CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Building Resiliency: Withstanding Wildfires and Other Natural Disasters

September 25, 2023 — Bill Creedon - Construction Executive
According to the National Fire Protection Association, between 2016 and 2020 an estimated average of 4,300 fires per year plagued structures under construction, adding up to about $376 million in annual property damage. More recently, the National Centers for Environmental Information reported that wildfires accounted for more than $3.2 billion in damages across the United States. These figures alone point to the heightened awareness that all companies—particularly construction companies—should maintain surrounding the unique challenges and risks that wildfires can present and how they could potentially impact the integrity of projects and the associated safety of their workers. As North America grapples with the increasing frequency and severity of wildfires, hurricanes and additional severe weather events, numerous industries have had to adapt and implement proactive measures to minimize their risks and associated exposures. The impact of these natural disasters on the construction industry is indisputable, necessitating proactive measures that construction companies should seriously consider adopting to effectively mitigate those risks, efficiently navigate insurance complexities and seamlessly integrate data-driven solutions alongside modern tools like AI and predictive modeling. Reprinted courtesy of Bill Creedon, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Creedon may be contacted at bill.creedon@wtwco.com

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“Good Faith” May Not Be Good Enough: California Supreme Court to Decide When General Contractors Can Withhold Retention

March 22, 2018 — Erinn Contreras and Joy O. Siu – Construction & Infrastructure Law Blog
It is industry standard in California for owners of a construction project to make monthly payments to a contractor for work it has completed, less a certain percentage that is withheld as a guarantee of future satisfactory performance. This withholding is called a retention. Contractors generally pass these withholdings on to their subcontractors via a retention clause in the subcontract. Under such clause, if a subcontractor fails to complete its work or correct deficiencies in its work, the owner and the general contractor may use the retention to bring the subcontractor’s work into conformance with the requirements of the contract. When and how retention payments must be released are governed by, among other statutes, Civil Code section 8800 et seq. Specifically, Civil Code section 8814, subdivision (a), states that a direct contractor must pay each subcontractor its share of a retention payment within ten days after the general contractor receives all or part of a retention payment. Failure to make payments in accordance with Section 8814 can subject an owner or a contractor to a (1) two percent penalty per a month on the amount wrongfully withheld, and (2) claim for attorney’s fees for any litigation required to collect the wrongfully withheld retention payments. (Civ. Code, § 8818.) Reprinted courtesy of Erinn Contreras, Sheppard, Mullin, Richter & Hampton LLP and Joy Siu, Sheppard, Mullin, Richter & Hampton LLP Ms. Contreras may be contacted at econtreras@sheppardmullin.com Ms. Siu may be contacted at jsiu@sheppardmullin.com Read the court decision
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The Moving Finish Line: Statutes of Limitation and Repose Are Not Always What They Seem

June 01, 2020 — Kenneth E. Rubinstein & Nathan Fennessy - Construction Executive
Having an end date for risk is important to construction professionals who need to know when they can close their books and destroy files relating to old projects. While professionals typically look to the statute of limitations and repose, these deadlines can sometimes be harder to determine than one might think. State Laws Prohibiting Alteration of Statutes of Limitation Many contractors seek to control the extent of their risk by negotiating the length of their liability period. In some instances, contractors may seek to shorten the statute of limitations to protect against stale claims. While in other instances, owners periodically negotiate for longer periods to ensure that they will not be time barred from pursuing valid claims. While the majority of states enforce such contractual provision, a number of states hold such clauses unenforceable. In these instances, the state’s original statute of limitations will apply regardless of what the contract says. Reprinted courtesy of Kenneth E. Rubinstein & Nathan Fennessy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Rubenstein may be contacted at krubinstein@preti.com Mr. Fennessy may be contacted at nfennessy@Preti.com Read the court decision
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Insurers Dispute Sharing of Defense in Construction Defect Case

May 13, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The California Court of Appeal affirmed the trial court's decision that the defending insurer was not entitled to reimbursement of defense costs from another insurer based upon a subcontract and additional insured endorsement. Zurich Am. Ins. Co. v. Old Republic Gen. Ins. Corp., 2024 Cal. App. Unpub. LEXIS 1261 (Cal. Ct. App. Feb. 28, 2024). Martin McNerney Development Company (McNerney) entered a construction contract to perform seismic upgrades and tenant improvements for condominiums. McNerney and Broadway Mechanical Contractors, Inc. (Broadway) entered a "Subcontract Agreement" under which Broadway was to perform plumbing work at the project. The agreement required Broadway to maintain general liability insurance naming McNerney as an additional insured for work performed on the project, including completed operations. The subcontract also required Broadway to indemnify and hold McNerney harmless with respect to all claims for damage to property arising out of work performed by Broadway. Broadway completed its work on the project in September 2007. Broadway issued a one-year warranty for its work on the project. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

September 30, 2011 — CDJ STAFF

The California Court of Appeals has ruled in the case of Allied Framers, Inc. v. Golden Bear Insurance Company. Allied had been sued in a construction defect case and its primary insurer had become insolvent. Coverage for Allied’s defense was paid for by the California Insurance Guarantee Association through June 8, 2006. When warned that CIGA’s involvement was ending, Allied notified Golden Bear, which declined to provide coverage.

In the matters that followed, Golden Bear claimed that Allied had not exhausted its $1 million in primary insurance. Allied then showed that $1 million had already been paid out in the case. A few months thereafter, Golden Bear offered a $500,000 settlement on behalf of Allied which was rejected. Thereafter, Golden Bear hired new counsel to defend Allied. Golden Bear received, but allegedly did not pay, invoices Allied sent from their former counsel. Golden Bear finally settled the construction defect case for $2 million.

Allied’s original counsel sued Allied for payment. Golden Bear declined coverage. Allied then claimed that Golden Bear liable on several counts, arising from its failure to settle the construction defect action earlier than it did and its failure to pay Allied’s counsel. Golden Bear demurred, arguing that Allied had now exhausted is coverage with the $2 million settlement. The lower court sustained Golden Bear’s demurrer, dismissing Allied’s complaints.

The appeal court reviewed Allied’s seven complaints and sustained most of them. However, the court did reverse the trial court’s order in regard to Allied’s complaint that Golden Bear breached an implied covenant of good faith and fair dealing. The appeals court was not convinced that Golden Bear properly evaluated the settlement demand in the underlying construction defect case. The court found three other ways in which Golden Bear’s actions might show bad faith, in refusing to pay defense fees “after promising [Allied] such costs would be paid in full,” “failing to advise Allied about ‘actual or potential negative consequences of agreeing to the proposed settlement,’” and that their choice of counsel “failed to protect [Allied’s] interests in the negotiation.”

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How Finns Cut Construction Lead Times in Half

December 17, 2024 — Aarni Heiskanen - AEC Business
Rakennustieto organized a Q&A on December 5, 2024, titled “Halving Construction Lead Times—Responsible or Irresponsible?” The discussion focused on speeding up residential construction and renovations. The experts answering questions were representatives from two Finnish contractors (COfLOW and Fira), a client organization (HOAS), a building materials retailer (STARK), and a research institute. Can you halve construction lead time without sacrificing quality? Jaana Matilainen of Rakennustieto asked the panelists whether halving construction time is a realistic goal today, whether they can provide any examples, and if the speed-up has increased or decreased quality. 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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The Law of Patent v Latent Defects

March 19, 2015 — Beverley BevenFlorez-CDJ STAFF
Candice B. Macario of Gordon & Rees LLP analyzed the case Delon Hampton & Associates, Chartered v. The Superior Court of Los Angeles, and stated that “[i]n his case, a design professional successfully challenged a construction defect lawsuit brought against them, on the basis that the defect complained of was open and obvious and the County had ran out of time to bring their action.” Macario recommended “as lawsuits are filed close to the ten year statute of repose, one area to explore in a single issue case is if you can eliminate a cause of action based on patent defects. Moreover, in multi-issue cases for several construction defects, parties should always be aware of analyzing whether issues can be identified as patent and perhaps used as a tool in negotiations, settlement discussions or pre-trial motions.” Read the court decision
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Dorian’s Wrath: How Event Cancellation Insurance Helps Businesses Recoup Losses from Severe Weather

December 16, 2019 — Sergio F. Oehninger, Andrea DeField & Daniel Hentschel - Hunton Insurance Recovery Blog
As the 2019 hurricane season peaks, the Bahamas and the Southeast United States have already endured a catastrophic storm. Hurricane Dorian not only tragically caused loss of life and substantial property damage, but it also led to the cancellation or postponement of major events, resulting in considerable economic losses for affected companies. For instance, Hurricane Dorian forced the cancellation of one of the Rolling Stones’ concerts at Hard Rock Stadium in Miami, as well as the cancellation of R&B singer Chris Brown’s concert in Fort Lauderdale. Dorian also affected the college football game between Florida State University and Boise State University in Jacksonville. Having sold 45,000 tickets to the game, officials were forced to move the game inland to Tallahassee at great expense and effort. The planners, headliners, teams and fans of these and similar events were not the only ones affected by the cancellations and schedule changes. Hotels, restaurants and businesses relying on tourism also were severely impacted by the schedule changes resulting from Hurricane Dorian over Labor Day weekend. Other programming that may have been affected includes conventions and meetings, fairs and festivals, trade shows and exhibitions, or any other corporate events planned to take place outdoors, requiring travel or with ticket-paying audiences. Reprinted courtesy of Hunton Andrews Kurth attorneys Sergio F. Oehninger, Andrea DeField and Daniel Hentschel Mr. Oehninger may be contacted at soehninger@HuntonAK.com Ms. DeField may be contacted at adefield@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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