In Pennsylvania, Contractors Can Be Liable to Third Parties for Obvious Defects in Completed Work
July 10, 2023 —
Michael L. DeBona - The Subrogation StrategistIn Brown v. City of Oil City, No. 6 WAP 2022, 2023 Pa. LEXIS 681 (2023), the Supreme Court of Pennsylvania (Supreme Court) recently held that a contractor can be liable for dangerous conditions it creates even if the hazard is obvious or known by the property owner. In City of Oil City, the City of Oil City (Oil City) contracted with Harold Best and Struxures, LLC and Fred Burns, Inc. (collectively Contractors) to reconstruct the concrete stairs to the city library. Contractors completed their work at the end of 2011. In early 2012, Oil City received reports of issues with the stairs. Oil City notified Contractors that it considered the stairs dangerous and that Contractors’ defective workmanship created the condition. Neither Oil City or Contractors took any action to fix the stairs or warn of the danger and the stairs’ condition worsened with time.
On November 23, 2015, David and Kathryn Brown exited the library. Kathryn Brown tripped on one of the deteriorated steps, falling and striking her head. Kathryn suffered a traumatic head injury and passed away six days later. The Estate of Kathryn Brown and David Brown, individually (collectively, the Browns), sued Oil City as the owner of the library and Contractors. With respect to Contractors, the Browns asserted that Contractors’ work on the stairs created a dangerous condition that presented an unreasonable risk of harm to those using the steps.
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Michael L. DeBona, White and WilliamsMr. DeBona may be contacted at
debonam@whiteandwilliams.com
Insurer's In-House Counsel's Involvement in Coverage Decision Opens Door to Discovery
January 11, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe Mississippi Supreme Court held that the insurer must produce written communications from and make available for deposition the in-house counsel who orchestrated the denial of coverage. Travelers Pro. Cas. Co. of Am. v. 100 Renaissance, LLC, 2020 Miss. LEXIS 409 (Miss. Oct. 29, 2020).
An unidentified driver struck a flagpole owned by the insured Renaissance, causing $2,134 in damages. Renaissance filed a claim with Travelers for uninsured-motorist coverage. The Travelers' claims handler, Charlene Duncan, determined there was no coverage because the flagpole was not a covered auto. Before corresponding with the insured, Duncan sought legal advice from Travelers' in-house counsel, Jim Harris.
Renaissance sued Travelers for coverage and bad faith. Renaissance then took Duncan's deposition and asked that she explain both the denial letter and the reasons Travelers denied the claim. Duncan repeatedly said she did not know the basis of the denial and that she had consulted with Harris.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
It Pays to Review the ‘Review the Contract Documents’ Clause Before You Sign the Contract
March 11, 2024 —
Alan Winkler - ConsensusDocsIt is fairly common for a construction contract to include a provision requiring the contractor to perform some level of review of the plans and specifications and perhaps other contract documents as part of their responsibilities. Typically, this provision is found in a section of the contract on the contractor’s responsibilities, although it can be anywhere. Owners and contractors are, with reason, focused on three main issues in reviewing contracts: (1) price, costs, and payments, (2) time and scheduling, and (3) scope of the work. Eyes may glaze over the contractor’s responsibilities section. Not only does it seem to be boilerplate, but industry professionals know what a contractor is supposed to do; in a nutshell, build the project.
An old school type of contractor may regard this role as strictly following the plans and specifications, no matter what they provide. That could lead to a situation where construction comes to a complete stop because, for example, two elements are totally incompatible with each other. If that happens, the contractor would then turn to the owner and architect to ask for a corrective plan and instructions on how to proceed. That may also be accompanied by a request for more time and money while the problem is resolved. The ‘review the contract documents’ clause is designed to avoid this. It is intended to address an understanding that everyone makes mistakes, even architects and engineers whose job it is to design a buildable, functional project. The clause also addresses the understanding that a contractor is more than a rote implementer of plans and specifications because its expertise in building necessarily means the contractor has expertise in understanding the documents that define the construction and how things are put together.
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Alan Winkler, Peckar & Abramson, P.C.Mr. Winkler may be contacted at
awinkler@pecklaw.com
Not Just Another Client Alert about Cyber-Risk and Effective Cybersecurity Insurance Regulatory Guidance
April 01, 2015 —
Robert Ansehl – White and Williams LLPThe prefix "cyber" was coined about 70 years ago to describe early stage computers, computer networks and virtual reality. Since then, the term has been used as a prefix for hundreds of words, however, the most recent (and newsworthy) usage is its link to the word “risk” and the correlative term “security.” Two sides of the same coin and not a day goes by when a data breach is not reported and the importance of cyber risk and cybersecurity underscored. Insurers, like other financial institutions, are at the forefront of the “cyber-curve.” Many insurers are particularly vulnerable on at least two fronts: (1) from a cyber risk/ cyber invasion perspective and; (2) an insurer’s insurance policy exposure, intentional and not, to third-parties under cyber policies, and even policies such as CGLs that may inadvertently cover such risks.
A number of federal and state regulators have spoken to this issue in an effort to address cyber risks with varying degrees of specificity. At last count, in addition to a myriad of existing and proposed state laws and regulations, there are at least nine federal Bills under consideration by Congress (covering six federal agencies including one new agency) that seek to impose regulatory requirements upon the cyber-arena. Those Bills empower six regulatory agencies; including one new agency. Initially, some states required companies to notify affected persons of a data breach. As breaches became more serious, state and federal regulators sought to increase the industry’s awareness of the potential exposures and provided instructions on appropriate steps to protect data from cyber invasions. Now, state insurance regulators are examining not only the threat of data theft, but the balance sheet impact of insurance exposures for underwriting such risks for third-parties’ under cyber risk policies. The regulatory efforts continue to multiply in an effort to stem some of these risks.
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Robert Ansehl, White and Williams LLPMr. Ansehl may be contacted at
ansehlr@whiteandwilliams.com
Evaluating Smart Home Technology: It’s About More Than the Bottom Line
May 03, 2021 —
James W. McPhillips & Rachel Newell - Gravel2Gavel Construction & Real Estate Law BlogOutfitting a commercial real estate space with smart technology can be a significant cost. While the long-term benefits and strategic improvements we’ve discussed previously can make that investment worthwhile, the evaluation period is critical to ensure an impactful ROI. Property developers, owners, and managers should undertake a rigorous evaluation process to ensure the technology procurement aligns with the project’s overall financial plan. And this is not just about getting the cost right. If the technology does not meet the needs of the space, then all the smart technology in the world will not prevent the project from being a sunk cost.
Do the Research so You Know …
The Technology. While the RFP is a key step of the procurement process, a more informal research phase should be undertaken first. Smart technology is a rapidly evolving field, and before reaching out to vendors, the business should ensure that it understands what is available—both in terms of the kinds of technology that can be implemented, and the various companies that offer solutions. Gathering this information early will yield results that align more closely with a particular building’s needs.
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James W. McPhillips, Pillsbury and
Rachel Newell, Pillsbury
Mr. McPhillips may be contacted at james.mcphillips@pillsburylaw.com
Ms. Newell may be contacted at rachel.newell@pillsburylaw.com
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Home Prices in U.S. Rose 0.3% in August From July, FHFA Says
October 28, 2015 —
Prashant Gopal – BloombergU.S. home prices rose in August as low borrowing costs and sustained job growth fueled demand amid a tight inventory of properties on the market.
Prices climbed 0.3 percent on a seasonally adjusted basis from July, the Federal Housing Finance Agency said Thursday in a report from Washington. The average estimate of 16 economists was for a 0.5 percent increase, according to data compiled by Bloomberg. The gain was 5.5 percent from a year earlier.
Values have increased steadily as buyers, bolstered by an improving job market and easing mortgage standards, compete for a limited supply of existing homes. The number of listed properties in August was the second-lowest for that month since 2002, according to the National Association of Realtors.
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Prashant Gopal, Bloomberg
Contract Terms Can Impact the Accrual Date For Florida’s Statute of Repose
October 19, 2017 —
William L. Doerler - White and Williams LLPWhen the validity of a construction defect claim depends on whether the claim is barred by the applicable state’s statute of repose, it is important to review the statute to identify when claims subject to the statute of repose accrue. In Busch v. Lennar Homes, LLC, 219 So.3d 93 (Fla. Ct. App. (5th Dist.) 2017), the Court of Appeals of Florida clarified the accrual date for the statute of repose in cases where the accrual date depends on a construction contract’s completion date. Pursuant to Busch, the date of full performance under the contract, not the building’s purchase closing date, is the date on which claims accrue.
In Busch, Timothy Busch (Busch), pursuant to a Purchase and Sale Agreement, contracted to have Lennar Homes build him a house. Nearly ten years after closing on the home, Busch served Lennar Homes with a notice of construction defects, as required by Florida’s right-to-repair act. Shortly thereafter, but more than 10 years after the home’s closing date, Busch filed suit against Lennar Homes, alleging that there were multiple construction defects associated with the home. Lennar Homes, relying on Florida’s statute of repose, Fla. Stat. § 95.11(3)(c), filed a motion to dismiss Busch’s complaint.
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William L. Doerler, White and Williams LLPMr. Doerler may be contacted at
doerlerw@whiteandwilliams.com
Read Her Lips: “No New Buildings”
November 18, 2011 —
CDJ STAFFMartha Johnson, the head of the General Services Administration, has said that her agency will not be building any new buildings in the near future. Among other duties, the GSA is responsible for the building, renovating, and leasing of federal office space. The White House had proposed $840 million in new construction, the Senate only $56 million. The House did not appropriate any money for the agency to use for new construction.
In addition to cutbacks on new buildings, Congress is suggesting only $280 million in repairs of existing government buildings. In order to cut back, the GSA has dropped plans to renovate their own offices in favor of renovations at the Department of Homeland Security and the Food and Drug Administration.
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