Fairfield Connecticut Building Expert Directory

Pay-if-Paid Clauses, Nasty, but Enforceable

March 12, 2015 — Craig Martin – Construction Contractor Advisor
I am preparing for a presentation this week on Troublesome Contract Clauses to the Construction Specifications Institute (“CSI”), Nebraska Chapter. One of the clauses we will be discussing is the dreaded Pay-if-Paid clause, a particularly nasty provision that places the risk of owner’s solvency squarely on the subcontractor’s shoulders. While pay-if-paid clauses can create tremendous problems for subcontractors, they are enforceable. Pay-if-Paid clauses eliminate the obligation to pay the subcontractor until the general contractor is paid by the owner. Pay-if-paid clauses usually contain something akin to the following phrases:

payment to subcontractors are “expressly and unequivocally contingent upon receipt of payment from the Owner for the Subcontract Work.”
the subcontractor “expressly acknowledges that it relies on payment under the Subcontract on the creditworthiness of Owner, not that of the General Contractor.”
the owner’s acceptance of the work and payment to the General Contractor are “conditions precedent to any obligation of the General Contractor to pay the subcontractor.”

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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

Champagne Wishes and Caviar Dreams. Unlicensed Contractor Takes the Cake

August 31, 2020 — Garret Murai - California Construction Law Blog
Before the Kardashians, before Empire, before Crazy Rich Asians there was Lifestyles of the Rich and Famous with Robin Leach. The next case, Moore v. Teed, Case No. A153523 (April 24, 2020), 1st District Court of Appeals, is about the unfulfilled wishes and dashed dreams of the $13 million dollar “fixer upper.” Moore v. Teed The $13 Million Dollar “Fixer Upper” Justin Moore just wanted to buy a house in San Francisco. But he couldn’t afford one in the neighborhoods he preferred. But in 2011, luck struck, when Moore met Richard Teed, a real estate agent with “over 25 years of experience as a building contractor,” “an extensive background in historic restorations” and a “deep understanding of quality construction.” Teed told Moore that he could locate a “lower-priced fixer-upper in a choice neighborhood and then renovate it.” Moore was sold. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Boston Water Main Break Floods Trench and Kills Two Workers

October 27, 2016 — Justin Rice – Engineering News-Record
Two workers died in Boston on Friday afternoon after a water main break flooded the trench where they were working, according to the Boston Fire Dept. Read the court decision
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Reprinted courtesy of Justin Rice, Engineering News-Record
Mr. Rice may be contacted at enrmidatlanticeditor@enr.com

When Can a General Contractor’s Knowledge be Imputed to a Developer?

August 06, 2014 — Zach McLeroy – Colorado Construction Litigation
The Colorado Court of Appeals recently handed down an opinion clarifying when the knowledge of a general contractor can be imputed to a developer. In the case of Jehly v. Brown, 327 P.3d (Colo. App. 2013), the Court of Appeals held that a developer cannot be held liable for fraudulent concealment when the developer has no actual knowledge of the fact or facts allegedly being concealed even if the general contractor had knowledge. In this case, Brown, the developer, owned real property in Teller County and hired a general contractor to build a single-family house. Sometime before or during the construction, the general contractor became aware that part of the home site was located in a designated floodplain. Although the general contractor was aware that part of the home site was located in a floodplain, he continued to build the home without informing Brown of the floodplain designation. Once the home was complete, Brown sold the property to the Jehlys. Brown completed a Seller’s Property Disclosure Form regarding the condition of the house and property, but failed to identify that the home site was located in a governmentally designated floodplain. Read the court decision
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Reprinted courtesy of Zack McLeroy, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLeroy may be contacted at McLeroy@hhmrlaw.com

Recovering Unabsorbed Home Office Overhead Due to Delay

May 30, 2022 — David Adelstein - Florida Construction Legal Updates
In the preceding article, I discussed the use of a retrospective as-built delay analysis in a case before the Civilian Board of Contract Appeals (CBCA). This case also discussed a damages component in certain delay claims known as unabsorbed home office overhead—a challenging damages component to recover because this deals with indirect costs as opposed to direct costs. Unabsorbed home office overhead is a damages component when the contractor is on standby, but this is NOT as easy as just claiming standby thereby you are automatically entitled to unabsorbed home office overhead. There are requirements that MUST be met.

To obtain an equitable adjustment for unabsorbed home office overhead as compensation for being on standby, [the contractor] must initially show “[1] a government-caused delay of uncertain duration,” that “[2] the delay extended the original time for performance” or precluded the contractor from finishing earlier than scheduled, and that “[3] the contractor [was] on standby and unable to take on other work during the delay period. CTA I, LLC v. Department of Veteran Affairs, CBCA 5826, 2022 WL 884710 (CBCA 2022) quoting Nicon, Inc. v. U.S., 331 F.3d 878, 883 (Fed. Cir. 2003).

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Illinois Couple Files Suit Against Home Builder

January 15, 2014 — Melissa Zaya-CDJ STAFF
Last December, Norman and Valerie Adkins, a couple in Edwardsville, Illinois, filed suit against their home builder, Customary Construction, and contractor Kevin M. Kahrig, alleging that the defendants did not build their deck according to code, Kelly Holleran of the Madison Record reported. According to the complaint as stated by the Madison Record, the Adkins purchased the home from the defendants in October of 2010. The couple notified Kahrig (the Customary Construction owner) regarding cracks along the perimeter of their deck that had not been caulked. Kahrig sent a crew to fix the cracks, but the Adkins were unhappy with the work, the complaint states. The Adkins hired a masonry contractor to fix the deck, and the contractor found “structural issues with the arches and brick columns supporting the deck at the back of their home,” reported the Madison Record. The Adkins then hired an engineer who “inspected the deck and reported that it had been improperly constructed and needed to be removed and replaced,” according to the complaint. The engineer continued, “The current condition of the deck is a safety hazard, as there is a risk of collapse and loose bricks or other masonry materials falling and striking a person within the proximity of the deck.” The Adkins are seeking “a judgment of more than $150,000, plus costs and attorney’s fees,” the Madison Record claims. Read the court decision
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A Brief Discussion – Liquidating Agreements

June 27, 2022 — Gerard J. Onorata - Peckar & Abramson, P.C.
During a construction project, it is not uncommon for disputes to arise between a general contractor and a subcontractor. Frequently, these disputes involve claims for extra work and delay damages that can be attributed to the owner of the project due to deficient design or unforeseen conditions. When these occasions arise, the parties can often resolve these claims without the need for litigation or arbitration by entering into a “liquidating agreement.” What is a Liquidating Agreement? Because there is no direct contractual relationship between a subcontractor and an owner, there does not exist a legal basis for a subcontractor to assert a breach of contract claim against a project owner. In legal parlance, this is known as “lack of contractual privity.” A liquidating agreement bridges this contractual gap and allows a subcontractor to pass its claim against the owner through the general contractor. Essentially, with a liquidating agreement, the general contractor acts as a conduit for passing through the subcontractor’s claim. Read the court decision
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Reprinted courtesy of Gerard J. Onorata, Peckar & Abramson, P.C.
Mr. Onorata may be contacted at gonorata@pecklaw.com

Lakewood Introduced City Ordinance to Battle Colorado’s CD Law

September 24, 2014 — Beverley BevenFlorez-CDJ STAFF
According to The Denver Post, the Lakewood City Council “introduced an ordinance that would make it more difficult for homeowners associations to sue developers for construction defects and give builders more opportunity to fix problems before litigation begins.” A hearing and final vote is scheduled for October 13th. "If there are defects, we want to get them fixed rather than dragging this through the courts for years," Lakewood Mayor Bob Murphy told The Denver Post. Murphy believes the ordinance will bring “more diverse housing options to Lakewood, especially around stations along the Regional Transportation District’s West Rail Line.” Lakewood’s City Planner Travis Parker also declared that the defects law is to blame for the lack of condos in the area. However, some believe that “Lakewood is overstepping its bounds as a home-rule city,” according to The Denver Post. "What they're trying to do is use an ordinance to circumvent state law in order to make it impossible for homeowners to seek redress against builders for defects," Molly Foley-Healy an attorney who serves as legislative liaison for the Community Associations Institute's Legislative Action Committee told the Post. “Mayor Murphy needs to incentivize quality construction in Lakewood instead.” Read the court decision
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FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES