Contractor Haunted by “Demonized” Flooring
December 14, 2020 —
Garret Murai - California Construction Law BlogThe most un-Halloween of Halloweens has come and gone. If you ask me though, between COVID, protests, fires, hurricanes, the passing of a Supreme Court Justice, and one of the most hotly contested elections in U.S. history, we’ve had enough scares this year to make up for it and then some.
In the next case, Sieg v. Registrar of Contractors, Case No. A156089 (September 28, 2020), 1st District Court of Appeal, one contractor, haunted by “demonized” flooring, and who couldn’t catch a break even with the talisman of a release of liability signed by the homeowner, can add one more to his list of reasons why 2020 needs to be relegated to the history books.
The Sieg Case
In January 2012, homeowners Dennis and Ana Torchia purchased wood flooring for their home in Windsor, California. Specifically, they selected Brazilian Ebony, an exotic species of unusually hard wood, for its appearance and durability.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Insurer Prohibited from Bringing Separate Contribution Action in Subrogation to Rights of Suspended Insured
January 15, 2019 —
Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel LLPIn Travelers Property Casualty Co. of Amer. v. Engel Insulation, Inc. (No. C085753, filed 11/30/18), a California appeals court held that an insurer may not file its own action to assert claims solely as a subrogee of a suspended corporation, where the corporation could not otherwise assert the claims on its own behalf.
In Engel, a homeowners association filed a construction defect action against the developer, Westlake. Travelers defended Westlake as an additional insured on the policy of a subcontractor. After the case settled, Travelers brought a subrogation action against another subcontractor for contribution to the defense costs. However, Westlake had its corporate status suspended for failure to pay taxes, and the subcontractor moved for judgment on the pleadings, which was granted.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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Implications for Industry as Supreme Court Curbs EPA's Authority
August 15, 2022 —
Pam McFarland & Jeff Yoders - Engineering News-RecordThe U.S. Supreme Court has limited the ability of the U.S. Environmental Protection Agency to regulate power plant greenhouse gas emissions, and though the court’s opinion referred to a fairly narrow provision within the Clean Air Act, the ruling potentially places broad restrictions on the ability of federal agencies to enact regulations to address the climate crisis, according to several sources.
Reprinted courtesy of
Pam McFarland, Engineering News-Record and
Jeff Yoders, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com
Mr. Yoders may be contacted at yodersj@enr.com
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Why Construction Law- An Update
May 07, 2015 —
Christopher G. Hill – Construction Law MusingsBack in 2009, only a year or so after my first post here at Musings, I posted on why I’m in the field of construction law. Well, a lot has happened in the over 5 years since then, not the least of which is my move to solo practice in July of 2010 and the later certification as a mediator. As I sit here, I look back at the passage of time and the events between my last thoughts on this subject and now and wonder if my thoughts have changed?
Frankly, not much has changed as far as my attitude toward the practice of construction law. Despite my kids occasionally rolling their eyes when I talk about a case of interest to me and their sometimes moniker for me as a “dirt lawyer,” I continue to find the representation of the construction professionals that I call clients and friends to be fulfilling and worthwhile. Even in the face of criticisms that we lawyers cause more problems that we solve, I firmly believe that I and other good construction lawyers can and do help avoid and anticipate more problems than I cause.
As one of the few solo construction attorneys here in the Richmond area, if anything, I am more involved in the construction community. Between my continued and even increased involvement with the AGC of Virginia and my more recent appointment to the board of the Virginia State Bar‘s Construction Law and Public Contracts Section, I have gained even more insight into the workings of the legal and business landscapes of construction. With each new piece of information gained by such involvement, I see another side to the business of construction that I may not have thought of.
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Christopher G. Hill, Construction Law MusingsMr. Hill may be contacted at
chrisghill@constructionlawva.com
Bailout for an Improperly Drafted Indemnification Provision
February 11, 2019 —
David Adelstein - Florida Construction Legal UpdatesA recent opinion came out that held that even though an indemnification provision in a subcontract was unenforceable per Florida Statute s. 725.06, the unenforceable portion is merely severed out of the indemnification clause leaving the rest of the clause intact. In essence, an otherwise invalid indemnification clause is bailed out by this ruling (which does not even discuss whether this subcontract had a severability provision that states that if any portion of any provision in the subcontract is invalid, such invalid portion shall be severed and the remaining portion of the provision shall remain in full force and effect).
This opinion arose from a construction defect case, CB Contractxors, LLC v. Allens Steel Products, Inc.,43 Fla.L.Weekly D2773a (Fla. 5thDCA 2018), where the general contractor, sued by an association, flowed down damages to subcontractors based on the contractual indemnification provision in the subcontracts. Subcontractors moved to dismiss the contractual indemnification claim because it was not compliant with Florida Statute s. 725.06. The indemnification provision required the subcontractors to indemnify the general contractor even for the general contractors own partial negligence, but failed to specify a monetary limitation on the extent of the indemnification as required by Florida Statute s. 725.06. (The indemnification clause in the subcontract was the standard intermediate form of indemnification that required the subcontractor to indemnify the general contractor for claims regardless of whether the claims were caused in part by the general contractor.)
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Economic Loss Not Property Damage
November 04, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit agreed with the district court that the insured subcontractor's economic losses did not amount to covered property damage. Greenwich Ins. Co. v. Capsco Industries, Inc., 2019 U.S. App. LEXIS 23949 (5th Cir. Aug 12, 2019).
Capsco Industries, Inc. was a subcontractor on the construction of a casino. Capsco subcontracted with Ground Control to install water, sewage, and storm-drain lines. Ground Control was terminated from the project by the general contractor for alleged safety violations and failed drug tests of its employees. Ground Control sued in state court against multiple parties, including Capsco, seeking payment for work on the project. The claims were dismissed on summary judgment because neither party had obtained the required certificates of responsibility from the state, making the parties' contract void. The Mississippi Supreme Court agreed the contract was void, but reversed and remanded for further proceedings based solely on theories of unjust enrichment and quantum meruit.
While the state case was on remand, Capsco's liability insurers, Greenwich Insurance Company and Indian Harbor Insurance Company, filed a compliant for declaratory judgment in federal district court seeking a declaration that they did not owe a defense or indemnity to Capsco. The defendants were Ground Control, Capsco, the general contractor, and the casino owner. The latter two parties were dismissed. Ground Control counterclaimed for coverage of its claims against Capsco. The district court stayed proceedings until the state court litigation ended.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
ACEC Statement on Negotiated Bipartisan Debt Limit Compromise
June 05, 2023 —
The American Council of Engineering CompaniesWashington, D.C. – The American Council of Engineering Companies (ACEC) released the following statement applauding the negotiated bipartisan compromise to raise the debt limit ahead of the scheduled House vote tonight:
"The American Council of Engineering Companies (ACEC) applauds President Biden and Speaker McCarthy for negotiating a bipartisan compromise to raise the debt limit and avoid a catastrophic default. We are particularly pleased that the bipartisan deal protects the critical funds provided under the Infrastructure Investment and Jobs Act (IIJA) and does not include any changes to the Inflation Reduction Act's (IRA) climate and clean energy provisions, which the engineering industry is working hard to deliver successfully. ACEC also strongly supports the provisions in the deal to reform the federal permitting process. These commonsense measures to modernize the National Environmental Policy Act (NEPA), particularly through the use of digital technologies, will improve interagency collaboration and allow engineering firms to help their clients deliver project benefits more efficiently while ensuring strong environmental protections and opportunities for community and stakeholder engagement."
The American Council of Engineering Companies (ACEC) is the business association of the nation's engineering industry. Founded in 1909, ACEC is a national federation of 51 state and regional organizations representing more than 5,500 engineering firms and 600,000+ engineers, surveyors, architects, and other specialists nationwide. ACEC member firms drive the design of America's infrastructure and the built environment.
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Boilerplate Contract Language on Permits could cause Problems for Contractors
March 19, 2014 —
Beverley BevenFlorez-CDJ STAFFCraig Martin on his blog Construction Contractor Advisor discusses the potential problems for a contractor that a “boilerplate contract” could cause: “A recent case revealed the problems a contractor had with permits when the contractor’s estimate contemplated an easy permitting process and compliance, but in actuality it was much, much more difficult.”
Martin cites the case Bell/Heery v. United States, where a contractor discovered that the permit process would be much more time-consuming and expensive than originally planned. When Bell/Heery asked for additional funds to cover the additional costs, the “contracting officer rejected the request, finding that Bell/Heery had assumed the risk of the permitting process and it was liable for any costs associated with the permitting process and construction methods required by the permitting process.”
“Bell/Heery appealed to the Court of Claims,” but lost the battle. The contractor had to absorb $7 million in costs to comply with the required permits.
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