The Connecticut Appellate Court Decides That Construction Contractor Was Not Obligated To Continue Accelerated Schedule to Mitigate Its Damages Following Late Delivery of Materials by Supplier
April 11, 2022 —
Robert M. Barrack - Gordon & ReesIn United Concrete Prods. v. NJR Constr., LLC, 207 Conn. App. 551, 263 A.3d 823 (2021), the Connecticut Appellate Court has issued a decision that should be of interest to the Connecticut construction industry and the construction bar. The lawsuit arose out of the late delivery of materials on a construction project, which is a frequent problem on construction projects. In United Concrete Products, the defendant general contractor, NJR Construction, LLC (“NJR”) was retained by the State of Connecticut Department of Transportation (“DOT”) to replace a bridge over the Hockanum River (“Project”). Id. at 555-58 (2021). The Prime Contract provided that NJR with an eight-week time-frame to perform the work, at which time the road would be closed to traffic. Id. The Prime Contract also provided for a bonus of $3,000 for each day the road was opened to traffic prior to the eight week deadline of August 8, 2016, and for liquidated damages of $3,000 for each day the road remained closed beyond the deadline. Id.
NJR subsequently entered into a purchase order (“Subcontract”) with the plaintiff, United Concrete Products, Inc. (“United”), whereby United agreed to provide certain concrete components for the Project, including ten pre-stressed concrete beams. Id. The Subcontract required that United deliver the concrete beams by June 7, 2016, but, NJR did not actually schedule the delivery until June 29, 2016. Id. Nevertheless, even with that schedule NJR could have reopened the road by July 19, 2016, which would have allowed it to receive the full $60,000 incentive bonus. However, United did not deliver the concrete beams until July 26, 2016, which caused NJR to lose the incentive bonus, be assessed liquidated damages by the DOT, and to incur additional delay damages. Id. After deducting the amount of $179,500 in damages that it incurred due to United’s late delivery of the beams, NJR paid United the balance of $66,074.75. Id.
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Robert M. Barrack, Gordon Rees Scully Mansukhani, LLPMr. Barrack may be contacted at
rbarrack@grsm.com
Disruption: When Did It Start and Where Will It End?
June 25, 2019 —
Brian Gallagher - Construction ExecutiveIf change is the only constant—as was famously observed by a Greek philosopher circa 500 B.C.—then why single out some changes as “disruption”?
Disruption is about more than just technology; it’s about more, even, than the rapid rollout and development of technology in the past couple of decades. The word disruption refers to processes or products that are fundamentally different from what is currently in use and that render unforeseen, large-scale changes. Early discussions of disruption (the term was coined by Harvard Business School professor Clayton M. Christensen in a 1995 Harvard Business Review article) compared incremental change in existing systems, which are usually supported by established corporations, to innovations that start out as something completely fresh, limited in their appeal and flawed in initial iterations.
The construction industry was—and still is—late to adopt most technologies and late in experiencing overall disruption. It also lags behind other industries when it comes to efficiency and productivity. McKinsey reported that construction is one of the “least digitized industries in the world,” despite employing approximately 7% of the world’s working-age population and representing one of the world economy’s largest sectors. Disruption is likely to be fast approaching now, even for the construction industry. But its delay may confer the benefit of allowing construction companies to learn from other industries’ mistakes.
Reprinted courtesy of
Brian Gallagher, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Chinese Brooklyn-to-Los Angeles Plans Surge: Real Estate
April 01, 2014 —
Nadja Brandt and John Gittelsohn – BloombergIt took just one 15-minute phone call in July to persuade Ifei Chang to join Shanghai-based developer Greenland Holding Group Co. and lead a U.S. expansion. Within three months, she was running $6 billion of projects as part of a record push by Chinese investors into American property.
Greenland reached a preliminary agreement in October to buy a 70 percent stake in the $5 billion Atlantic Yards development in Brooklyn, New York. That followed a July deal to acquire a $1 billion residential-and-entertainment project in downtown Los Angeles. Chang, who took charge of that site upon arriving in the U.S., is now on the hunt for more investments.
“In China, you climb a ladder where everything is floating and moving so fast,” Chang, 49, said in an interview at her sparsely furnished 46th-floor L.A. office overlooking the empty lot where the Metropolis project will be built. “We come from a country of 1.4 billion people and a lot of economic growth. This kind of project and investment speed is very normal in China. That’s why we are so confident we will deliver this project.”
Greenland, like other Chinese companies, is committing to a growing number of multibillion-dollar developments outside of its home market. Chinese investments in U.S. commercial properties jumped almost 10-fold last year from 2012, with Manhattan the biggest area for purchases, followed by other New York City boroughs and Los Angeles, according to research firm Real Capital Analytics Inc.
Ms. Brandt may be contacted at nbrandt@bloomberg.net; Mr. Gittelsohn may be contacted at johngitt@bloomberg.net
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Nadja Brandt and John Gittelsohn, Bloomberg
Analysis of the “owned property exclusion” under Panico v. State Farm
March 08, 2011 —
Colorado Construction LitigationThe U.S. Court of Appeals for the Tenth Circuit recently concluded that the “owned property exclusion” applied to bar coverage for claims of property damage. See Panico v. State Farm Fire and Cas. Co., 2011 WL 322830 (10th Cir. 2011). In Panico, the plaintiffs sold property in Aspen, Colorado to the Taylors, who sued the Panicos upon discovering the property was not as represented. After refusing to defend, the Panicos sued State Farm for breach of contract. The district court concluded that the Taylors’ claims were not covered under the Panicos insurance policies and granted summary judgment in State Farm’s favor. The U.S. Court of Appeals for the Tenth Circuit affirmed.
Mr. Panico built the house on the property as well as several additions to the house. As the Taylors lived in Florida, they primarily relied on their real estate agent and an inspector to ensure the property was acceptable. According to their complaint, the Taylors discovered that the house was “virtually uninhabitable due to serious design and construction defects, mold, rodents, and drainage problems.” Id. at *1. In their complaint, the Taylors asserted three claims for relief against the Panicos based upon misrepresentation and fraudulent concealment about the condition of the property.
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Reprinted courtesy of Heather M. Anderson of Higgins, Hopkins, McClain & Roswell, LLP. Ms Anderson can be contacted at anderson@hhmrlaw.com
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Indiana Court of Appeals Rules Against Contractor and Performance Bond Surety on Contractor's Differing Site Conditions Claim
April 03, 2013 —
Brian M. Falcon - Frost Brown Todd LLCEarlier this year, the Indiana Court of Appeals issued an important opinion that impacts contractors and sureties alike. The decision should give contractors in Indiana pause before ceasing work while a dispute with the owner is pending. Sureties also have been placed on notice that strict compliance with the terms of their bonds is amongst their best defenses to claims made by owners and bond claimants.
In Dave's Excavating, Inc. and Liberty Mutual Insurance Co. v. City of New Castle, Indiana, 959 N.E.2d 369 (Ind. Ct. App. 2012), the contractor (“Dave’s”) was the successful bidder on a public sanitary sewer and water main extension project. Dave's procured a performance bond from Liberty Mutual to guarantee its performance obligations to the owner (the "City"). After encountering what it deemed different subsurface conditions—and indeed after having been previously granted a change order to use excavated materials as backfill in light of the subsurface conditions on site—Dave’s placed the project engineer on notice of a differing site conditions claim. The total claim amounted to an 84% increase in the total contract price. With the claim, Dave's advised the project engineer it was ceasing further work until the project engineer provided direction.
While the project engineer reviewed the claim, it reminded Dave's of its contractual obligation to "carry on the work and adhere to the progress schedule during all disputes or disagreements with the OWNER." A dispute immediately occurred regarding whether Dave's was required to continue to work while the project engineer resolved the differing site condition claim. After Dave's maintained its position that it was not required to continue to work, the project engineer placed it on notice of default and copied the letter to Liberty Mutual.
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Brian M. FalconBrian M. Falcon can be contacted at http://www.frostbrowntodd.com/contact.html
Apartment Investors Turn to Suburbs After Crowding Cities
March 12, 2015 —
Nadja Brandt and Oshrat Carmiel – Bloomberg(Bloomberg) -- Real estate investor Robert Hart pulled into the lot of a 400-unit apartment community in a San Diego suburb last month, prepared to pay up for the recently completed project on a quiet residential street. A competitor from a publicly traded landlord was already there, he said.
“It was on the one hand reassuring to know that we were both chasing the same opportunity,” said Hart, president and chief executive officer of closely held TruAmerica Multifamily. “On the other hand, it reinforced my opinion that large institutional real estate investors will be chasing yield far beyond the urban core.”
Reprinted courtesy of
Nadja Brandt, Bloomberg and
Oshrat Carmiel, Bloomberg
Ms. Brandt may be contacted at nbrandt@bloomberg.net
Ms. Carmiel may be contacted at ocarmiel1@bloomberg.net
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A Performance-Based Energy Code in Seattle: Will It Save Existing Buildings?
August 11, 2011 —
Douglas Reiser, Builders Council BlogThe City of Seattle has one of the most stringent energy codes in the nation. Based upon the Washington State Energy Code (which has been embroiled in litigation over its high standards), the code demands a lot from commercial developers. But, does it prevent developers from saving Seattle?s classic and old buildings? Perhaps.
The general compliance procedure requires buildings to be examined during the permitting process. This means that buildings are examined before they begin operating. The procedure is not malleable and is applicable to all buildings, old and new, big and small.
The downside of this procedure is that it eliminates awarding compliance to those buildings exhibiting a number of passive features, such as siting, thermal mass, and renewable energy production. This problem has prevented a number of interesting and architecturally pleasing existing building retrofits from getting off the ground. The cost of complying with the current system can be 20% more, and it might prevent builders from preserving a building?s historical integrity.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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New Window Insulation Introduced to U.S. Market
February 04, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Construction Digital, Nitto has introduced PENJEREX, “a new transparent energy-saving window insulation film to the US Market” that may “satisfy the requirement for enhanced energy efficiency and CO2 reduction in the housing industry.”
The film is transparent, while still providing insulation, which helps maintain “the natural look of the home,” reported Construction Digital. The product “is said to improve insulation by reducing heat transfer by 35 percent.”
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