CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Termination of Construction Contracts

November 30, 2020 — Stuart Rosen - Construction Executive
Lately, in view of the COVID-19 pandemic, there is a heightened concern that some construction projects will not proceed as planned. Therefore, it is important to review each party’s right to terminate a construction contract and to examine some of the resulting consequences. While the parties to a construction contract can, as always, agree to other mutually acceptable terms and provisions, in broad terms, a typical construction contract includes four triggering events that can lead to termination. First, an owner can terminate a construction contract if the contractor defaults and thereafter fails to cure such default, which may include, without limitation, the failure to remediate deficient work, the failure to meet the construction schedule, the failure to pay subcontractors and the failure to comply with applicable law. A contractor must be mindful of the fact that in the case of such termination by the owner for cause, the vast majority of construction contracts provide that the contractor will not be entitled to receive any further payment for work performed by the contractor until the work is finished. Reprinted courtesy of Stuart Rosen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Rosen may be contacted at srosen@proskauer.com

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Latin America’s Biggest Corporate Crime Gets a Worthy Epic

January 04, 2021 — Mac Margolis - Bloomberg
As much as pouring cement and building towers, Brazilian construction dynasty Odebrecht was famed for its political panache. “I get down in the mud with the pigs but come out the other side clean in my white suit,” Norberto Odebrecht, founder of the legacy contractor, liked to boast back in the 1970s and 1980s. The catchphrase was shorthand for what became a patently Brazilian way of doing business – the art of buying influence and coming away unsoiled, or at least unincarcerated – among porcine politicians and bribe-truffling officials. In half a century and over three generations, the family firm from northeast Brazil grew into a multinational engineering colossus, hurling up grand public works from the Andes to Angola. Shady pacts with political grifters and bagmen were just part of the deal behind the build-up and seemingly nothing a little Brazilian bonhomie and contract skimming couldn’t tidy up. Until it didn’t. Read the court decision
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Reprinted courtesy of Mac Margolis, Bloomberg
Mr. Margolis may be contacted at mmargolis14@bloomberg.net

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California Appellate Court Confirms: Additional Insureds Are First-Class Citizens

May 04, 2020 — Scott S. Thomas - Payne & Fears
Many businesses shift risk by requiring others with whom they do business – e.g., vendors, subcontractors, suppliers, and others – to procure insurance on their behalf by making the business an “additional insured” under the other person’s liability insurance policy. Unfortunately, insurance companies sometimes treat these additional insureds as second-class citizens, refusing to acknowledge that the additional insured has the same rights as the policyholder, who paid the premium. In Philadelphia Indemnity Insurance Company v. SMG Holdings, a California appellate court removes any doubt whether these additional insureds are third-party beneficiaries entitled to the same rights – and bound by the same duties – as the entity that bought the policy. While the dispute at issue in SMG Holdings was a narrow one – i.e., whether the additional insured was bound by the policy’s arbitration clause – the implications of its holding are far ranging in ways that, in some instances, may benefit the additional insured. For example, because the additional insured is an intended beneficiary under the policy, neither the insurer nor the policyholder may do anything to impair the additional insured’s rights under the policy; if they do, they may be liable for tortiously interfering with the additional insured’s contract rights. This means that (again, by way of example) if the insurer attempts to rescind, or cancel, or amend the policy in a way that impairs the additional insured’s rights, the additional insured may have recourse. It also means that if the policyholder does something untoward that jeopardizes the additional insured’s rights under the policy, the policyholder may be liable to the additional insured for any resulting harm. Read the court decision
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Reprinted courtesy of Scott S. Thomas, Payne & Fears
Mr. Thomas may be contacted at sst@paynefears.com

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California Restricts Principles of “General” Personal Jurisdiction

April 01, 2015 — Kristian B. Moriarty and R. Bryan Martin – Haight Brown & Bonesteel LLP
In BNSF Railway Company v. Superior Court (Kralovetz) (Filed 3/27/2015, No. B260798), the California Court of Appeal, Second District, held a Delaware railroad corporation, with its principal place of business in Texas, was not subject to “general” personal jurisdiction in California, despite California housing 8.1% of the corporation’s total workforce, accounting for 6% of the corporation’s revenue, and containing just under 5% of its total track mileage. Plaintiff, Vicki Kralovetz, filed suit in California Superior Court against defendant, BNSF Railway Company (“BNSF”), and others, for wrongful death. Plaintiff contended her husband was exposed to asbestos products manufactured by BNSF in Kansas while working at a dismantling facility owned by BNSF’s predecessor in interest. Plaintiff claimed the exposure caused her husband to contract mesothelioma, which resulted in his death. Reprinted courtesy of Kristian B. Moriarty, Haight Brown & Bonesteel LLP and R. Bryan Martin, Haight Brown & Bonesteel LLP Mr. Moriarty may be contacted at mmoriarty@hbblaw.com Mr. Martin may be contacted at bmartin@hbblaw.com Read the court decision
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Wisconsin “property damage” caused by an “occurrence.”

April 04, 2011 — CDCoverage.com

In American Family Mut. Ins. Co. v. American Girl, Inc., 673 N.W.2d 65 (Wis. 2004), the insured general contractor was hired by the owner to design and build a warehouse on the owner s property. The general contractor hired a soil engineer to do a soil analysis and make site preparation recommendations. The soil engineer determined that the soil conditions were poor and recommended a compression process which the general contractor followed. After the warehouse was completed and the owner took possession, excessive soil settlement caused the foundation to sink which in turn caused structural damage to the warehouse. The warehouse had to be torn down.



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Real Estate & Construction News Round-Up (11/30/22) – Proptech Trends, Green Construction, and Sustainable Buildings

December 13, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up explores 4 key trends expected to impact proptech in 2023, global investment in green construction technologies, sustainable buildings and their perceived value for tenants in Europe, and more.

• Sitting at the crossroads between real estate and technology, proptech has experienced significant growth, which is expected to accelerate via 4 key trends in 2023. (Zain Jaffer, Forbes)
• Global investment in green construction technologies reached $2.2 billion in 2022, with legislation and technological innovation serving as the key driving forces behind this growth. (Jennifer Kite-Powell, Forbes)
• In Europe, sustainable buildings have increased the asset values for commercial real estate managers, with tenants willing to pay more for efficient buildings. (David Worford, Environment + Energy Leader)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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MTA Implements Revised Contractors Debarment Regulations

July 06, 2020 — Steven M. Charney, Gregory H. Chertoff & Paul Monte - Peckar & Abramson, P.C.
On June 3, 2020, the Metropolitan Transit Authority (“MTA”) published and implemented revised regulations pertaining to the debarment of contractors. The revised regulations address many of the deep concerns raised by the contracting community. Under relevant administrative procedure, the MTA publication of the revised regulations starts a 45 day notice period before the regulations can be adopted as final. The prior regulations essentially required that debarment occur upon a purely formulaic calculation establishing that a contractor: 1) was more than 10% late, or 2) had submitted invalid claims that exceeded the adjusted contract price by a measure of 10%. The revised regulations represent improvements over the prior regulations. Critically, the revised regulations address the primary concern raised by the contracting community, that being the mandate of purely formulaic debarment. Instead, the revised regulations establish a process that includes greater flexibility and discretion before debarment may ensue. Reprinted courtesy of Peckar & Abramson, P.C. attorneys Steven M. Charney, Gregory H. Chertoff and Paul Monte Mr. Charney may be contacted at scharney@pecklaw.com Mr. Chertoff may be contacted at gchertoff@pecklaw.com Mr. Monte may be contacted at pmonte@pecklaw.com Read the court decision
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Senior Housing Surplus Seen as Boomers Spur Building Boom

May 19, 2014 — Brian Louis – Bloomberg
Real estate developers are betting big on U.S. housing for the elderly, preparing for a surge in demand as the population of senior citizens almost doubles in the next 35 years. They may be building too fast. A jump in supply is forecast to cut growth in senior-housing net operating income to 1.8 percent in 2015 and 1.4 percent in 2016 from 3.3 percent this year, according to Green Street Advisors Inc. The increase may hurt health-care real estate investment trusts and companies including Brookdale Senior Living Inc. (BKD), which is buying competitor Emeritus Corp. (ESC) for about $1.4 billion to become the biggest owner of senior properties, the research firm said. “Increased supply is always worrisome in any type of commercial real estate,” said Jim Sullivan, a managing director at Newport Beach, California-based Green Street. “In senior housing, new construction has ramped up considerably over the last two years.” Read the court decision
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Reprinted courtesy of Brian Louis, Bloomberg
Mr. Louis may be contacted at blouis1@bloomberg.net

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