California Attempts to Tackle Housing Affordability Crisis
December 22, 2019 —
Garret Murai - California Construction Law BlogIt’s a bit too early yet for our 2020 Construction Law Update but here’s a preview of some of the new laws taking effect next year. Earlier this month, Governor Gavin Newsom signed a slate of 18 bills to boost housing production in an effort to tackle the state’s housing affordability crisis.
First, a bit of background.
California currently ranks 49th among the states in housing units per resident. Experts say that the state needs to double its current rate of housing production of 85,000 unit per year just to keep up with population growth and four times the current rate to reduce housing costs. Anecdotally, here in the San Francisco Bay Area, the median rent for a one-bedroom apartments in San Francisco is currently $3,690 per month or $44,280 per year. However, as of May 2018, according to the U.S. Bureau of Statistics, the annual mean wage of a teller is just $32,840, for farmworkers $34,700, and for teachers $48,250. And that’s before taxes. Let that sink in for a moment.
The result is one in five Californians live in poverty, the highest rate in the nation, when factoring in the cost of living.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Texas Federal Court Upholds Professional Services Exclusion to Preclude Duty to Defend
March 16, 2020 —
Jeremy S. Macklin - Traub Lieberman Insurance Law BlogIn Project Surveillance, Inc. v. The Travelers Indemnity Company, No. 4:19-CV-03324, 2020 WL 292247 (S.D. Tex. Jan. 21, 2020), a Texas federal court held that a professional services exclusion in a commercial general liability policy precluded Travelers’ duty to defend its insured.
The underlying lawsuit was a wrongful death action brought by the family of a worker killed on a construction site. Project Surveillance was present at the construction site “to provide safety supervision or other services.” The underlying lawsuit alleged that Project Surveillance negligently failed to inspect or adequately inspect the project and failed to warn or adequately warn the decedent of a dangerous condition. The underlying lawsuit also alleged that Project Surveillance was negligent in failing to stop work.
At the time of the incident, Project Surveillance had commercial general liability insurance through Travelers and professional liability insurance through RLI. RLI agreed to defend Project Surveillance in the underlying lawsuit. Travelers, however, denied owing a duty to defend or indemnify based on an exclusion for “bodily injury” arising out of the rendering or failure to render any “professional service.” The Traveler policy defined the term “professional services” to mean any service requiring specialized skill or training, including “failure to prepare [. . .] any warning,” “supervision,” “inspection,” “control,” “surveying activity or service,” “job site safety,” “construction administration,” and “monitoring [. . .] necessary to perform and of [those] services.”
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Jeremy S. Macklin, Traub LiebermanMr. Macklin may be contacted at
jmacklin@tlsslaw.com
Georgia Court of Appeals Holds Lay Witness Can Provide Opinion Testimony on the Value of a Property If the Witness Had an Opportunity to Form a Reasoned Opinion
September 25, 2018 —
Gus Sara - The Subrogation StrategistIn Woodrum v. Ga. Farm Bureau Mut. Ins. Co., 815 S.E.2d 650 (Ga. Ct. App. 2018), the Court of Appeals of Georgia considered whether the lower court properly disqualified a contractor as an expert witness and excluded the contractor from offering lay opinion testimony regarding the value of a property. The Court of Appeals held that, while the lower court properly disqualified the contractor as an expert witness, it improperly excluded the general contractor’s lay opinion testimony regarding the value of the property. This case establishes that, in Georgia, a lay witness can provide opinion testimony on the value of a property if the proponent of the testimony demonstrates that the witness had an opportunity to form a reasoned opinion.
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Gus Sara, White and Williams LLPMr. Sara may be contacted at
sarag@whiteandwilliams.com
Harmon Towers Duty to Defend Question Must Wait, Says Court
March 01, 2012 —
CDJ STAFFThe Harmon Towers project in Las Vegas was eventually halted short of the planned forty-seven stories after “it was determined that there was substantial defective construction, including defective installation of reinforcing steel throughout the Harmon.” The American Home Insurance Company and Lexington Insurance Company put forth a claim that they had no duty to defend Perini Construction, the builder of the defective Harmon Towers. Further, American Home seeks to recover the monies American reimbursed Perini. The United States District Court of Nevada ruled in the case of American Home Assurance Co. v. Perini Building on February 3, 2012.
The two insurance companies covered Perini and its subcontractors, Century Steel, Pacific Coast Steel, and Ceco Concrete Construction. Century Steel was the initial subcontractor for the reinforcing steel; they were later acquired by Pacific Coast Steel. In this current case, Perini Construction is the sole defendant.
Perini sought a dismissal of these claims, arguing that without the subcontractors joined to the case, “the Court cannot afford complete relief among existing parties.” The court rejected this claim, noting that the court can determine the duties of the insurance companies to Perini, which the court described as “separate and distinct from those of the subcontractors.” The subcontractors “have not claimed an interest in the subject matter of the action.” The court concluded that it could determine whether Perini was entitled or not to coverage without affecting the subcontractors. The court rejected Perini’s claim.
Perini also asked the court to abstain from the case, arguing that it was better heard in a state court. The court noted that several considerations cover whether a case is heard in state or federal courts. The court noted that if the case weighed heavily on state law, the state courts would be the obvious location. Further, if there were a parallel action in the state courts, “there is a presumption that the whole suit should be heard in state courts.” This is, however, no parallel state suit, although the court noted that Perini has “threatened” to do so.
However, the issue of who is to blame for the problems at Harmon Towers has not been resolved. The court concluded that until the “underlying action” was concluded, it was premature to consider the issues raised in this case while the earlier lawsuit was still in progress. The court denied Perini’s motion to dismiss the case. Given that the outcome of the earlier construction defect case may lead to further litigation in state court, the District Court granted Perini’s motion to abstain, but staying their judgment until the construction defect case is resolved.
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Suffolk Stands Down After Consecutive Serious Boston Site Injuries
May 23, 2022 —
Scott Van Voorhis - Engineering News-RecordAfter two serious safety incidents in consecutive days, the Boston-area’s largest contractor voluntarily issued a safety stand down on all projects in Boston through May 6.
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Scott Van Voorhis, Engineering News-Record
ENR may be contacted at enr@enr.com
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Don’t Waive Too Much In Your Mechanic’s Lien Waiver
December 22, 2019 —
Christopher G. Hill - Construction Law MusingsIn the past few years, the Virginia General Assembly has, with certain caveats, precluded pre-furnishing waiver of mechanic’s lien rights. While this essentially outlawed the types of mechanic’s lien waiver clauses that pervaded construction contracts in Virginia, the key to the previous sentence is “pre-furnishing.” What the General Assembly left intact were the usual waivers of mechanic’s lien rights typically required to be provided to Owners and others in the payment chain in exchange for payment.
These lien waivers come in a few “flavors” from conditional to unconditional, partial to full. Their terms usually include an acknowledgement of receipt of payment (we’ll get to this later), and a statement that the one seeking payment knows of no possible claims by lower tier subcontractors and then waives all mechanic’s lien rights against the property for work performed and included in the request for payment. Often over my years as a Virginia construction attorney, I have noticed that these waivers are often signed without comment or review. They are just part of the process and more often than not are not even an issue for most projects. Of course, if they are an issue they can be a big one, and their terms can come back to bite a claimant that has not properly vetted them.
The first potential issue is waiving lien rights while acknowledging receipt prior to actual receipt of the check or wire. Many of the waiver forms that are out there list a payment amount, or possibly simply state that the waiver is in exchange for some small payment, and then state “receipt of which is acknolwedged” or something similar. The issue here is that receipt may not have happened yet because these lien waivers are submitted as part of the payment package in order to get paid in the first place. In short, should you sign the waiver prior to payment, you may have acknowledged a non-event and in the event of non-payment have a written document stating that you waived your claim to a lien for that money. What a court would do with this, I am unsure, but why risk it? My advice, be sure your waiver is contingent on actual clearance of payment as well as receipt.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Condo Board May Be Negligent for not Filing Construction Defect Suit in a Timely Fashion
December 09, 2011 —
CDJ STAFFThe Maryland Court of Special Appeals has ruled that condominium association boards have a duty to “properly pursue any claims,” overturning the decision of a lower court that said that it had no legal duty to file suit. Tom Schild, writing at Marylandcondominiumlaw.net, writes about Greenstein v. Avalon Courts Six Condominium, Inc.
In this case, the condominium board waited six years after residents complained about water intrusion problems before suing the developer. The court ruled that the suit could not be filed, as the statute of limitations was only three years. After residents were assessed for the repairs, homeowners sued the board, arguing that their delay lead to the need for the special assessment.
After overturning the decision, the Court of Special Appeals has asked the trial court to review the negligence claim.
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Unfair Risk Allocation on Design-Build Projects
June 13, 2022 —
Brian Perlberg, Executive Director of ConsensusDocs Coalition & AGC Senior CounselThe AGC annual convention included a session entitled “Who’s on the Hook for Design Defects in Design-Build Projects.”
Fox Rothschild’s Dirk Haire, Les Synder of Infrastructure Construction Brightline West, and David Hecker of Kiewit presented. Attendees crowded into a standing-only room because more and more builders are facing design liability, especially design-builders on large infrastructure projects. The presentation highlighted how some owners abuse the submittal process on design-build jobs to make changes without compensating the builder with more time, money, or both. One project took a sample of owner comments and extrapolated that just one project generated over 15,000 submittals and generated over 110,000 comments of “concern” or “preference.”
Certain owner-representatives and attorneys for owners have oversold the risk allocation transfer aspect of design-build. The Spearin Doctrine protects a builder from design documents containing errors by entitling them to receive equitable compensation. The design-build project delivery method erodes potential Spearin protections. Ways that an owner may retain some design responsibility and bring Spearin protections back into play for a builder include the following:
- Accuracy of reports prepared by owner’s outside consultants
- Owner’s design approval process
- Viability of owner’s stated design and project criteria
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Brian Perlberg, ConsensusDocs
