Bidder Be Thoughtful: The Impacts of Disclaimers in Pre-Bid Reports
August 04, 2021 —
Joshua A. Morehouse - ConsensusDocsWhen bidding a project, subsurface or latent site conditions that are not immediately apparent can massively impact the costs of performance to general contractors. Were contractors required to bid on projects without any information on pre-existing conditions, they would need either to be assured that any additional costs would be reimbursed by the owner, or to include significant contingencies for subsurface conditions in their bids. For owners, these options result in either increased risk or increased cost—neither of which is particularly palatable. Owners therefore implement several contractual tools to minimize these risks and costs.
One of these tools is providing bidders with a report on latent conditions, often called a “geotechnical data report” or “GDR”, but otherwise shifting as much of the subsurface-related risk as possible to the contractor. In theory, these reports permit contractors to appropriately adjust their contingencies for latent conditions, thus saving owners money. However, several independent and thorny issues arise where site reports provided by the owner are either inconsistent with or silent on the actual conditions of a project site. Hence owners often include disclaimers with these reports, such as noting that the report is for “informational purposes only” or that the report is “not part of the contract documents."
Read the court decisionRead the full story...Reprinted courtesy of
Joshua A. Morehouse, Peckar & Abramson, P.C.Mr. Morehouse may be contacted at
jmorehouse@pecklaw.com
Federal Contractors – Double Check the Terms of Your Contract Before Performing Ordered Changes
July 08, 2019 —
Jonathan Schirmer - Ahlers Cressman & Sleight PLLCAs federal contractors may be aware, the general rule when performing a contract for the federal government is that only the contracting officer (“CO”) can bind the government. Often, the CO delegates responsibility to a contracting officer’s representative (“COR”). While in some cases a COR may be able to bind the federal government, the contract may limit that ability exclusively to the CO.
Important for our clients, it is the responsibility of the contractor to determine whether the COR can legally bind the federal government when ordering changes to the scope of work. [1] This is true even when a COR possesses apparent authority to order changes to the work, and when the project is almost exclusively overseen by COR’s. [2]
A recent case highlights the dangers of a contractor relying on the orders of a COR when performing work outside the scope of a contract. In Baistar Mechanical Inc., a contractor was awarded a maintenance and snow removal contract with the federal government. The contract expressly stated that only the CO had contracting authority regarding additional or changed work. [3] However, Baistar, the contractor, argued it was directed by the contracting officer’s representatives to perform work outside of the contract.
Read the court decisionRead the full story...Reprinted courtesy of
Jonathan Schirmer, Ahlers Cressman & Sleight PLLCMr. Schirmer may be contacted at
jonathan.schirmer@acslawyers.com
Recent Statutory Changes Cap Retainage on Applicable Construction Projects
March 11, 2024 —
Patrick McKnight - The Dispute ResolverRecent reforms to certain state retainage laws have reduced the lawful amount of withholding permitted on construction projects. In theory, retainage allows an owner to mitigate the risk of incomplete or defective work by withholding a certain portion of payment until the construction project is substantially complete. Recent statutory developments in Washington, New York, and Georgia represent significant changes in how much an owner may retain on applicable construction projects in those jurisdictions. The details of each state’s retainage laws vary in many important respects. Most states set caps at 5% or 10%, with important variations depending on the type of project and the amount of progress completed. Some states require retainage to be held in an escrow account, but most do not. Many federal construction projects allow up to 10% retainage, while other federal agencies do not require any retention. See 48 CFR § 52.232-5(e) - Payments Under Fixed-Price Construction Contracts.
The ongoing motivation for retainage reform is typically framed in terms of reducing delays in getting payment to subcontractors who complete their scope of work on time and free from defects.
Read the court decisionRead the full story...Reprinted courtesy of
Patrick McKnight, Fox Rothschild LLPMr. McKnight may be contacted at
pmcknight@foxrothschild.com
Bert Hummel Appointed Vice Chair of State Bar of Georgia Bench & Bar Committee
October 24, 2021 —
Bert Hummel - Lewis BrisboisAtlanta, Ga. (October 4, 2021) – Atlanta Partner Bert Hummel was recently named Vice Chair of the State Bar of Georgia's Bench & Bar Committee for the 2021-2022 year.
The Bench & Bar Committee identifies and facilitates solutions to issues of mutual interest between State judges and Georgia lawyers for the benefit of the bench, the bar and the public. It also oversees the annual Justice Thomas O. Marshall Professionalism Award, which honors one lawyer and one judge who have demonstrated the highest professional conduct and paramount reputation for professionalism.
Read the court decisionRead the full story...Reprinted courtesy of
Bert Hummel, Lewis BrisboisMr. Hummel may be contacted at
Bert.Hummel@lewisbrisbois.com
As Laura Wreaks Havoc Along The Gulf, Is Your Insurance Ready to Respond?
October 19, 2020 —
Walter J. Andrews, Michael S. Levine, Andrea DeField & Meagan R. Cyrus - Hunton Insurance Recovery BlogAs Texas and Louisiana brace for Hurricane Laura to make landfall, policyholders in the affected regions should be making last minute preparations to ensure their properties are covered in the storm’s wake.
Hurricane Laura is expected to make landfall as a Category 4 storm tonight, or early Thursday morning between Houston, Texas and Lake Charles, Louisiana. With wind speeds reaching over 120 mph, Laura has the potential for catastrophic damage to life and property and long-term disruption of normal business operations. The following three steps are crucial to ensuring that you protect your property and business and maximize insurance proceeds should your property fall in the path of this storm:
- Locate a copy of your policy.
Having your policy on hand prior to a loss will aid in starting your claim as soon as possible, as it may be more difficult to get in touch with your broker following a storm where thousands of claims are taking place simultaneously.
Reprinted courtesy of
Walter J. Andrews, Hunton Andrews Kurth,
Michael S. Levine, Hunton Andrews Kurth,
Andrea DeField, Hunton Andrews Kurth and
Meagan R. Cyrus, Hunton Andrews Kurth
Mr. Andrews may be contacted at wandrews@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. DeField may be contacted at adefield@HuntonAK.com
Ms. Cyrus may be contacted at mcyrus@HuntonAK.com
Read the court decisionRead the full story...Reprinted courtesy of
Undercover Sting Nabs Eleven Illegal Contractors in California
January 27, 2014 —
Beverley BevenFlorez-CDJ STAFFA sting operation conducted in Rancho Murieta, California on January 16th by the Statewide Investigative Fraud Team, with assistance from the state Department of Consumer Affairs Division of Investigation netted “11 people accused of illegal, unlicensed home improvement contracting,” reported the Merced Sun-Star. The news source stated that “the statewide drought” provided “a new angle in approaching conservation-minded property owners, according to the Contractors State License Board.”
The accusations included “illegal contracting after seeking bids for exterior painting, fencing and landscaping jobs,” according to the Merced Sun-Star. The eleven individuals received notices to appear in Sacramento Superior Court for arraignment March 27th.
Read the court decisionRead the full story...Reprinted courtesy of
BE PROACTIVE: Steps to Preserve and Enhance Your Insurance Rights In Light of the Recent Natural Disasters
October 19, 2017 —
Jacquelyn M. Mohr – Newmeyer & Dillion LLPOur hearts go out to those families and businesses who have suffered losses due to the recent fires, hurricanes, and other natural disasters. We hope that everyone in Sonoma, Napa, Orange County, and nationwide affected by these tragic events is somewhere safe. As someone who lost a house in a fire growing up and now is an attorney who helps both residential and business policyholders, there are a few pieces of wisdom I’d like to pass along to help prepare for the worst:
1) MAINTAIN DUPLICATES OF CRITICAL DOCUMENTS OFFSITE OR ONLINE
After the fire, you’re going to need your insurance policies and other critical documents. While it’s usually possible to request copies, this can take weeks, which will hold up your claims process. We are fortunate enough to have the technology for cloud-based storage of key documents – like your insurance policy, insurance broker contact information, tax returns, life insurance policies, will, business plan, inventories, etc. – oftentimes for free. Maintaining these records onsite during your daily life and business operations is important, but so is taking the time and trouble to make sure you have a back-up offsite. It’s easy to do, and so much easier than trying to recreate it after the fact.
2) MAKE A RECORD OF YOUR PROPERTY AND POSSESSIONS
If you are lucky enough to still be in your home or business property, I strongly recommend that you take a video of your property and possessions to keep for your records. A digital inventory with receipts would be great – but a video log will also be very helpful later.
- For your home: This includes the furniture, artwork, appliances, jewelry, electronics, collectibles, landscaping and custom features of the inside and outside of your house.
- For your business: This includes your furniture and artwork, your inventory and your electronics.
Look into offsite back-ups of your important electronic data – whether documents, e-mails, insurance policies, inventory logs, accounting data, client correspondence, or pictures of your kids or grandkids.
Why A Record Is Important in the Insurance Claims Process
Though I hope no one has to deal with this, a video record will make it much easier in the event of a tragedy to deal with insurance claims for two reasons:
- It is evidence to submit to the insurance company to show exactly what your property was like before disaster struck.
- For your home, you likely have a homeowner's insurance policy that covers your “3 bedroom, 2 bath, 2000 square foot home built in 1962,” but your insurer won’t know the quality of what is actually inside. It will be up to you to prove you had a brand new Viking stovetop, rather than a 20-year old Kitchenaid; custom built-in cabinets rather than Ikea furniture. (On this note, if you ever do any remodeling, be sure to tell your broker to make sure it's covered by your policy!)
- For your business, your policy will similarly be generic, and the insurer will similarly insist on evidence of your business inventory, sales orders, equipment, artwork, etc. in the event of a loss.
- A video record will also help to jog your memory to create itemized inventories to submit to the insurance company. Creating an inventory of everything lost after a casualty can be the most difficult and emotional part of the rebuilding process. I encourage you to do anything you can do now to lessen the stress later. After a traumatic loss, it’s impossible to remember everything, so most people never collect their full insurance benefits. United Policyholders, an amazing non-profit resource for policyholders, has a great app and other online tools to help create your inventory. You can find the app and other helpful information at http://www.uphelp.org/
3) CHECK YOUR POLICY
Even if you have not been personally affected by the recent disasters, these tragedies are an excellent reminder to check to make sure you are fully covered.
- Make sure you understand what is covered under your policy, and get confirmation that you are covered for a total loss. Talk with your broker to make sure your policy limits make sense, including those for separate structures, personal property, and additional living expenses, which are usually a percentage of your dwelling coverage limit.
- Check to make sure your personal property limits would cover your possessions– if you have a lot of artwork, jewelry, antiques, and other valuables, the standard limits might not be enough for you.
- Consider this question: Does your additional living expense/business interruption coverage (aka the amount your insurance company will pay while your home or business property is being rebuilt) provide enough for your needs? Even if your limits/coverage made sense when you purchased the policy, things may have changed.
You can usually increase your other coverage limits with a quick email to your insurance broker, often with very little impact on your annual premium.
4) DON’T BE AFRAID TO ASK FOR HELP
As simple as it sounds, don’t be afraid to ask for help. No one expects you to be an expert on this, and pretending you don’t need assistance can cost you thousands of dollars in insurance benefits in the future. So be sure to take advantage of the resources out there so that you are fully prepared to handle whatever disaster nature sends your way.
For any additional questions, and for help navigating the insurance claims process after a disaster, please do not hesitate to reach out.
Jacquelyn Mohr is an associate in the Walnut Creek office of Newmeyer & Dillion, focusing in business litigation, insurance coverage, securities fraud and construction disputes. Jacquelyn can be reached at Jacquelyn.Mohr@ndlf.com or 925.988.3200.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
Read the court decision
Read the full story...
Reprinted courtesy of Jacquelyn M. Mohr, Newmeyer & Dillion LLP
Ms. Mohr may be contacted at Jacquelyn.mohr@ndlf.com
Illinois Federal Court Applies Insurer-Friendly “Mutual Exclusive Theories” Test To Independent Counsel Analysis
November 09, 2020 — Jeremy S. Macklin - Traub Lieberman Insurance Law Blog
Insureds often request independent counsel when insurers agree to provide a defense subject to a reservation of rights, pursuant to which an insurer takes the position that certain damages may not be indemnifiable. Requests for independent counsel are often rooted in fear that a defense attorney who has a relationship with the insurer may be incentivized to defend the insured in a way that maximizes the potential for the insurer to succeed on its coverage defenses. As explained by the Illinois Supreme Court in Maryland Cas. Co. v. Peppers, 355 N.E.2d 24 (Ill. 1976), when a conflict of interest arises between an insurer and its insured, the attorney appointed by the insurer is faced with serious ethical questions and the insured is entitled to its own attorney.
Illinois courts generally follow the rule that an insured is entitled to independent counsel upon a showing of an actual conflict. In Builders Concrete Servs., LLC v. Westfield Nat’l Ins. Co., No. 19 C 7792, 2020 WL 5518474 (N.D. Ill. Sept. 14, 2020), the U.S. District Court for the Northern District of Illinois recently addressed a dispute between an insurer and its insured about independent counsel.
Westfield insured Builders Concrete Services (BCS). Focus Construction hired BCS as a subcontractor to perform concrete work on a new apartment building. BCS’ work included pouring concrete for structural columns, one of which buckled and failed. BCS sued Focus Construction for withholding payment, and Focus Construction counter-sued for breach of contract and negligence relating to BCS’ alleged faulty work that caused the column to fall. Focus Construction’s counterclaim alleged that the column failure damaged other parts of the building on which Builders did not perform work. Read the court decision
Read the full story...
Reprinted courtesy of Jeremy S. Macklin, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com
