Recent Bribery and Anti-Corruption Enforcement Trends in Global Construction Industry
August 26, 2019 —
Ralph A. Finizio & Anthony Finizio - ConsensusDocsBribery and corruption have long plagued the construction industry, particularly in the developing world and emerging markets. Large contracts often trickle down through layers of subcontractors, presenting opportunities for corruption at each level. The risk is enhanced in certain foreign jurisdictions, where large corporations may be wholly or partially state-owned enterprises and public officials may expect payment in exchange for state-issued licenses or government contracts.
Recent enforcement trends indicate that both the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are increasingly targeting the construction industry for anti-bribery and corruption actions under the Foreign Corrupt Practices Act (FCPA). Several former DOJ officials also recently commented that the construction industry has become a focus of anti-corruption enforcement efforts.
The FCPA is a formidable tool for regulators, making it unlawful to influence a foreign government official with any type of payment or personal reward. While certain safe harbors apply — including de minimis payments made to expedite routine governmental action or the payment being lawful in the foreign jurisdiction — these exceptions are construed narrowly and can be difficult to apply in practice.
Reprinted courtesy of
Ralph A. Finizio, Pepper Hamilton LLP and
Anthony Finizio, Pepper Hamilton LLP
Mr. Finizio may be contacted at finizior@pepperlaw.com
Mr. Finizio may be contacted at finizioa@pepperlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
You Don’t Have To Be a Consumer to Assert a FDUTPA Claim
February 22, 2018 —
David Adelstein – Florida Construction Legal UpdatesA few years ago, the Fourth District Court of Florida rendered an opinion in
Caribbean Cruise Line, Inc. v. Better Business Bureau of Palm Beach County, Inc., 169 So.3d 164 (Fla. 4th DCA 2015) regarding
Florida’s Deceptive and Unfair Trade Practices Act (referred as to “FDUTPA”) (Florida Statute s. 501.201et seq.).
This case held that a party can assert a FDUTPA claim even though the party is NOT a consumer. The party still has to prove there was an injury to consumers in filing such claim, but again, the party can bring the claim even though it is NOT a consumer. Caribbean Cruise Line, 169 So.3d at 169 (“[W]hile the claimant would have to prove that there was an injury or detriment to consumers in order to satisfy all of the elements of a FDUTPA claim, the claimant does not have to be a consumer to bring the claim.”).
See also Cemex Construction Materials Florida, LLC v. Armstrong World Industries, Inc., 2018 WL 905752, *15 (M.D.Fla 2018) (relying on
Caribbean Cruise Line to find that even though the plaintiff does not need to be a consumer, the plaintiff still must prove an injury to consumers to satisfy elements of a FDUTPA claim).
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
Blurred Lines: New York Supreme Court Clarifies Scope of Privileged Documents in Connection with Pre-Denial Communications Prepared by Insurer's Coverage Counsel
September 17, 2015 —
Greg Steinberg – White and Williams LLPIn a recent decision, the New York Supreme Court clarified the scope of privileged documents with respect to communications prepared by an insurer’s counsel prior to issuing a denial of coverage letter. The coverage litigation at issue arose out of MF Global Inc.’s claims under fidelity bonds for losses incurred as a result of large trades made by former MF Global employee, Evan Dooley. The trades cost MF Global, Dooley’s former clearing firm, $141 million after it had to reimburse the CME Group, Inc. futures clearinghouse that handled the trade. The insurers that issued the fidelity bonds contested coverage and sued MF Global in 2009.
The opinion underscores the fact that there is no “bright line” rule in New York with respect to disclosure of communications in the insurance context prior to the issuance of a coverage determination – the disclosure requirement will instead turn on what’s actually privileged. In addition, while retention of counsel may not serve as an automatic shield for all documents prepared prior to the coverage decision, insurers will not be required to disclose, among other things, communications which include an “indicia of the provision of legal services.”
Read the court decisionRead the full story...Reprinted courtesy of
Greg Steinberg, White and Williams LLPMr. Steinberg may be contacted at
steinbergg@whiteandwilliams.com
Order for Appraisal Affirmed After Insureds Comply with Post-Loss Obligations
April 15, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Florida Court of Appeal affirmed an order compelling an appraisal because the insureds complied with their post-loss obligations under the policy. State Farm Fla. Ins. Co. v. Cardelles, 2015 Fla. App. LEXIS 2559 (Fla. Ct. App. Feb. 25, 2015).
The insureds suffered damage to their home after Hurricane Katrina on August 25, 2005, and again after Hurricane Wilma on October 24, 2005. After each hurricane, State Farm was notified. With the assistance of their public adjuster, the insureds submitted sworn proofs of loss for damages caused by each hurricane. After the deductible, State Farm paid $19,000 for the Hurricane Katrina claim and $13,000 for the Hurricane Wilma claim. The insureds repaired their roof and made minor repairs to their home with the State Farm payment, but claimed the payment was insufficient to fully repair the damage from the two hurricanes.
Four years later, the insureds hired a second public adjuster, who submitted a supplemental claim to State Farm for $127,000 in damages. State Farm requested documents and an updated sworn proof of loss. The insureds did not submit any additional documents because they had not made any additional repairs without further payment from State Farm. The insureds did, however, allow State Farm to make a further inspection of the damages.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Keeping Detailed Records: The Best Defense to Constructive Eviction
October 24, 2023 —
Ben T. Welch & Ken Brown - Snell & WilmerInevitably, commercial property owners and managers will be faced with a claim by a tenant of constructive eviction. This article is intended to describe what constructive eviction is and to suggest what owners and managers can do to prepare for, and ward off, such claims.
Constructive eviction occurs where a tenant’s “right of possession and enjoyment” of the leasehold is disrupted by the landlord in a manner that renders the premises “unsuitable for the purposes intended.”i Put another way, it is interference that is so “substantial nature and so injurious as to deprive the tenant of the beneficial enjoyment of a part or the whole of the demised premises.”ii Although easy to describe in theory, constructive eviction can be devilishly difficult to determine in the real world. In litigation, determining when interference crosses over the line to constructive eviction is intensely fact-sensitive and resists sweeping generalizations.iii
For instance, Utah courts have held that tenants have been constructively evicted when they have been subjected to continual harassment or insults by the landlord or the landlord’s agent,iv prevented or impaired in their access to the leased premises during operating hours,v or when a landlord fails to provide an operable elevator (or other essential commercial amenities) necessary for a tenant’s business operations.vi By contrast, claims of “discomfort” or “inconvenience” have been rejected as a basis for constructive eviction.vii The same goes for claims that a landlord wrongfully served a three-day notice to pay or quit.viii
Generally, constructive eviction is an affirmative defense made in response to a landlord’s lawsuit for nonpayment of rent.ix It is not, as is commonly supposed, a basis for a tenant’s premature abandonment of the premises. In other words, the defense is raised after the tenant has vacated as a result of being effectively “evicted.”x Further, the defense requires the tenant to actually abandon the premises and do so within a “reasonable time” after the alleged interference.xi A tenant cannot stay in possession and simply refuse to pay rent on the basis of constructive eviction.xii
The key consideration in preparing for, and responding to, a claim of constructive eviction is keeping good records. A tenant claiming constructive evicting likely must prove that the issue was raised in a timely manner and, despite multiple entreaties, was never resolved.xiii As such, it is critical that landlords acknowledge tenant complaints as well as document in writing their efforts to ameliorate those complaints. While a landlord does not carry the burden of proof for constructive eviction, detailed documentation can thwart a tenant’s claim that a landlord has been inattentive or unwilling to address the tenant’s concerns.
Detailed records are also useful in disputes where a tenant claims substantial interference. “The whole point of constructive eviction is that the landlord basically drove the tenant out through the landlord’s action or inaction.”xiv As such, a landlord that is unable to document the steps taken in response to complaints will be grossly disadvantaged whereas the tenant, which had control and knowledge of the premises, will have a much easier time describing how the alleged interference deprived them of enjoying the premises.
Even with meticulous records, however, owners and managers may still face claims of construction eviction. In such instances, counsel should be retained to properly advise on compiling, preserving, and employing the evidence necessary to refute the tenant’s claims.
i Gray v. Oxford Worldwide Grp., Inc., 139 P.3d 267, 269 (Utah Ct. App. 2006).
ii Gray, 139 P.3d at 270 (citing Neslen, 254 P.2d at 850) (internal formatting omitted).
iii See Gray, 139 P.3d at 269–70 (citing Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847, 850 (Utah 1953)); Brugger v. Fonoti, 645 P.2d 647, 648 (Utah 1982).
iv See Gray, 139 P.3d at 270–71.
v Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847 (Utah 1953).
vi See Richard Barton Enterprises, Inc. v. Tsern, 928 P.2d 368, 375, 378 (Utah 1996) (citing Union City Union Suit Co. v. Miller, 162 A.D.2d 101, 556 N.Y.S.2d 864 (1990)).
vii See Myrah v. Campbell, 163 P.3d 679, 682–84 (Utah Ct. App. 2007).
viii Barton v. MTB Enterprises, 889 P.2d 476, 477 (Utah Ct. App. 1995); see also Brugger, 645 P.2d at 648 (stating that the tenant’s complaints revolved around standard problems commonly associated with building maintenance and did not rise to the level of substantial interference); viv Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 898–900 (Utah 1989) (upholding trial court’s findings of fact concerning insufficiency of disruption so as to justify claim for constructive eviction).
ix See Kenyon v. Regan, 826 P.2d 140, 142 (Utah Ct. App. 1992).
x See Kenyon, 826 P.2d at 142.
xi See Kenyon, 826 P.2d at 142; see also Barton v. MTB Enterprises, Inc., 889 P.2d 476, 477 (Utah Ct. App. 1995); Brugger, 645 P.2d at 648.
xii See Kenyon, 826 P.2d at 142 (citing Fernandez v. Purdue, 518 P.2d 684, 686 (Utah 1974)).
xiii See Brugger, 645 P.2d at 648 (noting that while the tenant had raised legitimate issues concerning state of the premises, the landorld had taken steps to remedy the problems within a reasonable time) (citing 49 Am.Jur.2d, Landlord and Tenant, § 617).
xiv Barton, 889 P.2d at 477.
Reprinted courtesy of
Ben T. Welch, Snell & Wilmer and
Ken Brown, Snell & Wilmer
Mr. Welch may be contacted at bwelch@swlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Asbestos Exclusion Bars Coverage
February 05, 2014 —
Tred R. Eyerly - Insurance Law HawaiiThe broad asbestos exclusion found in a Business Owners policy barred coverage for the insured after it sold a building in which asbestos was discovered. Phillips v. Parmelee, 2013 Wisc. LEXIS 747 (Dec. 27, 2013).
Prior to purchasing an apartment building, the insured had the building inspected. The report indicated that the building's heating supply ducts likely contained asbestos. The insured then sought to sell the building. The Real Estate Condition Report stated the insured was not aware of "asbestos or asbestos-containing materials on the premises."
The buyers purchased the property. A contractor cut through asbestos-wrapped ducts, dispersing asbestos throughout the building. The buyers sued the insured for breach of contract/warranty and negligence in failing to adequately disclose defective conditions including asbestos.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Designers “Airpocalyspe” Creations
May 19, 2014 —
Beverley BevenFlorez-CDJ STAFFBlaine Brownell in Architect Magazine discussed how recently some designers have created items to deal with urban pollution, however, the creations themselves are more politically-charged than practical.
Brownell lists recent examples of architects and designers “perverse” creations: “Notable smog-inspired works include the Aegis Parka, a protective jacket created by Dutch design studio Nieuwe Heren; a palladium dichloride coat that changes color in the presence of carbon dioxide emissions and is designed by London-based artist Lauren Bowker; and R&Sie(n)’s ‘Dustyrelief’ building in Bangkok, designed to collect atmospheric dust via an electrostatically-charged facade.”
“Perhaps such proposals—and the disarming irony they conjure—will motivate the changes necessary to clean up our act,” Brownell concluded.
Read the court decisionRead the full story...Reprinted courtesy of
Patriarch Partners Decision Confirms Government Subpoenas May Constitute a “Claim” Under D&O Policy; Warns Policyholders to Think Broadly When Representing Facts and Circumstances to Insurers
January 08, 2019 —
Michael S. Levine, Sergio F. Oehninger, & Joshua S. Paster - Hunton Andrews KurthThe Second Circuit recently confirmed in Patriarch Partners, LLC v. Axis Insurance Co. that a warranty letter accompanying the policyholder’s insurance application barred coverage for a lengthy SEC investigation, which ripened into a “Claim” prior to the policy’s inception date. The opinion left intact the lower court’s finding that the SEC subpoena constituted a “demand for non-monetary relief” and thus qualified as a “Claim” under the directors and officers (D&O) insurance policy.
Reprinted courtesy of Hunton Andrews Kurth attorneys
Michael S. Levine,
Sergio F. Oehninger and
Joshua S. Paster
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Paster may be contacted at jpaster@HuntonAK.com
Read the court decisionRead the full story...Reprinted courtesy of
