Rio Olympic Infrastructure Costs of $2.3 Billion Are Set to Rise
January 31, 2014 —
Tariq Panja and David Biller – BloombergBrazilian authorities announced 5.6 billion reais ($2.3 billion) will be spent on infrastructure directly related to the 2016 Rio de Janeiro Olympic Games and those costs will rise as projects are added.
Yesterday’s announcement comes months behind schedule, and after pressure on public bodies to reveal exactly how much it will cost for Rio to be the first South American city to host the quadrennial showpiece. Delays and cost overruns to several projects related to this year’s soccer World Cup have sharpened the focus on the Olympics.
“We are committed to being on schedule,” Sports Minister Aldo Rebelo said at a press conference in Rio to announce the spending plans. “It is the first time we have a consortium of three levels of government. It is in an effort to ensure the success and execution of all the commitments to deliver the Olympics in Rio in 2016.”
Mr. Panja may be contacted at tpanja@bloomberg.net and Mr. Biller may be contacted at dbiller1@bloomberg.net.
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Tariq Panja and David Biller, Bloomberg
Scope of Alaska’s Dump Lien Statute Substantially Reduced For Natural Gas Contractors
March 16, 2020 —
Trevor Lane - Ahlers Cressman & Sleight PLLCIn All American Oilfield, LLC v. Cook Inlet Energy, LLC,[1] the Supreme Court of Alaska clarified and substantially reduced a natural gas contractor’s ability to secure a preferred lien for its contribution to a natural gas well.
Alaska’s dump lien statute (AS § 34.35.140) authorizes a laborer to claim a lien for the amount owed for their labor in the production of a “dump or mass” of “extracted, hoisted and raised” matter from a mine. While Alaska’s dump lien statute is one of three Alaskan statutes allowing laborers to attach liens to mines, mining equipment or minerals,[2] the dump lien statute is unique because it is prior and preferred over other liens, increasing the laborer’s chance of being paid in a bankruptcy proceeding.
Attaching a lien to a “dump or mass” of hard-rock minerals piled outside a mine or oil stored in a tank is relatively straightforward. However, natural gas is typically left in its natural reservoir until removed by a pipeline that carries the gas to a location far from the mine. Natural gas is not extracted and stored in a “dump or mass” like other minerals, and until August 2019, controversy existed over how—or if—the dump lien statute could be used by natural gas contractors.
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Trevor Lane, Ahlers Cressman & Sleight PLLCMr. Lane may be contacted at
trevor.lane@acslawyers.com
Federal District Court Addresses Anti-concurrent Cause Language in Property Policy
February 04, 2025 —
James M. Eastham - Traub LiebermanIn Surchi1, LLC v. Travelers Indem. Co., 2024 U.S. Dist. LEXIS 227796 (N.D. Ill. Dec. 17, 2024), the United States District Court for the Northern District of Illinois addressed a carrier’s obligation to cover costs associated with remediating water-related damage to insured property. In July 2022, the insured property experienced water-related damage and resulting repair costs. A claim was submitted for coverage under a property policy issued by Travelers. Travelers denied the claim and the insured initiated an action against Travelers seeking coverage. During the litigation Travelers maintained its position that it was not obligated to cover the water-related damage, because (1) under the policy, Travelers is not obligated to cover damage caused by surface water, even if surface water contributed only in part to the damage, and (2) the pleadings irrefutably establish that surface water contributed, at least in part, to the property damage. The insured took the contrary view arguing that Travelers was obligated to cover water-related damage (1) because the damage was the result of a water or sewage backing up or overflowing from sewers, and (2) this obligation remains, even if surface water contributed in part to the damage.
The court began with a review of the relevant policy language. Under the policy, Travelers "will not pay for loss or damage caused directly or indirectly by ... surface water." At the same time, under a change endorsement to the policy, Travelers agreed to cover "direct physical loss of or damage to Covered Property at the described premises caused by or resulting from water or sewage that backs up or overflows from a sewer, drain, or sump." In light of this language, the parties dispute centered on whether Travelers is obligated to cover damages caused concurrently by surface water (an excluded peril) and by water or sewage that backs up or overflows from a sewer, drain, or sump (a covered peril).
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James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
Design and Construction Defects Not a Breach of Contract
February 14, 2013 —
CDJ STAFFThe California Court of Appeals tossed out a breach of contract award in Altman v. John Mourier Construction. The decision, which was issued on January 10, 2013, sent the construction defect case back to a lower court to calculate damages based on the conclusions of the appeals court.
The case involved both design issues and construction issues. According to the plaintiffs’ expert, the design plans did not make the buildings sufficiently stiff to resist the wind, and that the framing was improperly constructed, further weakening the structures, and leading to the stucco cracking. Additionally, it was alleged that the roofs were improperly installed, leading to water intrusion. The contractor’s expert “agreed the roofs needed repair, but disputed what needed to be done to repair the roofs and the cost.”
The jury rejected the plaintiffs’ claims of product liability and breach of warranty, but found in their favor on the claims of breach of contract and negligence. The plaintiffs were awarded differing amounts based on the jury’s conclusions about their particular properties.
Both sides sought new trials. JMC, the contractor, claimed that the jury’s verdicts were “inconsistent in that the relieved JMC of liability for strict products liability and breach of warranty, but found JMC liable for breach of contract and negligence.” The plaintiffs “opposed the setoff motion on the ground that the jury heard evidence only of damages not covered by the settlements.” Both motions were denied. After this, the plaintiffs sought and received investigative costs as damages. JMC appealed this amended judgment.
The appeals court rejected JMC’s claims that evidence was improperly excluded. JMC sought to introduce evidence concerning errors made by the stucco subcontractor. Earlier in the trial, JMC had insisted that the plaintiffs not be allowed to present evidence concerning the stucco, as that had been separately settled. When they wished to introduce it themselves, they noted that the settlement only precluded the plaintiffs from introducing stucco evidence, but the trial court did not find this persuasive, and the appeals court upheld the actions of the trial court. Nor did the appeals court find grounds for reversal based on claims that the jury saw excluded evidence, as JMC did not establish that the evidence went into the jury room. Further, this did not reach, according to the court, a “miscarriage of justice.”
The court rejected two more of JMC’s arguments, concluding that the negligence award did not violate the economic loss rule. The court also noted that JMC failed to prove its contention that the plaintiffs were awarded damages for items that were covered in settlements with the subcontractors.
The appeals court did accept JMC’s argument that the award for breach of contract was not supported by evidence. As the ruling notes, “plaintiffs did not submit the contracts into evidence or justify their absence; nor did plaintiffs provide any evidence regarding contract terms allegedly breached.”
The court also did not allow the plaintiffs to claim the full amount of the investigative costs. Noting that the trial court had rational grounds for its decision, the appeals court noted that “the jury rejected most of the damages claimed by plaintiffs, and the trial court found that more than $86,000 of the costs itemized in plaintiffs’ invoices ‘appear questionable’ as ‘investigation’ costs/damages and appeared to the trial court to be litigation costs nonrecoverable under section 1033.5.”
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Comparing Contracts: A Review of the AIA 201 and ConsensusDocs - Part II
March 28, 2018 —
Michael Sams and Amanda Cox – Construction Executive, A publication of Associated Builders and Contractors. All Rights Reserved.Part II of this three-part series compares and analyzes important contract sections in the AIA 201 (2007 and 2017 versions) and ConsensusDocs (2014 and 2017 versions), including Schedule/Time, Consequential Damages/LDs, Claims and Disputes/ADR.
Part I covered Financial Assurances, Design Risk, Project Management and Contract Administration. Part III will cover Insurance and Indemnification and Payment.
SCHEDULE/TIME
Relevant Sections:
- 2007 & 2017 A201: Section 3.10.1
- 2014 & 2017 ConsensusDocs: Section 6.2
AIA:
- Section 3.10.1 of the 2007 A201 requires that the Contractor promptly after being awarded the Contract, prepare and submit a construction schedule providing for Work to be completed within the time limits required in the Contract Documents.
- This schedule shall be revised at appropriate intervals.
- The 2017 edition breaks down the schedule to contain date of commencement, interim milestone dates, date of substantial completion, apportionment of Work by trade or building system, and the time required for completion of each portion of the Work.
- Under section 3.10.2 of the 2007 and 2017 versions, if the Contractor fails to provide a submittal schedule, the Contractor is not entitled to any additional compensation or a time extension based on the Owner’s or the Architect’s slow processing of submittals, regardless of how long they take.
ConsensusDocs 200:
- The 2017 Contract replaces the term Contract Time and instead requires a “Schedule of the Work…formatted in detailed precedence-style critical path method that (a) provides a graphic representation of all activities and events, including float values that will affect the critical path of the Work and (b) identifies dates that are critical to ensure timely and orderly completion of the Work.”
- The Constructor must submit an initial schedule to the Owner only before, “first application for payment” and thereafter on a monthly basis. (Section 6.2.1).
- The Owner is allowed to change the sequences provided in the schedule as long as it does not “unreasonably interfere with the Work.” (Section 6.2.2).
Reprinted courtesy of
Michael Sams , Kenney & Sams and
Amanda Cox, Kenney & Sams
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Breach of an Oral Contract and Unjust Enrichment and Implied Covenant of Good Faith and Fair Dealing
December 23, 2023 —
David Adelstein - Florida Construction Legal UpdatesIn an ideal world, parties would have written contracts. In reality, parties should endeavor to ensure every transaction they enter into is memorialized in a written contract. This should not be disputed. Of course, written contracts are not always the case. Parties enter transactions too often whereby the transaction is not memorialized in a clean written agreement. Rather, it is piecemealing invoices, or texts, or discussions, or proposals and the course of business. A contract can still exist in this context but it is likely an oral contract. Keep in mind if there is a dispute, what you think the oral contract says will invariably be different than what the other party believes the oral contract says. This “he said she said” scenario gets removed, for the most part, with a written contract that memorializes the written terms, conditions, and scope.
A recent federal district court opinion dealt with the alleged breach of an oral contract. In Movie Prop Rentals LLC vs. The Kingdom of God Global Church, 2023 WL 8275922 (S.D.Fla. 2023), a dispute concerned the fabrication and installation of a complex, modular stage prop to be used for an event. But here lies the problem. The dispute was based on an oral contract and invoices. The plaintiff, the party that was fabricating the modular stage prop, sued the defendant, the party that ordered the stage prop for the event, for non-payment under various claims. The defendant countersued under various claims.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Performance Bond Primer: Need to Knows and Need to Dos
February 01, 2022 —
Rafael Boza - Gravel2Gavel Construction & Real Estate Law BlogIf you are a construction contractor, you deal with performance bonds as part of your business and daily work. They are necessary for almost every project you are participating or will participate in, and, along with other sister bonds, constitute a basic tool to be able to work in construction. However, how much do you really know about this tool? Who in your organization knows how to use it? Are you relying on your insurance broker to procure the bonds? Can your broker competently review the terms of the bond? Are you, as a contractor, relying on the surety to explain and determine what you need for the project—a fox guarding the hen house?
To understand how a performance bond works and how to effectively tailor it to your needs, we need to understand the basics. What is a performance bond? Who are the parties to a performance bond? What does performance bond not do? What should be covered under a performance bond? How does a performance bond fit in a company’s overall risk management processes? A clear understanding of these and other basic topics will facilitate operations and reduce the risk of claims.
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Rafael Boza, PillsburyMr. Boza may be contacted at
rafael.boza@pillsburylaw.com
Keller Group Fires Two Executives in Suspected Australia Profits Reporting Fraud
February 20, 2023 —
James Leggate - Engineering News-RecordLondon-based geotechnical contracting giant Keller Group's profits from its Australia business unit may have been fraudulently inflated by the U.S. equivalent of as much as $20 million in today’s dollars since 2019, the company has revealed.
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James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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