South Dakota Supreme Court Holds That Faulty Workmanship Constitutes an “Occurrence”
September 14, 2017 —
Samantha Martino - Saxe Doernberger & Vita, P.C.The South Dakota Supreme Court recently determined that damage resulting from a subcontractor’s failure to test soil compaction before constructing a home constituted an “accident” and was therefore an “occurrence” under a commercial general liability (CGL) policy.
In Owners Ins. Co. v. Tibke Construction, Inc., the homeowners hired Tibke Construction, Inc. to build a new house, and Tibke Construction hired subcontractor Jerry’s Excavating to perform excavation work. The homeowners contended that Jerry’s Excavating failed to do soil compaction testing before commencing construction, which resulted in the home being built on highly expansive soils, leading to damage including excessive settlement, cracking and structural unsoundness.
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Samantha Martino, Saxe Doernberger & Vita, P.C.Ms. Martino may be contacted at
smm@sdvlaw.com
Monumental Museum Makeover Comes In For Landing
May 28, 2024 —
Jim Parsons - Engineering News-RecordAfter more than 40 years of chronicling the nation’s storied exploration of the sky and heavens, the Smithsonian Institution’s National Air and Space Museum in Washington, D.C., was, in a word, tired.
Reprinted courtesy of
Jim Parsons, Engineering News-Record
ENR may be contacted at enr@enr.com
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When Subcontractors Sue Only the Surety on Payment Bond and Tips for General Contractors
August 13, 2019 —
Ira M. Schulman & Emily D. Anderson - ConsensusDocsPayment bonds have been a staple of public construction projects since 1874, when the U.S. Congress first passed the Heard Act, which required that contractors obtain payment bonds for public projects to ensure that subcontractors and material suppliers have a way to recover their damages if an upstream contractor fails to pay for work performed and materials furnished on the project. The 1874 Heard Act has since been replaced by the 1935 Miller Act, and the concept has been expanded to construction projects funded by the states through state statutes known as “Little Miller Acts.” But the structure remains the same: On most public projects where the project’s cost exceeds $100,000, the prime contractor (the bond principal) is required to obtain a payment bond from a surety equal to the contract price to guarantee to subcontractors and material suppliers (the bond obligees) that the surety will pay for labor and materials under certain statutory or contractual conditions should the contractor fail to make payment.
A surety is jointly and severally liable with the contractor to the subcontractor, which means that the subcontractor may seek recovery against either the contractor or the surety or both, and the contractor and surety will be liable for the damages together. Put another way, in most states and in federal court, an unpaid subcontractor has the right to sue only the surety on the payment bond without joining the contractor because a contract of suretyship is a direct liability of the surety to the subcontractor.1 When the contractor fails to perform, the surety becomes directly responsible at once — it is unnecessary for the subcontractor to establish that the contractor failed to carry out its contract before the obligation of the surety becomes absolute.
Reprinted courtesy of
Ira M. Schulman, Pepper Hamilton LLP and
Emily D. Anderson, Pepper Hamilton LLP
Mr. Schulman may be contacted at schulmani@pepperlaw.com
Ms. Anderson may be contacted at andersone@pepperlaw.com
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Construction Injuries Under the Privette Doctrine. An Electrifying, but Perhaps Not Particularly Shocking, Story . . .
January 05, 2017 —
Garret Murai – California Construction Law BlogWe’ve talked about the Privette doctrine before (see
here,
here, and
here). The Privette doctrine, named after the court case Privette v. Superior Court (1993) 5 Cal.4th 689, provides in general that project owners and contractors are not responsible for worksite injuries suffered by employees of lower-tiered contractors they have hired, the rationale being that such workers should already be covered under their employers’ workers’ compensation insurance policies.
In the twenty years since Privette was decided, however, several exceptions have evolved that have narrowed the doctrine. One exception, known as the retained control exception, allows a contractor’s employees to sue the “hirer” of the contractor (that is, the higher-tiered party who “hired” the lower-tiered party whose employee is injured) when the hirer retains control over any part of the work and negligently exercises that control in a manner that affirmatively contributes to the employee’s injury. Hooker v. Department of Transportation (2002) 27 Cal.4th 198.
Another exception, known as the nondelegable duty exception, permits an injured worker to recover against a hirer when the hirer has assumed a nondelegable duty, including statutory and regulatory duties, that it breaches in a manner that affirmatively contributes to the injury. Padilla v. Pomona College (2008) 166 Cal.App.4th 661.
In a recently decided case, Khosh v. Staples Construction Company, Inc., Case No. B268937 (November 17, 2016), the California Court of Appeals for the Second District examined the application of the Hooker and Padilla exceptions where a general contractor was contractually responsible for overall site safety.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Dispute Resolution Provision in Subcontract that Says Owner, Architect or Engineer’s Decision Is Final
March 29, 2021 —
David Adelstein - Florida Construction Legal UpdatesIn subcontracts, it is not uncommon to see a provision that says something to the effect:
Should any dispute arise between the parties respecting the true construction or interpretation of the Plans, Specifications and/or the Contract Requirements, the decision of the Owner or the Owner’s designated representative as set forth in the General Contract shall be final.
This is a provision in a subcontract dealing with dispute resolution, typically when there is a dispute as to whether the subcontractor is performing extra-contractual or base contract work regarding an “interpretation of the Plans, Specifications, and/or the Contract Requirements.” It is not uncommon for there to be a dispute as to whether certain work is within the subcontractor’s scope of work or outside the subcontractor’s scope of work and subject to a change order.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Washington Supreme Court Interprets Ensuing Loss Exception in All-Risk Property Insurance Policy
May 20, 2024 —
David G. Jordan & William E. Phillips IV - Saxe Doernberger & Vita, P.C.The "ensuing loss" clause is a provision that restores coverage for property insurance claims that are subject to certain policy exclusions, such as “faulty workmanship” and “faulty design.” It applies in cases where there is damage from a covered cause of loss that ensues, or results from, the excluded cause of loss. Courts across jurisdictions have grappled with interpreting the breadth of this clause, leading to varying conclusions regarding its scope and applicability. One of the primary challenges in interpreting “ensuing loss” lies in determining the ultimate cause of damage. Courts must ascertain whether the ensuing loss is sufficiently distinct from the excluded event to warrant coverage under the policy. This analysis often hinges on whether the cause of loss is thought to constitute a separate and independent occurrence or is merely a continuation or exacerbation of the excluded event.
Reprinted courtesy of
David G. Jordan, Saxe Doernberger & Vita, P.C. and
William E. Phillips IV, Saxe Doernberger & Vita, P.C.
Mr. Jordan may be contacted at DJordan@sdvlaw.com
Mr. Phillips may be contacted at WPhillips@sdvlaw.com
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Appellate Court Endorses Discretionary Test for Vicarious Disqualification of Law Firms Due To New Attorney’s Conflict
February 07, 2018 —
David W. Evans and Stephen M. Tye – Publications & Insights In
California Self-Insurer’s Security Fund et al. v. The Superior Court of Orange County (1/26/2018 – No. G054981), the Fourth Appellate District considered whether vicarious disqualification of a law firm is mandatory or discretionary where an attorney with a conflict joins a firm and the firm enacts an ethical screen to prevent transmission of confidential information between the new attorney and the rest of the firm.
This case arose from an effort by the California Self-Insurer’s Security Fund (the “Fund”) to be reimbursed for workers’ compensation benefits advanced on behalf of the Healthcare Industry Self-Insurance Program (the “Program”). The Fund hired Nixon Peabody LLP (“Nixon Peabody”) to represent it in connection with this matter. In November 2013, represented by members of Nixon Peabody’s San Francisco office, the Fund filed a lawsuit naming 304 members of the Program as defendants. Approximately 170 defendants have since settled.
Two of the non-settling defendants (“Moving Parties”), were represented by Michelman & Robinson, LLP (“M&R”). From approximately 2009 until February 1, 2017, attorney Andrew Selesnick served as Chair of M&R’s Health Care Department at the firm’s Los Angeles office, managing a team of attorneys who represented clients in the healthcare industry. Commencing in 2014, a team of four attorneys at M&R, including Selesnick, represented the Moving Parties and four other defendants, the latter of whom have since settled. Selesnick was actively involved, including participating in a confidential discussion pertaining to Moving Parties’ liability and damages and receiving many e-mails containing communications about the common defense of the remaining 170 defendants.
Reprinted courtesy of
David W. Evans, Haight Brown Bonesteel and
Stephen M. Tye, Haight Brown Bonesteel
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Tye may be contacted at stye@hbblaw.com
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HOA Coalition Statement on Construction-Defects Transparency Legislation
May 12, 2016 —
David M. McClain – Colorado Construction LitigationFOR IMMEDIATE RELEASE
Contact: Bill Ray / 303-885-1881
DENVER—The Homeownership Opportunity Alliance—a broad coalition of business groups, builders, elected officials and affordable housing advocates—provided the following statements on reports that there will be no construction-defects transparency legislation this session:
“We are disappointed that negotiations broke down today and that event was immediately turned into an effort to use the media to score political points. The Homeownership Opportunity Alliance has worked on this issue for three years, and we are committed to finding a resolution that will address Colorado’s housing needs, especially through the development of attainable condominiums,” said Tom Clark, Chief Executive Officer of the Metro Denver Economic Development Corporation. “We understand the importance of this issue for our state, for working families, for first-time homebuyers and for anyone along the housing spectrum who is struggling to find a home. That's why we will remain committed to working on this issue.”
The Homeownership Opportunity Alliance’s diverse coalition includes more than 50 organizations from across Colorado. The coalition also includes individual mayors and 14 different communities that have passed local ordinances to address attainable condominium development.
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David M. McClain, Higgins, Hopkins, McLain & Roswell, LLCMr. McClain may be contacted at
mclain@hhmrlaw.com
