FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Potential Construction Liabilities Contractors Need to Know

September 21, 2020 — Manipal Dhariwal - Construction Executive
The outbreak of COVID-19 started in early December 2019, gradually expanding to the other countries of the world. The spread of the pandemic did not just affect the world in terms of health, but also made industries suffer across all verticals—leading to a few unique challenges for construction contractors. From financial imbalance to trouble retaining cash flow, the circumstances have turned to be completely unfavorable for the contractors that rely on banks for essential surety credits to sustain. To prevent loss of liquidity, the contractors are leaning toward construction accounting software and other technology to keep their accounting data in place and avoid risks with project deliveries. But still, there are many other factors that must be considered to maintain cash flow for potential credit availability such as debt agreements and lines of credit, which involve financing of equipment and vehicles. Nevertheless, it is completely the responsibility of the contractors to stick with the guidelines related to the line of credit and debt agreements which in most cases are covenant ratios. Reprinted courtesy of Manipal Dhariwal, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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U.K. Construction Growth Unexpectedly Accelerated in January

February 05, 2015 — Tom Beardsworth – Bloomberg
(Bloomberg) -- U.K. construction growth unexpectedly accelerated last month as housing strengthened and civil engineering bounced back from a contraction. Markit Economics said its Purchasing Managers’ Index rose to 59.1 from 57.6 in December. A reading above 50 indicates expansion. Economists forecast the gauge would fall to 57, according to the median estimate in a Bloomberg News survey. Read the court decision
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Reprinted courtesy of Tom Beardsworth, Bloomberg
Mr. Beardsworth may be contacted at tbeardsworth@bloomberg.net

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Insurer Unable to Declare its Coverage Excess In Construction Defect Case

January 06, 2012 — CDJ STAFF

The Ninth Circuit Court of Appeals has upheld a summary judgment in the case of American Family Mutual Insurance Co. v. National Fire & Marine Insurance Co. Several other insurance companies were party to this case. In the earlier case, the US District Court of Appeals for Arizona had granted a summary judgment to Ohio Casualty Group and National Fire & Marine Insurance Company. At the heart of it, is a dispute over construction defect coverage.

The general contractor for Astragal Luxury Villas, GFTDC, contracted with American Family to provide it with a commercial liability policy. Coverage was issued to various subcontractors by Ohio Casualty and National Fire. These policies included blanket additional insured endorsements that provided coverage to GFTDC. The subcontractor policies had provisions making their coverage excess over other policies available to GFTDC.

The need for insurance was triggered when the Astragal Condominium Unit Owners Association filed a construction defect claim in the Arizona Superior Court. CFTDC filed a third-party claim against several subcontractors. The case was settled with American Family paying the settlement, after which it filed seeking reimbursement from the subcontractor’s insurers. The court instead granted summary judgment in favor of Ohio Casualty and National Fire.

American Family appealed to the Ninth Circuit for a review of the summary judgment, arguing that the “other insurance” clauses were “mutually repugnant and unenforceable.” The Ninth Circuit cited a case from the Arizona Court of Appeals that held that “where two policies cover the same occurrence and both contain ‘other insurance’ clauses, the excess insurance provisions are mutually repugnant and must be disregarded. Each insurer is then liable for a pro rate share of the settlement or judgment.”

The court noted that unlike other “other insurance” cases, the American Family policy “states that it provides primary CGL coverage for CFTDC and is rendered excess only if there is ‘any other primary insurance’ available to GFTDC as an additional insured.” They note that “the American Family policy purports to convert from primary to excess coverage only if CFTDC has access to other primary insurance as an additional insured.”

In comparison, the court noted that “the ‘other insurance’ language in Ohio Casualty’s additional insured endorsement cannot reasonably be read to contradict, or otherwise be inconsistent with, the ‘other primary insurance’ provision in the American Family policy.” They find other reasons why National Fire’s coverage did not supersede American Family’s. In this case, the policy is “written explicitly to apply in excess.”

Finally, the Astragal settlement did not exhaust American Family’s coverage, so they were obligated to pay out the full amount. The court upheld the summary dismissal of American Family’s claims.

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MGM Seeks to Demolish Harmon Towers

September 01, 2011 — CDJ STAFF

Citing public safety concerns and the cost of repair, MGM Resorts International is seeking to demolish the unfinished hotel tower. The company has a few hurdles to go through before they start laying the charges to implode the structure. Any plans would have to be approved by not only Clark County officials, but also the district court has an order blocking any activity during litigation between MGM and the general contractor on the project, Perini Building Company.

Architectural Record reports that MGM states it would take “approximately 18 months to conduct test and come up with an approved, permitted design to fix the Harmon.” MGM feels that repairs would then take another two to three years. Perini contends that they could “provide stamped drawings detailing all necessary repairs within three months.” They attribute MGM’s desire to demolish the building as “buyer’s remorse.”

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Force Majeure and COVID-19 in Construction Contracts – What You Need to Know

April 06, 2020 — Brenda Radmacher & Jason Suh - Gordon & Rees Construction Law Blog
“Force Majeure” – While most construction contracts contain these provisions, they are often not understood in relation to the implications they may have on construction projects. With the onset of the COVID-19 pandemic, we are all taking a closer look at many portions of our contracts. The following is a brief primer on how to understand your construction contract and its potential implications on your business in this season of change. What is a Force Majeure? Construction contracts usually take into consideration that the parties want to agree at the outset on who bears the risk of unforeseen incidents that may affect the project’s progression. These issues are generally handled in a “force majeure” clause. Force majeure, according to Mariam Webster’s Dictionary is a “superior or irresistible force; or an event or effect that cannot be reasonably anticipated or controlled.” To be deemed a force majeure, generally the circumstances must be outside of a party’s control which makes performance impossible, inadvisable, commercially impractical, or illegal. In addition to being unforeseeable, the circumstances must have external causation, and be unavoidable. However, the key to understanding if COVID-19 will be deemed a condition that will excuse a contractor’s performance is the specific language in the provision. Generally force majeure events are unavoidable events such as “acts of God,” most notably weather conditions including hurricanes, tornadoes, floods, earthquakes, landslides, and wildfires, as well as certain man-made events like riots, wars, terrorism, explosions, labor strikes, and scarcity of energy supplies. However, there is not much case law or specifics on conditions similar to COVID-19. Reprinted courtesy of Brenda Radmacher, Gordon & Rees and Jason Suh, Gordon & Rees Ms. Radmacher may be contacted at bradmacher@grsm.com Mr. Suh may be contacted at jwsuh@grsm.com Read the court decision
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General Contractor Supporting a Subcontractor’s Change Order Only for Owner to Reject the Change

December 09, 2019 — David Adelstein - Florida Construction Legal Updates
The opinion in Westchester Fire Ins. Co, LLC v. Kesoki Painting, LLC, 260 So.3d 546 (Fla. 3d DCA 2018) leads to a worthy discussion because it involves a common scope of work occurrence on construction projects involving a general contractor and subcontractor. The contractor submits a subcontractor’s change order request to the owner and the owner rejects the change order. What happens next is a scope of work payment dispute between the general contractor and subcontractor. Yep, a common occurrence. In this case, a general contractor hired a subcontractor to perform waterproofing and painting. A scope of work issue arose because the specifications did not address how the window gaskets should be cut and then sealed. The owner wanted the window gaskets cut at a 45-degree angle and the subcontractor claimed this resulted in increased extra work. The general contractor agreed and submitted a change order to the owner to cover these costs. The owner rejected the change order claiming it was part of the general contractor’s scope of work even though the cutting of window gaskets at a 45-degree angle was not detailed in the specifications. After the subcontractor filed a suit against the general contractor’s payment bond surety, the project architect further rejected the change order because gasket cutting was part of the specification requirements. (Duh! What else was the architect going to say? It was not going to concede there was an omission that resulted in a change order to the owner, right?) Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Court Adopts Magistrate's Recommendation to Deny Insurer's Summary Judgment Motion in Collapse Case

June 06, 2018 — Tred R. Eyerly - Insurance Law Hawaii
The district court accepted the magistrate's recommended ruling denying the insurer's motion for summary judgment on breach of contract and bad faith claims in a case involving collapse. Jang v. Liberty Mut. Fire Ins. Co., 2018 U.S. Dist. LEXIS 51880 (D. Conn. March 27, 2018). After purchase of their home, the insureds' inspector found large cracks in the foundation. Liberty denied coverage, contending that the basement wall was collapsing due to settling earth or movement. The insureds' expert later found the foundation had cracks from the oxidation of iron sulfide minerals in the foundation's concrete. The insureds sued for breach of contract, bad faith, and violations of the Connecticut Unfair Insurance Practice Act and the Unfair Trade Practices Act. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Toll Brothers Surges on May Gain in Deposits for New Homes

June 01, 2020 — Prashant Gopal - Bloomberg
Toll Brothers Inc. shares surged after the company posted profit that beat estimates and said deposits on new homes were up in recent weeks, a potential sign of optimism for the luxury housing market. The homebuilder, which focuses on higher-end customers, has struggled during the pandemic. It reported orders for the second quarter that missed estimates and said the key metric had plunged starting March 16, when much of the economy shut down. But investors shrugged off those results, focusing instead on a 13% year-over-year gain this month in deposits, which the company called a “leading indicator of current market demand.” Read the court decision
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Reprinted courtesy of Prashant Gopal, Bloomberg

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