Top 10 Take-Aways from the 2024 Fall Forum Meeting in Pittsburgh
December 03, 2024 —
Marissa L. Downs - The Dispute ResolverOver 500 construction law attorneys and consultants convened last week at the confluence of three rivers in what became the first-ever meeting in Pittsburgh, Pennsylvania of the ABA Forum on Construction Law. The Steel City was a fitting backdrop for a meeting focused on issues of design in construction. Thanks to the hard work of many, most notably the newly minted Forum Chair Keith Bergeron and Meeting Coordinators Kendall Woods and Michael Clark, the meeting's attendees brought home new connections and a host of new lessons learned. Read on for my top 10 take-aways from the 2024 Fall Meeting in Pittsburgh and feel free to share yours in the comments below.
10. An architect's standard of care does not require perfection. A common refrain across many of the meeting's plenary sessions was that any design that is produced by human hands will never be perfect. In recognition of our own fallibility, the legal standard to which design professionals will be held to account does not require that their designs be error-free. A design professional must generally exercise the degree of care and skill ordinarily exercised by professionals performing similar services under similar circumstances. Establishing what that means in each locality will vary and will most likely need to be supported by the expert opinion of another practicing design professional.
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Marissa L. Downs, Laurie & Brennan, LLPMs. Downs may be contacted at
mdowns@lauriebrennan.com
Faulty Workmanship may be an Occurrence in Indiana CGL Policies
April 07, 2011 —
Beverley BevenFlorez CDJ STAFFThe question of whether construction defects can be an occurrence in Commercial General Liabilities (CGL) policies continues to find mixed answers. The United States District Court in Indiana denied the Plaintiff’s Motion for Summary Judgment in the case of General Casualty Insurance v. Compton Construction Co., Inc. and Mary Ann Zubak stating that faulty workmanship can be an occurrence in CGL policies.
Judge Theresa L. Springmann cited Sheehan Construction Co., et al. v. Continental Casualty Co., et al. for her decision, ”The Indiana Supreme Court reversed summary judgment, which had been granted in favor of the insurer in Sheehan, holding that faulty workmanship can constitute an ‘accident’ under a CGL policy, which means any damage would have been caused by an ‘occurrence’ triggering the insurance policy’s coverage provisions. The Indiana Supreme Court also held that, under identically-worded policy exclusion terms that are at issue in this case, defective subcontractor work could provide the basis for a claim under a CGL policy.”
As we reported on April 1st, South Carolina’s legislature is currently working on bill S-431 that would change the wording of CGL policies in their state to include construction defects. Ray Farmer, Southwest region vice president of the American Insurance Association spoke out against the bill. “CGL policies were never meant to cover faulty workmanship by the contractor,” he said. “The bill’s supplementary and erroneous liability provisions will only serve to unnecessarily impact construction costs in South Carolina.”
Read the Opinion and order...
Read the court’s ruling...
Read the American Insurance Association statement...
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Firm Leadership – New Co-Chairs for the Construction Law Practice Group
July 02, 2024 —
Haight Brown & Bonesteel LLPPartners Yvette Davis and Beth Obra-White have been named co-chairs for the firm’s Construction Law Practice Group. Yvette, Beth and other diverse leaders within the firm play an integral role in the firm’s Diversity, Equity & Inclusion initiatives.
Congratulations to Yvette & Beth for their new roles as practice group leaders!
Reprinted courtesy of
Haight Brown & Bonesteel LLP
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Subcontractors Must be Careful Providing Bonds when General Contractor Does Not
April 05, 2017 —
Christopher G. Hill – Construction Law MusingsAfter I wrote the title to this post, I thought, “Well, that says it all, doesn’t it?” I also considered the fact that for those that read this construction law blog on a regular basis, I am likely stating the obvious. I then thought about the fact that there can be confusion regarding the purpose of bonds versus insurance. Couple this with the fact that Murphy was an optimist, and I thought this would be a good reminder.
Bonds and insurance have one fundamental difference between them. When your construction company buys insurance, that insurance is meant to protect your company. When your company provides a payment and/or performance bond, that bond is there not to protect your company but to protect everyone else on the job and the project itself. Where insurance will pay for your company’s qualifying errors so that that money does not come out of the bottom line, a bond contract will have an indemnification agreement whereby anything paid by the surety will then be reimbursed by you and your company dollar for dollar (as opposed to just the premium).
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Nine Haight Attorneys Selected for Best Lawyers®: Ones to Watch 2021
September 14, 2020 —
Haight Brown & Bonesteel LLPNine Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers®: Ones to Watch 2021. Congratulations to
Courtney Arbucci,
Frances Brower,
James de los Reyes,
Kyle DiNicola,
Arezoo Jamshidi,
Kristian Moriarty,
Beth Obra-White,
Casey Otis and
Kaitlin Preston!
Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 94,000 industry leading lawyers are eligible to vote (from around the world), and Best Lawyers has received over 11 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”
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Haight Brown & Bonesteel LLP
Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts
July 13, 2020 —
Ted R. Gropman & Cindy J. Lee - ConsensusDocsOn April 17, the California Court of Appeal decided Crosno Construction, Inc. v. Travelers Casualty & Surety Company of America,1 effectively narrowing the scope of enforceable “pay-when-paid” provisions in construction subcontracts to the extent the subcontractor seeks recovery against a general contractor’s payment bond surety. Although the Crosno case involved a public works project, the rationale and holding should apply with equal force to private works projects. Basing the bulk of its decision on the Wm. R. Clarke Corp. v. Safeco Insurance Co.2 case, the court found that an open-ended “pay-when-paid” provision in a subcontract is not enforceable against a subcontractor that seeks to recover on a public works payment bond claim. This article discusses the Crosno decision and the implications for contractors on both sides of the contract moving forward.
Brief Case Summary
In Crosno, general contractor Clark Bros., Inc. contracted with the North Edwards Water District (the District) to build an arsenic removal water treatment plant. Clark hired steel storage tank subcontractor Crosno Construction, Inc. to build and coat two steel reservoir tanks. Clark and Crosno’s subcontract included a “pay-when-paid” provision, which stated that Clark would pay Crosno within a “reasonable time” of receiving payments from the owner, but “in no event less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment.” After Crosno completed its work, a dispute arose between Clark and the District, and the District withheld payment from Clark (including the monies earmarked for Clark’s subcontractors). Clark sued the District for payment, and Crosno filed its own action against Travelers Casualty and Surety Company of America, the surety on Clark’s statutory public works payment bond, for recovery of the unpaid subcontract balance. Travelers rejected Crosno’s bond claim as premature, invoking the “pay-when-paid” subcontract language and pointing to Clark’s pending payment action against the District. The issue on appeal was whether the “pay-when-paid” provision in the subcontract blocked Crosno from recovering under the payment bond from Travelers while Clark’s lawsuit against the District was still pending.
Reprinted courtesy of
Ted R. Gropman, Pepper Hamilton LLP and
Cindy J. Lee, Pepper Hamilton LLP
Mr. Gropman may be contacted at ted.gropman@troutman.com
Ms. Lee may be contacted at cindy.lee@troutman.com
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Construction Contract Terms Matter. Be Careful When You Draft Them.
February 01, 2022 —
Christopher G. Hill - Construction Law MusingsIn a prior post, I discussed the case of Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys in the context of the interplay between fraud, contract, and statutes of limitation. Some cases just keep on giving. This time the case illustrates the need for careful drafting of those
pesky, and highly important, clauses in your construction documents.
In the
current iteration of this ongoing saga, the Court considered the contractual aspects of the matter. As a reminder, the facts are as follows: In May 2011, the United States Army (“Army) awarded BAE Systems Ordnance Systems, Inc. (“BAE”) a contract to design and construct a natural gas-fired combined heating and power plant for the Radford Army Ammunition Plant (“RAAP”). On October 7, 2015, BAE issued a request for a proposal from Fluor Federal Solutions, LLC (“Fluor”) to design and build a temporary boiler facility at a specific location on the RAAP property. On October 13, 2015, the Army modified the prime contract to change the location of the boiler facility. On December 10, 2015, the Army modified the prime contract to require BAE to design and construct a permanent boiler facility. On December 30, 2015, Fluor and BAE executed a fixed-price subcontract for Fluor to design and construct the temporary boiler. Throughout 2016, BAE issued several modifications to Fluor’s subcontract to reflect the modifications BAE received from the Army on the prime contract. On March 23, 2016, BAE directed Fluor to build a permanent – rather than temporary – boiler facility. On March 28, 2016, Fluor began construction of the permanent facility and began negotiations with BAE about the cost of the permanent facility. On September 1, 2016, the parties reached an agreement on the cost for the design of the permanent facility, but not on the cost to construct the permanent facility. On November 29, 2016, the parties executed a modification to the subcontract, officially replacing the requirement to construct a temporary facility with a requirement to construct a permanent facility and agreeing to “negotiate and definitize the price to construct by December 15, 2016.” The parties were unable to reach an agreement on the construction price.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Contractors Liable For Their Subcontractor’s Failure To Pay Its Employees’ Wages And Benefits
November 01, 2022 —
Edward O. Pacer & David J. Scriven-Young - ConsensusDocsRecently, Illinois Governor J.B. Pritzker signed two House Bills that amend the Illinois Wage Payment & Collections Act, 820 ILCS 115 et. seq. (“Wage Act”), to provide greater protection for individuals working in the construction trades against wage theft in a defined class of projects. Pursuant to this new law, every general contractor, construction manager, or “primary contractor,” working on the projects included in the Bill’s purview will be liable for wages that have not been paid by a subcontractor or lower-tier subcontractor on any contract entered into after July 1, 2022, together with unpaid fringe benefits plus attorneys’ fees and costs that are incurred by the employee in bringing an action under the Wage Act. This new wage theft law follows several other states that have considered and passed similar legislation.
These amendments to the Wage Act apply to a primary contractor engaged in “erection, construction, alteration, or repair of a building structure, or other private work.” However, there are important limitations to the amendment’s applicability. The amendment does not apply to projects under contract with state or local government, or to general contractors that are parties to a collective bargaining agreement on a project where the work is being performed. Additionally, the amendment does not apply to primary contractors who are doing work with a value of less than $20,000, or work that involves only the altering or repairing of an existing single-family dwelling or single residential unit in a multi-unit building.
Reprinted courtesy of
Edward O. Pacer, Peckar & Abramson, P.C. (ConsensusDocs) and
David J. Scriven-Young, Peckar & Abramson, P.C. (ConsensusDocs)
Mr. Pacer may be contacted at epacer@pecklaw.com
Mr. Scriven-Young may be contacted at dscriven-young@pecklaw.com
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