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.
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Patrick McKnight, Fox Rothschild LLPMr. McKnight may be contacted at
pmcknight@foxrothschild.com
Jury Trials and Mediation in Philadelphia County: Virtually in Person
July 27, 2020 —
Andrew F. Susko, Robert G. Devine & Daniel J. Ferhat - White and Williams LLPWhen will the trial court in Philadelphia County be open for jury trials in civil actions? While a precise prediction, given the current state of our trial courts in the middle of the COVID-19 pandemic, is difficult to make, what is known is that the use of virtual technology is likely permanently changing the landscape of civil litigation, including depositions, mediation, and other forms of alternative dispute resolution. Even civil jury trials, at least in the near term and during the pandemic, are being conducted virtually, either by private agreement, or through the courts, as is occurring in Texas and most recently in Florida with its pilot virtual trial program in five of its trial courts. While it is necessary at present for the parties to consent to a virtual trial, courts may ultimately compel the parties’ participation. Regardless, litigants and their counsel are well advised to understand the complexities and manner of a virtual trial.
Seasoned trial attorneys have long experienced and are comfortable with virtual depositions bringing distant counsel, parties and witnesses together through technology to present testimony. The use of virtual technology as a means for court arguments and hearings, mediation, and alternative dispute resolution, while novel and emerging as the new normal, is territory where a comfort level can be achieved. And while distinctions most assuredly exist, recent experience has demonstrated that court arguments, mediations and depositions can be conducted effectively remotely and virtually. Legal issues certainly do remain in the context of the deposition of parties to a civil action regarding whether a lawyer’s physical presence in the same room with a party-witness can be demanded, and whether courts would compel a virtual deposition during the COVID-19 pandemic where such physical presence of a party and their attorney could not be achieved. Undoubtedly these issues will be resolved, likely sooner than later, given the scope of the pandemic in certain areas.
Reprinted courtesy of White and Williams LLP attorneys
Andrew F. Susko,
Robert G. Devine and
Daniel J. Ferhat
Mr. Susko may be contacted at suskoa@whiteandwilliams.com
Mr. Devine may be contacted at deviner@whiteandwilliams.com
Mr. Ferhat may be contacted at ferhatd@whiteandwilliams.com
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Pennsylvania Federal Court Finds No Coverage For Hacking Claim Under E&O Policy
July 25, 2022 —
Celestine Montague & Paul A. Briganti - White and Williams LLPOn June 9, 2022, the U.S. District Court for the Eastern District of Pennsylvania held, on summary judgment, that an insured was not entitled to coverage under a Professional Errors and Omissions (E&O) policy for loss allegedly resulting from a hacking incident. See Construction Fin. Admin. Servs., Inc. v. Federal Ins. Co., No. 19-0020, 2022 U.S. Dist. LEXIS 103042 (E.D. Pa. June 9, 2022). Applying North Carolina and Pennsylvania law, the court reasoned that: (1) coverage was barred by the policy’s unauthorized computer access, or “breach,” exclusions; and (2) the insured violated a condition in the policy that required the insurer’s consent to settlements and the violation prejudiced the insurer.
The insured, Construction Financial Administration Services, Inc. (CFAS), was a third-party fund administrator for construction contractors. In April 2018, the CFAS received email requests from what it believed to be one of its clients, SWF Constructors (SWF), to disburse $1.3 million from an SWF account to a foreign company. CFAS authorized the payments, despite not having received a copy of any executed agreement between SWF and the foreign company. After the funds were disbursed, SWF advised that it had not authorized or requested the payments to the foreign company. In response, CFAS placed approximately $1.2 million of recovered and borrowed funds into the SWF disbursement account. SWF then sent a letter advising CFAS that the requests from the foreign company did not include documentation required under the contract between SWF and CFAS. It was later determined that the emails had been initiated by a fraudster who had gained unauthorized access to the sender’s email account.
Reprinted courtesy of
Celestine Montague, White and Williams LLP and
Paul A. Briganti, White and Williams LLP
Ms. Montague may be contacted at montaguec@whiteandwilliams.com
Mr. Briganti may be contacted at brigantip@whiteandwilliams.com
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Commercial Construction in the Golden State is Looking Pretty Golden
August 26, 2015 —
Garret Murai – California Construction Law BlogIf the $2.1 trillion erased from the U.S. stock market over the last week has you white knuckled, you might consider commercial construction in the Golden State, where things are looking . . . well . . . pretty golden.
According to the Summer/Fall 2015 Commercial Real Estate Survey jointly published by Allen Matkins and the UCLA Anderson School of Management, commercial construction in California has risen to its highest level since 2001.
The survey, conducted of commercial real estate developers and financiers and their outlook for seven metropolitan regions in California including the East Bay, the Inland Empire, Los Angeles, Orange County, San Diego, San Francisco and Silicon Valley, found that all respondents expressed optimism (characterized as an optimism sentiment above 50) that office, multifamily, industrial and retail construction would grow over the next three-years although it varied depending on the region and sentiment was at times lower than when the survey was last taken last year.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Emotional Distress Damages Not Distinct from “Annoyance and Discomfort” Damages in Case Arising from 2007 California Wildfires
February 16, 2017 —
Kirsten Lee Price & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Hensley v. San Diego Gas & Elec. Co., (No. D070259, filed 1/31/17), the California Court of Appeal for the Fourth Appellate District held that emotional distress damages are available on claims for trespass and nuisance as part of “annoyance and discomfort” damages.
In Hensley, plaintiffs sustained fire damage to their home and property during the 2007 California wildfires. The Hensleys were forced to evacuate as the fires advanced. Although their home was not completely destroyed, it sustained significant damage and they were not able to return home permanently for nearly two months. Thereafter, the Hensleys filed suit against San Diego Gas and Electric Company (“SDG&E”) asserting causes of action for trespass and nuisance, among others. Mr. Hensley, who had suffered from Crohn’s disease since 1991, further claimed that as a result of the stress from the fire, he experienced a substantial increase in his symptoms and his treating physician opined that “beyond a measure of reasonable medical certainty... the stress created by the 2007 San Diego fires caused an increase of [Mr. Hensley’s] disease activity, necessitating frequent visits, numerous therapies, and at least two surgeries since the incident.” SDGE moved, in limine, to exclude evidence of Mr. Hensley’s asserted emotional distress damages arguing he was not legally entitled to recover them under theories of trespass and nuisance. The trial court agreed and excluded all evidence of such damages.
Reprinted courtesy of
Kirsten Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Hunton Andrews Kurth Associate Cary D. Steklof Selected to Florida Trend’s Legal Elite Up & Comers List for 2019
September 09, 2019 —
Michael S. Levine - Hunton Andrews KurthHunton Andrews Kurth’s insurance coverage practice is proud to congratulate Cary D. Steklof for being selected by his peers to Florida Trend’s Legal Elite Up & Comers list for 2019. A total of 131 attorneys under the age of 40 throughout the state of Florida were recognized for their leadership in the law and their communities. Cary was one of only seven attorneys selected for their skill and counsel in the area of insurance. We congratulate Cary and all of the recipients of this award who have distinguished themselves for their superior advocacy, knowledge, and accomplishments as young professionals.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com
Massachusetts Court Holds Statute of Repose Bars Certain Asbestos-Related Construction Claims
April 17, 2019 —
Timothy J. Keough & Rochelle Gumapac - White and Williams LLPIn Stearns v. Metropolitan Life Insurance Company, the Massachusetts Supreme Judicial Court (SJC) addressed whether the six-year statute of repose for improvements to real property applies to long-tail tort claims, such as those caused by exposure to asbestos. Reasoning that the language of § 2B is clear, unambiguous and unequivocal, the SJC held that Mass. Gen. Laws. c. 260 § 2B does in fact bar all tort claims arising out of a deficiency or neglect in the design, planning, construction or general administration of an improvement to real property filed after the expiration of the six-year repose period. Additionally, the court affirmed that the time limitations imposed by the statute of repose may not be tolled for any reason six years after either the opening of the improvement for use or the owner taking possession of the improvement for occupation upon substantial completion, whichever may occur first.
Reprinted courtesy of
Timothy J. Keough, White and Williams LLP and
Rochelle Gumapac, White and Williams LLP
Mr. Keough may be contacted at keought@whiteandwilliams.com
Ms. Gumapac may be contacted at gumapacr@whiteandwilliams.com
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Meritage Acquires Legendary Communities
July 23, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Big Builder, Meritage entered Atlanta through its acquisition of Legendary Communities for $130 million, “completing a two-year quest.”
“Probably for about two years, we’ve been looking in the market, talking to builders, and studying the geography, and meeting different people to learn who the players are and learn about the area,” Meritage Homes chairman and CEO Steven J. Hilton told Big Builder.
This acquisition makes Meritage Homes “the number one builder in the Greenville-Anderson-Mauldin, S.C. market, owning more than 16 percent of the 2013 market share with 266 closings, according to Metrostudy data. It also owns almost seven percent of the market share in nearby Spartanburg, S.C. with 44 closings.”
Legendary fits “in very nicely with what we do at Meritage,” Hilton said to Big Builder. “We’re a strong first and second move up builder, as are they at Legendary. It’s a very complementary fit between the two companies.”
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