Bankrupt Canada Contractor Execs Ordered to Repay $26 Million
April 25, 2022 —
Scott Van Voorhis - Engineering News-RecordJohn Aquino, the former president of a major and now bankrupt Ontario construction contractor, plans to appeal a provincial court ruling that puts him and his associates on the hook for $26.2 million drained from the company, according to his attorney.
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Scott Van Voorhis, Engineering News-Record
ENR may be contacted at enr@enr.com
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Homebuilding Down in North Dakota
October 30, 2013 —
CDJ STAFFOnly eleven new homes have been started this year in the Pierre area in North Dakota. Last year saw 35 homes built in the same area. Brad Lawrence, the Fort Pierre Director of Public Works, blamed last year’s Hurricane Sandy in New Jersey, stating that “superstorm Sandy has just devoured a tremendous amount of building projects.”
Area builders did say that some building materials went up in price after the storm, describing it as an “availability scare,” but some prices went down during the summer of 2013. Susan Ogan, of Neil Ogan Construction said that “our biggest thing is that people cannot find a lot they can afford and still say within their budget for the overall project.”
Although single-family homes aren’t being built, apartments are. “We’ve got a 24-unit apartment going in as we speak,” said Mr. Lawrence. That, some feel, may be responsible for the lack of demand for single-family homes.
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Housing Starts in U.S. Drop to Lowest Level in Three Months
February 23, 2016 —
Michelle Jamrisko – BloombergNew-home construction in the U.S. unexpectedly cooled in January, indicating there is a limit to how much gains in residential real estate will boost growth at the start of 2016.
Housing starts dropped 3.8 percent to a 1.1 million annualized rate, the weakest in three months, from a 1.14 million pace the prior month, a Commerce Department report showed Wednesday in Washington. The median forecast of 76 economists surveyed by Bloomberg was 1.17 million. Permits, a proxy for future construction, were little changed.
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Michelle Jamrisko, Bloomberg
Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.
February 10, 2012 —
CDJ STAFFSafety Control and EMC appealed the judgment in Colorado Casualty Insurance Company versus Safety Control Company, Inc., et al. (Ariz. App., 2012). The Superior Court in Maricopa County addressed “the validity and effect of a Damron agreement a contractor and its excess insurer entered into that assigned their rights to sue the primary insurer.” Judge Johnsen stated, “We hold the agreement is enforceable but remand for a determination of whether the stipulated judgment falls within the primary insurer’s policy.”
The Opinion provides some facts and procedural history regarding the claim. “The Arizona Department of Transportation (“ADOT”) hired DBA Construction Company (“DBA”) to perform a road-improvement project on the Loop 101 freeway. Safety Control Company, Inc. was one of DBA’s subcontractors. As required by the subcontract, Safety Control purchased from Employer’s Mutual Casualty Company (“EMC”) a certificate of insurance identifying DBA as an additional insured on a policy providing primary coverage for liability arising out of Safety Control’s work.”
A collision occurred on site, injuring Hugo Roman. Roman then sued ADT and DBA for damages. “Colorado Casualty tendered DBA’s defense to the subcontractors, including Safety Control. Safety Control and EMC rejected the tender. Roman eventually settled his claims against DBA and ADOT. DBA and ADOT stipulated with Roman for entry of judgment of $750,000; Roman received $75,000 from DBA (paid by Colorado Casualty) and $20,000 from ADOT, and agreed not to execute on the stipulated judgment. Finally, DBA, ADOT and Colorado Casualty assigned to Roman their rights against the subcontractors and other insurers.”
Colorado Casualty attempted to recover what “it had paid to defend DBA and ADOT and settle with Roman. However, Roman intervened, and argued that “Colorado Casualty had assigned its subrogation rights to him as part of the settlement agreement.” The suit was not dismissed, but the Superior Court allowed Roman to intervene. “Roman then filed a counterclaim against Colorado Casualty and a cross-claim against the subcontractors.”
All claims were settled against all of the defendants except Safety Control and EMC. “The superior court ruled on summary judgment that EMC breached a duty to defend DBA and that as a result, ‘DBA was entitled to settle with Roman without EMC’s consent as long as the settlement was not collusive or fraudulent.’ After more briefing, the court held the stipulated judgment was neither collusive nor procured by fraud and that EMC therefore was liable to Roman on the stipulated judgment and for his attorney’s fees. The court also held Safety Control breached its subcontract with DBA by failing to procure completed-operations insurance coverage and would be liable for damages to the extent that EMC did not satisfy what remained (after the other settlements) of the stipulated judgment and awards of attorney’s fees.” Safety Control and EMC appealed the judgment.
Four reasons were given for the decision of the ruling. First, “the disagreement between Roman and Colorado Casualty does not preclude them from pursuing their claims against EMC and Safety Control.” Second, “the settlement agreement is not otherwise invalid.” Third, “issues of fact remain about whether the judgment falls within the EMC policy.” Finally, “Safety Control breached the subcontract by failing to procure ‘Completed Operations’ coverage for DBA.”
In conclusion, the Superior Court affirmed in part, reversed in part, and remanded . “Although, as stated above, we have affirmed several rulings of the superior court, we reverse the judgment against EMC and remand for further proceedings consistent with this Opinion to determine whether the stipulated judgment was a liability that arose out of Safety Control’s operations. In addition, we affirm the superior court’s declaratory judgment against Safety Control but remand so that the court may clarify the circumstances under which Safety Control may be liable for damages and may conduct whatever further proceedings it deems appropriate to ascertain the amount of those damages. We decline all parties’ requests for attorney’s fees pursuant to A.R.S. § 12-341.01 without prejudice to a request for fees incurred in this appeal to be filed by the prevailing party on remand before the superior court.”
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Office REITs in U.S. Plan the Most Construction in Decade
July 09, 2014 —
Brian Louis – BloombergOffice buildings in top U.S. markets are getting so expensive that landlords are choosing to build rather than buy, spurring the most development by real estate investment trusts in at least a decade.
Office REITs, led by Boston Properties Inc. (BXP), Vornado Realty Trust (VNO) and Kilroy Realty Corp. (KRC), are planning to plow almost $11 billion into new projects, triple the amount just two years ago and the most in data going back to 2004, according to research firm Green Street Advisors Inc. Much of that is focused on the coasts, including San Francisco and New York, the areas with the most demand from both tenants and investors.
Prices for office buildings in major markets have surged past peak levels, lifted in part by sovereign-wealth funds and pensions willing to accept lower yields than other investors because they are seeking safe investments. For REITs, which have to answer to shareholders seeking higher returns, building is often a better option than competing with institutional buyers.
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Brian Louis, BloombergMr. Louis may be contacted at
blouis1@bloomberg.net
Genuine Dispute Over Cause of Damage and Insureds’ Demolition Before Inspection Negate Bad Faith and Elder Abuse Claims
June 30, 2016 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Paslay v. State Farm General Ins. Co. (No. B265348, filed 6/27/16), a California appeals court found triable issues of fact regarding whether State Farm breached its contract in paying a water loss, but affirmed summary adjudication for the insurer on bad faith and elder abuse claims based on the genuine dispute doctrine.
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Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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Do You Really Want Mandatory Arbitration in Your Construction Contract?
June 25, 2019 —
Christopher G. Hill - Construction Law MusingsIf you are in construction, you have likley run across (or even drafted) a dispute resolution provision into your construction contract. If you’ve been building for any length of time, you’ve read dispute resolution provisions containing mandatory arbitration clauses. These clauses can be found in the AIA documents and in many of the contracts that I review for my clients in my role as construction lawyer and counselor. More often than not, these arbitration clauses require arbitration (read “private court”) and refer to one of several sets of rules, though most likely the American Arbitration Association (“AAA”) Construction Industry rules. In Virginia, as in most of the United States, these clauses are read liberally and enforced by courts except in limited cases such as waiver.
The main justification for requiring arbitration over litigation is to avoid the fees and expense of the litigation process. In the right circumstances, arbitration does just that. With a carefully drafted arbitration clauses and with the right case that requires expertise in construction that a judge does not have (they have to liten to all manner of disputes so are necessarily generalists), arbitration can and should be a streamlined and less expensive version of litigation.
However, in my time as a construction attorney, I have more often run into situations where the arbitration process is at least equally expensive and frankly not much more streamlined. The additional administrative burden coupled with the possibility of paying for at least half of the hourly charges of one to three arbitrators is often not worth the additional expertise of those arbitrators. Many construction claims simply come down to non-payment and whether the work was performed properly. In my opinion, the fine judges in the Commonwealth of Virginia are more than capable of hearing this evidence and making a ruling.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Hunton Andrews Kurth Associate Cary D. Steklof Selected to Florida Trend’s Legal Elite Up & Comers List for 2019
September 09, 2019 —
Michael S. Levine - Hunton Andrews KurthHunton Andrews Kurth’s insurance coverage practice is proud to congratulate Cary D. Steklof for being selected by his peers to Florida Trend’s Legal Elite Up & Comers list for 2019. A total of 131 attorneys under the age of 40 throughout the state of Florida were recognized for their leadership in the law and their communities. Cary was one of only seven attorneys selected for their skill and counsel in the area of insurance. We congratulate Cary and all of the recipients of this award who have distinguished themselves for their superior advocacy, knowledge, and accomplishments as young professionals.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com