Fairfield Connecticut Building Expert Directory

Sometimes You Get Away with Default (but don’t count on it)

July 27, 2020 — Christopher G. Hill - Construction Law Musings
As an almost universal rule here in Virginia, failing to show up for court or respond to a lawsuit is a bad idea. Consequences include default judgment against you without the right to defend or make your case. Courts simply enter judgment and the consequences of that judgment will follow. However, and as is often the case around here, there are small exceptions where the courts of Virginia allow the defaulting party off the hook. Sullivan Mechanical Contractors, Inc. v. KBE Building Corporation is just such a case. In Sullivan Mechanical, the Federal District Court for the Western District of Virginia was faced with a Motion to Vacate Default Judgment from KBE. The facts are laid out in the opinion, but basically come down to the usual subcontractor not paid by the general contractor and general contractor has reasons for non-payment. Subcontractor, Sullivan Mechanical, sued KBE and KBE failed to respond in a timely manner. One day after the deadline for response had passed, Sullivan moved for entry of default and the clerk entered the default that same day. KBE moved to vacate the default a mere 6 days after entry of default. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Dynamics of Managing Professional Liability Claims for Design Builders

February 21, 2022 — Eric M. Clarkson - Saxe Doernberger & Vita, P.C.
Nearly half of America’s construction projects are now design-build in a continuing shift. As a result, contractors are taking on more professional liability (“PL”) risk than ever before, and the risk management landscape is changing. There are unique challenges to managing PL risks and claims. Specifically, PL coverage requires proactive claim management and project coordination. As a result, design-build projects should involve significant collaboration amongst all of the parties involved in the project. Claims Made Coverage Considerations PL policies typically provide three types of coverage:

Professional Liability covers defense and indemnity against claims arising out of acts or omissions of the insured in rendering a defined set of professional services –including construction management, project management, and design work in the design build context.

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Reprinted courtesy of Eric M. Clarkson, Saxe Doernberger & Vita, P.C.
Mr. Clarkson may be contacted at EClarkson@sdvlaw.com

Franchisors Should Consider Signing a Conditional Lease Assignment Rather Than a Franchisee’s Lease

November 17, 2016 — Richard H. Herold – Real Estate Litigation Blog
In Franchise & High Properties, LLC v. Happy’s Franchise, LLC, a 2015 decision issued by the Court of Appeals in Michigan, the franchisor, Happy’s Pizza Franchise, LLC, signed a five-year lease for the commercial space to be occupied by its franchisee, Happy’s Pizza #19, Inc. The franchisor did so to secure a right of first refusal to purchase the property and to enforce the franchise agreement to have the lease assigned to the franchisor if the franchisee defaulted. The issue in the case was whether the term “tenant” referred solely to Happy’s Pizza #19 or whether it also included Happy’s Franchise as a co-tenant. “Tenant” was defined as follows: “Happy’s Pizza #19, Inc., 29102 Telegraph Road, Suite 607, Southfield, MI 48034, the lessee, and Happy’s Pizza Franchise, LLC, a Michigan limited liability company (hereinafter referred to as `Franchisor’), hereinafter designated as the Tenant.” Read the court decision
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Reprinted courtesy of Richard H. Herold, Real Estate Litigation Blog
Mr. Herold may be contacted at rherold@swlaw.com

Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts

July 13, 2020 — Ted R. Gropman & Cindy J. Lee - ConsensusDocs
On April 17, the California Court of Appeal decided Crosno Construction, Inc. v. Travelers Casualty & Surety Company of America,1 effectively narrowing the scope of enforceable “pay-when-paid” provisions in construction subcontracts to the extent the subcontractor seeks recovery against a general contractor’s payment bond surety. Although the Crosno case involved a public works project, the rationale and holding should apply with equal force to private works projects. Basing the bulk of its decision on the Wm. R. Clarke Corp. v. Safeco Insurance Co.2 case, the court found that an open-ended “pay-when-paid” provision in a subcontract is not enforceable against a subcontractor that seeks to recover on a public works payment bond claim. This article discusses the Crosno decision and the implications for contractors on both sides of the contract moving forward. Brief Case Summary In Crosno, general contractor Clark Bros., Inc. contracted with the North Edwards Water District (the District) to build an arsenic removal water treatment plant. Clark hired steel storage tank subcontractor Crosno Construction, Inc. to build and coat two steel reservoir tanks. Clark and Crosno’s subcontract included a “pay-when-paid” provision, which stated that Clark would pay Crosno within a “reasonable time” of receiving payments from the owner, but “in no event less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment.” After Crosno completed its work, a dispute arose between Clark and the District, and the District withheld payment from Clark (including the monies earmarked for Clark’s subcontractors). Clark sued the District for payment, and Crosno filed its own action against Travelers Casualty and Surety Company of America, the surety on Clark’s statutory public works payment bond, for recovery of the unpaid subcontract balance. Travelers rejected Crosno’s bond claim as premature, invoking the “pay-when-paid” subcontract language and pointing to Clark’s pending payment action against the District. The issue on appeal was whether the “pay-when-paid” provision in the subcontract blocked Crosno from recovering under the payment bond from Travelers while Clark’s lawsuit against the District was still pending. Reprinted courtesy of Ted R. Gropman, Pepper Hamilton LLP and Cindy J. Lee, Pepper Hamilton LLP Mr. Gropman may be contacted at ted.gropman@troutman.com Ms. Lee may be contacted at cindy.lee@troutman.com Read the court decision
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Texas School System Goes to Court over Construction Defect

December 30, 2013 — CDJ STAFF
The Zapata County Independent School District filed a lawsuit against Satterfield and Pontikes, claiming construction defect in two schools and two gyms that the company built for the district, according to the Laredo Morning Times. The company built two elementary schools, Zapata South and Fidel & Andrea Villarreal, and the gyms were built at Zapata North and Arturo L. Benavides. The case is scheduled to reach the courtroom in January, 2014. Read the court decision
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Home Buyers will Pay More for Solar

February 05, 2015 — Beverley BevenFlorez-CDJ STAFF
The National Association of Home Builders’ (NAHB) Eye on Housing reported that a study’s results “found that homebuyers are willing to pay more for homes that have installed solar photovoltaic (PV) energy systems.” The team of researchers led by the U.S. Department of Energy’s Berkeley Laboratory “estimates a price premium of approximately $4 per watt of PV installed. For a typical PV system, the research team found that this translates into a price premium of $15,000.” Furthermore, according to the NAHB, the study “suggests that the presence of energy-efficient home features is among the most important concerns for prospective home buyers.” Read the court decision
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COVID-izing Your Construction Contract

December 21, 2020 — Frederick E. Hedberg - Construction Executive
The global COVID-19 pandemic has changed the world forever, disrupting many industries, as well as creating unprecedented challenges that threaten many businesses. The construction industry is no different. Projects throughout the country have been adversely affected by unplanned work stoppages, delays, disruptions to the supply chain, price escalations and other unanticipated events. It is critical that owners, developers, contractors and suppliers learn from their experiences over the past year and account for the COVID-19 pandemic when drafting and negotiating contracts for their projects. First and foremost, parties should clearly define their rights and responsibilities to properly manage risks due to COVID-19 and its impacts. COVID-19 and other key related terms should be defined, relying on the CDC and state governments for guidance, to eliminate any uncertainties. The contract should also identify executive orders, guidelines and regulations that have been issued concerning COVID-19 by states, municipalities and other authorities that have jurisdiction where the project is located. Reprinted courtesy of Frederick E. Hedberg, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Hedberg may be contacted at fhedberg@rc.com Read the court decision
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Insurer Must Defend Claims of Negligence and Private Nuisance

July 10, 2018 — Tred R. Eyerly - Insurance Law Hawaii
The court determined there was a duty to defend negligence and private nuisance claims for dumping materials on the plaintiffs' property. Peters Heavy Construction, Inc. v. X-Pert One Tracking Corp., 2018 Wisc. App. LEXIS 358 (Wis. Ct. App. March 29, 2018). Peters Heavy Construction sued X-Pert One for negligently depositing shingle materials, tires, and other solid materials on Peters' property, causing damage to Peters, including loss of use of portions of the property. Peters also alleged that X-Pert One's actions negligently created a private nuisance causing harm to Peters' property. X-Pert One's insurer, Northfield Insurance Company, was also sued. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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