Commercial Construction Heating Up
November 20, 2013 —
CDJ STAFFThe Motley Fool suggests that commercial construction is the next hot sector. Their analysis is that lag time between a rise in residential construction and commercial construction is just about over. “Industry surveys and construction data are suggestion that commercial construction could be about to turn.”
Among the indicators are increased billing by architects for commercial projects. With the exception of December 2012, with a strong slump in residential work, commercial projects lagged below residential projects from June 2012 until June 2013.
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Proving & Defending Lost Profit Damages
June 09, 2016 —
David Adelstein – Florida Construction Legal UpdatesI have written numerous articles regarding the challenge in proving
lost profit damages. Yes,
lost profits are a form of damages in business disputes, but they are a form of damages that are subject to a certain degree of
conjecture and speculation. For this reason,
lost profit evidence is oftentimes precluded from being presented at trial or lost profit damages are reversed on appeal. This is why it is imperative to ensure i’s are dotted and t’s are crossed when it comes to proving lost profit damages. It is also imperative, when defending a lost profit claim, to put on evidence and establish the speculative nature of the lost profit damages.
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David M. Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Appreciate The Risks You Are Assuming In Your Contract
February 10, 2020 —
David Adelstein - Florida Construction Legal UpdatesAPPRECIATE THE RISKS YOU ARE ASSUMING IN YOUR CONTRACT. Otherwise, those risks will come back and bite you in the butt. This language is not capitalized for naught. Regardless of the type of contract you are entering into, there are risks you will be assuming. You need to appreciate those risks because there may be insurance you can obtain to cover that risk.
For instance, exculpatory provisions (or get-out-of-jail provisions) in contracts are enforceable if they are unambiguous. “Such provisions are deemed to be unambiguous and enforceable when the language unequivocally demonstrates a clear and understandable intention for the defendant to be relieved from liability such that an ordinary and knowledgeable person will know what he or she is contracting away.” Pillay v. Public Storage, Inc., 44 Fla.L.Weekly D2744c (Fla. 4th DCA 2019).
An example of an exculpatory provision can be found in the public storage rental contract found in Pillay that read:
(1) ALL PERSONAL PROPERTY IS STORED BY OCCUPANT AT OCCUPANT’S SOLE RISK.
(2) Owner and Owner’s agents . . . will not be responsible for, and Tenant releases Owner and Owner’s agents from any responsibility for, any loss, liability, claim, expense, damage to property . . . including without limitation any Loss arising from the active or passive acts, omission or negligence of Owner or Owner’s agents.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
For Whom Additional Insured Coverage Applies in New York
November 11, 2024 —
Bill Wilson - Construction Law ZoneSimply including a requirement in a contract to add certain parties as additional insureds under a commercial general liability insurance (CGL) policy may not be enough to ensure such coverage is provided in New York. In New York City Hous. Auth. v. Harleysville Worcester Ins. Co., 226 A.D.3d 804 (2024), the New York Supreme Court Appellate Division – Second Department ruled that the language in an insurance endorsement required privity of contract with the insured party subcontractor to obtain additional insured status and denied coverage to others despite a provision in a subcontract requiring such additional insured coverage.
In this case, an owner entered into a contract with a general contractor for construction services. The general contractor entered into a subcontract with a subcontractor. The subcontractor agreed to procure and maintain a CGL policy naming the owner, the general contractor, and another related party as additional insureds thereunder. An employee of the subcontractor was injured on the project and sued the three additional insureds and several other parties. Subcontractor’s insurance company refused to defend and indemnify any party other than the general contractor. All the parties sued by the subcontractor’s employee brought an action against the subcontractor’s insurance company, seeking coverage for defense and indemnification as additional insureds under the subcontractor’s CGL policy.
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
Washington State Safety Officials Cite Contractor After Worker's Fatal Fall
October 09, 2023 —
James Leggate - Engineering News-RecordInspectors with the Washington State Dept. of Labor & Industries found that flipper deck platforms were not used in line with the manufacturer’s specifications on a jobsite where a worker was killed in a fall earlier this year. Officials cited a contractor, SAK Builders Inc., for $16,800 in penalties over three alleged serious violations.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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Not If, But When: Newly Enacted Virginia Legislation Bans “Pay-If-Paid” Clauses In Construction Contracts
August 22, 2022 —
Joseph A. Figueroa & Thomas E. Minnis - ConsensusDocsRecently passed legislation in Virginia is likely to dramatically change contractual relationships between prime contractors and subcontractors in the Commonwealth. Abrogating well-established common-law principles set forth by the Supreme Court of Virginia, on April 27, 2022, the Virginia General Assembly, after receiving input from Virginia Governor Glenn Youngkin, passed Senate Bill 550 banning “pay-if-paid” clauses in public and private construction contracts. Contractors performing work in Virginia should take note of the new law, which goes into effect next year and will apply to any contracts executed after January 1, 2023.
The History Of Pay-if-Paid Clauses In Virginia
Broadly speaking, “pay-if-paid” clauses are a commonly used tool by prime contractors on construction projects to shift the risk to subcontractors in the event that the owner does not pay the prime contractor for work. Such clauses usually include language creating an express condition precedent to the subcontractor’s right to be paid for work under a subcontract, stating that the prime contractor shall be under no obligation to pay the subcontractor for work unless and until the prime contractor first receives payment for that work by the project owner. The “pay-if-paid” clause also has a less extreme cousin, the “pay-when-paid” clause, which merely delays the time in which the prime contractor is obligated to pay the subcontractor to the time in which the prime contractor is paid by the owner. It does not, however, extinguish the prime contractor’s ultimate obligation to pay the subcontractor.
Reprinted courtesy of
Joseph A. Figueroa, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) and
Thomas E. Minnis, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)
Mr. Figueroa may be contacted at jfigueroa@watttieder.com
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A Homeowner’s Subsequent Action is Barred as a Matter of Law by way of a Prior “Right to Repair Act” Claim Resolved by Cash Settlement for Waiver of all Known or Unknown Claims
February 26, 2015 —
Richard H. Glucksman, Esq., Jon A. Turigliatto, Esq., and David A. Napper, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinDavid Belasco v. Gary Loren Wells et al. (2015) B254525
OVERVIEW
In a decision published on February 17, 2015, the Second District Court of Appeal made clear that settlement agreements containing waivers of unknown claims in connection with a construction of a property, absent fraud or misrepresentation, will be upheld. In brief, the homeowner plaintiff had made a claim against the builder pursuant to California Code of Civil Procedure Section 896 (“Right to Repair”) and settled for a cash payment and obtained a Release of all Claims including for all known and unknown claims. The court held that homeowner’s subsequent construction defect claim was barred pursuant to the terms and conditions of the earlier release.
DISCUSSION
Plaintiff and Appellant, David Belasco ("Belasco"), purchased a newly construction home in Manhattan Beach from builder Gary Loren Wells ("Wells"). Two years after purchasing the property, Belasco filed a Complaint for construction defects, which eventually resulted in settlement between the parties. The settlement agreement included a California Civil Code Section 1524 waiver of all known or unknown claims with the word "claims" defined in part as “any and all known and unknown construction defects." Six years later in 2012, Belasco filed a Complaint alleging a claim, amongst others, that the defective and leaky roof breached the statutory warranty on new construction under California Civil Code section 896 ("Right to Repair Act").
Relying on San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, Wells and Wells' surety, American Contractors Indemnity Company (collectively "Wells"), filed a motion for summary judgment contending that the 2012 action was barred by the settlement of Belasco’s prior Complaint against Wells for construction defects to his home. When the trial court ruled in favor of Wells, Belasco appealed. Belasco, a patent attorney, made the following contentions:(1) the general release and section 1542 wavier in the settlement agreement for patent construction defects is not a "reasonable release" of a subsequent claim for latent construction defects within the meaning of section 929 and the “Right to Repair” Act; (2) a reasonable release can only apply to a "particular violation" and not to a latest defect under the language of section945.5, subdivision (f), and the settlement was too vague to be valid because it does not reference a "particular violation;" (3) section 932 of the California Civil Code specifically authorizes an action on "[s]subsequently discovered claims of unmet standards;" (4) public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and (5) a genuine issue of material fact exists concerning Belasco's fraud and negligence claims that would have voided the settlement pursuant to section 1668.
Pursuant to the "Right to Repair Act" Section 929 subsection (a), a builder can make a cash offer in lieu of a repair and the homeowner is free to accept or reject such offer. Section 929subsection (b) goes on to state that
"[t]he builder may obtain a reasonable release in exchange for the cash payment. The builder may negotiate the terms and conditions of any reasonable release in terms of scope and consideration in conjunction with a cash payment under this chapter."
The Second District Court of Appeal ruled that the prior cash settlement, with a release and section 1524 wavier, was a "reasonable release" under the language of California Civil Code Section 929.
On multiple occasions, the Court noted that Belasco is an attorney and was represented by an attorney during the negotiation of the settlement agreement. By executing the agreement with express language regarding what claims were to be release, Belasco released Wells of "any and all claims" due to "any and all known and unknown construction defects." The Court reasoned that because Belasco is an attorney in his own right, he should have understood the import of the Section 1542 waiver and had the opportunity to reject or revise the settlement agreement prior to binding himself to it. The Court further found that the agreement "could not have been more clear" regarding the waiver of all unknown and known construction defect claims and therefore was not vague. Belasco's additional contentions were found to be without merit because Belasco availed himself of the statutory remedy of a cash settlement in lieu of repairs and voluntarily entered into a negotiated settlement agreement. Lastly, Belasco failed to present any evidence regarding his misrepresentation claim.
When a homeowner files a "Right to Repair Act" claim, often it seems that only two options exist: either repair the alleged defects or go to court. However, Belasco is a reminder to builders that the "Right to Repair Act" does offer an avenue for settlement. The Second District Court of Appeal presented a clear, unqualified opinion regarding the validity and enforceability of settlement agreements releasing all known or unknown construction defects in a single family home case. The Court will hold parties to the settlements they agree to. This is especially so when one of the parties is an attorney and provides deposition testimony expressly acknowledging that he understood the scope of the agreement. Attorneys for builders should always include a waiver of all known and unknown claims, which pursuant to Belasco and San Diego Hospice, will ensure that any future claims at the property will be effectively barred by the terms of the settlement agreement.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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Can Your Employee File a Personal Injury Claim if They’re Injured at Work?
March 14, 2022 —
Louis Patino - Construction ExecutiveConstruction accidents can happen to anyone. It’s common for employees to work at height, with machinery or alongside any number of potential hazards, so it’s no surprise that injury rates in construction are 71% higher compared to other industries.
Anything from a ladder manufacturing defect to an unguarded ledge or wet surface can increase the likelihood of a fall, but those aren’t the only dangers. If scaffolding collapses due to an excessive load or improper construction, it can prove fatal.
Then, there are struck-by hazards—one of the Occupational Safety and Health Administration’s (OSHA) “Fatal Four”—including falling, swinging and rolling objects; crane misuse; electrical faults; and issues with personal protective equipment. These are all hazards construction workers have to contend with daily.
Reprinted courtesy of
Louis Patino, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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