran politician? Or Trump the veteran developer?
Despite being on opposite sides on nearly every issue from abortion, to taxes, to . . . well, maybe immigration . . . both Clinton and Trump agree that the U.S. needs to invest more in its aging infrastructure. But that’s a little like saying we should take better care of ourselves and exercise more. Of course we should. The question is how.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
