SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

New York Labor Laws and Action Over Exclusions

February 01, 2021 — Theresa A. Guertin & Ashley McWilliams - Saxe Doernberger & Vita, P.C.
One of the most important methods for shifting risk in the construction context is insurance coverage. Upstream parties such as owner/developers and general contractors typically require that their downstream subcontractors who perform work on their properties or projects bring specific insurance to the table. These insurance requirements have a twofold purpose: protect the upstream parties, through additional insured coverage, from liabilities caused by the subcontractor; and protect the downstream parties by ensuring that they have adequate insurance for their own potential liabilities. In New York, subcontractor insurance coverage can have some surprising terms which frustrate risk transfer. Numerous policies contain “Action Over” exclusions, which bar coverage for one of the most significant exposures faced by owner-developers and general contractors: bodily injury lawsuits brought by subcontractor employees. It is critical that upstream parties understand the unique impact of New York’s labor laws on the insurance market and be prepared to identify and request removal of Action Over exclusions on subcontractor insurance policies. Reprinted courtesy of Theresa A. Guertin, Saxe Doernberger & Vita, P.C. and Ashley McWilliams, Saxe Doernberger & Vita, P.C. Ms. Guertin may be contacted at TGuertin@sdvlaw.com Ms. McWilliams may be contacted at AMcWilliams@sdvlaw.com Read the court decision
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Massachusetts Federal Court Rejects Adria Towers, Finds Construction Defects Not an “Occurrence”

July 03, 2022 — Eric B. Hermanson & Austin D. Moody - White and Williams
In an important ruling for insurers, U.S. District Court Judge Patti Saris found that Massachusetts does not follow the position taken in Cypress Point Condo Association v. Adria Towers, LLC, 226 N.J. 403, 418 (2016), i.e., it does not hold that "faulty workmanship claims [should be recognized] as ... an 'occurrence,' thus triggering coverage, 'so long as the allegedly defective work [was] performed by a subcontractor rather than the policyholder itself."[1] Instead, Judge Saris reaffirmed earlier Massachusetts authority holding faulty work is not an "occurrence" for coverage purposes,[2] and found this authority applied whether or not the work in question was subcontracted. In the alternative, Judge Saris found, even if a contractor's faulty work could be deemed an an "occurrence," such work did not constitute covered "property damage," because none of the alleged damage was "outside the scope of the work that Tocci was contractually required to fulfill as general contractor."[3] Reprinted courtesy of Eric B. Hermanson, White and Williams and Austin D. Moody, White and Williams Mr. Hermanson may be contacted at hermansone@whiteandwilliams.com Mr. Moody may be contacted at moodya@whiteandwilliams.com Read the court decision
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Rhode Island Examines a Property Owner’s Intended Beneficiary Status and the Economic Loss Doctrine in the Context of a Construction Contract

March 18, 2019 — Shannon M. Warren - The Subrogation Strategist
In Hexagon Holdings Inc. v. Carlisle Syntec, Inc. No. 2017-175-Appeal, 2019 R.I. Lexis 14 (January 17, 2019), the Supreme Court of Rhode Island, discussing claims associated with allegedly defective construction, addressed issues involving intended beneficiaries to contracts and the application of the economic loss doctrine. The court held that, based on the evidence presented, the building owner, Hexagon Holdings, Inc. (Hexagon) was not an intended third-party beneficiary of the subcontract between the general contractor (A/Z Corporation) and the subcontractor, defendant McKenna Roofing and Construction, Inc. (McKenna). In addition, the court held that, in the context of this commercial construction contract, the economic loss doctrine applied and barred Hexagon’s negligence claims against McKenna. Approximately nine years after Hexagon entered into a contract with A/Z Corporation for the construction of a building, Hexagon filed suit against A/Z Corporation’s roofing installation subcontractor, McKenna, and the manufacturer of the roofing system. Hexagon alleged that the roof began to leak shortly after McKenna installed it. Notably, Hexagon did not sue A/Z Corporation. Read the court decision
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Reprinted courtesy of Shannon M. Warren, White and Williams
Ms. Warren may be contacted at warrens@whiteandwilliams.com

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Sick Leave, Paid Time Off, and the Families First Coronavirus Response Act

April 20, 2020 — Garret Murai - California Construction Law Blog
Unemployment claims hit a historic high this past week as 3.3 million Americans filed for unemployment benefits. To give you some context, this is not only the highest number of unemployment claims ever filed, it is five times higher than the previous record of 695,000 unemployment claims in 1982. Restaurants, hotels, airlines and other businesses have begun to layoff or furlough workers. According to a survey conducted by the Associated General Contractors of America this past week, 39% of respondents reported that project owners have halted or cancelled construction projects due to deteriorating economic conditions, 45% reported project delays or disruptions, and 23% reported supply chain disruptions. While the construction industry likely won’t be impacted nearly to the same degree as the retail sector has, some involved in the construction industry may nevertheless be faced with the prospect of having to lay off or furlough workers as “shelter in place” orders are extended. If you’re faced with that situation here are a few things to remember: Paid Sick Leave Under California law, nearly all employers are required to provide paid sick leave to employees who work for 30 or more days in a given year. Paid sick leave can be used by an employee for illnesses, including COVID-19, the diagnosis, care, or treatment of existing health conditions, and preventative care for the employee or employee’s family member. The important thing to remember here is that use of paid sick leave is an employee’s choice. While an employer, concerned that an employee may have contracted COVID-19, may require that an employee not come to the office, the employer cannot force such an employee to use his or her paid sick leave. For more information, the California Labor Commissioner has created a webpage specific to COVID 19. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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U.S. Steel Invoking Carnegie’s Legacy in Revival Strategy

July 23, 2014 — Sonja Elmquist – Bloomberg
In March 2013, Mario Longhi lobbed an unexpected question into a roomful of 150 U.S. Steel Corp. managers: Who here would buy the company’s stock, tomorrow? He gave them three seconds, and “only a few reacted in that time frame positively,” Longhi said. Since that meeting, Longhi has been promoted to chief executive officer, and nine months into his tenure he’s closed one plant permanently, two more are temporarily idled and he’s planning to overhaul another. It’s all part of his plan to transform the 144-year-old company into a lean, modern steel producer. Investors are taking note, with the shares up 53 percent since he took over. Read the court decision
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Reprinted courtesy of Sonja Elmquist, Bloomberg
Ms. Elmquist may be contacted at selmquist1@bloomberg.net

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'Right to Repair' and Fixing Equipment in a Digital Age

August 30, 2021 — Jeff Rubenstone - Engineering News-Record
When a piece of equipment breaks down on site, rental agreements, subcontractor contracts and other arrangements generally make it clear who gets to open the hood and start tinkering. But heavy equipment made in the last two decades increasingly relies on digital components for many basic functions. Embedded computer systems oversee electronically controlled hydraulics and regulate engine behavior and emissions-control systems. The tools to access these firmware and software systems are not always easy to come by, and in some cases repairs can’t be done without working directly with a manufacturer-approved dealer or technician. Some repairs may require a digital handshake to take effect. Reprinted courtesy of Jeff Rubenstone, Engineering News-Record Mr. Rubenstone may be contacted at rubenstonej@enr.com Read the full story... Read the court decision
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Real Estate & Construction News Round-Up 04/06/22

April 11, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
A growing proptech startup aims to pre-emptively identify needed home repairs, 3D-printed homes could become a workable solution to the housing shortage, and more.

• Concerns about a housing-market crash are growing as the Fed begins to hike interest rates, leaving industry experts to speculate on what’s next for the U.S. housing bubble. (William Edwards, Insider)
• Real-estate sales in Manhattan topped $7 billion in the first quarter of 2022, with the average price of apartments jumping 19% over the previous year. (Robert Frank, CNBC)
• Proptech startup DwellWell claims to have produced the first “check engine light” that can pre-emptively diagnose needed home repairs. (T.P. Yeatts, The Real Deal)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Issue and Claim Preclusion When Forced to Litigate Similar Issues in Different Forums: White River Village, LLP v. Fidelity and Deposit Company of Maryland

October 10, 2013 — Brady Iandiorio — Higgins, Hopkins, McLain & Roswell, LLC.
Often in construction litigation the parties wish to move the case to arbitration. However, there are certain circumstances in which such change of litigation forums should be carefully analyzed. The case of White River Village, LLP v. Fidelity and Deposit Company of Maryland, serves as an example of one of those circumstances. In March 2013, U.S. District Court Judge Blackburn ruled on a motion for summary judgment filed by Fidelity and Deposit Company of Maryland (“F&D”). The order grants the motion in part and denies it in part. White River Village, LLP (“White River”) was the owner of the project which hired S&S Joint Venture (“S&S”), the contractor, to build two similar developments, directly adjacent to each other. The contracts between Whiter River and S&S for the two projects were so substantially similar that the court referred to them as the S&S Contracts. F&D issued payment and performance bonds guarantying the obligations of S&S under the S&S Contracts. After S&S defaulted on the construction contracts, F&D, as the surety, undertook to complete performance on the contracts. White River alleged that F&D was liable for construction defects and delays in completing the project, and failed to fulfill its obligations under the performance bonds after it overtook the construction of the projects. Read the court decision
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Reprinted courtesy of Brady Iandiorio
Brady Iandiorio can be contacted at Iandiorio@hhmrlaw.com

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