Cambridge Massachusetts Building Expert Directory

Contractor Entitled to Defense for Alleged Faulty Workmanship of Subcontractor

February 10, 2020 — Tred R. Eyerly - Insurance Law Hawaii
Applying Nevada law, the Federal District Court in Florida found that the general contractor was entitled to a defense of claims based upon alleged faulty workmanship of a subcontractor. KB Home Jacksonville LLC v. Liberty Mutual Fire Ins. Co, 2019 U.S. Dist. LEXIS 151235 (M.D. Fla. Sept 5, 2019). KB Home completed six residential developments utilizing various subcontractors. One subcontractor was Florida State Plastering, LLC (FSP) for installing stucco. Eighty-eight complaints against KB Home implicated FSP's stucco work. Plaintiffs alleged that the stucco subcontractor's work suffered from construction defects, causing damages not only to the exterior stucco, but also the underling wire lath, paper backing, house wrap, wood sheathing, interior walls, interior floors and other property. Ironshore insured FSP under a CGL policy. KB Home was an additional insured for liability for property damage caused by "your work." KB Home was also insured under its own CGL policy with Liberty Mutual. Both insurers refused to defend. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Real Case, Real Lessons: Understanding Builders’ Risk Insurance Limits

August 12, 2024 — David McLain - Higgins, Hopkins, McLain & Roswell, LLC
In the recent case of 5333 Mattress King LLC v. Hanover Insurance Company, the United States District Court for the District of Colorado provided significant insights into the limits of builders’ risk insurance policies. Mattress King LLC, a warehouse owner, faced a substantial loss when a subcontractor drove a crane over and damaged the warehouse’s concrete floor slab during construction. Despite having a builders’ risk insurance policy with Hanover Insurance Company, coverage was denied, leading to litigation. Applicable Policy Provisions The policy in question was a Commercial Marine/Commercial Lines Builders’ Risk insurance policy. Builders’ risk insurance is designed to cover direct physical loss to covered property during construction unless the loss is excluded or limited by the policy. Key exclusions of the policy at issue included losses caused by faulty, inadequate, or defective:

Planning, zoning, surveying, or development
Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, or compaction
Materials used in construction or renovation
Maintenance of the covered property

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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLain may be contacted at mclain@hhmrlaw.com

Arizona Court Cites California Courts to Determine Construction Defect Coverage is Time Barred

December 30, 2013 — CDJ STAFF
Construction defect claims in an Arizona community are time barred and so the judge had determined that National Fire & Marine Insurance is not liable for coverage. National Fire claimed that while there was no Arizona case law concerning statutes of limitations for equitable contributions by insurance carriers, the court agreed that “its position is directly supported by cases from other jurisdictions.” In the underlying construction defect case, Steadfast Insurance had settled with homeowners over allegations of construction defects. National Fire was a co-insurer and declined coverage. National Fire’s citing of two California cases was not unique for the Arizona courts. Other Arizona cases cited the same two California cases. Read the court decision
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Rescission of Policy for Misrepresentation in Application Reversed

August 17, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The California Court of Appeal reversed the trial court's issuance of summary judgment to the insurer, finding that the insured did not make misrepresentations when applying for a policy to cover rental property. Duarte v. Pacific Spec. Ins. Co., 13 Cal. App. 5th 45 (2017). Duarte rented his house to Jennifer Pleasants. Duarte gave her a 45-day notice to quit in February 2012, but she did not leave. Two months later, Duarte applied for landlord-tenant coverage with Pacific. The application was submitted electronically and Pacific issued a policy to Durate the same day. In June 2012, Pleasants filed a lawsuit against Duarte, alleging ten causes of action arising from habitability defects which began in 2009. The suit claimed Pleasants had notified Duarte about the defects, she had suffered emotional distress and physical injury, and over paid rent, and had out-of-pocket expenses. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Killer Subcontract Provisions

January 20, 2020 — Patrick McNamara - Porter Law Group
We are frequently requested by subcontractor clients to review the subcontract that has been prepared by the prime contractor, before our client signs it. While no two agreements are identical, there are a number of problematic contract provisions that appear in many agreements. Here is a list of ten such provisions (and their variations) that are potential “deal breakers”:

PAY IF/WHEN PAID (e.g. “Contractor shall have the right to exhaust all legal remedies, including appeals, prior to having an obligation to pay Subcontractor.”) “Pay-if-paid” provisions (“Receipt of payment from Owner shall be a condition precedent to Contractor’s duty to pay Subcontractor”) are illegal in California. However, the only legal limit on “Pay-When-Paid” provisions is that payment must be made “within a reasonable time.” The example above, as written, essentially affords the prime contractor a period of several years following completion of the project before that contractor has an independent duty to pay its subcontractors – not a “reasonable” amount of time, to those waiting to be paid. A compromise is to provide a time limit, such as 6 months or one year following substantial completion of the project.
CROSS-PROJECT SET-OFF (e.g. “In the event of disputes or default by Subcontractor, Contractor shall have the right to withhold sums due Subcontractor on this Project and on any other project on which Subcontractor is performing work for Contractor.”) Such provisions are problematic and likely unenforceable, as they potentially bar subcontractors’ lien rights. Such provisions should be deleted.
CONTRACTOR/SUBCONTRACTOR RESPONSIBILITY FOR DESIGN QUALITY (e.g. “Subcontractor warrants that the Work shall comply with all applicable laws, codes, statutes, standards, and ordinances.”) Unless a subcontractor’s scope of work expressly includes design work, this provision should either be deleted or modified, with the addition of the following phrase: “Subcontractor shall not be responsible for conformance of the design of its work to applicable laws, codes, statutes, standards, and ordinances.”

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Reprinted courtesy of Patrick McNamara, Porter Law Group
Mr. McNamara may be contacted at pmcnamara@porterlaw.com

These Pioneers Are Already Living the Green Recovery

June 01, 2020 — Laura Millan Lombrana & Akshat Rathi - Bloomberg
In the wake of the historic global economic shutdown in response to the Covid-19 pandemic, governments are unleashing trillions of dollars in a bid to create jobs and spur economic recovery. The scale of this stimulus is unprecedented, in some cases amounting to more than 10% of countries’ gross domestic product. At the same time, an overwhelming number of economists, finance ministers, and business leaders are saying that much of that money needs to help—and certainly not hinder—our ability to cut emissions. If that advice is heeded, these funds will go to emerging technologies that would have sounded like science fiction not so long ago. Now they have ambitions to help lower greenhouse gas emissions on an industrial scale. Leading the way is the European Union, which was planning a green transformation even before the outbreak began. It aims to make the 27-member bloc the first carbon neutral continent by 2050, and the pandemic hasn’t changed that. Read the court decision
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Reprinted courtesy of Laura Millan Lombrana & Akshat Rathi, Bloomberg

Your Contract is a Hodgepodge of Conflicting Proposals

January 06, 2016 — Craig Martin – Construction Contractor Advisor
Ouch. That’s what a court called a contract to remediate petroleum contamination at a number of gas stations in New York. Sometimes, it’s hard to believe the contracts that get signed. Environmental Risk hired Science Applications to remediate petroleum contamination at 47 gas stations. Environmental Risk had previously entered into a Professional Services Master Agreement with Science Applications, but also required Science Applications to sign three separate, but basically identical, subcontracts called the Project Specific Scopes of Work. So, right from the start, there were four contracts that could apply to Science Applications’ work. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

Subrogation 101 (and Why Should I Care?)

July 16, 2023 — Clark Thiel & Alexis N. Wansac - Gravel2Gavel Construction & Real Estate Law Blog
What is subrogation? Why am I being asked to waive it? Should I care? To answer that last question, let’s take a quick run at the first two. What Is Subrogation? “Subrogation” refers to the act of one person or party standing in the place of another person or party. It is a legal right held by most insurance carriers to pursue a third party that caused an insurance loss in order to recover the amount the insurance carrier paid the insured to cover the loss. This occurs when (i) the insurance carrier makes a payment on behalf of its insured as the result of a covered accident or injury, and then (ii) the insurer then seeks repayment from the at-fault party. Reprinted courtesy of Clark Thiel, Pillsbury and Alexis N. Wansac, Pillsbury Mr. Thiel may be contacted at clark.thiel@pillsburylaw.com Ms. Wansac may be contacted at alexis.wansac@pillsburylaw.com Read the court decision
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CAMBRIDGE MASSACHUSETTS BUILDING EXPERT DIRECTORY AND CAPABILITIES