Cambridge Massachusetts Building Expert Directory

New Jersey Court Washes Away Insurer’s Waiver of Subrogation Arguments

May 27, 2019 — William L. Doerler - The Subrogation Strategist
Subrogating insurers often address waiver of subrogation clauses in the form contracts drafted by the American Institute of Architects. In ACE Am. Ins. Co. v. Am. Med. Plumbing, No. A-5395-16T4, 2019 N.J. Super. LEXIS 45 (App. Div.), ACE American Insurance Company (ACE) argued that the waiver clause in the AIA General Conditions form A201-2007 did not extend to the post-construction loss at issue. Adopting what the court termed the “majority” position, the Appellate Division held that, by reading §§ 11.3.5 and 11.3.7 together, the waiver applied to bar the insurer’s subrogation claim. The Appellate Court’s ruling makes pursuing subrogation against New Jersey contractors using AIA contract forms more difficult. In this matter, Equinox Development Corporation (Equinox Development), ACE’s insured, contracted with Grace Construction Management Company, LLC (Grace Construction) to build the “core and shell” of a new health club (the Work). Grace Construction subcontracted the plumbing work to American Medical Plumbing, Inc. (AM Plumbing). Read the court decision
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Reprinted courtesy of William L. Doerler, White and Williams LLP
Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com

Repairs Could Destroy Evidence in Construction Defect Suit

June 28, 2013 — CDJ STAFF
Repair work is underway on the Palladium concert hall in Carmel, Indiana, a suburb of Indianapolis, a contractor for the project says that the repairs will destroy evidence that they need to defect against additional construction defect allegations. Work stopped in 2009 for three months of repairs after problems were found in the steel roof supports. Steel Supply & Engineering Co. has claimed that the column failures are due to errors in the design. They say that if the repair work continues, it “would result in the spoliation of evidence, and will irreparably harm the defendants, and ultimately adversely affect their ability to protect their rights in the action.” They have asked the court to bring repairs to a stop until they are able to inspect the steel. Read the court decision
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Reprinted courtesy of

When a Construction Lender Steps into the Shoes of the Developer, the Door is Open for Claims by the General Contractor

February 18, 2015 — Kevin Brodehl – California Construction Law Blog
Thank you to my partner Garret Murai for giving me the opportunity to post again on his excellent California Construction Law Blog. I am the author/editor of the Money and Dirt Blog, where I focus on issues relating to real estate investment, development, and secured lending. On the Money and Dirt Blog, I recently posted an article on an interesting new secured lending opinion from the California Court of Appeal (Fourth District in Riverside), California Bank & Trust v. Del Ponti. That blog post focused on guaranty liability, and the court’s holding that there are limits to the defenses that a guarantor can lawfully waive. But that same decision also highlights valuable lessons regarding the relationship between construction lenders and general contractors in distressed projects, which I’ll cover here. In short, the court held that when a construction lender “steps into the shoes” of the developer to manage a distressed project, the lender might open the door to liability to the general contractor under theories of breach of contract and promissory estoppel. Read the court decision
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Reprinted courtesy of Kevin Brodehl, Wendel Rosen Black & Dean LLP
Mr. Bordehl may be contacted at kbrodehl@wendel.com

The California Privacy Rights Act Passed – Now What?

November 09, 2020 — Heather Whitehead - Newmeyer Dillion
The ballot initiative, Proposition 24, has been passed by voters in yesterday’s election. What does this proposition entail and how does it impact the California Consumer Privacy Act (CCPA)? What’s Covered in Proposition 24 - The California Privacy Rights Act (CPRA) The CPRA, among other things, does the following:

Revises the existing CCPA to expand consumer rights with respect to personal information and sensitive personal information;
Creates a new agency responsible for enforcing the CPRA; and
Increases penalties for violations related to the personal information of children under the age of 16.

As for additional consumer rights, the CPRA offers consumers the opportunity to request a correction of inaccurate personal information. In addition, a consumer may direct a company to “limit its use of the consumer's sensitive personal information” to a use that an average customer would expect. Read the court decision
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Reprinted courtesy of Heather Whitehead, Newmeyer Dillion
Ms. Whitehead may be contacted at heather.whitehead@ndlf.com

Insured's Failure to Prove Entire Collapse of Building Leads to Dismissal

July 19, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The Fifth Circuit affirmed the district court's dismissal of the insured's claim for damage to her home caused by collapse. Stewart v. Metropolitan Lloyds Ins. Co. of Texas, 2021 U.S. App. LEXIS 14221 (5th Girl May 13, 2021). One evening, the insured was awakened by a loud bang that shook her house. The next morning, she noticed the damage to her home, cracked sheetrock and sunken floors. She cut a hole through her floor and discovered that a couple of joists below her subfloor had broken and fallen away. The insured filed a claim with Metropolitan. Metropolitan hired an expert who found broken and deteriorated floor joists, deteriorated floor decking, walls not plumb and gaps in the wall-to-ceiling interface. It was determined that the rot in the floor joists and subfloor decking were caused by a combination of termite damage and exposure to moisture over the lifespan of the structure, resulting in the broken floor joists and unlevel floors. The insured's own expert agreed that termite damage and wood rot were the cause of the foundation collapse failure. 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

Evaluating Construction Trends From 2023 and Forecasting For 2024

February 12, 2024 — Jason Feld & Dominic Donato - Kahana Feld
As we begin 2024, it is informative to evaluate what transpired in 2023 in the construction industry, and especially the use of construction technology. 2023 ushered in a variety of newly implemented construction technologies including 3D printed entire houses, improved wearables that detect all aspects of the construction worker from location to temperature to heart rate, increased use of modular construction for entire apartments, hotels, and condominium projects, and eco-friendly and conservation minded technologies to minimize carbon footprint, water preservation and sustainable construction methods, to name a few. 2023 also identified some significant issues in the construction industry. First and foremost, the labor shortages and hiring of skilled and qualified workers continued to be an issue resulting in increased delays, construction accidents, and project mismanagement. The skyrocketing interest rates, decline in commercial/office projects, supply chain issues, material price fluctuation and increase changes in scope of projects all negatively impacted the construction industry in 2023. There is also the demand for renewable and infrastructure projects put strain on construction resources as the projects became “mega” with larger and more complex construction leading to multi-party, high dollar, and more complex claims. Finally, there is a growing trend of construction claims and litigation being financed by third party litigation funding sources for personal/bodily injury claims and construction defect claims. Reprinted courtesy of Jason Feld, Kahana Feld and Dominic Donato, Kahana Feld Mr. Feld may be contacted at jfeld@kahanafeld.com Mr. Donato may be contacted at ddonato@kahanafeld.com Read the court decision
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May Heat Wave Deaths Prompt New Cooling Rules in Chicago

July 25, 2022 — The Associated Press (Don Babwin) - Bloomberg
Chicago (AP) -- A month after three women were found dead inside their stifling hot apartments at a Chicago senior housing facility, the City Council on Wednesday passed new cooling requirements for residential buildings. Under the rules approved by the Council's Zoning Committee on Tuesday and the full Council on Wednesday, any new construction of senior facilities and larger residential buildings must include permanent air conditioning, giving them the same requirements already in place for nursing homes. Any time the heat index climbs above 80 degrees, those buildings must run their air conditioning systems. Existing housing for older people can use portable cooling and dehumidification until May 2024, when they will be required to have permanent equipment installed. Read the court decision
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Reprinted courtesy of Bloomberg

“A No-Lose Proposition?”

October 07, 2024 — Daniel Lund III - Lexology
A Miller Act payment bond surety and its principal general contractor both sued in federal court in New Orleans by a project subcontractor sought to compel arbitration the claims against both contractor and surety based on an indisputably enforceable arbitration clause in the subcontract. This was urged to avoid separate actions against the contractor (arbitration) and its surety (litigation), even though the surety was not a party to the subcontract and, therefore, not a party to the arbitration clause. In the face of the lack of an express agreement to arbitrate, the contractor and contractor argued that “no federal statute or policy prohibits all of Plaintiff’s claims from proceeding to arbitration….” Additionally, those parties urged that the surety should be allowed to affirmatively compel arbitration because the surety “would otherwise have the ability to assert the right to compel arbitration as a defense….” The New Orleans federal district court was unpersuaded:

“[D]istrict courts within this circuit have recognized that ‘Miller Act claims by a subcontractor for unpaid labor and materials are separate and distinct from those for general breach of contract… [and] arbitration and Miller Act suits, are not, per se, inconsistent with one another.’…[A]bsent express contractual intent to subject Miller Act claims to arbitration, the court [will] not force the parties to arbitrate claims against nonparties to the contract at issue…. [C]laims against a surety, which was a non-signatory to the contract, would not be subject to arbitration without any contractual basis to do so.”

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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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