Congratulations 2020 DE, MA, NY and PA Super Lawyers and Rising Stars

Congratulations card

The selection process takes into consideration peer recognition and professional achievement.

November 16, 2020
White and Williams LLP

Sixteen White and Williams lawyers have been named by Super Lawyers as a Delaware, Massachusetts, New York or Pennsylvania "Super Lawyer" while eleven received "Rising Star" designations. Lawyers are selected through a process that takes into consideration peer recognition and professional achievement. The lawyers named to this year’s list represent a multitude of practices throughout the firm.

Reprinted courtesy of White and Williams LLP

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You May Be Able to Dodge a Bullet, But Not a Gatling Gun

Man jumping and twisting

Garret Murai analyzes the case C. W. Johnson & Sons, Inc. v. Carpenter.

November 16, 2020
Garret Murai - California Construction Law Blog

In the days before cable, and long before Netflix, I watched my fair share of spaghetti westerns on lazy weekend afternoons. Bullets zinging past cowboys, knocking off hats, and ricocheting off rocks. But while you might get lucky and dodge a bullet, not so with a Gatling gun.*

In the next case, C. W. Johnson & Sons, Inc. v. Carpenter, Case No. B300187 (August 7, 2020), a contractor who was unlicensed during a portion of a project dodged a bullet. However, I’m not so sure that he’s going to be able to dodge the hail of bullets that are coming after.

The C. W. Johnson & Sons Case

As cases go, the C. W. Johnson & Sons case is pretty straightforward. In March 2016, Contractor C. W. Johnson & Sons, a family owned flooring company, was contracted to install flooring at Randall Carpenter’s house for a total contract price of $68,343. Work was performed between March and September 2016 including some warranty, repair and corrective work after September 2016.

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


DC Metro Extension’s Precast Supplier Banned from Federal Contracts

Expansion icon

Defective precast concrete panels replaced on $2.7 billion northern Virginia project.

November 16, 2020
Jim Parsons - Engineering News-Record

Stowe, Pa.-based Universal Concrete Products, which supplied hundreds of defective precast panels for the $2.7 billion Silver Line light rail extension in northern Virginia, has received a three-year ban on participating in federally financed transportation projects. Imposed by the Federal Transit Administration, the ban makes Universal ineligible for contracts, grants, loans or other financial assistance from agency of the federal government until the end of 2023.

Reprinted courtesy of Jim Parsons, Engineering News-Record

ENR may be contacted at ENR.com@bnpmedia.com

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Are Untimely Repairs an “Occurrence” Triggering CGL Coverage?

Three construction workers repairing roof

Attorney Christopher G. Hill covers Erie Insurance Exchange v. Spalding Enterprises, et al.

November 16, 2020
Christopher G. Hill - Construction Law Musings

All Class A commercial contractors in Virginia are required to have a minimum level of Commercial General Liability (CGL) coverage. As a general rule, this insurance is there for damage to property or persons arising from an “occurrence” that is covered by the policy. Many cases that are litigated relating to coverage for certain events under a CGL policy turn on the definition of “occurrence” and whether the event leading to a request for coverage constitutes an “occurrence.”

A recent case in Fairfax County, Virginia, Erie Insurance Exchange v. Spalding Enterprises, et al., is just such a case. In the Spalding Enterprises case, the Court considered the following scenario. A homeowner, Mr. Yen contracted with Spalding Enterprises to fix some fire damage at his home. Spalding promised the repairs would be complete in October of 2019. However, after Mr. Yen paid a $300,000.00 deposit, Spalding Enterprises stated that the work would not be completed until November of 2019. Yen then fired Spalding Enterprises and sued for breach of contract, constructive fraud, and violation of the Virginia Consumer Protection Act. Spalding Enterprises sought coverage from Erie Insurance for the claim and Erie denied coverage and sought a declaratory judgment that the events alleged in the Complaint by Mr. Yen did not fall under the definition of “occurrence” in the CGL policy held by Spalding Enterprises.

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


Real Estate Trends: Looking Ahead to 2021

Businessmen discussing trends charts

It is essential to look at how the real estate markets have changed this year and which trends are likely to continue into 2021.

November 9, 2020
Adam Weaver - Gravel2Gavel Construction & Real Estate Law Blog

2020 has been an unprecedented year, and, while there are likely more twists and turns to come before December 31, it is essential to look at how the real estate markets have changed this year and which trends are likely to continue into 2021. The COVID-19 pandemic has impacted nearly every industry, including commercial real estate, and its impact will continue to influence the market and commercial real estate long after the virus has been eradicated.

Commercial Real Estate Loan Modifications

As the United States’ economy stalled, shut down and slowly started to recover throughout 2020, many businesses were negatively impacted, and most property owners found themselves negotiating with both their lenders and tenants. As tenants were unable to pay rent, property owners were unable to service their debt, which led to a surge of loan modifications this year. This trend certainly will continue through the first half of 2021, as the economy continues to recover.

Mr. Weaver may be contacted at adam.weaver@pillsburylaw.com


McCarthy Workers Test Fall-Protection Harnesses Designed to Better Fit Women

Woman climbing mountain

The firm is one of the recipients of an Autodesk/AGC women’s safety harness grant.

November 9, 2020
Corinne Grinapol - Engineering News-Record

At project sites in Dallas, Houston and Atlanta, 27 McCarthy Building Co. women employees are testing a harness better suited to fit a diversity of body types than the more ubiquitous harnesses generally available at construction sites.

Reprinted courtesy of Corinne Grinapol, Engineering News-Record

ENR may be contacted at ENR.com@bnpmedia.com

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Equitable Lien Designed to Prevent Unjust Enrichment

Woman walking tightrope

An equitable lien is tied to an analogous one-year limitations period for those liening for construction improvements.

November 9, 2020
David Adelstein - Florida Construction Legal Updates

There are instances where a party does not have construction lien rights but, nevertheless, feels the need to pursue an equitable lien against the real property.

No different than a construction lien, an action to enforce an equitable lien has a one-year limitations period if it arises from the “furnishing of labor, services, or material for the improvement of real property.” Fla. Stat. s. 95.11(5)(b). In other words, an equitable lien–not nearly as powerful as a construction lien because a construction lien is recorded in the official public records whereas an equitable lien is not–is tied to an analogous one-year limitations period for those liening for construction improvements. (Notably, if the equitable lien arises outside of the construction improvement context, the one-year statute of limitations would not apply. See Gabriji, LLC v. Hollywood East, LLC, 45 Fla. L. Weekly D2251a (Fla. 4th DCA 2020) (one-year statute of limitations period does not apply to all equitable liens such as those that do not arise from furnishing labor, services, or material for the improvement of real property)).

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


The Power of Planning: Four Key Themes for Mitigating Risk in Construction

Risk reward sign

There are many ways to mitigate risk before projects even start, but four key themes emerge to be clear, repeatable opportunities for success.

November 9, 2020
Zac Hays - Construction Executive

Construction is, and always has been, known as a relatively risky business. Whether it is dealing with factors that can be controlled or beyond control, proactively managing risk has proven to be of the most critical factors in delivering quality projects faster, more efficiently and with wider margins.

Many people assume on-site activities introduce the greatest amount of uncertainty and potential risk. But many mistakes in construction originate in the planning phase – meaning preconstruction is ripe with opportunity to be the most effective place for mitigating risk, saving money and ultimately broadening margins. There are many ways to mitigate risk before projects even start, but four key themes emerge to be clear, repeatable opportunities for success.

DIGITIZE THE PLANNING PHASE

Preconstruction is where ideas are brought to life by translating architectural designs into a real, constructible plan. Decisions made at this stage can determine the project’s success and profitability – but it’s far from straightforward. Estimating, scheduling and planning are highly complex activities that depend on constantly changing details and are all areas where missed information or miscommunication can lead to costly rework down the line.

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


Homebuyers’ Wallets Hammered as Prices for Plywood Substitute Spike

November 9, 2020
Marcy Nicholson - Bloomberg

Americans are coughing up $4,600 more on average to buy their dream home than six months ago -- thanks to a record run-up in prices for a once-cheap plywood substitute.

Prices are on a tear for those bonded wood-chip sheets commonly used as sheathing for walls, floors and roofs in new home construction. Oriented Strand Board, or OSB, has long been used as a low-cost alternative to plywood, but the product now fetches a higher price as increased demand and tight supplies lead to delivery delays and elevated construction costs in the U.S. and Canada.


U.K. High Court COVID-19 Victory for Policyholders May Set a Trend in the U.S.

Superhero

U.S. policyholders should review whether any of their policies issued by U.K.-based carriers.

November 9, 2020
Andres Avila & Anastasiya Collins - Saxe Doernberger & Vita

On September 15, 2020, in a matter entitled The Financial Conduct Authority v. Arch & Others1, the High Court of Justice of England and Wales, the equivalent of a trial court in the U.S., issued a ruling on a COVID-19 business interruption insurance case (the “Judgment”). Significantly, the Court sided with policyholders on most key coverage issues under specific non-damage business interruption insurance coverage forms. U.S. policyholders should review whether any of their policies issued by U.K.-based carriers, which may be subject to English law and have the forms discussed below, are impacted by this favorable decision.

The Financial Conduct Authority (“FCA”), the U.K. financial regulatory body, brought the case to establish liability under 21 lead representative sample policy wordings from eight insurer defendants. The case was filed on an expedited basis on June 9, 2020 under the Financial Market Test Case Scheme, which is used for claims of general importance that require authoritative court guidance. Although the Judgment is legally binding only on the carriers who were parties to the action, the FCA estimates the case could affect 700 types of policies across 60 different insurers, and 370,000 small to medium-sized enterprises policyholders (“SME”) in the U.K. While the Judgment may be appealed, it is expected to incentivize insurers to settle their claims before the outcome of an appeal is known.

Reprinted courtesy of Andres Avila, Saxe Doernberger & Vita and Anastasiya Collins, Saxe Doernberger & Vita

Mr. Avila may be contacted at AAvila@sdvlaw.com
Ms. Collins may be contacted at ACollins@sdvlaw.com


NEHRP Recommendations Likely To Improve Seismic Design

Vortex design

The 2020 NEHRP provisions contain rules for the seismic design of cross-laminated timber wall systems.

November 9, 2020
Nadine M. Post - Engineering News-Record

Code-based earthquake engineering is on the verge of getting simpler, thanks to the National Earthquake Hazards Reduction Program’s recommendation to replace the traditional seismic hazard maps with an improved seismic hazards database. The recommendation is one of the most significant changes put forth in the 2020 update of the NEHRP seismic design provisions, which are the foundation for the prescriptive seismic design code for buildings and other structures.

Reprinted courtesy of Nadine M. Post, Engineering News-Record

Ms. Post may be contacted at postn@enr.com

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Court Denies Remand of COVID-19 Case

November 9, 2020
Tred R. Eyerly - Insurance Law Hawaii

The federal district court rejected a challenge to its diversity jurisdiction and rejected the insured's attempt to remand the COVID-19 claims back to state court. Vandelay Hospitality Group LP v. Cincinnati Ins. Co., 2020 U.S. Dist. LEXIS 149196 (N.D. Tex. Aug. 18, 2020).

Vandelay purchased a commercial property policy from Cincinnati through Swingle Collins, its registered broker, and its employee, Baron Cass. The policy was "all risk" and purported to insure three of Vandelay's restaurants for, amoung other things, direct physical loss and loss incurred due to business interruptions.

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


Newmeyer Dillion Named 2021 Best Law Firm in Multiple Practice Areas by U.S. News-Best Lawyers

Best Practice Puzzle Piece

The practices recognized include Commercial Litigation, Insurance Law, Real Estate Law, Litigation - Real Estate, Construction Law, and Litigation - Construction.

November 9, 2020
Newmeyer Dillion

Prominent business and real estate law firm Newmeyer Dillion is pleased to announce that U.S. News-Best Lawyers® has recognized the firm in its 2021 "Best Law Firms" rankings, in six practice areas earning the highest ranking possible - Tier 1 in the Orange County Metro area. The practices recognized include Commercial Litigation, Insurance Law, Real Estate Law, Litigation - Real Estate, Construction Law, and Litigation - Construction.

Firms included in the 2021 "Best Law Firms" list have been recognized by their clients and peers for their professional excellence. Firms achieving a Tier 1 ranking have consistently demonstrated a unique combination of quality law practice and breadth of legal expertise.

"We are grateful that our relationship-first approach to propel our clients' needs forward has received this recognition," said Managing Partner Paul Tetzloff. "We will continue to show our appreciation through hard work in advocating for our clients and communities."

To be eligible for the "Best Law Firms" ranking, a firm must have at least one attorney recognized in the current edition of The Best Lawyers in America for a specific practice area. Best Lawyers recognizes the top 4 percent of practicing attorneys in the U.S., selected through exhaustive peer-review surveys in which leading lawyers confidentially evaluate their professional peers.

About Newmeyer Dillion
For over 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 60 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's operations, growth, and profits. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.


Landmark Contractor Licensing Case Limits Disgorgement Remedy in California

Santa Monica California aerial beach view

Contractors who perform work in California without being properly licensed are subject to a world of hurt, including civil and criminal penalties.

November 9, 2020
Candace Matson - Construction & Infrastructure Law Blog

Contractors performing work in California are required to be licensed by the California State License Board (“CSLB”). Cal. Bus. & Prof. Code §7065. Except for sole proprietors, contractors are typically licensed through “qualifiers,” i.e., officers or employees who take a licensing exam and meet other requirements to become licensed on behalf of the contractor’s company. Contractors who perform work in California without being properly licensed are subject to a world of hurt, including civil and criminal penalties (see, e.g., Cal. Bus. & Prof. Code §§ 7028, 7028.6, 7028.7, 7117, and Cal. Labor Code §§ 1020-1022), and the inability to maintain a lawsuit to recover compensation for their work. Cal. Bus & Prof. Code § 7031(a); Hydra Tech Systems Ltd. v. Oasis Water Park, 52 Cal.3rd 988 (1991).

But arguably the worst ramification of not being property licensed is that established in Business & Professions Code Section 7031(b), which provides that any person who uses the services of an unlicensed contractor may bring an action for the return of all compensation paid for the performance of the work, commonly known as “disgorgement.” This remedy is particularly harsh (often described as “draconian”) because it makes no allowance for the fact that an unlicensed contractor will likely have already paid out the bulk of its compensation to its subcontractors, suppliers and vendors, but nevertheless can be ordered to disgorge all compensation.

Ms. Matson may be contacted at cmatson@sheppardmullin.com


Business Risk Exclusions Dismissed in Summary Judgment Motion

Red block amidst white blocks

Attorney Tred R. Eyerly analyzes United Specialty Ins. Co. v. Dorn Homes.

November 9, 2020
Tred R. Eyerly - Insurance Law Hawaii

While the court denied summary judgment on whether the alleged damage was due to faulty workmanship and not covered, it granted summary judgment for dismissal of several business risk exclusions the insurer asserted against the developer. United Specialty Ins. Co. v. Dorn Homes, 2020 U.S. Dist. LEXIS 138431 (D. Ariz. Aug. 4, 2020).

Dorn, a residential home developer, developed a 350 single family residential home division. Dorn did not perform the actual construction, but contracted with various subcontractors.

After completion, Dorn began to receive complaints from homeowners about interior damage to some of the homes. Inspections showed interior cracking, wall separation and foundation movement. Dorn ultimately installed an unvented foam insulated roof system to address these issues. Therefore, it did not repair the faulty workmanship of its subcontractors because it would not have been efficient or as effective. Dorn paid for the repairs to the 87 homes at issue.

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


The Future of Pandemic Coverage for Real Estate Owners and Developers

Businessman holding red umbrella in yellow meadow

Many claims have resulted in litigation and require judicial intervention to determine whether private insurance carriers owe policyholders indemnification for pandemic related losses.

November 9, 2020
Ashley McWilliams - Saxe Doernberger & Vita

Shutdowns resulting from the COVID-19 pandemic have prompted an unprecedented number of business income and business interruption insurance claims. Many claims have resulted in litigation and require judicial intervention to determine whether private insurance carriers owe policyholders indemnification for pandemic related losses. Private insurance carriers that have denied the claims, in large part, argue that they did not underwrite coverage for the pandemic and assert that pandemic coverage is much too unpredictable to underwrite. Private carriers contend that a government-backed insurance program is necessary to mitigate the economic impact resulting from pandemic claims.

The COVID-19 pandemic has significantly impacted real estate owners and developers. Real estate owners and developers have sustained business income losses in the form of lost rents at commercial properties, service disruption, labor and/ or material shortages, to name a few. Questions about whether the virus caused “direct physical damage,” as well as whether specific “virus exclusions” on policies, have provided hurdles to coverage under existing schemes, click here.Those that have filed lawsuits against their insurers seeking coverage under current policy terms are having mixed results, at best. Click here to view SDV’s Litigation Tracker. A predictable source of indemnification for future pandemic-related losses would greatly relieve business disruption and, ultimately, the impact on the economy. However, the question remains, who will pay for such massive losses?

Ms. McWilliams may be contacted at AMcWilliams@sdvlaw.com


The California Privacy Rights Act Passed – Now What?

Santa Monica California aerial beach view

The ballot initiative, Proposition 24, has been passed by voters.

November 9, 2020
Heather Whitehead - Newmeyer Dillion

The ballot initiative, Proposition 24, has been passed by voters in yesterday’s election. What does this proposition entail and how does it impact the California Consumer Privacy Act (CCPA)?

What’s Covered in Proposition 24 - The California Privacy Rights Act (CPRA)

The CPRA, among other things, does the following:

  • Revises the existing CCPA to expand consumer rights with respect to personal information and sensitive personal information;
  • Creates a new agency responsible for enforcing the CPRA; and
  • Increases penalties for violations related to the personal information of children under the age of 16.

As for additional consumer rights, the CPRA offers consumers the opportunity to request a correction of inaccurate personal information. In addition, a consumer may direct a company to “limit its use of the consumer's sensitive personal information” to a use that an average customer would expect.

Ms. Whitehead may be contacted at heather.whitehead@ndlf.com


Be a Good Neighbor: Protect Against Claims by an Adjacent Landowner During Construction

Businessman shaking hands

At times, construction in close quarters can mark the beginning of costly and emotional disputes, which can escalate to costly legal battles during and after construction.

November 9, 2020
Joshua Levy & Madeleine Bailey - Construction Executive

There’s nothing like working in an office while pilings are being pounded into the ground next door, leading to crashing sounds of pile driving and the attendant afternoon headaches. Fortunately, that’s often the extent of a neighboring project’s real inconvenience. In other cases, however, construction in close quarters can mark the beginning of costly and emotional disputes, which can escalate to costly legal battles during and after construction.

NUISANCE AND STRUCTURAL DAMAGE CLAIMS

Construction claims are often based on the concept of “nuisance,” or on structural damage to adjacent property. Nuisance claims are typically based on noise and dust from construction sites, while structural damage claims are based on direct physical damage caused by neighboring demolition, vibrations, excavation and dewatering. These types of claims can result in monetary damages for neighbor plaintiffs, loss of permits for contractors and reputational damage to the developer.

In one recent case in New York City, the developer faces up to $10 million in damages in a lawsuit with a neighboring property owner. The developer was conducting excavation, dewatering and installation of steel sheet piles, which the plaintiff alleges caused its five-story building to settle and shift, rendering doors inoperable and causing extensive cracking and separation of floors and ceilings from walls and supports. The plaintiff filed its complaint on Jan. 24, 2019, and the lawsuit is ongoing, exemplifying that construction claims such as these can be time consuming and costly (Complaint, 642 East 14th St. v. 644 E. 14th Realty [N.Y. Sup. Ct. January 24, 2019]).

Reprinted courtesy of Joshua Levy & Madeleine Bailey, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Levy may be contacted at joshua.levy@huschblackwell.com


Construction Adds 84,000 Jobs in October, Largest Gain Since June

November 9, 2020
Tom Ichniowski - Engineering News-Record

The construction industry continues to recover from its coronavirus-caused deep drop in employment, adding 84,000 jobs in October, the industry’s largest monthly increase since June, the Bureau of Labor Statistics has reported.

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


Illinois Federal Court Applies Insurer-Friendly “Mutual Exclusive Theories” Test To Independent Counsel Analysis

Judge sitting behind bench (illustration)

Requests for independent counsel are often rooted in fear that a defense attorney who has a relationship with the insurer may be incentivized to defend the insured in a way that maximizes the potential for the insurer to succeed on its coverage defenses.

November 9, 2020
Jeremy S. Macklin - Traub Lieberman Insurance Law Blog

Insureds often request independent counsel when insurers agree to provide a defense subject to a reservation of rights, pursuant to which an insurer takes the position that certain damages may not be indemnifiable. Requests for independent counsel are often rooted in fear that a defense attorney who has a relationship with the insurer may be incentivized to defend the insured in a way that maximizes the potential for the insurer to succeed on its coverage defenses. As explained by the Illinois Supreme Court in Maryland Cas. Co. v. Peppers, 355 N.E.2d 24 (Ill. 1976), when a conflict of interest arises between an insurer and its insured, the attorney appointed by the insurer is faced with serious ethical questions and the insured is entitled to its own attorney.

Illinois courts generally follow the rule that an insured is entitled to independent counsel upon a showing of an actual conflict. In Builders Concrete Servs., LLC v. Westfield Nat’l Ins. Co., No. 19 C 7792, 2020 WL 5518474 (N.D. Ill. Sept. 14, 2020), the U.S. District Court for the Northern District of Illinois recently addressed a dispute between an insurer and its insured about independent counsel.

Westfield insured Builders Concrete Services (BCS). Focus Construction hired BCS as a subcontractor to perform concrete work on a new apartment building. BCS’ work included pouring concrete for structural columns, one of which buckled and failed. BCS sued Focus Construction for withholding payment, and Focus Construction counter-sued for breach of contract and negligence relating to BCS’ alleged faulty work that caused the column to fall. Focus Construction’s counterclaim alleged that the column failure damaged other parts of the building on which Builders did not perform work.

Mr. Macklin may be contacted at jmacklin@tlsslaw.com



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