Sobering Facts for Construction Safety Day
April 28, 2014 —
Melissa Dewey Brumback – Construction Law in North CarolinaHappy “Construction Safety Day” everyone! James White of Maxwell Systems, has shared with me an infographic showing all sorts of data about construction fatalities.
As you might expect, falls are the #1 source of construction-site fatalities, followed by being struck by falling objects, electrocution, and being caught between objects, in that order. Together, these “fatal four” make up 57% of all construction worker deaths.
Read the court decisionRead the full story...Reprinted courtesy of
Melissa Dewey Brumback, Construction Law in North CarolinaMs. Brumback may be contacted at
mbrumback@rl-law.com
Difficulty in Defending Rental Supplier’s Claim Under Credit Application
October 11, 2021 —
David Adelstein - Florida Construction Legal UpdatesIn construction, one of the easiest claims to prove from a burden of proof standpoint is that of a supplier, particularly a rental equipment supplier. Oftentimes, these claims are more in the realm of a collection claim because a rental supplier will generally be able to establish that a party opened an account with them, signed a credit application and personal guaranty, and equipment was rented and even delivered to a specific jobsite during set dates. Defending these claims is not so easy. And even if there is a defense as it relates to some amounts, there needs to be an upside challenging those amounts when factoring in the attorney’s fees, costs, and interest on the other amounts and on continuing the dispute.
An example of the difficulty in defending these claims from rental suppliers can be found in the recent case of Custom Design Expo, Inc. v. Synergy Rents, Inc., 2021 WL 4125806 (Fla. 2d DCA 2021). Here, a contractor rented equipment (e.g, forklifts) from a supplier. The equipment was rented on an open account and the contractor signed a personal guaranty. The supplier sued the contractor for about $81,000 that remained unpaid. The supplier appeared to waste no time and moved for summary judgment with an affidavit from its credit manager. The credit manager affirmed that the contractor executed a credit application for purposes of renting equipment on an open account, the application contained a personal guaranty, and the credit application formed the basis of a contract. The credit manager authenticated the credit application and affirmed that the contractor owed it about $81,000 in unpaid amounts for rental equipment that was furnished under the credit application.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Lay Testimony Sufficient to Prove Diminution in Value
September 25, 2018 —
Tred R. Eyerly - Insurance Law HawaiiThe trial court erred in excluding lay testimony on diminution of value of the insured's property and by requiring expert testimony. Woodrum v. Georgia Farm Bureau Mut. Ins. Co., 2018 Ga. App. LEXIS 429 (Ga. Ct. App. June 27, 2018).
During a thunderstorm, a large tree fell onto the roof the insured's house, causing significant damage. The damage was reported to their insurer, Georgia Farm Bureau Mutual Insurance Company. When there was disagreement on the amount of the loss, an appraisal was invoked. An award was agreed to and payment was made by Georgia Farm.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Prevent Costly Curb Box Damage Due on New Construction Projects
May 11, 2020 —
Bob Welker - Construction ExecutiveFor new construction projects in areas with acidic soils, keeping curb boxes in good working order is critical to avoid compromised water service, angry customers, and costly repair and replacement.
Traditionally, a curb box is composed of a metal tube that connects the cast iron base to a cast iron lid/cap. It is necessary for water line repairs and shut off in case of flooding. Typically, they are buried six to eight feet below ground, beneath the frost line. Curb boxes are found on every water line that connects a building to a city water main.
One major challenge is that many areas across the United States—including the East Coast, South, upper Midwest and Pacific Northwest—have acidic soil that rapidly corrodes cast iron infrastructure, including curb boxes. Soil with a pH of six or less is considered acidic.
Reprinted courtesy of
Bob Welker, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Court Sharpens The “Sword” And Strengthens The “Shield” Of Contractors’ License Law
July 24, 2023 —
Kyle S. Case - ConsensusDocsPerforming construction work without the necessary license can have significant repercussions on a contractor’s business. California in particular has become known for its imposition of “strict and harsh” penalties for a contractor’s failure to maintain proper licensure. In the realm of public works projects, any contract with an unlicensed contractor is deemed void. See Business & Professions Code Section 7028.15(e). On private projects, California’s Contractors’ License Law prohibits contractors from maintaining any action to recover payment for their work, and more severe, may require a contractor to disgorge all funds paid to it for performing unlicensed work. See Business & Professions Code Section 7031). These methods of deterrence are referred to as the “shield” and “sword” of the Contractors’ State License Law. Loranger v. Jones, 184 Cal. App. 4th 847, 854 (2010).
In any discussion surrounding licensure, it is important to review the language of the Business and Professions Code (“Bus. & Prof.”). Section 7031(a) states:
Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person…
Read the court decisionRead the full story...Reprinted courtesy of
Kyle S. Case, Watt, Tieder, Hoffar & Fitzgerald LLPMr. Case may be contacted at
kcase@watttieder.com
Practical Pointers for Change Orders on Commercial Construction Contracts
December 31, 2014 —
John E. Bowerbank - Newmeyer & DillionConstruction projects pose unique challenges, including keeping costs within budget, meeting project deadlines, and coordinating the work of numerous contractors and subcontractors in the wake of inevitable design revisions and changes to the plans. Anticipating potential project challenges and negotiating contract provisions before commencing work on a project is critical for all parties. Careful planning should reduce the number of contract disputes. This, in turn, can facilitate the completion of a project within budget and on schedule.
“Changes” Clauses in Construction Contracts
Most commercial construction contracts have a clause addressing changes to the contract. A “changes” clause typically requires the mutual agreement of the parties on the scope of any modifications to the contract, as well as the effect on the contract price and timeframe for the work to be performed. This results in what is generally referred to as a “change order.” Many projects have a large number of change orders, which can result in significant cost overruns and delays to the project if the contract contains a complicated change order process. Therefore, in order to minimize cost overruns and project delays, it is crucial to keep the change order process as simplified and streamlined as possible.
In the most basic terms, change orders memorialize modifications to the original contract, and typically alter the contract's price, scope of work, and/or completion dates. A typical change order is a written document prepared by the owner or its design professional, and signed by the owner, design professional, and affected contractors and subcontractors. An executed change order indicates the parties’ agreement as to what changes are taking place, including approval for additional costs and schedule impacts.
While the reasons for change orders and the parties initiating them may vary, all change orders have one feature in common. Effective change orders alter the original contract and become part of the contract. Therefore, from a legal standpoint, change orders must be approached with the same caution and forethought as the original contract.
Practice Pointers for Change Orders
In light of the foregoing, some practice pointers for change orders in commercial construction contracts are as follows:
- Carefully Negotiate and Draft Change Order Provisions in the Original Contract.
A carefully negotiated and drafted “changes” clause that accounts for “unexpected circumstances” or “hidden conditions” can protect the parties from downstream costly disputes.
- Immediately Address Changes by Following the Change Order Process, Including Obtaining Necessary Signatures.
Regardless if you are an owner, general contractor or subcontractor, you should address any proposed change order immediately. Even if a decision maker gives “verbal” approval to go ahead with changed work, the work should not proceed without following the change order process in the original contract. This includes making sure to obtain any necessary signatures for the change order, if at all possible.
- Analyze the Plans and Specifications to Determine Whether “Changes” are Within the Scope of the Original Contract, or Whether They are Extra Work.
Prior to entering an original contract, it is imperative that the parties review the plans and specifications for ambiguities regarding work included in the original contract, versus potential extra work that would require a change order. This is important because a careful review of the plans and specifications sometimes reveals that work believed to be a change order is, in fact, original work, or vice versa.
- Make Sure Requests and Approvals for Change Orders are Done by an Authorized Representative.
When a party requests or gives its approval to a change order, it is important to confirm the request or approval came from an authorized representative.
- Avoid Vague and Open-Ended Change Orders.
Indeed, the vaguer a change order, the more likely it can lead to a dispute. Vague and open-ended change orders, including change orders that provide for payment on a time and materials basis, can be difficult for an owner to budget and schedule. This can lead to disputes as to cost and/or time extensions.
- Oral Assurances for Payment Without a Signed Change Order May Not Be Recoverable.
When a party provides verbal assurances to another party for extra work without following the change order process, there is a much higher likelihood that disputes will occur. Although there is case law that may allow a contractor to recover for extra work in private contracts based on oral promises, the parties should avoid placing themselves in such a legal position. Notably, in public contracts, a contractor may not be able to recover for any extra work without a signed changed order, even with verbal assurances of payment from the owner.
About the Author:
John E. Bowerbank, Newmeyer & Dillion
Mr. Bowerbank is a partner in the Newport Beach office and practices in the areas of business, insurance, real estate, and construction litigation. You can reach John at john.bowerbank@ndlf.com
Read the court decisionRead the full story...Reprinted courtesy of
The Impact of the Russia-Ukraine Conflict on the Insurance Industry, Part One: Coverage, Exposure, and Losses
August 22, 2022 —
Michael Kopit - Lewis Brisbois(August 10, 2022) - The Russia-Ukraine conflict has far-reaching implications for the insurance industry and for insurers and insureds alike. Many corporate policy holders around the world have withdrawn or scaled back operations with Russia and/or Russian-based corporations. In doing so, the corporate policy holders left behind property, assets, and inventory in Russia and/or suffered losses in revenue. Corporate policy holders are looking to their insurers to offset the losses. It is estimated that the insurance and reinsurance markets could face losses at nearly $20 billion. S&P Global predicts that losses could reach $35 billion. Additionally, the conflict in Ukraine creates uncertainty for insurers on how to navigate the influx of claims, especially from the cybersecurity sector.
A key issue with the rise in claims is coverage. The general rule is that coverage under a policy for any loss must be evaluated by considering the policy language, the law applicable to the governing jurisdiction, and the facts surrounding the loss. Many policies contain a “war exclusion” clause, which can exclude property losses resulting from acts of war or governmental instability. However, corporate policy holders may have Political Risk Insurance, which can provide coverage for losses for items such as damaged property, seized property, and lost assets at a time of political turmoil or war. Even if a policy has Political Risk Insurance, it does not guarantee payout. Careful analysis of the policy language and facts surrounding the loss must still take place. For example, in the event of property claims, an insurer must still determine whether the loss is related to the conflict and/or whether the subject property was voluntarily abandoned or seized.
Read the court decisionRead the full story...Reprinted courtesy of
Michael Kopit, Lewis BrisboisMr. Kopit may be contacted at
Michael.Kopit@lewisbrisbois.com
Ex-San Francisco DPW Director Sentenced to Seven Years in Corruption Case
September 26, 2022 —
James Leggate - Engineering News-RecordA federal judge sentenced Mohammed Nuru, the former San Francisco public works director, to seven years in prison for bribery and kickbacks.
Nuru, 59, pleaded guilty to the charge of defrauding the public of its right to honest services earlier this year amid a federal investigation into public corruption in San Francisco’s government.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
Read the full story...
Read the court decisionRead the full story...Reprinted courtesy of
