AECOM Out as General Contractor on $1.6B MSG Sphere in Las Vegas
January 18, 2021 —
Doug Puppel - Engineering News-RecordDevelopers of the $1.66-billion MSG Sphere in Las Vegas have removed AECOM as general contractor on the project and will bring construction management in-house for the 875,000-sq-ft entertainment venue, according to a Madison Square Garden Entertainment Corp. statement released Dec. 17.
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Doug Puppel, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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History of Defects Leads to Punitive Damages for Bankrupt Developer
March 01, 2012 —
CDJ STAFFThe South Carolina Court of Appeals has ruled that evidence of construction defects at a developer’s other projects were admissible in a construction defect lawsuit. They issued their ruling on Magnolia North Property Owners’ Association v. Heritage Communities, Inc. on February 15, 2012.
Magnolia North is a condominium complex in South Carolina. The initial builder, Heritage Communities, had not completed construction when they filed for bankruptcy protection under Chapter 11. The remaining four buildings were completed by another contractor. The Property Owners’ Association subsequently sued Heritage Communities, Inc. (HCI) alleging defects. The POA also sued Heritage Magnolia North, and the general contractor, BuildStar.
The trial court ruled that all three entities were in fact one. On appeal, the defendants claimed that the trial court improperly amalgamated the defendants. The appeals court noted, however, that “all these corporations share officers, directors, office space, and a phone number with HCI.” Until Heritage Communities turned over control of the POA to the actual homeowners, all of the POA’s officers were officers of HCI. The appeals court concluded that “the trial court’s ruling that Appellants’ entities were amalgamated is supported by the law and the evidence.”
Heritage also claimed that the trial court should not have allowed the plaintiffs to produce evidence of construction defects at other Heritage properties. Heritage argued that the evidence was a violation of the South Carolina Rules of Evidence. The court cited a South Carolina Supreme Court case which made an exception for “facts showing the other acts were substantially similar to the event at issue.” The court noted that the defects introduced by the plaintiffs were “virtually identical across all developments.” This included identical use of the same products from project to project. Further, these were used to demonstrate that “HCI was aware of water issues in the other projects as early as 1998, before construction on Magnolia North had begun.”
The trial case ended with a directed verdict. Heritage charged that the jury should have determined whether the alleged defects existed. The appeals court noted that there was “overwhelming evidence” that Heritage failed “to meet the industry standard of care.” Heritage did not dispute the existence of the damages during the trial, they “merely contested the extent.”
Further, Heritage claimed in its appeal that the case should have been rejected due to the three-year statute of limitations. They note that the first meeting of the POA was on March 8, 2000, yet the suit was not filed until May 28, 2003, just over three years. The court noted that here the statute of limitation must be tolled, as Heritage controlled the POA until September 9, 2002. The owner-controlled POA filed suit “approximately eight months after assuming control.”
The court also applied equitable estoppel to the statute of limitations. During the time in which Heritage controlled the board, Heritage “assured the unit owners the construction defects would be repaired, and, as a result, the owners were justified in relying on those assurances.” Since “a reasonable owner could have believed that it would be counter-productive to file suit,” the court found that also prevented Heritage from invoking the statute of limitations. In the end, the appeals court concluded that the even apart from equitable tolling and equitable estoppel, the statute of limitations could not have started until the unit owners took control of the board in September, 2002.
Heritage also contested the jury’s awarding of damages, asserting that “the POA failed to establish its damages as to any of its claims.” Noting that damages are determined “with reasonable certainty or accuracy,” and that “proof with mathematical certainty of the amount of loss or damage is not required,” the appeals court found a “sufficiently reasonable basis of computation of damages to support the trial court’s submission of damages to the jury.” Heritage also claimed that the POA did not show that the damage existed at the time of the transfer of control. The court rejected this claim as well.
Finally, Heritage argued that punitive damages were improperly applied for two reasons: that “the award of punitive damages has no deterrent effect because Appellants went out of business prior to the commencement of the litigation” and that Heritages has “no ability to pay punitive damages.” The punitive damages were upheld, as the relevant earlier decision includes “defendant’s degree of culpability,” “defendants awareness or concealment,” “existence of similar past conduct,” and “likelihood of deterring the defendant or others from similar conduct.”
The appeals court rejected all of the claims made by Heritage, fully upholding the decision of the trial court.
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Waiver of Consequential Damages: The Most Important Provision in a Construction Contract
March 08, 2021 —
Jeremy P. Brummond - Construction ExecutiveConstruction agreements can be lengthy. They often include terms covering everything from logistics for working on the project site to complicated provisions regarding intellectual property. Many provisions in a construction agreement deal with risk and who is going to pay for damage claims if or when they occur.
However, not all risk-shifting provisions are equally important. While provisions that impose obligations on the contractor to maintain confidentiality, indemnify for personal injury or property damage, or correct defective work can expose a contractor to substantial damage claims and are thus important, contractors can significantly control the amount of damages the owner can claim by including a well-drafted waiver of “consequential damages” provision in the agreement.
Because the waiver of consequential damages can significantly control the amount of damages for which a contractor is assuming risk and greatly limit the owner’s ability to recoup many damages, it is arguably the most important provision in a construction contract. Therefore, it is essential for contractors and owners to carefully consider the waiver of consequential damages before entering into any construction agreement.
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Jeremy P. Brummond, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Brummond may be contacted at
jbrummond@lewisrice.com
New York’s Highest Court Gives Insurers “an Incentive to Defend”
November 20, 2013 —
CDJ STAFFThe New York Court of Appeals, that state’s highest court, has ruled that when an insurer disclaims duty to defend, “if the disclaimer is found bad, the insurance company must indemnify its insured for the resulting judgment, even if policy exclusions would have otherwise negated the duty to indemnify.” The insurer who makes a failed claim that there was no duty to defend cannot thereafter claim exclusions.
This recent New York decision is discussed by Allen R. Wolff and Eric R. Reed of Anderson Kill in their Policyholder Advisor. They note that the decision “confirms that the estoppel rule applies in New York , as it does in at least four other states.”
But this may not be the last word. American Guarantee made a motion for reargument, which the court granted. The case will return to the court in January 2014. They note that “if paying defense costs is the only consequence an insurance company faces for breaching its duty to defend the insured, an insurance company has a financial incentive to ‘kick the can down the road.’”
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Hunton Insurance Partner, Larry Bracken, Elected to the American College of Coverage Counsel
March 04, 2019 —
Michael S. Levine - Hunton Andrews KurthLawrence J. Bracken II, a partner in Hunton Andrews Kurth’s Insurance Coverage practice group, has been elected to the American College of Coverage Counsel (ACCC), which is the preeminent association of U.S. and Canadian lawyers who represent the interests of insurers and policyholders. The ACCC’s mission is to advance the creative, ethical and efficient resolution of insurance coverage and extracontractual disputes; to enhance the civility and quality of the practice of insurance law; to provide peer-reviewed scholarship; and to improve the relationships among the members of our profession. The ACCC engages in a rigorous vetting process prior to inviting a lawyer to become a fellow. ACCC fellows include many of the most prominent members of the insurance law bar.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com
Spa High-Rise Residents Frustrated by Construction Defects
February 07, 2013 —
CDJ STAFFIs this part of the spa treatment? A couple has sued over problems at Miraval Living, a luxury high-rise on the East Side of Manhattan. There was supposed to be ballroom dancing, culinary classes, and yoga. Anthony Argyrides's lawsuit notes that those didn't materialize. What they did get, he claims, was faulty plumbing, crumbling fixtures, and defective floor tiles. Mr. Argyrides claims that his front door "spontaneously fell of its hinges and nearly hit FiOS installation workers."
Meanwhile, building management has ended their agreement with Miraval and need to find someone else to operate the building's spa. Argyrides and his fellow building residents might need something more than a few deep calming breaths. He's suing for $5.5 million.
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Texas Walks the Line on When the Duty to Preserve Evidence at a Fire Scene Arises
October 14, 2019 —
Lian Skaf - The Subrogation StrategistThe extent to which a loss scene can be altered before adversaries can legitimately cry spoliation has long been a mysterious battleground in the world of subrogation. In the case of In re Xterra Constr., LLC, No. 10-16-00420-CV, 2019 Tex. App. LEXIS 3927 (Tex. App. – Waco, May 15, 2019), the Court of Appeals of Texas, Tenth District, addressed the question of when a party has a duty to preserve evidence. The court found that the trial court abused its discretion in imposing sanctions on the defendants for the spoliation of evidence as the evidence at issue was already gone by the time the defendants knew or reasonably should have known there was a substantial chance a claim would be filed against them.
In this matter, Xterra Construction, LLC, Venturi Capital, Inc. d/b/a Artisan Cabinets and Keith D. Richbourg (collectively, Xterra) leased a commercial space from building owners Daniel Hull and William H. Beazley, Jr. (collectively, Hull) to be used as a woodworking and cabinet making warehouse. On October 18, 2014, there was a fire at the warehouse. By October 20, 2014, Xterra informed its insurance carrier, Cincinnati Insurances Companies (“Cincinnati”) of the loss and Cincinnati’s adjuster, Leann Williams (Williams), met with Keith D. Richbourg (Richbourg) at the site. Williams also hired expert Jim Reil (Reil) to inspect the fire scene to perform a cause and origin investigation. The next day, Williams informed Hull’s attorney that Reil would inspect the scene on October 23, 2014. Hulls attorney, however, did not send anyone to the scene to participate in the inspection.
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Lian Skaf, White and Williams LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Alexander Moore Promoted to Managing Partner of Kahana Feld’s Oakland Office
May 08, 2023 —
Alexander R. Moore - Kahana FeldKahana Feld is pleased to announce that Alexander R. Moore, Esq., has been promoted to Managing Partner of our Oakland office. Mr. Moore has been at Kahana Feld since 2021 and is a member of the construction defect and general liability practice groups.
Mr. Moore has over 23 years of experience representing individual and commercial clients in complex disputes arising out of construction contracts, construction defect allegations, premises liability matters, landlord-tenant disputes, and contractual disputes arising out of various business relationships involving financial services companies, technology companies, telecommunications companies, real estate brokerages, non-profits, and a range of small businesses. When not focused on litigation, Mr. Moore enjoys consulting on transactional matters including the development of construction and business contracts. He has extensive experience evaluating rights and obligations under construction contracts and related insurance programs. He also assists clients in the implementation of pre-litigation risk management strategies.
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Alexander R. Moore, Kahana FeldMr. Moore may be contacted at
amoore@kahanafeld.com
