Subcontractors Aren’t Helpless
July 26, 2017 —
Christopher G. Hill - Construction Law MusingsAs a construction attorney here in Virginia, I often have the pleasure of assisting subcontractors seeking advice on their all important contracts with general contractors. I often sense that these subcontractors feel that they are at the bottom of the food chain and don’t have the “clout” necessary to push back at all against the myriad clauses in these contracts that seek to push the risk downhill. “Pay if Paid” clauses, subordination of lien clauses (which may or may not be enforceable), indemnification language that seems to make the subcontractor liable for way too much, and the dreaded incorporation clauses , would seem to make the subcontractor hold one big “bag of risk” on any construction project.
While this may seem bleak, never fear, as a subcontractor you are not totally helpless. Remember, you don’t have to take a job from a general contractor that you get a bad feeling about. Often the best indicator of whether you want to move forward is your “spidey sense” that something seems a bit off or that the GC is trying to cram too much down your throat. Use your experience in the construction industry to guide your contracting activities. It is better to avoid the bad job than to take it in the long run. If you are a quality subcontractor (and I know you are or you wouldn’t be reading this), other work will come along because general contractors need good subs to get their work done.
Read the court decisionRead the full story...Reprinted courtesy of
Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
New York Court Finds Insurers Cannot Recover Defense Costs Where No Duty to Indemnify
March 01, 2021 —
Tred R. Eyerly - Insurance Law HawaiiIn a case of first impression, the Supreme Court of New York, Appellate Division, found the insurer had no right to reimbursement of defense costs paid to defend the insured. Am. W. Home Ins. Co. v. Gjoaj Realty & Mgt. Co., 2020 N.Y. App. Div. LEXIS 8286 (N.Y. App. Div. Dec. 30, 2020).
Gjonaj Realty was sued by Viktor Gecaj when he fell from a ladder at the premises managed by Gjonaj Realty. The matter was not tendered to American Western Home Insurance Company until four years after the accident and after a judgment of $900,000 had been entered against Gjonaj Realty after its default. American denied coverage after late notice was given. Thereafter, the Supreme Court in the underling action vacated the default judgment. American then agreed to defend under a reservation of rights.
The Appellate Division reversed the vacatur of the default judgment and reinstated the default against the insured. American then advised Gjonaj Realty that it was denying coverage and reserving its right to recover any fees and costs incurred in defending the underlying action.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Hurricane Handbook: A Policyholder's Guide to Handling Claims during Hurricane Season
October 11, 2021 —
Tracy Alan Saxe, Kelly A. Johnson, Samantha M. Oliveira & R. G. Nelson - Saxe Doernberger & VitaSDV's Natural Disaster Recovery Group presents the Hurricane Handbook: A Policyholder's Guide to Handling Claims during Hurricane Season. This handbook intends to be a practical guide on policyholder issues, both homeowners and business owners alike, when preparing for hurricane season and handling claims after a loss due to a hurricane. The handbook is a living document that will evolve over time, as our Natural Disaster Recovery Group members continue to contribute new and expansive content on the complex issues arising in this area. Remember to check back for additional information and updated content regarding the Hurricane Season Policyholder’s Handbook.
I. Are You Adequately Insured for a Hurricane?
Understanding the various types of coverage policyholders can purchase is vital to weathering the financial storm following a natural disaster.
Reprinted courtesy of
Tracy Alan Saxe, Saxe Doernberger & Vita,
Kelly A. Johnson, Saxe Doernberger & Vita,
Samantha M. Oliveira, Saxe Doernberger & Vita and
R. G. Nelson, Saxe Doernberger & Vita
Mr. Saxe may be contacted at TSaxe@sdvlaw.com
Ms. Johnson may be contacted at KJohnson@sdvlaw.com
Ms. Oliveira may be contacted at SOliveira@sdvlaw.com
Ms. Nelson may be contacted at RNelson@sdvlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Pandemic-Related Construction Materials Pricing Poses Challenges in Construction Lawsuits
September 20, 2021 —
Nick Stewart - Construction ExecutiveDuring the global pandemic the construction industry saw unprecedented inflation in the cost of building supplies as a result of a myriad of issues. On May 7, 2021, lumber prices hit a record high at $1,670.50 per thousand board feet. This was more than six times their pandemic low in April 2020. This significant price spike was related to closure of sawmills during the height of the pandemic, low supply, soaring demand to expand existing homes or purchase new construction, the western U.S. wildfires and tariffs.
More recently, lumber prices have fallen but they are still up nearly 100% from spring 2020. Some experts believe that the recent wildfires in the western United States and upcoming hurricane season will cause prices to jump back up in the upcoming months.
Additionally, since March 2020, steel prices are up roughly 200%. The increase in steel prices is a result of many of the same factors causing lumber pricing spikes. Many steel mills shut down production or drastically reduced production during the early days of the pandemic expecting a deep recession and/or to comply with restrictive government mandates. Despite these industry expectations, demand for steel -elated products like grills and home appliances soared. These household demands for steel-based products impacted the price of steel for construction projects. Prior to the pandemic, hot-rolled steel traded between $500 and 800 per ton but hit an all-time high of $1,825 per ton in early July 2021.
Reprinted courtesy of
Nick Stewart, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Mr. Stewart may be contacted at
nstewart@turnerpadget.com
Construction Defect Bill Introduced in California
June 10, 2011 —
CDJ STAFFLinda Halderman (R-Fresno) has introduced a bill which would require lawyers soliciting clients for construction defect cases to provide their prospective clients with a statement including that sellers may be required to disclose that they were engaged in a construction lawsuit. Further, the bill would require lawyers to disclose that they cannot guarantee financial recovery.
Halderman was quoted by The Business Journal as saying, “Lawsuit abuse has been very damaging, especially to homeowners in the Valley.” Halderman hopes that her bill will discourage class action lawsuits against builders and that this will protect jobs in the construction industry.
Read the full story…
Read the court decisionRead the full story...Reprinted courtesy of
Ohio Condo Owners Sue Builder, Alleging Construction Defects
September 10, 2014 —
Beverley BevenFlorez-CDJ STAFFSeventy-four condominium owners that reside in the Villas at Northstar in Westerville, Ohio, have sued Romanelli & Hughes, the builder, for alleged construction issues that led to water intrusion, according to The Columbus Dispatch.
“There have been noted deficiencies at every building out there, with both the roofs and wall systems,” Kevin Fields, a partner at Kasman & Cusimano, the firm that is representing the condo owners, told The Columbus Dispatch. “There’s been severe water infiltration through the walls, which has caused underlying damage, and various roof leaks and roofs not properly secured — in essence, sliding off the buildings.”
Counsel for the builder, Gabe Roehrenbeck, a partner with Thompson Hines law firm, stated that “he could not comment on the specifics of the case…because he has not had time to analyze it.” But he issued the statement, “Romanelli & Hughes is an award-winning builder that over the course of more than 40 years has built a reputation for client service and satisfaction.”
Construction defects listed in the suit include “failure to install or improper installation of flashing, ice shields, roofing paper, shingles, control joints in stucco and weather-resistant barriers.”
Read the court decisionRead the full story...Reprinted courtesy of
Court Grants Motion to Dismiss Negligence Claim Against Flood Insurer
December 22, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer successfully moved to dismiss the insured's negligence claim and demand for jury trial, leaving only the insured's breach of insurance contract claim under the National Flood Insurance Program (NFIP). La Mirage Homeowners Association Inc. v. Wright National Flood Ins. Co., 2019 U.S. Dist. LEXIS 147667 (S.D. Tex. Aug 29, 2019).
Hurricane Harvey damaged three of insured homeowner's association condominium's buildings. Wright National Flood Insurance Company was the insurer pursuant to the NFIP when the hurricane damaged the insured's property. The insured alleged that Wright breached the policy by underpaying on the flood loss claims and by not initiating the appraisal the insured demanded. The insured sought recovery for negligence, consequential damage, statutory penalties, attorney's fees and pre-and-post judgment interest.
Wright moved to dismiss the extra-contractual claims and to strike the jury demand.
The NFIP's regulations allowed homeowners to purchase policies either directly from FEMA or from private insurers that functioned as Write Your Own (WYO) providers and fiscal agents of the United States. The Fifth Circuit had previously held that state law tort claims arising from claims handling by a WYO were preempted under federal law. The court, therefore, was faced with the issue of whether the insured's claims of negligence, attorney's fees, statutory penalties, and interest were policy-handling claims which were preempted by federal law.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Disputes Will Not Be Subject to Arbitration Provision If There Is No “Significant Relationship”
November 29, 2021 —
David Adelstein - Florida Construction Legal UpdatesAs you know from prior articles, arbitration is a creature of contract. This means if you want your disputes to be resolved by binding arbitration, as opposed to litigation, you want to make sure there is an arbitration provision in your contract. If there are certain types of disputes you do not want subject to arbitration, you want to specify those types of disputes/claims in your arbitration provision. If you are not sure, make sure to discuss the pros and cons of arbitration with your counsel when drafting and negotiating the contract. However, even with a broad arbitration provision, there are times where a dispute may still fall out of the scope of the arbitration provision, i.e., the dispute is not arbitrable. If this occurs, such dispute will be resolved by litigation. Parties that have buyer’s remove and do not want to arbitrate their dispute may try to make this argument that the dispute is not subject to the scope of the arbitration provision. There are times this argument carries weight because the dispute has no significant relationship to the agreement with the arbitration provision, as shown below.
In Deweees v. Johnson, 46 Fla. L. Weekly D2356b (Fla. 4th DCA 2021), a plaintiff purchased a home in a private residential community. The purchase contract with the developer contained a broad arbitration provision that materially provided that, “all post-closing claims, disputes, and controversies…between purchaser and seller will be resolved by binding arbitration except those arising under section G.5 and G.6 above.” Dewees, supra. Sections G.5 and G.6 provided that the purchaser will not interfere in the sales process with other purchasers and will not interfere with workmen during the construction process. There was also a workmanship and structural defect warranty for the dwelling that also contained an arbitration provision.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com