Construction Up in Northern Ohio
October 02, 2013 —
CDJ STAFFCrain’s Cleveland Business reports that both commercial and residential construction have seen spending increases in the last twelve months. The gain was only 5.4%, but it’s still welcome in the area. “It’s been quiet so long, it wouldn’t take much to generate an upturn,” according to Tom Laird, of Gilbane Building Co.
Some of the upturn comes from new building at universities and hospitals, but the corporate sector is also starting new project. Finally, the city of Cleveland is looking for proposals to develop parcels on their waterfront.
Still, some are wary. “It might just be a bubble,” said Jason Jones, the general manager of Turner Construction’s Cleveland office.
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Where Breach of Contract and Tortious Interference Collide
July 18, 2022 —
Christopher G. Hill - Construction Law MusingsClaims for breach of contract are numerous in the construction law world. Without these claims we construction attorneys would have a hard time keeping the doors open. A 2021 case examined a different sort of claim that could arise (though, “spoiler alert” did not in this case) during the course of a construction project. That type of claim is one for tortious interference with business expectancy.
In Clark Nexsen, Inc. et. al v. Rebkee, the U. S. District Court for the Eastern District of Virginia gave a great explanation of the law of this type of claim in analyzing the following basic facts:
In 2018, Clark Nexsen, Inc. (“Clark”) and MEB General Contractors, Inc. (“MEB”) responded to Henrico County’s (“Henrico”) Request for Proposals (“RFP”) for the design and construction of a sport and convocation center (the “Project”). Henrico initially shortlisted Clark and MEB as a “design-build” team for the Project, but later restarted the search, issuing a second RFP. Clark and MEB submitted a second “design-build” proposal, but Henrico selected Rebkee Co. (“Rebkee”) for certain development aspects of the Project. MEB also submitted proposals to Rebkee, and Rebkee selected MEB as the design-builder for the Project. MEB, at Rebkee’s request, solicited proposals from three design firms and ultimately selected Clark as its design partner. From December 2019 to May 2020, Clark and MEB served as the design-build team to assist Rebkee in developing the Project. In connection therewith, Clark developed proprietary designs, technical drawings, and, with MEB, several cost estimates. In February 2020, MEB submitted a $294,334.50 Pay Application to Rebkee for engineering, design, and Project development work. Rebkee never paid MEB. Henrico paid MEB $50,000.00 as partial payment for MEB’s and Clark’s work. MEB then learned that Rebkee was using Clark’s drawings to solicit design and construction proposals from other companies. On July 23, 2020, Rebkee told MEB that Henrico directed it to cancel the design-build arrangement with MEB and Clark and pursue a different planning method. MEB and Clark sued and Rebkee for, among other claims, tortious interference with a business expectancy. Rebkee moved to dismiss the tortious interference claim.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Landmark Towers Association, Inc. v. UMB Bank, N.A. or: One Bad Apple Spoils the Whole Bunch
May 12, 2016 —
Jean Meyer - Colorado Construction LitigationOn April 21, 2016, the Colorado Court of Appeals issued an opinion that immediately drew the ire of the greater real estate development industry and those concerned about affordable housing in a state in the midst of unprecedented soaring rent and housing prices. The Landmark Towers Assn., Inc. v. UMB Bank, N.A., 2016 COA 61, decision is the result of protracted litigation arising out of construction and sale of the ill-fated European Village (“Village”) residential community. For a thorough summary of the origins of the development and the unfortunate story of the man behind the curtain, review the Denver Post’s article titled “Zachary Davidson, Denver Landmark developer, and his fall from grace.” (http://www.denverpost.com/ci_22656011/fall-from-grace-zach-davidson-landmark denver)
Despite the unique facts and circumstances relating to the questionable dealings by the developer, Mr. Zachary Davidson, the decision now stands to turn the Colorado real estate development business on its head. Specifically, a group of condominium owners, who did not live in the Village, learned that their properties had been included in a special district, the Marin Metropolitan District (“District”), to finance the Village. Prior to their purchase, Mr. Davidson failed to disclose to the condominium owners that they would be responsible for financing the Village’s development through previously issued bonds by the District to be paid for through their property taxes. Understandably frustrated by this discovery the condominium owners, through the Landmark Towers Association, Inc. (“Landmark HOA”), investigated the origin of these unforeseen property taxes.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
Update Your California Release Provisions to Include Amended Section 1542 Language
April 02, 2019 —
Amy L. Pierce & William S. Hale, P.E. - Gravel2Gavel Construction & Real Estate BlogMost companies have been involved in a situation where they want to end their relationship with another company, or with an employee, and to permanently terminate their mutual obligations (e.g., a settlement agreement resolving end-of-project litigation). In 1992, a California Court of Appeals, in Winet v. Price, confirmed that upholding general releases is “in harmony… with a beneficial principle of contract law: that general releases can be so constructed as to be completely enforceable.”
In California, agreements with a release of claims (or s general release) include what is often referred to as a California Civil Code § 1542 waiver for the purpose of ensuring that the releasing party is consciously releasing both known and unknown claims that may be later discovered. Such a waiver provision generally confirms that the Releasing Party acknowledges that it understands and waives the provisions of Section 1542, followed by the quoted text of Section 1542 (typically in all capital letters).
Reprinted courtesy of
Amy L. Pierce, Pillsbury and
William S. Hale, Pillsbury
Ms. Pierce may be contacted at amy.pierce@pillsburylaw.com
Mr. Hale may be contacted at william.hale@pillsburylaw.com
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Repair of Part May Necessitate Replacement of Whole
February 10, 2012 —
CDJ STAFFJudge Gleuda E. Edmonds, a magistrate judge in the United States District Court of Arizona issued a ruling in Guadiana v. State Farm on January 25, 2012. Judge Edmonds recommended a partial summary judgment in favor of the plaintiff.
Ms. Guandiana’s home had water damage due to pluming leaks in September 2004. She was informed that polybutylene pluming in her house could not be repaired in parts “it must be completely replaced.” She had had the plumbing replaced. State Farm denied her claim, arguing that “the tear-out provision did not cover the cost of accessing and replacing those pipes that were not leaking.”
In September 2007, State Farm filed a motion to dismiss. The court rejected this motion, stating that “If Guadiana can establish as a matter of fact that the system that caused the covered loss included all the pipes in her house and it was necessary to replace all the pipes to repair that system, State Farm is obligated to pay the tear-out costs necessary to replace all the pipes, even those not leaking.”
In March 2009, State Farm filed for summary judgment, which the court granted. State Farm argued that “the tear-out provision only applied to ‘repair’ and not ‘replace’ the system that caused the covered leak.” As for the rest of the piping, State Farm argued that “the policy does not cover defective materials.”
In December 2011, Ms. Guadiana filed for summary judgment, asking the court to determine that “the policy ‘covers tear-out costs necessary to adequately repair the plumbing system, even if an adequate repair requires replacing all or part of the system.”
In her ruling, Judge Edmonds noted that Ms. Guadiana’s claim is that “the water damage is a covered loss and she is entitled to tear-out costs necessary to repair the pluming system that caused that covered loss.” She rejected State Farm’s claim that it was not obligated to replace presumably defective pipes. Further, she rejected State Farm’s argument that they were only responsible for the leaking portion, noting “Guadiana intends to prove at trial that this is an unusual case where repair of her plumbing system requires replacement of all the PB plumbing.”
Judge Edmonds concluded by directing the District Court to interpret the tear out issue as “the tear-out provision in State Farm’s policy requires State Farm to pay all tear-out costs necessary to repair the plumbing system (that caused the covered loss) even if repair of the system requires accessing more than the leaking portion of the system.”
Read the court’s decision…
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Because I Haven’t Mentioned Mediation Lately. . .
November 23, 2020 —
Christopher G. Hill - Construction Law MusingsAny regular reader of Construction Law Musings knows that I am both a great believer in mediation and a certified Virginia mediator. After the last few weeks in which I participated in mediation by Zoom, a Judicial Settlement Conference (read, court-ordered mediation with a retired judge), and will be participating in another mediation in person next week, it seems as if others believe in the process as well.
After all of this mediation activity, all of which related to construction project-related disputes, I am more convinced than ever that almost every construction case should at least be submitted for mediation. The list below gives my reasons for saying this:
- The parties are in control. In litigation or arbitration, the parties present their evidence to a third party or parties with no familiarity with the “boots on the ground” reality of the construction project at issue. This third party gives a cold review of what evidence court rules allow them to consider and gives a final ruling that one side “wins” and the other side “loses.” This decision has monetary consequences for the losing party, not the least of which is a large attorney fee bill after potentially several years of legal wrangling. With mediation, those closest to the project, the parties, can say what they want, present what they feel to be the best case, and work for a solution. The solution can be flexible and allow the two sides to reach a business decision that is at least better than a large monetary judgment against one of the parties that is only further enforceable in court.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Builder Pipeline in U.S. at Eight-Year High: Under the Hood
August 26, 2015 —
Sho Chandra – BloombergHere’s the takeaway from the Commerce Department’s report Tuesday in in Washington that showed sales of new homes in the U.S rebounded in July to a 507,000 annualized rate. The median forecast of 75 economists surveyed by Bloomberg projected 510,000.
* Number of homes sold but not yet started climbed to a 192,000 annualized rate, the most since June 2007.
* That means builders have a large pipeline of demand to fill, which will keep housing starts rising.
* The number of homes under construction was the lowest since August 2014 and the number completed were the fewest since November.
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Sho Chandra, Bloomberg
Carrier Has Duty to Defend Claim for Active Malfunction of Product
October 19, 2020 —
Tred R. Eyerly - Insurance Law HawaiiRejecting that the underlying claim was based solely on faulty workmanship, the Third Circuit held the insurer had a duty to defend allegations of a malfunctioning product. Nautilus Ins. Co. v. 200 Christina Street Partners LLC, 2020 U.S. App. LEXIS 22118 (3d Cir. July 16, 2020).
The insureds were sued by homeowners in two separate suits alleging defects in the construction of their homes. Nautilus defended under a reservation of rights. Nautilus filed suit in District Court and moved for judgment on the pleadings. The District Court denied the motion, finding Nautilus had a duty to defend because the underlying claims sufficiently alleged product--related tort clams that could fall within the scope of coverage under the relevant policies.
The Third Circuit affirmed. There was a distinction between a claim of faulty workmanship, for which the insurer did not have a duty to defend, and a claim of "active malfunction" of a product, for which an insurer did have such a duty. An active malfunction was sufficiently fortuitous as to constitute an "occurrence."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
