Fairfield Connecticut Building Expert Directory

Insurer Must Defend Additional Insured Though Its Insured is a Non-Party

November 18, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The plaintiff insurer's motion for partial summary judgment seeking an order that defendant insurer was obligated to defend a non-party as an additional insured was granted. Am Empire Surplus Lines Ins. Co. v. Burlington Ins. Co., 2019 N. Y. Misc. LEXIS 4145 (N. Y. Sup. Ct. July 25, 2019). Quality Building Construction, LLC was the contractor hired to work on exterior facade of a building owned by Central Park West Corporation. The underlying complaint alleged that Quality caused plastic spacers and pedestals used for the penthouse terrace to fall down the roof drain riser. A clog and rainwater backup resulted in water damage to apartment 8A. The resulting damage was allegedly due to the clogged roof drain riser. Quality subcontracted the work to Mega State, Inc. The subcontract required Mega to indemnify and hold Quality harmless against claims in connection with Mega's work, as well as name Quality as an additional insured on a primary, non-contributory bases under Mega's CGL policy. Burlington issued a policy to Mega naming Quality as an additional insured. American Empire issued a CGL policy to Quality. Quality was sued in the underlying action, but Mega was not. American Empire tendered a demand for coverage to Mega and Burlington, relying on the agreement between Quality and Mega. Burlington responded that Mega was not liable for the alleged damages. American Empire sued Burlington. Subsequently, Burlington accepted the tender to defend Quality in the underlying action, and reserved rights as to whether Burlington's policy was primary and on the question of indemnification. American Empire agreed to withdraw its suit if Burlington would modify its reservation of rights. Burlington refused. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Reminder: Just Being Incorporated Isn’t Enough

June 29, 2020 — Christopher G. Hill - Construction Law Musings
I have discussed why contractors need to incorporate previously here at Construction Law Musings. Among the many reasons to incorporate are possible tax benefits and the protection of personal assets (like your house and your dog) from judgement and collection actions. This latter reason is key in the construction world in which Murphy can look like an optimist and projects have so many moving parts that something is likely to go wrong. The reason incorporation works as at least a partial shield is that the company and the owners are separate “people” or entities from a legal perspective and a contract with one “person” cannot be enforced against another. This same logic applies in the context of corporate versus individual actions, i. e. the actions of one person cannot be legally attributed to another person. By extension the assets of an individual cannot be collected to satisfy a purely corporate debt or judgment. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Construction Litigation Roundup: “You Have No Class(ification)”

May 13, 2024 — Daniel Lund III - Lexology
In fact, you didn’t even have a license. A federal court in Alabama was tasked with determining whether an unlicensed contractor could recover from an Alabama project owner for in excess of $1.7 million in construction infrastructure and site work performed. In fact, the contractor “did not have a valid general contractor’s license” in the state of Alabama when it “assumed work on the project from its predecessor company.” During the course of work on the project, the principals of an original contractor decided to go their separate ways, whereupon one of those principals announced that his new company would take over ongoing work. Roughly two months after the new company began working at the project, the contractor applied for a license with the Alabama Licensing Board of General Contractors – the license was issued within about 45 days. Then, some eight months later, the contractor added a “municipal and utilities” classification to its contractor license. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Killer Subcontract Provisions

January 20, 2020 — Patrick McNamara - Porter Law Group
We are frequently requested by subcontractor clients to review the subcontract that has been prepared by the prime contractor, before our client signs it. While no two agreements are identical, there are a number of problematic contract provisions that appear in many agreements. Here is a list of ten such provisions (and their variations) that are potential “deal breakers”:

PAY IF/WHEN PAID (e.g. “Contractor shall have the right to exhaust all legal remedies, including appeals, prior to having an obligation to pay Subcontractor.”) “Pay-if-paid” provisions (“Receipt of payment from Owner shall be a condition precedent to Contractor’s duty to pay Subcontractor”) are illegal in California. However, the only legal limit on “Pay-When-Paid” provisions is that payment must be made “within a reasonable time.” The example above, as written, essentially affords the prime contractor a period of several years following completion of the project before that contractor has an independent duty to pay its subcontractors – not a “reasonable” amount of time, to those waiting to be paid. A compromise is to provide a time limit, such as 6 months or one year following substantial completion of the project.
CROSS-PROJECT SET-OFF (e.g. “In the event of disputes or default by Subcontractor, Contractor shall have the right to withhold sums due Subcontractor on this Project and on any other project on which Subcontractor is performing work for Contractor.”) Such provisions are problematic and likely unenforceable, as they potentially bar subcontractors’ lien rights. Such provisions should be deleted.
CONTRACTOR/SUBCONTRACTOR RESPONSIBILITY FOR DESIGN QUALITY (e.g. “Subcontractor warrants that the Work shall comply with all applicable laws, codes, statutes, standards, and ordinances.”) Unless a subcontractor’s scope of work expressly includes design work, this provision should either be deleted or modified, with the addition of the following phrase: “Subcontractor shall not be responsible for conformance of the design of its work to applicable laws, codes, statutes, standards, and ordinances.”

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Reprinted courtesy of Patrick McNamara, Porter Law Group
Mr. McNamara may be contacted at pmcnamara@porterlaw.com

After Breaching Its Duty to Defend, Insurer Must Pay Market Rates for Defense Counsel

October 30, 2023 — Tred R. Eyerly - Insurance Law Hawaii
After 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. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Manhattan Developer Wants Claims Dismissed in Breach of Contract Suit

August 27, 2014 — Beverley BevenFlorez-CDJ STAFF
The Real Deal reported that Savannah, the developer of the condo conversion at 141 Fifth Avenue, “has filed to dismiss a number of claims in a $7.5 million breach of contract lawsuit by the property’s board of managers, while alleging professional negligence against several of its own contractors.” Savanah’s lawyers stated, according to The Real Deal, that whether or not construction defects exist, their client isn’t responsible: “However to the extent that any of the alleged defects exist at the building, sponsor cannot be held liable for the existence of such defects.” Read the court decision
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OSHA Launches Program to Combat Trenching Accidents

October 16, 2018 — Tom Ichniowski – Engineering News-Record
In the wake of a recent rise in fatal trenching cave-ins, the federal Occupational Safety and Health Administration has begun a targeted education and enforcement program to try to reverse the trend. Read the court decision
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Reprinted courtesy of Tom Ichniowski, ENR
Mr. Ichniowski may be contacted at ichniowskit@enr.com

Construction Venture Sues LAX for Nonpayment

February 05, 2014 — Beverley BevenFlorez-CDJ STAFF
Construction joint venture Walsh/Austin filed suit against the Los Angeles International Airport, claiming that “the airport failed to properly pay more than $2.4 million to an electrical subcontractor,” according to The Daily Breeze. Furthermore, SASCO, the electrical firm, alleged that they were “given inaccurate design documents that made it impossible for the company to carry out the work at the agreed-upon rate.” The complaint, as reported by The Daily Breeze, cited “other lawsuits brought by an Orange County plastering firm and a Buena Park door company” and suggested that “eventually, all the litigation tied to nonpayment at LAX will end up in the same courtroom.” Nancy Castles, a spokeswoman for Los Angeles World Airports, told The Daily Breeze that “the agency does not comment on pending litigation.” Read the court decision
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FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES