Ensuring Efficient Arbitration of Construction Disputes Involving Mechanic’s Liens
February 18, 2020 —
Robert G. Campbell & Trevor B. Potter - Construction ExecutiveThere may be tension between the enforcement of statutory mechanic’s lien claims when a contractual dispute resolution provision calls for arbitration. Once the parties are in arbitration, it may not be clear whether the arbitrator has authority to make factual determinations regarding amount and validity of mechanic’s liens, and whether courts are bound by these determinations. This uncertainty stems from the fact that in most states a mechanic’s lien can only be enforced by a court of competent jurisdiction. Indeed, many mechanic’s liens statutes define foreclosure as a “judicial process,” and courts generally have exclusive jurisdiction to issue orders foreclosing on real property1.
The risk for contractors and owners is that they will spend time and money re-litigating factual issues related to proving elements of a mechanic’s lien claim, including the proper lien amount, timeliness and other prerequisites. Without a clear understanding of what issues and elements are arbitrable, the parties run the risk that an arbitrator will rule on certain elements only to find out during post-arbitration lien foreclosure proceedings that the arbitrator lacked authority to make determinations on those elements. Questions therefore arise whether a court will enforce the arbitrator’s determinations and whether the parties must relitigate mechanic’s lien issues creating a further risk of inconsistent rulings.
These risks can be minimized through arbitration provisions which address these issues, express requests in arbitration demands and by ensuring that arbitration awards contain explicit determinations of mechanic’s liens issues.
Reprinted courtesy of
Robert G. Campbell & Trevor B. Potter, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Potter may be contacted at tpotter@coxcastle.com
Mr. Campbell may be contacted at rcampbell@coxcastle.com
Read the court decisionRead the full story...Reprinted courtesy of
Seven Key Issues for Construction Professionals to Consider When Dealing With COVID-19
April 13, 2020 —
Jason Adams - Linked InBy now every construction professional has been inundated with articles regarding the impacts of COVID-19 on the construction industry. The sheer volume of information is overwhelming and changes by the hour. This article is intended to summarize key issues affecting construction professionals and serve as a general road map for navigating the crisis.
1. Determine Project Status
The first consideration is whether the construction projects at issue are allowed to proceed given “shelter in place” and related orders.
Generally speaking, Governor Newsom has deemed construction to be essential and, therefore, exempt from California’s “Safer at Home” order. There is some debate as to whether the governor’s order takes priority over contradictory local (City and County) orders. For example, some Northern California counties and the City of Berkeley have issued orders expressly providing that their local orders legally supersede the State order because the local orders are more restrictive.
If a local ordinance, public entity representative, or the project owner orders the project to shut down, the parties will need to make a fact specific determination regarding how to proceed at that time.
If the project proceeds, employee safety is paramount. In the City of Los Angeles employers are required to develop a “comprehensive COVID-19 exposure control plan” that includes a laundry list of safety requirements. Regardless of the jurisdiction, the parties must err on the side of caution and comply with social distancing (six feet), refrain from holding meetings, and close the project to the public. Anyone who can work remotely should be encouraged to do so.
Read the court decisionRead the full story...Reprinted courtesy of
Jason Adams, Gibbs GidenMr. Adams may be contacted at
jadams@gibbsgiden.com
Wisconsin Supreme Court Upholds Asbestos Exclusion in Alleged Failure to Disclose Case
January 22, 2014 —
Beverley BevenFlorez-CDJ STAFFIn the case Phillips v. Parmelee, the Wisconsin Supreme court ruled “that an asbestos exclusion in a liability policy barred a duty to defend and indemnify a building seller for claims that the seller failed to disclose that the building contained asbestos,” according to an article in Mondaq by Ruth S. Kochenderfer and Deanna P. Cook, both from Steptoe & Johnson LLP. The policyholder received a building report stating that the “heating ducts likely contained asbestos,” however, the buyers alleged that the policyholder never provided them the report. After the buyers purchased the property, contractors “cut through the heating ducts, unknowingly dispersing asbestos throughout the building.”
According to Kochenderfer and Cook’s article, “The insurer intervened in the buyers' suit and sought summary judgment against the policyholder and buyers, arguing that an asbestos exclusion precluded coverage for the buyers' suit against the policyholder.” The buyers took the case to the Wisconsin Supreme court and “attacked the asbestos exclusion,” but the court rejected every argument.
Kochenderfer and Cook stated that the “decision is significant because three courts, including Wisconsin's highest court, squarely rejected attempts to narrow a broad, clearly-worded asbestos exclusion. Further, it confirms that such an asbestos exclusion will apply to all causes of action, including an alleged failure to disclose the presence of asbestos.”
Read the court decisionRead the full story...Reprinted courtesy of
New York Restrictions on Flow Through Provision in Subcontracts
August 14, 2023 —
Bill Wilson - Construction Law ZoneMost subcontracts include a flow through provision (also called flow down and incorporation clauses) stating that the subcontractor and contractor are bound by the same obligations as set forth in the prime contract between the contractor and owner. Many jurisdictions interpret such provisions narrowly, as illustrated in a recent case out of New York. In Amerisure Insurance Company v. Selective Insurance Group, Inc., 2023 WL 3311879, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s interpretation of a flow through clause in a construction subcontract. The Amerisure case involved a dispute over insurance coverage for a personal injury to a subcontractor’s employee on a construction project. The owner of the project sought defense and indemnity from the general contractor (GC) and its insurance company, who in turn sought coverage for the owner as an additional insured under the subcontractor’s policy. The GC based its argument for coverage on the flow through provision in the subcontract.
The prime contract required the GC to procure commercial liability insurance including the owner as an additional insured for claims caused by the GC’s negligent acts or omissions. The subcontract likewise required the subcontractor to procure commercial general liability insurance but required only that the GC be named as an additional insured. However, the subcontract also included a flow through clause, binding the subcontractor to the terms of the prime contract and assuming toward the GC all the obligations and responsibilities that the GC assumed toward the owner. However, the subcontract did not expressly require that the subcontractor name the owner as an additional insured, and in order for the owner to qualify as an additional insured under the subcontractor’s insurance policy, the subcontractor must have agreed in the subcontract to name the owner as an additional insured.
Read the court decisionRead the full story...Reprinted courtesy of
Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
Super Lawyers Selects Haight Lawyers for Its 2024 Southern California Rising Stars List
February 05, 2024 —
Haight Brown & Bonesteel LLPCongratulations to the following Haight attorneys who were selected to the 2024 Southern California Rising Stars list:
- Kyle DiNicola
- Patrick McIntyre
- Kathleen Moriarty
- Kristian Moriarty
- Austin Smith
Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers magazines also feature editorial profiles of attorneys who embody excellence in the practice of law.
Read the court decisionRead the full story...Reprinted courtesy of
Haight Brown & Bonesteel LLP
Newark Trial Team Secures Affirmance of ‘No Cause’ Verdict for Nationwide Housing Manager & Developer
January 07, 2025 —
Lewis Brisbois NewsroomNewark, N.J. (December 30, 2024) - Newark Partner Afsha Noran and Managing Partner Colin Hackett recently obtained a ruling by a New Jersey Appellate Division panel affirming a unanimous "no cause" defense verdict obtained on behalf of a nationwide housing developer and manager.
In this case, the plaintiff and her two minor children brought suit against the firm's client. They appealed a unanimous no-cause jury verdict rendered in May 2023 that found the defendants not liable for mold exposure in their apartment. The plaintiffs argued that several trial errors, including improper jury instructions, a confusing verdict sheet, and prejudicial remarks by defense counsel led to an unjust result. However, the appellate court affirmed the trial court's decision, concluding that there was no miscarriage of justice and that the trial court properly exercised its discretion in handling the case.
Read the court decisionRead the full story...Reprinted courtesy of
Lewis Brisbois
Top 10 Take-Aways: the ABA Forum's 2024 Mid-Winter Meeting
February 26, 2024 —
Marissa L. Downs - The Dispute ResolverThe Forum on Construction Law convened last week at Caesars Palace in sunny Las Vegas for its 2024 Mid-Winter Meeting. Carrie Okizaki and David Suchar (along with John Cook, Karen Erger, and countless others) put together a truly outstanding program on power projects. Here are my top 10 take-aways from this unique and insightful event:
10. The demand for power projects is steadily increasing. The increasing demand for power construction projects is being driven chiefly by the need to replace aging infrastructure as well as the desire to develop cleaner and more sustainable generation facilities. The constant demand for more and more electricity is not that surprising but, according to Jeff Richardson (Energy Solutions) and Eric S. Gould (Modus Strategic Solutions), the pipeline market size for power-generation projects in 2028 is expected to reach $10.6 trillion, i.e., double what it was just in 2022.
9. "Net Zero" is the new normal. In December 2021, President Biden issued an executive order proclaiming that, by 2050, the federal government will be a Net-Zero contributor to the climate crisis. To achieve this goal, the greenhouse gasses ("GHGs") released by government operations must be less than (or equal to) the GHGs absorbed/removed from the environment. Other government bodies and private companies alike are adopting similar Net-Zero goals. Because not all of these promises are created equal, Moody’s Investors Services has a tool to help consumers compare and evaluate companies' carbon transition plans. According to panelists, Amanda Schermer MacVey (Venable), Brendan Hennessey (Pillsbury), and Laszlo von Lazar (Black & Veatch), these Net-Zero commitments are likely to result in more rigorous supplier codes of conduct and heightened carbon tracing efforts on construction projects.
Read the court decisionRead the full story...Reprinted courtesy of
Marissa L. Downs, Laurie & Brennan, LLPMs. Downs may be contacted at
mdowns@lauriebrennan.com
Idaho Supreme Court Address Water Exclusion in Commercial Property Exclusion
March 09, 2020 —
James M. Eastham - Traub LiebermanIn ABK, LLC v. Mid-Century Ins. Co., 2019 WL 7046393 (Idaho Dec. 23, 2019) an insured gas station owner sued its property insurance carrier for breach of contract and bad faith after the carrier denied coverage for loss caused by water contamination of the insured’s underground storage tanks. Mid-Century had denied coverage because the underground storage tanks were damaged by water -- which was an excluded peril under the policy. Mid-Century issued Business Owners Special Property Coverage to the insured which provided all-risk coverage for physical loss or damage. The policy contained a number of exclusionary provisions including a water exclusion which provided that the policy did not pay for loss or damage caused directly or indirectly by:
- Flood, surface water, waves, tides, tidal waves, overflow or any body of water, or their spray, all whether driven by wind or not; ...
- Water under the ground surface pressing on, or flowing or seeping through:
- Foundations, walls, floors or paved surfaces:
- Basements, whether paved or not; or
- Doors, windows or other openings.
In upholding the District Court’s ruling in favor of Mid-Century, the Idaho Supreme Court held that a clear reading of the unambiguous policy provides damage caused by surface water or water under the ground when flowing or seeping through other openings is excluded from coverage.
Read the court decisionRead the full story...Reprinted courtesy of
James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
