Do Construction Contracts and Fraud Mix After All?
October 27, 2016 —
Christopher G. Hill – Construction Law MusingsOn several occasions here at Construction Law Musings, I’ve discussed the fact that, with a few exceptions, fraud claims and written construction contract based claims do not mix. One of the exceptions to the so called “economic loss rule” that would seem to preclude both fraud and contract claims in the same lawsuit is where fraud is used to induce the contract in the first place. This exception would only apply where an independent duty, wholly outside of the duties created by the contract, is properly plead and proven to the court. For the same reason, namely a separate duty outside of the contract, the Virginia Consumer Protection Act (“VCPA”) may allow for an exception that would allow a cause of action under this statute.
Up until recently, the courts of Virginia have used these exceptions sparingly. However, the recent Loudoun County, VA Circuit Court opinion in Interbuild, Inc. v. Sayers (opinion also found at Virginia Lawyers Weekly) may signal a broadening of these exceptions. In the Interbuild case, the Court considered a claim for fraud in the inducement and breach of the VCPA. The basic facts plead by the plaintiffs were that Interbuild induced them into the contract through statements that it had been an established business since 1981, the project did not require a building permit, it had obtained all necessary subcontractor prices and would provide full-time project supervision, the project would be completed within 16 weeks, 4000 PSI concrete would be used for the project and that the project would be located in the agreed-upon area depicted and that they reasonably relied on these representations in deciding to enter into the contract to build their recreational facility.
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Christopher G. Hill, The Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Fifth Circuit Certifies Questions to Texas Supreme Court on Concurrent Causation Doctrine
August 07, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit certified unanswered questions on the concurrent causation doctrine to the Texas Supreme Court. Overstreet v. Allstate Vehicle & Prop, Ins. Co., 2022 U.S. App. LEXIS 13582 (5th Cir. May 19, 2022).
The insured alleged that a hail storm damaged his roof. The roof was three years old when he purchased a policy from Allstate. An adjuster sent by Allstate valued the loss at $1,263.123, less than the policy deductible. Allstate contended that the roof damage was due to uncovered causes, namely a combination of wear and tear and earlier hail storms that hit the roof before the insured purchased the policy. The insured disagreed because the roof had never leaked before the hail storm, but only after the storm. The insured's expert inspected the roof and determined it had been damaged by hail. The district granted Allstate's motion for summary judgment because the insured had not carried his burden of proving how much damages came from the hail storm alone.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Retainage on Pennsylvania Public Contracts
January 31, 2018 —
Wally Zimolong - Supplemental ConditionsAh yes, retainage, what could represent your profit on a project and something frequently abused by owners on private and public projects alike. Fortunately, Pennsylvania law offers public works contractors some protection from retainage abuse. The Public Prompt Payment Act dictates when retainage can be withheld and when it must be released. Agencies that fail to follow the Prompt Payment Act’s retainage rules can end up owing you interest, penalty, and attorney’s fees.
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Wally Zimolong, Zimolong LLC
Senate Committee Approves Military Construction Funds
June 29, 2011 —
CDJ STAFFWith a decrease in funding, as compared to the House bill, the Military Construction and Veteran’s Affairs subcommittee of the Senate moved on a $72 billion construction bill. The House version had approved an additional half billion dollars in funding. Senator Tim Johnson, Democrat of South Carolina, said that he expected easy reconciliation with the House version. The Senate bill will move to the full Senate Appropriations Committee on June 30.
The bill, S 1255, includes funding for construction and remodeling of military housing, as well as construction and remodeling of base facilities.
Read the full story… Read S1255
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Used French Fry Oil Fuels London Offices as Buildings Go Green
December 10, 2015 —
Siobhan Wagner – BloombergPricewaterhouseCoopers LLP’s office above Charing Cross railway station in London is cooled, heated and fueled by an unlikely source: used cooking oil.
The system, which helped the property become the greenest building in the U.K. capital, uses oil refined less than two miles away at London Bridge. It also helps prevent an invisible problem: “fatbergs” formed when oils dumped in drains and pipes congeal with baby wipes and diapers and block the city’s sewers.
“We’re using London’s waste to fuel a London office building,” said Jon Barnes, head of building at PwC. The system contributed toward a one-third reduction in electricity costs after a two-year refurbishment of the One Embankment Place office building that finished last year.
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Siobhan Wagner, Bloomberg
Texas Shortens Cut-Off Date for Suits Against Homebuilders Who Provide a 6-Year Written Warranty
June 26, 2023 —
Kim Altsuler - Peckar & Abramson, P.C.Summary of the new law as it pertains to builders of new homes:
The existing 10-year statute of repose for builders of new homes (the ultimate cut-off date for filing suit) has been shortened to 6 years if the builder provides a 1-2-6 written warranty (1-year workmanship and materials; 2-year plumbing, electrical and HVAC; 6-year structural).
Extended time to bring suit if written claim presented during the period of repose:
If a written claim for damages, contribution, or indemnity is presented to the builder during the applicable limitations period and the 6-year statute of repose applies, the time to sue is extended one year from the date the claim is presented. In practical effect, this means that if a written claim is presented and the statute of repose expires before suit is filed, suit may still be filed provided it is within one year of the date the written claim was made.
When the new law goes into effect:
The new law is effective as of June 9, 2023 and applies to suits commenced on or after that date. However, if the contract under which the claim is brought was entered into before June 9, 2023, the former 10-year version of the statute of repose applies. In other words, the statute applies to contracts entered into on or after June 9, 2023, if the contract has at least a 1-2-6 warranty.
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Kim Altsuler - Peckar & Abramson, P.C.Ms. Altsuler may be contacted at
kaltsuler@pecklaw.com
10 Safety Tips for General Contractors
October 09, 2018 —
Eric Weisbrot – JW Surety BondsThe construction industry continues to grow each year, paving the way for general contractors to make a profitable, sustainable living when the job is done right. However, to do so effectively, safety standards need to be met with consistency and focus on each worksite. General
contractors who are licensed and bonded must take proactive steps to avoid potentially fatal injuries among their subcontractors and employees, even though this may be easier said than done. To create and maintain a safe worksite each and every time, general contractors should consider how to implement the following best practices and safety tips on the job.
1 – Know the Risks
The most crucial step toward maintaining a safe construction site is to first be aware of the risks involved. Each year, thousands of
construction workers experience injuries on the job, and some ultimately lose their life because of safety missteps at work. As a general contractor, it is your responsibility to know that construction risks run rampant given the nature of the work. Being tuned into the potential for falls, slips, and other common safety-related incidents is a necessary part of operating a safe worksite for you and your employees.
2 – Require Protective Gear
An often overlooked safety precaution on construction sites is the use of up-to-date and well-maintained protective gear. For many subcontractors and employees, it is easy to skip this necessary step in safeguarding themselves from potential safety issues. However, general contractors can take steps to make protective gear a requirement on the job. This may include mandating hardhats and steel-toed shoes, gloves, and eyewear when appropriate. All visitors and workers on a construction site should follow protective gear instructions to avoid unnecessary safety risks.
3 – Educate on Ladder Safety
According to the Bureau of Labor Statistics, ladder injuries account for a significant number of construction worker incidents each year, making up more than 200,000 accidents on average. Ladders have continuously ranked high on OSHA’s list of violations at construction sites because the prevalence of injuries is so high. General contractors can help thwart ladder-related injuries among workers by promoting ladder safety training, including reminders about the right ladder to use for each task. Workers should also be well aware of the importance of inspection before use, and they should always follow the three points of contact rule when going up or down a ladder.
4 – Recognize Equipment Pitfalls
Many construction workers experience injuries relating to equipment used on the job. This could be tied to getting on or off equipment, or loading and unloading materials from machinery. In any case, general contractors can encourage simple tactics to improve equipment safety measures. Paying close attention to secure footing while getting on or off a machine, having more than one person assist with loading and unloading, and ensuring everyone feels comfortable asking for help with these tasks reduces safety risks.
5 – Document Potential Hazards
A general contractor’s main responsibility is to manage the construction site efficiently from start to finish. Part of this duty is recognizing the possible issues on a worksite that may lead to accidents or injuries if not addressed at the beginning of a project. It is necessary to take the time to identify safety risks such as unstable working surfaces, dangerous trenches, or weather-related concerns that may impact the safety of subcontractors, suppliers, or other site visitors. Potential hazards should be documented and shared with site workers, and they should be updated as the project progresses.
6 – Maintain Equipment and Tools
Poorly maintained equipment and tools also cause issues on construction sites. The Infrastructure Health and Safety Association suggests that general contractors
remind workers to inspect tools, machines, handheld equipment, and vehicles before each use to ensure they are properly maintained. Additionally, understanding the maintenance standards for certain tools or equipment and following those guidelines is crucial to reducing injury on the job.
7 – Minimize Crowds
Crowded work areas can be a serious safety issue for general contractors, subcontractors, and vendors and suppliers on site. It is common for crowds to gather during the use of heavy equipment or when a significant task is being completed. However, general contractors should discourage crowd-forming for spectating purposes. This can be done by limiting the number of people allowed to be in an area when certain activities are taking place, and enforcing these rules at every possible opportunity.
8 – Hire Licensed Subcontractors
General contractors may have full- or part-time employees as part of their business model, or there may be a heavy presence of subcontractors not directly tied to the main business. In either case, it is essential to have faith in the capabilities of workers, including their willingness and commitment to follow safety standards. General contractors can help ensure each worker is more likely to take safety seriously when they hire licensed contractors who follow through with
licensing requirements as mandated by the state or city.
9 – Focus on Training
Even after vetting subcontractors and employees based on their licensing status, general contractors also need to ensure training and education are a priority. Several online and in-person courses focus on construction safety training which workers should be encouraged to attend. Safety
education programs from OSHA and other reputable sources are crucial to decreasing accidents on the job.
10 – Be Present
Finally, general contractors can only have an impact on the safety of the job site when they are purposefully present. It is common for some GCs to stop by a project when they are needed or to check on progress periodically. However, new safety hazards, lacking worker training, and other risks are not easily fixed when the general contractor is not consistently on site. Reducing the potential for falls, slips, trips, and fatalities on the job requires communication with workers, and that takes place most effectively when general contractors are in person.
Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.
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An Oregon School District Files Suit Against Robinson Construction Co.
March 19, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Tigard-Tualatin School District in Tigard, Oregon filed a lawsuit against Robinson Construction for water damage to the Alberta Rider Elementary school, built in 2005, according to The Oregonian. The school district “is seeking $1.4 million in damages.”
According to the suit, as quoted by The Oregonian, the school district “holds Robinson responsible for faulty construction of the school’s panel siding, windows, doors, exterior walls and more.”
Repairs began in December of 2011, reported The Oregonian, and the cost so far is more than one million: “The district had to replace parts of the ‘exterior wall cladding system’ and remove and reinstall ‘storefront windows and window/door assemblies to ensure watertight performance,’ in addition to other alterations, the lawsuit reads.”
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