First Railroad Bridge Between Russia and China Set to Open

Yaquina bridge

Trans-border crossing a key link in Belt and Road Initiative

August 6, 2019
Saibal Dasgupta - Engineering News-Record

Work was completed on the first-ever railroad bridge connecting Russia to China in early April, as Russian engineers installed the final steel beam in its section of the structure over the river called the Amur in Russian and the Heilongjiang. China finished its part of the work last October, as the structure successfully spanned the world's 10th longest river, which markets the boundary between the two countries. Officials say the bridge will open for public use after the necessary inspections in July this year.

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


Summary Judgment for Partial Collapse Granted to Insurer

August 6, 2019
Tred R. Eyerly - Insurance Law Hawaii

The partial collapse of an exterior brick veneer of an apartment building was found not to be covered under the apartment policy. Keyser v. State Farm Fire & Cas. Co., 2019 U.S. Dist. LEXIS 81194 (W.D. Pa. May 14, 2019).

Norene Keyser was insured by State Farm for a six-unit apartment building. The exterior brick veneer of the property's west-facing wall partially collapsed while a maintenance staff attempted remedial repairs. Keyser filed a claim and State Farm hired Jon Nedley, an engineer, to determine the cause of the loss, and a contractor, Dave Wahl, to estimate the cost to repair the damage.

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


Release Language Extended To Successor Entity But Only Covered “Known” Claims

Businessmen sitting at table with cups over contract

David Adelstein analyzes MBlock Investors, LLC v. Bovis Lend Lease, Inc.

August 6, 2019
David Adelstein - Florida Construction Legal Updates

A recent case contains valuable analysis that has impact on whether a “successor” entity will be bound by a settlement agreement it was not a direct party to. This case contains arguments for contractors that can be raised in a number of different contexts if it is sued by a successor or related entity.

The same case discusses the difference between releasing a party for “known” claims without releasing the same party for “unknown” claims. This is an important distinction because unknown claims refer to latent defects so a release that only releases a party for known claims is not releasing that party for latent defects.

In MBlock Investors, LLC v. Bovis Lend Lease, Inc., 44 Fla. L. Weekly D1432d (Fla. 3d DCA 2019), an owner hired a contractor to construct a project. At completion, the owner transferred the project to an affiliated entity (collectively, the “Owner”). The contractor sued the Owner for unpaid work, the Owner claimed construction defects with the work, and a settlement was entered into that released the contractor for KNOWN claims. Thereafter, the Owner defaulted on the construction loan and agreed to convey the property through a deed in lieu of foreclosure to an entity created by the lender (the “Lender Entity”).

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


Effectively Managing Project Closeout: It Ends Where It Begins

The end printed on paper in typewriter

Project closeout can have a huge impact on a contractor’s overall profitability and success.

August 6, 2019
William E. Underwood - ConsensusDocs

Project closeout is sometimes one of the last things on a contractor’s mind at the beginning of a project, but project closeout can have a huge impact on a contractor’s overall profitability and success. Effectively managing the closeout process is critical, and it all begins with the negotiation and execution of the project contract. This contract can, and should, provide a complete roadmap for project closeout, as addressing these issues on the front end can set up the parties for successful project completion. It is then equally important to re-review the terms of the contract as project closeout approaches to ensure that everyone, including the owner, adheres to all contractual requirements.

This article examines several pertinent issues related to project closeout that should be addressed during the contracting stage, including defining substantial and final completion, inspection and acceptance, punch lists, and warranties.

Defining Substantial and Final Completion
Having clear definitions for both substantial and final completion in your construction contract is an important and necessary early step in achieving successful project closeout.

Mr. Underwood may be contacted at wunderwood@joneswalker.com


Ruling Closes the Loop on Restrictive Additional Insured Endorsement – Reasonable Expectations of Insured Builder Prevails Over Intent of Insurer

Judge sitting behind bench (illustration)

Theodore L. Senet, Esq., Jason M. Adams, Esq. and Clayton Calvin analyze McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company.

July 31, 2019
Theodore L. Senet, Esq., Jason M. Adams, Esq. and Clayton Calvin - Gibbs Gidden

On June 5, 2019, the Court of Appeal in McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company, 35 Cal. App. 5th 1042 (Cal. Ct. App. 2019) issued an important opinion on the scope of additional insured insurance coverage for developers and general contractors in California. Specifically, the “care, custody and control” (“CCC”) exclusion will be read to only exclude coverage for additional insureds who exercised exclusive control over the damaged property. Thus, general contractors who share control of the property with their subcontractors, as is typical on most projects, will not be denied coverage under this exclusion.

I. Facts & Procedural History
McMillin Homes Construction, Inc. was a Southern California developer and general contractor. In 2014, homeowners sued McMillin for roofing defects in a case called Galvan v. McMillin Auburn Lane II, LLC. Pursuant to a subcontract, the roofer, Martin Roofing Company, Inc., provided McMillin with additional insured coverage under Martin’s general liability insurance policy. The insurer, National Fire and Marine Insurance Company, covered McMillin under an ISO Form CG 20 09 03 97 Additional Insured (“AI”) endorsement. After McMillin tendered its defense of the Galvan lawsuit under the AI endorsement, National Fire declined to provide McMillin with a defense to the homeowners’ lawsuit, relying on a CCC exclusion contained in the AI endorsement for property in the care, custody or control of the additional insured. McMillin then sued National Fire for breach of the policy, bad faith and declaratory relief in McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company.

In McMillin Homes, the trial court found the CCC exclusion in the AI endorsement applied and held in favor of the insurer, National Fire. The trial court found the exclusion for damage to property in McMillin’s “care, custody, or control” precluded coverage for the roofing defect claims, as well as any duty on the part of the insurer to defend the home builder, McMillin. McMillin filed an appeal from the trial court’s ruling.

II. Case Holding
The Court of Appeal reversed to hold in favor of McMillin, interpreting the CCC exclusion narrowly and finding a duty on the part of the insurer to defend the general contractor pursuant to the AI endorsement on the roofer’s insurance policy. It held that for the CCC exclusion to attach, it would require the general contractor’s exclusive control over the damaged property, but here, the general contractor shared control with the roofer. The Court of Appeal noted that where there is ambiguity as to whether a duty to defend exists, the court favors the reasonable belief of the insured over the intent of the insurer. Here, that reasonable belief was that the coverage applied and the exclusion was narrow.

The Court of Appeal relied upon Home Indemnity Co. v. Leo L. Davis, Inc., 79 Cal. App. 3d 863 (Ct. App. 1978) (“Davis”), as a judicial interpretation of the CCC exclusion. That case synthesized a string of case law into a single conclusion: that courts may hold the exclusion inapplicable where the insured’s control is not exclusive. In the opinion in McMillin Homes, coverage turned upon whether control was exclusive: “[t]he exclusion is inapplicable where the facts at best suggest shared control.” The Court of Appeal stated the “need for painstaking evaluation of the specific facts of each case. Here, McMillin coordinated the project’s scheduling, but Martin furnished the materials and labor and oversaw the work; they therefore shared control.

Even if the rule in Davis did not apply and the exclusion was found to be ambiguous, the court stated that “control” requires a higher threshold than merely acting as a general contractor. Liability policies are presumed to include defense duties and exclusions must be “conspicuous, plain, and clear.” Furthermore, because “construction defect litigation is typically complex and expensive, a key motivation [for the endorsement] is to offset the cost of defending lawsuits where the general contractor’s liability is claimed to be derivative.” This is especially true because the duty to defend is triggered by a mere potential of coverage. Under the insurer’s construction of the exclusion, coverage would be so restrictive under the AI endorsement that it was nearly worthless to the additional insured.

III. Reasonable Expectation of the Insured Prevails over the Intent of the Insurer
Like most commercial general liability policies, National Fire’s policy excluded coverage for property damage Martin was contractually obliged to pay, with an exception for “insured contracts.” Typically, “insured contracts” include prospective indemnification agreements for third party claims. The National Fire policy contained a form CG 21 39 Contractual Liability Limitation endorsement, which deleted indemnity agreements from the definition of “insured contracts” to effectively preclude coverage for the indemnity provision between McMillin and Martin. National Fire argued that this endorsement demonstrated its intent to exclude coverage to McMillin for the homeowners’ defect lawsuit. The Court of Appeal stated that the insurer’s intent is not controlling and that the insureds reasonable expectation under the AI endorsement would control. As a result of its ruling, the Court also dealt a significant blow to the argument that the CG 21 39 endorsement is effective as a total bar to additional insured coverage for all construction defect claims.

IV. Conclusion
The decision is good news for developers and general contractors who rely on subcontractors to provide additional insured coverage. Unless the general contractor exercises exclusive control over a given project, the CCC exclusion in the CG 20 09 03 97 additional insured endorsement may not preclude the duty to defend. Demonstrating that a general contractor exercised exclusive control over the project would be extremely difficult to show under normal project circumstances because the any subcontractor participation appears to eliminate the general contractor’s exclusive control.

The case also highlights the need for construction professionals to regularly review their insurance programs with their risk management team (lawyers, brokers, and risk managers). As is often the case, a basic insurance policy review at the outset of the McMillin project could likely have avoided the entire dispute. For owners and general contractors, CG 20 10 (ongoing operations) and CG 20 37 (completed operations) additional insured forms are preferable to the CG 20 09 form at issue in the McMillin case because they do not contain the CCC exclusion. The CG 20 10 and 20 37 forms are readily available in the marketplace and are commonly added to most policies upon request. Had those forms been added, AI coverage likely would have been extended to McMillin without the need for litigation. Similarly, carriers will routinely delete the CG 21 39 Contractual Liability Limitation endorsement upon request. Deletion of the CG 21 39 would have circumvented National Fire’s second argument in its entirety.

Additionally, insurance policies, endorsements, and exclusions are subject to revision and are not always issued on standard forms. As a result, it is incumbent upon developers, contractors, and subcontractors to specify the precise overage requirements for construction projects and to review all endorsements, certificates, and policies carefully. Due to the difficulty in monitoring compliance with insurance requirements, project owners and general contractors are finding that it is better to insure projects under project specific wrap-up insurance programs which eliminate many of the issues pertaining to additional insured coverage. Wrap-up programs vary greatly as to their terms and conditions, so however a project is insured, insurance requirements and evidence of coverage should be carefully reviewed by experienced and qualified risk managers, brokers, and legal counsel to assure that projects and parties are sufficiently covered.

Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms. The authors can be reached at tsenet@gibbsgiden.com (Theodore Senet); jadams@gibbsgiden.com (Jason Adams) and ccalvin@gibbsgiden.com (Clayton Calvin).


Insurance Frauds Prevention Act Applies Broadly to Claims “Characterized in Any Way by Deceit”

July 30, 2019
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP

In People ex rel. Allstate v. Suh (No. B280293; filed 6/17/19), a California appeals court upheld a jury’s award of over $6 million in civil penalties for insurance fraud under Insurance Code section 1871.7.

In Suh, Allstate and other insurers brought an action under Insurance Code section 1871.7, on behalf of the People of the State of California, against Suh and others for insurance fraud in violation of Penal Code section 550, which makes it unlawful to submit false or fraudulent claims to an insurance company. Allstate alleged that Suh set up sham law firms, then procured auto insurance policyholders of Allstate as clients of the sham law firms, submitted insurance claims on behalf of the insureds, and absconded with settlement proceeds. The jurors found in favor of Allstate and imposed over $6 million in civil penalties.

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


What You Need to Know About Home Improvement Contracts

Businessman holding contract

California Section 7159 of the Business statute sets forth what must be included in home improvement contracts.

July 30, 2019
Garret Murai - California Construction Law Blog

Given the variety of problems that can arise on a construction project, from defects to delays, it’s difficult to draft a construction contract that addresses every possible problem exactly right. However, so long as you adequately address the “big three” of scope, price and time, it’s also difficult to draft a construction contract wrong.

That is, with one exception.

And that one exception, in California, is home improvement contracts. In 2004, the California State Legislature enacted the state’s Home Improvement Business statute (Bus. & Prof. Code §§7150 et seq.). Section 7159 of the statute sets forth what must be included in home improvement contracts.

It’s a section that could have been written by Felix Unger of the Odd Couple. In addition to setting forth required language that must be included in a home improvement contract, it directs where that language is to be set forth in a home improvement contract, and even how it is to be presented, down to type sizes.

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


Survey Finds Tough Labor Market Top-of-mind for Busy Georgia Contractors

Fountain pen pointing at the word Survey on a page

Survey demonstrates the state of construction in Georgia.

July 30, 2019
Scott Hazy - Construction Executive

In February 2019, the results of the third Annual Georgia Construction Outlook Survey were released. The survey respondents includes general contractors (44%), specialty contractors (53%) and heavy contractors (3%) with gross revenue size that ranged from in excess of $1 billion to less than $5 million. Three-quarters of respondents reported revenues of less than $25 million. Here’s what they had to say about the state of construction in Georgia.

Financial Performance and 2019 Outlook

It was no surprise to see the majority of respondents reporting increased revenues and margins in 2018. Average gross margins from all respondents increased to 11.3%, up from 9.33% in the prior year. Overall, 72% of respondents saw their gross margins increase and/or remain the same. The largest decrease in margins was seen in the heavy contractor sector, with 33% of respondents reporting a decrease in margins. When it comes to backlog, Georgia is seeing a record number of months in the pipeline and 57% of respondents reported higher backlogs than in the previous year. The increase in backlog helps explain why 84% of respondents are expecting increase in revenues in 2019 over 2018. Interestingly, of those expecting increase in revenue, 40% are anticipating an increase of more than 10% from the prior year. So, the overall financial health of Georgia contractors looks to remain strong at least through 2019.

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

Mr. Hazy may be contacted at scott.hazy@btcpa.net


San Francisco Partner Steven Cvitanovic Speaking during PLI’s 21st Annual Commercial Real Estate Institute on November 8, 2019

July 30, 2019
Steven M. Cvitanovic - Haight Brown & Bonesteel LLP

Partner Steven Cvitanovic is speaking during the Practising Law Institute’s 21st Annual Commercial Real Estate Institute. He is presenting, “Ethical Issues Facing Real Estate Attorneys” on November 8, 2019.

November 8th-9th, 2019
PLI California
685 Market Street, First Floor
San Francisco, CA

Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com


Warning! Danger Ahead for Public Entities

Warning stripes

Attorney Michael J. Baker analyzes the case JRI Sheet Metal, Inc. v. City of LAWA.

July 30, 2019
Michael J. Baker - Snell & Wilmer Under Construction Blog

Public entities are known to assert False Claims actions “to up the ante” to intimidate and aggressively address contractor construction claims. This strategy in the case of John Ross of Industrial Sheet Metal, Inc. (JRI) V. City of Los Angeles Department of Airports (LAWA), 29 Cal. App. 5th 378 (2018), backfired on the public entity, LAWA, in a big way and should serve as a warning to public entities about expanding claims to include False Claim actions. In this case, LAWA was awarded $1 in contract damages, its California False Claims Act (CFCA) claim was rejected by the jury as were JRI’s claims against LAWA. Despite losing on the substantive contract claims, the trial court found that JRI “prevailed in the action” under the relevant CFCA fee provision, Government Code 12652, subd. (g)(9)(B), regardless of JRI’s failure to prevail in the action as a whole. The California Appellate Court (hereinafter “Court”) affirmed the trial court’s finding.

The CFCA is analogous to the federal False Claims Act (FFCA; 31 U.S.C. 3729 et seq.). Since the CFCA is patterned on similar federal legislation, it was appropriate for the Court to look to precedent construing this similar federal act in interpreting the CFCA provisions. Accordingly, the Court looked at the False Claims Act cases for guidance in upholding the trial court’s decision in its determination that JRI was the “prevailing party” for determining an attorney’s fees award against LAWA.

Mr. Baker may be contacted at mjbaker@swlaw.com


Colorado Trench Collapse Kills Two

Construction site

The trench collapse in northern Colorado earlier this year is being investigated.

July 30, 2019
Engineering News-Record

Federal safety officials are investigating the April 16 collapse of a trench that killed two construction workers in northern Colorado. The two men—Cristopher Lee Ramirez, 26, and Jorge Baez Valadez, 41—were installing utilities at a site being developed by D.R. Horton Express Homes in Windsor, Colo., when they were trapped by soil and rocks in the 15-ft-deep trench. The rescue attempt lasted seven hours and involved small shovels because of fears of a second collapse.

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


Insurers Subrogating in Arkansas Must Expend Energy to Prove That Their Insureds Have Been Made Whole

Newton cradle showing energy and gravity

In Arkansas, an insurer must establish that the insured has been made whole in one of two ways.

July 30, 2019
Michael J. Ciamaichelo - The Subrogation Strategist

Arkansas employs the “made whole” doctrine, which requires an insured to be fully compensated for damages (i.e., to be “made whole”) before the insurer is entitled to recover in subrogation.[1] As the Riley court established, an insurer cannot unilaterally determine that its insured has been made whole (in order to establish a right of subrogation). Rather, in Arkansas, an insurer must establish that the insured has been made whole in one of two ways. First, the insurer and insured can reach an agreement that the insured has been made whole. Second, if the insurer and insured disagree on the issue, the insurer can ask a court to make a legal determination that the insured has been made whole.[2] If an insured has been made whole, the insurer is the real party in interest and must file the subrogation action in its own name.[3] However, when both the insured and an insurer have claims against the same tortfeasor (i.e., when there are both uninsured damages and subrogation damages), the insured is the real party in interest.[4]

In EMC Ins. Cos. v. Entergy Ark., Inc., 2019 U.S. App. LEXIS 14251 (8th Cir. May 14, 2019), EMC Insurance Companies (EMC) filed a subrogation action in the District Court for the Western District of Arkansas alleging that its insureds’ home was damaged by a fire caused by an electric company’s equipment. EMC never obtained an agreement from the insureds or a judicial determination that its insureds had been made whole. In addition, EMC did not allege in the complaint that its insureds had been made whole and did not present any evidence or testimony at trial that its insureds had been made whole. After EMC presented its case-in-chief, the District Court ruled that EMC lacked standing to pursue its subrogation claim because “EMC failed to obtain a legal determination that its insureds had been made whole . . . prior to initiating this subrogation action.” Thus, the District Court granted Entergy Ark., Inc.’s motion for judgment as a matter of law and EMC appealed the decision.

Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com


Dispute Waged Over Design of San Francisco Subway Job

Subway in depot

Dispute causing delay of the San Francisco Subway project.

July 30, 2019
Erica Berardi - Engineering News-Record

Contractor Tutor Perini Corp. is clashing with the San Francisco Municipal Transportation Agency over what the firm says are alleged design flaws that may push past December the completion of the already-delayed $1.6-billion Central Subway Project.

Ms. Berardi may be contacted at BerardiE@enr.com


Care, Custody or Control Exclusion Requires Complete and Exclusive Control by Insured Claiming Coverage

Three businessmembers discussing something

Attorneys Christopher Kendrick and Valerie A. Moore discuss the case McMillin Homes Construction v. Natl. Fire & Marine Ins. Co.

July 30, 2019
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP

In McMillin Homes Construction v. Natl. Fire & Marine Ins. Co. (No. D074219, filed 6/5/19) a California appeals court held that a “care, custody or control” exclusion did not bar coverage for defense of a general contractor as an additional insured under a subcontractor’s policy, because the exclusion requires exclusive control, but the facts and allegations posed a possibility of shared control with the subcontractor.

McMillin was the general contractor on a housing project and was added as an additional insured to the roofing subcontractor’s policy pursuant to the construction subcontract. The homeowners sued, including allegations of water intrusion from roof defects. McMillin tendered to the roofing subcontractor’s insurer, which denied a defense based on the CGL exclusion for damage to property within McMillin’s care, custody or control.

In the ensuing bad faith lawsuit, McMillin argued that the exclusion required complete or exclusive care, custody or control by the insured claiming coverage, which was not the case for McMillin. The insurer argued that the exclusion said nothing about complete or exclusive care, custody or control. Further, the intent to exclude coverage for damage to any and all property in McMillin’s care, custody or control, to whatever degree, was demonstrated by the fact that the additional insured endorsement in question was not an ISO CG2010 form, but a CG2009 form, which expressly adds a care, custody or control exclusion to the additional insured coverage not found in the CG2010 form. The argument was that the CG2009 form evidences an intent to conclusively eliminate coverage for property in the additional insured’s care, custody or control. In addition, the insurer argued that this result was also reinforced by its inclusion of an ISO CG2139 endorsement in the roofer’s policy, which eliminated that part of the “insured contract” language of the CGL form, defining an “insured contract” as “[t]hat part of any other contract or agreement pertaining to your business . . . under which you assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization.” The insurer’s argument was that by having eliminated coverage for contractual indemnity or hold harmless agreements, it had “closed the loop” of eliminating additional insured coverage for construction defect claims.

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


Quick Note: Don’t Forget To Serve The Contractor Final Payment Affidavit

Construction worker in site

The contractor final payment affidavit is not a meaningless form.

July 30, 2019
David Adelstein - Florida Construction Legal Updates

If you are a contractor in DIRECT CONTRACT with an owner, serve a contractor final payment affidavit on the owner, as a matter of course, and without any undue delay, particularly if you are owed money and have recorded a construction lien. In numerous circumstances, I like to serve the contractor final payment affidavit with the construction lien.

The contractor final payment affidavit is not a meaningless form. It is a statutory form (set forth in Florida Statute s. 713.06) required to be filled out by a lienor in direct privity of contract with an owner and served on the owner at least 5 days prior to the lienor foreclosing its construction lien. The contractor final payment affidavit serves as a condition precedent to foreclosing a construction lien. Failure to timely serve a contractor final payment affidavit should result in a dismissal of the lien foreclosure lawsuit, presumably by the owner moving for a motion for summary judgment. This should not occur.

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


U.S. Housing Starts Stabilize as Building Permits Edge Up

July 30, 2019
Reade Pickert - Bloomberg

U.S. new-home construction fell in May after an April reading that was stronger than initially reported, signaling stabilization in the market amid lower borrowing costs.

Residential starts dropped 0.9% to a 1.27 million annualized rate after a revised 1.28 million pace in the prior month, according to government figures released Tuesday that compared with a 1.24 million estimate in Bloomberg’s survey. Permits, a proxy for future construction, increased 0.3% to a 1.29 million rate that was about in line with estimates.


Congratulations to our 2019 Southern California Super Lawyers Rising Stars

Gold stars on blue background

Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement.

July 30, 2019
John Arbucci, Frances Brower, Lisa Hsiao, Kristian Moriarty & Michael Parme - Haight Brown & Bonesteel LLP

Congratulations to attorneys John Arbucci, Frances Brower, Lisa Hsiao, Kristian Moriarty and Michael Parme who were selected to the 2019 Southern California Rising Stars list. Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys T. Giovanni “John” Arbucci, Frances Brower, Lisa Hsiao, Kristian Moriarty and Michael Parme
Mr. Arbucci may be contacted at jarbucci@hbblaw.com
Ms. Brower may be contacted at fma@hbblaw.com
Ms. Lisa may be contacted at lhsiao@hbblaw.com
Mr. Kristian may be contacted at kmoriarty@hbblaw.com
Mr. Parme may be contacted at mparme@hbblaw.com


NYC Green Bill Requires Major Retrofits on Largest Buildings

July 30, 2019
Eydie Cubarrubia & Pam Radtke Russell - Engineering News-Record

New York’s largest buildings will have to be retrofitted to produce fewer carbon emissions under one of the first laws passed by the city council as part of the city’s sweeping Green New Deal. Under the law approved April 18, all buildings 25,000 sq ft or more must reduce their emissions 40% from 2005 levels by 2030 and 80% by 2050.

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


Terms of Your Teaming Agreement Matter

Red pencil on Terms and Conditions

Parties must be careful in how they draft the terms of teaming agreements.

July 30, 2019
Christopher G. Hill - Construction Law Musings

These days in construction, and other pursuits, teaming agreements have become a great method for large and small contractors to work together to take advantage of various contract and job requirements from minority participation to veteran ownership. With the proliferation of these agreements, parties must be careful in how they draft the terms of these agreements. Without proper drafting, the parties risk unenforceability of the teaming agreement in the evewnt of a dispute.

One potential pitfall in drafting is an “agreement to agree” or an agreement to negotiate a separate contract in the future. This type of pitfall was illustrated in the case of InDyne Inc. v. Beacon Occupational Health & Safety Services Inc. out of the Eastern District of Virginia. In this case, InDyne and Beacon entered into a teaming agreement that provided that InDyne as Prime would seek to use Beacon, the Sub, in the event that InDyne was awarded a contract using Beacon’s numbers. The teaming agreement further provided:

The agreement shall remain in effect until the first of the following shall occur: … (g) inability of the Prime and the Sub, after negotiating in good faith, to reach agreement on the terms of a subcontract offered by the Prime, in accordance with this agreement.

InDyne was subsequently awarded a contract with the Air Force and shortly thereafter sent a subcontract to Beacon and requested Beacon’s “best and final” pricing. Beacon protested by letter stating that it was only required to act consistently with its original bid pricing. Beacon then returned the subcontract with the original bid pricing and accepting all but a termination for convenience provision. Shortly thereafter, InDyne informed Beacon that InDyne had awarded the subcontract to one of Beacon’s competitors. Beacon of course sued and argued that the teaming agreement required that InDyne award the subcontract to Beacon.

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


Four Dead After Crane Collapses at Google’s Seattle Campus

Crane over dark blue sky

A construction crane on the new Google Seattle campus collapsed.

July 29, 2019
The Associated Press (Lisa Baumann & Nicholas K. Geranios) - Bloomberg

Seattle (AP) -- Four people died and three were injured when a construction crane on the new Google Seattle campus collapsed Saturday, pinning six cars underneath.

One female and three males were dead by the time firefighters got to the scene, Fire Chief Harold Scoggins said. Two of the dead were ironworkers, not crane operators, as had been previously stated, and the two others were people who had been in cars, Seattle Mayor Jenny Durkan said Saturday night.



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