In Midst of Construction Defect Lawsuit, City Center Seeks Refinancing
October 02, 2013 —
CDJ STAFFThe owners of the City Center complex in Las Vegas are going through with a refinancing of their $1.8 of debt while they still seek to demolish the Harmon Tower. The cost of building City Center was $8.5 billion, making it the most expensive development on the Las Vegas strip. Unfortunately for the owners, the Harmon Tower isn’t the only empty space in the complex.
MGM Resorts is currently in the midst of a construction defect lawsuit against the builder of the Harmon Tower. The judge in the case has given a go-ahead to tear down the building.
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The Enforceability of “Pay-If-Paid” Provisions Affirmed in New Jersey
January 04, 2023 —
Levi W. Barrett, Michael S. Zicherman & Brian Glicos - Peckar & Abramson, P.C.On December 7, 2022, the Appellate Division affirmed the New Jersey Superior Court decision in Jersey Precast v. Tricon Enterprises, Inc. et al., finding that the “pay-if-paid” clause in a material supplier’s purchase order with a general contractor was binding and enforceable. While clauses conditioning a general contractor’s obligation to pay its subcontractors on the general contractor’s receipt of payment from the project owner are not unique – this is the first time that a court in New Jersey has affirmed this practice in a published opinion. [1]
Background
The general contractor, Tricon, sent Jersey Precast its standard form purchase order for the supply of prestressed box beams to fulfill a public improvement contract with Union County. The reverse side of the form purchase order contained standard terms and conditions, and included a pay-if-paid clause drafted by Michael Zicherman, a partner of Peckar & Abramson, P.C. While Jersey Precast provided some draft revisions to the terms and conditions, Tricon never signed the purchase order and the proposed revisions were never accepted. Significantly, Jersey Precast did not attempt to modify the pay-if-paid provision. It later developed that the construction of the project became impossible, and the beams fabricated by Jersey Precast were not used. Tricon invoiced Union County for the cost of the beams, but the County failed to make payment and refused to accept delivery of the beams.
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Levi W. Barrett, Peckar & Abramson, P.C.,
Michael S. Zicherman, Peckar & Abramson, P.C. and
Brian Glicos, Peckar & Abramson, P.C.
Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Zicherman may be contacted at mzicherman@pecklaw.com
Mr. Glicos may be contacted at bglicos@pecklaw.com
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White House Proposal Returns to 1978 NEPA Review Procedures
November 15, 2021 —
Karen C. Bennett - Lewis BrisboisWashington, D.C. (October 15, 2021) - The Council on Environmental Quality (CEQ) has requested comments, by November 22, 2021, on proposed revisions to the National Environmental Policy Act (NEPA) regulations. The proposal is Phase I in a two-phased approach that will eventually undo a final rule, effective September 2020, that updated NEPA regulations to reflect decades of agency experience and caselaw interpreting the 1969 Act.
Phase I proposes to reinstitute 1978 definitions for key terms used to determine the scope of review and the range of alternatives required when undertaking any major federal action. Phase II is expected to be an extensive rewrite of the 2020 regulations to incorporate climate change and environmental justice objectives. Businesses with projects, now or in the future, that require federal authorizations will need to pay close attention to these regulatory revisions.
The 2020 update rule intended to scale back the time and cost of producing NEPA analyses by focusing agency resources on evaluating effects that are within the agency’s ability to control and studying only those alternatives that would meet the project purpose. CEQ’s proposal eliminates these efficiencies.
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Karen Bennett, Lewis BrisboisMs. Bennett may be contacted at
Karen.Bennett@lewisbrisbois.com
Contractor Sues Construction Defect Claimants for Defamation
June 28, 2013 —
CDJ STAFFAndrew Smith and Armando Delgado both own condos in the Willowbrook condominium complex in East Manatee, Florida, and they’ve both been dealing with structural problems with their homes. Now they’re together in another matter as the contractor who has been hired to do the repairs has sued them for defamation. The homeowners claim that the construction company is trying to intimidate them.
KB Homes, which built the Willowbrook complex, hired Dueall Construction to repair the buildings. Anthony Robbins, one of the owners of Dueall, is currently on probation for cocaine trafficking. Smith put this information on a website associated with complaints about KB Homes, while Delgado put a banner on the back of his pickup truck. The lawsuit claims that Smith and Delgado “have initiated a campaign to smear and defame Dueall and its owners.”
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No Damage for Delay? No Problem: Exceptions to the Enforceability of No Damage for Delay Clauses
October 18, 2021 —
Chris Broughton, Jones Walker LLP - ConsensusDocsIntroduction:
Under a no-damage-for-delay clause, the owner is not liable for any monetary damages resulting from delays on the project. In lieu of monetary recovery, the contractor’s remaining remedy is a non-compensatory time extension. These clauses are common at the contractor-subcontractor interface as well.
While no-damage-for-delay clauses are enforced in most jurisdictions, some states, either by statute or case law, have limited the enforceability of no-damage-for-delay clauses. Other states have also limited the enforceability of these clauses on state government contracts, and a select few have outlawed them on all projects regardless if they are publicly or privately owned. Additionally, for subcontractors on federal projects, the Miller Act may provide a way to avoid no-damage-for-delay and recover against the general contractor’s payment bond.
This article provides an overview of no-damage-for-delay clauses and the exceptions to enforcement of these clauses. However, due to the consequences of a no-damage-for-delay clause, it is important to know the terms of your contract and the law that governs your project.
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Chris Broughton, Jones Walker LLPMr. Broughton may be contacted at
cbroughton@joneswalker.com
Residential Contractors, Be Sure to Have these Clauses in Your Contracts
December 23, 2023 —
Christopher G. Hill - Construction Law MusingsI have often “mused” on the need to have a good solid construction contract at the beginning of a project. While this is always true, it is particularly true in residential contracting where a homeowner may or may not know the construction process or have experience with large scale construction. Often you, as a construction general contractor, are providing the first large scale construction that the homeowner has experienced. For this reason, through meetings and the construction contract, setting expectations early and often is key.
As a side note to this need to set expectations, the Virginia Department of Professional and Occupational Regulation (DPOR) and the Virginia General Assembly require certain clauses to be in every residential construction contract. DPOR strictly enforces these contractual items and failure to put them in your contracts can lead to fines, penalties and possibly even revocation of a contractor’s license.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
CGL Policies and the Professional Liabilities Exclusion
August 14, 2018 —
David Adelstein - Florida Construction Legal UpdatesCommercial general liability (CGL) policies for contractors traditionally contain a professional liabilities exclusion. This exclusion is generally added through a specific endorsement to eliminate coverage for professional services. Read the endorsement The point of the exclusion, in a nutshell, is simply to eliminate a CGL policy for a contractor serving as a professional liability policy.
Contractors need to appreciate a professional liabilities exclusion added through endorsement because oftentimes there are delegated design components they are responsible for. Perhaps the contractor value engineered a system and is responsible for engineering and signing and sealing the engineered documents (through its subcontractor) associated with that system. Perhaps there is a performance specification that requires the contractor to engineer a system. Perhaps there is a design-build component. Regardless of the circumstance, this professional liabilities exclusion can certainly come into play, particularly if a defect is raised with the design or professional services associated with the engineered system.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Gut Feeling Does Not Disqualify Expert Opinion
July 06, 2011 —
CDJ STAFFThe New Jersey Supreme Court issued a ruling in June on the case of Nevins v. Toll in which they reversed an earlier decision and remanded the case to a lower court for retrial. At issue in the case was the testimony of the plaintiff’s expert, J. Anthony Dowling. In depositions, Mr. Dowling said that his estimates for repair were based on a “gut feeling.” Dowling said he had “very little” experience in cost estimates for single-family homes. The defendants sought to bar Dowling’s testimony which was granted by the judge. Without an expert, Ms. Nevin’s case was dismissed.
Describing Dowling’s report as “far from a model of how an expert’s opinion in a construction case should be presented,” the court noted that Dowling is not a professional expert witness. However, the court did note that Dowling is a professional cost estimator. Despite Mr. Dowling using his “gut feeling” to construct his estimate, the New Jersey Supreme Court felt that whether his estimate is convincing is “a question for the jury.”
Read the court’s opinion…
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