Incorporation, Indemnity and Statutes of Limitations, Oh My!
January 19, 2017 —
Christopher G. Hill – Construction Law MusingsWe all know that the contract is king in Virginia. We also know that Virginia will allow for a so called “incorporation” clause that will allow for “flow down” of certain prime contract provisions in a way that will make those provisions applicable to subcontractors. We also know that a claim for breach of contract or other contractual claim does not last forever due to certain statutes of limitation found in the Code of Virginia. What happens when all of these elements crash together in one place leading to litigation? Well, a relatively recent case from the Virginia Supreme Court gives at least a partial answer.
In Hensel Phelps Construction Company v Thompson Masonry Contractor, Inc, the Virginia Supreme Court considered a claim that arose from construction at Virginia Tech by Hensel Phelps. The construction concluded in 1998 (remember that date). The Prime Contract included language concerning a one year “Guarantee of Work” as well as fairly typical Warranty of Workmanship” language. However the Prime Contract also stated that the one year guaranty term did nothing to affect any other limitations period for any other action pursuant to the Prime Contract (this is important as well because Virginia Tech was not subject to any statute of limitations due to its status as an agency of the Commonwealth of Virginia). Final payment was made to Hensel Phelps and subsequently to the subcontractors in 1999.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Insurer Not Responsible for Insured's Assignment of Policy Benefits
February 21, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Florida Court of Appeals affirmed the lower court's granting summary judgment to the insurer after failing to abide by an assignment to which it was not a party. Expert Inspections, LLC v. United Property & Cas. Ins. Co., 2022 Fla. App. LEXIS 88 (Fla. Ct. App. Jan. 5, 2022).
The insured's property sustained damage from Hurricane Irma resulting in a covered loss. The insured retained Expert Inspections to perform mold-related services. As payment, the insured assigned her policy benefits pursuant to an assignment of benefits agreement. Under the agreement, the insured agreed to cooperate with the assignee to ensure that payments were made by the insurer upon completion of work. The insured gave authority to the assignee to endorse any checks with her name listed on the check.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
New Pedestrian, Utility Bridge Takes Shape on Everett Waterfront
December 16, 2019 —
Tim Newcomb - Engineering News-RecordAmidst the constraints of weight limits, a seawall, a waterfront restaurant and high-voltage power poles, crews from ICI Interwest Construction Inc. and heavy mover Oxbo Mega Transport Solutions positioned a $20 million, 282-ft-long pedestrian and utility bridge in place this fall along the Everett, Washington, waterfront.
Reprinted courtesy of
Tim Newcomb, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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New Jersey’s Proposed Construction Defect Law May Not Cover Everything
December 11, 2013 —
CDJ STAFFNew Jersey is considering a new law that would make explicit that construction defects are accidents under a commercial general liability policy. But the site GreenBuildingConstructionLaw points out that it wouldn’t necessarily be the last word on things. The bill “does not obligate insurers to provide coverage for construction defects.” Exclusions could still come from “the various ‘business risk’ exclusions commonly found in commercial general liability policies, such as the ‘your work’ or ‘insured product’ exclusions.”
The writer concludes that “contractors seeking coverage under the policies (and their insurers seeking to disclaim coverage), however, will still need to litigate the issue of whether the alleged property damage is covered by the insuring clause, and if it is, whether the various exclusions apply.”
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Court Concludes That COVID-19 Losses Can Qualify as “Direct Physical Loss”
September 28, 2020 —
Lorelie S. Masters & Jorge R. Aviles - Hunton Andrews KurthIn a victory for policyholders, a federal district court found that COVID-19 can cause physical loss under business-interruption policies. In Studio 417, Inc., et al. v. The Cincinnati Insurance Co., No. 20-cv-03127-SRB (W.D. Mo. Aug. 12, 2020), the court rejected the argument often advanced by insurers that “all-risks” property insurance policies require a physical, structural alteration to trigger coverage. This decision shows that, with correct application of policy-interpretation principles and strategic use of pleading and evidence, policyholders can defeat the insurance industry’s “party line” arguments that business-interruption insurance somehow cannot apply to pay for the unprecedented losses businesses are experiencing from COVID-19, public-safety orders, loss of use of business assets, and other governmental edicts.
The policyholders in Studio 417 operate hair salons and restaurants asserting claims for business interruption. In suing to enforce their coverage, the policyholders allege that, over the last several months, it is likely that customers, employees, and/or other visitors to the insured properties were infected with COVID-19 and thereby infected the insured properties with the virus. Their complaint asserts that the presence of COVID-19 “renders physical property in their vicinity unsafe and unusable.” Unlike some other complaints seeking to enforce such coverage, it also alleges that the presence of COVID-19 and government “Closure Orders” “caused a direct physical loss or direct physical damage” to their premises “by denying use of and damaging the covered property, and by causing a necessary suspension of operations during a period of restoration.”
Reprinted courtesy of
Lorelie S. Masters, Hunton Andrews Kurth and
Jorge R. Aviles, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. Aviles may be contacted at javiles@HuntonAK.com
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The Construction Industry Lost Jobs (No Surprise) but it Gained Some Too (Surprise)
October 12, 2020 —
Garret Murai - California Construction Law BlogThe announcement this week by major airlines and then by Disney that they will be laying off tens of thousands of workers is just the latest in what we already know: The coronavirus pandemic has adversely impacted workers around the world. And the construction industry is no exception, although its impacts have been uneven, and in some cases surprisingly good.
According to a report by the Associated General Contractors of America, 39 states lost construction jobs between August 2019 and August 2020 while 31 states and the District of Columbia added construction jobs between July and August 2020.
California saw the largest decline in construction jobs between August 2019 and August 2020, down 52,000 jobs or 5.8%, followed by by New York (-46,000 jobs/-11.3%), Texas (-39,300 jobs/-5.0%), Massachusetts (-20,200 jobs/-12.4%) and Illinois (-17,200/-7.5%).
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
FirstEnergy Fined $3.9M in Scandal Involving Nuke Plants
February 06, 2023 —
Annemarie Mannion - Engineering News-RecordHaving admitted to participating in the largest energy-involved bribery scandal in Ohio history, provider FirstEnergy Corp., based in Akron, has agreed to pay a $3.9-million fine for withholding lobbying and accounting information from the Federal Energy Regulatory Commission’s enforcement office.
Reprinted courtesy of
Annemarie Mannion, Engineering News-Record
Ms. Mannion may be contacted at manniona@enr.com
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HOA Foreclosure Excess Sale Proceeds Go to Owner
August 15, 2022 —
Ben Reeves - Snell & Wilmer Real Estate Litigation BlogOver the last few years, the Arizona Court of Appeals wrestled with the question of who should receive the excess proceeds from a foreclosure sale. We’ve blogged about some these past unreported decisions
here and
here. Those decisions, somewhat inexplicably, required excess sale proceeds to be paid to senior creditors. As we noted at the time, these unreported (and non-precedential) decisions did not seem to make much sense in the context of debtor/creditor rights. Thankfully, a reported opinion finally sets the record straight. Excess sale proceeds should be paid downstream.
In
Tortosa Homeowners Assoc. v. Garcia, et al., No. 2 CA-CV 2021-0114 (Ct. App. Aug. 1, 2022), the Court of Appeals held that after the foreclosing lienholder is paid in full, then the excess sale proceeds should be paid to claimants in the order of their priority after the foreclosing lienholder. In other words, if a junior lienholder forecloses, then any creditors behind (i.e., junior to) the foreclosing creditor should be paid, and if all such creditors are paid, then the rest should be given to the owner. Creditors senior to the foreclosing creditor should not be paid anything from the foreclosure sale. This makes sense from a policy perspective, because the senior creditor retains its lien against the property and the bidder presumably took the presence of the senior lien into account when it made its bid for the foreclosed property.
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Ben Reeves, Snell & WilmerMr. Reeves may be contacted at
breeves@swlaw.com