Cambridge Massachusetts Building Expert Directory

Unpredictable Opinion Regarding Construction Lien (Reinstatement??)

January 17, 2023 — David Adelstein - Florida Construction Legal Updates
Here comes the discussion of an appeal I was intimately involved in dealing with a construction lien. See Suntech Plumbing and Mechanical Corp. v. Bella Isla, LLC, 2022 WL 14672765 (Fla. 3d DCA 2022). Unfortunately, it was a losing result on my end but not a losing result to the issue at-hand. You should ask what in the world does this mean. I will tell you. Here is the fact pattern. A subcontractor files a construction lien foreclosure lawsuit against an owner for unpaid contract balance. In the same lawsuit, the subcontractor sues the general contractor for breach of contract and unjust enrichment associated with an approximate three-year delay on a construction project. The project was scheduled to be completed in 2019. It was not. The project was pushed into COVID and into 2022. (The subcontractor did not sue the general contractor for amounts subject to the lien foreclosure claim.) The general contractor, assuming the defense of the owner, moved to stay the lawsuit pending the outcome of arbitration based on an arbitration provision in the subcontract. The subcontractor did not dispute the arbitration provision, but argued that arbitration provision should not extend to the owner that was (a) not bound by the subcontract, (b) would not be a party to the arbitration, and (c) the amounts pled against the general contractor did not include the amounts subject of the lien foreclosure lawsuit. At a minimum, the lawsuit should be stayed, not dismissed. Nevertheless, the trial court dismissed the entire lawsuit in an order that states that it is a final order with language that the lien may be “reinstated” after the outcome of the arbitration (that the owner is not a party to). 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

Waiver of Subrogation Enforced, Denying Insurers Recovery Against Additional Insured in $500 Million Off-Shore Oil Rig Loss

September 30, 2019 — Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery Blog
The United States District Court for the Southern District of Texas recently rejected a claim by a group of insurance companies (“Underwriters”) against American Global Maritime Inc. for more than $500 million that the Underwriters paid the named insured under an Off-Shore Construction Risk insurance policy for losses resulting from the an alleged off-shore oil rig failure. The action arose out of alleged construction defects related to Chevron’s “Big Foot” oil-drilling platform in the Gulf of Mexico. Chevron hired American Global to be the marine warranty surveyor responsible for reviewing and certifying the project’s specifications and materials. American Global issued the certificate of approval required for the project to proceed; however, during the attempted installation of the platform in 2015, it was alleged that parts from the structure fell to the sea floor. The Underwriters paid more than $500 million in connection with the incident under an Off-Shore Construction insurance policy they had issued to Chevron. After paying the claim, the Underwriters filed a negligence action against American Global and other contractors involved in the project. Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews & Kurth and Daniel Hentschel , Hunton Andrews & Kurth Mr. Oehninger may be contacted at soehninger@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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Privette: The “Affirmative Contribution” Exception, How Far Does It Go?

August 10, 2020 — Courtney Arbucci, Peter A. Dubrawski & Austin F. Smith - Haight Brown & Bonesteel
In Horne v. Ahern Rentals, Inc. (No. B299605, filed 6/10/2020 ord. publ. 6/10/2020), Plaintiffs filed a wrongful death action against Defendant Ahern Rentals, Inc. (“Ahern”) arising out of the fatal incident involving Ruben Dickerson (“decedent”), while employed by independent contractor 24-Hour Tire Service, Inc. Decedent was ultimately crushed on Ahern Rentals, Inc.’s property when a forklift that was improperly placed on uneven ground collapsed as decedent laid under the raised forklift as he performed tire maintenance. Plaintiffs’ suit would normally be barred by the Privette line of decisions which arise out of the foundational principle that an independent contractor’s hirer presumptively delegates to the contractor its tort law duty to provide a safe workplace for the contractor’s employees. (Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette).) The Privette rule is subject to a number of exceptions including the “peculiar risk” exception, the “nondelegable duty” exception and the “affirmative contribution” exception. (See Privette, supra.) Here, Plaintiffs’ claimed that their suit against Ahern arose out of the “affirmative contribution” exception to Privette as defined by Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202 (Hooker). Hooker allows suits otherwise barred by Privette to go forward if the hirer of the independent contractor “exercised control over safety conditions at the worksite in a way that affirmatively contributed to the employee’s injuries.” Reprinted courtesy of Haight Brown & Bonesteel attorneys Courtney Arbucci, Peter A. Dubrawski and Austin F. Smith Ms. Arbucci may be contacted at carbucci@hbblaw.com Mr. Dubrawski may be contacted at pdubrawski@hbblaw.com Mr. Smith may be contacted at asmith@hbblaw.com Read the court decision
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Lien Waivers Should Be Fair — And Efficient

February 18, 2015 — Christopher G. Hill – Construction Law Musings
This week for our Guest Post Friday here at Construction Law Musings, we welcome back my good friend Scott Wolfe. Scott, a thought leader in the construction industry, combines his construction background, tech experience, entrepreneurial spirit, and legal education to bring a unique perspective to the industry’s construction payment problem. Scott is the founder of zlien, a venture-backed construction payment platform. A licensed attorney in six states, his writing has appeared in the New York Times, CFMA’s Building Profits, Supply House Times, Construction Executive, and tED Magazine. He has been a Keynote Speaker for the American Subcontractors Association annual conference, and spoken at CFMA events. Lien waivers are perhaps the most legally and practically complicated documents exchanged in the construction industry. Unfortunately, this results in huge corporate inefficiencies, and worse, provides an opportunity for some parties to exert undue leverage over others. Lien waivers — or lien releases, as they are commonly (but mistakenly) called — aren’t supposed to be complicated, though. They are designed to make the complex construction payment process easy and fair. This article will address why that is, how it works, and where things have gone awry. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

N.J. Governor Signs Bill Expanding P3s

September 04, 2018 — Nick Steingart - Construction Executive
Government entities in New Jersey that enter into public-private partnerships to help finance public construction projects are now required to utilize a project labor agreement (PLA) and pay state prevailing wages, among other requirements. Previously, P3s were only available to state and county colleges, but did not contain prevailing wage or PLA mandates. The new law, Senate Bill 865, allows the state and its subdivisions, including counties, municipalities and school districts, to enter into agreements with private funding sources provided they follow the additional mandates such as abiding by the state’s prevailing wage law and utilizing a union-only PLA for construction of the project. Reprinted courtesy of Nick Steingart, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Steingart may be contacted at steingart@abc.org

Requesting an Allocation Between Covered and Non-Covered Damages? [Do] Think Twice, It’s [Not Always] All Right.

October 12, 2020 — Todd Likman - Colorado Construction Litigation
As is often the case in construction defect and other insurance defense litigation, a plaintiff’s claims for relief typically encompass both covered and uncovered damages. Obviously, it is in the insured’s best interests to have as many damages covered by insurance as possible. From the insurer’s perspective and against the backdrop of owing duty of good faith and fair dealing to its insureds, however, it is generally better to have an allocation of covered vs. non-covered damages. This places the insurer, insured, and insurance retained defense counsel in a difficult position. A recent opinion from U.S. District Court for the District of Colorado, Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt, Civil Action No. 1:16-CV-02760-RM-MJW, 2020 U.S. Dist. LEXIS 35209 (D. Colo. Mar. 2, 2020), sheds light on the issue, even though some may feel it only further muddies already murky waters. Rockhill involved review of an arbitration proceeding that property-owner, Heirloom I, LLC (“Heirloom”) filed against CFI-Global Fisheries Management (“CFI”). Rockhill Insurance Company (“Rockhill Insurance”) was asked to defend the arbitration as CFI’s professional and general liability insurer. At issue in the arbitration was Heirloom’s claim that CFI defectively designed and constructed a fisheries enhancement that was destroyed by natural processes four times in three years. Read the court decision
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Reprinted courtesy of Todd Likman, Higgins, Hopkins, McLain & Roswell
Mr. Likman may be contacted at likman@hhmrlaw.com

Defense Owed to Directors and Officers Despite Insured vs. Insured Exclusion

May 13, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The court found there the duty to defend a suit filed by the FDIC against officers and directors was not excluded by the insured versus insured provision in the policy. W Holding Co., Inc. v. AIG Ins. Co. - Puerto Rico, 2014 U.S. App. LEXIS 5943 (1st Cir. March 31, 2014). Regulators ordered the closure of the insured bank and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver. FDIC concluded certain bank directors and officers had breached their fiduciary duty by jeopardizing the bank's financial soundness. The FDIC concluded these breaches had caused more than $367 million in losses and demanded reimbursement by the directors and officers. 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

California to Require Disclosure of Construction Defect Claims

October 30, 2013 — CDJ STAFF
California Governor Jerry Brown has signed Senate Bill 625. Starting in July 2014, anyone who sells a home will have to disclose all claims made of construction defects and the status of these claims. Read the court decision
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