Is New York Heading for a Construction Defect Boom?
March 12, 2015 —
Beverley BevenFlorez-CDJ STAFFThe New York Times reported that “[t]here is growing concern that some developers are repeating the mistakes of the last housing boom and delivering substandard product.”
“My phone is ringing already on projects that were just completed,” Steven D. Sladkus, a Manhattan real estate lawyer who says his firm has dozens of active construction defect cases, told the New York Times. “Uh-oh, here we go again.”
Recent data shows a rising trend of building plans in New York: “Last year, the city issued construction permits for 20,300 units of housing, according to the Real Estate Board of New York. And the state attorney general’s office received submissions for 263 offering plans for condo conversions and new construction in 2014, up from 184 in 2011. Those numbers will most likely grow in 2015, encouraged by Mayor Bill de Blasio’s push to build more housing.”
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Changes To Commercial Item Contracting
May 29, 2023 —
Marcos R. Gonzalez - ConsensusDocsThe FAR Council has recently published two changes to commercial item contracting that clarify the definition of commercial services and simplify commercial item determinations (“CIDs”) for contracting officers (“COs”). Since the 1990s, the federal government has encouraged the purchase of commercial items to ease the regulatory burden on vendors who have not previously conducted federal business, encourage innovation, and lower prices[
1]. These different objectives (cost savings, broadening markets, innovation) often have corollary policies; for example, vendors who are not accustomed to the regulatory burdens of government business are encouraged to enter the market by being exempted from a slew of regulations (found in standard commercial items clause FAR 52.212-4). As a result, the regulations applicable to commercial item contracting are those required by statute and executive orders in addition to generic commercial terms that may be tailored due to potential variation in commercial terms.[
2]
Commercial Products v. Commercial Services
The first change, in effect since November 2021 pursuant to the 2019 National Defense Authorization (“NDAA”), split the old definition of “commercial item” into two separate definitions: “commercial product” and “commercial service.”[
3] We are now blessed with the following definitions of commercial products and services, respectively:
Commercial product means—
(1) A product, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes, and–
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general public;
Reprinted courtesy of
Marcos R. Gonzalez, Peckar & Abramson, P.C.
Mr. Gonzalez may be contacted at mgonzalez@pecklaw.com
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Insurer Able to Refuse Coverage for Failed Retaining Wall
October 28, 2011 —
CDJ STAFFThe Eleventh District of the US Court of Appeals has ruled in the case of Nix v. State Farm Fire & Casualty Company. In this case, the Nixes filed a claim after a portion of the retaining wall in their home collapsed and their basement flooded. State Farm denied the claim “on the ground that the policy excluded coverage for collapses caused by defects in construction and for damage caused by groundwater.”
The court reviewed the Nixes’ policy and found that State Farm’s statement did specifically exclude both of these items. In reviewing the lower court’s ruling, the appeals court noted that State Farm’s expert witness, Mark Voll, determined that the retaining wall “lacked reinforcing steel, as required by a local building code, and could not withstand the pressure created by groundwater that had accumulated during a heavy rainfall.” Additionally, a french drain had been covered with clay soil and so had failed to disperse the groundwater.
The Nixes argued that the flooding was due to a main line water pipe, but their opinions were those of Terry Nix and the contractor who made temporary repairs to the wall. “Those opinions were not admissible as lay testimony. Neither Nix nor the contractor witnessed the wall collapse or had personal knowledge about the construction of the Nixes’ home.”
The lower court granted a summary judgment to State Farm which has been upheld by the appeals court.
Read the court’s decision…
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What Construction Firm Employers Should Do Right Now to Minimize Legal Risk of Discrimination and Harassment Lawsuits
October 07, 2024 —
Anthony LaPlaca, Dawn Solowey, Andrew Scroggins & Adrienne LeeSeyfarth Synopsis: In June 2024, Seyfarth published a blog article warning construction industry employers of recent anti-harassment guidelines issued by the EEOC. We predicted that the EEOC has “put the construction industry squarely in its sights.”[1] In this follow-up Alert, we discuss recent cases confirming the renewed regulatory focus on the construction sector, which demonstrate the need to put in place sound practices for non-discriminatory recruitment, hiring, and training of the work force in order to be prepared for this heightened risk of government scrutiny.
Recent EEOC Settlements
The U.S. Equal Employment Opportunity Commission (EEOC) has indicated, in no uncertain terms, that over the next five years it intends to prioritize the mitigation of systemic workplace problems and the historical underrepresentation of women and workers of color in the construction sector.[2] Two recent cases confirm that the EEOC is true to its word when it comes to tackling racial and gender disparities in the construction work force.
In August 2024, the EEOC secured two consent decrees with two separate construction firms in Florida, totaling nearly $3 million.
Reprinted courtesy of
Anthony LaPlaca, Seyfarth,
Dawn Solowey, Seyfarth,
Andrew Scroggins, Seyfarth and
Adrienne Lee, Seyfarth
Mr. LaPlaca may be contacted at alaplaca@seyfarth.com
Ms. Solowey may be contacted at dsolowey@seyfarth.com
Mr. Scroggins may be contacted at ascroggins@seyfarth.com
Ms. Lee may be contacted at aclee@seyfarth.com
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Appetite for Deconstruction
July 02, 2024 —
Patrick Sisson - BloombergThe death of 206 College Avenue was slow and painstaking. Over several days in January 2022, dozens of bundled-up volunteers swarmed over the three-story property, a tired wooden boarding house built in the early 1900s in Ithaca, New York. Long used as rental apartments for Cornell University students, the 13-bedroom house was set to be demolished, along with several neighboring structures of the same vintage, to make room for a new multi-use complex. But while those buildings were quickly reduced to rubble by trackhoes, the house at 206 was deconstructed, piece by piece, so that its elements could be used again.
The Catherine Commons Deconstruction Project, an effort by Cornell’s Circular Construction Lab, was a large-scale pilot designed to show how building waste can be kept out of landfills. As volunteers pulled nails out of fir, oak, and walnut boards and hauled lumber off to be sorted and redistributed, a team of eight workers with heavy machinery began meticulously sawing, slicing and removing 8-by-18-foot panels of the old building. These were trucked off to a warehouse, where they’d be taken apart and recycled.
The labor that went into this process was substantially more than a typical demolition. But it avoided the societal penalties left behind at nearly every building and demo site across the US. The sheer volume of waste generated by knocking down, adding to or renovating buildings in the US is stunning: 600 million tons of construction demolition waste annually, according to the most recent EPA estimate from 2018. Roughly 75% gets ground up into aggregate and fill, and only a small share is recycled and reused, necessitating production of new material for the next project. For scale, municipal solid waste only accounts for 300 million tons every year.
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Patrick Sisson, Bloomberg
California Appellate Court Rules That Mistakenly Grading the Wrong Land Is Not an Accident
June 27, 2022 —
Jared De Jong & Scott S. Thomas - Payne & FearsIn a decision that further muddies the already murky waters of “occurrence” jurisprudence, the California Court of Appeal has ruled that a general liability policy does not cover a homeowner who mistakenly grades the wrong piece of land because the act of grading land is not “accidental.”
In Ghukasian v. Aegis Security Insurance Company, ___ Cal. App. 5th ___, 2022 WL 1421511 (2022), a homeowner instructed her contractor to clear and level a piece of land that the homeowner believed was part of her property. Unfortunately, the land was owned by a neighbor, who sued the homeowner and the contractor for trespass and negligence. The homeowner tendered to her insurer, Aegis. The homeowner’s policy contained a standard insuring agreement creating coverage for property damage caused by an “occurrence,” defined by the policy as an “accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The insurer denied coverage, arguing that intentionally grading land is not an accident. Coverage litigation ensued.
Reprinted courtesy of
Jared De Jong, Payne & Fears and
Scott S. Thomas, Payne & Fears
Mr. De Jong may be contacted at jdj@paynefears.com
Mr. Thomas may be contacted at sst@paynefears.com
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Subcontractors Aren’t Helpless
July 26, 2017 —
Christopher G. Hill - Construction Law MusingsAs a construction attorney here in Virginia, I often have the pleasure of assisting subcontractors seeking advice on their all important contracts with general contractors. I often sense that these subcontractors feel that they are at the bottom of the food chain and don’t have the “clout” necessary to push back at all against the myriad clauses in these contracts that seek to push the risk downhill. “Pay if Paid” clauses, subordination of lien clauses (which may or may not be enforceable), indemnification language that seems to make the subcontractor liable for way too much, and the dreaded incorporation clauses , would seem to make the subcontractor hold one big “bag of risk” on any construction project.
While this may seem bleak, never fear, as a subcontractor you are not totally helpless. Remember, you don’t have to take a job from a general contractor that you get a bad feeling about. Often the best indicator of whether you want to move forward is your “spidey sense” that something seems a bit off or that the GC is trying to cram too much down your throat. Use your experience in the construction industry to guide your contracting activities. It is better to avoid the bad job than to take it in the long run. If you are a quality subcontractor (and I know you are or you wouldn’t be reading this), other work will come along because general contractors need good subs to get their work done.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
SE 2050 Is In Quixotic Pursuit of Eliminating Embodied Carbon in Building Structures
January 23, 2023 —
Nadine M. Post - Engineering News-RecordWalking to work one November morning, structural engineer Chris Jeseritz was buoyed by a Nelson Mandela quotation on a digital sign on the side of a Seattle office tower: “A winner is a dreamer who never gives up.”
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Nadine M. Post - Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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