FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Death of Subcontractor’s Unjust Enrichment Claim Against Project Owner

April 12, 2021 — David Adelstein - Florida Construction Legal Updates
In a previous article, I discussed a subcontractor’s unjust enrichment claim against a project’s owner and the death of this equitable claim if the owner fully paid the general contractor or paid the general contractor for the subcontractor’s work. This can be best summarized from a very short 1995 opinion out of the Fourth District Court of Appeal: “Unjust enrichment is equitable in nature and cannot exist where payment has been made for the benefit conferred. [Owner] paid [General Contractor] the full amount of its contract for the construction project. Accordingly, there can be no unjust enrichment claim to support [Subcontractor’s] claim.” Gene B. Glick Co., Inc. v. Sunshine Ready Concrete Co., Inc., 651 So.2d 90 (Fla. 4th DCA 1995). Reprinted courtesy of David Adelstein, Kirwin Norris, P.A. Mr. Adelstein may be contacted at dma@kirwinnorris.com Read the full story... Read the court decision
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Court Rejects Efforts to Limit Scope of Judgment Creditor’s Direct Action Under Insurance Code Section 11580

May 01, 2019 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Ins. Co. of St. of PA v. Amer. Safety Indemnity Co. (No. B283684, filed 3/1/19) (“ICSOP”), a California appeals court rejected one insurer’s efforts to limit the scope of another insurer’s direct action as a judgment creditor under Insurance Code section 11580(b)(2). In ICSOP, homeowners filed a claim in arbitration against their general contractor alleging damages from subsidence. While the arbitration was pending, the general contractor filed suit against the grading subcontractor seeking indemnity and contribution. The complaint attached the homeowners’ complaint in arbitration pleading damages of $2.3 million, and alleged that the subcontractors had a duty to indemnify for those damages. The arbitrator awarded the homeowners $1.1 million. The general contractor was insured by plaintiff ICSOP, which paid the arbitration award. A default judgment was entered against the grading subcontractor for $1.5 million, that included both the arbitration award plus $356,340 for the general contractor’s attorney’s fees. American Safety insured the grading subcontractor but refused to indemnify ICSOP. ICSOP then sued American Safety on the default judgment, pursuant to Insurance Code section 11580(b). The trial court granted summary judgment for ICSOP and the appeals court affirmed. Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Read the court decision
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Public Contract Code 9204 – A New Mandatory Claims Process for Contractors and Subcontractors – and a Possible Trap for the Unwary

March 22, 2017 — Alex R. Baghdassarian & Joseph S. Sestay – Peckar & Abramson, P.C.
New California legislation affecting public works contractors was adopted pursuant to Assembly Bill 626, sponsored by the Union Trade Contractors Association of California and endorsed by various trade and contractor associations including the AGC. AB 626, which was intended to assist contractors in presenting claims against public agencies, affords new opportunities, and some potential pitfalls, to contractors and subcontractors submitting claims to public owners. The legislation, codified at California Public Contract Code (PCC) section 9204, is effective for public works contracts entered into after January 1, 2017. All public entities (including the CSUS and the UC system), other than certain Departments of the State (CalTrans, High-Speed Rail Authority, Water Resources, Parks and Recreation, Corrections and Rehabilitation, General Services and the Military) are bound by the provisions of PCC Section 9204. PCC 9204 establishes a mandatory pre-litigation process for all claims by contractors on a public works project. It is an attempt to address the reluctance of public owners to promptly and fairly negotiate change orders on projects, putting some teeth to the mandate of existing law under PCC Section 7104, which precludes public owners from shifting to the contractor the risk of addressing differing subsurface and/or concealed hazardous site conditions. Reprinted courtesy of Alex R. Baghdassarian, Peckar & Abramson, P.C. and Joseph S. Sestay, Peckar & Abramson, P.C. Mr. Baghdassarian may be contacted at abaghdassarian@pecklaw.com Mr. Sestay may be contacted at jsestay@pecklaw.com Read the court decision
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Harrisburg Sought Support Before Ruinous Incinerator Retrofit

September 20, 2017 — Jonathan Barnes & Richard Korman - Engineering News-Record
When former Harrisburg, Pa., Mayor Stephen Reed (D) and his aides set out to retrofit the city’s aging incinerator in late 2000, the project spun out of control over the coming years, enlarging the debt the city owed on the facility to $300 million and sinking Harrisburg into financial ruin. Reprinted courtesy of Jonathan Barnes, ENR and Richard Korman, ENR ENR staff may be contacted at ENR.com@bnpmedia.com Read the court decision
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Draft Federal Legislation Reinforces Advice to Promptly Notify Insurers of COVID-19 Losses

April 20, 2020 — James Hultz - Newmeyer Dillion
Insurers across the country are nearly universally denying claims for business interruption stemming from the COVID-19 pandemic. Those denials have in turn been met with swift litigation and potential legislative action. The first business interruption coverage lawsuit related to COVID-19 was filed in New Orleans on March 16. There are now no less than 13 such cases nationwide and many more are likely to follow. Further, legislatures in at least seven states are considering legislation that would, to varying degrees, mandate business interruption coverage for COVID-19 losses, notwithstanding any seemingly contrary policy provisions. From the early stages of the pandemic, we have consistently advised our clients to promptly notify their insurers of all COVID-19 related losses, even where coverage appeared uncertain. The deluge of coverage litigation and contemplated legislation could drastically alter how insurers handle COVID-19 claims. But policyholders who have failed to satisfy policy notice requirements could miss out on the benefits of those changes. Therefore, policyholders would be ill-advised to sit on the sidelines and wait it out. Now, draft Federal legislation appears to add further impetus to instructions to “tender early.” The contemplated “Pandemic Risk Insurance Act of 2020” would reportedly devote billions of dollars of federal funds through a Department of Treasury administered reinsurance program designed to offset losses sustained by insurers who actually pay business interruption losses. The legislation is still taking shape but would reportedly create “a Federal program that provides for a transparent system of shared public and private compensation for business interruption losses resulting from a pandemic or outbreak of communicable disease.” President Trump is also reportedly pressuring insurers to provide business interruption coverage. The massive influx of federal funds and pressure from the White House could encourage insurers to reconsider denials of COVID-19 business interruption claims. Read the court decision
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Reprinted courtesy of James Hultz, Newmeyer Dillion
Mr. Hultz may be contacted at james.hultz@ndlf.com

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Building Permits Up in USA Is a Good Sign

November 27, 2013 — CDJ STAFF
The number of building permits for houses issued throughout the country hasn’t been higher since June 2008, a sign that the home building industry continues to recover, even in the face of higher interest rates. “These reports are unequivocally in line with our view that the housing recovery remains will on track, as the lack of supply will continue to support both construction activity and house prices,” according to Harm Bandholz, the chief U.S. economist for UniCredit Research. Building permits were up 13.9% over last year and beat projections of 930,000 permits on an annual rate. The current annual rate for building permits is 1.03 million. Permits for multifamily homes were up 20.1% in September and 15.3% in October. Single-family homes were up 0.8% in October, but had fallen 1.9% the month before. Read the court decision
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"Occurrence" May Include Intentional Acts In Montana

June 22, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The Montana Supreme Court found that policy language defining "accidents may include intentional acts." Employers Mut. Cas. Co. v. Fisher Builders, Inc., 2016 Mont. LEXIS 269 (Mont. Sup. Ct. April 19, 2016). Jerry and Karen Slack hired Fisher Builders to build a remodeled home located on the site of their home at Flathead Lake. The existing home was an aged vacation home. The County zoning regulations required the remodeled home to incorporate the existing structure. The permit issued to the Slacks required the existing deck to remain unchanged. Fisher elevated the existing home structure on steel beams to pour a new foundation. Fisher began to dismantle the walls while the structure was resting on the beams, and found an infestation of carpenter ants. The ant-infested planks were cut out, apparently in order to salvage what usable materials he could from the remaining structure. The ant-infested boards were subsequently burned. Eventually, the deck collapsed. 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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Constructive Change Directives / Directed Changes

June 06, 2018 — David Adelstein - Florida Construction Legal Updates
rime contracts typically contain a constructive change directive clause. A constructive change directive also goes by the acronym CCD (and for purposes of this article, such changes will be referred to as a CCD), however it can also be known as a Work Change Directive, Interim Directed Change, or Directed Change, depending on the type of contract beign utilized. An owner can order a CCD, versus issuing the contractor a formalized change order, as a mechanism to direct the prime contractor to perform work if there is a dispute as to contract amount, time, or scope. Just because an owner issues a CCD does not mean the owner is conceding that it owes the contractor a change order. Rather, the owner is ordering the CCD as a mechanism to keep the project moving forward notwithstanding a disagreement with the contractor as to the price or time impact. Standard form construction agreements such as the AIA, EJCDC, or ConsensusDocs, will have a standard provision dealing with change directives where the owner can order the contractor to proceed with work in the absence of a change order. In the federal government context, most construction contracts will contain a changes clause that authorizes the government to formally direct changes; and, there is authority for contractors to equitably pursue a constructive change based on certain directives or instructions issued by the government. Naturally, from the contractor’s perspective, this CCD provision is an important consideration as it could likely require the contractor to finance a change to the owner’s project, particularly if there is a scope dispute where the owner does not believe the contractor is entitled to any change order. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

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