Coverage of the ongoing litigation concerning the Harmon Hotel continues to proliferate. Architectural Record and a number of other news outlets continue to provide additional details and coverage of the matter. Chief among the conditions alleged are improperly installed reinforcing steel inside link beams on 15 floors. MGM Claims that the conditions amount to hundreds of millions of dollars in damages, while Perini (the builder) indicated in a July 12th statement that the buildings problems are related to the design, and the they are “fixable.”
There is significant speculation that MGM Resorts International isn’t interested in repairing the hotel due to a glut of hotel rooms attendant to the troubled economy. In a statement Tuesday Perini reportedly stated that “Repairing and opening the Harmon would only create a greater glut of unused hotel rooms for MGM,” “If market conditions were better and MGM found that demand existed for the Harmon hotel rooms, MGM would not be claiming that the Harmon is unstable.”
MGM asserts that Perini failed to ”properly construct” the project. Clark County’s Department of Development Services has reportedly asked MGM to provide a plan to fix the project by August 15th.
The Harmon is part of the $8.5 billion CityCenter project that opened in the fourth quarter of 2009 and is jointly owned by MGM Resorts and Dubai World.
Prior reports indicated that the owner (MGM) had considered razing the entire project. The future of the project remains uncertain.
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New York: The "Loss Transfer" Opportunity to Recover Otherwise Non-Recoverable First-Party Benefits
May 13, 2014 —
Robert M. Caplan – White and Williams LLPNew York’s “no-fault” legislation reflects a public policy designed to make the insurer of first-party benefits absorb the economic impact of loss without resort to reimbursement from its insured or, by subrogation, from the tortfeasor. Country Wide Ins. Co. v. Osathanugrah, 94 A.D.2d 513, 515 (N.Y. 1st Dept. 1983). The no-fault concept embodied in New York’s Insurance Law modifies the common law system of reparation for personal injuries under tort law. Safeco Ins. Co. of Am. v. Jamaica Water Supply Co., 83 A.D.2d 427, 431 (N.Y. 2nd Dept. 1981). “[F]irst party benefits are a form of compensation unknown at common law, resting on predicates independent of the fault or negligence of the injured party.” Id. at 431. The purpose of New York’s no-fault scheme is “to promote prompt resolution of injury claims, limit cost to consumers and alleviate unnecessary burdens on the courts.” Byrne v. Oester Trucking, Inc., 386 F. Supp. 2d 386, 391 (S.D.N.Y. 2005).
New York’s no-fault scheme—contained in Article 51 of its Consolidated Laws (“Comprehensive Motor Vehicle Insurance Reparations”)—requires owners of vehicles to carry insurance with $50,000 minimum limits which covers basic economic loss, i.e., first-party benefits, on account of personal injury arising from the use or operation of a motor vehicle. Basic economic loss includes, among other things: (1) medical expenses; (2) lost earnings up to $2,000 per month for three years; and (3) out-of-pocket expenses up to $25 per day for one year. N.Y. INS. LAW § 5102(a).
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Robert M. Caplan, White and Williams LLPMr. Caplan may be contacted at
caplanr@whiteandwilliams.com
Guilty Pleas Draw Renewed Interest In Nevada’s Construction Defect Laws
December 09, 2011 —
CDJ STAFFA report this week by David McGrath Schwarz of the Las Vegas Sun suggests that Nevada’s construction defect laws will be a point of much contention in upcoming legislative sessions. The report cites renewed interest in the state’s construction defect laws due to ongoing federal investigations of construction defect attorney Nancy Quon and construction company owner Leon Benzer. Guilty pleas have been entered by at least ten individuals including an attorney, property managers, straw purchasers, and former HOA board members.
The article suggests that Nevada’s Chapter 40 laws are easily manipulated to the detriment of Nevada’s homebuilding industry. Construction industry lobbyists have tried unsuccessfully to change the laws in past legislative sessions.
The Sun’s article speculates that the building industry might be able to gain legislative concessions due to the volume of guilty pleas and what it refers to as examples of Chapter 40 abuses. ”With federal authorities collecting guilty pleas, the construction industry has prime examples of the system being abused, and how lucrative it can be for attorneys.”
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Damage Control: Major Rebuilds After Major Weather Events
October 21, 2024 —
David McMillin - Construction ExecutiveMore than two feet of rain drenching Fort Lauderdale in a day, baseball-sized hail chunks falling on Minneapolis and the deadliest wildfire in more than a century destroying more than 2,100 acres of Maui—2023 was a stark reminder that Mother Nature is a force to be reckoned with. In total, $28 billion dollars’ worth of extreme weather and climate-related disasters ripped across the U.S. last year—a new record, according to the National Oceanic and Atmospheric Administration. And there’s no relief in sight: 2024 is already the second-busiest tornado season on the books, and wildfires were burning in Oregon, California, Montana and Texas as this issue went to print.
Part of dealing with disasters is preparing for their impact to infrastructure, and Roland Orgeron Jr.—who co-founded New Orleans-based Legacy Industries with business partner Blake Couch in 2016—has been helping clients do just that. “We do a lot of consulting to identify vulnerabilities, and we offer action plans for companies based on potential storm scenarios,” Orgeron Jr. says.
Some of those clients include large oil and gas companies with operations along the Mississippi River that cannot afford to be shut down for any extended period. “Before Hurricane Ida hit, we pre-positioned equipment inside some facilities, and we had guys responding the day after the storm to clear the area and assess the damage,” Orgeron Jr. says. During the immediate response to Hurricane Ida in 2021, the company’s work involved more than keeping the business locations up and running; they needed to help a business’ employees find a place to live. “We have a home stabilization contract with one oil and gas company designed to make sure their employees can get back to work as comfortably and quickly as possible,” Orgeron Jr. says.
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David McMillin, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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New Orleans Reviews System After Storm Swamps Pumps
August 17, 2017 —
Pam Radtke Russell - Engineering News-RecordThe city of New Orleans will hire an independent team of engineers to evaluate the problems that led to severe flooding following an Aug. 5 rainfall of up to 10 in. The decision followed the revelation that 16 of the city’s pumps were not working, despite claims the system was at capacity. Further, the power system that operates those pumps was severely crippled.
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Pam Radtke Russell, ENRMs. Russell may be contacted at
Russellp@bnpmedia.com
Insurer Motion to Intervene in Underlying Case Denied
August 10, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe Colorado Supreme Court determined that the insurer defending under a reservation of rights could not intervene in the underlying case after the insured assigned its rights to any bad faith claim against the insurer. Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass'n, Inc., 2021 Colo. LEXIS 365 (Colo. May 24, 2021).
Bolt Factory initiated a construction defects lawsuit against various contractors. Several defendants filed third-party complaints against subcontractors, including Sierra Glass Company. Auto-Owners agreed to defend its insured, Sierra Glass, under a reservation of rights. Auto-Owners declined to settle with Bolt Factory for $1.9 million, within policy limits. Sierra Glass then retains independent counsel and entered into a settlement with Bolt Factory. The settlement allowed Sierra Glass to assign its bad faith claims to Bolt Factory in exchange for the right to pursue the insurer for payment of the excess judgment rather than Sierra Glass. Instead of entering into a stipulated judgment, Bolt Factory and Sierra Glass proceeded to an abbreviated trial.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Is It Time to Get Rid of Retainage?
June 15, 2020 —
David K. Taylor - Construction ExecutiveMany debate the pros, cons and claims of retainage—when one party to a construction contract withholds a percentage (typically 5%-10%) from an otherwise approved contractor pay application, and which typically is not paid until a project is substantially complete. If an owner withholds retainage from a prime contractor, typically the contractor will in turn withhold retainage from its subcontractors.
While retainage has been part of the construction industry for decades, its concept, use (and abuse) have been under more discussion during the past 10 years.
Based on heavy lobbying from primary subcontractor groups, state legislatures have passed laws to regulate retainage in commercial projects. Lenders have become more careful about loans and are frequently involved in retainage discussions. Bonded projects are subject to criticism when a surety does not step in and, like the mythical insurance company, write a check.
Reprinted courtesy of
David K. Taylor, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Taylor may be contacted at
dtaylor@bradley.com
Environmental Roundup – April 2019
May 06, 2019 —
Anthony B. Cavender - Gravel2GavelBesides showers, this April brought a number of notable new environmental decisions issued by the federal courts. Before your mind turns to May and its flowers, here’s a summary:
1.
DC Circuit. On April 23, 2019, the U.S. Court of Appeals for the DC Circuit decided the case of State of New York, et al. v. EPA. In the Clean Air Act amendments of 1990, the Congress established the Northeast Ozone Transport Region, composed of the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, the District of Columbia and a portion of Virginia. Recently, several of these states requested EPA to expand this region to include the “upwind states” of Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and the remaining portions of Virginia. Doing so would assist the “downwind” states in complying with EPA’s 2008 Ozone standard. EPA rejected this request, which was then appealed to the DC Circuit by the states of Connecticut, Delaware, Maryland, Massachusetts, New York, Pennsylvania, Rhode Island and Vermont. Because of its unique properties, ozone created by emissions in the upwind states can be transported to the downwind states, thus allegedly hampering their ability to cope with EPA ozone standards. The court agreed that EPA has the authority to expand the Northeast Transport Ozone Transport Region, but it also has the ability to exercise its reasonable discretion not to do so. In addition, the agency’s decision to rely instead on the remedies available to it in in the Clean Air Act’s “Good Neighbor” provision was reasonable and adequately justified, and the court accordingly upheld the agency’s decision. The court also noted that other remedies may be available to the downwind states, just not this one.
2.
DC Circuit. The Court also decided on April 23, 2019 the case of Air Transport Association of America v. Federal Aviation Administration. The FAA held that the payments made by the City of Portland’s airport’s utility city charges for offsite stormwater drainage and Superfund remediation was not an “impermissible diversion” of airport revenues or in violation of the “Anti-Head Tax Act,” which is codified at 49 USC Section 40116(b) and which prohibits collecting a tax on persons travelling in air commerce. Here, the charges are assessed against the airport for the use by the airport of the city’s water and sewage services. The Superfund assessment is based on the fact that the Willamette River which runs through downtown Portland could make the city a Superfund potentially responsible party, and the cty is assessing all rate payers—including the airport—a Superfund assessment. The airport is federally funded and is owned and operated by the Port of Portland, and the Port pays a combined sewer, stormwater /water bill with multiple line items including these contested items. The court notes that federal law, in particular 49 USC Section 47107(k)(2), authorizes airport revenues to be used for the operating costs of the airport receiving federal funding, and the FAA could reasonably determine that these general expenses are authorized airport “operating costs” even though the city services are provided outside the boundaries of the airport.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
