More (and Simpler) Options Under New Oregon Retention Law
October 21, 2024 —
Michael Yelle - Ahlers Cressman & Sleight PLLCSimilar to the changes made by the Washington Legislature last year, the Oregon Legislature recently changed its retention law. Oregon public works agencies and large commercial project owners are now required to accept surety bonds in lieu of withholding retainage on construction projects. There is also no longer a requirement to deposit retention funds in an interest-bearing escrow account.
The owner or public agency must accept the bond in lieu of retainage unless specific grounds exist. For example, public agencies must find there is “good cause” for rejection of the bond based on the “unique project circumstances. Private owners have less discretion to reject a bond and if the bond meets the statutory requirements, per ORS 701.435(1)(a) “the owner and lender shall accept” the bond “in lieu of all or any portion of the retainage…”
Courts have not analyzed when “good cause” exists for public agencies to reject bonds or exactly what will allow a private owner to reject a bond. However, an agency or owner cannot have a general policy to reject retention bonds. The statute does not provide next steps if the contractor disagrees with a decision to reject the bond. It may be necessary to proceed under the contract’s dispute resolution procedure or it may be more appropriate to take the issue directly to the courts.
Read the court decisionRead the full story...Reprinted courtesy of
Michael Yelle, Ahlers Cressman & Sleight PLLCMr. Yelle may be contacted at
michael.yelle@acslawyers.com
The Peak of Hurricane Season Is Here: How to Manage Risks Before They Manage You
September 21, 2020 —
Vincent E. Morgan - Construction ExecutiveThe Atlantic hurricane season runs from June 1 to Nov. 30, but it peaks sharply during August, September and October. The latest forecasts predict this will be one of the most active seasons in history, in terms of frequency and severity, though it is always important to remember that even a single hurricane or tropical storm making landfall can still be a devastating event.
Hurricanes pose unique risks to the construction industry ranging from project and labor force disruptions to concerns about the availability and price of construction materials. This is even more true this year, which requires merging hurricane preparedness and response plans with the realities of COVID-19. Because hurricanes cannot be avoided, preparing for them is the only way to manage these risks. Ensuring the personal safety and wellbeing of affected individuals is the first priority. After that, here are some key issues, and suggestions for handling them, that may help guide construction companies through the storm.
SITE PROTECTION
Construction contracts often place responsibility for site protection on contractors. Where those duties exist, failing to properly carry them out can lead to enormous losses that then turn into liability claims. This could be anything from removing materials that can become projectiles, covering exposed ventilation shafts, and sealing electrical conduits to ensuring that key equipment such as generators and pumps can remain functional in a storm. One way to approach it is to imagine sustained 100-mph winds and relentless water, and then make sure preparedness efforts are likely to survive that kind of test. This is not the time for guessing. It is far better to go through a rigorous analytical process now than in a courtroom years later.
Reprinted courtesy of
Vincent E. Morgan, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Pennsylvania Court Finds that Two Possible Causes Can Prove a Product Malfunction Theory of Liability
September 29, 2021 —
Gus Sara - The Subrogation StrategistIn Allstate Ins. Co. v. LG Elecs. USA, Inc., No. 19-3529, 2021 U.S. Dist. LEXIS 127014, the United States District Court for the Eastern District of Pennsylvania considered whether plaintiff’s expert engineer’s opinion that there were two possible causes of a fire—both related to alleged product defects within a refrigerator manufactured by the defendant—was sufficient to support the malfunction theory of products liability. The court found that because both potential causes imposed liability on the product manufacturer and the expert ruled out misuse of the product, as well as all external causes of the fire, it was not necessary for the engineer to identify a specific cause under the malfunction theory. The court also found that the expert’s investigation and opinions met the criteria set forth in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) and the Federal Rules of Evidence and, thus, were admissible.
LG Electronics arose from a fire at the home of Thomas and Lisa Ellis. The public sector fire investigator identified the area of fire origin as the top of a refrigerator manufactured by LG Electronics USA, Inc. (LG). The Ellises filed a claim with their homeowner’s insurance carrier, Allstate Insurance Company (Insurer). Insurer retained a fire investigator and an electrical engineer to investigate the origin and cause of the fire. The fire investigator agreed with the public sector investigator that the fire originated at the top of the refrigerator. The engineer conducted a forensic inspection of the scene and ruled out all potential external ignition sources. He then examined the internal components of the refrigerator. He found arcing activity on a wire at the front top of the refrigerator. He opined that there were two possible causes of the fire: either the heater circuit insulation failed over time due to mechanical damage, or the heat from the internal light fixture ignited combustible components of the refrigerator. Since the engineer ruled out improper use of the refrigerator, he opined that the damage was caused by a manufacturing defect.
Read the court decisionRead the full story...Reprinted courtesy of
Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
Stick to Your Guns on Price and Pricing with Construction Contracts
December 20, 2021 —
Christopher G. Hill - Construction Law MusingsIn recent posts here at Construction Law Musings, I have discussed the need for clarity of contract, trusting your gut, and assuring that your contract has the necessities. All of these bits of advice (along with my usual advice of working with an experienced construction attorney) are true with regard to commercial construction contracts and apply ten fold in a residential construction (read working for a single/family owner on their house). With a residential project, you, as a construction contractor, are likely to be dealing with the difficult combination of an owner with little or no experience relating to how a construction project is supposed to work and an owner that is emotionally invested in the project because it is their home.
Because of the above, and the fact that your project is likely the biggest single investment that the owner has made outside of possibly a prior house, the residential owner will likely be looking over your shoulder and may very well attempt to negotiate down some of the costs that they perceive as the project moves forward. In short, the average person 1. does not know how much the project truly costs the contractor, and 2. feels that because they hold the cash, they can and should have some control over the individual costs of the construction thus making those costs, and by extension, their contract, negotiable right up until the end.
Read the court decisionRead the full story...Reprinted courtesy of
The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
ASCE Statement on The Partial Building Collapse in Surfside, Florida
June 28, 2021 —
Tom Smith - American Society of Civil EngineersThe following is a statement by Tom Smith, Executive Director, American Society of Civil Engineers (ASCE):
WASHINGTON, DC. – We are saddened by the tragic news coming out of Surfside, Florida, regarding the fatal partial building collapse of a condominium early Thursday morning. Safety is the top priority of every civil engineer, and protecting public health and safety is core to our mission at ASCE. We share our deepest condolences to all of those affected by this tragedy.
Collapses like these are fortunately highly unusual and extremely rare. However, it is imperative to identify the root cause of failures when they do occur, and to ensure that proactive steps are taken to prevent future incidents. ASCE fully supports the need for continued engineering assessments to pinpoint the cause of the collapse, and we stand ready to support official investigations with technical expertise and advice available through our 150,000 civil engineer members worldwide.
While rescue and recovery operations are underway, it is important that we support our first responders who are conducting essential rescue efforts and are operating as quickly as possible. We will also continue to keep those who have been injured and those who have not yet been accounted for in our hearts and thoughts, and we share our heartfelt sympathies to all of those affected.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
Read the court decisionRead the full story...Reprinted courtesy of
Guilty Pleas Draw Renewed Interest In Nevada’s Construction Defect Laws
December 09, 2011 —
CDJ STAFFA report this week by David McGrath Schwarz of the Las Vegas Sun suggests that Nevada’s construction defect laws will be a point of much contention in upcoming legislative sessions. The report cites renewed interest in the state’s construction defect laws due to ongoing federal investigations of construction defect attorney Nancy Quon and construction company owner Leon Benzer. Guilty pleas have been entered by at least ten individuals including an attorney, property managers, straw purchasers, and former HOA board members.
The article suggests that Nevada’s Chapter 40 laws are easily manipulated to the detriment of Nevada’s homebuilding industry. Construction industry lobbyists have tried unsuccessfully to change the laws in past legislative sessions.
The Sun’s article speculates that the building industry might be able to gain legislative concessions due to the volume of guilty pleas and what it refers to as examples of Chapter 40 abuses. ”With federal authorities collecting guilty pleas, the construction industry has prime examples of the system being abused, and how lucrative it can be for attorneys.”
Read the full story…
Read the court decisionRead the full story...Reprinted courtesy of
Builder’s Be Wary of Insurance Policies that Provide No Coverage for Building: Mt. Hawley Ins. Co v. Creek Side at Parker HOA
May 01, 2014 —
David M. McLain – Higgins, Hopkins, McLain & Roswell, LLCOn the heels of a recent order regarding coverage under a Comprehensive General Insurance policy issued by Mt. Hawley Insurance Company (“Mt. Hawley”), builders should be very wary of CGL policies providing no coverage for property damage.
On January 8, 2013, District Court Judge R. Brooke Jackson granted a motion for declaratory judgment filed by Mt. Hawley. The order states that the subject insurance policies issued by Mt. Hawley to Mountain View Homes II, LLC (“MV Homes”), the builder developer of the Creek Side at Parker development (the “Project”), did not provide coverage for any of the work performed by MV Homes or its subcontractors on the Project.
MV Homes originally began construction on the Project in 2002 and completed construction in 2005. MV Homes was insured by National Fire and Marine Insurance Company (“National Fire”) and Mt. Hawley. In December 2008, Creek Side at Parker Homeowners Association, Inc. (“the HOA”) served notice on MV Homes. The HOA then instituted a construction defect lawsuit on June 1, 2009 against MV Homes and others. MV Homes initially demanded a defense and indemnity from National Fire, which provided a defense. Then, after two years, MV Homes demanded a defense and indemnity from Mt. Hawley in July 2011. Mt. Hawley denied coverage and did not provide a defense. The case was settled soon after, and National Fire reserved or assigned claims against Mt. Hawley.
Read the court decisionRead the full story...Reprinted courtesy of
David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
The Administrative Procedure Act and the Evolution of Environmental Law
September 19, 2022 —
Anthony B. Cavender - Gravel2GavelEnacted in 1946, the Administrative Procedure Act (APA) has provided a lasting framework for federal agency rulemaking and adjudication, as well as establishing the power of the federal courts to exercise judicial review over these actions of the federal bureaucracy. The APA is codified at 5 U.S.C. §§ 551–559, and §§ 701-706. There have been very few amendments made to the APA over these years, which indicates that Congress is reasonably satisfied with its administration and implementation.
What follows is an overview of how the APA has been used by the courts to resolve disputes involving the federal agencies, with particular attention being paid to the development of environmental law and practice. While there have been very few amendments to the statute, the courts have been free to enlarge upon the sometimes-opaque text of the APA to, in effect, change the law, even in an era when “textual fidelity” to the language of the statute is the prevalent approach.
Read the court decisionRead the full story...Reprinted courtesy of
Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
