When is an Indemnification Provision Unenforceable?
September 06, 2021 —
Christopher G. Hill - Construction Law MusingsVirginia Code Sec. 11-4.1 makes indemnification provisions in construction contracts that are so broad as to indemnify the indemnitee from its own negligence unenforceable. Of course, this begs the question as to what language of indemnification provisions make them unenforceable.
A case from the City of Chesapeake Virginia Circuit Court examined this question. In Wasa Props., LLC v. Chesapeake Bay Contrs., Inc., 103 Va. Cir 423 [unfortunately I can’t find a copy to which to link], Wasa Properties (“Wasa”) hired Chesapeake Bay Contractors (“CBC”) to perform utility work at Lake Thrasher in the Tidewater area of Virginia. Wasa then alleged that CBC breached the contract and caused over $400,000 in damages due to incorrectly installed water lines. Wasa used the following indemnification language as the basis for its suit:
To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and his agents and employees from and against all claims, damages, losses, and expenses, including but not limited to attorney’s fees arising out of or resulting from the performance of the Work.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
A Survey of Trends and Perspectives in Construction Defect Decisions
November 27, 2013 —
CDJ STAFFThomas F. Segella, Ellen H. Greiper, and Matthew S. Lerner, partners at the firm Goldberg Segalia, together with Suzin L. Raso, an associate of the firm, have prepared a wide-ranging survey of cases, in their commentary, “Emerging Trends and Changing Perspectives on Construction Defect Claims.
The authors examine 11 coverage cases, representing decisions from eight states, and 15 cases of litigation, here covering 11 states. In each case, they give a one-sentence summary, a further discussion of the case, and they end with a practice note.
They start with Alabama, noting that the court found that “faulty workmanship is not an occurrence,” looking at the recent case of Owners Insurance Co. v. Jim Carr Homebuilders, LLC. Here they note that under Alabama law, “there was no damage to personal property or property of others; therefore, there was no ‘occurrence.’” They also note that “the policy involved did not contain a ‘subcontractor exception.’”
In Georgia, they noted, the courts concluded that “damage to insured’s completed work is an ‘occurrence.’” Here they cite a recent decision of the Georgia Supreme Court, noting that the court looked at cases from Connecticut, South Carolina, Illinois, Texas, as well as the Fourth and Tenth Circuits.
Under litigation, they look at such aspects of construction defect litigation such as the application of the economic loss doctrine in Kansas and Florida, and how the courts view arbitration agreements in states including New Jersey, Louisiana, and Colorado.
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Patti Santelle Honored by Rutgers School of Law with Arthur E. Armitage Sr. Distinguished Alumni Award
March 01, 2021 —
Patricia Santelle - White and WilliamsWhite and Williams is proud to announce that Patti Santelle, Chair Emeritus, will be honored by the Rutgers School of Law-Camden Alumni Association with the 2020 Arthur E. Armitage Sr. Distinguished Alumni Award. The Armitage Award was established in 1983 in memory of Armitage, who, with a group of interested citizens, founded both the South Jersey Law School in 1926 and its companion College of South Jersey in 1927. Past recipients include governors, member of Congress, state and federal judges, and industry leaders.
Patti, a 1985 graduate, is a Co-Chair of the Executive Committee of the newly established Rutgers Law Alumnae Network and a Past Chancellor and long-time member of the Board of the Rutgers-Camden Law Alumni Association. While in law school, she was President of the Student Bar Association, winner of the Hunter Advanced Moot Court Competition and a member of the National Moot Court Team. In 2010, Patti received the Scarlet Oak Meritorious Service Award from Rutgers University for her contributions as an alumni leader and student mentor at the law school. For the past seven years, she served as the Managing Partner and Chair of the Executive Committee at White and Williams, the first woman in the firm’s history and in the City of Philadelphia to serve in that role in a major law firm.
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Patricia Santelle, White and WilliamsMs. Santelle may be contacted at
santellep@whiteandwilliams.com
Avoiding Project Planning Disasters: How to Spot Problem Projects
December 13, 2021 —
James T. Dixon - Construction ExecutiveThe burden of project planning falls first and foremost upon a project owner. Owners have varying levels of sophistication, and the smart ones fill weak spots on their staff by engaging project managers, construction managers and owner’s representatives.
Typically, the owner then delegates the largest part of the project’s plan to the contractor in terms of creation and execution of a critical path method schedule during the construction phase. Before accepting that burden, a wise contractor will evaluate the project to determine if it is on a path to success or disaster. It is guaranteed that an owner’s problems will become the contractor’s problems in one way or another.
There are legendary projects that were also legendary planning failures. The iconic Sydney Opera House is one. The design competition began in 1955. After selecting the architect, the owner implemented a team that involved that architect, a structural engineer and an executive committee of inexperienced politicians. The original plan included a budget of $7 million (Australian) and a completion schedule spread over four years. That executive committee forced the project to start before designs were complete, doubled the number of theaters and then put a strangle-hold on the payment process, eventually causing the architect to quit and return to Europe with the construction drawings. The Opera House opened for its first performance in 1973—14 years late and $98 million over budget.
Reprinted courtesy of
James T. Dixon, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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DC Circuit Upholds EPA’s Latest RCRA Recycling Rule
September 23, 2019 —
Anthony B. Cavender - Gravel2GavelOn July 2, 2019, the U.S. Court of Appeals for the District of Columbia Circuit decided the case of California Communities Against Toxics, et al. v. EPA. In this decision, the court rejected the latest petition to strike or vacate EPA’s 2018 revisions to the Resource Conservation and Recovery Act (RCRA) hazardous waste recycling rules. In 1985, EPA promulgated a new regulatory definition of “solid waste,” which is the linchpin of the agency’s very stringent hazardous waste management rules. (See the rules located at 40 CFR Sections 260-268.) Unless a material is a “solid waste” as defined by the rules, it cannot also be a hazardous waste.
The 1985 rules grappled with the challenges posed by recycling practices, and attempted to distinguish between legitimate recycling which is not subject to hazardous waste regulation, and other more suspect forms of recycling. The rules are complex and replete with nuance. In doing so, EPA was adhering to RCRA’s statutory mandate that it develop appropriate rules to govern the treatment, storage and disposal of hazardous waste, while also promoting “properly conducted recycling and reuse.” The DC Circuit reviewed the 1985 rules in the seminal case of American Mining Congress v EPA, 824 F.2d 1177 (1987), (AMC) and stressed that only those materials that were truly discarded could be regulated as solid waste; for instance, those materials that were destined for immediate recycling or recovery in an ongoing production process were not discarded and hence were not solid waste. Over the years, the court has struggled to clarify the basic holding of AMC in numerous cases while EPA has frequently revised and amended the RCRA rules, and in particular the definition of solid waste, in an attempt to balance the policies mandated by the statute.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Arbitration Denied: Third Appellate District Holds Arbitration Clause Procedurally and Substantively Unconscionable
February 15, 2021 —
Stephen M. Tye & Lawrence S. Zucker II - Haight Brown & BonesteelIn Cabatit v Sunnova Energy Corporation, the Third Appellate District held that an arbitration clause in a solar power lease agreement was unenforceable because it was procedurally and substantively unconscionable.
In Cabatit, Mr. and Ms. Cabitat entered into a solar power lease agreement (the “Agreement”) with Sunnova Energy Corporation (“Sunnova”). Ms. Cabitat, who signed the agreement, speaks English but does not understand complicated or technical terms. The salesperson scrolled through the agreement language and Ms. Cabatit initialed where the salesperson indicated, even though she did not understand most of what he was saying. The salesperson did not explain anything about the arbitration clause nor did he provide Ms. Cabatit with a copy of the Agreement.
Reprinted courtesy of
Stephen M. Tye, Haight Brown & Bonesteel and
Lawrence S. Zucker II, Haight Brown & Bonesteel
Mr. Tye may be contacted at stye@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Harrisburg Sought Support Before Ruinous Incinerator Retrofit
September 20, 2017 —
Jonathan Barnes & Richard Korman - Engineering News-RecordWhen former Harrisburg, Pa., Mayor Stephen Reed (D) and his aides set out to retrofit the city’s aging incinerator in late 2000, the project spun out of control over the coming years, enlarging the debt the city owed on the facility to $300 million and sinking Harrisburg into financial ruin.
Reprinted courtesy of
Jonathan Barnes, ENR and
Richard Korman, ENR
ENR staff may be contacted at ENR.com@bnpmedia.com
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Allegations of Actual Property Damage Necessary to Invoke Duty to Defend
January 17, 2013 —
Tred Eyerly, Insurance Law HawaiiThe Fifth Circuit held that under Texas law, conclusory allegations of property damage in the underlying complaint did not trigger the insurer's duty to defend. PPI Tech. Serv., L.P. v. Liberty Mut. Ins. Co., 2012 U.S. App. LEXIS 24571 (5th Cir. Nov. 29, 2012).
Royal Production Company was the lessor and operator of three leases for oil exploration. Royal retained the insured, PPI, as its agent to assist in well-planning and oversee the drilling of wells on the leases.
A well was drilled on one of the three leased areas, but in resulted in a dry hole. It was later discovered that the well had been drilled on the wrong lease. Royal sued PPI for negligence, claiming that PPI caused the drilling rig to be towed to the wrong location, resulting in a dry hole and "property damage."
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com