Fairfield Connecticut Building Expert Directory

Pennsylvania Court Extends Construction Defect Protections to Subsequent Buyers

December 20, 2012 — CDJ STAFF
The Pennsylvania courts have long held that there is an implied warranty of habitability for the initial purchaser of a home. Now, as some defects may not immediately show up, the court has extended that implied warranty to second and subsequent purchasers. As Marc D. Brookman, David I. Haas, and Christopher Bender of Duane Morris note, “this judicially created doctrine shifts the risk of a latent defect in the construction of a new home from the purchaser to the builder-vendor.” The Pennsylvania Supreme Court concluded that a contractual relationship is not needed for an implied warranty of habitability. The court’s concern was inequalities would result when a home was sold while other homes were protected by being within the statute of repose. Read the court decision
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Security on Large Construction Projects. The Payment Remedy You Probably Never Heard of

May 07, 2015 — Garret Murai – California Construction Law Blog
California has a number of statutory payment remedies available on construction projects. Some, such as the mechanics lien, are relatively well known and often utilized. Others, such as the stop payment notice, are somewhat less so. However, there’s one statutory payment remedy you may not have heard of at all. And that is, security requirements for large projects. What is security for large projects? Security is required on certain large construction projects to guarantee the payment by owners to direct contractors, and applies if either: 1. Fee Interest and Contract of Greater Than $5 million: The owner contracting for a work of improvement holds a fee interest in the property being improved and enters into a construction contract for the improvement of the property greater than $5 million; or 2. Less Than Fee Interest, Including Leasehold Interest, and Contract of Greater Than $1 million: The owner contracting for a work of improvement holds less than a fee interest (including a leasehold interest) in the property being improved and enters into a construction contract for the improvement of the property greater than $1 million. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

Henderson Land to Spend $839 Million on Hong Kong Retail Complex

September 03, 2014 — Michelle Yun – Bloomberg
Henderson Land Development Co. (12), controlled by billionaire Lee Shau-kee, will spend HK$6.5 billion ($839 million) on a shopping center in a prime retail area of Hong Kong after beating 17 rivals to win a land tender. The complex in the Tsim Sha Tsui district will be completed by 2019 and will house retail, services and dining, as well as a public 345-space parking garage, spokeswoman Bonnie Ngan said yesterday, citing Vice Chairman Martin Lee. Henderson won the site for HK$4.69 billion as the highest bidder, the government said in a statement yesterday. Henderson beat other developers, including Cheung Kong Holdings Ltd. (1), Sino Land Co. (83), and Sun Hung Kai Properties Ltd., to win the site in the district host to global luxury brands and hotels such as the Peninsula. The price was more than the HK$3.4 billion median estimate of three surveyors compiled by Bloomberg News. Read the court decision
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Reprinted courtesy of Michelle Yun, Bloomberg
Ms. Yun may be contacted at myun11@bloomberg.net

Wells Fargo, JPMorgan Vexed by Low Demand for Mortgages

April 15, 2014 — Zachary Tracer – Bloomberg
Slack demand for home loans continued to drag on earnings at Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) as the two largest U.S. mortgage lenders grappled for pieces of a shrunken market. Even as interest rates hovered near historically low levels, new home loans tumbled 67 percent to $36 billion in the first quarter at San Francisco-based Wells Fargo, the biggest originator. JPMorgan posted a 68 percent drop to $17 billion, and the bank predicted it would lose money on mortgage production for the full year. Both lenders are paring staff to keep expenses in line with demand for loans, which has waned as investors and cash buyers dominate some sales. New York-based JPMorgan said jobs at its mortgage business declined 14,000, or 30 percent, since the start of last year. Wells Fargo set plans to cut 1,100 positions in the most recent three months, which ranked as its worst first quarter for mortgage revenue since 2008. Read the court decision
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Reprinted courtesy of Zachary Tracer, Bloomberg
Mr. Tracer may be contacted at ztracer1@bloomberg.net

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

Does a No-Damage-for-Delay Clause Also Preclude Acceleration Damages?

January 27, 2020 — Ted R. Gropman & Christine Z. Fan - ConsensusDocs
Construction contracts often include a “no damage for delay” clause that denies a contractor the right to recover delay-related costs and limits the contractor’s remedy to an extension of time for noncontractor-caused delays to a project’s completion date. Depending on the nature of the delay and the jurisdiction where the project is located, the contractual prohibition against delay damages may well be enforceable. This article will explore whether an enforceable no-damage-for-delay clause is also a bar to recovery of “acceleration” damages, i.e., the costs incurred by the contractor in its attempt to overcome delays to the project’s completion date. Courts are split as to whether damages for a contractor’s “acceleration” efforts are distinguishable from “delay” damages such that they may be recovered under an enforceable no-damage-for-delay clause. See, e.g., Siefford v. Hous. Auth. of Humboldt, 223 N.W.2d 816 (Neb. 1974) (disallowing the recovery of acceleration damages under a no-damage-for-delay clause); but see Watson Elec. Constr. Co. v. Winston-Salem, 109 N.C. App. 194 (1993) (allowing the recovery of acceleration damages despite a no-damage-for-delay clause). The scope and effect of a no-damage-for-delay clause depend on the specific laws of the jurisdiction and the factual circumstances involved. There are a few ways for a contractor to circumvent an enforceable no-damage-for-delay clause to recover acceleration damages. First, the contractor may invoke one of the state’s enumerated exceptions to the enforceability of the clause. It is helpful to keep in mind that most jurisdictions strictly construe a no-damage-for-delay clause to limit its application. This means that, regardless of delay or acceleration, courts will nonetheless permit the contractor to recover damages if the delay is, for example, of a kind not contemplated by the parties, due to an unreasonable delay, or a result of the owner’s fraud, bad faith, gross negligence, active interference or abandonment of the contract. See Tricon Kent Co. v. Lafarge N. Am., Inc., 186 P.3d 155, 160 (Colo. App. 2008); United States Steel Corp. v. Mo. P. R. Co., 668 F.2d 435, 438 (8th Cir. 1982); Peter Kiewit Sons’ Co. v. Iowa S. Utils. Co., 355 F. Supp. 376, 396 (S.D. Iowa 1973). Reprinted courtesy of Ted R. Gropman, Pepper Hamilton LLP and Christine Z. Fan, Pepper Hamilton LLP Mr. Gropman may be contacted at gropmant@pepperlaw.com Read the court decision
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Avoid Five Common Fraudulent Schemes Used in Construction

December 02, 2019 — Ken Van Bree - Construction Executive
Here’s an attention-getting statistic: A typical case of fraud in the construction industry has a median loss of $227,000, according to the 2018 Report to the Nations issued by the Association of Certified Fraud Examiners (ACFE) on occupational or internal fraud. This report further showed that the construction industry’s median loss is approximately $119,000 higher than the average fraud losses across all industries. Construction companies are most at risk for fraud related to corruption (such as bribes and kickbacks), billing related schemes, expense reimbursements, check tampering and equipment or material theft. This brings up three important questions:

What are the fraud schemes affecting your company?
How can contractors keep their companies from experiencing these types of fraud?
What is the profile of fraudster?

The threat of fraud can never be wholly removed; however, companies should take steps to identify likely fraud schemes they might face. Below are a number of schemes frequently used to defraud construction companies. Reprinted courtesy of Ken Van Bree, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Notice of Claim Sufficient to Invoke Coverage

August 06, 2014 — Tred R. Eyerly – Insurance Law Hawaii
Indirect notice to the insurer was sufficient to trigger coverage for the additional insured under a liability policy. Spoleta Constr., LLC v. Aspen Ins. UK Ltd., 2014 N.Y. App. Div. LEXIS 5174 (N.Y. App. Div. July 11, 2014). An employee of the subcontractor was injured at the construction project on October 20, 2008. The general contractor was named as an additional insured on the subcontractor's CGL policy with Aspen. Under the subcontract, the subcontractor also agreed to defend and indemnify the general contractor for all claims arising out of the subcontractor's work. The general contractor did not receive notice of the accident until late December 2009 in a letter from the injured employee's attorney. On January 27, 2010, the general contractor's liability carrier sent a letter to the subcontractor giving notice of the employee's claim and requesting that the subcontractor put its carrier on notice. On February 9, 2010, the subcontractor sent to Aspen a claim form with the January 2010 letter attached. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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