Miller Act Bond Claims Subject to “Pay If Paid”. . . Sometimes
November 04, 2019 —
Christopher G. Hill - Construction Law MusingsThe Federal Miller Act is a great tool that subcontractors and suppliers on Federal projects can use for collection of wrongfully withheld amounts due. However, as a recent federal case from the Eastern District of Virginia points out, the construction contract’s terms affect when a subcontractor or supplier can use this great collection tool and how much it can recover.
In Aarow v Travelers the Court looked at the interaction between a typical termination clause, a “pay when paid” clause, and the Miller Act. The key facts are these. The general contractor on the project at issue, Syska, did not get paid some disputed amounts by the owner and subsequently did not pay Aarow, the plaintiff and a subcontractor on the project. Aarow then refused to continue work and was terminated by Syska who then took over the completion of the work. Aarow sued, seeking damages for the value of its work prior to the termination. Travellers, the surety defended stating that, if Aarow was properly terminated for cause by Syska, then Aarow was not entitled to payment under the contract until such time as the work was completed and accepted by the owner. The termination clauses are set out in the linked opinion.
The Court agreed with Travelers, stating that the pay when paid clause created a situation whereby Aarow could not stop work merely because of a non-payment by Syska attributed to non-payment by the owner. The Court was clear in stating that the Miller Act trumps “pay when paid” in instances where the only cause for non-payment is non-payment by an owner. The Court then reasoned that it is the interaction between the termination and “pay when paid” provisions, and not the “pay when paid” clause itself, that exonerated Travelers because it created the default by Aarow due to its refusal to continue work. In short, Aarow was properly terminated for cause because it left the job without justification and therefore Travelers was not liable.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Insurance for Defective Construction Now in Third Edition
November 07, 2012 —
CDJ STAFFAvailable both in print and online, the International Risk Management Institute, Inc has brought out a third edition of Insurance for Defective Construction. The work is written by Patrick J. Wielinski of Cokinos, Bosien & Young, a Dallas-Fort Worth law firm. Mr. Wielinski practice focuses on insurance coverage. Insurance for Defective Construction is described as “a must read for anyone who buys, sell, or underwrites construction insurance or who becomes involved in construction claims.”
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Civil Engineers: Montana's Infrastructure Grade Declines to a 'C-'
December 23, 2024 —
American Society of Civil EngineersHelena, MT — The Montana Section of the
American Society of Civil Engineers (ASCE) today released the
2024 Report Card for Montana's Infrastructure, assigning 14 categories of infrastructure a cumulative grade of 'C-', which is on par with the national average from the
2021 Report Card for America's Infrastructure. This is a one-notch decrease from the 'C' grade Montana received in its last report in 2018, citing increasingly severe weather events putting strain on aging and underfunded assets, and one of the fastest growing populations requiring expansions of transportation, water and energy infrastructure.
The report includes the first-ever chapter on Montana's broadband infrastructure, assigning an 'I' grade for 'incomplete' due to a lack of sufficient condition data; however, the chapter does note that 71% of Montana residents have access to adequate broadband service, and the IIJA provided nearly $630 million to expand this access across the state.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 160,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Good Indoor Air Quality Keeps Workers Healthy and Happy
June 10, 2024 —
Ellie Gabel - Construction ExecutiveMost people primarily think of air conditioners as appliances to keep people cool. However, a 2024 study of office air conditioners shows that they promote indoor air quality by minimizing the harmful effects of bushfire smoke.
The research indicated air conditioners used in office environments can trap particles and reduce people’s exposure to harmful elements such as sulfates and nitrates. The researchers collected particulate matter from commercial air conditioner filters during the peak bushfire season in Australia. Evaluations showed the daily particulate matter levels were usually two to three times the average amount. However, some hourly maximums were 10.5 times the usual.
The team took samples for four months, finding the specimens exceeded national air quality standards 19% of the time. Analyses performed in a university showed commercially available air filters captured significant amounts of bushfire smoke, reducing the associated hazards for building occupants.
Reprinted courtesy of
Ellie Gabel, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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New Member Added to Seattle Law Firm Williams Kastner
May 21, 2014 —
Beverley BevenFlorez-CDJ STAFFAttorney Todd W. Blischke has become a member of Seattle, Washington’s Williams Kastner law firm, according to Herald Online. Blishcke, who “has experience representing contractors, sureties, real estate developers, public agencies and private owners” will “chair the firm’s Construction Litigation and Surety Practices Team.”
“Todd is an excellent addition to the firm’s Seattle office, and we are thrilled to have him on board,” said Jessie Harris, Managing Director of Williams Kastner, as quoted by Herald Online. “His years of experience in construction and surety matters will be an asset to Williams Kastner’s established construction litigation practice.”
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Construction Litigation Roundup: “Wrap Music to an Insurer’s Ears?”
February 05, 2024 —
Daniel Lund III - LexologyThe general contractor on a New Orleans condominium construction project obtained a Contractor Controlled Insurance Program/CCIP policy or "Wrap-Up" policy for the job.
An accident occurred on the job when a construction elevator/hoist fell, injuring several workers. The elevator/hoist was provided by a subcontractor, pursuant to a rental agreement and related subcontract with the general contractor. Contained within the subcontract was a provision which states that the general contractor "has arranged for the Project to be insured under a controlled insurance program (the "CCIP" or "WrapUp"),” and that the CCIP shall provide "commercial general liability insurance and excess liability insurance, in connection with the performance of the Work at the Project site."
A third-party administrator for the wrap-up policy had been in communication with the subcontractor prior to the commencement of the work, “specifically advising that insurance coverage was not automatic” and providing the subcontractor with an enrollment form for the CCIP. Ultimately, the subcontractor “declined to comply with the request,” stating that the subcontractor would "not participate in paying any wrap insurance premiums" – because the subcontractor had its own insurance.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Insurer Fails to Establish Prejudice Due to Late Notice
October 17, 2022 —
Tred R. Eyerly - Insurance Law HawaiiSummary judgment awarded to the insurer was reversed because the insurer presented no evidence of prejudice caused by untimely notice. Perez v. Citizens Prop. Ins. Corp., 2022 Fla. App. LEXIS 5435 (Fla. Ct. App. Aug. 10, 2022).
The insureds' home suffered water damage due to Hurricane Irma around September 10, 2017. A claim was submitted to Citizens on November 27, 2018. Citizens had an independent adjuster inspect, but then denied the claim due to untimely notice.
The insureds sued and Citizens moved for summary judgment. Citizens argued it was prejudiced because it could not confirm the cause of the loss or the property damage attributed to it.
The court agreed that the insureds' notice was untimely. The insureds were notified by tenants renting the property that leaks appeared around the time of Hurriane Irma. The policy language, however, placed the burden to rebut the presumption of prejudice caused by late notice on Citizens. Whether the insurer was prejudiced was a question of fact. Citizens failed to demonstrate any prejudice due to the untimely notice.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
The "Dark Overlord" Strikes The Practice Of Law: What Law Firms Can Do To Protect Themselves
April 17, 2019 —
Ivo G. Danielle – Newmeyer & DillionCybersecurity breaches involving law firms are on the rise with each passing year. Law firms are prime targets for cyber criminals seeking confidential and sensitive information because of the various types of legal work that law firms normally handle for their clients. Whether it be mergers and acquisitions, the use of intellectual property, purchase agreements, bankruptcy or even litigation involving divorce, law firms are a rich depository for highly confidential and sensitive information. As a result, law firms must employ comprehensive security measures to protect themselves from security breaches or risk being on the losing end of a costly malpractice claim, and suffer severe reputational harm.
Law Firms Continue To Be Targeted By Cybercriminals
According to the American Bar Association ("ABA") 2018 Legal Technology Survey Report, 23% of the law firms who participated in the survey reported that their law firm experienced a data breach. Although this may be just a 1% increase from the 22% who reported a breach in 2017, it is important to understand that this is an increase of 8% from the stable percentages reported from 2013 through 2016.1 The 2018 survey report also revealed that security breaches fluctuated with firm size – 14% for solo law firms, 24% for firms employing 2-9 attorneys, approximately 24% for firms with 10-49 attorneys, 42% for firms with 50-99 attorneys, and approximately 31% for those firms employing 100 or more attorneys.
Latest Law Firm Security Breaches
The notorious criminal group called "The Dark Overlord" has a history of committing data breaches of high profile companies such as Gorilla Glue, Netflix, Larson Studios, multiple healthcare companies, and Little Red Door Cancer Agency. Their goal is simple – steal sensitive information and then extort payment from the victims by threatening to release the sensitive information to the public.
On December 31, 2018, this cybercriminal group announced to the world that they had acquired 18,000 documents containing highly sensitive legal information related to insurance based litigation connected to the 9/11 tragedy. The stolen information was the attorney/client property of Lloyd's of London, Silverstein Properties, and Hiscox Syndicates, Ltd. In its announcement, The Dark Overlord boasted that they were in possession of client sensitive information, such as: "emails; retainer agreements; non-disclosure agreements; settlements, litigation strategies; liability analysis; defense formation; collection of expert witness testimonies; communication with government officials in countries all over the world; voice mails; dealings with the FBI, USDOJ, DOD, confidential communications, and so much more."
Subsequent to the data breach, The Dark Overlord announced to the public that they designed a compensation plan that would allow for public crowd-funding for its organization to permit the public to view the stolen information in exchange for bitcoin payment. The more public funding it receives, the more stolen sensitive information will be unlocked and released to the public. It is estimated that this cybercriminal group already distributed information to the public on two separate occasions during the month of January 2019.
High profile cybersecurity breaches of law firms is nothing new – for example, the infamous Panama Papers breach, where cybercriminals leaked 11.5 million documents exposing the shadowy business of setting up offshore corporations as tax shelters for businesses, celebrities, and politicians - and the infamous Petya Malware attack which resulted in a digital lockdown of one of the world's largest law firms, DLA Piper. However, despite the infrequency of publicized cyber-attacks of law firms by the media, the FBI has recently announced that law firms should expect an increase in security attacks by cybercriminals because law firms are now viewed as "one-stop shops" for cybercriminals. Therefore, in order to combat the inevitable increase in cyber-attacks, law firms must get prepared.
How Law Firms Can Protect Themselves
All law firms will agree that the most serious consequence of a security breach for their firm would be the unauthorized access to sensitive client data. The American Bar Association's Model Rules of Professional Conduct, specifically Rules 1.1 and 1.62 and related Comments, require an attorney to take competent and reasonable measures to safeguard information relating to their clients. This duty to "safeguard' information imposes a significant challenge to firms when using technology in connection with protecting client information because most law firms are not savvy with technology and lack proper cyber security training.
In order for a law firm to protect itself from security breaches and inadvertently violate its duty of safeguarding a client's sensitive information, it is important to take the following actions:
- Start by taking an inventory and risk assessment of the firm to determine what needs to be protected – the inventory should include both technology and data;
- Develop, implement and maintain an appropriate cybersecurity program that complies with applicable ethical and legal obligations;
- Ensure the cybersecurity program addresses people, policies and procedures, and technology. The cybersecurity program must designate an individual or a group to be in charge and coordinate security;
- Develop an incident response plan scaled to the size of the firm;
- Continually train staff and attorneys to identify and understand potential cybersecurity threats;
- Consider implementing a third-party assessment of firm's cybersecurity program and policies;
- Purchase cyber liability for insurance which not only covers first party losses to law firms (like lost productivity, data restoration, and legal expenses) but also liability protection to third parties;
- Implement authentication and access controls for network, computers and mobile devices used by the firm's staff and attorneys;
- Consider the use of full-drive encryption for computers and mobile devices;
- Have staff and attorneys avoid and/or limit the use of public WiFi when working remotely; and
- Create a disaster recovery plan to backup all data in the event of a cyber-attack or natural catastrophe.
Continually reviewing, implementing, training and updating a firm's cybersecurity program and protocols will help safeguard sensitive and confidential client information and/or data. No law firm wants to be the next data breach headline – so take the necessary steps to avoid a potential disaster.
1 Past ABA Legal Technology Surveys reported 14% in 2016, 15% in 2015, 14% in 2014 and 15% in 2013.
2 On November 1, 2018, California adopted ethics rules patterned after the ABA Model Rules of Professional Conduct.
Ivo Daniele is a seasoned associate in Newmeyer & Dillion's Walnut Creek office. His practice includes representing private and public companies with both their transactional and litigation needs. You can reach Ivo at ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business law, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
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