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Kentucky Court Upholds Arbitration Award, Denies Appeal

June 15, 2011 — CDJ STAFF

The Kentucky Court of Appeals has ruled in Lake Cumberland Community Action Agency v. CMW, Inc. affirming the arbitration award. CMW, Inc. was responsible for the construction of a facility to be used for pre-school students and the housing of Alzheimer patients and senior citizens. An agreement was made that any disputes would be heard by an arbitrator selected by the construction industry.

The plaintiff alleged that there were design and construction defects in the building trusses, violation of the Kentucky Building Code, and problems with the HVAC system. The arbitrator awarded $106,000 to the plaintiff which then sought to vacate the award. The circuit court upheld the arbitrator’s decision.

The Court of Appeals found that there was no basis for rejecting the arbitrator’s decision, noting “there is nothing to show that there was any fraud or bias on the part of the arbitrator.” The appeals court, with all three judges concurring, upheld the arbitration award.

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Not in My Kitchen – California Supreme Court Decertifies Golden State Boring Case

November 26, 2014 — Roger Hughes – California Construction Law Blog
On November 11, 2014, the California Supreme Court rejected the recent California Court of Appeals decision Golden State Boring & Pipe Jacking, Inc. v Eastern Municipal Water District, 228 Cal.App.4th 273 (2014) which we wrote about earlier by “decertifying” it (meaning that lawyers cannot cite to the case as legal precedent) The decertification removed a decision that added substantially to the confusion as to when an action on a payment bond is timely filed. Even though the decision was determined in accordance with pre-2014 statutes, the case was relevant precedent for construction attorneys when determining time deadlines for filing a claim on a bond. Background In July of this year, the California Court of Appeals for the Fourth Appellate District upheld a trial court’s granting of summary judgment against a project subcontractor Golden State Boring & Pipe Jacking, Inc. (GSB) who sued Safeco Insurance Company (Safeco) for unpaid contract amounts on a project payment bond issued by Safeco. Both at the trial level and on appeal Safeco successfully argued that GSB’s action on its payment bond claim was time barred by former California Civil Code Sections 3249 (now Section 9558), because it was filed more than six month after the period in which stop notices may be filed as provided by California’s Civil Code Section 3184 (now Section 9558). Read the court decision
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Reprinted courtesy of Roger Hughes, Wendel Rosen Black & Dean LLP
Mr. Hughes may be contacted at rhughes@wendel.com

Colorado Abandons the “Completed and Accepted Rule” in Favor of the “Foreseeability Rule” in Determining a Contractor’s Duty to a Third Party After Work Has Been Completed

January 17, 2013 — Brady Iandiorio, Higgins, Hopkins, McLain & Roswell, LLC

In a recent case, the Colorado Court of Appeals found that a contractor had a duty to a third party to warn it of a dangerous condition, even after the contractor had completed its work and the owner had accepted the contractor’s work. Collard v. Vista Paving Corp., -- P.3d --, 2012 WL 5871446 (Colo. App. 2012). While not an earth shattering or entirely new concept, the decision rendered in Collard directly accepted the foreseeability rule at the expense of the completed and accepted rule. Id.

In Collard, the City of Grand Junction (“the City”) hired Vista Paving Corp. (“Vista”) to construct two road medians according to the City’s plans and designs. On July 9, 2007, Vista began work on the medians. According to its contract with the City, Vista was responsible for traffic control during construction of the medians. On July 19, 2007, Vista completed its construction of both medians. On that date, the City’s project inspector conducted his final inspection of Vista’s work. The City’s inspector then told Vista that its work had been completed and that Vista was authorized to leave the site. Vista requested permission to remove the traffic control devices to which the City’s inspector agreed. Vista removed all of its traffic control devices.

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Reprinted courtesy of Brady Iandiorio
Mr. Iandiorio can be contacted at iandiorio@hhmrlaw.com

Zell Says Homeownership Rate to Fall as Marriages Delayed

April 30, 2014 — John Gittelsohn – Bloomberg
The U.S. homeownership rate may fall to as low as 55 percent because more Americans are choosing to rent as they postpone getting married and having children, said Sam Zell, chairman of landlord Equity Residential. Demographic and lifestyle changes, more than economic factors, are driving down the ownership rate over the long term, Zell said yesterday at the Milken Institute Global Conference in Beverly Hills, California. As of 2010, about 54 percent of adults were married, down from 57 percent a decade earlier, according to the U.S. Census Bureau. “The deferral of marriage has such a staggering impact on real estate and I just don’t think people focus on it,” said Zell, 72, whose Chicago-based Equity Residential is the largest U.S. apartment landlord. “I don’t think the multifamily market has ever had a better set of future demographics.” Read the court decision
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Reprinted courtesy of John Gittelsohn, Bloomberg
Mr. Gittelsohn may be contacted at johngitt@bloomberg.net

Subcontractor Strikes Out in its Claims Against Federal Government

July 08, 2024 — David Adelstein - Florida Construction Legal Updates
Is it a good idea for a subcontractor to sue the federal government? A recent case would suggest NO–way too many huge hurdles for the subcontractor to overcome. No matter how creative the arguments may be, it’s a high mountain to climb. In Fox Logistics & Construction Co. v. U.S., 2024 WL 2807677 (Fed.Cl. 2024), a subcontractor sued the federal government when it was not paid by the prime contractor. The subcontractor claimed it was a third-party beneficiary under the government’s modifications to the prime contractor’s payment procedure, or alternatively it had an implied-in-fact contract with the government. The Court of Federal Claims granted summary judgment in favor of the government. The subcontractor, while creative, struck out in its claims based on the hurdles in a subcontractor suing the federal government. This case involved upgrading an air force base. The subcontractor performed most of the work. The prime contractor had cash flow problems and did not pay the subcontractor. The government got involved to enforce provisions of its contract to force the prime contractor to pay subcontractors and even modified the payment procedure by having future payments to the prime contractor deposited into a new bank account that government could monitor. This ultimately did not work, and the prime contractor filed for bankruptcy. The subcontractor claimed it was owed millions–apparently, it was not able to recover the money through the prime contractor’s bankruptcy—and pursued claims against the federal government in an effort to recover money it was owed. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

To Sea or Not to Sea: Fifth Circuit Applies Maritime Law to Offshore Service Contract, Spares Indemnity Provision from Louisiana Oilfield Indemnity Act

March 29, 2017 — Richard W. Brown & Afua Akoto – Saxe Doernberger & Vita, P.C.
Faced with the issue of whether maritime or state law should be applied to determine the validity of an indemnity clause in a Master Services Contract (MSC), the Fifth Circuit affirmed that where there is no historical treatment of the contract in question (1), it would consider six factors established in Davis (2). In Doiron, the Apache Corporation and STS (3) entered a broad-form blanket MSC, under which STS agreed to perform flow-back services, a process designed to dislodge solid objects from inside a well, on Apache’s well located off shore of Louisiana. The MSC also contained an indemnification provision, which required STS to defend and indemnify Apache and its company groups against all claims of property injury or bodily injury. During the flow-back operation, Larry Doiron Inc. (LDI), one of the Apache Company groups, supplied a crane barge for use by STS employees. Subsequently, the crane knocked over an STS employee, causing him to suffer severe injuries. LDI then made a formal demand to STS for defense and indemnification. STS rejected the demand and argued that the Louisiana Oilfield Indemnity Act applied to the MSC instead of maritime law. Pursuant to the Act, indemnity clauses in agreements pertaining to wells for oil, gas or water are void as against public policy. But, under maritime law, the enforcement of such provisions is not barred. Therefore, if the MSC was construed under the Act, STS had no duty to defend or indemnify LDI. Reprinted courtesy of Richard W. Brown, Saxe Doernberger & Vita, P.C. and Afua S. Akoto, Saxe Doernberger & Vita, P.C. Mr. Brown may be contacted at rwb@sdvlaw.com Ms. Akoto may be contacted at asa@sdvlaw.com Read the court decision
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“But it’s 2021!” Service of Motion to Vacate Via Email Found Insufficient by the Eleventh Circuit

June 21, 2021 — Justin K. Fortescue - White and Williams
While we are all getting used to the “new normal” of working remotely and relying on emails for almost all communications, a recent decision from the United States Court of Appeals for the Eleventh Circuit provides arbitration practitioners with a stark reminder – the “notice” requirements of the Federal Arbitration Act (FAA) will be strictly enforced and providing notice of a motion to vacate via email may not qualify as proper service. In O'Neal Constructors, LLC v. DRT Am., LLC, 991 F.3d 1376 (11th Cir. 2021), O’Neal Constructors, LLC (O’Neal) and DRT America (DRT) entered into a contract containing an arbitration provision. Following a dispute, the parties went to arbitration and, on January 7, 2019, the panel issued an award requiring DRT to pay O’Neal a total of $1,415,193. The amount awarded to O’Neal consisted of two parts: $765,102 for the underlying contract dispute and $650,090 for reimbursement of O’Neal’s attorneys’ fees. While DRT paid O’Neal the first portion of the award, DRT refused to pay the portion that related to O’Neal’s attorneys’ fees. On April 4, 2019, as a result of DRT’s refusal to pay O’Neal’s attorneys’ fees, O’Neal filed a motion to confirm the award in Georgia state court (which was subsequently removed to the Northern District of Georgia). The next day, in a separate action, DRT filed a motion to vacate the attorneys’ fees portion of the award and, that same night, DRT’s counsel emailed O’Neal’s counsel a “courtesy copy” of DRT’s memorandum in support of the motion to vacate. A few weeks later, on April 30, 2019 (i.e., more than three months after the award was issued), DRT served O’Neal (via U.S. Marshall) with a copy of the motion to vacate. Read the court decision
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Reprinted courtesy of Justin Fortescue, White and Williams
Mr. Fortescue may be contacted at fortescuej@whiteandwilliams.com

Real Estate & Construction News Roundup (10/23/24) – Construction Backlog Rebounds, Real Estate Sustainability Grows, and Split Incentive Gap Remains Building Decarbonizing Barrier

November 18, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, construction output decreased, office utilization unchanged, September apartment starts fell 15% from a year ago as developers pulled permits, and more!

Developers pulled permits for a seasonally adjusted rate of 398,000 apartments in buildings with five units or more, a 17.4% YOY drop and a 10.8% decrease compared to August 2024. (Leslie Shaver, Multifamily Dive)
Construction input prices decreased 0.9% in September due to dips in two of three energy subcategories, reflecting the trend of overall material price stabilization over the past 12 months. (Sebastian Obando, Construction Dive)
Thanks in part to the Federal Reserve’s lowering of the interest rate, construction backlog rebounded in September after slumping at the end of the summer. (Joe Bousquin, Construction Dive)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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