Seattle Washington Building Expert Directory

Recent Bribery and Anti-Corruption Enforcement Trends in Global Construction Industry

August 26, 2019 — Ralph A. Finizio & Anthony Finizio - ConsensusDocs
Bribery and corruption have long plagued the construction industry, particularly in the developing world and emerging markets. Large contracts often trickle down through layers of subcontractors, presenting opportunities for corruption at each level. The risk is enhanced in certain foreign jurisdictions, where large corporations may be wholly or partially state-owned enterprises and public officials may expect payment in exchange for state-issued licenses or government contracts. Recent enforcement trends indicate that both the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are increasingly targeting the construction industry for anti-bribery and corruption actions under the Foreign Corrupt Practices Act (FCPA). Several former DOJ officials also recently commented that the construction industry has become a focus of anti-corruption enforcement efforts. The FCPA is a formidable tool for regulators, making it unlawful to influence a foreign government official with any type of payment or personal reward. While certain safe harbors apply — including de minimis payments made to expedite routine governmental action or the payment being lawful in the foreign jurisdiction — these exceptions are construed narrowly and can be difficult to apply in practice. Reprinted courtesy of Ralph A. Finizio, Pepper Hamilton LLP and Anthony Finizio, Pepper Hamilton LLP Mr. Finizio may be contacted at finizior@pepperlaw.com Mr. Finizio may be contacted at finizioa@pepperlaw.com Read the court decision
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Include Contract Clauses for Protection Against Ever-Evolving Construction Challenges

May 30, 2022 — Michael Henry & Kevin J. Riexinger - Construction Executive
The first quarter of 2022 provided a valuable glimpse into some of the major issues the construction industry can expect to continue impacting jobsites for the rest of the year. Early in the pandemic, construction was not immune from the shut-downs that swept across market sectors. Workers were staying home to shield themselves and their families from the COVID-19 virus (and variants). This caused delays with construction projects and failures to meet negotiated benchmarks or deadlines. Contractors were left to wonder whether they remained obligated to perform under their contracts, or whether COVID-19 allowed them to invoke force majeure clauses. Over the past two years, there has been much debate about whether force majeure clauses encompass COVID-19 risks. Traditionally, force majeure is only invoked for significant weather events or natural disasters. Unsurprisingly, outcomes of legal actions regarding COVID-19 and force majeure varied by state and by contract. It didn’t take long for contractors to seek a more predictable and certain solution. Reprinted courtesy of Michael Henry & Kevin J. Riexinger, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Riexinger may be contacted at kriexinger@gllawgroup.com Mr. Henry may be contacted at MbHenry@tcco.com Read the court decision
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And the Winner Is . . . The Right to Repair Act!

February 15, 2018 — Garret Murai – California Construction Law Blog
Civil litigation attorneys often talk about “damages.” Because without damages . . . well . . . you’re out of luck. But damages come in different flavors. In construction litigation, when it comes to defective construction, there are two basic flavors: actual damages and economic damages. Actual damages include property damage and personal injury, such as a defective roof that causes water damage into the interior of the structure or collapses causing injury to someone inside the structure. In contrast, economic damages would be the cost to repair or replace the defective roof, without any resulting property damage or personal injury. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Florida Appellate Court Holds Four-Year Statute of Limitations Applicable Irrespective of Contractor Licensure

June 22, 2016 — Clay Whittaker – Florida Construction Law Update
In Brock v. Garner Window & Door Sales, Inc.,[1] Florida’s Fifth District Court of Appeal rejected a novel attempt to circumvent Florida’s well-established four-year statute of limitations for all actions founded on the construction of an improvement to real property. Plaintiff filed a lawsuit alleging breach of contract as a result of water intrusion damage following the installation of windows.[2] It was undisputed that Plaintiff commenced the litigation more than four years following the discovery of the allegedly latent defect in the window installation.[3] Plaintiff’s counsel argued that the window contractor could not rely on the four-year statute of limitations because the window subcontractor was not a licensed contractor and, therefore, the five-year statute of limitations for actions founded on written contracts should apply. Read the court decision
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Reprinted courtesy of Clay Whittaker, Cole, Scott, & Kissane, P.A.
Mr. Whittaker may be contacted at clay.whittaker@csklegal.com

Resulting Loss Provision Does Not Salvage Coverage

April 06, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The court confirmed that there was no coverage for damage to the policyholder's building caused by a large volume of water. Praetorian Ins. Co. v. Arabia Shrine Ctr. Houston, 2016 U.S. Dist. LEXIS 20186 (S.D. Texas Feb. 19, 2016). The damage occurred when water began seeping through the baseboards of the Shrine. Employees saw a large amount of water entering the building. Eventually, the city shut off a water main valve. It was later determined that an 8 inch diameter fire suppression metal pipe failed at the elbow, causing over one million gallons of water to be released into the building. Damages were estimated at nearly $1.7 million. Clean up and repair costs amounted to $237,156. 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

Ownership is Not a Conclusive Factor for Ongoing Operations Additional Insured Coverage

November 15, 2017 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In McMillin Management Services v. Financial Pacific Ins. Co. (No. D069814, filed 11/14/17), a California appeals court held that an insurer had a duty to defend a general contractor under an “ongoing operations” additional insured (AI) endorsement for damage occurring after the named insured subcontractor completed its work, because the endorsement did not limit coverage solely to liability during the subcontractors’ ongoing operations, but rather, broadly provided coverage for liability “arising out of” such operations. Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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When an Insurer Proceeds as Subrogee, Defendants Should Not Assert Counterclaims Against the Insured/Subrogor

June 14, 2021 — Gus Sara - The Subrogation Strategist
In a subrogation action, one party is substituted to the rights and remedies of another with respect to a lawful claim. The substituted party (the subrogee) is legally able to pursue any right or seek any remedy that would be available to the subrogor regarding that claim. But can a defendant in a subrogation action assert any claim against the subrogee that it would have against the subrogor? In Federated Mut. Inc. Co. v. Kosciusko County, No. 3:20-CV-960, 2021 U.S. Dist. Lexis 88735, the United States District Court for the Northern District of Indiana considered whether a defendant could assert counterclaims against the insureds/subrogors in an action filed in the name of their subrogee. The court held that since the insurerds/subrogors were not a party to the action and the defendant could assert the substance of its counterclaim as a defense, the defendant could not file counterclaims against the insureds/subrogors in the insurer’s subrogation action. Kosciusko County arose from a motor vehicle accident involving a semi-tractor trailer owned by Bellman Oil Company, Inc. (Bellman) and B & B Transport, Inc. (B & B). The accident occurred on a highway in Kosciusko County in October of 2019. The accident caused the semi-tractor trailer containing ethanol fuel to roll over four times and burst into flames. Federated Mutual Insurance Company (FMIC) insured Bellman and B & B for the semi-tractor trailer and issued payments as a result of the accident. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

Recent Federal Court Decision Favors Class Action Defendants

October 26, 2020 — Amber Karns & Dan Pipitone - Construction Executive
The commercial construction contracting and subcontracting industry in general is unique under the law for industry professionals, as they’re typically limited to wage and hour litigation under provisions of the Fair Labor Standards Act. The majority of FLSA cases seek class action status or collective classification, while other FLSA litigation is initiated by individuals seeking damages. For the former, past and current employees can opt into class action litigation and seek collective damages against a construction company. The looming financial burden of class action or collective litigation against construction companies consume time, money and resources to the extent it’s often advisable for Defendants to negotiate an unfair settlement. Yet, thanks to a recent federal court decision on March 27, 2020, the legal maneuvering behind unreasonable Plaintiff demands may soon be counter-balanced by the class action Defendants’ right to due process review. A recent legal opinion in a recent FLSA case has potentially wide-ranging implications for Defendant employers mired in future class action litigation. Moreover, as the FLSA applies to all employers, this decision potentially applies to all ownership groups representing the commercial construction industry, extending to partners, contractors and subcontractors. Reprinted courtesy of Amber Karns & Dan Pipitone, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Pipitone may be contacted at dpipitone@munsch.com Ms. Karns may be contacted at akarns@munsch.com Read the court decision
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