FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

The Clock is Ticking: Construction Delays and Liquidated Damages

September 18, 2023 — Tiffany Harrod - ConsensusDocs
With the on-going shortage of construction workers in the industry and other factors ranging from weather to procurement problems, the threat of project delay is real. When a contract contains a liquidated damages clause for assessing project delays, real financial consequences for contractors can result. Courts have long allowed parties to apportion contractual risks as they deem appropriate especially in the commercial context where the parties are considered to be sophisticated even if their bargaining power is not equal. Liquidated damage provisions such as those for delay that are found in construction contracts are not unusual but they must be crafted in such a way as to be enforceable and not violate public policy. A liquidated damage clause in a construction contract is a customary way for the parties to deal with the possibility of delay in the completion of a project and the potential losses flowing from the delay.[1] In their most basic form, the party in breach, which is more often than not the contractor, is obligated to pay the non-breaching party, usually the project owner, some fixed sum of money for the period that exceeds the designated completion date that was agreed upon in advance and memorialized in the contract. (It is after all no secret that these provisions are primarily for the owner’s benefit.) The non-breaching party is then compensated for losses associated with the delay without the time and expense of having to prove in either a civil suit or an arbitration proceeding what the actual damages are. This option is particularly attractive to project owners because the liquidated damages assessment can simply be withheld from payments owed to the contractor once the agreed-upon completion date has been passed. Read the court decision
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Reprinted courtesy of Tiffany Harrod, Peckar & Abramson
Ms. Harrod may be contacted at tharrod@pecklaw.com

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North Dakota Supreme Court Clarifies Breadth of Contractual Liability Coverage

October 30, 2018 — Michael S. Levine & Latosha M. Ellis - Hunton Insurance Recovery Blog
North Dakota’s highest court delivered a blow to Mid-Continent Casualty Company in Borsheim Builders Supply, Inc. v. Manger Insurance Co., ruling that a contract between a policyholder and general contractor fit the insured contract exception of contractual liability. Commercial General Liability (“CGL”) policies generally exclude an insured’s contractual assumption of another party’s liability. The exclusion typically contains an exception for what is known as an “insured contract.” However, many policyholders and insurance claims personnel often miss the significance of the insured contract exception. This was the case in Borsheim. Read the court decision
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Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com

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House Bill Clarifies Start Point for Florida’s Statute of Repose

September 14, 2017 — Lian Skaf - White and Williams LLP
The Florida legislature recently enacted a law clarifying when the ten-year statute of repose begins to run for cases involving “improvements to real property,” as that phrase is used in Florida Statute Section 95.11. House Bill 377 was signed into law on June 14, 2017 and took effect in all cases accruing on or after July 1, 2017. This amendment is significant to subrogation professionals evaluating when cases involving contractors and design professionals are time barred. Read the court decision
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Reprinted courtesy of Lian Skaf, White and Williams LLP
Mr. Skaf may be contacted at skafl@whiteandwilliams.com

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Washington Court Limits Lien Rights of Construction Managers

August 17, 2011 — Douglas Reiser, Builders Council Blog

A newly filed, yet unpublished, court opinion opines that a construction manager cannot file a construction lien in Washington state. So, how far reaching is this opinion?



In the case of Blue Diamond Group Inc. v. KB Seattle 1, Inc., et al, a New York construction manager filed a lien against the Westfield Southcenter Mall in Tukwila, Washington. The lien was filed after the owner of a coffee stand failed to pay Blue Diamond for consulting services used in the construction of a kiosk.



Blue Diamond served as the owner’s agent, assisting with managing subcontractors, vendors and other tasks. The manager’s tasks also included paying invoices, managing deliveries, setting schedules and other site managerial tasks. Blue Diamond was not registered as a contractor under Washington’s RCW 18.27.

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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com

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Don’t Be Lazy with Your Tenders

October 24, 2022 — Rick Erickson - Snell & Wilmer Real Estate Litigation Blog
Our clients probably spend significant time, money and effort refining and updating their contract provisions covering indemnification and the duty to defend claims arising on their projects. But they should also consider spending an appropriate and adequate amount of time, money and effort when sending notices, or “tenders,” to enforce those critical provisions. Tenders demanding defense and indemnity are strictly interpreted based on what the contract documents require. Getting tenders wrong can result in losing one of the most significant risk-shifting tools in the contract. It can also be a monumental mistake if insurance coverage for indemnification damages and defense costs are lost because of an inadequate tender. The legal definition of “tender” is simple; it is “[a]n unconditional offer of money or performance to satisfy a debt or obligation.” Black’s Law Dictionary 1479-80 (7th ed. 1999). Whereas “tender of defense” for insurance is “the act in which one party places its defense and all costs associated with said defense with another due to a contract or other agreement … [which] transfers the obligation of the defense and possible indemnification to the party to which the tender was made.” Int’l Risk Mgmt. Inst., Glossary. Thus, when claims arise on your projects, notice by tenders of defense and indemnity will often determine dispute resolution and available insurance proceeds. Read the court decision
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Reprinted courtesy of Rick Erickson, Snell & Wilmer
Mr. Erickson may be contacted at rerickson@swlaw.com

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BIM Meets Reality on the Construction Site

September 25, 2018 — Aarni Heiskanen - AEC Business
BIM models are mostly used by foremen on construction sites. But what if they could be made available for workers at the press of a button? This question was what the Finnish government-funded KIRA pilot project set out to answer. As a by-product, the project also produced augmented reality (AR) solutions for construction sites. The research project was called ”Digitalization of a construction project based on role and location information” (RoPa). It was conducted by construction company Fira and engineering consultancy Sweco. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Illinois Supreme Court Holds That the Implied Warranty of Habitability Does Not Extend to Subcontractors

March 04, 2019 — Michael J. Ciamaichelo - The Subrogation Strategist
The implied warranty of habitability allows a homeowner to recover damages for latent defects that interfere with the intended use of a home. In Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, 2018 Ill. LEXIS 1244 (2018), the Supreme Court of Illinois held that buyers of new homes cannot assert claims for breach of the implied warranty of habitability against subcontractors involved in the construction of the homes because the subcontractors have no contractual relationship with the homeowners and the damages are purely economic. As the court explained, the implied warranty of habitability is a creature of contract (not tort) and, therefore, only exists when there is contractual privity between the defendants and the homeowners. In Sienna, a group of condominium unit owners alleged that their new homes contained latent construction defects and asserted claims against the various parties involved in the construction and sale of the homes, including claims against the defendant subcontractors for breach of the implied warranty of habitability. The plaintiffs contracted with the property developer to purchase the homes, but the plaintiffs had no contractual relationship with the subcontractors involved in the construction of the homes. The Sienna court, overturning the decisions of the trial court and the appellate court, granted the subcontractors’ joint motion to dismiss the plaintiff’s claims for the implied warranty of habitability because the plaintiffs had no contractual relationship with the subcontractors and the damages were purely economic. Read the court decision
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Reprinted courtesy of Michael J. Ciamaichelo, White and Williams LLP
Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com

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Handling Insurance Claims in the Wake of the Los Angeles Wildfires

January 28, 2025 — Yosef Itkin & Michael S. Levine - Hunton Insurance Recovery Blog
Los Angeles continues to be devastated by wildfires, and our thoughts are with those who have been affected. Tragically, lives have been lost. Homeowners and businesses ordered to evacuate have left behind properties that suffered enormous property damage and loss. At this time, more than 15,000 structures have been burned and counting. Landmarks, places of worship, schools and notable business are among the structures that have been damaged or destroyed. Recent estimates have pegged insured losses in the $20 billion to $30 billion range with some estimates coming in even higher. Safety is the number one priority. At some point, though, the focus will shift as the fires seize and those affected rebuild and replace their property. There has already been much talk of insurance availability and maximizing insurance recoveries will be a key component of the recovery process. For those who will go through the insurance claims process, we have prepared critical action items to help policyholders navigate the claim process. We also invite you to visit our Wildfire Insurance Resource Center for additional helpful resources and materials, including a seven-part wildfire insurance coverage series that includes an overview on handling the claims process. Reprinted courtesy of Yosef Itkin, Hunton Andrews Kurth LLP and Michael S. Levine, Hunton Andrews Kurth LLP Mr. Itkin may be contacted at yitkin@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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