Seattle Washington Building Expert Directory

Court of Appeals Finds Arbitration Provision Incorporated by Reference Unenforceable

September 20, 2021 — Garret Murai - California Construction Law Blog
Subcontractors have gotten accustomed to incorporation clauses in their contracts. While an incorporation clause can incorporate any document, most typically, it’s the prime contract between the general contractor and the project owner. Subcontractors will sometimes even accept these documents sight unseen which can be a recipe for disaster. But not in the next case. In Remedial Construction Services, LP v. AECOM, Inc., Case No. B303797 (June 15, 2021), the 2nd District Court of Appeal examined whether a subcontractor was bound to an arbitration provision contained in a prime contract that was incorporated by reference into the subcontractor’s contract. In this case, it was the prime contractor who was in for a surprise. The Remedial Construction Case In 2015, Shell Oil Products US, LLC entered into a prime contract with AECOM Technical Services, Inc. for the demolition, remediation and restoration of the Gaviota oil terminal in Goleta, California. AECOM in turn entered into a subcontract with Remedial Construction Services, LP to perform portions of the work. When AECOM refused to pay Remedial for delay costs asserted by Remedial, Remedial filed suit. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Additional Insured Not Entitled to Coverage for Named Insured's Defective Work

September 02, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The Court of Appeals for the Seventh Circuit determined there was no duty to defend or to indemnify the additional insured for the named insured's defective work. St. Paul Guardian Ins. Co., et al. v. Walsh Construction Co., 99 F. 4th 1035 (7th Cir. 2024). The City of Chicago contracted with Walsh Construction Company to manage the construction of a canopy and curtain wall system at O'Hare International Airport. Walsh entered into a contract with Carlo Steel Corporation, which in turn subcontracted with LB Steel, LLC to fabricate and install steel columns to support the wall and canopy. LB Steel listed Walsh as an additional insured in its commercial general liability policies. LB Steel's insurers were St. Paul, Travelers, and Charter Oak Fire Insurance Company. Several years into the project, the City discovered cracks in the welds of the steel columns and sued Walsh. Walsh, in turn, sued LB Steel under its subcontract. Walsh also asked LB Steel's insurers to defend it in the City's lawsuit, but they refused to do so. Walsh eventually secured a judgment against LB Steel, but LB Steel declared bankruptcy. Walsh then sued LB Steel's insurers to recover the costs of defending against the City's lawsuit and indemnification for any resulting losses. 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

Recent Supreme Court Decision Could Have Substantial Impact on Builders

January 23, 2023 — Cassidy Ingram - Ahlers Cressman & Sleight
On October 27, 2022, the Washington State Supreme Court issued a decision which could have a substantial impact on the enforceability of contract clauses that require litigation to be commenced within a stated period of time from project completion. In Tadych v. Noble Ridge Construction, Inc.,the Supreme Court held that the contractual one-year statute of limitations for bringing claims against the contractor was substantively unconscionable and reversed the Court of Appeals. In Tadych, plaintiff owners (the Tadychs) contracted with defendant contractor (Noble Ridge Construction, Inc., or NRC) for the construction of a custom home in 2012. The contract included a one-year claim limitations clause that required claims to be raised within a one year period from project completion and that any claims not raised during the one-year period would be waived. In December 2013, as the project neared completion, the Tadychs met with NRC to identify any outstanding project issues. The Tadychs noted several, including rainwater pools at the landing at the bottom of the stairs and several nicks and cracks on the stucco exterior walls. The Tadychs moved into the home on April 8, 2014, and the City of Seattle Department of Planning and Development conducted its final site inspection on April 15 and approved the residence for occupancy on April 23. In January or February of 2015, the Tadychs began to notice a shift in their home. In February of 2015, the Tadychs engaged the Construction Dispute Resolution (CDR) to review NRC’s work. CDR raised concerns about the adequacy of the home’s construction and prepared a written report in March 2015 indicating several deviations from the architectural plans and building codes. The Tadychs sent this report to NRC, who assured the Tadychs that NRC’s work followed all requirements and rejected any claims that there were deviations from the plans. The Tadychs continued to notice issues with the home through October 2016. Read the court decision
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Reprinted courtesy of Cassidy Ingram, Ahlers Cressman & Sleight
Ms. Ingram may be contacted at cassidy.ingram@acslawyers.com

A New Study: Unexpected Overtime is Predictable and Controllable

January 31, 2022 — Aarni Heiskanen - AEC Business
A new study by Dodge Construction Network and Versatile, a construction technology pioneer using artificial intelligence (AI) and the internet of things (IoT) to optimize construction processes, found that unexpected overtime is predictable and controllable through regular job site activity measurement. According to the study, overtime is predictable at an 88% confidence level, if proper measurement is utilized. Overtime is a persistent feature of construction sites, however, it is often unplanned and unpredictable. Despite the cost of overtime, its impact on skilled workers, and its implications for safety and other key factors on a project site, it is often applied to address immediate concerns rather than planned to maximize its effects. This recent study shows that in order to best understand overtime and its impact, data and measurement of jobsite activities are key. “Unique insights derived from advanced data and analytics tools will empower construction crews to build better,” said Meirav Oren, co-founder and CEO of Versatile. “Overtime can be a very effective tool on the jobsite. Through the power of data, general contractors gain the ability to minimize unnecessary overtime while maximizing its strategic benefits.” 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

Hunton Insurance Partner Syed Ahmad Serves as Chair of the ABA Minority Trial Lawyer Committee’s Programming Subcommittee

January 13, 2020 — Michelle M. Spatz - Hunton Insurance Recovery Blog
Syed Ahmad, a partner in Hunton Andrews Kurth’s Insurance Coverage practice, has volunteered to serve as Chair of the ABA Minority Trial Lawyer Committee’s Programming Subcommittee. The Minority Trial Lawyer Committee (MTL) serves as a resource for minority litigators, in-house counsel and law students, aiming to foster professional development, legal scholarship, advocacy and community involvement. As Chair of the Programming Subcommittee, Syed, who was named to Benchmark Litigation’s 40 & Under Hot List earlier this year, will help advance MTL’s mission of facilitating discussions about diversity and the law and providing career network opportunities for minority trial lawyers. Read the court decision
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Reprinted courtesy of Michelle M. Spatz, Hunton Andrews Kurth
Ms. Spatz may be contacted at mspatz@HuntonAK.com

Real Estate & Construction News Roundup (10/1/24) – Hybrid Work Technologies, AI in Construction and the Market for Office Buildings

November 05, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, commercial mortgage bond market in trouble, commercial real estate investments, pressure on mortgage REITs, and more!

Short-term issues facing U.S. commercial real estate have made it an investment opportunity and values have bottomed out. (CNBC)
As organizations report plans to shake up their real estate portfolios, the flight to quality spurs interest in space planning, amenities and hybrid work technologies. (Joe Burns, Facilities Dive)
The conversation about AI’s potential benefits and risks has been a common refrain in construction recently. (Matthew Thibault, Construction Dive)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

TOLLING AGREEMENTS: Construction Defect Lawyers use them to preserve Association Warranty Claims during Construction Defect Negotiations with Developers

March 07, 2014 — Nicholas D. Cowie – Maryland Condo Construction Defect Law Blog
If properly drafted, a tolling agreement stops, or “tolls,” the running of the statue of limitations and other time periods aplicable to an association’s legal claims while it attempts to negotiate the repair of and/or monetary compensation for construction deficiencies with the developer and other responsible parties. In short, it is a “time -out” that allows and association to preserve its legal claim so it can focus on settling its claims rather than pursing them in court. Too often, condominium associations and homeowner associations (“HOA”) unknowingly allow their legal claims for construction defects to expire during lengthy negotiations with developers and builders. If negotiations fail, the association may turn to a construction defect attorney for legal representation only to find their construction defect legal claims are time barred because the statute of limitations or other legal time period has expired. This article explains how condominium associations and HOAs can avoid this scenario by the use of tolling agreements to preserve their legal claims while engaged in potentially lengthy negotiations with developers to correct construction defects. Read the court decision
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Reprinted courtesy of Nicholas D. Cowie, Maryland Condo Construction Defect Law Blog
Mr. Cowie may be contacted at ndc@cowiemott.com

Gru Was Wrong About the Money: Court Concludes that Lender Owes Contractor “Contractually, Factually and Practically”

November 07, 2022 — Matthew DeVries - Best Practices Construction Law
This weekend was all about The Rise of Gru. I love Gru so much that when my children ask for money, my best Gru-like voice belts back: “Now, I know there have been some rumors going around that the bank is no longer funding us….In terms of money, we have no money.” And that’s precisely what many lenders say on distressed projects when the owner fails to make final payment and the contractor looks to the bank for funding: “We have no money for you contractor!” In BCD Associates., LLC v. Crown Bank, CA No. N15c-11-062 (Super. Ct. Del, May 2, 2022), the trial court found that when a bank pays a contractor directly, it can create a legally binding relationship subject to the terms of the construction loan agreements with the owner. The project involved a $13m construction loan between the lender and the owner to renovate a hotel. The owner and contractor entered into an AIA Contract for the construction management services. During construction the contractor would submit payment applications to the lender, who would review and approve the invoices for payment. The lender then would pay 90% of the approved payment application and hold back the remaining 10% as retainage. The contractor was supposed to be paid the final retainage upon completion, which it did not receive in accordance with the terms of the AIA Contract. Read the court decision
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Reprinted courtesy of Matthew DeVries, Burr & Forman LLP
Mr. DeVries may be contacted at mdevries@burr.com

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