Risk Protection: Force Majeure Agreements Take on Renewed Relevance
November 30, 2020 —
Michael E. Carson - Construction ExecutiveForce majeure clauses have been standard in contracts dating back hundreds of years in the United States—and even longer in Europe. “Force majeure,” which is French for “greater force,” removes liability for unforeseen events that prevent parties from fulfilling contractual obligations.
In a year defined by the COVID-19 pandemic, these clauses have gone from boilerplate basics to something worthy of further examination and attention in order to minimize risk for all parties involved in a construction project. Prior to COVID-19, drafters might have considered a localized or regional event that would lead to invoking a force majeure clause. It is doubtful, however, that anybody envisioned the impact on such a world-wide scale.
UNDERSTANDING THE AGREEMENTS
Force majeure clauses cover unforeseen events, a broad term that encompasses both acts of God and human-caused incidents. These range from natural disasters like earthquakes and hurricanes to acts of terrorism, strikes, political strife, government actions, war and other difficult- or impossible-to-predict disruptions. When such an event occurs, the force majeure clause attempts to remove, or at least reduce, uncertainty as to the rights and liabilities of the parties to the agreement.
Reprinted courtesy of
Michael E. Carson, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Mr. Carson may be contacted at
michael.carson@nationwide.com
An Overview of the New EPA HVAC Refrigerant Regulations and Its Implications for the Construction Industry
September 30, 2024 —
Stefanie A. Salomon, Nadia Ennaji & Ali Heyat - Peckar & Abramson, P.C.The U.S. Environmental Protection Agency (EPA) recently announced a series of significant changes to the rules governing the use of refrigerants in heating, ventilation, and air conditioning (HVAC) systems. These changes, which were promulgated under the American Innovation and Manufacturing (AIM) Act, are designed to phase down the use of hydrofluorocarbons (HFCs), a class of potent greenhouse gases.
The AIM Act: A Game-Changer for HVAC Industry
The recent changes to refrigerant regulations by the EPA signify a substantial shift in environmental policy that will have profound implications for the construction industry. For the construction industry, this means a transition to next-generation technologies that do not rely on HFCs. The AIM Act’s sector-based restrictions will affect a wide range of equipment, including refrigeration and air conditioning systems integral to building design and function.
Starting January 1, 2025, the manufacturing or importing of any product in specified sectors that uses a regulated substance with a global warming potential of 700 or greater is prohibited (40 C.F.R. § 84.54(a)). The specified sectors listed include R-410A, the most common refrigerant used in the HVAC industry. The installation of systems using a regulated substance with a global warming potential of 700 or greater in specified sectors is allowed until January 1, 2026, provided that all system components are manufactured or imported before January 1, 2025. See 40 C.F.R. § 84.54 (c). “Installation” of an HVAC system is defined as the completion of assembling the system’s circuit, including charging it with a full charge, such that the system can function and is ready for its intended purpose. See 40 C.F.R. § 84.52.
Reprinted courtesy of
Stefanie A. Salomon, Peckar & Abramson, P.C. and
Nadia Ennaji, Peckar & Abramson, P.C.
Ms. Salomon may be contacted at ssalomon@pecklaw.com
Ms. Ennaji may be contacted at nennaji@pecklaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Intricacies of Business Interruption Claim Considered
January 07, 2015 —
Tred R. Eyerly – Insurance Law HawaiiReaching into the weeds to analyze a business interruption claim, the Massachusetts Court of Appeals determined the cost of ordinary payroll could be included in the calculation of net profit or loss in determining business loss income when business is resumed quickly after a fire. Verrill Farms, LLC v. Farm Family Cas. Ins. Co., 2014 Mass. App. LEXIS 145 (Mass. App. Ct. Nov. 4, 2014).
The insured suffered a fire loss at its farm store. Within two days, the business was reopened at alternate locations at reduced capacity. Within a month, the business had resumed nearly full capacity in temporary locations. No employees were laid off. This allowed the insured to maintain its business and generate income.
The insured submitted a claim for loss of business income, based on its loss of net income in the year after the fire. The insurer paid a sum considerably less than the claim based upon its interpretation of what expenses could be included in a calculation of net profit or loss in order to determine loss of business income. The trial court held that the insurer did not have to pay the cost of ordinary payroll beyond the sixty-day limit, and granted summary judgment in the insurer's favor.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
A “Flood” of Uncertainty; Massachusetts SJC Finds Policy Term Ambiguous
August 26, 2024 —
Michael S. Levine & Torrye Zullo - Hunton Insurance Recovery BlogThe highest court in Massachusetts recently held that term “Flood” and the associated phrase “surface waters,” as used in two all-risk insurance policies, is ambiguous in the context of water that accumulated on a parapet roof and rooftop courtyard, thereby negating the insurers’ attempt to limit coverage to a sublimited coverage for “Flood.”
Background
In June 2020, a severe storm caused damage to Norwood Hospital, owned by Medical Properties Trust, Inc. (“MPT”) and leased to Steward Health Care System (“Steward”), the policyholders. The relevant portion of the damage included damage from rain that accumulated on the rooftop courtyard and seeped into the interior of the building causing damage to the building and its contents.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Torrye Zullo, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. Zullo may be contacted at tzullo@HuntonAK.com
Read the court decisionRead the full story...Reprinted courtesy of
Update Regarding New York City’s Climate Mobilization Act (CMA) and the Reduction of Carbon Emissions in New York City
July 05, 2021 —
Caroline A. Harcourt, Natalie S. Starkman & Nika Bederman - Gravel2Gavel Construction & Real Estate Law BlogIn a previous post, we described how the New York City Climate Mobilization Act, 2019 (the CMA, or Local Laws 92, 94, 95, 96, 97, and 147 enacted in 2019) was passed with the goal of reducing New York City’s carbon emissions by 40 percent by 2030 and by 80 percent by 2050 (as against a 2005 baseline as provided for in item 3 of Local Law 97). It is the most ambitious building emissions law to be enacted by any city in the world. The CMA impacts “Covered Buildings” (described below) and, besides contemplating the retrofitting of Covered Buildings to achieve energy efficiency and establishing a monitoring program for Covered Buildings, the CMA contemplates compliance by means of the purchase of carbon offset credits or renewable energy. (Note the new NYC Accelerator program, launched in 2012 by the Mayor’s Office of Sustainability, provides guidance regarding energy-efficient upgrades to properties and emission reductions.)
Pursuant to the CMA:
- Beginning in 2024, Covered Buildings will have to meet the first emission targets, which are calculated by multiplying the gross floor area of each Covered Building by the occupancy classification as set forth in Local Law 97; and
- In 2025, owners of Covered Buildings will need to establish compliance by submitting a report establishing such compliance (prepared by a certified design professional) to the newly created Office of Building Energy and Emissions Performance.
Read the court decisionRead the full story...Reprinted courtesy of
Caroline A. Harcourt, PillsburyMs. Harcourt may be contacted at
caroline.harcourt@pillsburylaw.com
North Carolina Soil & Groundwater Case to be Heard by U.S. Supreme Court
April 09, 2014 —
Beverley BevenFlorez-CDJ STAFFIn Ashville, North Carolina, property owners have sued CTS Corp for alleged toxic chemicals in the soil and groundwater discovered decades after the company closed its manufacturing plant, according to the Citizen-Times. The contamination wasn’t discovered by the owners until 1999: “That lapse in time will be a primary point of consideration by the U.S. Supreme Court later this month when it hears arguments in a lawsuit brought by 25 Buncombe County property owners against the company.”
Citizen-Times declared that the “issue is a North Carolina law establishing a 10-year ‘statute of repose’ that sets a deadline for filing claims related to environmental pollution in cases involving real property, even if the victims weren't aware of the contamination until long after.” However, the law might be “pre-empted by the federal Comprehensive Environmental Response, Compensation and Liability Act passed by Congress in 1980.”
Read the court decisionRead the full story...Reprinted courtesy of
Lien Attaches To Landlord’s Interest When Landlord Is Party To Tenant Improvement Construction Contract
January 03, 2022 —
David Adelstein - Florida Construction Legal UpdatesIf you are a landlord / lessor, then you want to maximize the protections afforded to you under Florida’s Lien Law in Florida Statute s. 713.10. These protections are designed to protect your property from liens for improvements performed by your tenant / lessee. The intent is that if you comply with s. 713.10, then a tenant improvement contractor’s recourse is against the leasehold interest, and NOT against the interest of the real property (or your interest as the landlord / lessor). Needless to say, it is imperative that a landlord / lessor make efforts to comply with this section when a tenant is performing tenant improvements, even when the landlord is contributing money to those improvements.
Section 713.10 provides in material part:
(1) Except as provided in s. 713.12, a lien under this part shall extend to, and only to, the right, title, and interest of the person who contracts for the improvement as such right, title, and interest exists at the commencement of the improvement or is thereafter acquired in the real property. When an improvement is made by a lessee in accordance with an agreement between such lessee and her or his lessor, the lien shall extend also to the interest of such lessor.
(2)(a) When the lease expressly provides that the interest of the lessor shall not be subject to liens for improvements made by the lessee, the lessee shall notify the contractor making any such improvements of such provision or provisions in the lease, and the knowing or willful failure of the lessee to provide such notice to the contractor shall render the contract between the lessee and the contractor voidable at the option of the contractor.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Hunton Insurance Practice Again Scores “Tier 1” National Ranking in US News Best Law Firm Rankings
December 05, 2022 —
Hunton Insurance Recovery BlogOn November 3, 2022, US News announced its
annual law firm rankings, where Hunton Andrews Kurth LLP garnered the highest (Tier 1) ranking among national insurance law practices. Hunton’s insurance team also received Tier 1 honors for “Insurance Law” in three regions (Washington, DC, Atlanta and San Francisco) and Tier 2 honors for “Litigation – Insurance” in Washington, DC. US News ranks law firms in tiers from 1 (highest) to 3 (lowest) based on quantitative data that speaks to general demographic and background information on the practice group, attorneys and other data that speaks to the strengths of a law firm’s practice, as well as qualitative client feedback about:
- the practice group’s expertise,
- responsiveness,
- understanding of a business and its needs,
- cost-effectiveness,
- civility, and
- whether the client would refer another client to the firm.
Read the court decisionRead the full story...Reprinted courtesy of
Hunton Andrews Kurth LLP
