Kiewit Hired as EPC for Fire-Damaged Freeport Gas Terminal Fix
September 19, 2022 —
Mary B. Powers - Engineering News-RecordFreeport LNG’s $13.5-billion natural gas liquefaction plant and export terminal in Texas, closed since a June 8 fire and explosion that damaged the facility, said it will not partially reopen until possibly mid-November, and not fully operate until next March—the third delay it has announced.
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Mary B. Powers, Engineering News-Record
ENR may be contacted at enr@enr.com
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DoD Issues Guidance on Inflation Adjustments for Contractors
August 15, 2022 —
Jennifer Harris & Abby Salinas - ConsensusDocsThe Department of Defense (“DoD”) recently issued a memorandum to contracting officers (“COs”) guiding the use of economic price adjustment (“EPA”) clauses to address inflation-related cost increases. The memorandum, entitled Guidance on Inflation and Economic Price Adjustments, comes as the year-over-year inflation rate rose to 8.6% in May, and contractors with fixed-price contracts seek ways to recover their rising costs. EPA clauses allow the parties to mitigate cost risks that present themselves as a result of circumstances beyond the contractor’s control, e.g., inflation and supply chain price fluctuations. Generally, an EPA clause will dictate that the Government bear the cost risk up to a mutually agreed-upon ceiling. EPA clauses apply to the cost portion of a contract, but do not normally apply to the profit. DFARS PGI 216.203-4.
Memorandum: No CO Authority to Grant Contractual Relief Absent an EPA Clause
The memorandum states that absent an existing EPA clause, COs do not have the authority to provide contractual relief for unanticipated inflation under a firm-fixed-price contract.
Reprinted courtesy of
Jennifer Harris, Peckar & Abramson, P.C. (ConsensusDocs) and
Abby Salinas, Peckar & Abramson, P.C. (ConsensusDocs)
Ms. Harris may be contacted at jharris@pecklaw.com
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New Jersey Rules that Forensic Lab Analysts Can’t be Forced to Testify
August 06, 2014 —
Beverley BevenFlorez-CDJ STAFFThe New Jersey Law Journal reported that the New Jersey Supreme Court has rejected a rule that would have required “laboratory analysts who prepare forensic reports in criminal cases be available for cross-examination at trial.”
The court stated that “requiring every analyst who was involved in the testing to be available for questioning by the defense was not required by the U.S. Constitution's Sixth Amendment Confrontation Clause and that doing so would create ‘practical drawbacks that range from moderate to severe.’”
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CDJ’s #9 Topic of the Year: Nevada Supreme Court Denies Class Action Status in Construction Defect Case
December 31, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Sean Whaley of the Las Vegas Review-Journal, “The Nevada Supreme Court has rejected a request for class action status for claims of damaged stucco from faulty construction by Del Webb Communities involving nearly 1,000 Sun City Summerlin residents.” However, “the court upheld the award of damages to 71 homeowners following a jury trial in Clark County District Court in 2008.” Whaley reported that this construction defect case was touted as the largest in Nevada history.
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A Homeowner’s Subsequent Action is Barred as a Matter of Law by way of a Prior “Right to Repair Act” Claim Resolved by Cash Settlement for Waiver of all Known or Unknown Claims
February 26, 2015 —
Richard H. Glucksman, Esq., Jon A. Turigliatto, Esq., and David A. Napper, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinDavid Belasco v. Gary Loren Wells et al. (2015) B254525
OVERVIEW
In a decision published on February 17, 2015, the Second District Court of Appeal made clear that settlement agreements containing waivers of unknown claims in connection with a construction of a property, absent fraud or misrepresentation, will be upheld. In brief, the homeowner plaintiff had made a claim against the builder pursuant to California Code of Civil Procedure Section 896 (“Right to Repair”) and settled for a cash payment and obtained a Release of all Claims including for all known and unknown claims. The court held that homeowner’s subsequent construction defect claim was barred pursuant to the terms and conditions of the earlier release.
DISCUSSION
Plaintiff and Appellant, David Belasco ("Belasco"), purchased a newly construction home in Manhattan Beach from builder Gary Loren Wells ("Wells"). Two years after purchasing the property, Belasco filed a Complaint for construction defects, which eventually resulted in settlement between the parties. The settlement agreement included a California Civil Code Section 1524 waiver of all known or unknown claims with the word "claims" defined in part as “any and all known and unknown construction defects." Six years later in 2012, Belasco filed a Complaint alleging a claim, amongst others, that the defective and leaky roof breached the statutory warranty on new construction under California Civil Code section 896 ("Right to Repair Act").
Relying on San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, Wells and Wells' surety, American Contractors Indemnity Company (collectively "Wells"), filed a motion for summary judgment contending that the 2012 action was barred by the settlement of Belasco’s prior Complaint against Wells for construction defects to his home. When the trial court ruled in favor of Wells, Belasco appealed. Belasco, a patent attorney, made the following contentions:(1) the general release and section 1542 wavier in the settlement agreement for patent construction defects is not a "reasonable release" of a subsequent claim for latent construction defects within the meaning of section 929 and the “Right to Repair” Act; (2) a reasonable release can only apply to a "particular violation" and not to a latest defect under the language of section945.5, subdivision (f), and the settlement was too vague to be valid because it does not reference a "particular violation;" (3) section 932 of the California Civil Code specifically authorizes an action on "[s]subsequently discovered claims of unmet standards;" (4) public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and (5) a genuine issue of material fact exists concerning Belasco's fraud and negligence claims that would have voided the settlement pursuant to section 1668.
Pursuant to the "Right to Repair Act" Section 929 subsection (a), a builder can make a cash offer in lieu of a repair and the homeowner is free to accept or reject such offer. Section 929subsection (b) goes on to state that
"[t]he builder may obtain a reasonable release in exchange for the cash payment. The builder may negotiate the terms and conditions of any reasonable release in terms of scope and consideration in conjunction with a cash payment under this chapter."
The Second District Court of Appeal ruled that the prior cash settlement, with a release and section 1524 wavier, was a "reasonable release" under the language of California Civil Code Section 929.
On multiple occasions, the Court noted that Belasco is an attorney and was represented by an attorney during the negotiation of the settlement agreement. By executing the agreement with express language regarding what claims were to be release, Belasco released Wells of "any and all claims" due to "any and all known and unknown construction defects." The Court reasoned that because Belasco is an attorney in his own right, he should have understood the import of the Section 1542 waiver and had the opportunity to reject or revise the settlement agreement prior to binding himself to it. The Court further found that the agreement "could not have been more clear" regarding the waiver of all unknown and known construction defect claims and therefore was not vague. Belasco's additional contentions were found to be without merit because Belasco availed himself of the statutory remedy of a cash settlement in lieu of repairs and voluntarily entered into a negotiated settlement agreement. Lastly, Belasco failed to present any evidence regarding his misrepresentation claim.
When a homeowner files a "Right to Repair Act" claim, often it seems that only two options exist: either repair the alleged defects or go to court. However, Belasco is a reminder to builders that the "Right to Repair Act" does offer an avenue for settlement. The Second District Court of Appeal presented a clear, unqualified opinion regarding the validity and enforceability of settlement agreements releasing all known or unknown construction defects in a single family home case. The Court will hold parties to the settlements they agree to. This is especially so when one of the parties is an attorney and provides deposition testimony expressly acknowledging that he understood the scope of the agreement. Attorneys for builders should always include a waiver of all known and unknown claims, which pursuant to Belasco and San Diego Hospice, will ensure that any future claims at the property will be effectively barred by the terms of the settlement agreement.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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Florida Property Bill Passes Economic Affairs Committee with Amendments
April 14, 2011 —
Beverley BevenFlorez CDJ STAFFThe Florida Property Bill (HBB 803) was passed by the Economic Affairs Committee by a vote of 11-7, according to Property Casualty 360, after adopting nine new amendments. The additions to the bill included limiting notice of claims to a set number of years, extending the statute of limitation on property claims from five years to six years, among others.
HB 803 and SB 408, the Senate companion bill, focus primarily on residential property insurance. They make changes to the Florida Hurricane Catastrophe Fund, while also promoting increased notification of policy changes to policyholders. Sections of the bills provide minor fixes such as renaming Citizens Property Insurance Corporation to Taxpayer-Funded Property Insurance Corporation. However, other sections of the bills contain more significant policy changes such as sinkhole coverage and hurricane claims.
The bills’ intent, according to the SunSentinel.com, is to reduce fraudulent claims and to bring new insurers into the insurance market. However, SunSentinel.com also reports that the bills may drastically increase property insurance premiums.
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Construction Case Alert: Appellate Court Confirms Engineer’s Duty to Defend Developer Arises Upon Tender of Indemnity Claim
January 27, 2010 —
Steven M. CvitanovicIn the recent case of UDC-Universal Development, L.P. v. CH2M Hill, 2010 Cal.App.LEXIS 47 (filed January 15, 2010), the Sixth District Court of Appeal provided a stunning illustration of the far-reaching effects of the California Supreme Court’s holding in Crawford v. Weather Shield Manufacturing Inc. (2008) 44 Cal.4th 541. In Crawford, the Court held the duty to defend under an indemnity agreement arose upon the mere tender of defense of a claim covered by the indemnity.
In the UDC case, CH2M Hill provided engineering and environmental planning services to developer UDC on a project that ultimately wound up in a construction defect lawsuit by the homeowners association ( HOA ). UDC tendered its defense to CH2M Hill, the tender was rejected, and UDC filed a cross-complaint for negligence, breach of contract and indemnity against CH2M Hill and others. After the HOA’s construction defect claims were settled, UDC proceeded to trial against CH2M Hill. The jury found in favor of CH2M Hill on the claims for negligence and breach of contract. At the request of the parties prior to trial, the trial court ruled on the application of the indemnity agreement in light of Crawford and, in so doing, found that the defense obligation arose upon the tender and that CH2M Hill breached that duty despite the jury finding in favor of CH2M Hill.
The Court of Appeal affirmed, noting that the defense obligation arose as soon as the defense was tendered and did not depend on the outcome of the litigation, and that the HOA’s general description of the defects along with an allegation that Doe engineers were negligent triggered the duty to defend.
Although this case did not expand the crushing impact of Crawford’s holding, it is
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Bond Principal Necessary on a Mechanic’s Lien Claim
October 23, 2018 —
Christopher G. Hill - Construction Law MusingsAs anyone that reads this construction law blog knows, mechanic’s liens are a big part of the Virginia landscape for a construction attorney like me.
One option for dealing with a mechanic’s lien here in Virginia that we have not discussed but so often is the ability to “bond off” a lien. In short, the Virginia statute allows a party to essentially substitute a bond valued at a court set multiple of the principal amount of the mechanic’s lien for the memorandum. In exchange, the lien is released of record. Any enforcement action can still proceed with security for the claimant and the property owner feeling better about things because there will be no lien on the title to the land.
In many ways this process provides an easier path to resolution for both owner and claimant. First of all, the claimant does not have to deal with a bank or other interest holders in the property (though a recent case discussed below reminds us that certain other parties are necessary). Second of all, the owner does not have the cloud on the title of a mechanic’s lien that may have been filed by a subcontractor over which he has no control.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
