A Classic Blunder: Practical Advice for Avoiding Two-Front Wars
August 23, 2021 —
William Underwood - ConsensusDocs“Ha ha! You fool! You fell victim to one of the classic blunders – the most famous of which is ‘never get involved in a land war in Asia’ – but only slightly less well-known is this: ‘Never go in against a Sicilian when death is on the line.’”[1]
Vizzini forgot to include “never fight a two-front war with your owner and a subcontractor” on his list of classic blunders, but it certainly belongs there. This article examines practical tips and tricks for general contractors to avoid the classic blunder of a two-front war, including recommended contract provisions and sound project documentation practices.
Admittedly, general contractors face a wide array of obligations on a project. And perhaps one of the most delicate balancing acts is managing relationships with the owner and your subcontractors. But far too often general contractors find themselves in the difficult position of fighting a two-front war against one (or more) of their subcontractors and the project owner.
But this does not always have to be the case—there are ways for general contractors to reduce the risk of finding themselves in a two-front war. And every project does not have to devolve in a circular firing squad with you in the middle. That said, this article comes with the caveat that a general contractor cannot avoid a two-front war in every instance, nor does this article examine every imaginable way to reduce the risk of a two-front war (see e.g. https://www.consensusdocs.org/pass-through-subcontractor-claims-liquidating-agreements-and-avoiding-a-two-front-war/). But this article will provide an overview of several key tools that can be used to minimize the risk of falling into a classic blunder.
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William Underwood, Jones Walker LLPMr. Underwood may be contacted at
wunderwood@joneswalker.com
Navigating Threshold Arbitration Issues in Construction Contracts
April 29, 2024 —
Daniel D. McMillan and TJ Auner - The Dispute ResolverIncluding an arbitration clause in your construction contract may not mean that your dispute will be confined to arbitration. Instead, parties often find themselves in court litigating threshold issues related to the existence and/or enforceability of an arbitration clause. Common issues include whether the underlying contract containing the arbitration clause is valid, whether the dispute falls within the scope of the clause, whether the parties complied with contractual prerequisites to arbitration, whether issues related to arbitrability are decided by the court or arbitrator, and whether one of the parties has waived their right to arbitrate. This blog post highlights two recent construction cases addressing threshold issues that a party seeking to enforce—or oppose enforcing—an arbitration clause might face.
Seifert v. United Built Homes, LLC: Delegating Issues of Arbitrability to the Arbitrator
In Seifert, an owner sued a homebuilder in Texas federal court for breach of contract and sought damages and declaratory relief. No. 3:22-CV-1360-E, 2023 WL 4826206 (N.D. Tex. July 27, 2023). The builder moved to compel arbitration. The owner opposed and argued that: (1) there was no agreement to arbitrate because the underlying contract was null and void, and (2) its claim for declaratory relief fell outside the scope of the arbitration clause. The court did not address the merits of either argument. Instead, it determined that these were issues for the arbitrator to decide.
Reprinted courtesy of
Daniel D. McMillan, Jones Day and
TJ Auner, Jones Day
Mr. McMillan may be contacted at ddmcmillan@jonesday.com
Mr. Auner may be contacted at tauner@jonesday.com
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Bremer Whyte Brown & O’Meara, LLP is Proud to Announce Jeannette Garcia Has Been Elected as Secretary of the Hispanic Bar Association of Orange County!
February 03, 2020 —
Bremer Whyte Brown & O'Meara LLPThe Hispanic Bar Association of Orange County is an affiliate bar of the OCBA. The OC HBA promotes education, unity, and excellence in the Hispanic legal community by expanding the business and professional opportunities available to its members, enhancing the members’ business and professional stature in the Hispanic community, increasing the participation of Hispanic leaders in civic affairs and enhancing the quality of life for the members and the community.
Associate Jeannette Garcia has been a member of the OC HBA since 2012, a board member since 2017 and an executive board member since 2018. Jeannette will now serve as Secretary of the OC HBA for the 2020 term.
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Bremer Whyte Brown & O'Meara LLP
Flood Sublimit Applies, Seawater Corrosion to Amtrak's Equipment Not Ensuing Loss
November 10, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe insurers were granted summary judgment on three issues regarding Amtrak's claim for damages caused by Hurricane Sandy. Amtrak v. Aspen Sec. Ins. Co., 2016 U.S. App. LEXIS 16074 (2nd Cir. Aug. 31, 2016).
Hurricane Sandy caused flooding which damaged two of Amtrak's tunnels under the East and Hudson Rivers. Seawater from the flooding caused extensive damage to equipment in the tunnels. The district court granted summary judgment to the insurers on the following issues: (1) the damage caused by an inundation of water in the tunnels was subject to the policies' $125 million flood sublimit; and (2) the corrosion of equipment after Amtrak pumped out the seawater was not an "ensuing loss" and therefore was also subject to the flood sublimit.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Courthouse Reporter Series: Nebraska Court of Appeals Vacates Arbitration Award for Misconduct
November 18, 2024 —
Brendan J. Witry - The Dispute ResolverVacating an arbitration award is often seen as an uphill battle. Indeed, the U.S. Supreme Court has stated that “courts may only vacate an arbitrator’s decision ‘only in very unusual circumstances.’” Oxford Health Plans, LLC v. Sutter, 569 U.S. 564, 568 (2013). The Federal Arbitration Act provides limited grounds to seek the vacatur of an arbitration award. In Lund-Ross Constructors v. Duke of Omaga, LLC, ___ N.W.3d ___, 33 Neb.App.73, the Nebraska Court of Appeals found that an arbitrator’s conduct warranted the partial vacatur of the award, which granted relief to a subcontractor who filed a counterclaim after the arbitration hearing had closed.
Lund-Ross contracted with Duke of Omaha to build an apartment complex in Omaha. Lund-Ross, in turn, sub-contracted with A Raymond Plumbing. Following completion of the building, Owner withheld payment from Lund-Ross, who in turn, withheld payment from Raymond. Both Lund-Ross and Raymond filed mechanics liens and initiated suits; Raymond’s suit ultimately was dismissed for want of prosecution. Lund-Ross proceeded to arbitration with Owner, naming Raymond as a respondent. Raymond did not participate in the arbitration as a claimant at the time of the hearing.
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Brendan J. Witry, Laurie & Brennan LLPMr. Witry may be contacted at
bwitry@lauriebrennan.com
ASCE Statement on Passage of the Water Resources Development Act (WRDA) of 2022
December 26, 2022 —
Maria Lehman - American Society of Civil EngineersWASHINGTON, D.C. – ASCE applauds Congress for passing the bipartisan Water Resources Development Act (WRDA) for 2022, which was included in the National Defense Authorization Act. The legislation authorizes construction for 25 new and existing U.S. Army Corps of Engineers (USACE) water infrastructure projects, including those related to dams, ports and inland waterways, flood risk management, and storm risk reduction. We are encouraged that the biannual reauthorization of WRDA continues to be a congressional priority.
ASCE applauds Congress for WRDA 2022 authorizing and establishing several programs dedicated to ensuring that our nation's water resources infrastructure benefits communities across the country. These accomplishments include reauthorizing the National Levee Safety Program; authorizing dredging activity in underserved community harbors; authorizing the USACE to recruit individuals more actively for careers in science, technology, engineering, and math (STEM); and enhancing infrastructure resilience, such as allowing the USACE to incorporate resilience measures into federally authorized hurricane or shore protection projects when performing emergency repairs. ASCE is also pleased to see that WRDA 2022 makes the current federal cost share formula for Inland Waterways Trust Fund projects permanent, with 65 percent coming from the general fund and 35 percent from the Inland Waterways Trust Fund (IWTF). ASCE strongly supports this provision, as it was a key recommendation to raise the nation's "D+" inland waterways grade in the 2021 Report Card for America's Infrastructure.
Additionally, ASCE strongly supports provisions in WRDA 2022 that will enhance the safety of the nation's dams and levees, which each received a "D" grade in the 2021 report card. The bill requires the Corps to establish a new National Low-Head Dam Inventory to account for the nation's low-head dams, which can pose significant public hazards. Identifying and monitoring these types of dams nationwide will contribute to the overall safety of the nation's dams and help to save lives.
Finally, the reauthorization of WRDA works hand-in-hand with the additional investments made in the Bipartisan Infrastructure Law. This reauthorization shows that infrastructure remains a bipartisan priority. We thank Congress for passing this legislation and look forward to translating these investments to critical water infrastructure system improvements nationwide.
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.
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Proving & Defending Lost Profit Damages
June 09, 2016 —
David Adelstein – Florida Construction Legal UpdatesI have written numerous articles regarding the challenge in proving
lost profit damages. Yes,
lost profits are a form of damages in business disputes, but they are a form of damages that are subject to a certain degree of
conjecture and speculation. For this reason,
lost profit evidence is oftentimes precluded from being presented at trial or lost profit damages are reversed on appeal. This is why it is imperative to ensure i’s are dotted and t’s are crossed when it comes to proving lost profit damages. It is also imperative, when defending a lost profit claim, to put on evidence and establish the speculative nature of the lost profit damages.
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David M. Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Unpredictable Opinion Regarding Construction Lien (Reinstatement??)
January 17, 2023 —
David Adelstein - Florida Construction Legal UpdatesHere comes the discussion of an appeal I was intimately involved in dealing with a construction lien. See Suntech Plumbing and Mechanical Corp. v. Bella Isla, LLC, 2022 WL 14672765 (Fla. 3d DCA 2022). Unfortunately, it was a losing result on my end but not a losing result to the issue at-hand. You should ask what in the world does this mean. I will tell you.
Here is the fact pattern. A subcontractor files a construction lien foreclosure lawsuit against an owner for unpaid contract balance. In the same lawsuit, the subcontractor sues the general contractor for breach of contract and unjust enrichment associated with an approximate three-year delay on a construction project. The project was scheduled to be completed in 2019. It was not. The project was pushed into COVID and into 2022. (The subcontractor did not sue the general contractor for amounts subject to the lien foreclosure claim.) The general contractor, assuming the defense of the owner, moved to stay the lawsuit pending the outcome of arbitration based on an arbitration provision in the subcontract. The subcontractor did not dispute the arbitration provision, but argued that arbitration provision should not extend to the owner that was (a) not bound by the subcontract, (b) would not be a party to the arbitration, and (c) the amounts pled against the general contractor did not include the amounts subject of the lien foreclosure lawsuit. At a minimum, the lawsuit should be stayed, not dismissed. Nevertheless, the trial court dismissed the entire lawsuit in an order that states that it is a final order with language that the lien may be “reinstated” after the outcome of the arbitration (that the owner is not a party to).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
