FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors

April 10, 2019 — Thomas Cronin - Gordon & Rees Construction Law Blog
In a recent decision, the Illinois Supreme Court held that a purchaser of a newly constructed home could not assert a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser. Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, ¶ 1. The decision overruled Minton v. The Richards Group of Chicago, which held that a purchaser who “has no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor” could assert a claim of a breach of the warranty of habitability against the subcontractor. 116 Ill. App. 3d 852, 855 (1983). In Sienna Court Condo. Ass’n, the plaintiff alleged that the condo building had several latent defects which made individual units and common areas unfit for habitation. 2008 IL 122022 at ¶ 3. The Court rejected the plaintiff’s argument that privity should not be a factor in determining whether a claim for a breach of the warranty of habitability can be asserted. Id. at ¶ 19. The Court also rejected the plaintiff’s argument that claims for a breach warranty of habitability should not be governed by contract law but should instead be governed by tort law analogous to application of strict liability. Id. The Court reasoned that the economic loss rule, as articulated in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 91 (1982), refuted the plaintiff’s argument that the implied warranty of habitability should be covered by tort law. 2008 IL 122022 at ¶ 20. Under the economic loss rule, a plaintiff “cannot recover for solely economic loss under the tort theories of strict liability, negligence, and innocent misrepresentation.” National Tank Co., 91 Ill. 2d at 91. The Court explained that the rule prevented plaintiffs from turning a contractual claim into a tort claim. 2008 IL 122022 at ¶ 21. The Court further noted that contractual privity is required for a claim of economic loss, and an economic loss claim is not limited to strict liability claims. Id. Because the plaintiff’s claim was solely for an economic loss, it was a contractual claim in nature; therefore, the Court concluded that “the implied warranty of habitability cannot be characterized as a tort.” Id. at ¶ 22. Read the court decision
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Reprinted courtesy of Thomas Cronin, Gordon & Rees Scully Mansukhani
Mr. Cronin may be contacted at tcronin@grsm.com

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Biden Administration Issues Buy America Guidance for Federal Infrastructure Funds

April 25, 2022 — Garret Murai - California Construction Law Blog
As you know, late this past year Congress passed and President Biden signed the largest infrastructure bill since President Franklin D. Roosevelt’s “New Deal” in 1933. The infrastructure bill provides $1.2 trillion in spending on the nations’ infrastructure over the next five years. On Monday, the Biden Administration issued Initial Implementation Guidance requiring that, beginning May 14, 2022, materials paid for with infrastructure bill funds be made in America. The Guidance, which implements the “Buy America” provisions of the infrastructure bill requires that: 1. All iron and steel used in a project be produced in the United States; Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Traub Lieberman Partners Ryan Jones and Scot Samis Obtain Affirmation of Final Summary Judgment

February 28, 2022 — C. Ryan Jones & Scot E. Samis - Traub Lieberman
Traub Lieberman Partners Ryan Jones and Scot Samis recently obtained affirmation of final summary judgment in favor of a windstorm and general insurance provider (“Insurer”) in the Florida First District Court of Appeal. The Appellant, a restoration service provider (“Restoration Service”), provided emergency mitigation services in the wake of hurricane damage to a residential home that was covered by an insurance policy issued by the Insurer. The Restoration Service invoiced the Insurer and, following an investigation, the Insurer paid a portion of the invoiced amount and invoked the policy’s appraisal clause to resolve the dispute over the difference. The Restoration Service brought suit against the Insurer, arguing that the appraisal process did not apply to mitigation services. The Insurer countered that it was entitled to resolve the claim by appraisal and, following arguments, the Court determined that the appraisal provision applied to mitigation services. Reprinted courtesy of C. Ryan Jones, Traub Lieberman and Scot E. Samis, Traub Lieberman Mr. Jones may be contacted at rjones@tlsslaw.com Mr. Samis may be contacted at ssamis@tlsslaw.com Read the court decision
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Changes and Extra Work – Is There a Limit?

October 09, 2018 — Joseph R. Young - Smith Currie
Design and construction changes can be a challenge for everyone involved in a construction project. Designers and contractors endeavor to deliver a project that meets the owner’s needs, budget, and aesthetic considerations. As a project comes to fruition, the project frequently changes, and the parties must address and resolve the financial considerations of those changes and implement the changes at the project level. Often times the most critical aspect of a contractor’s financial success or failure of a construction project is its ability to manage changes. Contractors are sometimes faced with changes that are beyond the reasonable expectation of the original undertaking and have significant planning, scheduling, and cost implications that may not be considered or addressed in the contract’s changes clause. Changes of this magnitude may be considered “cardinal changes” and provide the contractor with recourse beyond restrictions imposed by the contract’s changes clause. But cardinal change is a risky basis for a contractor to refuse to perform additional or changed work. Even major changes can probably be more safely handled within the terms of the contract’s changes clause. Read the court decision
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Reprinted courtesy of Joseph R. Young, Smith Currie
Mr. Young may be contacted at jryoung@smithcurrie.com

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Quick Note: Aim to Avoid a Stay to your Miller Act Payment Bond Claim

February 23, 2017 — David Adelstein – Florida Construction Legal Updates
Strategy is important. This is especially true if you are trying to avoid arbitration. In a recent federal district court case, a subcontractor sued the prime contractor and the Miller Act payment bond surety. The subcontractor, however, had an arbitration provision in its subcontract with the prime contractor. The prime contractor moved to compel arbitration pursuant to the subcontract and moved to stay the subcontractor’s Miller Act payment bond claim. The last thing, and I mean the last thing, the subcontractor wanted to do was to stay its claim against the Miller Act payment bond. However, the district court compelled the subcontractor’s claim against the prime contractor to arbitration and stayed the subcontractor’s Miller Act payment bond claim pending the outcome of the arbitration. See U.S. v. International Fidelity Ins. Co., 2017 WL 495614 (S.D.Al. 2017). This is not what the subcontractor wanted. 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

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Supreme Judicial Court of Maine Addresses Earth Movement Exclusion

March 01, 2021 — James M. Eastham - Traub Lieberman
In Bibeau v. Concord Gen. Mut. Ins. Co., 2021 WL 243867, 2021 ME 4, the Supreme Judicial Court of Maine addressed an earth movement exclusion contained in a residential homeowners policy. In 2017, the insured submitted a claim to Concord for damage to the insured’s home which included foundation cracks and settlement resulting in interior damage to the home. The insured contended that the damage was the result of a 2006 water line leak. Concord denied the claim based on the Earth Movement exclusion contained in it’s policy which precluded coverage for losses caused by earthquakes, landslides, mudslides, mudflow, subsidence, sinkholes or “[a]ny other earth movement including earth sinking, rising or shifting; caused by or resulting from human or animal forces or any act of nature”. The insured filed suit asserting a breach of the policy and unfair claims settlement practices. According to the insured’s expert, the damage was caused by a 2006 water line leak -- which in turn caused the foundation to settle. Concord's expert, however, concluded that the settling was caused by the house being built on “unprepared or uncontrolled fill” which allowed the house to settle at different rates. Despite the disagreement regarding the cause of the settling, the parties ultimately agreed that the damage was the result of earth moving under the house's foundation. Concord moved for summary judgment and the trial court entered summary judgment for Concord, reasoning that because there was no genuine dispute that the losses were caused by “subsurface soils being undermined and earth movement,” the Earth Movement exclusion precluded coverage. The trial court further concluded that the disagreement over the cause of the settlement was not material because regardless of the cause of the earth movement, the losses were clearly excluded by the policy's Earth Movement exclusion. Read the court decision
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Reprinted courtesy of James M. Eastham, Traub Lieberman
Mr. Eastham may be contacted at jeastham@tlsslaw.com

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Flow-Down Clauses Can Drown Your Project

August 26, 2015 — Craig Martin – Construction Contractor Advisor
Flow-Down or pass-through clauses obligate downstream contractors to certain provisions contained in the up up-stream contractor contracts, such as the contract between the general contractor and the owner. These clauses are contained in every major form subcontract and they can expand the scope of your potential liability. This blog will look at typical language of a flow-down clause, what it means and how you can deal with them. Typical Flow-Down Clause A simple flow down clause might provide:

“The Subcontractor agrees to be bound to the Contractor by the terms of the prime contract and to assume to the Contractor all the obligations and responsibilities that the Contractor by those documents assumes to the Owner, except to the extent that the provisions contained therein are by the terms or by law applicable only to the Contractor.”

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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

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Builder Exposes 7 Myths regarding Millennials and Housing

January 12, 2015 — Beverley BevenFlorez-CDJ STAFF
Builder Magazine discussed seven myths regarding Generation Y and housing, and stated whether it was fact or fiction. First, they answered whether “Millennials Carry Historically High Student Debt Levels,” (True), and second they concluded it was true that “Millenials Can’t Afford Down Payment at Today’s Standards.” However, Builder was split on whether “Millennials Will Pay a Premium for Green and Tech Features.” Read the court decision
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