Seattle Washington Building Expert Directory

A Lack of Sophistication With the Construction Contract Can Play Out In an Ugly Dispute

November 07, 2022 — David Adelstein - Florida Construction Legal Updates
There are times where a lack of sophistication can come back to haunt you. This is not referring to a lack of sophistication of the parties. The parties, themselves, could be quite sophisticated. This is referring to a lack of sophistication with the construction contract forming the basis of the relationship. While parties don’t always want to buy into the contract drafting and negotiation process, it is oftentimes the first document reviewed. Because contract terms and conditions are important. They govern the relationship, the risk, scope, amount, and certain outcomes with disputes. However, a lack of sophistication can play out when that contract that should govern the relationship, the risk, the scope, the amount, and certain outcomes doesn’t actually do that, or if it does, it does it poorly. An example of how bad a dispute can play out when it comes to the lack of sophistication on the front end is Avant Design Group, Inc. v. Aquastar Holdings, LLC, 2022 WL 6852227 (Fla. 3d DCA 2022), where a cost-plus contract was treated as a lump sum contract. Here, an owner planned to perform an extensive interior build-out to a residential unit. The owner had an out-of-country architect; because the architect was not licensed in Florida, the owner hired a local architect/designer to oversee construction and obtain goods and services for the residential interior build-out. The contract was nothing but a proposal of items and costs. The proposal stated the owner “would pay the cost of goods and services of the vendors, plus pay a ‘20% Interior Design & Administrative Fee’” to the local designer. Avant Design Group, 2022 WL at *1. The proposal further stated, “This preliminary budget of the Client’s construction costs include [sic] anticipated costs for construction materials, labor and sales tax. Any other cost, including but not limited to freight, cartage, shipping, receiving, storage and delivery are not included in the preliminary budget and will be invoiced separately.” Id., n.2. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Snooze You Lose? Enforcement of Notice and Timing Provisions

November 11, 2024 — Cornelius F. "Lee" Banta, Jr. - ConsensusDocs
Deadlines are an inescapable part of the construction industry. Bid deadlines. Submittal deadlines. Material delivery deadlines. Substantial completion. Final completion. And so, inevitably, fighting about deadlines becomes a necessary byproduct. Was the deadline really a deadline? Was the schedule slippage on the critical path? Should there be an equitable extension to the date of substantial completion? Given the amount of attention and concern conferred on deadlines, those drafting construction contracts naturally seek to clarify which deadlines really matter with the inclusion of notice and timing provisions. A contract’s change order and claims procedures are often a key friction point for those drafting and administering the contract. Should there be a requirement for prior written notice of a claim for cost/time relief? How much advance notice? Who should the request be sent to? Is a specific form of notice required? What are the consequences of failing to provide timely notice? A practitioner should pay careful attention to negotiating these terms on the front end, because rest assured, these contract provisions will garner scrutiny when a change order dispute boils over. Read the court decision
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Reprinted courtesy of Cornelius F. "Lee" Banta, Jr., Peckar & Abramson, P.C.
Mr. Banta may be contacted at lbanta@pecklaw.com

Court Rules that Collapse Coverage for Damage Caused “Only By” Specified Perils Violates Efficient Proximate Cause Rule and is Unenforceable

January 26, 2016 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Vardanyan v. Amco Ins. Co. (No. F069953, filed 12/11/15) a California appeals court held that policy wording that the collapse coverage for damage “caused only by” certain specified perils did not mean “solely” by those specified perils, but that coverage may nonetheless apply even if excluded causes contributed to the loss, under the Insurance Code section 530 and the efficient proximate cause rule. In Vardanyan, the insured made a claim for water damage from unknown origin to a rental house. An engineer concluded that the various sources of moisture—roof leaks, gutters and downspouts that did not channel the water away from the house, a faucet spraying water on the exterior of the house, leaking toilet and bathtub, and humidity—contributed to the damage to the house, along with poor construction, termite damage and decay. The insurer denied coverage citing multiple policy exclusions, including damage caused by seepage or leakage of water from a plumbing system; deterioration; mold, wet or dry rot; settling of foundations, walls or floors; earth movement; water damage; neglect; weather conditions; acts or decisions of any person; and faulty or defective design, workmanship, repair, construction, or maintenance. The insured retained a public adjuster who disagreed, in particular citing the policy’s “Other Coverage 9” coverage for collapse of a building or part of a building “caused only by one or more” of a list of perils, including hidden decay, hidden insect damage, and weight of contents, equipment, or people. Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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Key Amendments to Insurance Claims-Handling Regulations in Puerto Rico

September 23, 2019 — Andres Avila & Richard W. Brown - SDV Insights
Policyholders in Puerto Rico should be aware of significant benefits provided by recent amendments to the Insurance Code. New rules establish an expedited method of property insurance dispute resolution, mandatory expedited partial payments in the event of catastrophic events, and protection against bad faith claims handling by insurers. Appraisal Process with a Puerto Rican Twist A key amendment is the establishment of an appraisal process, widely used for many years in the United States and now adopted in Puerto Rico. Commercial and personal property insurers in Puerto Rico shall include, in their policies, a clause for an appraisal process according to Article 11.150 of the Insurance Code of Puerto Rico, 26 L.P.R.A. § 101 et seq. (“the Code”). The appraisal process provides both policyholders and insurers the option to submit insurance claims to an impartial umpire if a dispute arises over the value of covered damages or losses. The umpire and appraisers do not have authority to resolve coverage or legal issues. They can only resolve disputes over the quantum claimed for losses already determined to be covered by the insurer. Id. Each party is required to pay its own appraiser’s fees and split equally the fees of the umpire. Id. Reprinted courtesy of Andres Avila, Saxe Doernberger & Vita, P.C. and Richard W. Brown, Saxe Doernberger & Vita, P.C. Mr. Avila may be contacted at ara@sdvlaw.com Mr. Brown may be contacted at rwb@sdvlaw.com Read the court decision
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Study Finds San Francisco Bay is Sinking Faster than Expected

July 15, 2019 — Alan Rider - Engineering News-Record
All coastal cities in the U.S. face some potential threat from sea-level rise, but areas around San Francisco Bay may be more vulnerable than previously thought according to a recent study by Arizona State University’s Manoochehr Shirzaei and UC Berkley’s Roland Bürgmann published in the peer-reviewed journal Science Advances. Read the court decision
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Reprinted courtesy of Alan Rider, ENR
ENR may be contacted at ENR.com@bnpmedia.com

Factor the Factor in Factoring

May 03, 2017 — David Adelstein - Florida Construction Legal Updates
What is factoring? Have you heard this term used in the business context? Factoring is not uncommon in the business world. It comes up when a business is in need of cash (immediate cash flow) and sells/assigns money owed under accounts receivable to a third party known as a factor. The factor purchases the accounts receivable at a discount in consideration of an assignment of the full value of the accounts receivable from the debtor (the entity that owes the money under the accounts receivable). The factoring arrangement is a recognized relationship, implicates Florida’s Uniform Commercial Code, and places obligations on the debtor to pay the factor directly for the accounts receivable upon notice of the assignment. 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

Construction Wall Falls, Hurts Three

November 06, 2013 — CDJ STAFF
A construction wall collapsed on November 1 during heavy rainfall in New York City. Two women were briefly trapped under the rubble, while other bystanders worked to free them. Einstein Construction Group, a contractor based in Texas, was remodeling the first floor for a new tenant, a Japanese restaurant. The company, which disclaims responsibility for the occurrence, were cited for violations and a stop work order was issued. Just prior to the incident, high winds whipped through the area. The construction wall allegedly had not been securely attached to the building. Read the court decision
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Wisconsin High Court Rejects Insurer’s Misuse of “Other Insurance” Provision

March 04, 2019 — Michael S. Levine & David M. Costello - Hunton Andrews Kurth
The Wisconsin Supreme Court held last week in Steadfast Ins. Co. v. Greenwich Ins. Co. that two insurers must contribute proportionally to the defense of an additional insured under their comprehensive liability policies. In 2008, torrential rainstorms battered the Milwaukee area for two days. The downpour overwhelmed the city’s sewer system, causing significant flooding in homes throughout the region. Out of those floods sprang several lawsuits against the Milwaukee Metropolitan Sewerage District (“MMSD”) for negligent inspection, maintenance, repair, and operation of Milwaukee’s sewage system. MMSD was an additional insured under liability policies covering two other water service providers responsible for the city’s sewer systems. The first policy was issued by Greenwich Insurance Company for United Water Services Milwaukee, LLC, and the second was issued by Steadfast Insurance Company for Veolia Water Milwaukee, LLC. After learning of the lawsuits, MMSD tendered its defense of the sewage suits to both insurers. Steadfast accepted the defense; but Greenwich refused, claiming that its policy was excess to Steadfast’s based on an “other insurance” clause in Greenwich’s policy. Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and David Costello, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Costello may be contacted at dcostello@HuntonAK.com Read the court decision
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