CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

A Duty to Design and Maintain Reasonably Safe Roadways Extends to All Persons. (WA)

February 25, 2014 — Natasha Khachatourians – Scheer & Zehnder LLP Liability Newsletter
Case: Lowman v. Wilbur, et al., 178 Wn.2d 165, 309 P.3d 3.87 (2013). Issue: If a passenger’s injuries are in fact caused by the placement of a utility pole too close to a roadway, can the injuries be deemed too remote for purposes of legal causation? NO. Facts: Plaintiff was a passenger in a vehicle that lost control and collided with a utility pole that was 4.47 feet from the edge of the roadway. The vehicle’s driver was under the influence of alcohol. Plaintiff sued the driver as well as the utility company and Skagit County for negligence. The trial court granted the utility company and Skagit County’s summary judgment motion, finding that the negligent placement of the utility pole was not a legal cause of plaintiff’s injuries. The issue before the Supreme Court was whether a negligently placed utility pole could be the legal cause of a resulting injury. Read the court decision
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Reprinted courtesy of Natasha Khachatourians, Scheer & Zehnder LLP
Ms. Khachatourians may be contacted at natashak@scheerlaw.com

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Unions Win Prevailing Wage Challenge Brought By Charter Cities: Next Stop The Supreme Court?

April 06, 2016 — Steven M. Cvitanovic & Sarah A. Marsey – Haight Brown & Bonesteel LLP
In City Of El Centro v. David Lanier (State Building And Construction Trades Council Of California, AFL-CIO), the 4th appellate district upheld by a 2-1 majority the constitutionality of Labor Code section 1782, which prohibits a charter city from receiving or using state funding or financial assistance for a public construction project if the city has a charter provision or ordinance that authorizes a contractor to not comply with the state prevailing wage laws. As we wrote on this topic back in 2012 (See alert here), charter cities are governed by a municipal constitution and may make and enforce its own ordinances and regulations with respect to municipal affairs (i.e., the ‘home rule’ doctrine), as opposed to general law cities, which must comply with the state laws such as the Public Wage Rate Act (requiring municipalities to pay prevailing wages). The California Supreme Court previously held in State Building and Construction Trade Council of California, AFL-CIO v. City of Vista that the ‘home rule’ rule permits charter cities not to pay prevailing wages to its contract workers on locally funded public works because such determination is a municipal affair and not a statewide concern. Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and Sarah A. Marsey, Haight Brown & Bonesteel LLP Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com Ms. Marsey may be contacted at smarsey@hbblaw.com Read the court decision
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Pa. Contractor Pleads No Contest to Prevailing-Wage Charges, Pays Workers $20.7M

September 20, 2021 — Tom Ichniowski - Engineering News-Record
Pennsylvania construction contractor Glenn O. Hawbaker Inc. has pleaded no contest to counts of theft of worker pay—in alleged violation of state prevailing-wage laws—and will pay 1,267 workers restitution of $20.7 million in unpaid wages, Pennsylvania Attorney General Josh Shapiro said. The company entered its plea to four felony counts of “theft by failure to make required disposition of funds received” on Aug. 3 before President Judge Pamela A. Ruest of the Centre County Court of Common Pleas in Bellefonte, Pa. Reprinted courtesy of Tom Ichniowski, Engineering News-Record Mr. Ichniowski may be contacted at ichniowskit@enr.com Read the full story... Read the court decision
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Drawing the Line: In Tennessee, the Economic Loss Doctrine Does Not Apply to Contracts for Services

December 11, 2023 — Gus Sara - The Subrogation Strategist
In Commercial Painting Co. v. Weitz Co. LLC, No. W2019-02089-SC-R11-CV, 2023 Tenn. LEXIS 39 (Weitz), the Supreme Court of Tennessee (Supreme Court) considered whether the economic loss doctrine barred the plaintiff’s claims for fraud, negligent misrepresentation and punitive damages arising out of a contract with the defendant for construction services. The court held that the economic loss doctrine only applies to product liability cases and does not apply to claims arising from contracts for services. This case establishes that, in Tennessee, the economic loss doctrine does not bar tort claims in disputes arising from service contracts. In Weitz, defendant, Weitz Co. LLC (Weitz), was the general contractor for a construction project and hired plaintiff Commercial Painting Co. (Commercial) as a drywall subcontractor. Weitz refused to pay Commercial for several of its payment applications, claiming that the applications were submitted untimely and contained improper change order requests. Commercial filed a lawsuit against Weitz seeking over $1.9 million in damages, alleging breach of contract, unjust enrichment, enforcement of a mechanic’s lien, and interest and attorney’s fees under the Prompt Pay Act of 1991. Weitz filed a counterclaim for $500,000 for costs allegedly incurred due to Commercial’s delay and defective workmanship. In response, Commercial amended its complaint to add claims for fraud, intentional and negligent misrepresentation, rescission of the contract and $10 million in punitive damages. Commercial alleged that Weitz received an extension of the construction schedule but fraudulently withheld this information from Commercial and continued to impose unrealistic deadlines. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Insureds' Experts Insufficient to Survive Insurer's Motion for Summary Judgment

October 17, 2023 — Tred R. Eyerly - Insurance Law Hawaii
The magistrate recommended that insurer's motion for summary judgment be granted due to the insureds' expert's inability to present genuine issues of material fact. Walker v. Century Sur. Co., 2023 U.S. Dist. LEXIS 142408 (E.D. Texas July 17, 2023). The insureds' property sustained damage from Hurricane Laura. Colonial Claims inspected the property for Century and reported that a portion of the roof was damaged by the hurricane. Century paid insureds $2,212,34. Van Fisher, an engineer with Envista Forensics, then inspected the interior of the property on Century's behalf. Fisher reported that there was some covered interior damage caused by a leak from a storm-created opening in the roof. However, Fisher further reported that there was other interior damage caused by existing water leaks not attributed to the hurricane and thus not covered by the policy. Century then paid the insureds an additional $485.05 based on Fisher's inspection. 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

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New York Revises Retainage Requirements for Private Construction Contracts: Overview of the “5% Retainage Law”

January 22, 2024 — Levi W. Barrett, Patrick T. Murray, Skyler L. Santomartino & Mark A. Snyder - Peckar & Abramson, P.C.
On November 17, 2023, the State of New York enacted the “5% Retainage Law.” This legislation effectively limits the amount of retainage that can be held from general contractors and subcontractors to no more than 5%. It applies to many but not all construction contracts. In addition, the new law revises late stage billing requirements, enabling contractors to invoice for retainage at substantial completion. Previously, the parties to a construction contract were free to negotiate any retainage amount, limited only by an unspecified “reasonable amount” that would be released as the parties contractually set forth. Summary The new law amends Sections 756-a and 756-c of the General Business Law (part of Article 35E of the GBL, known as the “Prompt Pay Act”), and applies to private construction contracts “where the aggregate cost of the construction project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars.” Reprinted courtesy of Levi W. Barrett, Peckar & Abramson, P.C., Patrick T. Murray, Peckar & Abramson, P.C., Skyler L. Santomartino, Peckar & Abramson, P.C. and Mark A. Snyder, Peckar & Abramson, P.C. Mr. Barrett may be contacted at lbarrett@pecklaw.com Mr. Murray may be contacted at pmurray@pecklaw.com Mr. Santomartino may be contacted at ssantomartino@pecklaw.com Mr. Snyder may be contacted at msnyder@pecklaw.com Read the court decision
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Mitigate Construction Risk Through Use of Contingency

April 26, 2021 — Laurie A. Stanziale - Construction Executive
Mitigation of risk and costs in a construction project are always priorities for owners. In some contracts, in particular, Guaranteed Maximum Price contracts, some of those monetary risks are shifted to the contractor. Contingency is important because it allows for money to be in the budget for the unexpected and to keep the project moving, which benefits everyone. WHAT IS CONTINGENCY? Contingency is an amount of money built into the contractor’s price to complete the project to address unforeseen (although sometimes very common) costs that arise. This sum of money is generally referred to as the contractor’s contingency. The amount of the contingency is a balance struck between having money on hand to address the unexpected while also not unnecessarily tying up money that could otherwise be used for the project. Contingency is typically 5-10% of the hard costs. However, how the money is actually allocated during the project is not always well thought out, which can be the source of problems during the project. The contractor’s contingency is not to be confused with an owner’s contingency (or reserve) which is outside of the contractor’s budget and generally used for owner driven changes to the project, such as changes to scope, design and schedule. Reprinted courtesy of Laurie A. Stanziale, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Pine River’s Two Harbors Now Targets Non-Prime Mortgages

November 05, 2014 — Jody Shenn - Bloomberg
Count Two Harbors Investment Corp. (TWO) among investors looking for profits in riskier home loans -- and expecting a market for bonds backed by them to re-emerge even with safer issuance showing limited signs of life. The real-estate investment trust, whose 74 percent total return over the past three years is almost double that of peers, recently told the lenders that have been selling it big, high-quality mortgages that it’s now also seeking to purchase non-prime loans and those with low down payments, Chief Investment Officer Bill Roth said today during a conference call for analysts and investors. “Our expectation and certainly hope would be as this market opens up and becomes fairly meaningful that a securitization market would develop,” he said. Of course, he sees the timeline as “probably measured in years, not months.” Read the court decision
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Reprinted courtesy of Jody Shenn, Bloomberg
Ms. Shenn may be contacted at jshenn@bloomberg.net

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