CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - TUESDAY, JANUARY 14, 2025

Businessman in cape and superhero pose

Super Lawyers®, part of Thomson Reuters, is a rating service of lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.

GRSM Attorneys Selected to 2024 Super Lawyers and Rising Stars Lists

January 14, 2025
Gordon Rees Scully Mansukhani

Super Lawyers® has released its 2024 attorney lists across various regions of the United States. This year, 169 Gordon Rees Scully Mansukhani attorneys have been selected, with 51 named to Super Lawyers and 118 named to Rising Stars.

*For attorneys licensed to practice in New Jersey: No aspect of this advertisement has been approved by the Supreme Court of New Jersey. Please visit the Super Lawyers Selection Process for a detailed description of the Super Lawyers and Rising Stars selection methodology.

The selections are a result of independent research by the team at Super Lawyers® to determine no more than the top five percent of legal professionals in each geographic region. The research team selects no more than two and a half percent of the lawyers in each geographic region to the Rising Stars list.

Reprinted courtesy of Gordon Rees Scully Mansukhani

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CDJ NEWS THIS WEEK



Urban retrofit

Several of the worlds tallest buildings, or soon to be so, are seeking LEED gold or platinum certification.

Urban Retrofits, Tall Buildings, and Sustainability

January 14, 2025 — Christopher G. Hill - Construction Law Musings

As I took a small break between cases and contract reviews, an article in the November 2, 2009 issue of ENR Magazine caught my eye. The article discusses the efforts of a Chicago architect to create a holistic approach to the renovation and “de-carbonization” of the Chicago Loop area. The plan involves large scale energy retrofits and sustainable reuse of Chicago’s tall buildings.

Another interesting aspect of this article points out that tall buildings in general have hit the construction skids in the US and Latin America, this is not the case in Europe and the Middle East. However, those buildings that are going up (and up and up) are trying to go “green.” Several of the worlds tallest buildings, or soon to be so, are seeking LEED gold or platinum certification.

These two trends, in my view, are healthy. First of all, much like the goal of Build2Sustain, the Chicago effort is a move toward sustainable reuse and retrofit/renovation. I see this as a great trend and a way to perform the “Three R’s” (Reduce, Reuse, Recycle), by reusing existing building materials and footprints without the cost and use of newer materials from tear downs and rebuilds.

Mr. Hill may be contacted at chrisghill@constructionlawva.com

Reprinted courtesy of The Law Office of Christopher G. Hill

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Illustration of AI and People

2024 was undoubtedly the year of AI.

Will the AI Frenzy Continue in 2025?

January 14, 2025 — Aarni Heiskanen - AEC Business

In AEC technology, 2024 was undoubtedly the year of AI. Every company seemed to announce its pledge to embrace artificial intelligence in the coming years, not to mention the numerous startups that peppered their pitch decks with promises of bleeding-edge innovation.

Tech developers who had been using machine learning before the generative AI boom were delighted. They no longer needed to invest significant resources in convincing the industry of AI’s potential. The mainstream success of generative AI in 2024 created a ripple effect, making AEC firms eager to explore and adopt AI solutions.

Many all-digital startups also got a boost from the AI frenzy, even though many significant innovations happened in hardware and material technology that did not rely on AI.

Mr. Heiskanen may be contacted at aec-business@aepartners.fi

Reprinted courtesy of Aarni Heiskanen, AEC Business

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White Right Arrows Red Left Arrow

The Fifth Circuit reversed the district court's granting of summary judgment to the insurer on a construction defect claim asserted against the insured.

Summary Judgment for Insurer on Construction Defect Claim Reversed

January 7, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The Fifth Circuit reversed the district court's granting of summary judgment to the insurer on a construction defect claim asserted against the insured. TIG Ins. Co. v. Woodsboro Farmers Cooperative, 2024 U.S. App. LEXIS 24003 (5th Cir. Sept. 20, 2024).

In March 2013, Woodsboro Farmers Cooperative contracted with E.F. Erwin, Inc. to construct two Brock 105' diameter grain silos. Erwin hired subcontract AJ Constructors, Inc. (AJC) to construct the silos. Erwin was responsible for supervising the work.

Brock silos were kits shipped by the manufacturer and then assembled according to the manufacturer's manuals and specifications. The silos are constructed section by section. AJC began erecting the silos in May 2013 and completed its work in June or early July. Erwin occasionally inspected the work and found the silos were structurally sound and not defective. AJC left the job site after completing the assembly.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Glowing earth surrounded by trade

The industry must now utilize the lessons learned from the rear-view mirror to strategically prepare for what was promised to be a second round of tariffs come January 2025.

The Ghosts of Tariffs Past May Help Us in the Future

January 7, 2025 — Kellie Ros - ConsensusDocs

The havoc material tariffs have caused the construction industry is nothing new. President-Elect Donald Trump imposed heavy tariffs on steel and aluminum in his first administration in 2016. While the tariffs themselves were not wholly unexpected, the ripple effect of those tariffs (coupled with the impacts of the COVID-19 pandemic) caused unexpected challenges for the construction industry. Those included allocating the risk of the additional costs caused by tariffs, supply and demand issues, grappling with escalation clauses, and navigating fixed price projects. The industry must now utilize the lessons learned from the rear-view mirror to strategically prepare for what was promised to be a second round of tariffs come January 2025.

Tariffs’ Impacts on Material Prices Everywhere
New or increased tariffs have the potential to raise prices for a wide range of construction inputs. Based on simple supply and demand principles, this includes inputs produced domestically that compete with foreign imports. For example, if a 20% tariff is imposed on Chinese steel, contractors may look to procure Brazil or U.S. steel in an effort to cut their costs. Such a rush to those less-costly alternatives may result in a supply shortage or an increase in prices in the marketplace across the globe. This occurred in 2016 when material prices indirectly related to the inputs on which the tariffs were imposed even increased. Contractors may be well served to get ahead of anticipated price increases and purchase materials now or take other actions in negotiating contracts to protect themselves.

Ms. Ros may be contacted at kros@pecklaw.com

Reprinted courtesy of Kellie Ros, Peckar & Abramson, P.C.

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Dallas Texas skyline

In Janis Smith Consulting, LLC v. Rosenberg, the Court of Appeals addressed a challenge from the defendant as to the sufficiency of the plaintiff’s certificate of merit in an interlocutory appeal.

Texas Allows Wide Scope for Certificate of Merit

January 7, 2025 — Lian Skaf - The Subrogation Strategist

The purpose of certificate of merit (sometimes referred to as affidavit of merit) statutes is to identify frivolous claims before the court wastes time and resources during litigation. More common in medical malpractice cases, several states have enacted similar requirements for professional negligence claims dealing with construction-related issues. While a subrogation attorney should not be bringing a frivolous case to suit anyway, the requirement adds another step in the process that plaintiffs need to properly navigate.

Chapter 150 of the Texas Civil Practice and Remedies Code requires that in an action arising out of professional services by a licensed or registered professional, claimants must file an affidavit from a qualified expert attesting to the theories of recovery, the negligence and the factual basis for the claims. The expert must be competent, have the same professional license or registration as the defendant and practice in the area of practice of the defendant.

In Janis Smith Consulting, LLC v. Rosenberg, No. 03-23-00370-CV, 2024 Tex. App. LEXIS 7961, the Court of Appeals of Texas, Third District (Court of Appeals) addressed a challenge from the defendant as to the sufficiency of the plaintiff’s certificate of merit in an interlocutory appeal. The Court of Appeals affirmed the lower court’s dismissal of the defendant’s motion to dismiss based on the allegedly improper certificate of merit, holding that the plaintiff’s expert was sufficiently qualified to certify the legitimacy of the case.

Mr. Skaf may be contacted at skafl@whiteandwilliams.com

Reprinted courtesy of Lian Skaf, White and Williams LLP

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Update balloon

Attorney Garret Murai covers recent law changes affecting construction in 2025.

2025 Construction Law Update

January 7, 2025 — Garret Murai - California Construction Law Blog

It’s that time of year again.

The second half of the 2023-2024 legislative session saw the introduction of 2,124 bills, of which, 1418 were signed into law. Among the bills signed by the governor impacting contractors is an increase in the small work licensing exemption for $500 to $1,000, the licensing of Indian tribes by the CSLB, and a number of project-specific bills, as is typical, related to project-specific alternative project delivery methods.

Wishing you and yours a great 2025!

Licensing
AB 2622 – Increases the small work licensing exemption from $500 to $1,000 provided that the work: (1) does not require a building permit; and (2) does not involve the employment of others to perform or assist in the work.

Mr. Murai may be contacted at gmurai@nomosllp.com

Reprinted courtesy of Garret Murai, Nomos LLP

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Bridge

42% of all U.S. bridges are at least 50 years old, and 46,154, or 7.5%, of the nation’s bridges are considered structurally deficient, meaning the bridges are in “poor” condition.

America’s Bridges and the Need for Bridge Infrastructure Investment

January 7, 2025 — Lisa D. Love - The Dispute Resolver

During the October 2024 meeting of the American Bar Association’s Forum on Construction held in Pittsburgh, a city of many bridges, the importance of bridges to our nation’s transportation infrastructure was apparent. Just two years ago, the Forbes Avenue bridge in Pittsburgh collapsed—resulting in several vehicles and a bus falling into a ravine. Ten people were injured in the event. It was later reported that the bridge had received a “poor” rating but was still permitted to remain open to traffic. The event resulted in several lawsuits which, just this past September, the City of Pittsburgh requested $500,000 from the city council to settle. The Forbes Avenue bridge is hardly a unique case and is just one example of the litigation that can ensue if we fail to maintain our aging infrastructure.

The State of Our Nation’s Bridges
As of June 2024, the United States has more than 616,000 bridges located on public roads, including interstate highways, U.S. highways, state and county roads, as well as publicly accessible bridges on federal and tribal lands.

Reprinted courtesy of Lisa D. Love, JAMS

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AI Technology

Counsel for the defendant in the case pointed up in a reply brief that the opposition brief of the plaintiff cited two purported – and as it turned out, nonexistent – unpublished decisions.

¡AI Caramba!

January 7, 2025 — Daniel Lund III - Lexology

You can’t make this up.

That’s what a federal judge in Texas told an attorney whom it was sanctioning for impermissible reliance on artificial intelligence in preparing a brief to the court.

“Pending before the court is the question of whether Plaintiff's counsel… should be sanctioned for submitting a response brief to the court that includes case cites generated by artificial intelligence that refer to nonexistent cases as well as to nonexistent quotations.”

Counsel for the defendant in the case – pursuing summary judgment for a tire manufacturer in a wrongful termination lawsuit – pointed up in a reply brief that the opposition brief of the plaintiff cited two purported – and as it turned out, nonexistent – unpublished decisions: Roca v. King's Creek Plantation, LLC, 500 F. App'x 273, 276 (5th Cir. 2012) and Beets v. Texas Instruments, Inc., No. 94-10034, 1994 WL 714026, at *3 (5th Cir. Dec. 16, 1994), and quotations from as many as six other apparently-existing cases but which were unable to be found within the reported decisions.

Mr. Lund may be contacted at daniel.lund@phelps.com

Reprinted courtesy of Daniel Lund III, Phelps

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Trial

The appellate court reviewed the trial record and found no miscarriage of justice.

Newark Trial Team Secures Affirmance of ‘No Cause’ Verdict for Nationwide Housing Manager & Developer

January 7, 2025 — Lewis Brisbois Newsroom

Newark, N.J. (December 30, 2024) - Newark Partner Afsha Noran and Managing Partner Colin Hackett recently obtained a ruling by a New Jersey Appellate Division panel affirming a unanimous "no cause" defense verdict obtained on behalf of a nationwide housing developer and manager.

In this case, the plaintiff and her two minor children brought suit against the firm's client. They appealed a unanimous no-cause jury verdict rendered in May 2023 that found the defendants not liable for mold exposure in their apartment. The plaintiffs argued that several trial errors, including improper jury instructions, a confusing verdict sheet, and prejudicial remarks by defense counsel led to an unjust result. However, the appellate court affirmed the trial court's decision, concluding that there was no miscarriage of justice and that the trial court properly exercised its discretion in handling the case.

Reprinted courtesy of Lewis Brisbois

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Injured construction worker

Undocumented immigrants, who are more likely to be injured during construction projects, are entitled under New York law to workers' compensation and the right to sue for negligence.

Immigrants' Legal Status Eyed Over Roles in New York Fake Injury Lawsuits

January 7, 2025 — Richard Korman - Engineering News-Record

Edison Fernando Pesantez Ramon says that early on the morning of Sept. 29, 2021, while working on a building renovation project on 96th Street in Manhattan, he tripped and fell badly on a staircase.

Mr. Korman may be contacted at kormanr@enr.com

Reprinted courtesy of Richard Korman, ENR

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Congrats

The Insurance Law Hawaii blog seeks to keep readers apprised of developments in insurance-related cases from Hawaii and across the country.

Blog Completes Seventeenth Year

January 7, 2025 — Tred R. Eyerly - Insurance Law Hawaii

Insurance Law Hawaii reaches the end of its seventeenth year this month. We began posting long ago, in December 2007.

We seek to keep readers apprised of developments in insurance-related cases from Hawaii and across the country. Coverage issues surrounding the Maui fires have been top of mind this year. We will continue posting on important coverage developments in the next year.

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Capital building

WRDA 2024 authorizes 21 USACE water resources projects across 15 states, Washington, D.C., and Puerto Rico, with a focus on waterway navigation, hurricane and storm damage risk reduction, flood risk management, and ecosystem restoration.

ASCE Statement on Congress Passage of WRDA 2024

January 7, 2025 — Feniosky Peña-Mora - American Society of Civil Engineers

WASHINGTON, DC. – ASCE applauds Congress for passing the bipartisan Water Resources Development Act (WRDA) for 2024, Congress's biennial authorization for new U.S. Army Corps of Engineers (USACE) projects. WRDA 2024 authorizes 21 USACE water resources projects across 15 states, Washington, D.C., and Puerto Rico, with a focus on waterway navigation, hurricane and storm damage risk reduction, flood risk management, and ecosystem restoration. This legislation will support vital port and inland waterways projects through provisions such as an adjustment of the cost share formula for the Inland Waterways Trust Fund (IWTF), which helps pay for major rehabilitation and construction efforts along navigation channels, and an increase in the depth at which federal port and harbor projects can receive federal assistance for construction and maintenance. These provisions can help raise the ports (B-) and inland waterways (D+) grades reflected in ASCE's 2021 Report Card for America's Infrastructure, and we are thrilled to see WRDA 2024 prioritizing policies that will improve the nation's infrastructure systems.

The latest agreement includes the reauthorization of the National Dam Safety Program (NDSP) through 2028, a top legislative priority for ASCE and a critical program needed to improve the "D" grade that dams received in the 2021 Report Card for America's Infrastructure. The NDSP is the primary source of federal funding supporting state dam safety programs with inspection and monitoring activities, emergency preparedness, and staffing needs. The agreement also incorporates low-head dams into the National Inventory of Dams. These small structures can have deadly consequences when unaccounted for because they produce dangerous, undetectable currents. Incorporating them into the National Inventory of Dams will increase awareness and lead to more safety precautions that could save lives.

ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 160,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.

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Maine Lighthouse

KBS Builders Wins $3.2 Million Contract for Multifamily Construction Project in Maine

January 14, 2025 — KBS Builders, Inc.

SOUTH PARIS, Maine, Jan. 08, 2025 (GLOBE NEWSWIRE) -- KBS Builders, Inc. ("KBS" or the "Company"), the leading modular manufacturer in New England, announced it has signed a $3.2 million contract to manufacture 40 modules for the construction of five 4-unit multifamily townhouse condominiums in Lincoln County, Maine. Production at the Company is expected to commence later this month, with delivery to be completed in the second quarter of 2025.

The diversity of KBS' expertise in modular manufacturing for the commercial construction market spans from workforce housing to college dormitories, to affordable and multifamily projects, allowing commercial builders to complete high-quality custom work, both on time and on budget. With headquarters in South Paris, Maine, KBS is also geographically well-positioned to help the region tackle ongoing housing shortages with affordable construction.

About KBS Builders, Inc.
KBS designs and manufactures modular structures with a commitment to residential housing, net-zero design, commercial, and mixed-use buildings. KBS works hand-in-hand with developers, general contractors, architects, and builders to customize and produce the exact type of modular structure they are seeking. The Company's main office and factory are located in South Paris, Maine, while a second factory is located a short distance away in Oxford, Maine. To learn more about KBS, please visit kbsbuildersinc.com.

Uncertainty Volatility Ambiguity Complexity Blocks

4Q Cost Report: Building a Resilient Future: Adapting to Uncertainty In 2025

January 14, 2025 — Rachel Personius - Engineering News-Record

The key trends of 2024 will persist into 2025: Material price stabilization, labor shortages, growth in digital infrastructure and renewable energy construction, with 2-6% average cost escalations. Alongside this, a prevailing sense of rapidly shifting uncertainty remains. Currie & Brown will be closely monitoring the impacts from government regime changes (including the U.K., U.S. and France), increasing protectionism attitudes (including the U.S. and China), and ongoing conflicts. These could dramatically impact costs, supply chain health and construction activity.

ENR may be contacted at enr@enr.com

Reprinted courtesy of Rachel Personius, Engineering News-Record

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Gavel scale book

Insurer's Motion in Limine Granted in Part, Denied in Part

January 14, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The insurer's Motion in Limine seeking to preclude the insured from referencing or seeking certain categories of damages was largely denied. Las Brisas Condo. Homes Ass'n., Inc. v. Empire Indem. Ins. Co., 2024 U.S. Dist. LEXIS 178360 (M.D. Fla. Oct. 1, 2024).

Following Hurricane Irma, Las Brisas Condominium Homes Association submitted a claim to Empire for storm-related damage. Empire's field adjuster reported "severe wind damage to tile roofs on all locations." He estimated the damage at $1 to $1.5 million.

Empire then retained a structural engineer who found no storm-related damage. Instead, he attributed the roof problems to "foot traffic, wear and tear, [and] thermal expand and contraction."

Mr. Eyerly may be contacted at te@hawaiilawyer.com

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Seminar

Coverage Ahead: The Next Wave in Insurance Law Seminar

January 14, 2025 — Beverley BevenFlorez – CDJ Staff

The American Bar Association’s Insurance Coverage Litigation 2025 Conference “will hold panel discussions and small-group presentations featuring leading experts from across the country—including policyholder and carrier-side counsel, insurance brokers, authors, and prominent academics.” Attendees “will gain invaluable insights and fresh perspectives on the latest trends and innovations in the coverage field.” On February 21st, attorney Tracy Alan Saxe of Saxe Doernberger & Vita, P.C. presents a discussion on Professional Liability Insurance in Construction.

February 20th-22nd, 2025
Estancia La Jolla Hotel & Spa
9700 N Torrey Pines Rd
La Jolla, CA 92037

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Death Toll Rises in L.A. Wildfire Disaster as Winds Intensify and People Protect Their Homes

NBC News reported, officials said at least 24 people have died in the Southern California wildfires, while Santa Ana winds are expected to make the battle more difficult.

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Los Angeles Wildfires Latest: Eaton, Palisades Fire Updates - 8 p.m., Jan. 13, 2025

Fire risk continues for Los Angeles County as the Eaton and Palisades Fires continue to burn, ABC News reported.

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