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Condominium Exclusion Bars Coverage for Construction Defect

August 17, 2011 — Tred R. Eyerly - Insurance Law Hawaii

Coverage was denied under the policy’s condominium exclusion in California Traditions, Inc. v. Claremont Liability Ins. Co.,2011 Cal. App.LEXIS912 (Cal. Ct. App., ordered published July 11, 2011).

California Traditions was the developer and general contractor for a housing development. California Traditions subcontracted with Ja-Con to perform the rough framing work for 30 residential units. The project had 146 separate residences that were freestanding with no shared walls, roof, halls, or plumbing or electrical lines. To allow a higher density development, the project was developed, marketed and sold as condominiums.

The purchaser of one of the units filed a complaint against California Traditions alleging property damage from the defective construction. California Traditions cross-complained against Ja-Con.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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#6 CDJ Topic: Construction Defect Legislative Developments

December 30, 2015 — Beverley BevenFlorez-CDJ STAFF
Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper of Chapman Glucksman Dean Roeb & Barger discussed Right to Repair developments occurring in Nevada, Arizona, Florida, and Colorado in their article, “Right to Repair Reform: Revisions and Proposals to State’s ‘Right to Repair Statutes.” Read the full story... Texas also had changes that affected construction defect claims, as covered by David H. Fisk of Coleman & Logan PC: “Before filing a lawsuit or initiating an arbitration proceeding pertaining to a construction defect, a condominium association in Texas with eight or more units must now comply with the newly added Section 82.119 to Chapter 82 of the Texas Property Code. This is in addition to compliance with the Texas Residential Construction Liability Act (RCLA) and any preconditions included in the condominium association’s declarations.” Read the full story... Read the court decision
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2021 Real Estate Trends: New Year, New Reality—A Day of Reckoning for Borrowers and Tenants

February 08, 2021 — Robert J. Grados & Adam Weaver - Gravel2Gavel Construction & Real Estate Law Blog
On the one-year anniversary of China’s Wuhan lockdown, COVID-19 has become a part of everyday life and as we enter the new year, real estate borrowers and lenders alike will need to understand this new normal and face the reality that is fast approaching. In 2020, as the COVID-19 pandemic swept across the United States, many state and local governments instituted eviction moratoria and other protections for real estate tenants and borrowers. These protections created a window of opportunity for tenants and borrowers to negotiate reasonable solutions with their respective landlords and lenders regarding rent and debt payments amid the COVID-19 pandemic. This temporary period of restricted remedies also allowed courts to analyze legal arguments on how the COVID-19 pandemic impacts the real estate industry. However, with court rulings forthcoming and many of these eviction protections set to expire in 2021, landlords and tenants as well as borrowers and lenders will be forced to have discussions regarding the realities of their industry and their ability to pay their respective rents and mortgages amid the ongoing COVID-19 crisis. Throughout 2020, lenders and landlords were forced to accommodate workout negotiations as their ability to evict or foreclose upon defaulting tenants or borrowers was prohibited. Many commercial real estate parties were able to come to agreements on what borrowers and tenants were able to pay, given the impact of the COVID-19 pandemic on their respective industries. As the legal protections are rolled back and the leverage shifts back into the hands of the lenders and landlords, we will likely see a trend of aggressive landlords and lenders and an increased number of evictions and foreclosures, especially in industries that are most vulnerable to the COVID-19 pandemic: retail and hospitality. Reprinted courtesy of Robert J. Grados, Pillsbury and Adam Weaver, Pillsbury Mr. Grados may be contacted at robert.grados@pillsburylaw.com Mr. Weaver may be contacted at adam.weaver@pillsburylaw.com Read the court decision
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Texas Federal Court Upholds Professional Services Exclusion to Preclude Duty to Defend

March 16, 2020 — Jeremy S. Macklin - Traub Lieberman Insurance Law Blog
In Project Surveillance, Inc. v. The Travelers Indemnity Company, No. 4:19-CV-03324, 2020 WL 292247 (S.D. Tex. Jan. 21, 2020), a Texas federal court held that a professional services exclusion in a commercial general liability policy precluded Travelers’ duty to defend its insured. The underlying lawsuit was a wrongful death action brought by the family of a worker killed on a construction site. Project Surveillance was present at the construction site “to provide safety supervision or other services.” The underlying lawsuit alleged that Project Surveillance negligently failed to inspect or adequately inspect the project and failed to warn or adequately warn the decedent of a dangerous condition. The underlying lawsuit also alleged that Project Surveillance was negligent in failing to stop work. At the time of the incident, Project Surveillance had commercial general liability insurance through Travelers and professional liability insurance through RLI. RLI agreed to defend Project Surveillance in the underlying lawsuit. Travelers, however, denied owing a duty to defend or indemnify based on an exclusion for “bodily injury” arising out of the rendering or failure to render any “professional service.” The Traveler policy defined the term “professional services” to mean any service requiring specialized skill or training, including “failure to prepare [. . .] any warning,” “supervision,” “inspection,” “control,” “surveying activity or service,” “job site safety,” “construction administration,” and “monitoring [. . .] necessary to perform and of [those] services.” Read the court decision
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Reprinted courtesy of Jeremy S. Macklin, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com

Turning Back the Clock: DOL Proposes Previous Davis-Bacon Prevailing Wage Definition

April 19, 2022 — David Chidlaw & Carina Novell - Sheppard Mullin Construction & Infrastructure Law Blog
On March 11, 2022, the Department of Labor (“DOL”) proposed reverting the definition of “prevailing wage” under the Davis-Bacon Act to a definition used over 40 years ago. According to the DOL, the proposal is meant to modernize the law and “reflect better the needs of workers in the construction industry and planned federal construction investments.”[1] Brief History Lesson The Davis-Bacon Act was enacted in 1931 and requires the payment of locally prevailing wages and fringe benefits on federal construction contracts. The law applies to workers on contracts in excess of $2,000 entered into by federal agencies and the District of Columbia for the construction, alteration, or repair of public buildings or public works.[2] From the 1930s to the early 1980s, the DOL used the following three-step process to define prevailing wage:

Any wage rate paid to a majority of workers.
If there was no wage rate paid to a majority of workers, then the wage rate paid to the greatest number of workers, provided it was paid to at least 30 percent of workers (i.e., the “30 percent rule”).
If the 30 percent rule was not met, the weighted average rate.

Reprinted courtesy of David Chidlaw, Sheppard Mullin and Carina Novell, Sheppard Mullin Mr. Chidlaw may be contacted at dchidlaw@sheppardmullin.com Ms. Novell may be contacted at cnovell@sheppardmullin.com Read the court decision
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Final Thoughts on New Pay If Paid Legislation in VA

August 15, 2022 — Christopher G. Hill - Construction Law Musings
This past General Assembly session, and after a governor’s amendment and with the convening of a study group, a new statute banning so-called “pay-if-paid” clauses from enforcement was passed. Some of the key features of the legislation are as follows: It does not take effect until January 1, 2023, and, For those construction contracts in which there is at least one general contractor and one subcontractor:

It requires payment within 60 days of receipt of an invoice following the satisfactory performance of the work or within 7 days of receipt of payment by the Owner
It allows for retainage
It allows the higher-tier contractor to withhold money for improper performance

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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Not Pandemic-Proof: The Ongoing Impact of COVID-19 on the Commercial Construction Industry

December 06, 2021 — George B. Green Jr. - Construction Executive
The impact of COVID-19 has been felt in nearly every industry and arena across the country, with the exception of construction—or so that is the general perception. Perceptions are often wrong though, and this one is no different. The truth is that the construction industry has been hit just as hard, if not harder, than every other industry. As the COVID-19 pandemic struck in the spring of 2020, construction projects plowed forward full steam ahead. Roadwork seemed to increase and developers continued to systematically acquire property and initiate large-scale projects. Perhaps it was these observations that led many to the conclusion that construction was pandemic-proof as the rest of society attempted to cobble together something that vaguely resembled a normal business year. But the construction industry has endured many challenges over the last 18 months, and unfortunately, the challenges do not appear to be evaporating anytime soon. The industry has been primarily affected in the areas of scheduling, manpower and permitting, which has ultimately affected pricing. The entire way jobs are scheduled has been turned upside down. The supply chain issues that many have experienced for everyday household items have hit the construction industry as well. Reprinted courtesy of George B. Green Jr., Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Green may be contacted at ggreen@wwhgd.com

Don’t Kick the Claim Until the End of the Project: Timely Give Notice and Preserve Your Claims on Construction Projects

December 10, 2015 — Christopher G. Hill – Construction Law Musings
For this week’s Guest Post Friday, we welcome Tara L. Chadbourn. Tara is an attorney with ReavesColey PLLC in Chesapeake, VA, where she concentrates her practice on construction law, litigation and commercial litigation. Tara counsels owners, contractors, subcontractors and materials suppliers in various government and commercial construction matters. Tara can be reached at tara.chadbourn@reavescoley.com. You may have experienced and have certainly heard of the scenario in which a contractor waits to address a claim as part of project closeout, only to realize the applicable deadline has already passed. While there may have been discussions about claims during the course of the project, contractors cannot rely upon oral conversations about outstanding claims. Instead, contractors must be vigilant in satisfying notice requirements and preserving claims. While entitlement must still be proven, a contractor’s chances of recovery increase greatly if the contractor abides by notice requirements and consciously preserves claims in the following ways. Contractors Must Acquaint Themselves with Contractual Notice Provisions: Many prime and subcontract agreements contain stringent notice provisions that require the contractor to give notice within a certain time period or else the claim is expressly waived. The deadline for notice is often only a few days after the occurrence giving rise to the claim or the contractor becoming aware of the claim. To avoid waiver, contractors must carefully review their contracts for provisions requiring notice of a claims for adjustment for a variety of situations to include unforeseen site conditions, trade sequencing changes, project delay or scope of work changes. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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