Catching Killer Clauses in Contract Negotiations
January 29, 2024 —
James T. Dixon - Construction ExecutiveRisk-management personnel who are in the business of reviewing and negotiating construction contracts have some simple tools at their disposal to make sure their edits are addressing all of the killer risk-shifting clauses in those contracts. One of those is the index to that document. But not all authors of construction contract documents are kind enough to include an exhaustive index in their form agreements.
One of the most popular sets of general conditions, the A201 General Conditions published by the American Institute of Architects, includes one that is fairly comprehensive. It identifies the six terms that include a reference to indemnification, for example. On the other end of the spectrum are the innumerable custom forms created by public and private project owners, and these rarely have an index.
Even more powerful than an index is the search or find functions that are available in word processing applications and now in Adobe, the publisher of documents in portable document format, more commonly known as PDF. But with PDF documents, one must be careful to make sure the document under review is in fact searchable. Because every letter counts, it is important to have full confidence in the integrity of the search.
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James T. Dixon, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mortgagors Seek Coverage Under Mortgagee's Policy
July 19, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe mortgagor homeowners survived a motion to dismiss their claim for coverageunder the lender's property policy after their home suffered hurricane damage. Gary v. Am. Sec. Ins. Co., 2021 U.S. Dist. LEXIS 100010 (W.D. La. May 26, 2021).
Plaintiffs' home was mortgaged by Pennymac Loan Services, LLC. Pennymac held a property policy with American Security to insure its interest in the home. Plaintiffs were not named as insureds or additional insureds under the policy. Plaintiffs were identified as the borrowers under the policy on the Declarations page.
After hurricane damage to their home, plaintiffs sued American Security for coverage for the losses. American Security moved to dismiss, arguing plaintiffs were neither additional insureds nor third party beneficiaries. Lender-placed policies were designed to insure the lender's collateral whenever the borrower failed to maintain adequate insurance. The Loss Payment provisions in the policy stated that "Loss will be made payable to the named insured [Pennymac]. No coverage will be available to any mortgagee other than that shown as the named insured on the Declarations."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Alabama Federal Magistrate Recommends Dismissal of Construction Defect Declaratory Judgment Action Due to Expanded Duty to Defend Standard
May 31, 2021 —
Anthony L. Miscioscia & Margo Meta - White and WilliamsWhile the starting point for assessing an insurer’s duty to defend requires comparing the allegations contained within a complaint to the language contained within the insured’s policy, the majority of states require an insurer to do more. In Alabama, a failure of the underlying complaint to allege damages falling within the policy’s terms is not necessarily fatal to coverage – if there are facts provable by admissible evidence to place the loss within coverage.
The U.S. District Court for the Southern District of Alabama recently examined Alabama’s broadened duty to defend standard in Frankenmuth Mutual Insurance Company v. Gates Builders, No. 20-00596, 2021 U.S. Dist. LEXIS 83645 (S.D. Ala. Apr. 29, 2021). In Frankenmuth, the magistrate judge was tasked with determining whether the court should abstain from hearing an insurer’s declaratory judgment coverage action pending the resolution of the underlying state court action.
The underlying state court action arose out of an allegedly defective construction project. Frankenmuth’s insured, Gates Builders, was hired to perform exterior and structural rehabilitation work at the Resort Conference Center Condominium (the Condominium) in Gulf Shores, Alabama. The project began in July 2014 and concluded in June 2015. In 2019, Gates Builders was informed that the Condominium’s decks were sagging. Gates Builders shored up the decks and provided the Condominium with a quote for the cost of repairs. In July 2020, the Condominium’s Association filed suit, alleging that the work performed in 2014 and 2015 was faulty and had caused damage to the Condominium.
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Anthony L. Miscioscia, White and Williams and
Margo Meta, White and Williams
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Ms. Meta may be contacted at metam@whiteandwilliams.com
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Large Canada Employers and Jobsites Mandate COVID-19 Vaccines
November 08, 2021 —
Scott Van Voorhis - Engineering News-RecordThe push for COVID-19 vaccine mandates is gaining traction in Canada’s construction industry, with governments, large project sites and major employers setting new inoculation deadlines.
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Scott Van Voorhis, Engineering News-Record
ENR may be contacted at enr@enr.com
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Bally's Secures Funding for $1.7B Chicago Casino and Hotel Project
August 12, 2024 —
Annemarie Mannion - Engineering News-RecordPlans for a $1.7-billion casino and adjacent 34-story hotel are advancing in Chicago as the gaming operator reports it has secured $940 million to complete funding for the project and has set demolition for a printing press building now occupying the site for this summer.
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Annemarie Mannion, Engineering News-Record
Ms. Mannion may be contacted at manniona@enr.com
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Scary Movie: Theatre Developer Axed By Court of Appeal In Prevailing Wage Determination Challenge
July 19, 2017 —
Steven M. Cvitanovic & Omar Parra - Haight Brown & Bonesteel LLPThe First Appellate District of the California Court of Appeal recently held that the construction of a movie theater, which was performed in furtherance of a city’s redevelopment agenda, constitutes a “public work” within the meaning of California’s prevailing wage law. Cinema West, LLC v. Christine Baker, No. A144265, (Cal. Ct. App. June 30, 2017).
Like many California cities, the City of Hesperia (the “City”) endeavored to revitalize its downtown. In furtherance of this goal, the City acquired vacant property in its downtown with the hope of turning it into a new city hall, a public library, and “complimentary retail, restaurant, and entertainment establishments.” After completing construction of the civic buildings, the City entered into discussions with Cinema West, LLC (“Cinema West”) for the construction of a “state-of-the-art cinema experience.”
Under the agreement with the City, Cinema West agreed to purchase the property from the City at fair market value, obtain financing for the construction costs, and build and maintain the movie theater. The City, on the other hand, agreed to provide Cinema West with an interest-bearing loan forgivable over ten years, and to construct an adjacent parking lot “for use by Cinema West... as a parking lot for the movie theater.” The City, moreover, agreed to issue Cinema West a one-time payment as consideration for the operating covenant.
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Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and
Omar Parra, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com
Mr. Parra may be contacted at oparra@hbblaw.com
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Manhattan Gets First Crowdfunded Condos
September 03, 2015 —
David M. Levitt & Oshrat Carmiel – BloombergNew York’s first real estate project financed significantly though crowdfunding is set to open, a step forward for a nascent investing model that has yet to prove itself in commercial property.
AKA United Nations, an extended-stay hotel-condominium on East 46th Street near Second Avenue, will start taking guests Sept. 10. Sales of the suites have already begun. Of the $95 million it cost to buy and fix up the existing hotel, $12 million was raised from online pledges.
It’s “the first ever crowdfunded building in New York coming to completion, from A to Z,” said Rodrigo Nino, chief executive officer of Prodigy Network, which is gut-renovating the building with partners. Until now, “everything has been about promises.”
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David M. Levitt, Bloomberg and
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Wisconsin Court of Appeals Re-affirms American Girl To Find Coverage for Damage Caused by Subcontractors
September 20, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe trial court's finding of no occurrence and no property damage due to faulty workmanship was reversed by the appellate court. No. 5 Walworth v. Engerman Contracting, Inc., 2021 Wis. App. LEXIS 401 (Wis. Ct. App, July 30, 2021).
Engerman was the general contractor on a construction project at a residence. Engerman was hired to build a poll complex. Engerman subcontracted the project to Downes Swimming Pool Co., Inc. Downes purchased shotcrete (sprayed concrete) from Otto Jacobs Company LLC for the swimming poll walls and base.
After completion, the pool immediately began leaking. An investigation determined that the shotcrete material was not installed correctly, contributing to cracking in the pool walls and the steel reinforcing bars were not sufficient to prevent cracks in the pool walls. The owner demolished the pool and constructed a new one. Thereafter, the owner sued Engerman, its insurers (General Casualty Company of Wisconsin and West Bend Mutual Insurance Company) and Downes and its insurer. Downes filed a third-party complaint against Jacobs and its insurer (Acuity Mutual Insurance Company) alleging Jacobs negligently provided inferior shotcrete to Downes.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com