Contractor Walks Off Job. What are the Owner’s Damages?
September 25, 2018 —
David Adelstein - Florida Construction Legal UpdatesWhat are your damages as the result of a breach of the construction contract? This is an important question, right? It is probably the most important part of your case. If you didn’t have damages, you wouldn’t be in a dispute. So, I repeat, what are your damages as the result of a breach of the construction contract? The below case explains dealing with a contractor that elected to walk off the job mid-construction.
In Forbes v. Prime General Contractors, Inc., 43 Fla.L.Weekly D20194a (Fla. 2d DCA 2018), owners hired a contractor to perform a residential renovation job for $276,000. The owners were to pay the contractor in five draw payments (common for residential jobs) where the third draw payment was due upon the contractor’s completion of the dry-in (as defined in the contract). After the contractor received the first two draw payments totaling $138,000 plus an additional $6,000 for updated architectural plans, the contractor claimed the job doubled in price and demanded that the owners pay the contractor the third draw payment immediately (before it was due) plus an additional $31,450. The contractor refused to continue unless the owners agreed to its terms, and then walked off the job when the owners would not agree to these terms (nor should the owners agree to those terms). At the time the contractor walked off the job, the owners’ home was not habitable due to the construction.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Litigation Roundup: “It’s None of Your Business.”
May 22, 2023 —
Daniel Lund III - Lexology“It’s none of your business.”
So said a construction surety resisting discovery of its underwriting file in the context of the surety’s affirmative $2 million indemnity claim (on a $25M bond), and a Missouri federal court agreed.
In response to the surety’s indemnity suit, the defaulted principal contractor and additional corporate indemnitors offered up defenses of “lack of consideration and the doctrine of unclean hands, laches, waiver and/or estoppel, among others.” The indemnitors also issued written discovery to the surety seeking to obtain the surety’s underwriting file – which would reveal the underpinnings of the surety’s decision to issue the bond to the contractor – asserting “that the underwriting and due diligence documents are relevant to the[] lack of consideration defense. [Indemnitors] claim that ‘[t]his defense is based on Defendants' belief that Plaintiff did not conduct any reasonable inquiry into any Defendants' ability to pay or financial resources and therefore Plaintiff did not rely on the financial condition of each Defendant in determining whether to issue the bonds.’"
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Nine ACS Lawyers Recognized as Super Lawyers
August 15, 2022 —
Cassidy Ingram - Ahlers Cressman & SleightACS is very honored and pleased to announce nine members of our firm were awarded the distinction of top attorneys in Washington. Our blog articles usually cover Construction Legal News, but we feel this is a newsworthy accolade to be shared with friends and clients.
To become candidates to receiving the Super Lawyer nomination, lawyers are nominated by a peer or identified by research. After completing this first step in the process, Super Lawyers’ research department analyzes 12 indicators, such as experience, honors/awards, verdicts/settlements, and others. As for the third step, there is a peer evaluation by practice area. Finally, for step four, candidates are grouped into four firm-size categories. In other words, solo and small firm lawyers are compared only with other solo and small firm lawyers, and large firm lawyers are compared with other large firm lawyers. The process is very selective and only 5 percent of the total lawyers in Washington are nominated as Super Lawyers.
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Cassidy Ingram, Ahlers Cressman & SleightMs. Ingram may be contacted at
cassidy.ingram@acslawyers.com
Number of Occurrences Depends on Who is Sued
August 20, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to David L. Beck of Pillsbury Winthrop Shaw Pittman LLP (as published by Association of Corporate Counsel), an Oregon court “held that property damage incurred to a condominium project resulting from a myriad of construction defects constituted just one occurrence under the relevant excess general liability policy.”
In Chartis Specialty Ins. Co. v. American Contractors Ins. Co Risk Retention Group, et al., Chartis argued that “[b]ecause there were multiple defects/conditions resulting in property damage” there were also “multiple occurrences.” However, “[t]he court disagreed, finding that despite various defects, the property damages at issue arose from just one occurrence: the developers' failure to perform its duties.”
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4 Lessons Contractors Can Learn From The COVID-19 Crisis
May 25, 2020 —
Patrick Hogan - Handle.comAt the start of 2020, the industry outlook in construction was positive. Many contractors were optimistic about what the year had in store for construction businesses in terms of profit, expansion of operations, and even payment issues. That was until the COVID-19 pandemic put a wrench in everyone’s business plans.
There’s no question about how huge the impact of the novel coronavirus crisis is on business operations. With the federal and state governments implementing strict measures to slow down the spread of COVID-19, construction businesses are experiencing significant delays and disruptions in their operations. Because of the lockdowns and stay-at-home orders, many construction projects are forced to postpone operations or, worse, cancel them altogether.
Nevertheless, there are lessons in the COVID-19 pandemic that contractors can learn. Here are some of them.
1. Contractors need to be proactive in meeting preliminary notice requirements
Cash is tight in times of crisis. As the economy comes to a standstill, construction businesses will need to deal with decreasing profits. They may even have to dip into their own cash reserves to cover fixed expenses and their employees’ salaries.
In times like this, it is crucial that contractors perform due diligence in protecting their right to get paid. The first step in doing so is to prepare
preliminary notices. These notices are an important step in the mechanics lien process and without them, chances contractors will not be able to recover the unpaid compensation for the materials they furnished and services they rendered.
2. Force majeure provisions are crucial parts of a contract
The novel coronavirus pandemic has highlighted the importance of force majeure provisions in construction contracts. Before the COVID-19 crisis hit business operations, force majeure provisions were typically considered as simple boilerplate clauses. This means they were just there as a standard part of contracts.
However, the same force majeure clauses, as well as impossibility of performance provisions, have become crucial in the current crisis. As many construction businesses experience difficulties with their operations, they may not be able to fulfill their contractual responsibilities. The said clauses can give contractors a much-needed reprieve.
As the current crisis continues, contractors should review contracts as these provisions can give them more time to finish the job. And in the hopefully near future when the crisis ends, business owners should review the contract creation process and ensure that these clauses included in contracts will be able to address the impact of situations similar to COVID-19.
3. Having solid internal communication is crucial
There’s a lot of uncertainty with the COVID-19 situation. With work operations temporarily stopping, the circumstances can be quite stressful for employees. There will be doubts and fears within your workforce on whether work will be back to normal as soon as possible or not.
Keeping your workforce well-informed and trusting of your organization is crucial, especially in this time of uncertainty. That is why it is paramount that you have a solid internal communication infrastructure to disseminate information about the current work situation and the next steps that the business will take. In addition, only through proper employee communication can the implementation of social distancing and hygiene measures be effective.
4. Contractors can benefit from flexible work arrangements
As the coronavirus crisis has made it necessary for everyone to stay at home, construction businesses should look for ways to continue operations. Expanded work arrangements such as work-from-home setups may just be the solution.
Of course, most of the physical work that is needed to be done on-site will be impossible to do at home, but office-based functions such as sales, client relations, design, and administrative roles can still continue. This can even have additional benefits to productivity and health. And when the crisis is over, business owners should consider incorporating these work arrangements into their operations permanently.
The COVID-19 crisis is not showing any sign of stopping soon, and even when it ends, it will take quite a long time before we can be back to business as usual. As the crisis continues, however, business owners should take the situation as a learning experience.
Once the COVID-19 crisis is over, it will take a long time for things to go back to normal. In fact, things may not end up going back to the way they were before and businesses will need to adapt to the new normal. However the situation evolves, business owners should take this opportunity to learn new things and maintain resilience in trying times.
About the Author:
Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.
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HVAC System Collapses Over Pool at Gaylord Rockies Resort Colorado
June 12, 2023 —
Jennifer Seward - Engineering News-RecordThe collapse May 6 of the HVAC system above an indoor pool at the Gaylord Rockies Resort near Denver sent six people to local hospitals, two with life-threatening injuries. An estimated 50 to 100 people were in the water or on the pool deck as pieces of the system fell into the pool and hot tub.
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Jennifer Seward, Engineering News-Record
Ms. Seward may be contacted at sewardj@enr.com
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When is an Indemnification Provision Unenforceable?
September 06, 2021 —
Christopher G. Hill - Construction Law MusingsVirginia Code Sec. 11-4.1 makes indemnification provisions in construction contracts that are so broad as to indemnify the indemnitee from its own negligence unenforceable. Of course, this begs the question as to what language of indemnification provisions make them unenforceable.
A case from the City of Chesapeake Virginia Circuit Court examined this question. In Wasa Props., LLC v. Chesapeake Bay Contrs., Inc., 103 Va. Cir 423 [unfortunately I can’t find a copy to which to link], Wasa Properties (“Wasa”) hired Chesapeake Bay Contractors (“CBC”) to perform utility work at Lake Thrasher in the Tidewater area of Virginia. Wasa then alleged that CBC breached the contract and caused over $400,000 in damages due to incorrectly installed water lines. Wasa used the following indemnification language as the basis for its suit:
To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and his agents and employees from and against all claims, damages, losses, and expenses, including but not limited to attorney’s fees arising out of or resulting from the performance of the Work.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
AB 685 and COVID-19 Workplace Exposure: New California Notice and Reporting Requirements of COVID Exposure Starting January 1, 2021
February 01, 2021 —
Sewar K. Sunnaa & Nathan A. Cohen - Peckar & Abramson, P.C.SUMMARY
Effective January 1, 2021, a new California law requires employers to notify employees about possible or known exposure to COVID-19 at the workplace. The law requires actual notification to employees within one day.
In addition, the law requires notifications to local public health authorities of a COVID-19 outbreak. The law also gives Cal/OSHA a new emergency police power to issue Orders Prohibiting Use (“OPU”), permitting Cal/OSHA to close workplaces that constitute an imminent hazard to employees due to COVID-19.
ANALYSIS AND GUIDANCE
On January 1, 2021, a new California law took effect, which will enforce stringent new mandatory protocols governing notification of employees of COVID-19 exposures in the workplace. Until now, federal agencies such as the Occupational Safety and Health Administration (“OSHA”) and state agencies such as the California Division of Occupational Safety and Health Administration (“Cal/OSHA”) have released guidance to help employers navigate employee training, workplace surveillance and temperature-taking, among many other issues, that have arisen during the COVID-19 pandemic. Beginning January 1st, the new law places mandatory notice requirements of COVID-19 contact on all public and private employers under Labor Code Section 6409.6, with two exceptions: (1) health facilities, as defined in Section 1250 of the Health and Safety Code and (2) employees whose regular duties include COVID-19 testing or screening, or who provide patient care to individuals who are known or suspected to have COVID-19.
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Sewar K. Sunnaa, Peckar & Abramson, P.C. and
Nathan A. Cohen, Peckar & Abramson, P.C.
Ms. Sunnaa may be contacted at ssunnaa@pecklaw.com
Mr. Cohen may be contacted at ncohen@pecklaw.com
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