Why A Jury Found That Contractor 'Retaliated' Against Undocumented Craft Worker
August 22, 2022 —
Richard Korman - Engineering News-RecordOn May 10, 2017, a Boston wall taper who had broken his leg in a fall from a ladder during work six weeks earlier took his two-year-old son to an office of a West Bridgewater, Mass.-based contractor, on the invitation of the CEO who asked him to come and gave the worker $500 to help him get by while recovering.
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Richard Korman, Engineering News-Record
Mr. Korman may be contacted at kormanr@enr.com
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Court Strikes Down Reasonable Construction Defect Settlement
December 20, 2012 —
CDJ STAFFThe Court of Appeals of Washington has struck down a construction defect settlement between a building owner and the companies she hired to repair the siding, among other repairs to bring the building up to code. Yuan Zhang hired Hawk Construction LLC to do repair work. Hawk, in turn, hired Ready Construction LLC for some aspects of the project. Hawk and Ready were both insured by Capital Specialty Insurance Corporation.
There were several problems with Ready’s work. After removing old siding, they did not protect the building, nor did they remove all of the damaged layers. Ready covered, but did not fix, a mildew problem under the old siding. When new siding was reattached, the nails used were too short to adequately attach it.
After paying for an inspection of the work, Zhang had Hawk and Ready begin the repairs again, but the work was abandoned without being completed. Zhang sued Hawk for breach of contract. Hawk then sued Ready, claiming that “Ready was liable to Hawk to the extent that Hawk was liable to Zhang.” Capitol retained defense for both contractors.
Zhang settled with Hawk, in an agreement that gave her “the right to collect and/or pursue all costs and attorney fees paid by Hawk or its insurance company defending against the Zhang’s claims and pursuing claims against Ready.” Subsequently, she also settled with Ready. Both companies ceased operations.
Zhang had the settlements reviewed by a court, which concluded that the settlements were reasonable. Capital was allowed to appeal, claiming that the settlement included costs that were Zhang’s responsibility. The appeals court did not examine the question of the reasonableness of the settlement, concluding that Capitol’s interests were relevant only to “questions of bad faith, collusion, and fraud.”
In the case of Zhang, the court concluded that the relationship between Zhang and her former contractors was collusive. The court noted that “bad faith or collusion may exist when the evidence indicates a joint effort to create, in a non-adversarial atmosphere, a resolution beneficial to both parties, yet highly prejudicial to the insurer as intervener.” The court noted that both companies had minimal assets which were, in any case, exempted from the agreement. Further, the court found that the agreements failed to determine “what amount of the repairs related to preexisting water damage.” Zhang’s calculation of costs also included her expenses for architectural and engineering services, which the court points out, “where always Zhang’s costs to bear.”
The court concluded that “the overall structure of the settlements is highly probative of collusion, fraud, or bad faith.” Zhang’s agreements with Hawk and Ready allowed her to collect compensation from Hawk and then collect Ready’s compensation to Hawk for their portion of the settlement, allowing Zhang to collect the monies twice. Further, she was allowed to pursue Capitol for Hawk’s attorney expenses, even though Hawk had none. “The right to recover Hawk’s fees merely set up a windfall recovery for Zhang.” The court described the agreements among Zhang, Hawk, and Ready as “precisely the type of manipulation [the law] is intended to preclude.”
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Surviving the Construction Law Backlog: Nontraditional Approaches to Resolution
June 07, 2021 —
Jeffrey Kozek - Construction ExecutiveAcross the construction industry, COVID-19’s impact has caused a range of problems for contractors and projects—prolonged or intermittent work shutdowns, supply chain delays, pricing increases on materials and funding shortfalls. It has also led to court closures. The legal backlog for claims and disputes means that owners and contractors are facing the option of waiting until the courts are functioning the way they were previously or utilizing alternative approaches to resolution to keep projects and businesses running.
Though courts across the country reopened to some extent in the latter half of 2020, many state and federal facilities were shut down or working with a limited capability for weeks or months. The closures not only froze the progress of numerous disputes already underway, but caused new schedule, cost and COVID-19-related claims to also be held up in the same backlog that is slowly being addressed under current restricted operations. New safety measures to reduce viral transmission, including reduced usage of courtrooms, restrictions on personnel and increased cleaning and sanitizing measures, have limited the number of cases courts can handle on a daily basis and lengthened legal timelines in ways many parties had not anticipated and cannot afford.
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Jeffrey Kozek, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Construction Manager Has Defense As Additional Insured
September 03, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court found that the construction manager was an additional insured under the contractor's policy. Turner Constr. Co. v. Navigators Ins. Co., 2015 N.Y. Misc. LEXIS 2704 (N.Y. Sup. Ct. July 23, 2015).
The owner hired two contractors, Enclos Corp. and Five Star Electric Corp. In their separate contracts with the owner, each contractor agreed to procure a CGL policy naming the owner and a person identified as the construction manager as additional insureds. Travelers was Enclos's insurer, and Navigators Insurance Company was Five Star's insurer.
Turner was hired to "provide pre-construction services and construction management services for the Project."
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Summary Judgment Granted to Insurer for Hurricane Damage
January 24, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer's motion for summary judgment, contending there was no coverage for hurricane damage, was granted. Laurence v. Liberty Ins. Corp., 2021 U.S. Dist. LEXIS 227807 (S.D. Texas Nov. 29, 2021).
When Hurricane Harvey hit, Mike Laurence held a homeowner's policy from Liberty Insurance Corporation and a contractor policy for his business, Pride Plumbing, Inc., issued by State Farm Lloyds. Laurence's property suffered water damage during the storm. State Farm investigated and concluded that all but a small amount, within the policy's deductible, was from flood damage and excluded. Laurence sued.
The property covered by the State Farm policy included Laurence's home, Pride Plumbing's office and two sheds. Pride Pluming did not own or lease any of the buildings on the property. Laurence testified in his deposition that the only damage to his property not caused by flood water was to three buildings from fallen tree limbs and equipment from his business.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
A Court-Side Seat: Butterflies, Salt Marshes and Methane All Around
November 16, 2020 —
Anthony B. Cavender - Gravel2GavelOur latest summary of some recent developments in the courts and the federal agencies includes a unique case involving salt marshes adjacent to San Francisco Bay.
THE FEDERAL COURTS
A Wolf Among the Butterflies
On October 13, 2020, the U.S. Court of Appeals for the District of Columbia Circuit decided the case of North American Butterfly Association v. Chad Wolf, Acting Secretary of the Department of Homeland Security. The National Butterfly Center is a 100-acre wildlife sanctuary located in Texas along the border between the United States and Mexico, and in 2017, the DHS exerted control over a segment of the sanctuary to construct facilities to impede unauthorized entry into the United States. It was alleged that the government failed to provide advance notice to the sanctuary before it entered the sanctuary to build its facilities. The Association filed a lawsuit to halt these actions for several reasons, including constitutional claims and two federal environmental laws (NEPA and the Endangered Species Act), but the lower court dismissed the lawsuit because of the provisions of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). That law forecloses the applicability of these laws if the Secretary of DHS issues appropriate declaration. On appeal, the DC Circuit held, in a 2 to 1 decision, that the lawsuit should not have been dismissed. The plaintiffs had standing to file this lawsuit, but the jurisdiction stripping provisions of the IIRIRA, when invoked, required that the statutory claims be dismissed as well as a constitutional Fourth Amendment search and seizure claim. However, the plaintiff’s Fifth Amendment claim that the government’s actions violated their right to procedural due process must be reviewed. The Center was given no notice of the government’s claims and no opportunity to be heard before these actions were taken. The dissenting judge argued that the court was being asked to review a non-final decision, which it should not do.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Higgins, Hopkins, McLain & Roswell, LLC Announces Leadership Changes and New Vision for Growth
January 21, 2025 —
David McLain - Higgins, Hopkins, McLain & Roswell, LLCHiggins, Hopkins, McLain & Roswell, LLC (“HHMR”) is excited to announce several significant developments as the firm transitions into an exciting new chapter of growth and innovation. Sheri Roswell, one of the firm’s founding members, is stepping out of ownership to serve as “Of Counsel,” continuing her vital work with clients and strengthening relationships that have been the cornerstone of HHMR’s success. Her tireless contributions since the firm’s inception have helped establish HHMR as a leader in Colorado’s construction law landscape.
“Sheri has been a pillar of HHMR since day one. Her commitment to our clients and her unwavering dedication to the firm’s success have left an indelible mark. We are excited for her to continue contributing her expertise and leadership in this new capacity,” said David McLain at the firm’s recent holiday celebration.
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David McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Traub Lieberman Partner Lisa M. Rolle Wins Summary Judgment in Favor of Third-Party Defendant
May 06, 2024 —
Traub LiebermanTraub Lieberman Partner Lisa M. Rolle won summary judgment in favor of Third-Party Defendant, a general contracting company (the “Contracting Company”), in a personal injury action brought in Suffolk County. In the underlying matter, the Plaintiff—an employee of the Contracting Company—alleged that they sustained injuries from an incident which occurred when they were struck by a skid-steer loader owned by the Co-Defendant masonry company (the “Masonry Company”) and operated by the president and owner of the Co-Defendant/Third-Party Plaintiff construction company (the “Construction Company”). The Plaintiff brought claims against the Defendant companies for common law negligence and violations of Labor Law § § 200, 240, and 241, as well as Industrial code (12 NYCRR) subpart 23-2.
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Lisa Rolle, Traub Lieberman
Ms. Rolle may be contacted at lrolle@tlsslaw.com
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