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It's important to confirm that a viable insurance claim exists before proceeding with a Nunn-Agreement.

Dreyer v. Am. Natl. Prop. & Cas. Co. Or: Do Not Enter into Nunn-Agreements for Injuries that Occurred After Expiration of the Subject Insurance Policy

Monday, January 20, 2020 — Jean Meyer - Colorado Construction Litigation

While Nunn-Agreements[1] may be appealing for both plaintiffs and defendants where an insurer unreasonably fails to defend a lawsuit, a recent opinion from The Honorable Marcia Krieger in the United States District Court of Colorado[2] (“Opinion”) demonstrates the importance of first confirming that there exists a viable insurance claim before proceeding with such a Nunn- Agreement.

The facts giving rise to the Opinion were as follows. In March 2015, a Homeowner couple (the “Homeowners”) suffered damages to their home resulting from a brushfire. Fortunately, the Homeowners were insured, they submitted their claim to their homeowners’ insurance carrier which was in effect at the time of the brushfire (the “Insurance Carrier”), and the Insurance Carrier paid the claim. Ostensibly as part of the Homeowners’ remediation efforts to their home they removed a large bush which left a hole in the ground. After paying the claim, in August 2015 the Insurance Carrier cancelled or elected not to renew the Homeowners’ policy. In October 2015, a repairman working on the Home (the “Repairman”) was injured after his ladder fell over allegedly because of the hole in the ground caused by the bush that had been removed.

As a result of injuries caused by the fall from the ladder, the Repairman brought suit against the Homeowners. In response to the Repairman’s claim, the Homeowners again tendered to their Insurance Carrier. This time, however, the Insurance Carrier denied coverage on the basis that the Repairman’s injuries occurred after the expiration of the relevant policy. Without insurance coverage, the Homeowner’s entered into a Nunn-Agreement with the Repairman, conceding liability, and assigning any claims they might have had against the Insurance Carrier in lieu of execution of any judgment against the Homeowners.

Reprinted courtesy of Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLC

Mr. Meyer may be contacted at meyer@hhmrlaw.com

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The Federal District Court in Connecticut denied the insurer's motion to dismiss.

Court Denies Insurer's Motion to Dismiss Collapse Claim

Monday, January 20, 2020 — Tred R. Eyerly - Insurance Law Hawaii

Facing yet another collapse claim based upon alleged poorly mixed cement, the Federal District Court in Connecticut denied the insurer's motion to dismiss. Oliveria v. Safeco Ins Co., 2019 U.S. Dist. LEXIS 147256 (D. Conn. Aug. 29, 2019).

In 1993, the insureds' purchased their home that had been built in 1986. Safeco insured the property. In February 2017, the insureds noticed that the basement walls had a series of cracks. They consulted professionals and learned that the cracking was due to a chemical compound found in certain concrete walls constructed in the late 1980s with concrete most likely from the J. J. Mottes Concrete Company.

The insureds submitted a claim to Safeco for the substantial impairment to the structural integrity of their basement walls. Safeco denied the claim. The insureds filed suit. Safeco moved to dismiss.

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

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

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Few are aware of Armstrong’s exposure to liability and criminal culpability for false claims against the government.

False Implied Certifications in Making Payment Requests: What We Can Learn from Lance Armstrong

Monday, January 20, 2020 — Brian S. Wood & Alex Gorelik - ConsensusDocs

In April 2018, the Department of Justice announced a $5M settlement reached in its lawsuit against former professional cyclist, Lance Armstrong. While the fallout from Armstrong’s latently-admitted use of performance-enhancing drugs (“PEDs”) was well-publicized, including lost sponsorship deals, stripped Tour de France titles, and damage to his reputation, few were aware of Armstrong’s exposure to liability and criminal culpability for false claims against the government. The DOJ’s announcement reminded Armstrong and the rest of us of the golden rule of dealing with the government: honesty is the best policy. The corollary to that rule is that dishonesty is costly.

Armstrong’s liability stemmed from false statements (denying the use of PEDs) he made, directly and through team members and other representatives, to U.S. Postal Service (“USPS”) representatives and to the public. USPS was the primary sponsor of the grand tour cycling team led by Armstrong. The government alleged in the lawsuit that Armstrong’s false statements were made to induce USPS to renew and increase its sponsorship fees, in violation of the False Claims Act.

The Statute

Enacted in 1863, the False Claims Act (“FCA”) was originally aimed at stopping and deterring frauds perpetrated by contractors against the government during the Civil War. Congress amended the FCA in the years since its enactment, but its primary focus and target have remained those who present or directly induce the submission of false or fraudulent claims. The current FCA imposes penalties on anyone who knowingly presents “a false or fraudulent claim for payment or approval” to the federal Government. A “claim” now includes direct requests to the Government for payment, as well as reimbursement requests made to the recipients of federal funds under federal benefits programs (such as Medicare). Thirty-one states, the District of Columbia, and Puerto Rico have also enacted laws imposing penalties for false claims against state agencies and their subdivisions, with most of these laws modelled after the federal FCA.

Reprinted courtesy of Brian S. Wood, Smith, Currie & Hancock, LLP and Alex Gorelik, Smith, Currie & Hancock, LLP
Mr. Wood may be contacted at bswood@smithcurrie.com
Mr. Gorelik may be contacted at agorelik@smithcurrie.com


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AB5, Dynamex and the ABC Standard Exception for Construction-Related Trucking

January 20, 2020 — Donald A. Velez - Smith Currie

Our earlier alert on AB5 outlined the Dynamex case, which brought the inflexible ABC Standard to California for determining whether a worker is an employee or an independent contractor for IWC wage orders. The Legislature passed, and Governor Newsom signed, AB5, codifying the Dynamex case and the ABC Standard for wage orders, the Labor Code, unemployment insurance, and worker’s compensation issues.

We also discussed the Borello test, which applies when a hiring party can meet the construction or construction-related trucking exception and which applies a more employer friendly multi-factor test.

Mr. Velez may be contacted at davelez@smithcurrie.com

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Certified Question Asks Texas Supreme Court About Use of Extrinsic Evidence In Determining Duty to Defend

January 20, 2020 — Tred R. Eyerly - Insurance Law Hawaii

The Fifth Circuit certified a question to the Texas Supreme Court about the use of extrinsic evidence in determining the insurer's duty to defend. State Farm Lloyds v. Richards, et al, 2019 U.S. App. LEXIS 27221 (5th Cir. Sept. 9, 2019).

The insureds' grandson was killed in an all-terrain vehicle accident while under their temporary care. The child's parents sued the insureds, alleging they were negligent in failing to supervise and instruct the child. The insureds sought a defense from State Farm under their homeowners' policy. State Farm defended under a reservation of rights, but sought a declaration there was no duty to defend or indemnify from the federal district court.

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

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Sao Paulo Skyline Fills Up With New Towers as Real Estate Booms

January 20, 2020 — Fabiola Moura, Vinicius Andrade, & Patricia Lara – Bloomberg

Sao Paulo real estate has never been so hot.

Walking around Brazil’s wealthiest city, it’s impossible to avoid the construction sites suddenly breathing life into formerly empty lots. One street alone in Itaim Bibi, the city’s financial district, has five skyscrapers going up. Newspapers are packed with ads for new high rises targeting just about anyone with a steady paycheck.

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CLFT’s 33rd Annual Construction Law Conference

January 20, 2020 — Beverley BevenFlorez – CDJ Staff

The Construction Law Foundation of Texas (CLFT) presents their annual Construction Law Conference this March in San Antonio. A few of the topics include Case Law Update, Miller Act, and Proving Delay. The day preceding the conference includes a golf tournament, a Texas Women’s Construction Law Group Forum, and a reception.

March 5th-6th, 2020
The La Cantera Resort & Spa
16641 La Cantera Parkway
San Antonio, Texas 78256

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The court held that Georgia’s eight-year statute of repose applied to bar the project owner’s warranty claims.

Construction Warranties and the Statute of Repose – Southern States Chemical, Inc v. Tampa Tank & Welding Inc.

Monday, January 20, 2020 — David R. Cook - AHC Construction and Procurement Blog

In a recent holding by the Georgia Court of Appeals, the court held that Georgia’s eight-year statute of repose applied to bar the project owner’s warranty claims. The renovation work by the contractor on the owner’s chemical tank constituted an improvement of real property, and thus, the statute of repose bared any claims eight years after substantial completion thereof. In addition, the court rejected the project owner’s claim that it qualified as a third-party beneficiary of an extended warranty contained in a report given by a subcontractor to the contractor.

Factual Background

In 2000, Southern States Phosphate and Fertilizer Company (“Southern States”) hired Tampa Tank & Welding, Inc (“Tampa Tank”) to renovate a tank to hold sulfuric acid. The parties’ written contract contained an express one-year warranty for material and workmanship from the date of completion. Two years later, in January 2002, the tank renovation was completed. Tampa Tank contracted with Corrosion Control Inc. (“CCI”) to design, assist with, and test the cathodic corrosion system. CCI provided only consultation and did not provide any onsite installation. Upon completion of installation, CCI supplied a report to Tampa Tank that the system was properly installed and fully functioning. Additionally, a post–installation report from CCI to Tampa Tank calculated an estimated life expectancy of forty-three to forty-five years.

Reprinted courtesy of David R. Cook, Autry, Hall & Cook, LLP

Mr. Cook may be contacted at cook@ahclaw.com

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Firefighters with fire in background

Attorney William L. Doerler discusses State Farm Fire & Cas. Co. v. Amazon.com, Inc.

Amazon Feels the Heat From Hoverboard Fire Claims

Monday, January 20, 2020 — William L. Doerler - The Subrogation Strategist

In State Farm Fire & Cas. Co. v. Amazon.com, Inc., No. 3:18CV166-M-P, 2019 U.S. Dist. LEXIS 189053 (Oct. 31, 2019), the United States District Court for the Northern District of Mississippi considered a Motion for Judgment on the Pleadings filed by defendant Amazon.com, Inc. (Amazon). Amazon argued that, because it was a “service provider” who cannot be held liable under Mississippi’s Product Liability Act (MPLA), Miss. Code § 11.1.63, the negligence and negligent failure to warn claims filed against it by plaintiff State Farm Fire & Casualty Company (State Farm) failed as a matter of law. The court, looking beyond the MPLA, held that State Farm’s complaint stated a claim against Amazon.

In State Farm, Taylor and Laurel Boone (the Boones), State Farm’s subrogors, purchased two hoverboards from third parties in transactions facilitated by Amazon. They purchased the first hoverboard on October 31, 2015 and the second on November 10, 2015. The Boones started using the hoverboards on or about December 25, 2015. On March 16, 2016, the hoverboards caught fire and the fire spread to destroy the Boones’ home. As alleged in the amended complaint, the hoverboards were “manufactured by unknown manufacturers from China.” State Farm, as the Boones’ subrogee, filed suit asserting negligence and negligent failure to warn claims against Amazon.

Amazon filed a Motion for Judgment on the Pleadings, arguing that State Farm’s claims against it were governed by the MPLA and, as a service provider, it was not liable under the MPLA. In response, State Farm argued that Amazon was liable because it acted as a “marketplace” and that, rather than MPLA claims, Amazon is subject to common law negligence and failure to warn claims. The District Court agreed with State Farm.

Reprinted courtesy of William L. Doerler, White and Williams LLP

Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com

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FIRRMA’s real estate-related expansion of CFIUS jurisdiction

New Proposed Regulations Expand CFIUS Jurisdiction Regarding Real Estate

Monday, January 20, 2020 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog

On September 17, 2019, the U.S. Department of Treasury issued two new proposed rules for the Committee on Foreign Investment in the United States (CFIUS) implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). Of particular interest to readers of this blog was the second of the proposed rules, which addressed FIRRMA’s real estate-related expansion of CFIUS jurisdiction.

Pillsbury's Construction & Real Estate Law Team

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Latosha M. Ellis was named to The National Black Lawyers Top 40 Under 40 class of 2019.

Latosha Ellis Joins The National Black Lawyers Top 40 Under 40

Monday, January 20, 2020 — Hunton Insurance Recovery Blog

Latosha M. Ellis, an associate in Hunton Andrews Kurth’s Insurance Coverage Practice, was recently named to The National Black Lawyers Top 40 Under 40 class of 2019.

The professional honorary association recognizes attorneys under 40 from each state who demonstrate superior leadership, reputation, influence, stature and profile as a black lawyer. Selection is by invitation only following a multi-phase review process that includes peer nominations and third party research.

Reprinted courtesy of Hunton Andrews Kurth LLP
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Construction worker in site

An unwritten “gentleman’s agreement” can lead to confusion, faulty memories, and more money paid to construction counsel.

Sometimes You Get Away with Unwritten Contracts. . .

Monday, January 20, 2020 — Christopher G. Hill - Construction Law Musings

I have spoken often regarding the need for a well written construction contract that sets out the “terms of engagement” for your construction project. A written construction contract sets expectations and allows the parties to the contract to determine the “law” of their project. An unwritten “gentleman’s agreement” can lead to confusion, faulty memories, and more money paid to construction counsel than you would like as we lawyers play around in the grey areas.

One other area where the written versus unwritten distinction makes a difference is in the calculation of the statute of limitations. In Virginia, a 5 year statute of limitations applies to written contracts while a 3 year statute of limitations applies to unwritten contracts. This distinction came into stark relief in the case of M&C Hauling & Constr. Inc. v. Wilbur Hale in the Fairfax, Virginia Circuit Court. In M&C Hauling, M&C provided hauling services to the defendant through a subcontract with Hauling Unlimited in 2014, the last of which was in July. M&C provided over 2000 hours of hauling and provided time tickets (that were passed to Mr. Hale on Hauling Unlimited letterhead and signed by Mr. Hale or his agent) and an invoice stating the price term of $75.00 per hour. No separate written contract between M&C and Hauling Unlimited or Mr. Hale existed.

Reprinted courtesy of The Law Office of Christopher G. Hill

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

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Fountain pen pointing at the word Notice on a page

Rights preservation is everything!

Serving Notice of Nonpayment Under Miller Act

Monday, January 20, 2020 — David Adelstein - Florida Construction Legal Updates

Under the federal Miller Act, if a claimant is NOT in privity with the prime contractor, it needs to serve a “notice of nonpayment” within 90 days of its final furnishing. In this manner, 40 U.S.C. 3133 (b)(2) states:

A person having a direct contractual relationship with a subcontractor but no contractual relationship, express or implied, with the contractor furnishing the payment bond may bring a civil action on the payment bond on giving written notice to the contractor within 90 days from the date on which the person did or performed the last of the labor or furnished or supplied the last of the material for which the claim is made. The action must state with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. The notice shall be served–

(A) by any means that provides written, third-party verification of delivery to the contractor at any place the contractor maintains an office or conducts business or at the contractor’s residence; or
(B) in any manner in which the United States marshal of the district in which the public improvement is situated by law may serve summons.

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Two businessmen across from table with contracts

There are a number of problematic contract provisions that appear in many agreements.

Killer Subcontract Provisions

Monday, January 20, 2020 — Patrick McNamara - Porter Law Group

We are frequently requested by subcontractor clients to review the subcontract that has been prepared by the prime contractor, before our client signs it. While no two agreements are identical, there are a number of problematic contract provisions that appear in many agreements. Here is a list of ten such provisions (and their variations) that are potential “deal breakers”:

  1. PAY IF/WHEN PAID (e.g. “Contractor shall have the right to exhaust all legal remedies, including appeals, prior to having an obligation to pay Subcontractor.”) “Pay-if-paid” provisions (“Receipt of payment from Owner shall be a condition precedent to Contractor’s duty to pay Subcontractor”) are illegal in California. However, the only legal limit on “Pay-When-Paid” provisions is that payment must be made “within a reasonable time.” The example above, as written, essentially affords the prime contractor a period of several years following completion of the project before that contractor has an independent duty to pay its subcontractors – not a “reasonable” amount of time, to those waiting to be paid. A compromise is to provide a time limit, such as 6 months or one year following substantial completion of the project.
  2. CROSS-PROJECT SET-OFF (e.g. “In the event of disputes or default by Subcontractor, Contractor shall have the right to withhold sums due Subcontractor on this Project and on any other project on which Subcontractor is performing work for Contractor.”) Such provisions are problematic and likely unenforceable, as they potentially bar subcontractors’ lien rights. Such provisions should be deleted.
  3. CONTRACTOR/SUBCONTRACTOR RESPONSIBILITY FOR DESIGN QUALITY (e.g. “Subcontractor warrants that the Work shall comply with all applicable laws, codes, statutes, standards, and ordinances.”) Unless a subcontractor’s scope of work expressly includes design work, this provision should either be deleted or modified, with the addition of the following phrase: “Subcontractor shall not be responsible for conformance of the design of its work to applicable laws, codes, statutes, standards, and ordinances.”
Reprinted courtesy of Patrick McNamara, Porter Law Group

Mr. McNamara may be contacted at pmcnamara@porterlaw.com

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Founding Member Dave McLain has been named as the 2019 People’s Choice for Best Construction Defects Lawyer for Defendants.

Dave McLain named Barrister’s Best Construction Defects Lawyer for Defendants for 2019

Monday, January 20, 2020 — David M. McLain – Colorado Construction Litigation

The attorneys and staff at Higgins, Hopkins, McLain & Roswell are proud to announce that Law Week Colorado named Founding Member Dave McLain as the 2019 People’s Choice for Best Construction Defects Lawyer for Defendants. According to the publication:

Law Week Colorado asked its readership to weigh in on the best attorneys in just about every practice area we could think of. We received hundreds of responses and sifted through the votes for each category to determine the “People’s Choice” winner – the top attorney in each practice area according to other attorneys. And then we handed it to the “Barrister” (the hive mind of Law Week staff, supplemented by public votes and a healthy dose of additional research) to determine the Barrister’s Choice.

In recognizing Mr. McLain this year, Law Week Colorado stated:

Previously appearing in Law Week’s 2015 Barrister’s Best issue [in which he was recognized as the Barrister’s Choice as Best Construction Defects Lawyer for Defendants], David McLain participates in numerous speaking engagements on construction defects claims and is seen as a leader in the field. His extensive experience over the last two decades of practice speaks for itself.

Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell

Mr. McLain may be contacted at mclain@hhmrlaw.com

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KONE's mission is “to improve the flow of urban life.”

KONE is Shaking Up the Industry with BIM

Monday, January 20, 2020 — Aarni Heiskanen - AEC Business

KONE supplies elevators, escalators, autowalks and maintenance and modernization solutions. I sat down with Kenneth Flannigan to discuss how BIM is changing KONE and what it means to the industry.

KONE operates in over 60 countries, has around 1.3 million units in service, and moves over one billion people per day. The company’s mission is “to improve the flow of urban life.” Kenneth Flannigan is the BIM Solution Owner for the company. He acknowledges that even though KONE provides equipment and software innovation, in this day and age that’s not enough.

“We’re a critical path item. How innovative are we if we’re not working on every single project in a shared 3D environment, like our customers?” Flannigan asks.

KONE serves both indirect and paying customers. It works with influencers like architects and with general contractors, builders, and construction managers. It also has a life-cycle relationship with building owners, which is evidenced by the fact that over 30% of the company’s sales come from maintenance.

Reprinted courtesy of Aarni Heiskanen, AEC Business

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

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Making planning collaborative is a necessary step in making construction less wasteful.

Construction Needs Collaborative Planning

Monday, January 20, 2020 — Aarni Heiskanen - AEC Business

What makes construction different from manufacturing is its dynamic nature. Unlike a systemized production plant, a construction site is a mesh of interconnected processes that are far from optimized. The traditional top-down planning practice does not solve problems on the construction site, as recent research reveals. Making planning collaborative is a necessary step in making construction less wasteful.

Everybody in the industry has felt frustration with inefficiencies in construction, but seeing the data is still disconcerting. I’ve had the pleasure of attending several workshops organized by the Finnish Aalto University’s research teams. These eye-opening events both revealed how much waste we have in construction today and suggested solutions to this problem.

Four Aalto University graduate students shared insights from their research at a workshop of the Waste Workgroup of the Building 2030 consortium. They focused on projects where takt production, a lean construction method, had been used. Takt production breaks the work down into equally timed work batches and typically shortens project lead time considerably—up to 50%. However, even these well-planned projects included waste and unnecessary movement, as the researchers found out.

Reprinted courtesy of Aarni Heiskanen, AEC Business

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

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Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

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