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DIRECTORY AND CAPABILITIES

BKV Barnett, LLC v. Electric Drilling Technologies, LLC: Analyzing the Impact of Colorado’s Anti-Indemnification Statute

December 23, 2024 — David M. McLain – Colorado Construction Litigation Blog
In the recent case of BKV Barnett, LLC v. Electric Drilling Technologies, LLC, the United States District Court for the District of Colorado dealt with significant legal issues concerning indemnification and insurance obligations in construction agreements. The ruling, handed down on September 26, 2024, serves as a crucial reminder of the limitations imposed by Colorado’s Anti-Indemnification Statute, C.R.S. § 13-21-111.5, and its implications for contracts in the construction industry. This case arose from a Master Service Contract (“MSC”) between BKV Barnett, LLC (“BKV”) and Electric Drilling Technologies, LLC (“EDT”), in which EDT provided electrical services and equipment to an oil and gas lease wellsite in Texas. Following a lightning strike in early 2022 that damaged electrical infrastructure at the site, EDT dispatched Turn Key Utility Construction to repair the damage. During the repair work, an arc flash occurred, causing significant injuries to one of Turn Key’s employees, Matthew Lara, leading to a personal injury lawsuit filed by Lara in Dallas County, Texas. BKV sought indemnification, defense, and additional insured status from EDT under the terms of their MSC, which EDT contested. Read the court decision
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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell
Mr. McLain may be contacted at mclain@hhmrlaw.com

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South Carolina Contractors Regain General Liability Coverage

May 20, 2011 — CDJ STAFF

PR Newswire reports that the Carolinas Associated General Contractors (CAGC) have successfully persuaded the South Carolina legislature to pass a bill restoring commercial general liability (CGL) coverage. Governor Nikki Hartley signed the legislation on May 17.



A South Carolina Supreme Court decision given on January 7, 2011, had ended commercial general liability coverage in the state. Senate Bill 431 addressed this decision, restoring the ability of home builders to obtain CGL coverage.



PR Newswire quotes South Carolina homebuilder, Allen Amsler: “We have seen a lot of legislation with substantial impact to our business over the years. However, I would place this in the same level of importance with the original tort reform legislation. The effects of the Supreme Court’s ruling could have been catastrophic to our industry in South Carolina had it not been for this bill. Thanks to all those in the House, Senate and the Governor’s office who assisted us.”



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Providing Your Insurer Prompt Notice

May 20, 2024 — David Adelstein - Florida Construction Legal Updates
Sometimes, when it comes to insurance, you may hear the argument that you breached your insurance policy by failing to provide your insurer with prompt notice as the insurance policy requires. Well, this is not such an absolute issue. With that said, you should absolutely provide your insurer with prompt notice of a claim or loss. No legitimate reason not to. But, if you don’t, it is not an absolute get out of jail free card for your insurer, but it does give them a good argument, which you don’t really want to deal with. In Gulfpoint Construction Co., Inc. v. Westfield Ins. Co., 2024 WL 1759228 (11th Cir. 2024), an insured appealed a trial court’s ruling that found it did not provide prompt notice to its property insurer as the policy required. In this case, notice was provided two years after a loss from a hurricane. The insurer denied coverage and, in doing so, relied on the insured’s failure to provide prompt notice. Although the trial court agreed, the appellate court found this was a genuine issue of material fact. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Weslaco, Texas Investigating Possible Fraudulent Contractor Invoices

March 19, 2014 — Beverley BevenFlorez-CDJ STAFF
The city of Weslaco in Texas fears that they have received “fraudulent invoices from the contractor of the…Valley Nature Center facility,” according to the Mid-Valley Town Crier. The project had been stalled due to “problems with numerous subcontractors claiming they hadn’t received payment.” Furthermore, “[c]onstruction is more than 14 months delayed and now halted as contractor GAS Enterprises demands more money from the city.” City Manager Leo Olivares informed GAS President Rene Salinas “that the city was aware of ‘forged requests for payments,’ ‘padding invoices’ and ‘requests for reimbursement for items, materials and labor that you did not pay,’” reported the Mid-Valley Town Crier. While Salinas did not respond to the Mid-Valley Town Crier when asked for a comment, he did send a letter to the city “arguing that none of the subcontractors had questioned the documents to him.” Read the court decision
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No Duty to Defend Faulty Workmanship Under Hawaii Law, but All is not Lost for Insured Contractor

June 06, 2022 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court found no duty to defend claims of faulty workmanship under certain policies issued to the insured contractor, but rejected arguments made by the Insurers regarding various provisions of the general liability and excess policies. St. Paul Fire & Marine Ins. Co. v. Bodell Consr. Co., 2022 U.S. Dist. LEXZIS 79379 (D. Haw. May 2, 2022). (Note- our office represents the insured contractor). In 2003, Bodell was hired by developer Sunstone Realty Partners L LLC to be the general contractor for construction work on a condominium project, "Ali`i Cove." The project consisted of approximately 37 buildings and one recreation center that were constructed over the course of four years. On August 14, 2015, the AOAO of Ali`i Cove sued Sunstone, alleging that Sunstone developed, built, and sold condominium nits using embedded straps that did not meet building codes, instead of bolting house frames to their foundations. The AOAO filed a second amended complaint alleging numerous additional defects which were referenced in an expert report. These included additional alleged construction defects such as site conditions, structural issues, building envelope, roofing, general architecture, mechanical, plumbing and electrical. In all, the report purported to find approximately 281 instances of faulty workmanship. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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“To Indemnify, or Not to Indemnify, that is the Question: California Court of Appeal Addresses Active Negligence in Indemnity Provisions”

April 05, 2017 — Steven M. Cvitanovic & Omar Parra – Haight Brown & Bonesteel LLP
In California, it is well-established that the extent of a party’s obligation under an indemnity agreement is an issue of contractual interpretation, and it is therefore the intent of the parties that should control. What is the parties’ intent, then, when a subcontractor (indemnitor) agrees to indemnify the general contractor (indemnitee) “except to the extent the claims arise out of the general contractor’s active negligence or willful misconduct”? Does this mean the general contractor is barred entirely from recovering any indemnity if its active negligence contributed to the injury? Not according to the First Appellate District of the California Court of Appeal, which recently held that an actively negligent general contractor may still recover indemnity for the portion of liability attributable to the fault of others. Oltmans Construction Co. v. Bayside Interiors, Inc., No. A147313, 2017 WL 1179391, at *1 (Cal. Ct. App. Mar. 30, 2017). In Oltmans Construction, an employee of O’Donnell Plastering, Inc. (“O’Donnell”), a sub-subcontractor of Bayside Interiors, Inc. (“Bayside”), which was a subcontractor to Oltmans Construction Company (“Oltmans”), sustained injuries when he fell through a skylight opening in the roof of a building under construction. The employee filed suit against Bayside, Oltmans, and the building’s owner, arguing Oltmans negligently cut and left unsecured the skylight opening. Oltmans subsequently filed a Cross-Complaint against Bayside and O’Donnell, contending it was entitled to indemnification under the governing agreements. Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and Omar Parra, Haight Brown & Bonesteel LLP Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com Mr. Parra may be contacted at oparra@hbblaw.com Read the court decision
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Covenant of Good Faith and Fair Dealing Applied to Pass-Through Agreements

June 19, 2023 — Scott D. Cessar - Construction Executive
Pass-through claims are claims by a party that has suffered damages but does not have a contractual relationship with the entity that caused the damages. In the construction industry, subcontractors commonly have claims for additional costs based on actions or inactions by the owner. However, since the subcontractor is not in privity of contract with the owner, it has no direct cause of action against the owner other than, perhaps, on a nongovernment project, a lien claim. In such cases, subcontractors may seek to pass the claim through the general contractor, who is in privity with the owner, to the owner. Indeed, many construction contracts require the subcontractor, in such cases of owner-caused damages, to pass the claim through the general contractor to the owner. And since the harm visited on a subcontractor by the owner usually also affected the general contractor, the subcontractor’s claim is packaged together with the general contractor’s claim, which is usually greater, for presentation to the owner and, if not resolved, litigation with the owner. Reprinted courtesy of Scott D. Cessar, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Insurance Policies Broadly Defining “Suits” May Prompt an Insurer’s Duty to Defend and Indemnify During the Chapter 558 Pre-Suit Notice Process

May 30, 2018 — Daniel Garcia - Gordon & Rees Construction Law Blog
In Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, No. SC16-1420, 2017 WL 6379535 (Fla. Dec. 14, 2017), the Florida Supreme Court addressed whether the notice and repair process set forth in chapter 558, Florida Statutes, constitutes a “suit” within the meaning of a commercial liability policy issued by Crum & Forster Specialty Insurance Company (“C&F”) to Altman Contractors, Inc. (“Altman”). The Court found that because the chapter 558 pre-suit process is an “alternative dispute resolution proceeding” as included in the definition of “suit” in the policy by C&F to Altman, C&F had a duty to defend Altman during the chapter 558 process, prior to the filing of a formal lawsuit. Chapter 558, titled “Construction Defects,” sets forth procedural requirements before a claimant may file a construction defect action. It requires a claimant to serve a written notice of claim on the applicable contractor, subcontractor, supplier, and/or design professional prior to filing a construction defect lawsuit. The legislature intended for Chapter 558 to be an alternative dispute resolution mechanism in certain construction defect matters allowing an opportunity to resolve the claim without further legal process. Read the court decision
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Reprinted courtesy of Daniel Garcia, Gordon & Rees Scully Mansukhani
Mr. Garcia may be contacted at daniel.garcia@grsm.com

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