Three Recent Cases Strike Down Liquidated Damages Clauses In Settlement Agreements…A Trend Or An Aberration?
November 01, 2021 —
Adam M. Tuckman - ConsensusDocsBeginning more than one century ago, owners and contractors generally have adopted the convention of including liquidated damages in their contracts to fix potential liability for delay (and other losses) at the inception of the project. The proliferation of liquidated damages clauses in modern contracts can be attributed to economic and legal factors. From the owner’s standpoint, it may be exceedingly difficult to prove the actual cost impact of a delayed completion of the project. A properly calculated liquidated damages rate would save the owner the significant expense of quantifying its delay damages. On the contractor’s side, a reasonable amount of liquidated damages may be preferable to uncapped or unknown liability, allowing the contractor to more accurately price its bid and efficiently allocate risk.
Coinciding with, or perhaps a leading cause of, the industry’s embrace of liquidated damages provisions, was the shift in courts throughout the country from disfavoring such clauses to accepting them (within limits) as an appropriate exercise of contract rights. While some variation exists among the states, courts have generally recognized that liquidated damages clauses are a viable alternative to proof of actual loss so long as (i) actual losses were difficult to quantify, and (ii) the stipulated sum bears a reasonable relationship to the anticipated loss at the time of contracting. See, e.g., Restatement (Second) of Contracts § 356. Conversely, a clause that penalizes the breaching party rather than serving as an estimate of probable loss is likely to be found unenforceable.
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Adam M. Tuckman, Watt, Tieder, Hoffar, & Fitzgerald, LLPMr. Tuckman may be contacted at
atuckman@watttieder.com
Extreme Rainfall Is Becoming More Frequent and Deadly
November 11, 2024 —
Lou Del Bello - BloombergTorrential rains that triggered floods and landslides have killed hundreds of people and displaced millions across parts of Africa, Europe, Asia and the US in recent months.
The unprecedented deluges overwhelmed even communities accustomed to extreme weather and showed the limitations of the early-warning systems and emergency protocols established in many countries to avoid major loss of life.
Climate scientists have warned that an accelerated water cycle is locked into the world’s climate system due to past and projected greenhouse gas emissions, and is now irreversible.
The communities that tend to pay the highest price are often in poorer countries, where environments can be more fragile and governance more patchy, and there are fewer resources to bounce back after a disaster.
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Lou Del Bello, Bloomberg
Courthouse Reporter Series: The Bizarre Case That Required a 117-Year-Old Expert
December 04, 2023 —
Todd Heffner & Di'Vennci Lucas - The Dispute ResolverA recent decision by the Georgia Court of Appeals, Munro v. Georgia Department of Transportation, highlights how overly specific and inflexible rules of evidence can create peculiar results.
Munro involved a dispute over the design of a Georgia intersection. No. A23A0404, 2023 WL 4194716 (Ga. Ct. App. June 27, 2023). The plaintiff alleged that the defendant improperly designed the intersection, never corrected that improper design, and failed to properly maintain the intersection. These claims were dismissed for a very odd reason: the plaintiff’s expert witness wasn’t old enough.
The case arose from a car accident. A vehicle in which the plaintiff Munro was a passenger collided with a tractor trailer crossing an intersection. Munro sued the Georgia Department of Transportation (DOT) for negligently designing, maintaining, and inspecting the intersection. The DOT filed a motion to dismiss for lack of subject matter jurisdiction on the ground of sovereign immunity and a motion to exclude the testimony of the Munros’ expert witness, among other motions. The trial court dismissed the case in full on the sovereign immunity ground and denied the other motions as moot. The Munros appealed.
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Todd Heffner, Troutman Pepper and
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Mr. Heffner may be contacted at
todd.heffner@troutman.com
Cross-Office Team Secures Defense Verdict in Favor of Client in Asbestos Case
November 18, 2024 —
Lewis Brisbois NewsroomSt. Louis/Kansas City, Mo. (October 23, 2024) - St. Louis Partners Tracy J. Cowan and Karen M. Volkman, along with Kansas City Partner Vincent Gunter, secured a defense verdict in a Jackson County, Missouri matter on behalf of a Lewis Brisbois client, which was the successor-in-interest to a life, health and reinsurance firm, against claims brought by an individual who worked in the corporate headquarters and was diagnosed with mesothelioma.
Background
The plaintiff was 62 years old when she was diagnosed with mesothelioma. She worked as a clerk for several years in the 1970s in a 19-story office building that opened in 1963. The plaintiff claimed construction work being performed in the areas where she worked exposed her to asbestos from above the suspended ceiling. The beams and girders in the building were fireproofed with sprayed-on insulation. Although the plaintiff did not perform any maintenance work, she relied on evidence from several operating engineers who worked above the ceiling near the fireproofing to establish the presence of asbestos in the building. The plaintiff submitted claims for negligence and unsafe workplace. At the beginning of trial, the LBBS client had a pending motion for summary judgment on the grounds that the plaintiff’s exclusive remedy was governed by the Missouri Workers’ Compensation Law. The Court denied a motion to continue the trial and submitted the workers’ compensation issue as an affirmative defense.
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Lewis Brisbois
Where Did That Punch List Term Come From Anyway?
March 27, 2019 —
Duane Craig - Construction InformerI’ve often wondered just where the term “punch list” came from, and I’ve found a few sources that seem to make sense, while others not so much.
One person claims it came from the telephone installer process of “punching down” terminals on a block. That seems a bit of a stretch though. A blog writer said it had to do with the term ‘punch’ since it means to “punch something up” as in fix it.
Another blog writer thought it had something to do with a long forgotten practice. Apparently subcontractors used to each have their own hole punches that would punch a hole with a shape unique to them. They would use these punches to indicate they had corrected the deficiency that was their responsibility.
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Duane Craig, Construction Informer
Recent Developments in Legislative Efforts To Combat Climate Change
October 30, 2023 —
Dominick Weinkam & Robert B. Cimmino - ConsensusDocsGovernments across the United States have been increasingly integrating climate considerations into legislation affecting various sectors of the economy. The construction industry is no exception. Recent legislative developments at various levels of government are reshaping construction practices to mitigate the industries’ greenhouse gas emissions and vulnerability to climate-related risks. These developments include incentivizing eco-friendly construction projects, mandating stricter regulations to reduce carbon emissions, and enhancing building resilience to more severe weather events. Contractors must stay abreast of these developments to ensure compliance with new substantive and administrative requirements to remain competitive in a changing environment.
Funding Greener Construction Projects: The Inflation Reduction Act
The federal Inflation Reduction Act (IRA) enacted in August 2022 marked a significant milestone in the pursuit of greener construction. The IRA is widely considered to be the single largest investment into climate change in history, with potential ripple effects throughout the construction industry. The IRA allocates substantial funds for projects utilizing “low-carbon” materials, with an explicit focus on climate-conscious construction. This initiative aligns with the broader goal of curbing emissions from sectors like steel, concrete, and glass, which have been major contributors to the nation’s carbon footprint.
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Dominick Weinkam, Watt Tieder and
Robert B. Cimmino, Watt Tieder
Mr. Weinkam may be contacted at dweinkam@watttieder.com
Mr. Cimmino may be contacted at rcimmino@watttieder.com
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Remediation Work Caused by Installation of Defective Tiles Not Covered
August 19, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe federal district court applied California law to find there was no coverage when the subcontractor was sued for broken tiles on a project. Am. Home Assur. Co. v. SMG Stone Co., 2015 U.S. Dist. LEXIS 75910 (N. D. Cal. June 11, 2015).
The subcontractor installed stone floor tiles at the project. The developer discovered fractures in some of the tiles. The fractured tiles were removed and replaced. This remediation process required the removal and replacement of portions of drywall and concrete subfloor installed by other subcontractors. The developer sued the subcontractor, who tendered the defense to its insurer.
The insurer denied coverage and filed for a declaratory judgment that there was no coverage for the floor tile fracture claims.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Major Changes in Commercial Construction Since 2009
December 11, 2013 —
CDJ STAFFA new report from Jones Lang LaSalle tracks some of the changes that the commercial building industry has seen since 2009. One important change is that financing has returned. In reviewing the report, Buildings.com notes that “commercial lending conditions are improving.” A less positive change is that construction costs have gone up, with the increase in residential construction pushing prices up in commercial construction. Green construction has gone from a luxury to something owners and developers want.
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