Fairfield Connecticut Building Expert Directory

Coverage Issues: When You Need Your Own Lawyer in a Construction Defect Suit

October 16, 2013 — CDJ STAFF
When an insurer hires an attorney on behalf of a client in a construction defect suit, that attorney is the client’s lawyer, but as Mike Curry writes on the website of Pendleton Wilson Hennessey & Crow, PC, a point may come when you need to hire your own additional attorney. Even though an insurance company client may refer to the lawyer as “the insurance carrier’s attorney,” Mr. Curry cites the words of the Colorado Bar Association’s ethics committee, “the insured is the client to whom the lawyer’s duty of loyalty is owed, regardless of any retention agreement the lawyer may have with the carrier.” Mr. Curry then offers the example of what happens when the insurance company advises its client that it may not cover. “You presumably call your attorney and ask him to explain what’s going on, what the letter means, and what to do next.” All the attorney can say is “I cannot offer legal advice on coverage issues.” This is the limitation of what Mr. Curry refers to as “the tripartite relationship.” The attorney has been retained for issues related to the construction defect dispute between the insured and the plaintiff. Not between the insurer and its insured. The attorney has, as he points out, a fiduciary obligation to the insurance company. When coverage issues arise, “an independent attorney — one you hire — can help you with the coverage issues that your insurance-assigned attorney simply cannot address.” He further notes that “personal counsel owes no fiduciary obligation to the insurance company,” and can be “utilized to persuade the carrier to provide coverage or settle the case.” Read the court decision
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Insurer’s Duty to Defend: When is it Triggered? When is it Not?

February 18, 2015 — Zach McLeroy – Colorado Construction Litigation
In Colorado it is well recognized that an insurer has a broad duty to defend its policyholder against pending claims. An insurer’s duty to defend is triggered when the underlying complaint against the insured alleges any set of facts that might fall within the coverage policy. Greystone Construction, Inc. v. National Fire & Marine Insurance, Co., 661 F.3d 1272, 1284 (10th Cir. 2011). Even if the insurer’s duty to defend is not clear from the pleadings filed against the insured, the insurer’s duty to defend is triggered if the claim is potentially or arguably within the policy coverage. Id. If there is any doubt as to whether a theory of recovery falls within the policy coverage, such doubt is decided in favor of the insured and the insurer’s duty to defend is triggered. Id. In order to avoid this duty to defend, an insurer must show that an exemption to the policy applies and that no other basis exists for coverage under the policy. In Cornella Brothers, Inc. v. Liberty Mutual Fire Insurance Company, 2014 WL 321335 (D. Colo. Jan. 29, 2015), the Court was to determine whether Liberty Mutual Fire Insurance Company (“Liberty Mutual”) had a duty to defend a lawsuit filed against its insured, Cornella Brothers, Inc. (“Cornella”). The underlying lawsuit alleged construction defects at a recharging facility. Upon being named a party to the underlying litigation, Cornella provided notice to Liberty Mutual and demanded that Liberty Mutual defend Cornella. Read the court decision
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Reprinted courtesy of Zach McLeroy, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLeroy may be contacted at mcleroy@hhmrlaw.com

How to Mitigate Lien Release Bond Premiums with Disappearing Lien Claimants

May 20, 2019 — Scott MacDonald - Ahlers Cressman & Sleight PLLC
It is one of those dreaded business situations that plagues the construction industry, especially in times of economic downturn—what to do when a lower-tier entity files a lien against a property then disappears. It has happened to countless owners, general contractors, subcontractors, and even some particularly unlucky sub-tier subcontractors and suppliers. Here is how it arises: a project is moving along, then performance or payment issues arise, and a company that is over extended or unwilling to continue work stops performance, walks off the job, and files a lien against the property for whatever amounts were allegedly unpaid. Often, the allegedly unpaid sums were legitimately withheld due to a good faith dispute over payment/performance, and it is not unusual for the defaulting entity to not be entitled to any of the sums claimed in the lien. Regardless, the lien stays on the property, and pressure is applied from the “upstream” entities to the party who contracted with the defaulting entity to “deal” with the lien. Oftentimes, a contract will require the parties to “deal” with a lien by obtaining a lien release bond (“release bond”). For those lucky enough to not have encountered this issue, a release bond is a nifty statutory device whereby a surety agrees to record a release bond for the full claimed amount of the lien, with the release bond substituting in for the liened property, effectively discharging the property from liability under the lien. In other words, the lien is released from the property and attaches to the release bond. If the lien claimant recovers on its lien, it is technically satisfied by the surety providing the release bond (or the party who agrees to indemnify and defend the release bond). In exchange for delivering the release bond, the surety demands yearly premiums be paid on the release bond amount Read the court decision
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Reprinted courtesy of Scott MacDonald, Ahlers Cressman & Sleight PLLC
Mr. MacDonald may be contacted at scott.macdonald@acslawyers.com

Surge in Home Completions Tamps Down Inflation as Fed Meets

June 17, 2015 — Carlos Torres – Bloomberg
American builders are tamping down what little inflation there is. Construction companies completed 392,000 buildings with five or more units at an annualized rate in May, the most since 1988, Commerce Department figures showed Tuesday in Washington. “The pickup in demand is pushing up rents and also creating more incentive for builders to put up more units,” said Michael Hanson, a senior economist at Bank of America Corp. in New York. The jump in completions “helps offset some of the upward pressure we’ve seen” on rents, said. Read the court decision
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Reprinted courtesy of Carlos Torres, Bloomberg

New WOTUS Rule

November 13, 2023 — David R. Cook Jr. - Autry, Hall & Cook, LLP
The U.S. Army Corps of Engineers amended the regulation to conform the definition of “waters of the United States” to conform to the Supreme Court’s ruling in Sackett v. Environmental Protection Agency. See the prior blog post about the Supreme Court’s ruling: Sackett v. Environmental Protection Agency – Construction and Utility Law | Atlanta | AHC Law Federal Register :: Revised Definition of “Waters of the United States”; Conforming Reprinted courtesy of David R. Cook Jr., Autry, Hall & Cook, LLP Mr. Cook may be contacted at cook@ahclaw.com Read the full story... Read the court decision
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Fraud and Construction Contracts- Like Oil and Water?

December 31, 2014 — Christopher G. Hill – Construction Law Musings
We have discussed the interaction of fraud and breach of contract actions on occasion here at Construction Law Musings. In most cases the two do not mix. Between the economic loss rule and the general desire of Virginia courts to keep contract actions and tort actions separate, most of the time it is impossible to make a fraud action relating to a contract stick in a construction context. The Virginia Supreme Court recently confirmed this fraud/contract distinction. As discussed in the Virginia Real Estate Land Use & Construction Law blog (Thanks Heidi!), Station No. 2, LLC v. Lynch, et. al. strongly re-states the Virginia courts’ strong reluctance to allow a breach of contract turn into a claim for fraud. Without re-iterating the great discussion of the facts of the case found in the post by Heidi Meizner, suffice it to say that certain contractual promises between and among the parties were not fulfilled much to Station 2, LLC’s detriment. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Ritzy NYC Tower Developer Says Residents’ Lawsuit ‘Ill-Advised’

January 17, 2022 — Chris Dolmetsch - Bloomberg
The developers of a Manhattan skyscraper that has become one of New York City’s toniest residences said the condo board is trying to squeeze money out of them with a lawsuit that claims bogus design flaws. The board is seeking $250 million from builders of the 1,396-foot residential tower at 432 Park Avenue that opened in 2015 on the so-called Billionaire’s Row. Their suit alleges the company that developers CIM Group and Macklowe Properties formed to build the structure failed to take into account its unusual height, leading to flooding, noise, vibrations and elevators that are prone to malfunctions. In a response to the suit filed Wednesday, the company called the building “a treasure” and the suit was “ill-advised.” While the structure needed to be “fine-tuned” when residents started to move in, the board stopped the builders from accessing the facilities and finishing the job “while manufacturing an ever-increasing list of demands,” most of which were not required, according to court filings. Read the court decision
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Reprinted courtesy of Chris Dolmetsch, Bloomberg

Statute of Frauds Applies to Sale of Real Property

April 19, 2022 — David Adelstein - Florida Construction Legal Updates
In law school, one of the first legal doctrines we learn is known as the “statute of frauds.” The statute of frauds is essentially a defense to a contract enforcement action claiming the contract is unenforceable due to the statute of frauds. In other words, this doctrine is raised when one party seeks to enforce a contract. The other party argues, “not so fast,” because the contract is NOT enforceable in light of the statute of frauds. Common scenarios where the statute of frauds comes into play are with transactions involving real property or agreements where services are not to be performed within one year. The statue of frauds doctrine is contained in Florida Statute s. 725.01:

No action shall be brought whereby to charge any executor or administrator upon any special promise to answer or pay any debt or damages out of her or his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person or to charge any person upon any agreement made upon consideration of marriage, or upon any contract for the sale of lands, tenements or hereditaments, or of any uncertain interest in or concerning them, or for any lease thereof for a period longer than 1 year, or upon any agreement that is not to be performed within the space of 1 year from the making thereof, or whereby to charge any health care provider upon any guarantee, warranty, or assurance as to the results of any medical, surgical, or diagnostic procedure performed by any physician licensed under chapter 458, osteopathic physician licensed under chapter 459, chiropractic physician licensed under chapter 460, podiatric physician licensed under chapter 461, or dentist licensed under chapter 466, unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES