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David M. McLain is a founding member of Higgins, Hopkins, McLain & Roswell, LLC, a firm which specializes in construction law and construction litigation throughout Colorado.

What Are The Most Commonly Claimed Issues In Construction Defect Litigation?

Monday, April 22, 2019 — David M. McLain - Colorado Construction Litigation Blog

As a lawyer that has spent his career defending against construction defect claims, one of the most common questions I get when counseling clients regarding risk management is: “What are the most commonly claimed issues in construction defect litigation?” Until very recently, my answer to this question has been based on my own experience and knowledge on the subject, and only vaguely reliant on empirical data.

Recently, two engineers, Elizabeth Brogan and William McConnell, along with Caroline Clevenger, an associate professor at the University of Colorado, Denver, wrote a paper entitled “Emerging Patterns in Construction Defect Litigation: A Survey of Construction Cases.” The authors analyzed 41 multifamily construction defect cases litigated in 2015, 2016 and 2017, mostly in the Denver metro area.

The authors classified the 55 most prevalent alleged defects into the following categories: structural issues; civil issues; building envelope issues; roof issues; deck, balcony and porch issues; fire protection issues; and miscellaneous issues. The authors then identified the 10 most commonly claimed construction defects, which occurred in over half of all of the cases analyzed.

Reprinted courtesy of David M. McLain, Higgins, Hopkins, McLain & Roswell, LLC

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

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These Haight Brown & Bonesteel attorneys analyze the case Deere & Co. v. Allstate Ins. Co.

Court Finds That SIR Requirements are Not Incorporated into High Level Excess Policies and That Excess Insurers’ Payment of Defense Costs is Not Conditioned on Actual Liability

Monday, April 22, 2019 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP

In Deere & Co. v. Allstate Ins. Co. (No. A145170, filed 2/25/19), a California appeals court held that the insured was not required to pay additional self-insured retentions (SIRs) in order to trigger higher level excess coverage because the retained limits applicable to the first layer of coverage did not also apply to the higher-layer excess policies.

In Deere, the insured was sued for injuries from alleged exposure to asbestos-containing assemblies used in Deere machines. In a declaratory relief action against its umbrella and excess insurers, the case was tried on: (1) whether the higher-layer excess policies were triggered once the first-layer excess policy limits, which were subject to an SIR paid by Deere, had been exhausted; and (2) whether the insurers’ indemnity obligation extended to Deere’s defense costs incurred in asbestos claims that had been dismissed. The trial court found in favor of the insurers, concluding that the retained limits in the first layer of coverage also applied to the higher-layer excess, which was not triggered until Deere paid additional SIRs. The court also concluded that the insurers were not obligated to pay defense costs when underlying cases were dismissed without payment to a claimant either by judgment or settlement.

Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP


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The prevention doctrine is a useful tool to use when the situation warrants.

Using the Prevention Doctrine

Monday, April 22, 2019 — David Erhart - Gordon & Rees Construction Law Blog

The following scenario happens regularly in the construction industry. A contractor on a project reaches out to a subcontractor to perform work. Excited about the prospect of performing the work, the subcontractor signs a contract and puts it nose to the grindstone. After dutifully completing the work the subcontractor turns to the contractor and asks to be paid. But, the contractor refuses saying that there is a provision in the subcontract that says the contractor is only obligated to pay the subcontractor if the contractor receives payment from the owner. So the contractor has completed the work, but has no money to show for it.

One potential remedy for a subcontractor in this situation is the use of the prevention doctrine. “Under the prevention doctrine, ‘if a promisor prevents or hinders fulfillment of a condition to his performance, the condition may be waived or excused.’” Cox v. SNAP, Inc., 859 F.3d 304, 308 (4th Cir. 2017) (quoting Moore Bros. Co. v. Brown & Root, Inc., 207 F.3d 7171, 725 (4th Cir. 2000)). “Put simply, ‘where a party to a contract is the cause of the failure of the performance of the obligation due him or her, that party cannot in any way take advantage of that failure.’” Haddon Hous Assocs v. United States, 711 F.3d 1330, 1338 (Fed. Cir. 2013) (quoting Restatement (Second) of Contracts § 245; Williston, § 39:4).

Reprinted courtesy of David Erhart, Gordon & Rees Scully Mansukhani

Mr. Erhart may be contacted at derhart@grsm.com

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Five Ideologies That Need to Change for Construction to Advance

April 22, 2019 — Matt Mann - Construction Executive

While it may seem as though the construction industry has stuck to the status quo for some time, peering beneath the surface reveals much more is changing than actually meets the eye. Despite an estimated 11 percent increase in commercial construction in the United States, the percentage of young construction workers has declined by 30 percent in the past decade. With more projects and fewer workers, the landscape of the construction industry must adapt if it hopes to advance.

1. Construction Sites Are Prone to Delayed Information
Historically, construction sites have been operating comparably to a game of telephone: inaccurate information travels slowly by word of mouth to each party operating different portions of the jobsite. However, with the emergence of artificial intelligence (AI), there is reason to believe a solution is on the horizon. Often, all parties involved in a project have different pieces of information. Fifty-two percent of rework is the result of poor project data or miscommunication, costing more than $31 billion in 2018 alone. Having a common and consistent understanding is crucial to the success of a jobsite to generate more trust and improve decision-making. Tools such as AI establish newfound workplace transparency and are rapidly improving the efficiency of construction and development.

Reprinted courtesy of Matt Mann, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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France’s Axa Insured Notre Dame Art, Two Construction Firms

April 22, 2019 — Katherine Chiglinsky - Bloomberg

French insurer Axa SA could be on the hook for potential payouts tied to the devastating fire that ripped through Notre-Dame Cathedral, but the government’s ownership of the landmark means the insurance industry could be spared from significant losses tied to the blaze.

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Homebuilders' Earnings Boosted by Falling Mortgage Rates

April 22, 2019 — Prashant Gopal & Sydney Maki - Bloomberg

Falling mortgage rates are giving a lift to U.S. homebuilders just in time for the key spring selling season.

Lennar Corp. on Wednesday reported a jump in home orders that beat the company’s own projections. While KB Home had a slight drop in orders, they were also better than expected. Both companies expressed optimism that demand would strengthen in the coming months.

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Clean Water Act 2019: Law and Regulation

April 22, 2019 — Beverley BevenFlorez – CDJ Stafff

This two-day seminar updates experienced environmental attorneys and related professionals and provides general practitioners with a durable framework for understanding the law and counseling clients in this complex, evolving area. Panel topics will include:

  • What does “compliance” with water quality standards mean?
  • Does the CWA prohibit the release of pollutants from a source when they eventually enter surface waters through groundwater migration?
  • Absent CWA regulation, what laws apply to curtail PFAS contamination?
  • Is “cooperative federalism” working in the real world? Has anything changed in the relationship between the EPA and the states?
  • With their federal consent decrees terminating, what lies in the future for regulating combined sewer systems?

May 2nd-3rd, 2019
Hunton Andrews Kurth LLP Washington, DC
2200 Pennsylvania Avenue, NW
Washington, DC 20037

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Tred Eyerly practices law in Honolulu, Hawaii, and focuses on insurance coverage issues.

Consequential Damage Claims for Insurer's Bad Faith Dismissed

Monday, April 22, 2019 — Tred R. Eyerly - Insurance Law Hawaii

Partial dismissal of the insured's complaint seeking consequential damages for the insurer's bad faith was granted by the court. Bryant v. General Cas. Co., 2019 U.S. Dist. LEXIS 15369 (N.D. N.Y. Jan. 30, 2019).

Bryant purchased from General Casualty Company of Wisconsin (GCCW) a commercial property and casualty policy to cover the insured premises. While the building was rented to a tenant who operated a restaurant, it sustained a collapse. GCCW refused to cover the loss. Bryant sued. In addition to the cost of repairing and replacing the damage to the property, Bryant alleged he was out the value of rental revenue from his tenant, which was forced to close the restaurant and relocated as a result of the unrepaired damage.

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

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

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Windmills

We need to learn to deal with the risks brought on by the new requirements to assure that the goal of sustainable building will be reached.

Mandatory Energy Benchmarking is On Its Way

Monday, April 22, 2019 — Christopher G. Hill - Construction Law Musings

We have discussed the issue of benchmarking and energy reporting on several occasions here at Musings. As the January 18, 2010 issue of ENR Magazine discusses, now cities and states are getting on board in a big way.

Washington, D.C. began requiring building owners to use the EPA Energy Star Portfolio Manager tool on January 1, 2010 and New York City passed a similar measure in December. The D.C. law is the first to require mandatory public disclosure of energy performance. Such disclosure will create a public database of energy performance data.

While I understand that this data and its reporting will create energy accountability in a way that non-disclosure of this data would not, the possibilities for misuse or uses that impact the construction world abound. This energy reporting is a step beyond that of the LEED program in that the data is not just reported to the USGBC, but to a public database. As such, the ease of access will impact contracts and contractors in an even bigger way than the USGBC requirements.

Reprinted courtesy of The Law Office of Christopher G. Hill

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

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Anthony B. Cavender discusses the case Norfolk Southern Railway Co. v. City of Roanoke, et al.

Fourth Circuit Holds that a Municipal Stormwater Management Assessment is a Fee and Not a Prohibited Railroad Tax

Monday, April 22, 2019 — Anthony B. Cavender - Gravel2Gavel

On February 15, the U.S. Court of Appeals for the Fourth Circuit decided Norfolk Southern Railway Co. v. City of Roanoke, et al.; the Chesapeake Bay Foundation was an Intervenor-Defendant. The Fourth Circuit held that a large stormwater management fee (stated to be $417,000.00 for the year 2017) levied by the City of Roanoke against the railroad to assist in the financing of the City’s permitted municipal stormwater management system was a permissible fee and not a discriminatory tax placed on the railroad.

The Railroad Revitalization and Regulatory Reform Act of 1976 specifically provides that states and localities may not impose any tax that discriminates against a rail carrier, 49 U.S.C. § 11501. Accordingly, the issue confronting the Fourth Circuit was whether the assessment was fee and not a tax.

Reprinted courtesy of Anthony B. Cavender, Pillsbury

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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CONSTRUCTION DEFECT NEWS
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Fairness doesn’t always follow justice.

Federal Subcontractor Who Failed to Follow FAR Regulations Finds That “Fair” and “Just” are Not Synonymous

Monday, April 22, 2019 — Garret Murai - California Construction Law Blog

Inscribed over the doors of the U.S. Supreme Court are the words “Equal Justice Under Law.” It’s a reminder that judicial decisions should be just. That doesn’t necessarily mean fair.

In Aspic Engineering and Construction Company v. ECC Centcom Constructors, LLC, U.S. Court of Appeals for the 9th Circuit, Case No. 17-16510 (January 28, 2019), the 9th Circuit overturned an arbitration decision in favor of a local Afghani subcontractor seeking termination costs after it was terminated for convenience by a U.S.-based general contractor. This, despite the arbitrator’s finding that the subcontract was “clearly drafted to give every advantage to” the general contractor, that the local Afghani subcontractor’s “experience with government contracting [was] not nearly as extensive as that of” the general contractor, and “that the normal business practices and customs of subcontractors in Afghanistan were more ‘primitive’ than those of U.S. subcontractors experienced with U.S. Government work.”

Aspic Engineering and Construction
Local Afghani subcontractor Aspic Engineering and Construction Company was awarded two subcontracts by ECC Centcom Constructors the general contractor on two projects in Afghanistan overseen by the United States Army Corps of Engineers. The first subcontract involved construction of various buildings in the Badghis province of Afghanistan . The second subcontract involved the construction various buildings Sheberghan province of Afghanistan . Both subcontracts included clauses from the Federal Acquisition Regulation (FAR), which were incorporated by reference, and included flow-down provisions obligating Aspic to ECC in the same manner that ECC was obligated to the U.S. government.

Reprinted courtesy of Garret Murai, Wendel Rosen

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

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The court held that New Hampshire’s statute of repose did not apply to the manufacturer because it was not involved in incorporating its product into the property.

New Hampshire’s Statute of Repose for Improvements to Real Property Does Not Apply to Product Manufacturers

Monday, April 22, 2019 — Gus Sara - The Subrogation Strategist

In United Services Automobile Association v. Broan-Nutone, LLC, No. 218 2017 CV 01113, [1] the Superior Court of Rockingham County, New Hampshire recently considered whether the eight-year statute of repose for improvements to real property applied to the manufacturer of a ceiling ventilation fan that was installed in the property during its original construction. The court held that New Hampshire’s statute of repose did not apply to the manufacturer because it was not involved in incorporating its product into the property.

In 2012, Chad St. Francis purchased a home in Northwood, New Hampshire. The home was originally constructed in 2008, at which time a Broan-Nutone ceiling ventilation fan was installed in the first-floor bathroom. In 2016, a fire occurred at the home. United Services Automobile Association (USAA) provided property casualty insurance for the home and paid Mr. St. Francis for the damage. In 2017, USAA filed a subrogation lawsuit against Broan-Nutone, alleging that its ceiling fan caused the fire due to a design defect within the product. Broan-Nutone filed a motion for summary judgment on grounds that USAA’s action was barred by New Hampshire’s statute of repose for improvements to real property.

Reprinted courtesy of Gus Sara, White and Williams LLP

Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Tred R. Eyerly analyzes the case MTI, Inc. v. Emplrs. Ins. Co.

Business Risk Exclusions (j) 5 and (j) 6 Found Ambiguous

Monday, April 22, 2019 — Tred R. Eyerly - Insurance Law Hawaii

Reversing the district court's grant of summary judgment in favor of the insurer, the Tenth Circuit found that exclusions (j) 5 and (j) 6 were ambiguous as applied to the facts of the case. MTI, Inc. v. Emplrs. Ins. Co., 2019 U.S. App. LEXIS 2543 (10th Cir. Jan. 25, 2019).

Western Farmers Electrical Cooperative (WFEC) owned cooling towers which were serviced by MTI, Inc. Wausau provided a CGL policy to MTI.

In 2011, MTI found that anchor bolts in Cooling Tower 1 were corroded. WFEC hired MTI to make repairs by installing new anchor castings with anchor bolts and anchor adhesive.

On May 23, 2011, MTI employees removed all of the corroded anchor bolts in Tower 1. Because the adhesive applicator had not yet arrived, MTI did not immediately install new anchor bolts. On the night of May 24, strong winds struck the tower, causing it to lean and several structural components broke. Due to the extent of the structural damage, removal and replacement of the tower was determined to be the only viable option.

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

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

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Bel Aire Estate with Six-Car Elevator

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Despite their small numbers, women executives in construction are paving the way for others to access leadership.

Women Make Their Mark on Construction Leadership

Monday, April 22, 2019 — Annalisa Enrile & Oliver Ritchie - Construction Executive

In the era of the Lean In movement and the Women’s March, women are finding their voices and using them. In politics, in the classroom and even on the playing field, women’s participation and leadership are breaking records. However, this is not the case in the board room—especialy in the C-suite. The Russell 3000 Index, a market index that benchmarks the U.S. Stock Market, found that only 9 percent of top executive positions were filled by women. The construction industry reflects this low participation of female executives. Women in construction only number 9 percent across the board of the industry.

Seven percent of all construction executives are women and only 3 percent of the Fortune 500 construction companies have a female construction manager. Most are in sales and office roles (about 45 percent). Russell 3000 also found that women who are in the C-suite usually fill more HR- or administrative-related positions with very few in COO or CEO positions. Women in leadership need to have real decision making power to progress further. On the upside, women in construction tend to have less of a pay gap than other industries—about 5 percent compared to 20 percent.

Though she be but little, She is Fierce
Despite their small numbers, women executives in construction are paving the way for others to access leadership. In 1984, 11 women created Women Construction Owners and Executives, an organization for support and professional development. Their purpose is to promote women into leadership, assist women in executive positions and encourage more women to join the industry. The National Association of Women in Construction and Women in Construction Operations are also resources and networks with thousands of members.

Reprinted courtesy of Annalisa Enrile & Oliver Ritchie, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.



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Frightened businessman sinking and asking for help

Astaldi’s default on that project comes nearly a year after the contractor commenced work.

Struggling Astaldi Announces Defaults on Florida Highway Contracts

Monday, April 22, 2019 — Scott Judy - Engineering News-Record

Astaldi Construction Corp. announced on March 28 that it was voluntarily defaulting on four contracts with the Florida Dept. of Transportation. Included among those was a $108.3-million contract covering the 3.5-mile-long Section 7A for the $1.6-billion Wekiva Parkway project. Astaldi’s default on that project comes nearly a year after the contractor commenced work on April 1, 2018.

Reprinted courtesy of Scott Judy, ENR

Mr. Judy may be contacted at judys@enr.com

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Pensive businesswoman reading contract

In North Carolina, there is no requirement for any review prior to a lawsuit against an architect, engineer, or surveyor.

Certificates Of Merit For NC Lawsuits Against Engineers And Architects? (Still No)(Law Note)

Monday, April 22, 2019 — Melissa Dewey Brumback - Construction Law in North Carolina

Certificates of Merit are documents intended to show that a true issue exists with a professional’s work, prior to that person being sued. While North Carolina does require that a person suing a medical provider first have the matter reviewed by a professional (and attest to that in the Complaint), there is no requirement for any review prior to a lawsuit against an architect, engineer, or surveyor. Thus, anyone can file a lawsuit against an engineer/architect/surveyor without first having their case eyeballed reviewed by another professional.

Over the years, there have been attempts at adding a Certificate of Merit requirement to design professional lawsuits. See, for example, examples here: from 2005; from 2007; from 2011; and from 2013.

Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC

Ms. Brumback may be contacted at mbrumback@rl-law.com

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Word puzzle disaster quake tsunami crisis

President Trump derided Puerto Rico’s leaders in a series of tweets.

Disaster-Relief Bill Stalls in Senate

Monday, April 22, 2019 — Tom Ichniowski - Engineering News-Record

A partisan squabble over funds to help Puerto Rico continue its long recovery and rebuilding from two hurricanes in 2017 has tied up a wide-ranging spending package on Capitol Hill. At stake in the fight are hundreds of millions of dollars for reconstruction and related work around the U.S.

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

Reprinted courtesy of Tom Ichniowski, ENR



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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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