Rhode Island Affirms The Principle That Sureties Must be Provided Notice of Default Before They Can be Held Liable for Principal’s Default
August 21, 2023 —
Dennis Cavanaugh & Tasnuva Islam - Construction Law ZoneMost bond forms in use today, including the standard form AIA A312-2010, contain express condition precedents that trigger a surety’s obligations under the bond. Under a performance bond, the bond obligee is required to provide formal notice to the surety that the principal has materially defaulted and that the surety must begin to perform under the terms of the bond. This principle is grounded in the idea that the surety should have an opportunity to address the default and investigate the claim so as to mitigate its own liability. Failure to provide sufficient notice will discharge the surety of its obligations under the bond.
Reprinted courtesy of
Dennis Cavanaugh, Robinson & Cole LLP and
Tasnuva Islam, Robinson & Cole LLP
Mr. Cavanaugh may be contacted at dcavanaugh@rc.com
Ms. Islam may be contacted at tislam@rc.com
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No Coverage for Restoring Aesthetic Uniformity
December 10, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court found there was no coverage regarding aesthetic uniformity between new materials installed after water damage occurred and the rest of the building. Great Am. Ins. Co. of New York v. The Towers of Quayside No. 4 Condominium Assoc., Case No. 15-CV-20056-King (U.S. Dist. Ct., S.D. Fla., Nov. 5, 2015).
The insured's high rise condominium suffered water damage when a valve on the air conditioning unit damaged the drywall, carpeting, baseboards, insulation and wallpaper in the east hallways of the eleventh floor and the floors below. Floors three through twenty-five had a uniform appearance by design with respect to the carpet, wallpaper, and woodwork in the common area hallways.
The insured submitted a claim under its property policy with Great American. A payment of $170,291.84 was made for damage to the east hallways of the eleventh floor and the floors below. The insured sought coverage to repair or replace undamaged carpeting, wallpaper, baseboards, and woodwork in (1) the west hallways and elevator landings of the eleventh floor and the floors below and in (2) floors twelve through twenty-five.The insured contended that the loss of aesthetic uniformity devalued the building and constituted a loss to the building.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Using the Prevention Doctrine
April 22, 2019 —
David Erhart - Gordon & Rees Construction Law BlogThe following scenario happens regularly in the construction industry. A contractor on a project reaches out to a subcontractor to perform work. Excited about the prospect of performing the work, the subcontractor signs a contract and puts it nose to the grindstone. After dutifully completing the work the subcontractor turns to the contractor and asks to be paid. But, the contractor refuses saying that there is a provision in the subcontract that says the contractor is only obligated to pay the subcontractor if the contractor receives payment from the owner. So the contractor has completed the work, but has no money to show for it.
One potential remedy for a subcontractor in this situation is the use of the prevention doctrine. “Under the prevention doctrine, ‘if a promisor prevents or hinders fulfillment of a condition to his performance, the condition may be waived or excused.’” Cox v. SNAP, Inc., 859 F.3d 304, 308 (4th Cir. 2017) (quoting Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 7171, 725 (4th Cir. 2000)). “Put simply, ‘where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure.’” Haddon Hous Assocs v. United States, 711 F.3d 1330, 1338 (Fed. Cir. 2013) (quoting Restatement (Second) of Contracts § 245; Williston, § 39:4).
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David Erhart, Gordon & Rees Scully MansukhaniMr. Erhart may be contacted at
derhart@grsm.com
EEOC Issues Anti-Harassment Guidance To Construction-Industry Employers
July 22, 2024 —
Christopher Kelleher & Andrew Scroggins - The Construction SeytSeyfarth Synopsis: The Equal Employment Opportunity Commission (“EEOC”) has issued guidance tailored to the construction industry regarding compliance with anti-harassment laws. This lines up with our prediction in early 2024 that the EEOC had put the construction industry squarely in its sights. The guidance is important for construction-industry leaders and employers to understand to prevent and remedy workplace harassment, and to avoid potential harassment liability.
On June 18, 2024, the EEOC issued its
Promising Practices for Preventing Harassment in the Construction Industry. This guidance provides key recommendations that construction-industry leaders and employers should consider implementing to prevent and address harassment in the workplace, and avoid being the target of the EEOC’s enforcement efforts. The guidance is intended to supplement the EEOC’s
Strategic Enforcement Plan (“SEP”) for fiscal years 2024-2028, which provides direction on the EEOC’s current objectives, principles, and enforcement efforts – among them, increasing diversity in the construction industry and remedying harassment. (We’ve written previously about the
proposed and
final SEP.)
Reprinted courtesy of
Christopher Kelleher, Seyfarth and
Andrew Scroggins, Seyfarth
Mr. Kelleher may be contacted at ckelleher@seyfarth.com
Mr. Scroggins may be contacted at ascroggins@seyfarth.com
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Review of Recent Contractors State License Board Changes
February 27, 2023 —
Alexander Moore - Kahana FeldCalifornia’s Contractors State License Board (CSLB) was established in 1929 to protect California residents through licensing and regulating contractors working in the state. Today, the CSLB licenses approximately 290,000 contractors, utilizing forty-four different classifications. Each licensing classification specifies the type of contracting work permitted by that classification.
The CSLB website (www.cslb.ca.gov) contains a wealth of information for contractors and non-contractor consumers alike. Consumers can use the website’s features to check the history and business information of contractors, searching via license number, business name, or individual name. License applicants can use the website for instructions and forms for the application process. Contractors can use the website for renewals, regulations, and various resources.
One the CSLB’s most important roles is assisting contractors with keeping track of the multitude of state regulations, and periodic changes thereto, that apply to those in the construction trades. The CSLB posts periodic Industry Bulletins which provide helpful guidance and reminders of important construction topics. At year end, the CSLB issues a bulletin to update licensees of the changes to California Law that will become effective on the first of January in the coming year. Below are four of the more interesting and impactful statutory changes.
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Alexander Moore, Kahana FeldMr. Moore may be contacted at
amoore@kahanafeld.com
Wendel Rosen Construction Attorneys Recognized by Super Lawyers and Best Lawyers
August 30, 2017 —
Wendel Rosen Black & Dean LLP - California Construction Law BlogTwo members of Wendel Rosen’s
Construction Practice Group were recognized recently.
Garret Murai was selected for inclusion in the 2017 list of Northern California Super Lawyers and
Matthew Graham was selected for inclusion in
The Best Lawyers in America© 2018 edition. Garret Is co-chair of the firm’s Construction Practice Group and Matt is a 30+ year veteran of construction law.
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Construction Defect Leads to Death, Jury Awards $39 Million
November 27, 2013 —
CDJ STAFFA failure in the installation of a 13-ton concrete panel in Milwaukee County lead to the death of a 15-year-old boy in 201; two others were also injured. A lawsuit over this has concluded with the contractor, Advance Cast Stone, found culpable due to their concealing that the panel was not installed as prescribed. The incident happened at a parking garage operated by the county.
Advanced Cast Stone made the claim that the method they used to secure the panel had been approved by other in the project. The jury awarded $6.3 million to the estate of Jared Kellner, $1.5 million each to the young man who was injured, Eric Wosniki, and his parents. The county was also awarded $6 million for lost revenue in the parking garage and for repairs.
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Iowa Apartment Complex Owners Awarded Millions for Building Defects
March 31, 2014 —
Beverley BevenFlorez-CDJ STAFFThe owners of a West Des Moines, Iowa apartment complex received an award of $12.4 million by a Polk County jury, according to The Des Moines Register, who declared that “[i]t’s believed to be one of the largest judgments of its kind in state history.” The owners had sued the builders “over leaks and mold the owners said took years to correct.”
The verdict “marked the culmination of a nearly decade-long saga involving the construction of the Westlake apartments and condos, a 300-unit complex built at 1770 92nd St. on the Dallas County side of West Des Moines during the pre-recession housing boom.”
Attorney Steve Eckley told The Des Moines Register that “the settlement covers about $3 million in previous repairs, about $6 million in expected repairs and maintenance and about $6 million in lost revenue.”
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