Downtown Sacramento Building Riddled with Defects
July 23, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Board of Equalization tower in Sacramento, California has gone through $60 million in repairs to deal with issues such as bats, floods, leaky windows, mold, and glass panels that would “pop off the building with no warning and shatter on the sidewalk,” according to Insurance News. However, an additional $115 million in repairs are planned to deal with “crumbling core plumbing” and “concrete-and-glass exterior,” among other problems.
Now, “a Sacramento attorney filed a $50 million tort claim this month, a first step toward suing the tax-collecting department on behalf of employees who say their bosses downplayed the building's ailments and put workers' health at risk.”
"Even though my lawyers told me not to say this, I don't think it's safe," board Chairman Jerome Horton told Insurance News.
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Slowing Home Sales Show U.S. Market Lacks Momentum: Economy
August 27, 2014 —
Lorraine Woellert – BloombergThe pace of new-home sales fell to the slowest in four months in July, signaling U.S. real estate lacks the vigor to propel faster growth in the economy.
Purchases unexpectedly declined 2.4 percent to a 412,000 annualized pace, weaker than the lowest estimate of economists surveyed by Bloomberg, Commerce Department data showed today in Washington. June purchases were revised up to a 422,000 rate after a May gain that was also bigger than previously estimated.
Housing has advanced in fits and starts this year as tight credit and slow wage growth kept some prospective buyers from taking advantage of historically low borrowing costs. Bigger job and income gains, along with a further slowdown in price appreciation, would help make properties more affordable.
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Lorraine Woellert, BloombergMs. Woellert may be contacted at
lwoellert@bloomberg.net
Can Your Small Business Afford to Risk the Imminent Threat of a Cyber Incident?
November 28, 2018 —
Jeffrey M. Dennis & Heather H. Whitehead – Newmeyer & Dillion LLPCybersecurity incidents are occurring on a daily basis and at an increasingly growing rate. Yet, many small businesses still have not obtained adequate (or any) cyber insurance to address these risks and the costly impacts to the business that will result. In a recent study completed by the Insurance Information Institute1, only about a third of all small businesses polled responded that they have cyber insurance in place, with 70% of respondents replying that they have no plans to purchase a cyber insurance policy in the next 12 months. Most of the businesses indicated that they do not believe they have any need for cyber insurance, yet almost half of those same companies stated they are unprepared to handle cyber threats. A main reason for not purchasing cyber insurance was a lack of understanding about this type of insurance and coverages available.
The Risks for Small Businesses
These statistics are alarming considering that the average cost of a cyber-related loss for a small business has increased 250% in the past two years, and now totals $188,400. In determining whether insurance coverage should be purchased, companies typically assess the perceived risks to the company, the likelihood of such risks occurring, as well as any costs or expenses that may result. For example, most companies regularly obtain a property policy to cover a fire or other casualty that may damage its business location even though such an event is unlikely or unexpected. Yet, cyber incidents are just as likely, if not more likely to occur, and the impacts to a company in the event of an incident are far worse. Many incidents result in a complete suspension of the daily operations of the company for several days or longer.
In addition to financial loss, companies may face the following as a result of a cyber incident:
- Theft, breach or loss of information and data;
- Damage to the company's reputation, brand or image; and
- Regulatory, governance and legal issues.
- How Cyber Insurance can Help
Cyber insurance policies can be obtained to address the losses related to a data breach and may include costs for investigating a breach, notifying people affected by a breach of personally identifiable information, managing the potential damage to reputation and other crisis-management expenses, recovering lost or corrupted data, and related legal expenses. More importantly, well-drafted policies can afford coverage for business interruption losses; i.e. those expenses and lost revenue resulting from a breached system and a company's inability to continue its usual operations. Coverage may also be obtained for "cyber extortion", which covers costs resulting from an extortion event such as ransomware or fraudulent wire transfers.
It is important to keep in mind that cyber insurance is only one component to consider when developing and implementing an overall risk management strategy to prevent cyber incidents. However, taking into account the exposure to a company if and when a cyber incident occurs, it is highly advisable to have this coverage in place.
1Insurance Information Institute, "Small business, big risk: Lack of cyber insurance is a serious threat," October 2018.
Jeff Dennis is the head of the firm's Privacy & Data Security practice. Jeff works with the firm's clients on cyber-related issues, including contractual and insurance opportunities to lessen their risk. For more information on how Jeff can help, contact him at jeff.dennis@ndlf.com.
Heather Whitehead is a Partner in the firm's Privacy & Data Security practice. Heather also practices insurance coverage matters for commercial, retail, industrial, mixed-use, multi-family and residential projects. For more information on how Heather can help, contact her at heather.whitehead@ndlf.com.
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Differing Site Conditions: What to Expect from the Court When You Encounter the Unexpected
September 05, 2022 —
Margarita Kutsin - Ahlers Cressman & Sleight[
1]Seattle Tunnel Partners (“STP”), a joint venture of Dragados USA and Tutor Perini, entered into a $1.4 billion contract with the Washington State Department of Transportation (“WSDOT”) to replace the Highway 99 viaduct. In December 2013, a tunnel boring machine (“TBM”) bearing the moniker “Bertha,” then the largest TBM ever built, measuring 425 feet long and 57 feet in diameter, struck an underground pipe. Shortly after the impact, Bertha overheated and eventually could no longer make forward progress. A massive repair effort ensued causing a 2.5-year delay in reaching substantial completion.
WSDOT sued STP for the delay, seeking liquidated damages of $57 million. In response, STP argued its delay was excusable because it was caused by Bertha’s impact with the pipe, and the steel well casing was a Differing Site Condition (DSC) undisclosed in the contract documents. STP asserted counterclaims against WSDOT, alleging breach of contract and seeking $300 million in damages. Ultimately, a jury found that the steel well casing on the pipe was not a DSC, foreclosing STP’s excusable delay defense and counterclaims, and resulting in a $57 million verdict, plus interest, in favor of WSDOT.
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Margarita Kutsin, Ahlers Cressman & SleightMs. Kutsin may be contacted at
margarita.kutsin@acslawyers.com
Construction Problem Halts Wind Power Park
November 13, 2013 —
CDJ STAFFEngineers have yet to determine why a blade on a wind turbine broke at a wind power plant in Michigan, but as part of their investigation they are halting work on the final 10 turbines. The already completed 60 turbines have been taken out of operation. As a result, the Echo Wind Park is no longer generating power.
Scott Simons, a spokesperson for the project, said “we’re not going to put anyone or anything at risk until we get to the bottom of this.” However, Dennis Buda, the project manager, attributed the broken blade to a manufacturing defect. Construction was planned to end in November.
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Justice Didn’t Ensure Mortgage Fraud Was Priority, IG Says
March 19, 2014 —
Tom Schoenberg and Phil Mattingly – BloombergThe U.S. Justice Department failed to pursue mortgage fraud in the years following the 2008 financial crisis with the same level of commitment that it publicly touted, an internal watchdog said.
While Attorney General Eric Holder said mortgage-fraud cases were among the department’s top priorities, the Federal Bureau of Investigation internally ranked them the lowest of six criminal threats, according to a report released today by Inspector General Michael Horowitz. The FBI devoted fewer resources to such cases even though Congress allocated $196 million for fiscal years 2009 to 2011 to pursue such conduct.
The Justice Department has been criticized by lawmakers and judges for not bringing more criminal cases against individuals following the collapse in housing prices and ensuing market turmoil. In August, Holder retracted a public statement after Bloomberg News reported that the department had inflated its track record of mortgage-fraud prosecutions.
Mr. Schoenberg may be contacted at tschoenberg@bloomberg.net; Mr. Mattingly may be contacted at pmattingly@bloomberg.net
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Tom Schoenberg and Phil Mattingly, Bloomberg
Protect Your Right To Payment By Following Nedd
August 03, 2022 —
Denise Motta - Gordon & Rees Construction Law BlogIn order to preserve your right to payment, you must satisfy the contractual requirements supporting a change order for the increased costs or time due to the delay. The key to the successful presentation of change order claims is educating your team on the following:
1. NOTICE
- Review the change order and notice provisions of your contracts. Make your contract searchable and insert the term “Noti” and look for the items listed below.
- Who: Check the designated representative for notice.
- It may not be the project manager.
- Confirm who can authorize the change order.
- Is owner approval required?
- Ensure that the party approving the change order has authority to do so.
- What: Check for specific information required by the contract.
- Provide ALL information available.
- If certain information is not yet available, state that the information will be provided when available.
- Reserve all rights to amend and submit additional information.
- Request both an increase to the Contract Sum and Contract Time.
- Make the request even if you do not believe the delay or time necessary will cause a significant impact.
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Denise Motta, Gordon Rees Scully Mansukhani, LLPMs. Motta may be contacted at
dmotta@grsm.com
WA Supreme Court Allows Property Owner to Sue Engineering Firm for Lost Profits
February 25, 2014 —
Beverley BevenFlorez-CDJ STAFFIn the Daily Journal of Commerce, Scott A. Smith and James H. Wendell discussed the recent Washington Supreme Court decision in Donatelli v D. R. Strong Consulting Engineers. The court’s ruling casts “doubt on a company's ability to limit its liability for economic losses arising out of a contract dispute.”
The Donatellis hired D. R. Strong Consulting Engineers to develop vacant land in King County, however, the “project did not go according to plan and the real estate market collapsed before the project was completed,” according to the Daily Journal of Commerce. The “Donatellis lost their property through foreclosure” and then “sued the engineering firm for more than $1.5 million in lost profits.”
D. R. Strong Consulting Engineers asked for the negligence claims to be dismissed “because the parties' contract contained a provision limiting the engineering firm's liability to the amount of its fee for ‘any injury or loss on account of any error, omission, or other professional negligence.’” However, the Washington Supreme Court ruled that “the case could proceed in the trial court on a theory that the engineers could be liable if they made negligent misrepresentations that induced the Donatellis to enter into the contract in the first place.”
Smith and Wendell stated that because of “this decision, engineering, architectural, construction, and other professional service companies may now face damage claims they thought they were contractually protected against.”
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