COVID-19 Impacts on Subcontractor Default Insurance and Ripple Effects
April 20, 2020 —
Smith CurrieSubcontractor default insurance (“SDI”) may be described as an alternative to bonding subcontractors. SDI is first-party insurance that compensates the general contractor insured in the event a covered subcontractor fails to fulfill its contractual obligations. Under SDI policies, general contractor insureds are obligated to develop and implement rigorous subcontractor prequalification procedures.
Basic questions and answers about how SDI might come into play and impact the construction industry in response to COVID-19 follow:
Who may make a claim on an SDI policy?
The general contractor may make a claim. An Owner may make a claim if the general contractor becomes insolvent in many cases. Subcontractors may not make claims on SDI policies.
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Smith CurrieThe Smith Currie firm may be contacted at
info@smithcurrie.com
Defining Constructive Acceleration
March 22, 2021 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to the definition of “constructive acceleration,” the case of Fraser Const. Co. v. U.S., 384 F.3d 1354 (Fed.Cir. 2004) is a cited case and contains an instructive definition, quoted below, for proving a constructive acceleration claim.
In a nutshell, a constructive acceleration claim is when the contractor incurs added costs for trying to complete the contract on time when it should be provided extensions of time to perform based on excusable delay (i.e., delay not caused by the contractor). These added costs could be bringing in additional supervision to manage the work, adding manpower to perform the work, working overtime, working weekends, adding more shift work, stacking trades, etc. However, just because a contractor claims they have been constructively accelerated does not make it so. The contractor has to actually ask for an extension of time based on an excusable delay and the owner either denied the extension or unreasonably sat on the request for an extension of time; thus, the contractor incurred significant costs to accelerate in order to finish the project on time because it was deprived of a requested time extension for excusable delay.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
EPA Looks to Reduce Embodied Carbon in Materials With $160M in Grants
August 19, 2024 —
James Leggate - Engineering News-RecordThe U.S. Environmental Protection Agency estimates that construction materials used for buildings and built infrastructure account for more than 15% of global greenhouse gas emissions. The agency now hopes to boost adoption of materials with lower embodied emissions by offering $160 million in grants to better track and ultimately reduce climate pollution associated with those materials.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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Hunton Andrews Kurth Promotes Insurance Recovery Lawyer Andrea (Andi) DeField to Partner
April 05, 2021 —
Lorelie S. Masters - Hunton Insurance Recovery BlogEffective April 1, 2021, Hunton Andrews Kurth LLP has promoted insurance recovery lawyer,
Andi DeField, and six other attorneys, to
partner. “Andi has been a superstar in our practice since the day she arrived,” said insurance recovery practice head,
Walter Andrews, adding that “Andi’s promotion reflects the incredible hard work she has contributed to the practice and outstanding results she has achieved for our clients over the years.” A native of Miami, Andi ascended through the ranks at Hunton in its Miami office, joining the firm as a contract lawyer before earning promotions to associate, counsel and, now, partner. But Andi’s rapid ascension did not come without much hard work. Since joining the firm, “Andi has, year after year, consistently knocked the cover off the ball in terms of her tireless work ethic, the superior results she has achieved and her extraordinary aptitude for marketing herself, our practice and the firms many other practices,” said insurance recovery partner,
Mike Levine. Levine added, “Andi is an amazing lawyer and a true champion for her clients. I’m proud to now call her my partner.”
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Lorelie S. Masters, Hunton Andrews KurthMs. Masters may be contacted at
lmasters@HuntonAK.com
Home Prices in 20 U.S. Cities Rose in June at a Slower Pace
August 27, 2014 —
Lorraine Woellert – BloombergHome prices in 20 U.S. cities rose at a slower pace in the year ended in June as declining affordability and weak wage gains kept appreciation in check.
The S&P/Case-Shiller index of property values increased 8.1 percent from June 2013, the smallest 12-month gain since January 2013, the group reported today in New York.
Price gains are slowing as more houses are coming up for sale and investors retreat to the sidelines. That, combined with an improving job market, could put homeownership within reach of more Americans grappling with disappointing wage growth and strict lending rules.
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Lorraine Woellert, BloombergMs. Woellert may be contacted at
lwoellert@bloomberg.net
United States Supreme Court Limits Class Arbitration
May 13, 2019 —
Jeffrey K. Brown & Raymond J. Nhan - Payne & FearsOn April 24, 2019, the United States Supreme Court held that the Federal Arbitration Act ("FAA") bars orders requiring class arbitration when an agreement is ambiguous about the availability of such a procedure. Lamps Plus v. Varela, 587 U.S. __ , 2019 WL 1780275, (2019). In Lamps Plus, the Court clarified a 2010 case in which it held that a court may not compel arbitration on a class-wide basis when an agreement is silent on the availability of class arbitration. Stolt-Nielsen S.A. v. Animal Feeds Int'l Corp., 559 U.S. 662, 687 (2012).
In Lamps Plus, a 5-4 decision authored by Chief Justice Roberts, the Court explained that because the FAA envisions the use of traditional individualized arbitration, a party cannot be forced under the FAA to submit to class arbitration unless the parties explicitly agreed to do so. Because class arbitration does not share the benefits of traditional arbitration -- lower costs, greater efficiency and speed, and the parties' choice of a neutral -- the FAA requires more than an "ambiguous" agreement to show that the parties bound themselves to arbitrate on a class-wide basis. Unlike individualized arbitration, or even traditional class actions, class arbitration raises serious due process concerns because absent class members will have limited judicial review. Based on these critical differences between individual and class arbitration, the Court reiterated in Lamps Plus that "courts may not infer consent to participate in class arbitration absent an affirmative contractual basis for concluding that the party agreed to do so."
Reprinted courtesy of
Jeffrey K. Brown, Payne & Fears and
Raymond J. Nhan, Payne & Fears
Mr. Brown may be contacted at jkb@paynefears.com
Mr. Nhan may be contacted at rjn@paynefears.com
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Construction News Roundup
September 19, 2022 —
Christopher G. Hill - Construction Law MusingsMuch happened in the last week or so in Virginia construction, both legally and otherwise. I thought a quick roundup was in order.
On the green front we has a great article in ENR relating to the liability risk of green building and the great interest in the
AGCVA Green Building Breakfast.
Also, the Virginia courts decided several interesting cases:
The first is Travelers Property Cas. Co. of America a/s/o Covenant Woods v. Premier Project Mgmt. Group LLC v. Haskell Co. a case that reminds everyone that waivers of third party rights under the contract will be enforced in Virginia.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Risk Protection: Force Majeure Agreements Take on Renewed Relevance
November 30, 2020 —
Michael E. Carson - Construction ExecutiveForce majeure clauses have been standard in contracts dating back hundreds of years in the United States—and even longer in Europe. “Force majeure,” which is French for “greater force,” removes liability for unforeseen events that prevent parties from fulfilling contractual obligations.
In a year defined by the COVID-19 pandemic, these clauses have gone from boilerplate basics to something worthy of further examination and attention in order to minimize risk for all parties involved in a construction project. Prior to COVID-19, drafters might have considered a localized or regional event that would lead to invoking a force majeure clause. It is doubtful, however, that anybody envisioned the impact on such a world-wide scale.
UNDERSTANDING THE AGREEMENTS
Force majeure clauses cover unforeseen events, a broad term that encompasses both acts of God and human-caused incidents. These range from natural disasters like earthquakes and hurricanes to acts of terrorism, strikes, political strife, government actions, war and other difficult- or impossible-to-predict disruptions. When such an event occurs, the force majeure clause attempts to remove, or at least reduce, uncertainty as to the rights and liabilities of the parties to the agreement.
Reprinted courtesy of
Michael E. Carson, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Carson may be contacted at
michael.carson@nationwide.com