More Fun with Indemnity and Construction Contracts!
June 04, 2024 —
Christopher G. Hill - Construction Law MusingsWell, I’m back. It’s been quite a while since my last post due to some busy family times and running my law practice. Hopefully, you will hear from me more often in the future.
Now. . . on with the post:
I have often discussed indemnity provisions here at Construction Law Musings. I’ve posted on a range of things relating to indemnity from when those
sticky clauses are unenforceable to
what to look out for in such a clause when reviewing your construction contract. A recent case out of Fairfax examines another wrinkle in these indemnity clauses. In
Leesburg Pike, Falls Church, LLC v. Paramount Constr. Servs., LLC, the Court examined the language of a fairly typical indemnity clause in a construction contract.
The general facts of the case are as follows. The Plaintiff alleged that it owns the property at 6129 Leesburg Pike, that it entered into a contract with Paramount Construction Services LLC to install clothes washers and dryers in individual units at the property, and that, in the process, Paramount (or one of its subcontractors) negligently severed a water pipe, which caused significant damage to the property. The plaintiff’s property insurance carrier agreed to pay the plaintiff $2,598,918.41. But the actual damages exceeded that payment by $952,020.90. The plaintiff sued Paramount for $952,020, pursuant to an indemnity provision in the contract. Paramount demurred to the Complaint arguing that the indemnity clause did not apply to create liability for Paramount.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Helsinki is Building a Digital Twin of the City
May 20, 2019 —
Aarni Heiskanen - AEC BusinessThe capital of Finland first tested city modeling as long back as 1987. But the most recent model of the Kalasatama district demonstrates the new state-of-the-art possibilities of this technology: creation of a highly accurate digital twin of the city.
My hosts, Helsinki’s city modeling specialists Jarmo Suomisto and Enni Airaksinen, showed me their latest projects. One of them offered a glimpse of history through a lens of the future.
With 3D glasses on, I was able to experience the unrealized city plan made by Eliel Saarinen, the father of the world-renowned architect Eero Saarinen. The virtual model in question was a digitized version of a huge physical model from 1915. Being able to stroll the streets and fly over the roofs of the imagined city really made me understand how awesome the original design was. I had seen a scale model of this same plan while it was laid in the foyer of the Museum of Finnish Architecture many years ago, but this experience was quite different.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Newmeyer & Dillion Attorneys Selected to the 2016 Southern California Super Lawyers Lists
June 09, 2016 —
Newmeyer & Dillion LLPNEWPORT BEACH, Calif. – JUNE 6, 2016 – Prominent business and real estate law firm
Newmeyer & Dillion LLP is pleased to announce that three of the firm’s attorneys,
Jennifer L. Ferrentino,
Robyn E. Frick and
Michael B. McClellan were selected to the
Southern California Super Lawyers 2016 Rising Stars list for business litigation. Each year, no more than 2.5 percent of the lawyers in the state are selected by Super Lawyers to receive this honor. The attorneys will be recognized in the July 2016 issues of Super Lawyers Magazine, Los Angeles Magazine and Orange Coast magazine.
In addition, twelve of the firm’s Newport Beach attorneys were selected to the
2016 Southern California Super Lawyers list, an honor given to no more than five percent of the lawyers in California.
Michael S. Cucchissi, Real Estate
Mark S. Himmelstein, Construction Litigation
Jane M. Samson, Real Estate
Jeffrey M. Dennis, Construction Litigation
Charles S. Krolikowski, Eminent Domain
Robert K. Scott, Insurance Coverage
Gregory L. Dillion, Business Litigation
Thomas F. Newmeyer, Business Litigation
Michael J. Studenka, Employee Litigation: Defense
Joseph A. Ferrentino, Construction Litigation
John A. O'Hara, Construction Litigation
Carol S. Zaist, Business Litigation
Making the list since it was originally published in 2004 is co-founding litigation partner
Greg Dillion who was again selected to the
Top 50: 2016 Orange County Super Lawyers List. In addition,
Jennifer L. Ferrentino, Robyn E. Frick, Jane M. Samson and
Carol S. Zaist were listed in the
2016 Top Women Attorneys in Southern California by Super Lawyers.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The patented selection process includes independent research, peer nominations and peer evaluations. The Rising Stars list is developed using the same selection process except a candidate must be either 40 years old and younger or in practice for 10 years or less.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
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Congratulations to Partner Madeline Arcellana on Her Selection as a Top Rank Attorney in Nevada!
July 02, 2024 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara, LLP is proud to announce that Las Vegas Partner
Madeline Arcellana was once again selected by Nevada Business Magazine as a Top Rank Attorney in Nevada for her work in Civil Litigation, General Liability, and Personal Injury!
Nevada Business Magazine‘s Top Rank Attorneys list is comprised of attorneys in both private and public practice who are voted for by nearly 3,000 Nevada-licensed attorneys.
The attorneys on this list are at the top of their field and each nomination is put through an extensive verification process. To view Nevada’s 2024 Top Rank Attorneys, please click
here.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
Illinois Supreme Court Holds That the Implied Warranty of Habitability Does Not Extend to Subcontractors
March 04, 2019 —
Michael J. Ciamaichelo - The Subrogation StrategistThe implied warranty of habitability allows a homeowner to recover damages for latent defects that interfere with the intended use of a home. In Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, 2018 Ill. LEXIS 1244 (2018), the Supreme Court of Illinois held that buyers of new homes cannot assert claims for breach of the implied warranty of habitability against subcontractors involved in the construction of the homes because the subcontractors have no contractual relationship with the homeowners and the damages are purely economic. As the court explained, the implied warranty of habitability is a creature of contract (not tort) and, therefore, only exists when there is contractual privity between the defendants and the homeowners.
In Sienna, a group of condominium unit owners alleged that their new homes contained latent construction defects and asserted claims against the various parties involved in the construction and sale of the homes, including claims against the defendant subcontractors for breach of the implied warranty of habitability. The plaintiffs contracted with the property developer to purchase the homes, but the plaintiffs had no contractual relationship with the subcontractors involved in the construction of the homes. The Sienna court, overturning the decisions of the trial court and the appellate court, granted the subcontractors’ joint motion to dismiss the plaintiff’s claims for the implied warranty of habitability because the plaintiffs had no contractual relationship with the subcontractors and the damages were purely economic.
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Michael J. Ciamaichelo, White and Williams LLPMr. Ciamaichelo may be contacted at
ciamaichelom@whiteandwilliams.com
NJ Court Reaffirms Rule Against Coverage for Faulty Workmanship Claims and Finds Fraud Claims Inherently Intentional
September 20, 2021 —
Anthony L. Miscioscia & Frank J. Perch, III - White and Williams LLPAwarding summary judgment to an insurer under both liability and directors & officers (D&O) coverage parts, a New Jersey trial court reaffirmed the principle that claims of defective workmanship without resulting “property damage” are not covered under a general liability policy, and further dismissed claims for fraud and breach of fiduciary duty, finding that such claims were inherently intentional and do not state a covered “occurrence.”
In Velez v. AR Management Company, et al., 2021 N.J. Super. Unpub. LEXIS 1675 (Law Div. Bergen Co. Aug. 10, 2021), owners of a condominium unit rebuilt after a fire sued the condominium association, several association board members, the association’s property management company and the general contractor for the reconstruction work. The owners’ suit alleged faulty workmanship and incomplete repairs. In addition, the owners asserted fraud and breach of fiduciary duty claims against the management company, alleging conflicts of interest and self-dealing between the management company and the general contractor, which had common ownership.
In a third-party complaint, the management company sought coverage from the condo association’s liability and D&O insurer. The court dismissed the D&O coverage claim, noting that the management company was not a director or officer or otherwise entitled to insured status for the D&O coverage part.
Reprinted courtesy of
Anthony L. Miscioscia, White and Williams LLP and
Frank J. Perch, III, White and Williams LLP
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Mr. Perch may be contacted at perchf@whiteandwilliams.com
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Understand Agreements in Hold Harmless and Indemnity Provisions
June 06, 2022 —
Jeffrey Cavignac - Construction ExecutiveOne of the most important provisions in a construction contract is the indemnity provision. An indemnity provision, which usually includes a requirement to hold harmless and defend another party, is included in nearly all construction contracts. Generally speaking, the upstream party (a general contractor or owner, for example) is attempting to shift risk to a downstream party (the general contractor or a subcontractor). In simple terms, subject to certain parameters, the downstream party is agreeing to be responsible for the upstream parties’ mistakes.
DEFINING INDEMNIFICATION
Insurance brokers focused on development and construction businesses get asked frequently: “If we sign this, are we insured?” It would be great if this could be answered “yes” or “no,” but life is rarely that straightforward. To understand whether a specific indemnification is insurable, we have to drill down on the actual provision. Let’s look at a typical indemnification below:
“To the fullest extent permitted by law the Contractor shall indemnify, defend and hold harmless the owner, architect, architect’s consultants and agents and employees of any of them from and against any claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the work whether caused in whole or in part by the contractor, a subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable.”
Reprinted courtesy of
Jeffrey Cavignac, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Contractual Assumption of Liability Does Not Bar Coverage
August 27, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe Michigan Court of Appeals rejected the insurer's argument that coverage was barred for the insured's contractual assumption of liability of another. Travelers Prop. Cas. Co. of Am v. Peaker Serv., Inc., 2014 WL 3605680 (Mich. Ct. App. July 22, 2014).
The contractor was hired to install an "electronic over-speed system" at the University of Michigan. The hope was that the new system would prevent the steam turbines at the central power plant from turning too quickly. The parties' contract provided,
“Section 15.18. Supplier Damage to University Property. Without regard to any other section of the Agreement, Supplier shall be responsible for the costs to return to ‘as was’ condition from any damage caused to the building, grounds, or other equipment and furnishings caused in whole or part by Supplier Personnel while performing activities arising under this Agreement.”
The contractor improperly calibrated the system, causing one of the university's turbines to operate at twice the safe operational speed, causing significant damage to the generator equipment. The university sued the contractor for more than $3 million in damages. Travelers defended, but filed a declaratory judgment action, contending that coverage did not exist because the "contractual liability" exclusion applied. Section 15.18 of the contract purportedly constituted an "assumption" of the insured's own liability, and was therefore not covered under the CGL policy.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
