Select the Best Contract Model to Mitigate Risk and Achieve Energy Project Success
October 17, 2022 —
Gregory S. Seador - Construction ExecutivePower and energy projects are inherently complex and risky. Therefore, management and proper allocation of risk among project participants are essential to success.
Careful drafting of the engineering, procurement and construction (EPC) contract is a critical first step in managing risk. The standard contract format used for power and energy construction projects is the EPC contract. In its traditional form, the EPC contract makes the EPC contractor responsible for the entire project, including engineering (design of the power plant), procurement (purchase, installation and performance of all equipment) and construction (construction of the plant).
EPC contracts can, however, employ different contract models and pricing structures, each of which carries differing levels of risk for project participants. Selecting the appropriate contract model and pricing structure to meet the unique needs of the project is important.
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Gregory S. Seador, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Seader may be contacted at
seador@slslaw.com
Wait, You Want An HOA?! Restricting Implied Common-Interest Communities
September 17, 2018 —
Neil McConomy - Snell & Wilmer Real Estate Litigation BlogWhile the butt of many jokes and a thorn in the side of some property owners, homeowners associations (“HOAs”) serve the vital function of collecting and disbursing funds to care for and maintain common areas of residential developments. Without HOAs, neighborhood open spaces, parks, and other amenities risk falling into disrepair through a type of tragedy of the commons, wherein residents use such amenities but refuse to subsidize care and maintenance for these common areas believing someone else will pony-up the funds. HOAs, when properly organized and managed, avoid this problem by ensuring everyone pays their fair shares for the common areas. Colorado’s Common Interest Ownership Act (“CCIOA”), C.R.S. § 38-33.3-101 et seq., sets forth the manner in which such common-interest communities, and their related associations, must be established.
Earlier this summer, the Colorado Supreme Court issued an opinion limiting the application of previous case law that allowed for the establishment of common-interest communities (and their related HOAs) by implication. See McMullin v. Hauer, 420 P.3d 271 (Colo. 2018). Prior to McMullin, Colorado courts had been increasing the number of factual scenarios implying the creation of common-interest communities under CCIOA. See e.g., Evergreen Highlands Assoc. v. West, 73 P.3d 1 (Colo. 2003) (finding an implied obligation of landowners to fund a pre-existing HOA’s obligations); DeJean v. Grosz, 412 P.3d 733 (Colo. App. 2015) (finding an implied right of a homeowner to found an HOA after the developer filed a declaration expressing an intent to form one but ultimately failed to do so); and Hiwan Homeowners Assoc. v. Knotts, 215 P.3d 1271 (Colo. App. 2009) (finding the existence of an HOA despite no common property existing within the development). The McMullin opinion highlights the importance of strict compliance with CCIOA to preserve common areas in a development, ensure the ability to fund maintenance of such areas, and avoid future litigation.
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Neil McConomy, Snell & WilmerMr. McConomy may be contacted at
nmcconomy@swlaw.com
After Breaching Its Duty to Defend, Insurer Must Pay Market Rates for Defense Counsel
October 30, 2023 —
Tred R. Eyerly - Insurance Law HawaiiAfter breaching its duty to defend, the insurer could not take advantage of a California statute allowing insurers to establish rates for defense counsel. S. Cal. Edison Co. v. Greenwich Ins. Co., 2023 U.S. Dist. LEXIS 151695 (C.D. Cal. July 28, 2023).
Edison was an additional insured under a policy issued by Greenwich Insurance Company to Utility Tree Service, Inc. (UTS). UTS contracted with Edison to provide vegetation management services near Edison's transmission lines. The Greenwich policy provided additional insured coverage to third parties to the extent of UTS's obligations under the contract.
Edison was sued in numerous lawsuits for property damage caused by the Bobcat wildfire in the Angeles National Forest (Bobcat Wildfire lawsuits). Edison tendered the defense in each lawsuit to Greenwich. Coverage was denied, however, based on a lack of underlying allegations or extrinsic evidence that Edison's liability resulted from UTS's negligent actions.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
The A, B and C’s of Contracting and Self-Performing Work Under California’s Contractor’s License Law
July 19, 2017 —
Garret Murai - California Construction Law BlogThe California Contractors State License Board issues licenses in three general classifications:
- Class A – General Engineering Contractors;
- Class B – General Building Contractors; and
- Class C – Specialty Contractors of which there are currently 42 different Class C specialty contractors license types.
Each of these license classifications has separate contracting rules, and rules regarding when work can be self-performed, which for many can be confusing.
Minor Work Exception
One important (albeit “minor”) exception is that no contractor’s license is required no matter what type of work is being performed if the project has a value of less than $500. Known as the “minor work exception,” the exception is a project-based, not work-based, exception. Thus, for example, if a project owner is remodeling their kitchen at a cost of $6,000 and the cost of doing the flooring is only $300, the person doing the flooring would need to have a contractor’s license in the appropriate classification since the aggregate cost of the work is $500 or more.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
The Condominium Warranty Against Structural Defects in the District of Columbia
July 24, 2023 —
Nicholas D. Cowie - Cowie Law GroupTHE CONDOMINIUM WARRANTY AGAINST STRUCTURAL DEFECTS
Condominium developers in Washington DC are required by statute to warrant against structural defects in residential condominiums. District of Columbia Condominium Act (“DC Condo Act”) § 42-1903.16(b). The warranty applies to both condominium common elements and each condominium unit. It requires a developer to repair structural defects, including any resulting damage to the condominium caused by a common element structural defect. DC Condo Act § 42-1903.16(a-1)(2). The statute creating this warranty is called the “Warranty Against Structural Defects,” contained in the DC Condo Act § 42-1903.16.
“Structural Defects” Defined
The warranty applies to “structural defects,” which are very broadly defined to include many types of construction defects. Structural defects are not just limited to defects in the supporting structure of the building. Rather, a structural defect can be any condition that:
“(A) Reduces the stability or safety of unit or common elements below standards commonly accepted in the real estate market,” or
(B) Restricts the normally intended use of all or part of the common elements of a unit and which requires repair, renovation, restoration, or replacement to serve the purpose for which it was intended.”
DC Condo Act § 42-1903.16(j)(6).
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Nicholas D. Cowie, Cowie Law GroupMr. Cowie may be contacted at
ndc@cowielawgroup.com
Texas Jury Awards $5.3 Million to Company Defamed by Union: Could it work in Pennsylvania?
December 21, 2016 —
Wally Zimolong – Supplemental ConditionsIn early September a Texas jury awarded a janitorial $5.3 million against the local chapter of the SEIU. The janitorial firm claimed that the SEIU damaged its reputation and caused it damages when it spread false, defamatory, and disparaging stories about the firm. Specifically, the janitorial firm claimed that the SEIU told the janitorial firms customer and potential customers that the firm “systematically failed to pay its employees for all hours worked, instructed janitors to work off the clock and had fired, threatened or refused to hire janitors who supported joining a union.” According to Law360.com, the union did this with “fliers, handbills, letters, emails, newsletters, speeches and postings on its website accused [the firm] of violating wage-and-hour and other labor laws.”
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Professional Services Exclusion in CGL Policies
December 05, 2022 —
David Adelstein - Florida Construction Legal UpdatesA professional services exclusion in a commercial general liability policy means something. It’s an exclusion an insurer will rely on to avoid insurance coverage based on “professional services” performed or rendered by the insured. Don’t take it from me. Take it from the recent opinion in Colony Insurance Company v. Coastal Construction Management, LLC, 2022 WL 16636697 (M.D.Fla. 2022) where the trial court granted a commercial general liability insurer’s motion for judgment on the pleadings based on the professional services exclusion.
Here, an owner sued, among other parties, an entity performing only construction management services based on construction defects at its project. The construction manager did not perform any design or physical construction. It was hired to make site inspections of the construction, review construction quality and finish standards, ensure workmanship quality, coordinate the punchlist process, and supervise management and administration of the project.
The construction manager’s commercial general liability insurer sued for declaratory relief claiming it owed no duty to defend or indemnify based on the professional services exclusion.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Angela Cooner Named "Top Lawyer" by Phoenix Magazine in Inaugural Publication
October 10, 2022 —
Angela L. Cooner - Lewis BrisboisPhoenix, Ariz. (September 7, 2022) – Phoenix Partner Angela L. Cooner was recently recognized for her work in Commercial Litigation by Phoenix Magazine in its inaugural list of Top Lawyers.
Ms. Cooner was named a Top Lawyer after Phoenix Magazine partnered with research firm Data Joe to collect and tally online survey results from local practicing attorneys. The survey asks respondents to provide the names of up to three attorneys they deem the best in 39 legal specialties. After the votes are tallied and the nominees are confirmed to be members of Valley-based firms and in good standing, the top 10-20% of vote-getters in each category are named to the Top Lawyers list.
Ms. Cooner is a member of Lewis Brisbois’ Construction and General Liability Practices. For more than two decades, she has managed an array of matters, including construction litigation, complex commercial litigation, professional liability cases, product liability issues, premises liability cases, and real estate litigation. Earlier this year, she was appointed vice-chair of the State Bar of Arizona’s inaugural Board of Legal Specialization Construction Defect Law Advisory Commission.
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Angela L. Cooner, Lewis BrisboisMs. Cooner may be contacted at
Angela.Cooner@lewisbrisbois.com