Seattle Washington Building Expert Directory

In Contracts, One Word Makes All the Difference

July 21, 2018 — Christopher G. Hill - Construction Law Musings
Here at Musings, I sometimes feel as if I am beating the “contract is king” drum to death. However, each time I start to get this feeling, a new case out of either the Virginia state courts or the Fourth Circuit Court of Appeals here in Richmond reminds me that we all, lawyers and contractors alike, need to be reminded of this fact on a regular basis. The terms written into a construction contract (or any other contract for that matter) will control the outcome of any dispute in just about every case. A recent 4th Circuit case takes this to the extreme in pointing out the the choice which of two tiny words can change the entire set of procedural rules and even the courthouse in which your dispute will be decided. In FindWhere Holdings Inc. v. Systems Env. Optimization LLC, the Fourth Circuit looked at a forum selection clause found in a contract between the parties. In this case, the clause stated that any dispute would be litigated in the courts “of the State of Virginia.” When the defendants tried to remove the case from Virginia state court to the Eastern District of Virginia federal courts, the federal court remanded the case, sending it back to the Circuit Court of Loudoun County, Virginia. Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

When Subcontractors Sue Only the Surety on Payment Bond and Tips for General Contractors

August 13, 2019 — Ira M. Schulman & Emily D. Anderson - ConsensusDocs
Payment bonds have been a staple of public construction projects since 1874, when the U.S. Congress first passed the Heard Act, which required that contractors obtain payment bonds for public projects to ensure that subcontractors and material suppliers have a way to recover their damages if an upstream contractor fails to pay for work performed and materials furnished on the project. The 1874 Heard Act has since been replaced by the 1935 Miller Act, and the concept has been expanded to construction projects funded by the states through state statutes known as “Little Miller Acts.” But the structure remains the same: On most public projects where the project’s cost exceeds $100,000, the prime contractor (the bond principal) is required to obtain a payment bond from a surety equal to the contract price to guarantee to subcontractors and material suppliers (the bond obligees) that the surety will pay for labor and materials under certain statutory or contractual conditions should the contractor fail to make payment. A surety is jointly and severally liable with the contractor to the subcontractor, which means that the subcontractor may seek recovery against either the contractor or the surety or both, and the contractor and surety will be liable for the damages together. Put another way, in most states and in federal court, an unpaid subcontractor has the right to sue only the surety on the payment bond without joining the contractor because a contract of suretyship is a direct liability of the surety to the subcontractor.1 When the contractor fails to perform, the surety becomes directly responsible at once — it is unnecessary for the subcontractor to establish that the contractor failed to carry out its contract before the obligation of the surety becomes absolute. Reprinted courtesy of Ira M. Schulman, Pepper Hamilton LLP and Emily D. Anderson, Pepper Hamilton LLP Mr. Schulman may be contacted at schulmani@pepperlaw.com Ms. Anderson may be contacted at andersone@pepperlaw.com Read the court decision
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Federal Government May Go to Different Green Building Standard

February 12, 2013 — CDJ STAFF
The federal government has expressed a commitment to environmentally sound, or “green” building practices, but now the question becomes who decides what constitutes a green building. The U.S. General Services Administration has started a public comment period on what certification program the GSA should recommend. Currently, the GSA uses the LEED standard from the U.S. Green Building Council. Although there are three green building standards, LEED, Green Globes, and the Living Building Challenge, only the first two are being seriously considered, according to a report on TriplePundit.com. The Green Globes program from the Green Building Initiative has its detractors, as some feel that the program fails to be sufficiently environmentally sound. Green Globes was created by a former lumber industry executive, Ward Hubbell, and is more permissive about woods and plastics used in construction. Hubbell defends the program, saying that the certification program is both rigorous and transparent. The U.S. Green Building Council also has its critics, and allegation have been made that LEED costs about twice as much as Green Globes in order to enrich the executives at the U.S. Green Building Council. Further, some claim that LEED certification involves lengthy delays. One architect criticized LEED, indicating that if he has questions he would “have to wait a month for a response.” The U.S. Department of Energy seems to be favoring Green Globes, as their review found it a better choice for meeting government requirements for new buildings. Conversely, the agency preferred LEED for modifying existing buildings. Read the court decision
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Georgia Court Clarifies Landlord Liability for Construction Defects

June 02, 2016 — Chadd Reynolds - AHHC Construction Law Blog
In Cowart v. Schevitz, the Georgia Court of Appeals clarified the instances in which an out-of-possession landlord can be liable in a premises liability claim. No. A15A2036, 2016 WL 563114, at *4 (Ga. Ct. App. Feb. 15, 2016). In this case, the plaintiff was leaving a restaurant and injured herself stepping down off of a sidewalk near the bottom of a ramp. The plaintiff filed a premises liability claim against the owner of commercial property (the “landlord”) and the operator of the restaurant (who later settled), seeking medical expenses and costs of litigation. An expert testifying on behalf of the plaintiff stated that the ramp was required to have railings pursuant to building codes and, had the railings been installed on the ramp, the plaintiff’s fall more than likely would not have occurred. The landlord moved for summary judgment, arguing that as an out-of-possession landlord, his liability to third persons for the use of the property by his tenant was precluded under O.C.G.A. § 44-7-14. The trial court denied the motion without comment, and the owner subsequently appealed. Read the court decision
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Reprinted courtesy of Chadd Reynolds, Autry, Hanrahan, Hall & Cook, LLP
Mr. Reynolds may be contacted at reynolds@ahclaw.com

Cyber Security Insurance and Design Professionals

March 29, 2017 — David Adelstein – Florida Construction Legal Updates
Cyber security insurance is a relatively new insurance product that has probably become more popular and important in today’s digital age. Think about it. Almost everything is created, transmitted, shared, and stored digitally. Companies utilize cloud-based platforms to store documents, share documents, and transmit documents. Documents are transmitted via e-mail. Documents are created electronically with various software programs. And, finally, technology has made it convenient to create, access, store, share, and transmit documentation digitally through smartphones, tablets, or laptops (and various applications) – so technology enables things to be done remotely in the moment to maximize efficiency and production. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

California Expands on Scope of Coverage for Soft Cost Claims

February 14, 2023 — Caitlin N. Rabiyan - Saxe Doernberger & Vita, P.C.
The California federal district court case of KB Home v. Illinois Union Insurance Co., No. 8:20-cv-00278-JLS-JDE, (C.D. Cal. August 23, 2022), provides much needed guidance for cases involving builder's risk insurance claims for soft cost coverage. The case stems from damage to several of KB Home’s residential building sites caused by a severe rainstorm in January 2017. Each home site was a smaller part of a large housing development project. The damage caused significant delay in the completion of some individual home sites, although there was limited evidence of delay to the overall housing development project. As a result, KB Home sought coverage under a builder’s risk policy purchased from Illinois Union for both hard costs and soft costs. “Hard costs” are the costs directly associated with repairing property damage to the sites. Conversely, “soft costs” are indirect expenses associated with project delays caused by such property damage and repair efforts. For example, hard costs would include labor and materials, whereas the soft costs claimed by KB Home included additional real estate taxes, construction loan interest, and advertising and promotional expenses incurred because of the delays. Illinois Union paid the claim for the hard costs, but denied the soft costs claim. KB Home filed suit and Illinois Union eventually filed a motion for summary judgment. Read the court decision
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Reprinted courtesy of Caitlin N. Rabiyan, Saxe Doernberger & Vita, P.C.
Ms. Rabiyan may be contacted at CRabiyan@sdvlaw.com

London Shard Developer Wins Approval for Tower Nearby

November 05, 2014 — Neil Callanan - Bloomberg
Sellar Property Group, developer of the Shard in London, won local government approval to build a 26-story residential tower close to the skyscraper on the south bank of the River Thames. The council for the Southwark borough voted in favor of the 148-apartment project, which also includes a 16-story tower, at a meeting yesterday, Sellar spokesman Baron Phillips said by e-mail. The project, like the Shard, will be developed in a partnership with the state of Qatar. Developers plan to construct more than 25,000 luxury properties in London worth more than 60 billion pounds ($96 billion) over the next decade, EC Harris said in an Oct. 7 report. The homes approved yesterday at the Fielden House site are expected to sell for about 800,000 pounds each, according to a filing by the borough. Read the court decision
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Reprinted courtesy of Neil Callanan, Bloomberg
Mr. Callanan may be contacted at ncallanan@bloomberg.net

HOA Group Speaking Out Against Draft of Colorado’s Construction Defects Bill

April 30, 2014 — Beverley BevenFlorez-CDJ STAFF
Ed Sealover of the Denver Business Journal reported on a homeowner association group that has spoken out against the recent draft of Colorado’s Construction Defects bill. According to Sealover’s article, Senator Jessie Ulibarri claimed that the “proposed bill…would mandate that homeowners alleging that owner-occupied multi-family structures have major construction defects go through mediation or arbitration before a lawsuit can be filed.” Furthermore, the bill would require “written consent from a majority of unit owners” before the “executive board of a homeowners association files such a lawsuit.” The bill originated due to findings that “[l]ess than 2 percent of new housing stock being built in Colorado is in the form of condos, an anomaly that developers attribute to state laws that allow condo owners to file multi-million-dollar class-action lawsuits even if only a few of them want to move forward with the legal action.” However, Molly Foley-Healy, chairwoman of the Community Associations Institute (CLAC), spoke out against the bill: “Senator Ulibarri’s stated goal is to create more affordable housing, but this bill has nothing to do with affordable housing. Instead, it hurts the very people he said he wanted to help. It effectively blocks homeowners from holding builders responsible for their shoddy construction and leaves homeowners living in HOAs to pick up the tab for repairing the defects.” Read the court decision
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