FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

What Counts as Adequate Opportunity to Cure?

June 13, 2022 — Christopher G. Hill - Construction Law Musings
qimono @ PixabayHere at Musings, we like to discuss (likely more than readers would like) the fact that in Virginia, the contract is king and its terms will be looked at carefully by the courts. One of those provisions that will be looked at carefully is the so-called “cure period.” The “cure period” is the time that a subcontractor has to fix any non-compliant construction after receiving notice of any deviation from the contract documents that must be fixed. In United States ex rel Allan Myers VA, Inc. v. Ocean Construction Services, Inc. the federal court for the Eastern District of Virginia examined what it means to grant a proper opportunity to cure. The Ocean Construction Services case arises from a contractual dispute between Allan Myers VA Inc. and Ocean Construction Services Inc., or OCS, involving renovation work performed in sections of Arlington National Cemetery. Presently before the court is Myers’ motion for partial summary judgment, arguing that the undisputed facts demonstrate that it was not provided with a three-day cure period, a contractual prerequisite to OCS terminating the subcontract for default. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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“Bound by the Bond”

September 02, 2024 — Daniel Lund III - Lexology
A New York trial court granted judgment in favor of a performance bond surety on a construction project, based upon the failure of the claiming party to abide by the terms of the bond. The “AIA Document A312” bond form – described by the court (quoting surety law authority) to be “one of the clearest, most definitive, and widely used type of traditional common law ‘performance bonds’ in private construction” – contains various procedures which must be honored as a “condition precedent to an action to recover” on the bond/against the surety. One of those prerequisites is a “declaration of default” concerning the contractor principal (here, a subcontractor). The case involved the construction of an 85-story skyscraper in midtown Manhattan, and the performance of the subcontract for the building’s superstructure. The bonded contract was at a value of approximately $25,000,000 and obligated the sub to provide a performance bond “in a form similar to the [A312 bond],” and which was otherwise satisfactory to the obligee/construction manager. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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Giant Gas Pipeline Owner, Contractor in $900M Payment Battle

January 22, 2024 — David Godkin, Debra K. Rubin
A Canadian partnership including energy developer TC Energy that is building the $10.6-billion Coastal GasLink pipeline, and a key project contractor, are disputing more than $900 million in project costs in court and in upcoming arbitration. The 670-kilometer line in British Columbia that announced mechanical completion last year is set to carry liquefied natural gas to the LNG Canada export terminal under construction on the province’s Pacific Coast—the country’s first such facility. Reprinted courtesy of David Godkin, Engineering News-Record and Debra K. Rubin, Engineering News-Record Ms. Rubin may be contacted at rubind@enr.com Read the full story... Read the court decision
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New York Court Finds No Coverage Owed for Asbestos Losses Because Insured Failed to Prove Material Terms

February 15, 2021 — Gregory S. Capps & Marianne E. Bradley - White and Williams LLP
In the long-tail insurance context, it is not unusual to have issues arise addressing “lost” or “missing” policies. In an opinion issued on January 22, 2021, a New York court ruled that an insurer did not owe coverage to its insured for underlying asbestos claims because the insured had failed to establish the material terms of a “lost” policy under which it sought coverage for the underlying claims. The lawsuit, Cosmopolitan Shipping Company, Inc. v. Continental Insurance Company,[1] arose out of a coverage dispute between Plaintiff Cosmopolitan Shipping Co., Inc. (Cosmopolitan) and its insurance carrier, Continental Insurance Company (CIC), in connection with bodily injury claims arising out of asbestos exposure. The case provides a good analysis of what an insured must do to establish coverage under a “lost” or “missing” policy. During and after World War II, Cosmopolitan chartered and operated a number of shipping vessels on behalf of United Nations Relief and Rehabilitation Administration (UNRRA). In the 1980s, seamen who had worked on board Cosmopolitan’s vessels between 1946 and 1948 filed lawsuits against Cosmopolitan seeking damages for injuries arising out of alleged exposure to asbestos on Cosmopolitan’s vessels. Cosmopolitan sought coverage from CIC for the claims, alleging that CIC had insured Cosmopolitan’s vessels during the relevant time period under a protection and indemnity policy issued to the UNRAA (the P&I Policy). Reprinted courtesy of Gregory S. Capps, White and Williams LLP and Marianne E. Bradley, White and Williams LLP Mr. Capps may be contacted at cappsg@whiteandwilliams.com Ms. Bradley may be contacted at bradleym@whiteandwilliams.com Read the court decision
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Pulte Home Corp. v. CBR Electric, Inc.

August 24, 2020 — Michael Velladao - Lewis Brisbois
In Pulte Home Corp. v. CBR Electric, Inc., 50 Cal.App.5th 216 (June 10, 2020), the California Court of Appeal reversed the trial court’s entry of judgment in favor of six subcontractors with respect to an equitable subrogation lawsuit filed by St. Paul Mercury Insurance Company (“St. Paul”). St. Paul filed the lawsuit after defending Pulte Home Corp. (“Pulte”) against two construction defect lawsuits. The lawsuit contended that St. Paul was entitled to seek recovery of defense costs incurred on behalf of Pulte based on equitable subrogation. St. Paul relied on the indemnity clauses in each of the subcontracts, and argued that the subcontractors had breached their contracts with Pulte. As such, each subcontractor was obligated to pay an equitable share of the defense of the construction defect lawsuits relating to their work on the homes at issue in such lawsuits. The trial court ruled against St. Paul and held that the subcontractors’ failure to pay defense costs did not “cause” the homeowners’ claims, such that there was no causal connection supporting a claim for equitable subrogation. In addition, the trial court found that “equitable subrogation was an all-or-nothing claim, meaning it required a shifting of the entire amount of defense costs to the subcontractors on a joint and several basis and did not allow for an apportionment of costs among the defendant subcontractors.” In reversing the trial court’s decision, the Court of Appeal reasoned that St. Paul stood in the shoes of Pulte and was limited to pursuing recovery from the subcontractors based on the same rights as afforded to Pulte under the subcontracts. The Court of Appeal noted that St. Paul was seeking reimbursement of defense costs from the subcontractors based on the theory that they were contractually liable for paying an equitable share of defense costs. The Court of Appeal also noted that St. Paul’s claim was not premised on the contention that the subcontractors’ failure to pay defense costs caused the homeowners’ claims. Rather, St. Paul’s claim was premised on the subcontractors’ breach of their defense duty owed to Pulte under the indemnity clauses in their subcontracts. Read the court decision
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Reprinted courtesy of Michael Velladao, Lewis Brisbois
Mr. Velladao may be contacted at Michael.Velladao@lewisbrisbois.com

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Insurers Reacting to Massachusetts Tornadoes

August 11, 2011 — CDJ STAFF

The Patriot-Ledger reports that insurers could pay out as much as $200 million to cover homes damaged or destroyed in the tornadoes that hit central and southern Massachusetts in June, 2011. Joseph Murphy, Commissioner of the State Division of Insurance didn?t foresee problems with insurers covering these claims. “At this point, there doesn’t seem to be any one company overexposed in that area,” he told the Patriot-Ledger.



Insurance executives did not think the tornadoes would cause them to raise rates. Steve Chevalier, CEO of NLC Companies, said, “it’s a major event for those impacted by it, but it’s not close to a financial hit to us.”



One insurer noted that the winter weather generated more claims; however the cumulative value of those claims was $15 million.



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Protect Projects From Higher Repair Costs and Property Damage

March 04, 2024 — Michael Teng - Construction Executive
Every aspect of a jobsite costs more today, from materials and labor to tools and equipment. Take construction input costs for example. While relatively flat in 2023, they remain almost 40% higher than they were pre-pandemic. With borrowing costs still high in the face of a stubbornly strong economy, project financing will remain a challenge. Still, contractors are expected to break more ground in 2024, fueled in part by the CHIPS Act, the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. Despite wages growing and the labor market remaining tight, many businesses are expected to dive deeper into their backlogs. Meanwhile, the economy is expected to grow with a chance for a short and mild recession. As industry leaders gauge economic pressures, it’s clear businesses must manage their costs—and financial risks in 2024. It’s a year where insurance and safety should take priority. Below are economic trends to monitor, and insurance strategies to help protect this year’s bottom line. Reprinted courtesy of Michael Teng, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Florida’s New Civil Remedies Act – Bulletpoints As to How It Impacts Construction

April 10, 2023 — David Adelstein - Florida Construction Legal Updates
There has been much talk about Florida’s new Civil Remedies Act (House Bill 837) that Governor DeSantis approved on March 24, 2023. As it pertains to construction, here is how I see it with key bulletpoints on the impact this new Act has on the construction industry:

• New Florida Statute s. 86.121 – This is an attorney’s fees statute for declaratory relief actions to the prevailing insured to determine insurance coverage after TOTAL COVERAGE DENIAL. (Note: A defense offered pursuant to a reservation of rights is not a total coverage denial.) This right only belongs to the insured and cannot be transferred or assigned. And the parties are entitled to the summary procedure set forth in Florida Statute s. 51.011 requiring the court to advance the cause on the calendar. The new statute does say it does NOT apply to any action arising under a residential or commercial property insurance policy. (Thus, since builder’s risk coverage is a form of property insurance, the strong presumption is this new statute would not apply to it.) Rather, the recent changes to Florida Statute s. 626.9373 would apply which provides, “In any suit arising under a residential or commercial property insurance policy, there is no right to attorney fees under this section.”
• Florida Statute s. 95.11 – The statute of limitations for negligence causes of action are two years instead of four years. This applies to “causes of action accruing after the effective date of this act.”

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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