New York Court Rejects Owner’s Bid for Additional Insured Coverage
September 06, 2021 —
Eric D. Suben - Traub LiebermanTenders for additional insured coverage in construction accidents are frequently litigated in New York courts. Although the past few years have seen changes in the law regarding the causal nexus between the named insured’s work and coverage for the purported additional insured, courts often find there is at least a duty to defend the additional insured where there are allegations of the employer/subcontractor’s presence at the site.
An exception is the recent decision in Gemini Insurance Company v. Certain Underwriters at Lloyd’s, London, Index No. 652669/20 in the Supreme Court of the State of New York, County of New York (Lebovits, J.). In that case, Gemini insured the owner and general contractor of a construction project, and Lloyd’s insured the injured claimant’s employer under a policy endorsed to provide additional insured coverage to entities who “have agreed in writing in a contract or agreement” with the named insured that they must be “added as additional insured.” Although the court found that the contracts here satisfied this requirement for additional insured coverage, the court’s analysis did not end there.
Noting that even where such contract exists, the Lloyd’s policy would not provide additional insured coverage “in all circumstances” (emphasis in original), the court next considered whether the underlying injury was “caused in whole or in part by: 1. [The named insured’s] acts or omissions, or 2. The acts or omissions of those acting on [the named insured’s] behalf,” as required under the endorsement’s wording.
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Eric D. Suben, Traub LiebermanMr. Suben may be contacted at
esuben@tlsslaw.com
That Boilerplate Language May Just Land You in Hot Water
December 17, 2015 —
Kevin Brodehl – California Construction Law BlogThe following post originally appeared in my partner
Kevin Brodehl‘s informative blog,
Money and Dirt. If you’re involved in real estate investment, development and/or secured lending in California, it’s a must read. While Kevin’s post below discusses a case involving a real estate purchase agreement, it applies equally to construction contracts, perhaps even more so, since I can’t think of any other type of contract in which indemnity and integration clauses are as common, or as integral.
Almost all real estate purchase and sale agreements contain provisions relating to integration and indemnity.
In the “boilerplate” worldview, these provisions are standard, generic, and basically all the same — integration clauses prohibit extrinsic evidence that would contradict the terms of the agreement, and indemnity clauses force the seller to protect the buyer from third party claims arising after closing.
But a recently published opinion by the California Court of Appeal (Fourth District, Division Three in Santa Ana) — Hot Rods, LLC v. Northrop Grunman Systems Corp. — clarifies that integration and indemnity clauses can have vastly different effects depending on how they are drafted.
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Kevin Brodehl, California Construction Law BlogMr. Brodehl may be contacted at
kbrodehl@wendel.com
Housing Starts Plunge by the Most in Four Years
March 19, 2015 —
Bloomberg News(Bloomberg) -- Housing starts plummeted in February by the most since 2011 as plunging temperatures and snow became the latest hurdles for an industry struggling to recover.
Work began on 897,000 houses at an annualized rate, down 17 percent from January and the fewest in a year, the Commerce Department reported Tuesday in Washington. The pace was slower than the most pessimistic projection in a Bloomberg survey of 81 economists.
“Today’s report leaves me a little concerned,” said Michelle Meyer, deputy head of U.S. economics at Bank of America Corp. in New York. “While the initial reaction is to dismiss much of the drop because of the bad weather, the level of home construction continues to be depressed.”
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Bloomberg NewsMichelle Jamrisko may be contacted at
mjamrisko@bloomberg.net
Sierra Pacific v. Bradbury Goes Unchallenged: Colorado’s Six-Year Statute of Repose Begins When a Subcontractor’s Scope of Work Ends
November 03, 2016 —
Luke Mecklenburg – Snell & Wilmer Real Estate Litigation BlogIt’s official: the October 20, 2016 deadline to petition for certiorari to the Colorado Court of Appeals on its decision in Sierra Pacific Industries, Inc. v. Bradbury has passed, so it appears that decision will stand.
In Sierra Pacific, the Court of Appeals held as a matter of first impression that the statute of repose for a general contractor to sue a subcontractor begins to run when a subcontractor’s scope of work is substantially complete, regardless of the status of the overall project. Sierra Pac. Indus., Inc. v. Bradbury, 2016 COA 132, ¶ 28, ___ P.3d ___. The Court of Appeals interpreted the statute of repose in C.R.S. section 13-80-104, which requires that “all actions against any architect, contractor, builder or builder vendor, engineer, or inspector performing or furnishing the design, planning, supervision, inspection, construction, or observation of any improvement to real property” must be brought within six years of substantial completion of that improvement. C.R.S. § 13-80-104(1)(a). Recognizing that “an improvement may be [to] a discrete component of an entire project” under Shaw Construction, LLC v. United Builder Services, Inc., 296 P.3d 145 (Colo. App. 2012), the Court of Appeals determined that “a subcontractor has substantially completed its role in the improvement at issue when it finishes working on the improvement.” Sierra Pac., 2016 COA at ¶¶ 20, 28. In doing so, it rejected Sierra Pacific’s argument that the statute could be tolled under the repair doctrine “while others worked to repair [the subcontractor’s] ‘improper installation work and flawed repair work.’” Id. at ¶ 29. Because six years had undisputedly passed since the subcontractor completed its scope of work when Sierra Pacific filed suit against it, the Court of Appeals affirmed the trial court’s order granting the subcontractor’s motion for summary judgment under Section 13-80-104(1)(a).
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Luke Mecklenburg, Snell & Wilmer Real Estate Litigation BlogMr. Mecklenburg may be contacted at
lmecklenburg@swlaw.com
What The U.S. Can Learn from China to Bring Its Buildings to New Heights
November 15, 2022 —
Marc Gravely - Gravely PC“China’s history is marked by thousands of years of world-changing innovations: from the compass and gunpowder to acupuncture and the printing press. No one should be surprised that China has re-emerged as an economic superpower.” —Gary Locke
Westerners have often criticized China’s ‘creative’ interpretation of the concept of intellectual property, but even its harshest critics recognize the Asian superpower’s ability to build large-scale infrastructure projects at a breakneck pace. America does not want to emulate the absolute government control that has allowed China to build futuristic bridges and airports in record time. However, there are still some things we can learn from our biggest global competitor.
The White House itself has invoked China’s grand achievements in its quest to secure more infrastructure funding from Congress. The administration believes that the only way to compete with China is to spend
at least $2 trillion on upgrading bridges and mass transit, modernizing neighborhoods and airports, and making broadband access universal.
The skylines of China’s largest metropolises are nothing short of mesmerizing. Its grand airports and auditoriums amaze tourists and locals alike. Explore any important Chinese city on Google maps, and you will find a level of modernization in infrastructure that far surpasses American cities of similar size. Scholars have coined the phrase
“China envy” to refer to the effects of this phenomenon.
According to urban planning historian Thomas J. Campanella, China is doing the kind of things America used to do: amazing the world with grand structures that push engineering and architecture forward. The question is, if China has emulated us, can we now emulate China?
China Envy
There are some basic differences between the two nations which make emulation difficult. On the one hand, China has leapfrogged from rudimentary infrastructure to suborbital spaceships and bullet trains. America is at a different stage and moves at a different pace. Chinese leaders don’t need approval from the opposition in Congress; they have total control. If the Chinese administration wants to build a bridge, they just go ahead and do it. Democracy is a bit more complicated, but we naturally welcome the complexities, considering how stifling the political atmosphere is under communist rule.
Another difference some analysts have pointed out is that the current Chinese President and his predecessor both studied engineering, so they were naturally keen on innovation in their field. Meanwhile, U.S. presidents have seldom had such backgrounds. The American public has more often elected lawyers to rule over our nation.
China envy is understandable. Our competitor is home to
49 of the planet’s 100 tallest skyscrapers. It also boasts a million bridges. While the U.S. spends 2.4 percent of GDP on infrastructure,
China spends 8 percent. This was an important selling point for the White House’s ambitious infrastructure plan.
Located in a mountainous region with over 1,500 rivers, China has built bridges of fantastic proportions to keep urban centers and important agricultural areas connected.
The Pingtang Bridge in Guizhou province links two sides of a canyon that are 7,000 feet apart. The spectacular, 7-mile-long Hutong Yangtze River Bridge efficiently provides railway and highway access to Shanghai from Jiangsu province.
As climate change forces us to reevaluate Americans’ preference for private cars and the neglect of our railway systems, the inferior car ownership that was once a disadvantage for China is now an advantage. By 2025, high-speed trains will service
98 percent of Chinese cities. Subways are common in many of them. Today, the country boasts a high-speed rail network totaling more than 23,500 miles, or
eight times the distance between New York and LA. Chinese workers travel on bullet trains at 215 miles per hour, much faster than their American counterparts.
The gap between China and the U.S. when it comes to infrastructure is one of astronomic proportions. A few years ago, Bill Gates announced that China had used as much cement in three years as the U.S. in 100 years. China currently produces 14 times more steel than the U.S. and about 2.2 gigatons of cement per year, roughly half of the
4.5 gigatons our country used in the 20th century. In China, city planners have not focused on short-term return on investment, but on broader societal benefits. For example, World Bank officials were not enamored with the idea of creating a subway in Shanghai; the region’s geology made the project far too complex. The World Bank suggested buses would be a better solution for the city’s transit, but Chinese officials
didn’t listen and went ahead. Thirty years later, the Shanghai subway has become an example of efficiency, transporting more than 10 million people every day. It is as if China followed a different logic, one that often pays off.
According to Mr. Campanella, “We need a bit of China to be stirred into our game. . . We’re over privileging the immediately affected residents. What we don’t do is give requisite weight to the larger society.” China’s modernization has, however, not been without cost. Accelerated construction creates pollution, and not all the country’s massive structures are green or energy efficient. President Xi’s country is conscious about pollution, and it has poured significant resources into green infrastructure projects like wind and solar farms.
There is a boldness in China’s infrastructure planning, a pioneering spirit that we would do well to imitate. What American jurisdiction would spend billions on a new state-of-the-art airport only 50 miles away from a recently modernized one? China has done it in Beijing. In a way, it seems that China is seeing beyond the here and now, planning for tomorrow, and this is something we can learn from our competitors.
Marc Gravely is the founder and lead attorney at Gravely PC and author of Reframing America’s Infrastructure: A Ruins to Renaissance Playbook.
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Contractual Fee-Shifting in Litigation: Who Pays the Price?
December 31, 2024 —
Caitlin Kicklighter - ConsensusDocsWhen disputes on a construction project escalate to litigation, general contractors may find themselves entangled in a costly and time-consuming legal battle. One important concept to understand is contractual fee-shifting under a “prevailing party” provision, which can significantly impact damages recovered in litigation. The general rule, known as the “American Rule,” requires each party to pay its own legal costs, including attorney’s fees, expert witness expenses, and other court-related costs. This differs from other legal systems where the losing party typically pays the winning party’s fees. One exception to the American Rule is contractual fee-shifting, specifically through “prevailing party” provisions, which allows for the award of attorney’s fees and costs when explicitly provided for in a contract.
This article explores this exception to the American Rule, delves into the challenges posed by prevailing party provisions, and shares tips to consider for drafting these clauses to improve clarity and minimize uncertainty in the face of litigation.
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Caitlin Kicklighter, Jones Walker LLPMs. Kicklighter may be contacted at
ckicklighter@joneswalker.com
ASCE Statement on Biden Administration Permitting Action Plan
May 23, 2022 —
Dennis D. Truax, President, American Society of Civil Engineers (ASCE)Washington, DC. – ASCE applauds the Biden Administration for the development of their new Permitting Action Plan aimed at accelerating the federal permitting and environmental review process for major infrastructure projects across the country.
The plan leverages permitting provisions that were included in the Infrastructure Investment and Jobs Act and aims to ensure that the federal environmental review and permitting processes will be efficient, transparent, guided by science, and shaped by meaningful input from the public and government agencies.
One of the key recommendations in the 2021 Report Card for America's Infrastructure was to streamline the project permitting process across infrastructure sectors, while ensuring appropriate safeguards and protections are in place. Therefore, ASCE believes that the most recent plan is a step in the right direction to ensure that projects can be delivered on-time, and on-budget, while maintaining the rigorous environmental review process.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Performance Bonds: Follow the Letter of the Bond and Keep The Surety Informed
December 06, 2021 —
Bill Shaughnessy, Jones Walker, LLP - ConsensusDocsConstruction surety bonds are risk management tools utilized by parties on large construction projects. However, bonds are not insurance, and a surety is not an “insurer” of the project. Different from insurance, a surety’s obligation to act typically arises if the principal fails to perform in accordance with the construction contract, and if the claimant satisfies the conditions precedent to enforcing the bond.[1]
This article focuses exclusively on performance bonds on private projects,[2] and highlights practical considerations and surety defenses to enforcement of the performance bond.[3] Spoiler alert – the party making a claim on the bond must strictly adhere to the conditions precedent set forth in the bond throughout the construction project and when calling upon the surety to take action, otherwise the performance bond may be rendered void and unenforceable.
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Bill Shaughnessy, Jones Walker, LLPMr. Shaughnessy may be contacted at
bshaughnessy@joneswalker.com
