Tishman Construction Admits Cheating Trade Center Clients
December 17, 2015 —
Erik Larson – BloombergTishman Construction Corp., builder of One World Trade Center in New York’s financial district, admitted to an overbilling scheme spanning a decade and agreed to pay $20 million in restitution and penalties.
The scam included the World Trade Center project, the renovation of the landmark Plaza Hotel on 5th Avenue and the expansion of the Javits Convention Center in Manhattan, the U.S. Attorney’s Office in Brooklyn, New York, said Thursday.
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Erik Larson, Bloomberg
Withholding Payment or Having Your Payment Withheld Due to Disputes on Other Projects: Know Your Rights to Offset
January 04, 2021 —
Christopher C. Broughton, Jones Walker LLP - ConsensusDocsIntroduction
The right to offset refers to the common sense ability to reduce or eliminate your payment obligations to a party who owes you money on another contract. With offsets, common law largely tracks common sense. The right of offset is recognized by statute and court decisions in many states as well as under federal law and the U.S. Bankruptcy Code. The right to offset can also be established in the contract or subcontract.
But like many things that may seem simple, the right to offset can easily become complex. This article provides an overview of the extent and limits of the right to offset varies from state to state and with federal government contracts about the extent and limits of the right of offset. Construction trust fund statutes add another layer of complications.
These variations may not be obvious or intuitive, but they have a tremendous impact on your right to get paid or your right to withhold payment. Because of the variations, you must always confirm the law applicable to your contract or subcontract, which may not be where the project or you are located.
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Christopher C. Broughton, Jones Walker LLPMr. Broughton may be contacted at
cbroughton@joneswalker.com
With Wildfires at a Peak, “Firetech” Is Joining Smart City Lineups
October 21, 2024 —
James P. Bobotek - Gravel2Gavel Construction & Real Estate Law BlogThe
threat of extreme wildfires has doubled in the past 20 years, with almost 20,000 fires blazing across the United States in 2024 alone. These high-intensity fires can be deadly, expensive, and create lingering health and environmental consequences. While we are used to seeing firefighters on the frontlines, researchers hope that next-generation smart technology, augmented by artificial intelligence (AI), will also play a key role in battling these conflagrations. Many municipalities, particularly those near wildfire-prone forests, are beginning to incorporate fire-focused advances (or “firetech”) into their smart city ecosystems.
“Smart cities” are urban centers enhanced by utilities, emergency services,
traffic signals and more that are linked through information and communications technology. Though the concept can spark cybersecurity-related concerns, many locales are gradually implementing many different kinds of smart tech. Following the 2023 wildfire that devastated Maui, for example, Hawaii installed a network of
cloud-based fire and wind sensors that use AI to detect wildfires in real time. Smart tools like these can aid in predicting and discovering fires, streamlining emergency alert protocols, calculating vital analytics and improving firefighter safety. The National Fire Protection Association (NFPA) is
actively studying these innovations, particularly in terms of environmental (smart buildings or robotics), operational (communications) and personnel (PPE sensors or biometrics). Below are a few of the key technologies to watch in this emerging field:
- Smart Sensors. A total of 80 sensors (64 wildfire sensors and 16 wind sensors) were placed throughout Hawaii starting in March of 2024. Attached to existing utility poles, they detect heat in the air, and then engage AI and smart learning to distinguish smoke particles and gases produced by fires from those commonly found in Hawaii’s atmosphere—such as volcanic ash and ocean salt. Positioned in “strings,” the sensors “talk” to each other and send text messages to officials when they find a problem.
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James P. Bobotek, PillsburyMr. Bobotek may be contacted at
james.bobotek@pillsburylaw.com
Key Amendments to Insurance Claims-Handling Regulations in Puerto Rico
September 23, 2019 —
Andres Avila & Richard W. Brown - SDV InsightsPolicyholders 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
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When to use Arbitration to Resolve Construction Disputes
February 25, 2014 —
Beverley BevenFlorez-CDJ STAFFOn the blog Construction Contractor Advisor, Craig Martin answers the question of whether arbitration is always the best choice for resolving construction claims. His answer: “Some claims may benefit from arbitration, but the benefit is not always clear.”
Martin brings forth four points to consider. First, AIA Contracts do not “push Arbitration.” Second, the cost of arbitration may be expensive: “You could well spend over $5,000 just to have the arbitrator decide your case—again, not to mention your own attorneys fees.” Third, arbitration doesn’t avoid discovery. And finally, “mediation is always an option, regardless of which way you pursue your claim.”
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Challenging a Termination for Default
September 23, 2024 —
David Adelstein - Florida Construction Legal UpdatesNo contractor wants to be terminated for default. It is the harshest contractual recourse. It is a recourse that has implications, particularly in the public sector. However, a party needs to be in a position to support the basis of the termination for default, and the terminated party, in most instances, should not be in a position to imply accept the basis of the default. This applies regardless of the project.
In the federal context: “When a contractor challenges a default termination, the government bears the burden of establishing the validity of the termination.” Sergent’s Mechanical Systems, Inc. v. U.S., 2024 WL 4048175, *7 (Fed.Cl. 2024) (internal quotation and citation omitted). Once the government establishes the default, “the contractor bears the burden of establishing that the default was excused by fault of the government.” Id. at *8 (internal quotation and citation omitted).
Relevant considerations as to whether the contractor is in default include the contractor’s failure to meet contract specifications or the required schedule. Sergent’s Mechanical Systems, supra, at *8. “[T]here is ‘a requirement that the contractor give reasonable assurances of performance in response to a validly issued cure notice.” Id. (internal quotation and citation omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Challenging and Defending a California Public Works Stop Payment Notice: Affidavit vs. Counter-Affidavit Process
October 21, 2019 —
William L. Porter - Porter Law GroupOne of the most effective collection procedures available to subcontractors and suppliers to California Construction projects is the “stop payment notice” procedure found under California Civil Code sections 9350 – 9364. Under this procedure, the unpaid subcontractor or supplier may serve the stop payment notice on the public entity and the direct or “prime” contractor and cause the public entity to withhold from the direct contractor 125% of the funds identified in the stop payment notice. Thereafter, funds will not generally be released unless the parties reach a settlement agreement or the issue is decided through litigation, arbitration or mediation. There is however an alternative procedure available to direct contractors to expedite the determination of whether a stop payment notice is valid and to possibly obtain an early release of the funds withheld by the public entity. This “summary proceeding” process could result in release of funds to the direct contractor in less than 30 days. The summary proceeding can also be challenged by the unpaid subcontractor or supplier. All public works contractors, subcontractors and suppliers should be aware of the process. The process for direct contractors to release a stop payment notice and for subcontractors and suppliers to challenge the process works as follows:
After a California stop payment notice has been served and the public entity has withheld funds accordingly, the direct contractor may challenge the stop payment notice by serving an “affidavit” (basically a sworn statement showing why the stop notice is not valid) on the public entity, demanding that the public entity release all funds withheld. Upon receipt of such an affidavit, the public entity will serve the subcontractor or supplier who served the stop payment notice with a copy of the affidavit, along with a “demand for release of funds”. If the stop payment notice claimant does not respond with a “counter-affidavit” by the date stated on the notice sent by the public entity (“not less than 10 days nor more than 20 days after service on the claimant of a copy of the affidavit”), then the public entity will be within its rights to release the withheld funds to the direct contractor, and the stop payment notice claimant will relinquish its stop payment notice rights.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
One to Watch: Case Takes on Economic Loss Rule and Professional Duties
June 28, 2011 —
Douglas Reiser, Builders Council BlogAccording to the Supreme Court of Washington Blog, The Supreme Court heard oral argument in Jackowski v. Hawkins Poe on Thursday, June 16, 2011. The court’s synopsis of the case can be found on the Washington State Court website.
In short, two home purchasers brought a lawsuit against the home’s sellers, the sellers’ agent and the purchasers’ own agent, alleging claims of fraud, fraudulent concealment, negligent misrepresentation and breach of common law and statutory duties. The trial court dismissed the buyers’ claims on the basis of the economic loss doctrine and Division II reversed, opining that the ELR does not apply to professional duties. The Supreme Court will now look at applying the Independent Duty Doctrine established last year, and whether professional duties (those of the real estate agents) should be reviewed under a different light.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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