A Court-Side Seat: “Inholdings” Upheld, a Pecos Bill Come Due and Agency Actions Abound
January 25, 2021 —
Anthony B. Cavender - Gravel2GavelHere are some significant environmental and regulatory rulings and administrative actions from December 2020.
THE U.S. SUPREME COURT
Texas v. New Mexico
On December 14, 2020, the U.S. Supreme Court decided a water rights controversy involving sharing the water of the Pecos River. The 1949 Pecos River Compact provides for the equitable apportionment of the use of the Pecos River’s water by New Mexico and Texas, and a “River Master’s Manual,” approved by the Court in 1988, implements the Compact. These are very dry areas, and access to this water is very important. In 2014, a rare tropical storm drenched the Pecos River Basin, and Texas asked New Mexico to temporarily store the water that would otherwise flow into Texas. A few months later, New Mexico released the water to Texas, but the quantity was reduced because some of the water held by New Mexico had evaporated. The River Master awarded a delivery credit to New Mexico, and after Texas objected, Texas “in response” filed the Original Jurisdiction of the Court, suing New Mexico and seeking a review of the River Master’s determination. The Court held for New Mexico, deciding that this dispute was subject to and resolved by the Manual. This case is important because it highlights the high value the states place on the equitable apportionment of water that flows through different states.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
New Jersey School Blames Leaks on Construction Defects, May Sue
January 28, 2013 —
CDJ STAFFThe Carlstadt Board of Education recently commissioned a investigation into the water leaks at Carlstadt Public School. The report has not been released in full, but redacted board minutes make reference to "a lack of waterproofing, drainage and clogged or buried weep holes." The investigation is ongoing and the board's business administrator, Pamela Baxley, states that its "ability to recover damages in potential litigation may be impacted should this information be released prior to the conclusion of their investigation."
The building in question opened in April 2007, and the leaking began that October. The contractor has fixed leaks, but further leaks have occurred.
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Ensuing Losses From Faulty Workmanship Must be Covered
May 10, 2012 —
Tred R. Eyerly - Insurance Law HawaiiCoverage for damages resulting from faulty workmanship in the construction of an apartment complex was at issue in The Bartram, LLC v. Landmark Am. Ins. Co., 2012 U.S. Dist. LEXIS 44535 (N.D. Fla. March 30, 2012).
The owner of the apartments, Bartram, had primary coverage and three layers of excess coverage. Each contract excluded loss from faulty workmanship. The policies provided, however, "if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage."
Bartram contended water intrusion occurred because of faulty workmanship, which caused damage to the buildings’ exterior and interior finishes, wood sheathing, framing, balcony systems, drywall ceilings and stucco walls. This damage was separate from the work needed to simply fix the faulty workmanship. Therefore, Bartram argued, the ensuing losses that resulted from the water intrusion was covered.
The insurer argued the ensuing loss exception was not applicable if the ensuing loss was directly related to the original excluded loss.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Wine without Cheese? (Why a construction contract needs an order of precedence clause)(Law Note)
August 11, 2011 —
Melissa Brumback, Construction Law in North CarolinaFor today’s law note, I’m addressing a comment that came to me last week from Dave O’Hern of Miller O’Hern Construction. Dave writes:
I am a general contractor doing a fuel tank replacement project for our county. In the specifications there is a spec for a UL 142 tank, on the plans the spec references UL 2085 ? a much more expensive tank. My subcontractor bid the UL 142 tank. The specifications state that the specs and plans are on the same level of precedence.
The county wants me to furnish the more expensive tank without compensation citing the clause that states the plans and specs are complementary and what is called for by one is binding as if called by all and the most stringent requirement will apply.
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Reprinted courtesy of Melissa Brumback of Ragsdale Liggett PLLC. Ms. Brumback can be contacted at mbrumback@rl-law.com.
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Court Rejects Anti-SLAPP Motion in Construction Defect Suit
September 01, 2011 —
CDJ STAFFThe California Court of Appeals has upheld the denial of an anti-SLAPP motion in Claredon American Insurance Company v. Bishop, Barry, Howe, Haney & Ryder. This case was triggered by a water intrusion problem at a condominium complex, the Terraces at Emerystation, built and sold by Wareham Development Corporation. The insurer, Claredon, retained Risk Enterprise Management as the third party claims administrator. REM retained the law firm Bishop, Barry, Howe, Haney & Ryder. The construction defect case was settled in 2007 and the condo owners moved back by early 2008.
Due to issues with the claims settlement, Claredon filed against REM for “professional negligence, indemnity, apportionment and contribution,” with a cross-complaint that the cross-defendants negligently defended the developer, Wareham.
In response, the cross-defendants filed a motion to strike the cross-complaint under the anti-SLAPP statute. The trial court denied this motion and now this has been upheld by the appeals court.
The court noted that “The fundamental thrust of the cross-complaint is not protected litigation-related speech and petitioning activity undertaken on another’s behalf in a judicial proceeding.”
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A New Study: Unexpected Overtime is Predictable and Controllable
January 31, 2022 —
Aarni Heiskanen - AEC BusinessA new study by Dodge Construction Network and Versatile, a construction technology pioneer using artificial intelligence (AI) and the internet of things (IoT) to optimize construction processes, found that unexpected overtime is predictable and controllable through regular job site activity measurement. According to the study, overtime is predictable at an 88% confidence level, if proper measurement is utilized.
Overtime is a persistent feature of construction sites, however, it is often unplanned and unpredictable. Despite the cost of overtime, its impact on skilled workers, and its implications for safety and other key factors on a project site, it is often applied to address immediate concerns rather than planned to maximize its effects. This recent study shows that in order to best understand overtime and its impact, data and measurement of jobsite activities are key.
“Unique insights derived from advanced data and analytics tools will empower construction crews to build better,” said Meirav Oren, co-founder and CEO of Versatile. “Overtime can be a very effective tool on the jobsite. Through the power of data, general contractors gain the ability to minimize unnecessary overtime while maximizing its strategic benefits.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
L.A. Mixes Grit With Glitz in Downtown Revamp: Cities
May 13, 2014 —
James Nash and Nadja Brandt – BloombergNear streets so gritty they were used as the backdrop for a shootout in the next “Fast & Furious” movie, million-dollar condos and $38 racks of lamb beckon the urban pioneers of Los Angeles.
The rehab of warehouses and factories in the Arts District is the latest wave in a revival transforming the core of the second-largest U.S. city. Since 2011, about $7 billion has been poured into downtown. A decade ago its most prominent residents were the homeless. Now condos sell for a median of $523.36 a square foot -- more than in Beverly Hills. Alma, Bon Appetit magazine’s best new U.S. restaurant in 2013, is a few blocks from the convention center the city plans to renovate.
“All of a sudden, overnight, you have more cranes going up in downtown L.A. than any other neighborhood in Southern California, by far,” said Lew Horne, head of the regional CBRE Real Estate Group Inc. (CBG) office.
Mr. Nash may be contacted at jnash24@bloomberg.net; Ms. Brandt may be contacted at nbrandt@bloomberg.net
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James Nash and Nadja Brandt, Bloomberg
Material Prices Climb…And Climb…Are You Considering A Material Escalation Provision?
May 31, 2021 —
David Adelstein - Florida Construction Legal UpdatesAs you may know, material prices have been climbing. And they continue to climb based on the volatility of the material market. On top of that, there are lead times in getting material due to supply chain and other related concerns. The question is, how are you addressing these risks? These are risks that need to be addressed in your contract.
As it relates to climbing material prices, one consideration is a material escalation provision. The objective of this provision is to address the volatility of the material market in economic climates, such as today’s climate, where the price of material continues to climb. Locking down a material price today will be different than locking down the same price months from today. This volatility and risk impacts pricing and budgets. Naturally, an owner and contractor would like to be in a position to lock down supplier prices as soon as possible—both to secure pricing and to account for items with long lead times or that recent data forecasts a long lead time due to supply chain concerns. However, this is not always possible or practical and can depend on numerous issues such as when the owner contracts with the contractor, when the owner issues the notice to proceed (and permits are issued), final construction documents and revisions to the construction documents, the type of material, whether there is staging or storage available for the materials, and the current status including climitazation of the project.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com