Fairfield Connecticut Building Expert Directory

Unfair Risk Allocation on Design-Build Projects

June 13, 2022 — Brian Perlberg, Executive Director of ConsensusDocs Coalition & AGC Senior Counsel
The AGC annual convention included a session entitled “Who’s on the Hook for Design Defects in Design-Build Projects.” Fox Rothschild’s Dirk Haire, Les Synder of Infrastructure Construction Brightline West, and David Hecker of Kiewit presented. Attendees crowded into a standing-only room because more and more builders are facing design liability, especially design-builders on large infrastructure projects. The presentation highlighted how some owners abuse the submittal process on design-build jobs to make changes without compensating the builder with more time, money, or both. One project took a sample of owner comments and extrapolated that just one project generated over 15,000 submittals and generated over 110,000 comments of “concern” or “preference.” Certain owner-representatives and attorneys for owners have oversold the risk allocation transfer aspect of design-build. The Spearin Doctrine protects a builder from design documents containing errors by entitling them to receive equitable compensation. The design-build project delivery method erodes potential Spearin protections. Ways that an owner may retain some design responsibility and bring Spearin protections back into play for a builder include the following:

Accuracy of reports prepared by owner’s outside consultants

Owner’s design approval process
Viability of owner’s stated design and project criteria

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Reprinted courtesy of Brian Perlberg, ConsensusDocs

Additional Insured Not Entitled to Coverage for Post-Completion Defects

December 21, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The general contractor, an additional insured on the subcontractor's policy, was not entitled to coverage for construction defect claims that arose after completion of the project. Weitz Co. v. Acuity, 2016 U.S. Dist. LEXIS 150433 (S.D. Ohio Oct. 31, 2016). Weitz was the general contractor hired by Twin Lakes for construction of a residential community. One of the subcontractors, Miter Masonry, was insured by Acuity under a CGL policy. Work on the project began in 2002 and was substantially completed in 2005. In 2011, Twin Lakes notified Weitz that there were moisture infiltration issues at the project that may be related to work during the project. Twin Lakes filed a Demand for Arbitration against Weitz on November 30, 2012. Twin Lakes alleged that the defects included the building wrap, windows, doors, wood trim, aluminum wrap, vinyl siding, flashing and brick veneer not being installed in accordance with contract documents and/or industry standards. The arbitration panel awarded damages to Twin Lakes in the amount of $2,775,771.86. The panel found that Weitz breached sections of the contract which caused moisture intrusion and damage to all the units. The panel ultimately held that Weitz could recover from the subcontractors 100% of the $2,775,771.86 awarded. Acuity's insured, Miter Masonry, was determined to be 4% at fault for the damages. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Personal Guarantor Cannot Escape a Personal Guarantee By…

June 02, 2016 — David Adelstein – Florida Construction Legal Updates
In a prior article, I discussed the point that a personal guarantor cannot escape a contractual requirement of a personal guarantee merely by executing the guarantee as a corporate officer. The recent decision Frieri v. Capital Investment Services, Inc., 41 Fla. L. Weekly D1189a (Fla. 3d DCA 2016) illustrates this point. In this case, a company hired an individual to help grow that company’s business. The contract required the individual to invest $6 Million into a trust in consideration of the company’s president transferring substantial shares of the company into the trust. The objective was that the trust would own the controlling shares of the company. The money was transferred. However, the shares were never placed in the trust and the trust never received controlling interest in the company. Read the court decision
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Reprinted courtesy of David M. Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Construction Down in Twin Cities Area

October 30, 2013 — CDJ STAFF
Although the year has been better for the Minneapolis/St. Paul area, with a 9% increase since last year, this September saw 25% less construction spending than last September. Non-residential construction dropped even further, losing 36%. Although September was a bad month, the year-to-date value of construction contracts is about $3.3 billion, exceeding last year’s $3.0 billion for the region. Read the court decision
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Don’t Do this When it Comes to Construction Liens

September 07, 2020 — David Adelstein - Florida Construction Legal Updates
When it comes to preparing and recording a construction lien, this case is an example of what NOT TO DO! I mean it — this exemplifies what NOT TO DO! It is also a case study of why a party should always work with counsel in preparing a construction lien so that you can avoid the outcome in this case–your lien being deemed fraudulent. In Witters Contracting Company v. West, 2020 WL 4030845 (Fla. 2d DCA 2020), homeowners hired a contractor to renovate their home under a cost-plus arrangement where the contractor was entitled to a 10% fee on construction costs. The contract also required extra work to be agreed in writing between the owner and contractor. During construction a dispute arose. The contractor texted the owner that it will cancel the permit and record a $100,000 construction lien if the owner did not pay it $30,000. Shortly thereafter, the contractor’s counsel sent the homeowners a demand for $59,706 with back-up documentation. Less than a week later, the contractor recorded a construction lien for $75,000. The owners initiated a lawsuit against the contractor that included a claim for fraudulent lien. The contractor then amended its construction lien for $87,239. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

California to Build ‘Total Disaster City’ for Training

July 30, 2014 — Beverley BevenFlorez-CDJ STAFF
California is building a “world-class $56 million training facility in eastern Sacramento County that would pit fire crews against a variety of realistic, pressure-packed simulated disasters,” according to the Sacramento Bee. Construction has begun on the Emergency Response Training Center in Mather Field in Rancho Cordova. “The project is a joint effort between Henke’s fire department, the Governor’s Office of Emergency Services and the Sacramento Fire Department,” reported the Sacramento Bee. Read the court decision
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Georgia Federal Court Says Fact Questions Exist As To Whether Nitrogen Is An “Irritant” or “Contaminant” As Used in Pollution Exclusion

May 20, 2019 — Lawrence J. Bracken II, Michael S. Levine & Alexander D. Russo - Hunton Andrews Kurth
The Southern District of Georgia recently ruled that Evanston Insurance Company is not entitled to summary judgment on whether its policies’ pollution exclusion bars coverage for the release of nitrogen into a warehouse. The case stems from an incident at Xytex Tissue Services, LLC’s warehouse, where Xytex stored biological material at low temperatures. Xytex used an on-site “liquid nitrogen delivery system” to keep the material properly cooled. This system releases liquid nitrogen, which would vaporize into nitrogen gas and cool the biological material. On February 5, 2017, a Xytex employee, Deputy Greg Meagher, entered the warehouse to investigate activated motion detectors and burglar alarms. Deputy Meagher was overcome by nitrogen gas and died as a result. Following Deputy Meagher’s death, his heirs filed suit against Xytex and other defendants. Evanston denied coverage based on the pollution exclusion in its policy. Evanston then brought a declaratory judgment action to confirm its coverage position. In denying Evanston’s summary judgment motion, the Southern District of Georgia reasoned that the type of injury sustained is essential in analyzing whether the pollution exclusion applies. Specifically, Xytex argued, and the court agreed, that the underlying lawsuit alleged that the bodily injury was caused by a lack of oxygen, not exposure to nitrogen. The court also distinguished prior decisions, explaining that injury caused by a lack of oxygen is not a contamination or irritation of the body in the same way as injury resulting from exposure to carbon monoxide or lead. The court also found that Xytex “reasonably expected that liability related to a nitrogen leak would be insured.” Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys Lawrence J. Bracken II, Michael S. Levine and Alexander D. Russo Mr. Bracken may be contacted at lbracken@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Russo may be contacted at arusso@HuntonAK.com Read the court decision
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OPINION: Stop Requiring Exhibit Lists!

September 18, 2023 — Todd Heffner - The Dispute Resolver
You are conducting the final hearing of a high-dollar construction arbitration. Opposing counsel hands you the next document that counsel plans to use in questioning the witness on the stand. You notice that the document is bates stamped but has no exhibit number. So, you quickly consult opposing counsel’s exhibit list and – gasp – you find that the document is not on the list. What do you do? Do you object? Assuming this is not your first construction arbitration hearing, you do not object. Why? Because your objection would be futile. Construction arbitrators simply do not exclude evidence on the basis that it does not appear on an exhibit list. (Evidence not produced in discovery or otherwise previously provided might be a different case.) In an informal poll of a dozen construction lawyers conducted by this author, not one reported evidence being excluded solely because it did not appear on an exhibit list. This remained true even when the applicable case management order purported to prohibit the introduction of evidence not on an exhibit list. Thus, to be used in an arbitration hearing, documents must appear on an exhibit list, unless they don’t, in which case you can use them anyway. So far, so pointless. Read the court decision
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Reprinted courtesy of Todd Heffner, Troutman Pepper
Mr. Heffner may be contacted at todd.heffner@troutman.com

FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES