Seattle Washington Building Expert Directory

Foundation Arbitration Doesn’t Preclude Suing Over Cracks

March 28, 2012 — CDJ STAFF

The Louisiana Court of Appeals has reversed the decision of a lower court, allowing a construction defect case to go through. In Greer v. Town Construction Company, the Greers hired Town Construction to build a home in Baton Rouge. The business relationship went sour, with disputes over “costs, change orders, workmanship, and timeliness issues.”

Town Construction filed an arbitration claim for the unpaid contract balance. In the counterclaim, the Greers made claims of mold and mildew problems, and wall cracks that they attributed to a “structural defect in the foundation.” In arbitration, Town Construction was awarded the full contract balance plus extra costs and interest, while the Greers were awarded for their structural claims.

Three years later, the Greers found additional cracks and filed a suit against Town Construction. Town Construction argued that the Greer’s lawsuit should be dismissed, as the claims had already been through the arbitration process. The district court agreed with Town Construction and dismissed the suit.

The appeals court noted that the Greers would have no ground for a suit if the arbitration was a “valid and final judgment,” and went on to note that there was no evidence in the trial record that the arbitration met this qualification. The court noted that although it was clear that both parties had agreed to the decisions of the arbiter, under Louisiana law, arbitration is not final until it has been “rendered by a court with jurisdiction over subject mater and over parties.”

The court remanded the case to the lower court, noting that “the district court is obligated to first determine whether a valid arbitration award is in existence and had been confirmed before considering the merits of the exception. The court noted that their decision “should not be read to express any opinion as to the merits of the claims or as to the propriety of damages sought in the Greer’s lawsuit.”

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Topic 606: A Retrospective Review of Revenue from Contracts with Customers

October 12, 2020 — Christopher Sisk & Robert Mercado - Construction Executive
The anticipation has been building regarding implementation of the new revenue recognition standard, known as Topic 606, by private companies. Public companies have reported under Topic 606 since the beginning of 2019. For private companies, the time is now. As of January 2020, private companies became subject to Topic 606 for all entities with a year-end of Dec. 31, 2019, or subsequent. However, with the COVID-19 pandemic affecting businesses across the board, this year any company with a year-end financial statement not yet issued can defer implementation of Topic 606 until the contractors’ next year end that falls after Dec. 15, 2020. What have we learned about the impact of Topic 606, if any, on construction contractors’ financial statements? The most significant impact relates to the presentation of contract assets and contract liabilities, and the disclosures associated with Topic 606. The recording of what is known as “the cost to fulfill a contract” is another area that has been affected. PRESENTATION OF CONTRACT ASSET AND CONTRACT LIABILITY A contract asset is defined in Topic 606 as an entity’s right to consideration in exchange for goods or services the entity has transferred to a customer, conditional on something other than the passage of time. Reprinted courtesy of Christopher Sisk & Robert Mercado, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Sisk may be contacted at Christopher.sisk@marcumllp.com Mr. Mercado may be contacted at Robert.mercado@marcumllp.com Read the court decision
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OSHA Begins Enforcement of its Respirable Crystalline Silica in Construction Standard. Try Saying That Five Times Real Fast

November 02, 2017 — Garret Murai - California Construction Law Blog
On October 23, 2017, the U.S. Occupational Safety and Health Administration (OSHA) began enforcement of its Respirable Crystalline Silica in Construction Standard (Construction Silica Standard). OSHA enforcement of its Construction Silica Standard actually began on September 23, 2017, but for a period of 30 days, OSHA offered compliance assistance in lieu of enforcement for employers who were making good faith efforts to comply with the Construction Silica Standard. California’s Occupational Safety and Health Administration (Cal/OSHA) has a nearly identical construction silica standard that requires employers to limit worker exposure to respirable crystalline silica above 25 micrograms per cubic meter of air (25 μg/m3) as an 8-hour time-weighted average (TWA) under any foreseeable condition. 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

Stormy Skies Ahead? Important News Regarding a Hard Construction Insurance Market

August 13, 2019 — Jason M. Adams - Gibbs Giden
Word out of the construction insurance brokerage community is that the construction insurance industry has entered a hard market, seemingly overnight. Property (i.e. builder’s risk), liability and wrap-up markets are all reacting unfavorably, resulting in higher premiums and decreased availability of coverage options. The prospect of a hard market has been looming for some time given massive weather driven property losses and historically low rates (among other factors). It appears the time is upon us. Key takeaways for construction professionals are:

Expect insurance premiums to go up, potentially significantly, at renewal time and/or when seeking a new project specific program (e.g., an OCIP, CCIP, etc.).
Expect that the available coverage will get worse. Carriers may be unable to offer once standard coverage enhancements and/or may add new exclusions.
If quotes have been offered consider locking them in now, before the underwriters are forced to increase the rates/restrict coverage, or pull the quotes entirely.
With respect to wrap-ups and other project specific programs, consider requesting extensions now if the project is expected to go beyond the current policy term.
As always, the risk management team (lawyer, broker, risk manager) should work together to carefully review contracts and coverage. This will become even more important if the carriers start to introduce new exclusions as a result of the hard market.

Hard markets come and go. The tough times are when true construction insurance professionals separate themselves from the pack and become the key to weathering the storm. Jason M. Adams, Esq. is Senior Counsel at Gibbs Giden representing construction professionals (owners/developers, contractors, architects, etc.) in the areas of Construction Law, Insurance Law and Risk Management, Common Interest Community Law (HOA) and Business/Civil Litigation. Adams is also a licensed property and casualty insurance broker and certified Construction Risk & Insurance Specialist (CRIS). Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms. Mr. Adams can be reached at jadams@gibbsgiden.com. Read the court decision
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Indemnity Provision Provides Relief to Contractor; Additional Insured Provision Does Not

January 06, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The court found that the contractor was entitled to relief under the contractual indemnity provision, but not the policy's additional insured clause. Chatelain v. Fluor Daniel Constr. Co., 2015 La. App. LEXIS 2257 (Ct. App. La. Nov. 10, 2015). Following Hurricanes Katrina and Rita, FEMA retained Fluor Enterprises, Inc. as a contractor to transport and install FEMA trailers. Fluor entered a Blanket Ordering Agreement (BOA) with Bobby Reavis Contracting, Inc. to transport and install the trailers. The BOA provided Reavis would defend and indemnify Fluor from all liability arising from the subcontractor's work. Reavis also agreed to name Fluor as an additional insured under its CGL policy. Reavis installed a FEMA trailer for Connie Chatelain. Ms. Chatelain was injured when she fell exiting her FEMA trailer. She sued Fluor and Reavis. Fluor tendered the suit to Reavis and Reavis' insurer, Guilford Insurance Company. The tender was rejected and Fluor filed a third-party action demanding indemnification, reimbursement of all legal expenses and damages for insurer misconduct. 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

Appraisal May Include Cause of Loss Issues

March 21, 2022 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court determined that an appraisal can include causation issues when determining the amount of loss. B&D Inv. Grp., LLC v. Mid-Century Ins. Co., 2021 U.S. Dist. LEXIS 246853 (N.D. Ill. Dec. 28, 2021). B&D commercial building was damaged by hail. B&D submitted a claim to Mid-Century, but the parties disagreed as to the damage. Mid-Century found there was hail damage to metal vents on the roof and estimated the repair costs to be $4,271.95. Mid-Century found no hail damage to the roof itself. B&D disagreed and insisted that there was additional damage to the property, specifically the roof. B&D requested an appraisal, but Mid-Century denied the request. Mid-Century found that the condition of the roof was due to wear and tear and therefore constituted an excluded cause under the policy. B&D filed suit seeking a declaratory judgment compelling the parties to proceed with an appraisal. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Legislative Changes that Impact Construction 2017

May 10, 2017 — Christopher G. Hill - Construction Law Musings
Well, the Virginia General Assembly has finished its yearly run through the legislative process and this year there are a few highlights for those of us in the construction industry. It is always interesting to see what issues are the big ones that get a lot of attention. This year the changes impacted public procurement, VOSH fines, and employment of unlicensed individuals on a job site. These changes to the various statutes that impact the day to day operation of the construction industry in Virginia will go into effect on July 1, 2017. Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

What Every Project Participant Needs to Know About Delay Claims

August 05, 2024 — Andrew G. Vicknair - The Dispute Resolver
A “delay” on a construction project is defined as the stretching out of the time for completion of certain key milestone scopes of work which can impact the completion date of an entire project, due to some circumstances or events that were not reasonably anticipated when the project began. 2 Construction Law ¶ 6.01 (Matthew Bender, 2024). While delays can be caused by any number of events, the most common are defective plans and specifications; design changes; severe weather and other, similar unforeseeable events; unforeseen or differing site conditions; unavailability of materials or labor; labor inefficiencies or stoppages; contractor negligence; and owner influences, including construction changes or outright interference by the owner or its agents. If the project schedule is not recovered following a delay, then the project schedule will likely be extended, resulting in an increase in the contractor’s costs of performance. A contractor that has experienced a delay on a project can take certain actions to pursue recovery of any damages the contractor may have incurred. However, to do so it is important to understand the different types of delays and the methods for establishing the delays. I. Types of Delays Delays may be categorized as (1) critical versus non-critical delays, (2) excusable versus non-excusable delays, and (3) compensable versus non-compensable delays. A critical delay is a delay that affects the project completion date and delays the entire project. In essence, a critical delay is one that will extend the critical path of a project. A non-critical delay is a delay that has no effect on the project’s critical path. Courts have recognized that delays to work not on the critical path will generally not delay the completion of a project. G.M. Shupe, Inc. v U.S., 5 Cl. Ct. 662, 728 (1984). Such a non-critical delay may affect the completion of certain activities, but does not affect the completion date of the entire project. In order for a delay to provide the basis for a claim for additional time or money, the delay must impact critical path activities on the project schedule. Read the court decision
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Reprinted courtesy of Andrew G. Vicknair, D'Arcy Vicknair, LLC
Mr. Vicknair may be contacted at agv@darcyvicknair.com

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