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.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Home Building on the Upswing in Bakersfield
May 10, 2013 —
CDJ STAFFLow inventories and low mortgage rates are leading developers to build new homes in Bakersfield, California. According to KGET, home permits are up forty-five percent over last April. In one development, a street of six homes all sold on the same day. Indications are also that people who lost their homes during the bust are entering homeownership again.
Prices are also up. A year ago, the average home sale price was $145,000. Now it’s $250,000. Oh, and that development where they sold six homes in a day? The next phase of development goes on sale in May.
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Quick Note: Lis Pendens Bond When Lis Pendens Not Founded On Recorded Instrument Or Statute
May 20, 2019 —
David Adelstein - Florida Construction Legal UpdatesIf a lis pendens is recorded and the lis pendens is NOT founded on a duly recorded instrument (e.g., mortgage) or a statute (e.g., construction lien), a lis pendens bond should be recorded. The lis pendens bond should cover prospective damages associated with the wrongful / unjustified recording of a lis pendens that were suffered by the property owner. The reason being is that the lis pendens has an effect on the title to the property as long as the lis pendens is recorded. Damages could stem from a decline in the market value of the property, continued upkeep and maintenance of the property, and there may also be (and, really, should be) consideration for loss of investment return associated with the equity in that property.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
A New Hope - You Now May Have Coverage for Punitive Damages in Connecticut
February 15, 2018 —
Stella Szantova Giordano – SDV BlogOn December 19, 2017, the Connecticut Supreme Court released its decision in Nationwide Mutual Ins. Co. v. Pasiak. The decision is significant for two reasons: 1) it clarifies the amount of proof an insurer needs to determine whether an exclusion to coverage applies; and 2) it found that where an insurance policy expressly provides coverage for an intentional act such as false imprisonment, common-law punitive damages are also covered.
Underlying action
The underlying action proves that real life is often stranger than fiction. Ms. S worked as an office help for a construction company owned by Mr. P, which operated out of his home. Ms. S was working alone in the home office, when an armed, masked intruder entered the office, tied her hands, gagged and blindfolded her and, pointing a gun to her head, threatened to kill her family if she did not give him the combination to a safe in the home. As this was happening, Mr. P entered the office, unmasked the intruder, and discovered it was his lifelong friend. After Ms. S was untied, she asked to leave, but Mr. P told her to stay. She was not allowed to leave for several hours as Mr. P made her accompany him to an errand. Ms. S sued Mr. P for false imprisonment, among other things. The trial court awarded her compensatory and punitive damages. Insurance coverage for the underlying judgment is at the heart of the Pasiak case.
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Stella Szantova Giordano, Saxe Doernberger & Vita, P.C.Ms. Szantova Giordano may be contacted at
ssg@sdvlaw.com
Court Grants Summary Judgment to Insurer in HVAC Defect Case
August 04, 2011 —
CDJ STAFFThe US District Court in Colorado has determined in the case of RK Mechanical, Inc. v. Travelers Property Casualty Company of America that Travelers did not breach its insurance contract when it refused to cover RK Mechanical.
RK Mechanical performed an HVAC installation for a residential project for which J.E. Dunn Rocky Mountain was the general contractor. As part of the work, RK “installed approximately one hundred seventy-one CPVC flanges, which were manufactured by Charlotte Pipe and Foundry Company.” Two of these flanges failed in June, 2009 leading to water damage. RK replaced the cracked flanges and engaged in water remediation. “Travelers paid Dunn and RK for the costs associated with the water damage associated with the Flange Failure.” The court notes that Travelers did not pay for the cracked flanges, however.
Subsequently, RK examined the remaining flanges, finding many cracked ones. These were replaced with new ones. Later, all the Charlotte flanges were replaced with ones from another manufacturer. RK applied for coverage.
All sides brought in their experts: “Microbac Laboratories, Inc. prepared a report on behalf of RK concluding that the Flange Failure was due, in part, to an assembly or workmanship defect in addition to manufacturing defects in the flanges. Higgins & Associates prepared a report on behalf of Travelers concluding that the flanges failed due to improper installation. Plastic Failure Labs prepared a report on behalf of the flange manufacturer concluding that the flanges failed due to improper installation by RK.”
At this point, Travelers denied coverage. RK sued alleging that the coverage for flange failure and water damage implicitly includes mitigation costs. The court rejected this claim, noting it would do so even if Travelers had paid for the replacement of the first two flanges. Nor did the court find that replacement of the faulty flanges is not "a covered cause of loss." RK also argued that as it was required to mitigate, Travelers was obligated to cover costs. However, the court found that “the mitigation costs expended by RK were not incurred in an effort to avoid damages from a potential breach of contract by Travelers.” The court additionally noted that despite RK’s claims, the Colorado courts have not found a common law duty to mitigate. Finally, the court found that the exclusions in the policy were not in violation of public policy.
Read the court’s decision…
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Tropical Storms Pile Up Back-to-Back-to-Back Out West
September 17, 2014 —
Brian K. Sullivan – BloombergTropical Storm Polo, the 16th storm of an unusually active eastern Pacific hurricane season, is on a path eerily like that of Odile, which blasted the Baja California peninsula earlier this week.
Odile went ashore late Sept. 14 with top winds of 125 miles (201 kilometers) per hour, the strongest storm to hit the region since 1967. As its winds swept the resort city of Cabo San Lucas, it was a Category 3 storm on the five-step Saffir-Simpson scale and a major hurricane.
At its peak, hours before landfall, Odile’s winds reached 135 mph, Category 4-force. Photos from Mexico’s Baja California Sur show houses destroyed, hotels piled with debris and gaping holes in the local airport. At least 30,000 tourists were stranded.
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Brian K. Sullivan, BloombergMr. Sullivan may be contacted at
bsullivan10@bloomberg.net
Unlicensed Contracting and Florida Statute S. 489.128
February 03, 2025 —
David Adelstein - Florida Construction Legal UpdatesFlorida Statute s. 489.128 is a statute that provides a remedy against unlicensed contracting. However, keep in mind that this argument—the unlicensed contractor argument—is a technical statutory argument. In other words, it’s not so much of a fact-based merits argument, but an argument that’s solely based on the technicality of the statute. This, by no means, is not a recommendation that the argument should not be raised. In instances, it absolutely should be and could have legitimate traction. However, when deciding whether to or how to pursue a dispute, including settlement, you want to keep in mind whether this is an argument you want to bank your outcome on because there are always costs (attorney’s fees, court costs, etc.) that should get factored into any business decision regarding a dispute.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Anchorage Building Codes Credited for Limited Damage After Quakes
January 08, 2019 —
Christine Kilpatrick - Engineering News-RecordThe magnitudes 7.0 and 5.7 earthquakes that struck Anchorage, Alaska, on Nov. 30 shook buildings and shattered highways, but caused limited structural damage and no reported loss of life, mostly due to the depth and location of the quake’s epicenter, as well as the city and state’s stringent building requirements.
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Christine Kilpatrick - ENRMs. Kilpatrick may be contacted at
kilpatrickc@enr.com