Seattle Washington Building Expert Directory

Funding the Self-Insured Retention (SIR)

August 17, 2020 — David Adelstein - Florida Construction Legal Updates
Unlike a deductible, a self-insured retention (referred to an “SIR”) is, as the name suggests, a self-insured obligation of the insured before its insurer picks up coverage. The SIR needs to be exhausted by the insured (as the primary self-insurance component) before the carrier’s excess defense and indemnification obligations kick-in under the terms of the policy. However, an insured can generally exhaust an SIR by paying legal fees and costs associated with a claim. Oftentimes, the language in the policy requires the SIR to be paid for by the named insured or an insured under the policy. This was an issue addressed by the Florida Supreme Court in Intervest Const. of Jax, Inc. v. General Fidelity Ins. Co., 133 So.3d 494 (Fla. 2014). In this matter, a personal injury claimant asserted a claim against the contractor dealing with a residential home. The contractor hired a subcontractor to install attic stairs and the subcontract required the contractor to indemnify it. The owner of the house injured herself on the attic stairs and sued the contractor. The contractor, in turn, sought indemnification against the subcontractor that installed the attic stairs. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Can a Contractor be Liable to Second Buyers of Homes for Construction Defects?

November 05, 2014 — Craig Martin - Construction Contractor Advisor
Whether a contractor will be liable to a second purchaser, even though the contractor never contracted with the second purchaser, varies state to state. The Pennsylvania Supreme Court, in Conway v. The Cutler Group, is the latest court to rule that a subsequent purchaser lacks privity and cannot pursue an action against the builder. In that case, the Conways purchased a home from the original owner. After living in the home for about two years, the Conways discovered water leaking around the windows. The Conways sued the builder, alleging breach of the implied warranty of habitability. The builder defended the claim, asserting that it had not contracted with the Conways and thus had not provided any warranties to the Conways. The trial court agreed and dismissed the claim. The first level of appellate court reversed the trial court, holding that the warranty of habitability was intended to level the playing field between the builder and purchaser of a home and it should be extended to subsequent purchasers. The Pennsylvania Supreme Court disagreed and refused to extend any warranties to subsequent purchasers. 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

Manhattan Townhouse Sells for a Record $79.5 Million

April 05, 2017 — Oshrat Carmiel - Bloomberg
A home on Manhattan’s Upper East Side sold for $79.5 million, according to property records made public Wednesday, making it the highest price ever paid for a townhouse in the borough. The 20,500-square-foot (1,905-square-meter) property, at 19 E. 64th St., had been owned by the Wildenstein family, billionaire art dealers whose gallery was located at the site for more than 80 years. The previous record for a Manhattan townhouse was the $53 million paid for 4 E. 75th St., in 2006, according to appraiser Miller Samuel Inc. Read the court decision
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Reprinted courtesy of Oshrat Carmiel, Bloomberg
Mr. Carmiel may be followed on Twitter @OshratCarmiel

Owner Bankruptcy: What’s a Contractor to Do?

February 28, 2018 — Troy R. Covington and Stephen M. Parham - Construction Executive Magazine
Bankruptcy of the owner or developer of a real estate construction project can be very unsettling to contractors. But a declaration of bankruptcy by the developer, in and of itself, does not constitute a breach of contract such that the contractor can stop working. Contract provisions providing that the contract is terminated if a party becomes insolvent or files for bankruptcy are generally unenforceable. Partially-performed construction contracts are executory contracts, meaning that the obligations of the parties to the contract have not yet been fully performed. The Bankruptcy Code allows a bankruptcy trustee (in a Chapter 7 dissolution case) or the debtor-in-possession (in a Chapter 11 reorganization case) either to assume or to reject an executory contract. A debtor-in-possession has until the time of the confirmation of its plan of reorganization to decide if it will assume or reject the contract. The contractor may ask the bankruptcy court to require the debtor-in-possession to make a decision on the contract sooner, but the court will most likely give the debtor-in-possession a fair amount of time to make the decision. Reprinted courtesy of Troy R. Covington and Stephen M. Parham, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Covington may be contacted at sparham@bloomparham.com Mr. Parham may be contacted at tcovington@bloom-law.com Read the court decision
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TOP TAKE-AWAY SERIES: The 2023 Fall Meeting in Washington, D.C.

November 13, 2023 — Marissa L. Downs & Jennifer M. Kanady - The Dispute Resolver
Over 500 construction lawyers, experts, and consultants descended on Washington last week for the Forum’s 2023 Fall Meeting. Newly minted Forum Chair John Cook and Program Coordinators Catherine Delorey and Brian Zimmerman put together a stellar program focused on navigating government construction. For this installation of the post-meeting post, I'm teaming up with guest contributor, Jennifer Kanady, to bring you 10 of our top take-aways from this unique program. 10. Contracting with the government is replete with risk that could easily trap the unwary. Nobody likes to be taken advantage of. But hell hath no fury like the U.S. Government scorned. Erin Cannon-Wells and Aaron Silberman, gave a (truly) delightful, Indiana-Jones-inspired presentation on the regulations that can doom the unwitting contractor who is less than perfectly forthright in its dealings. The government has created financial incentives for members of the public to report your company’s violations as part of a qui tam action. When you consider the number of potential whistleblowers in the bidding process and the contracting chain, a qui tam action would seem more likely than not. Add to that the sanctions contractors might face for even innocent errors either by their own companies or their downstream subs, and government contracting begins to sound increasingly like the Temple of Doom. Oh, and in case you were only focused on affirmative claims, beware the “reverse false claim” which is concealing information that would rightfully entitle the government to a credit… Reprinted courtesy of Marissa L. Downs, Laurie & Brennan, LLP and Jennifer M. Kanady, FAC Services, LLC Ms. Downs may be contacted at mdowns@lauriebrennan.com Ms. Kanady may be contacted at JKanady@facfin.com Read the court decision
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California Indemnity and Defense Construction Law Changes for 2013

April 03, 2013 — William L. Porter, Esq. - Porter Law Group

Death of “Type 1” Indemnity in California Construction

For many years the prevalence of the “Type 1” indemnity clause has been the subject of fierce debate within the construction industry. Subcontractors have complained that they are saddled with indemnity obligations that require them to indemnify contractors from construction-related claims for which these subcontractors are truly not responsible. In defense, contractors have argued that they must be entitled to the freedom to set contractual terms to best protect themselves and they point out that subcontractors are certainly free to negotiate better terms or turn down work.

After many years of debate and small legislative inroads in prohibiting Type 1 indemnity in residential projects and where it concerns the “sole negligence”, “willful misconduct” or the “design defects” of others, the California legislature has finally spoken broadly and definitively on the issue of Type 1 indemnity clauses in construction contracts. Under new Civil Code section 2782, beginning with contracts entered into on or after January 1, 2013, broad “Type 1” indemnity clauses shall be void and unenforceable in the context of both private and public construction projects in California. Civil Code section 2782 now makes it clear that subcontractors can no longer be required to indemnify against another’s active negligence in connection with construction contracts, whether public or private.

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Reprinted courtesy of William L. Porter, Esq.
William L. Porter, Esq. can be contacted at bporter@porterlaw.com

COVID-19 Could Impact Contractor Performance Bonds

March 30, 2020 — Ben Williams & MG Surety - Construction Executive
As COVID-19 continues to expand around the United States and the world, it may only be a matter of time before U.S. construction projects are affected by the virus. Performance bonds guarantee that a project will be completed by a contractor according to the contract. However, what if a contractor cannot complete a project on time due to widespread disease? What, if any, impact could the virus have on a contractor’s surety bond program? Risk Factors Several risks associated with the virus could trigger a performance bond claim. 1. Materials. The Chinese account for a large supply of construction materials, including steel, copper, cabinetry, etc. An inability to obtain these materials could significantly delay or stop a project all together. Even if a contractor is able to obtain them from other sources, it may be at a significantly higher cost than they put into the bid. 2. Labor. There is already a shortage of qualified labor in the construction industry. Additionally, construction already lends itself to the spreading of viruses; workers are often in close proximity, handling common materials, and they may not have an easily accessible place to wash their hands. Furthermore, even though many now have paid sick leave, there is often pressure not to use it. These things could magnify the labor shortage and make it difficult to complete projects on time. 3. Safety. Finally, the world is having a serious shortage of respirators. Because of widespread panic, many people have been purchasing N95 respirators—so much that the Surgeon General has asked people to stop buying them. It has created a shortage for people who really need them, like contractors. If contractors can’t get these safety masks, certain trades will either be unable to work, or risk continuing the project without masks, which would endanger workers and open them up to OSHA penalties. Reprinted courtesy of Ben Williams and MG Surety, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Williams may be contacted at benw@mgsuretybonds.com

Real Estate & Construction News Round-Up (08/17/22) – Glass Ceilings, Floating Homes and the Inflation Reduction Act

September 12, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up features the construction industry’s latest happenings: the Inflation Reduction Act, women shattering the glass ceiling, eco-friendly floating homes, and more.

The Inflation Reduction Act contains approximately $5 billion for programs to accelerate the construction industry’s shift toward green building materials. (Julie Strupp, Construction Dive)
According to a new analysis from consultancy Rider Levett Bucknall, the speed of growth for construction costs has only gotten faster. (Erik Sherman, Globe St.)
Record vacancies in the construction industry has created the opportunity for women to step into what’s previously been an all-male business. (Craig Torres & Maria Paula Mijares Torres, Bloomberg)
A midlife crisis hits office buildings, with the late-30s/early-40s stable of office product accounting for about a third of the national market today. (Commercial Observer)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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