Sinking Buildings on the Rise?
July 01, 2019 —
Jason M. Adams - Gibbs GidenBy now everyone in the construction and insurance industries is familiar with the 58-story Millennium Tower building in San Francisco that has sunk 17 inches and tilted another 14 inches to the northwest. Another recent New York lawsuit alleges that a 58-story luxury Manhattan condo high-rise is also sinking and causing significant damage. With construction booming in the Southeast and other areas with questionable soils, sinking building cases may be on the rise. Given this reality, the issue of subsidence should be of paramount importance to every construction and insurance professional when insuring a project.
Most insurance carriers will include a subsidence and/or other earth movement exclusion on a commercial general liability ("CGL") quote for insurance as a matter of course. Construction professionals (owners/developers, general contractors, and subcontractors) or their brokers may be under the mistaken impression that they have no choice but to accept these subsidence exclusions as part of a standard construction policy. This is not the case. To the contrary, most insurance carriers are willing to remove subsidence exclusions if the underwriters are provided with acceptable geotechnical/soils reports when considering the project.
The insured construction professional often pushes back on the insurance carrier's request for soils reports because the insured sees the request as an unnecessary hassle, expense or unwelcome interference in the job. However, the carrier's soils review is designed to benefit everyone. If potential soils issues are discovered during the underwriting process they can be addressed at the outset of the project rather than after the project is built, which will typically cost substantially more to remedy. Moreover, a thorough analysis of the condition of the soils at the outset of the project allows the risk management team to recognize any potential issues and ensure that the proper coverage is obtained in order to provide protection down the road. Even if the insurance carrier charges more money to sign off on questionable soils after a review of the reports, the slight increase in premium is likely a worthwhile investment in the event of a subsidence loss.
The lesson is that the insured should not blindly accept a subsidence exclusion and should negotiate its removal. The insured should provide its broker and the insurance carrier the information they need in order to make a fully-informed decision as it pertains to the soils. Once the insurance carrier has had the opportunity to review and sign off on the condition of the soil, the carrier should feel comfortable enough to remove any subsidence exclusions or other similar earth movement limitations.
Subsidence is a relatively straightforward issue to deal with as long as the project team’s lawyers, brokers, risk managers and insurance company underwriters are working together toward the common goal of properly evaluating the risk and adequately insuring the project. This simple cooperative process between the entire risk management team could mean the difference between being covered or not covered in the event of a loss related to earth movement.
Jason M. Adams, Esq. is Senior Counsel at Gibbs Giden representing construction professionals (owners/developers, contractors, architects, etc.) in the areas of Construction Law, Insurance Law and Risk Management, Common Interest Community Law (HOA) and Civil Litigation. Adams is also a licensed property and casualty insurance broker and certified Construction Risk & Insurance Specialist (CRIS). Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms. Mr. Adams can be reached at jadams@gibbsgiden.com.
The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. The transmission of information by email, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. This publication may not be reproduced or used in whole or in part without written consent of the author. Copyright 2019 ©
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Court of Appeals Discusses Implied Duty of Good Faith and Fair Dealing in Public Works Contracting
August 17, 2017 —
Lindsay K. Taft - Ahlers & Cressman PLLCThe implied duty of good faith and fair dealing is implied in every contract, including construction contracts. Generally speaking, this implied duty requires parties cooperate with one another so that they each obtain the full benefit of their contracted bargain. Recently, the Court of Appeals (Division II) in Nova Contracting, Inc. v. City of Olympia discussed this duty’s application to a public works contract.
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Lindsay K. Taft, Ahlers & Cressman PLLCMs. Taft may be contacted at
ltaft@ac-lawyers.com
California Reinstates COVID-19 Supplemental Paid Sick Leave
February 21, 2022 —
Jessica L. Daley - Newmeyer DillionOn February 9, 2022, Governor Newsom signed California Legislature Senate Bill 114 (SB 114), which reinstates supplemental paid sick leave for qualifying reasons relating to COVID-19.
Employers may recall SB 95, which expired on September 30, 2021, and was substantially similar to SB 114. Like its predecessor, SB 114 applies to employers with 26 or more employees and provides up to 80 hours of supplemental paid sick leave to full-time employees who are unable to work (including telework) for a reason relating to COVID-19. While this legislation goes into effect on February 19, 2022, it will retroactively apply back to January 1, 2022 and remain in effect until September 30, 2022.
REASONS FOR LEAVE – TWO PERIODS
Unlike SB 95, SB 114 breaks the total possible 80 hours of COVID-19 Supplemental Paid Sick Leave (CSPL) for full-time employees into two 40-hour periods.
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Jessica L. Daley, Newmeyer DillionMs. Daley may be contacted at
jessica.daley@ndlf.com
New Orleans Drainage System Recognized as Historic Civil Engineering Landmark
May 29, 2023 —
The American Society of Civil EngineersNEW ORLEANS, La. – The
American Society of Civil Engineers (ASCE) today recognized the New Orleans Drainage System in New Orleans, Louisiana as a
Historic Civil Engineering Landmark. The project was innovative and largely unprecedented for its time, and the first portions came online in the year 1900. The system now consists of 22 drainage pumping stations and 1,200 miles of network drains, as well as green infrastructure elements to manage stormwater runoff. The infrastructure is largely credited for making the existence of New Orleans possible, and the improved drainage and reduction in standing water contributed to better public health and reduced the number of malaria and typhoid deaths in the early 20th century.
New Orleans' position near the mouth of the Mississippi River made it a vital city for trade and commerce in the U.S. economy since the early 1800s, despite its problematic natural environment. The city was perched along the banks of the Mississippi River and next to Lake Pontchartrain, surrounded by swamps. Improvements to levee systems prevented the city from being inundated with flooding from the river, but rainfall became a pervasive issue as the city's population grew in the 1870s.
The drainage system was first proposed in 1876 to replace primitive "drainage machines," steam-powered paddle wheels that moved water runoff into canals that led to Lake Pontchartrain. The existing system was inefficient and could not handle the frequent, heavy tropical rain New Orleans experiences and could not lift water sufficiently to drain the city. After several proposals, construction on the current drainage system started in 1897, and the first portions of the system came online in 1900. The system drains stormwater through pipes and canals to reach drainage pump stations which expel the water into several bodies of water surrounding the city. Engineers have repeatedly expanded and enlarged the drainage system, including a massive investment in the drainage system authorized by the Southeast Louisiana Urban Flood Control Project and approved by Congress in 1996. The Sewerage and Water Board's green infrastructure plan is a critical partner and complement to the drainage system today.
The New Orleans Drainage System's design has inspired water management system design in communities around America and worldwide. In Southeastern Florida, water management systems using pumps and canals divert excess water away from heavily populated areas during heavy rain, including tropical storms and hurricanes. Engineers in Kolkata, India and Shanghai, China have also used drainage and pumping systems like the ones in New Orleans to assist with water management.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Avoid Drowning in Data: Keep Afloat with ESI in Construction Litigation
May 15, 2023 —
Steve Swart - The Dispute ResolverMaybe it is another lawyer on your team, a client, the Court. Maybe it is you. Almost every lawyer has heard (or thought, felt, or anguished over) the following: Wait — What? Discovery is going to cost how much?
The concern is real. Per a 2019 Southern District of New York opinion:
- The average case can involve collection, review and production of 100 gigabytes of data (or 6.5 million pages of Word documents).
- At a typical rate of review of 40-60 documents per hour, assuming 100,000 documents are collected, that is about 2,000 hours of attorney review time.
- Adding in fees for forensic collection, storage, and processing to maintain metadata can result in a bill totaling $500,000.
Brown v. Barnes & Noble, Inc., 474 F. Supp. 3d 637, 645 & n.3 (S.D.N.Y. 2019).
What's counsel to do? The following four points can help counsel streamline and reduce costs in discovery: (1) know your case, (2) know your data — understand it and document collection, (3) cooperate with counsel, and (4) implement a protocol for electronically-stored information ("ESI").
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Steve Swart, Williams MullenMr. Swart may be contacted at
sswart@williamsmullen.com
Billionaire Row Condo Board Sues Developers Over 1,500 Building Defects
September 29, 2021 —
Robert Burnson, BloombergThe condo board at one of New York’s tallest and toniest towers sued the building’s developers, claiming design flaws are to blame for flooding, stuck elevators and “horrible and obtrusive noise and vibration.”
The residential tower at 432 Park Avenue is a 1,396-foot skyscraper overlooking Central Park that was opened in 2015 on the city’s so-called Billionaire Row.
The condo board claims its engineering consultant has identified more than 1,500 construction and design defects — “many of which are described as life safety issues.”
The board that represents the condo owners sued the developers, CIM Group and Macklowe Properties, and the company, also known as sponsor, that the developers formed to build the tower.
The board is seeking $250 million, plus punitive damages, in the lawsuit, filed Thursday in New York Supreme Court.
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Robert Burnson, Bloomberg
Time is of the Essence, Even When the Contract Doesn’t Say So
January 11, 2021 —
Christopher G. Hill - Construction Law MusingsWelcome to 2021! As often happens here at Construction Law Musings, the year starts with a few posts on notable construction law cases that dropped in the past year or so. Not only does this review hopefully help you keep up, but helps me keep up with the latest developments (one of the reasons why I keep blogging).
The first of these cases is Appalachian Power Co. v. Wagman Heavy Civil, Inc. out of the Western District of Virginia federal court. In this case, Wagman Heavy Civil, Inc. (“Wagman”) and the Virginia Department of Transportation (“VDOT”) contracted for the design and construction of a highway interchange project (the “Project”). Wagman and the Appalachian Power Company (“APCO”) entered into a written contract (the “Written Contract”) for APCO to remove and relocate its utility structures (the “Work”) in order to facilitate construction for the Project.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
No Subrogation, Contribution Rights for Carrier Defending Construction Defect Claim
December 23, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe Court held that the insurer defending the additional insured general contractor had no right to equitable subrogation or equitable contribution from a separate carrier who also insured the general contractor as an additional insured. Old Republic Gen. Ins. Co. v. Amerisure Ins. Co., 2023 U.S. Dist. LEXIS 170293 (N.D. Ill. Sept. 25, 2023).
Tanger Grand Rapids, LLC hired Rockford Construction Company to build the Tanger Outlet Center. Rockford subcontracted with Kamminga & Roodvoeis, Inc. (K&R) to work on the pavement for the outlet mall. Under the subcontract, K&R agreed to maintain primary commercial general liability insurance for itself, with Rockford as an additionial insured. K&R obtained a policy from Amerisure. For additional paving work, Rockford subcontracted with Michigan Paving & Materials, CP. The subcontract also required Michigan Paving to maintain primary coverage, with Rockford as an additional insured. Michigan Paving obtained a policy from Liberty Mutual.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
