Properly Trigger the Performance Bond
January 05, 2017 —
David Adelstein – Florida Construction Legal UpdatesA performance bond is a valuable tool designed to guarantee the performance of the principal of the contract made part of the bond. But, it is only a valuable tool if the obligee (entity the bond is designed to benefit) understands that it needs to properly trigger the performance bond if it is looking to the bond (surety) to remedy and pay for a contractual default. If the performance bond is not properly triggered and a suit is brought upon the bond then the obligee could be the one materially breaching the terms of the bond. This means the obligee has no recourse under the performance bond. This is a huge downside when the obligee wanted the security of the performance bond, and reimbursed the bond principal for the premium of the bond, in order to address and remediate a default under the underlying contract.
A recent example of this downside can be found in the Southern District of Florida’s decision in Arch Ins. Co. v. John Moriarty & Associates of Florida, Inc., 2016 WL 7324144 (S.D.Fla. 2016). Here, a general contractor sued a subcontractor’s performance bond surety for an approximate $1M cost overrun associated with the performance of the subcontractor’s subcontract (the contract made part of the subcontractor’s performance bond). The surety moved for summary judgment arguing that the general contractor failed to property trigger the performance bond and, therefore, materially breached the bond. The trial court granted the summary judgment in favor of the performance bond surety. Why?
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dma@katzbarron.com
Construction Defects through the Years
July 31, 2013 —
CDJ STAFFBuilder has an article on the some building changes over the years that have led to construction defect problems. Is insulation evil? Well, that what some thought in the 1930s. Early attempts at insulating walls trapped moisture causing paint to peel. Then in the 1960s, the rise of aluminum wire lead to an even more serious problem: house fires.
And it continues. The plastic piping that was though to last forever when it was installed in the late 70s turned out to have about a decade of life. It’s a short forever. Eventually, polybutylene plumbing was forbidden by building codes.
The article has a series of building innovations that seemed like great ideas at the time, but were later found to be problematic.
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Gordon & Rees Ranks #5 in Top 50 Construction Law Firms in the Nation
June 29, 2020 —
Gordon Rees Scully MansukhaniGordon Rees Scully Mansukhani has been ranked the #5 construction law firm in the nation by Construction Executive in the magazine’s 2020 ranking of The Top 50 Construction Law Firms. Gordon & Rees is the only California-based law firm to rank in the Top 25.
The firm was ranked in the Top 10 in more specific areas as well.
- #1 in the Top 10 Law Firms Ranked by Most Locations
- #2 in the Top 10 Law Firms Ranked by Number of Construction Attorneys
- #6 in the Top 10 Law Firms Ranked by Number of States Admitted to Practice
“With offices throughout the nation and outstanding construction attorneys in many of those offices, we are able to offer our construction clients a diverse range of legal services wherever they do business,” said
Ernie Isola partner and co-chair of the firm’s construction practice group.
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Gordon Rees Scully Mansukhani
DEP Plan to Deal with Noxious Landfill Fumes Met with Criticism
March 19, 2014 —
Beverley BevenFlorez-CDJ STAFFResidents of Roxbury, New Jersey have dealt with hydrogen sulfide fumes coming from the Fenimore landfill, which gives off a rotten-egg smell and many say have “made them or their children sick,” according to New Jersey Online. The Department of Environmental Protection (DEP) announced their plan to fix the situation, which is to “first dig more wells at Fenimore, to help feed noxious gasses into the oxidizer and scrubber system the agency has credited with radically reducing smells over the last several months.”
But no one seems to be satisfied with the plan, according to New Jersey Online: “Not state Sen. Anthony R. Bucco, who authored a bill to enable a state takeover of the site last year. Not the Roxbury Township Council. Not the activist group created to respond to Fenimore issues. Not one of the state's most vocal environmental organizations. And not the site's owner, who has been in multi-pronged litigation with the state for months.”
Roxbury’s mayor, Jim Rilee, stated, “The council and I will continue to demand that the DEP show us compelling data that supports its conclusions and that its plan is based only on what is best for Township residents," as quoted by New Jersey Online.
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Federal District Court Declines Invitation to Set Scope of Appraisal
January 18, 2021 —
James M. Eastham - Traub LiebermanIn Mt. Hawley Ins. Co. v. Harrods Eastbelt, Ltd., No. CV H-20-2405, 2020 WL 7632250 (S.D. Tex. Dec. 22, 2020), the United States District Court for the Southern District of Texas addressed a request to set the scope of an appraisal by requiring the appraisers to use a specific format for the appraisal. At issue was a claim for damages to three insured buildings allegedly damaged during Tropical Storm Imelda. The insurer had denied coverage based on the asserted lack of wind-created openings as required for coverage under the policy. Rather, the insurer took the position that the interior leaks were caused by a number of excluded causes including long-term weathering, wear and tear, age-related deterioration, ponding, and long-term leaks.
In response to the denial of coverage, the insured invoked the appraisal provision of the policy which provided, among other things, that the “appraisers will state separately the value of the property and amount of loss.” Despite the language of the appraisal provision, the Insurer sought an order requiring the appraisers to state the amount of loss separately for each portion of the property in dispute and for each major building component including separate amounts of loss for roofs, exterior walls, windows, and interior water damage.
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James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
Suppliers Must Also Heed “Right to Repair” Claims
October 16, 2013 —
CDJ STAFF“Right to repair” statutes don’t only affect general contractors, but everyone involved in the building of a home, down to those who supply materials, warns Paul Gary in a post on Window & Door. He notes that “if you sell your window or door products in one of the growing number of states with a ‘Notice and Opportunity to Cure’ or ‘Right to Repair’ statute, you need a plan in the event you receive a defect notice relating to your product.”
A supplier that receives a statement that a defect exists should, according to Mr. Gary, carefully document not only when the notice was received, but when it was sent, according to postmark, and whether the sender complied with all the regulations. From there, the supplier should determine if there were previous, informal complaints. Finally, determine sales information. At this point, the supplier has the information its insurer will require.
His next caution is that in what follows, other may “seek defense and indemnity from you.” And while you may point out problems with the notice,” he counsels that “if you confirm there is an issue with your product, don’t be afraid to make a fair proposal for repair.”
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Product Liability Alert: Evidence of Apportionment of Fault Admissible in Strict Products Liability Action
March 26, 2014 —
R. Bryan Martin and Kristian B. Moriarty - Haight Brown & Bonesteel LLPIn Romine v. Johnson Controls, Inc. (No. B239761, filed March 17, 2014), the California Court of Appeal for the Second District held that a trial court must permit a defendant, in a products liability action, to present evidence of apportionment of fault among settling and non-settling entities. The case involved an automobile collision in which the plaintiff was struck from behind, causing the driver’s seat to recline and propel plaintiff into the back seat where she struck her head. Plaintiff was left quadriplegic as a result.
Plaintiff brought suit against the driver who caused the accident, the Nissan entities who manufactured the car plaintiff was driving, Johnson Controls, Inc. (“Johnson”), Ikeda Engineering Corporation (“Ikeda”), Vintec Co. (“Vintec”), and Autoliv ASP, Inc., who designed and manufactured the driver’s seat of the vehicle plaintiff was driving, and against Faurecia Automotive Seating, Inc. who manufactured the recliner mechanism of plaintiff’s vehicle’s front seat. Ikeda participated in the design of the driver’s seat and Vintec manufactured the driver’s seat. Johnson manufactured the seat belt for the driver’s seat of plaintiff’s vehicle in accordance with Nissan’s design. Prior to trial, plaintiff settled with the defendant driver, the Nissan defendants, the Autoliv defendants, and Faurecia Automotive Seating, Inc. Plaintiff elected to proceed to trial solely on a cause of action for strict products liability against Ikeda and Vintec. Pursuant to a stipulation, Johnson agreed it would be legally responsible for damages awarded to plaintiff at trial based upon the actions of Vintec or Ikeda.
At trial, the court precluded Vintec and Ikeda from offering evidence that: (1) plaintiff would not have been injured if her vehicle’s seat belt was designed in a different manner by Nissan; (2) Nissan chose the manufacturer of the recliner mechanism and required defendants to use that manufacturer and that part in the seat; and (3) The other defendants had already reached settlements with plaintiff.
Reprinted courtesy of
R. Bryan Martin, Haight Brown & Bonesteel LLP and
Kristian B. Moriarty, Haight Brown & Bonesteel LLP
Mr. Martin may be contacted at bmartin@hbblaw.com; Ms. Moriarty may be contacted at kmoriarty@hbblaw.com
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At Least 46 Killed in Taiwanese Apartment Building Inferno
November 01, 2021 —
The Associated Press (Huizhong Wu)- BloombergKaohsiung, Taiwan (AP) -- At least 46 people were killed and another 41 injured after a fire broke out early Thursday in a run-down mixed commercial and residential building in the Taiwanese port city of Kaohsiung, officials said.
Neighborhood residents said the 13-story building was home to many poor, elderly and disabled people and it wasn’t clear how many of the 120 units were occupied.
Witnesses said they heard something that sounded like an explosion at about 3 a.m. when the blaze erupted in the building's lower floors, which housed a closed movie theater, abandoned restaurants and karaoke clubs.
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Bloomberg