California Booms With FivePoint New Schools: Real Estate
May 13, 2014 —
John Gittelsohn – BloombergFivePoint Communities Management Inc. is already constructing a school at its Great Park Neighborhoods project in Irvine, California, for 1,000 elementary and middle school students even as it’s still building the first 700 homes.
“We build the schools ahead of time,” said Emile Haddad, chief executive officer of Aliso Viejo, California-based FivePoint, which has permits for about 10,000 homes at Great Park. “That way we always have them ready.”
Local schools, along with parks and recreation facilities, have long been draws for buyers in new communities. Now, as school districts face tight construction budgets and homebuilders compete to attract families able to qualify for mortgages, developers are taking the lead on school construction instead of waiting for local governments to do the job.
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John Gittelsohn, BloombergMr. Gittelsohn may be contacted at
johngitt@bloomberg.net
Should a Subcontractor provide bonds to a GC who is not himself bonded? (Bonding Agent Perspective)
May 03, 2017 —
Christopher G. Hill - Construction Law MusingsGuest Post Friday is back, and for this week, Construction Law Musings welcomes Steve Moore. Steve has been the Construction & Surety Manager for Towne Insurance Agency-Invincia, in Chesterfield, VA since 2010. Steve’s experience in the Virginia surety bonding marketplace started in 1985 with USF&G. His underwriting travels took him from USF&G to starting National Grange Mutual’s mid-Atlantic bond department over Virginia, Maryland, Delaware, North & South Carolina, to being Reliance Surety’s “Firemark” bond manager in Virginia. Reliance was purchased by Travelers, where Steve continued to grow the surety book of business and build expertise and relationships. Experience with Travelers and Zurich had Steve handling surety bonds for some of Virginia’s largest and best-of-class contractors. Recently, he was contracted by the Commonwealth’s Attorney’s office to serve as a contract surety expert witness on behalf of the state. He is a 1985 graduate of Virginia Tech with double-major B.S. degrees in Finance and Marketing.
Today, Steve has business and relationships with Travelers, The Hartford, Westfield, CNA, CBIC, Selective, Liberty Mutual, Ohio Casualty, Cincinnati, and many other companies. Steve’s strong foundation of insurance knowledge and in bonding principles and practices allow him to serve as a great resource for his clients.
An old Aesop fable comes to mind when I am asked whether a Sub should bond to an unbonded GC:
"A woodsman entered the forest and asked the trees to give him a handle made of the best wood. After giving the woodsman a stave of hickory, the forest watched the woodsman fashion an axe onto the handle. In a flash, the woodsman began to chop down the various oaks and maples in the forest. The oak then said to a pine, “It serves us right, since we gave our adversary the very thing that contributes to our doom…"
When a subcontractor client of mine asks about bonding to an un-bonded general contractor, a number of questions immediately come to mind. Why isn’t the GC bonded? What is the existing relationship between the GC and Sub? How well is the job financed? While wanting to help my subcontractor procure work, and surely enjoying the commissions from writing a bond, I also want to help my sub client manage unforeseen risk. What are the risks to a sub, when posting a bond to an unbonded GC?
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Disappearing Data: Avoid Losing Electronic Information to Avoid Losing the Case
February 01, 2022 —
Daniel C. Wennogle & Jennifer Knight Lang - Construction ExecutiveIt happens: A contractor on a delayed project ends up in litigation over liquidated damages, but the key communications regarding delays and approvals were sent and received by the project manager on a mobile device using text messages and personal email accounts. Unfortunately, the project manager left the company a year ago on bad terms and has changed phones. The information that would serve to mitigate the contractor’s liability has disappeared. With better awareness and policies for capturing and managing electronic information, this is avoidable.
Proactive and effective management of electronically stored information on construction projects can not only reduce costs and discovery disputes should litigation arise but can also provide critical evidence in reducing liability exposure in such disputes. The Federal Rules of Civil Procedure (as well as most state rules, which often mirror federal rules), provide for sanctions if a party fails to preserve electronically stored information (ESI) that should have been preserved in anticipation of litigation but is lost due to the failure to take reasonable steps to preserve it.
Even in arbitration, where discovery and disclosure obligations are often more limited than in the court setting, preservation of ESI can help strengthen claims and defenses, avoiding accusations of spoliation that can derail a case. Arbitrators can also fashion appropriate sanctions for destruction of relevant evidence, not to mention the impact that apparent spoliation can have on a party’s credibility.
Reprinted courtesy of
Daniel C. Wennogle & Jennifer Knight Lang, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Ms. Lang may be contacted at jennifer.lang@moyewhite.com
Mr. Wennogle may be contacted at daniel.wennogle@moyewhite.com
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Herman Russell's Big Hustle
May 20, 2024 —
Maggie Murphy - Construction Executive“Any person that I knew of in the city of Atlanta who did anything ran it by Herman before they did anything else.”
These are the words of Anthony Dixon, senior project manager and 47-year veteran employee with H. J. Russell & Company. But ask anyone who knows anything about H. J. Russell, and they’ll say the same thing: The story of the company is the story of Herman J. Russell himself.
From humble beginnings in Atlanta’s Summerhill neighborhood came a young man with an unbreakable entrepreneurial spirit, who used that drive to forge an unlikely path to success in the Jim Crow–era South. What began as a plastering company in 1952 is today one of the largest Black-owned contractors in the United States, with Herman’s children—Donata Russell Ross, H. Jerome Russell and Michael B. Russell Sr.—at the helm (a natural fit for the family-focused firm).
Over its 72-year history, H. J. Russell has grown exponentially, contracted when necessary and persevered through segregation, the turbulence of the Civil Rights Movement and multiple economic downturns. Now, in the next five years, they’re poised to become a billion-dollar company.
But long before any of that, there was just a boy and a dream.
Reprinted courtesy of
Maggie Murphy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Ohio Court Refuses to Annualize Multi-Year Policies’ Per Occurrence Limits
June 19, 2023 —
Patricia Santelle, Adam Berardi & Lynndon Groff - White and Williams LLPWhite and Williams recently obtained summary judgment against an insured on behalf of an insurer and a guarantor, establishing that two multi-year insurance policies provide per occurrence limits on a per policy rather than a per year basis, which shielded potential exposure by over $100 million.
The insured had previously sought and obtained coverage under two policies in connection with a single occurrence arising out of massive environmental contamination claims involving a large industrial site. The issue of whether the policies provide per occurrence limits on a policy term or annual basis was not resolved in this earlier litigation.
The first policy was effective for three years and provides per occurrence limits of $40 million. The second policy was effective for up to three years and provides per occurrence limits of $15 million.
Reprinted courtesy of
Patricia Santelle, White and Williams LLP,
Adam Berardi, White and Williams LLP and
Lynndon Groff, White and Williams LLP
Ms. Santelle may be contacted at santellep@whiteandwilliams.com
Mr. Berardi may be contacted at berardia@whiteandwilliams.com
Mr. Groff may be contacted at groffl@whiteandwilliams.com
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Design and Construction Defects Not a Breach of Contract
February 14, 2013 —
CDJ STAFFThe California Court of Appeals tossed out a breach of contract award in Altman v. John Mourier Construction. The decision, which was issued on January 10, 2013, sent the construction defect case back to a lower court to calculate damages based on the conclusions of the appeals court.
The case involved both design issues and construction issues. According to the plaintiffs’ expert, the design plans did not make the buildings sufficiently stiff to resist the wind, and that the framing was improperly constructed, further weakening the structures, and leading to the stucco cracking. Additionally, it was alleged that the roofs were improperly installed, leading to water intrusion. The contractor’s expert “agreed the roofs needed repair, but disputed what needed to be done to repair the roofs and the cost.”
The jury rejected the plaintiffs’ claims of product liability and breach of warranty, but found in their favor on the claims of breach of contract and negligence. The plaintiffs were awarded differing amounts based on the jury’s conclusions about their particular properties.
Both sides sought new trials. JMC, the contractor, claimed that the jury’s verdicts were “inconsistent in that the relieved JMC of liability for strict products liability and breach of warranty, but found JMC liable for breach of contract and negligence.” The plaintiffs “opposed the setoff motion on the ground that the jury heard evidence only of damages not covered by the settlements.” Both motions were denied. After this, the plaintiffs sought and received investigative costs as damages. JMC appealed this amended judgment.
The appeals court rejected JMC’s claims that evidence was improperly excluded. JMC sought to introduce evidence concerning errors made by the stucco subcontractor. Earlier in the trial, JMC had insisted that the plaintiffs not be allowed to present evidence concerning the stucco, as that had been separately settled. When they wished to introduce it themselves, they noted that the settlement only precluded the plaintiffs from introducing stucco evidence, but the trial court did not find this persuasive, and the appeals court upheld the actions of the trial court. Nor did the appeals court find grounds for reversal based on claims that the jury saw excluded evidence, as JMC did not establish that the evidence went into the jury room. Further, this did not reach, according to the court, a “miscarriage of justice.”
The court rejected two more of JMC’s arguments, concluding that the negligence award did not violate the economic loss rule. The court also noted that JMC failed to prove its contention that the plaintiffs were awarded damages for items that were covered in settlements with the subcontractors.
The appeals court did accept JMC’s argument that the award for breach of contract was not supported by evidence. As the ruling notes, “plaintiffs did not submit the contracts into evidence or justify their absence; nor did plaintiffs provide any evidence regarding contract terms allegedly breached.”
The court also did not allow the plaintiffs to claim the full amount of the investigative costs. Noting that the trial court had rational grounds for its decision, the appeals court noted that “the jury rejected most of the damages claimed by plaintiffs, and the trial court found that more than $86,000 of the costs itemized in plaintiffs’ invoices ‘appear questionable’ as ‘investigation’ costs/damages and appeared to the trial court to be litigation costs nonrecoverable under section 1033.5.”
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No Coverage for Counterclaim Arising from Insured's Faulty Workmanship
August 03, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe Eighth Circuit found there was no coverage for the insured's faulty workmanship. Am. Family Mut. Ins. Co., S.I. v. Mid-American Grain Distributors, LLC, 958 F.3d 748 (8th Cir. 2020).
Mid-American contracted with Lehenbauer to design and construct a grain storage and distribution facility for Lehenbauer. Before the work was competed, Lehenbauer terminated Mid-American's services. Mid-American then sued Lehenbauer for breach of contract. Lehenbauer counterclaimed against Mid-American, alleged breach of "implied duties of workmanlike performance and fitness for a particular purpose" and negligence. Mid-American tendered the counterclaim to American Family. American Family accepted the tender under a reservation of rights, but sued Mid-American for a declaratory judgment.
The district court granted American Family's motion for summary judgment, concluding that the counterclaims did not allege an occurrence.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
DRCOG’s Findings on the Impact of Construction Defect Litigation Have Been Released (And the Results Should Not Surprise You)
November 13, 2013 —
Derek Lindenschmidt — Higgins, Hopkins, McLain & Roswell, LLC.The downward trend in attached-housing construction in Colorado is well-known and discussed often within the region’s construction, insurance, finance, and legal communities. In recent years, builders and insurers in particular have striven to bring greater awareness to local governments and lawmakers regarding the impact that construction defect lawsuits have on the builders’ ability to introduce desirable, affordable, yet cost-efficient attached-housing options, such as condominiums and townhomes, into the marketplace. The Denver Regional Council of Governments (“DRCOG”) has been aware of the builders’ and insurers’ plight, largely because of the impact that the scarcity of affordable attached-housing has had on their respective communities.
On October 29th, DRCOG released its long-awaited Denver Metro Area Housing Diversity Study, prepared by Economic & Planning Systems, Inc., which investigated the factors contributing to the recent (downward) attached-housing development trends and conditions. The Study evaluated factors including changing financing and insurance requirements for builders and homebuyers, the impacts of foreclosures, changes in prospective homebuyer demographics, economic conditions which limit options for prospective homebuyers, and the costs and risks associated with construction defect regulations and lawsuits.
Despite the retorts and rebukes of the naysayers, the negative impact of construction defect regulations and lawsuits on Colorado’s housing market is significant.
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Derek LindenschmidtDerek Lindenschmidt can be contacted at
lindenschmidt@hhmrlaw.com
