Caterpillar Said to Be Focus of Senate Overseas Tax Probe
March 26, 2014 —
Richard Rubin and Jesse Drucker - BloombergA U.S. Senate investigative panel is examining Caterpillar Inc. (CAT) and whether the company improperly avoided U.S. taxes by moving profits outside the country, said three people familiar with the inquiry.
The Senate’s Permanent Subcommittee on Investigations will hold a hearing in early April, said two of the people. They spoke on condition of anonymity before an official announcement.
Rachel Potts, a spokeswoman for Caterpillar, declined to comment. Two staff members for the subcommittee declined to comment.
In 2009, Daniel Schlicksup, an employee who had worked on tax strategy, alleged in a lawsuit in federal court that Caterpillar used a “Swiss structure” to shift profits to offshore companies and avoid more than $2 billion in U.S. taxes. He also alleged that Caterpillar used a “Bermuda structure” involving shell companies to return profits to the U.S. without paying required taxes.
Mr. Rubin may be contacted at rrubin12@bloomberg.net; Mr. Drucker may be contacted at jdrucker4@bloomberg.net
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Richard Rubin and Jesse Drucker, Bloomberg
Mexico Settles With Contractors for Canceled Airport Terminal
August 26, 2019 —
Eric Martin - BloombergMexico City's airport authority settled a dispute with builders on an 85 billion peso ($4.45 billion) contract for the terminal at a new Mexico City airport that President Andres Manuel Lopez Obrador canceled a month before taking office.
Grupo Aeroportuario Ciudad de la Mexico will pay 14.2 billion pesos, equivalent to 16.7% of the contract's total cost, to Constructora Terminal de Valle de Mexico, a consortium that includes Carlos Slim's Operadora Cicsa, the Communications and Transportation Ministry said in an emailed statement. The contracts represented 45% of the airport's total cost, the ministry said.
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Eric Martin, Bloomberg
New York Appellate Court Holds Insurer’s Failure to Defend Does Not Constitute a “Reasonable Excuse” Required to Overturn Judgment
January 21, 2019 —
Timothy Carroll & Anthony Miscioscia - White and WilliamsA recent opinion by the New York Supreme Court, Appellate Division (Second Department) highlights the potential risks for an insurer leaving an insured unrepresented while the insurer pursues other parties or insurers who may be primarily responsible for defending the insured. In refusing to overturn a default judgment entered against an insured while its insurer knew that a complaint had been filed but refused to defend, the New York court’s decision raises questions about how claims adjusters are to effectively manage new claims to prevent a default judgment being entered against the insured, while at the same time ensuring that the appropriate party or insurance company handles the insured’s defense.
In Kaung Hea Lee v. 354 Management Inc., 2018 N.Y. App. Div. LEXIS 7749 (N.Y. App. Div. Nov. 14, 2018) (354 Management) the underlying plaintiffs obtained a default judgment against the defendant insured due to its failure to answer the plaintiffs’ complaint. The plaintiffs then moved to determine the extent of damages to which they were entitled by virtue of the default judgment. The defendant opposed that motion, relying on an affidavit from a senior liability claims adjuster employed by the defendant’s insurer. “In the affidavit, the claim adjuster stated that she did not assign an attorney to answer the complaint because the codefendant . . . was contractually obligated to defend and indemnify the defendant [insured], and she had been attempting to have either [the codefendant] or its insurer provide an attorney” for the defendant. However, it was determined that the claims adjuster knew about the plaintiffs’ complaint two weeks after the plaintiffs served it on the defendant and months before the plaintiffs moved for default judgment. Despite this knowledge, the defendant’s insurer did not provide a defense or, apparently, obtain an extension of time to respond to the complaint, which led to the default judgment.
Reprinted courtesy of
Timothy Carroll, White and Williams and
Anthony Miscioscia, White and Williams
Mr. Carroll may be contacted at carrollt@whiteandwilliams.com
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
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Court Orders House to be Demolished or Relocated
April 26, 2011 —
Beverley BevenFlorezCDJ STAFFDecision Affirmed in Central Arkansas Foundation Homes, LLC v. Rebecca Choate
The Arkansas Court of Appeals affirmed the decision by the trial court in Central Arkansas Foundation Homes, LLC v. Rebecca Choate. In the trial case, Central Arkansas Foundation Homes (CAFH) sought payment for a home built for Choate, while Choate alleged that the builders committed multiple construction defects including using the wrong foundation materials and positioning the house in the wrong direction.
After the house was built, CAFH contacted Choate regarding payment, however, Choate alleged that the finished product did not match the contract. “ After CAFH completed construction, it obtained permanent home financing for Choate and tried to contact her to close the transaction. Choate did not respond until October 2005, when she sent CAFH a list of alleged construction defects, including that the house was facing in the wrong direction; that it was not built on a slab; and that the fireplace, garbage disposal, driveway, and storage area were missing. CAFH replied to Choate in writing, telling her that she had until January 6, 2006, to close on the house or CAFH would sell it. The correspondence enclosed worksheets showing that the amount Choate would owe at closing exceeded $94,000, which included interest that had accrued on the as-yet unpaid construction loan.”
Initially, the court found in favor of CAFH. “On April 18, 2007, Choate’s attorney withdrew from representing her. Soon thereafter, CAFH’s attorney asked the court to set a final hearing on the case. The attorney purportedly sent Choate a letter by regular mail on May 15, 2007, advising her that the case was set for trial on July 9, 2007. Choate, however, did not appear. CAFH did appear, and its general manager, John Oldner, testified to events leading up to the case and the amount of damages claimed. According to Oldner, the interest on the construction loan had accrued to the point that CAFH now sought $104,965.88 from Choate. The court found in favor of CAFH and entered judgment for that amount, plus attorney fees, on July 18, 2007. The court ruled that CAFH could sell the house and either remit any excess to Choate or look to Choate for the deficiency if the sales price did not cover the judgment.”
However, Choate successfully argued that she did not receive notice of the trial. A new trial was ordered, and the outcome was quite different. “On June 6, 2008, the circuit court entered judgment for Choate, ruling that the house was not in substantial compliance with the parties’ contract and that the contract should be rescinded. The court found that the house suffered from numerous construction defects, that the contract contemplated a slab rather than a concrete-pier foundation, and that CAFH ignored Choate’s complaints that the house was facing the wrong way. The judgment directed CAFH to hold Choate harmless on the construction loan, to deed Choate’s two acres back to her, and to remove the house from Choate’s property.”
The Court of Appeals “found that Choate would be unjustly enriched by retaining the benefit of the septic systems and utility lines that CAFH installed on her land. The court therefore awarded $5340 to CAFH as a quantum-meruit recovery for the value of that work. CAFH contends that the award is not sufficient, but we see no clear error.” In the end, the Court of Appeals provided this reason for declining to reverse the trial court’s decision: “The court in this case apparently concluded that the house constructed by CAFH was so fundamentally at odds with Choate’s contractual expectations that she was not unjustly enriched and should simply be, as nearly as possible, returned to the status quo ante. Accordingly, the court ordered the house removed from her property and permitted CAFH to either relocate the house or salvage the house’s materials and unused appliances. We decline to reverse the court’s weighing of the equities in this manner.”
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Second Circuit Finds Potential Ambiguity in Competing “Anti-Concurrent Cause” Provisions in Hurricane Sandy Property Loss
November 28, 2018 —
CDJ STAFFThe Second Circuit recently held that competing “anti-concurrent cause” provisions in a commercial property policy present a potential ambiguity that could result in favor of coverage for losses sustained by Madelaine Chocolate after storm surge from Hurricane Sandy combined to cause substantial damage to Madelaine’s property and a resulting loss of income.
Madelaine was insured under an all-risk insurance policy issued by Chubb subsidiary Great Northern Insurance Company. By endorsement, Madelaine’s policy added “windstorm” as a covered peril and defined “windstorm” as “wind… regardless of any other cause or event that directly or indirectly contributes concurrently to, or contributed in any sequence to, the loss or damage.” The policy also included a common flood exclusion that removed coverage for loss or damage caused by or resulting from waves, tidal water, or tidal waves, or the rising, overflowing, or breaking of any natural harbors, oceans, or any other body of water, whether driven by wind or not. Like the windstorm endorsement, the flood exclusion contained concurrency language that broadened the exclusion to any loss to which flood contributed, regardless of any other cause or event that directly or indirectly contributed to the loss.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Tae Andrews, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Andrews may be contacted at tandrews@HuntonAK.com
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Construction Defect Claim over LAX Runways
October 22, 2013 —
CDJ STAFFThe city of Los Angeles is claiming that problems with the south runway at Los Angeles International Airport are due to construction defects. The city as filed a lawsuit against four of the firms involved in building the runway, CH2M Hill, R&L Brosamer, HNTB, and Tutor-Saliba Corp. The lawsuit also includes the possibility of naming up to 200 individuals or corporations.
The suit alleges that the firms incorrectly installed the concrete, leading to accelerated wear. As a result, renovation of the runway will likely have to be done earlier than anticipated. The runway was opened in 2007 as part of a safety improvement effort.
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Navigate the New Health and Safety Norm With Construction Technology
August 03, 2020 —
Jeremy Larsen - Construction ExecutiveSafety has always been a pressing issue in construction, and as states reopen and construction projects pick up steam once again, the industry will become even more closely scrutinized than before. Construction safety looks a lot different than it did six months ago. In addition to the concerns around keeping workers safe on construction sites, today’s contractors are faced with a whole new category of risk, and with new health and safety measures that may vary by county, state or region. New requirements range from social distancing and limits on the size of crews, to requiring masks and temperature checks for all workers.
OPERATING IN THE NEW NORM
This sudden onset of COVID-19 put otherwise healthy businesses into a state of chaos that, months later, is still hard to navigate. By March of 2020, reports indicated that nearly one-third of construction projects had come to a halt. Now, as the industry emerges, balancing business continuity efforts with trying to get crews back to work and jobsites moving again will no doubt present challenges. New health and safety measures, plus the fact that no one wants to touch paper in the field, will add another layer of administrative and procedural oversight to the construction process. Of course, these measures are absolutely needed, but construction businesses can’t ignore the fact that it changes the very way projects and jobsites are managed. And, without the right tools in place, it may be a bumpy ride.
Reprinted courtesy of
Jeremy Larsen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Larsen may be contacted at
jeremy.larsen@viewpoint.com
Cable-Free Elevators Will Soar to New Heights, and Move Sideways
January 14, 2015 —
Belinda Lanks – BloombergI live in one of the few buildings in New York that still has a manual elevator. When I ask the operator on the morning shift how he's doing, his well-oiled response is "up and down." For the last 160 years, elevators have travelled a predictably vertical path. That will soon change when the German manufacturer ThyssenKrupp introduces the first fleet of cable-free cars that can also move sideways.
The system, dubbed MULTI, will allow multiple cabs to motor along a single, looping shaft. The cars move by magnetic levitation (the same technology behind some high-speed trains), rather than being pulled by the heavy steel ropes that limit how high skyscrapers can stretch. With MULTI, architects will be able to build spindly towers on small plots formerly deemed untenable for high-rises.
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Belinda Lanks, BloombergMs. Lanks may be contacted at
blanks@bloomberg.net
