Construction Defect News You May Have Missed

New Jersey Supreme Court Issue Important Decision for Homeowners and Contractors

September 8, 2016
Wally Zimolong – Supplemental Conditions

The lack of insurance coverage for a contractor’s faulty workmanship is the bane of both homeowners looking to recover damage for defective work and contractors seeking to defend against such claims. In many states, like Pennsylvania, courts hold that faulty workmanship is not an “occurrence” that is covered by a standard commercial general liability insurance policy. In other words, courts hold that CGL policies cover damage to other property not part of the construction project itself.

This is problematic for both the homeowner and the insured. For the homeowner, the lack of a policy providing indemnification sometimes means the homeowner is left trying to collect against a defendant, who is otherwise but has little to no assets against which to collect a judgment. For the contractor, the lack of a policy providing coverage means that assets are at risk and it could be forced to spend significant sums in attorneys fees defending the case.

Mr. Zimolong may be contacted at wally@zimolonglaw.com


National Demand Increases for Apartments, Refuting Calls for Construction Defect Immunity in Colorado

September 8, 2016
Jesse Witt – The Witt Lawfirm

For the last four years, the homebuilders’ lobby has been aggressively pushing the idea that consumer protection laws are stifling condominium construction in Colorado. The lobbyists claim that the fear of liability for construction defects has forced many local developers to build apartments instead of condominiums. They have dismissed the notions that the shift to apartments merely reflects supply and demand, or that modern families might actually prefer to rent rather than buy. To support this theory, they have touted high condominium sales in other states. A new story from NPR’s Here & Now refutes this claim, however.

Contrary to what the lobbyists have been saying, data now confirm that large numbers of Americans prefer to rent, not buy, their homes. NPR reported today that home ownership in the U.S. fell to its lowest rate since 1965, while the share of U.S. households who rent is nearing a 50-year high. This trend appears nationwide and can hardly be blamed on consumer protection laws in Colorado.

Reprinted courtesy of Jesse Howard Witt, Acerbic Witt
Read the full story...

Mr. Witt welcomes comments at www.witt.law


Practical Advice: Indemnification and Additional Insured Issues Revisited

September 8, 2016
John P. Ahlers – Ahlers & Cressman PLLC Construction Blog

Lawyers love writing about indemnification. There are seventeen blog articles on our website alone that deal with the subject. Before you click out of this email in disgust that we are rehashing a stale topic, this post contains some practical advice for contractors and subcontractors dealing with the perplexing issues of indemnification and additional insured provisions.

The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for the potential losses or damages caused by the other party. To indemnify someone means to protect that person or entity by promising to pay the cost of possible future damage, loss, or injury. When signing a contract, you should identify the indemnity obligations that could cost your business money. Finding the words “hold harmless” or “indemnify” in a proposed contract is not enough. The terms “hold harmless,” “save harmless,” or “indemnify” are a big part of the indemnification obligation. Although insurance requirements (“additional insured” clauses) accomplish virtually the same thing as very broad, unfair, or unlimited indemnity terms do, they result in an “end run” around the effort to limit the indemnification obligation.

Mr. Ahlers may be contacted at jahlers@ac-lawyers.com


Partner Denis Moriarty and Of Counsel William Baumgaertner Listed in The Best Lawyers in America© 2017

September 8, 2016
Haight Brown & Bonesteel LLP

Partner Denis Moriarty and Of Counsel William Baumgaertner were selected by their peers for inclusion in The Best Lawyers in America© 2017. This marks the fifth consecutive year Mr. Moriarty has been listed for his work in insurance law, and this marks the eleventh year Mr. Baumgaertner has been listed for his defendants’ and plaintiffs’ work in personal injury and product liability litigation.


Newmeyer & Dillion Attorneys Listed in the Best Lawyers in America© 2017

September 1, 2016
Newmeyer & Dillion LLP

Prominent business and real estate law firm Newmeyer & Dillion LLP is pleased to announce that eight of the firm’s attorneys were recently selected for inclusion and will be recognized in their respective areas in The Best Lawyers in America© 2017. They are:

  • Michael Cucchissi: Real Estate Law
  • Jeffrey M. Dennis: Insurance Law
  • Gregory L. Dillion: Commercial Litigation, Construction Law, Insurance Law, Litigation- Construction, Litigation- Real Estate
  • Joseph A. Ferrentino: Litigation- Construction, Litigation- Real Estate
  • Thomas F. Newmeyer: Commercial Litigation, Construction Law, Litigation- Real Estate
  • John A. O’Hara: Litigation- Construction
  • Bonnie T. Roadarmel: Insurance Law
  • Carol Sherman Zaist: Commercial Litigation

Beyond the above recognition, Greg Dillion was also named the Best Lawyers® 2017 Construction Law "Lawyer of the Year" in Orange County.

Best Lawyers is the oldest peer-review publication for the legal profession. Attorneys are chosen through intensive peer-review surveys in which leading lawyers evaluate their professional peers. Best Lawyers listings are published in almost 70 countries worldwide and are recognized for their reliable and unbiased selections.

About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. 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 have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.


Louisiana Flooding Prompts Cleanup, Recovery

September 1, 2016
Tom Ichniowski & Debra K. Rubin – Engineering News-Record

As flood-battered Louisiana starts to recover from heavy August rains, housing, schools, other buildings and roads are among the hard-hit infrastructure sectors.

Reprinted courtesy of Tom Ichniowski, ENR and Debra K. Rubin, ENR
Mr. Ichniowski may be contacted at ichniowskit@enr.com
Ms. Rubin may be contacted at rubind@enr.com


Newmeyer & Dillion Ranked Fourth Among Medium Sized Companies in 2016 OCBJ Best Places to Work List

September 1, 2016
Newmeyer & Dillion LLP

Prominent business and real estate law firm Newmeyer & Dillion LLP is proud to announce that it has been ranked fourth among medium sized companies in the Best Places to Work in Orange County – 2016 Survey. The firm was the only law firm to make the top 25 of its category. This marks the fifth consecutive year Newmeyer & Dillion LLP has made the list showing that its deep commitment to professionalism and client service is shared and appreciated by its workforce.

Jeff Dennis, Newmeyer & Dillion’s Managing Partner, believes the award is representative of the team effort and atmosphere that is fostered at the firm. “We believe that client satisfaction goes hand-in-hand with work-place satisfaction. By combining an environment in which individual effort is recognized, with a team approach in which everyone is respected, we have achieved the perfect balance for success. We are honored that our employees appreciate our efforts in this regard.”

Created in 2009, the awards program evaluates entries based on workplace policies, practices, demographics and also collects employee surveys to measure overall satisfaction and experience. The Best Companies Group worked alongside the Orange County Business Journal in collecting and analyzing the data and is a partner in the project.

Newmeyer & Dillion has been honored in the July 25 issue of the Orange County Business Journal. For more information on the survey process and to see other award recipients contact Jackie Miller at 877-455-2159 or visit www.BestPlacestoWorkOC.com.

About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. 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 have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.


What are the Potential Damages when a House is a Lemon?

September 1, 2016
Haldon L. Greenberg, Esq. – Florida Construction Law News

It seems that lemons are front page news these days. Beyonce just released a chart-topping[1] album all about what to do when life hands you lemons. In today’s vernacular, we use the term “Lemon” to describe a person or thing that is unsatisfactory, disappointing, or feeble.[2] In Florida, there is a “Lemon Law” that provides a way for consumers to receive a replacement or full refund for vehicles found to have defects which may affect the vehicle’s safety, value or use.[3] While there is no “Lemon Law” for construction projects, in Gray v. Mark Hall Homes, Inc.,[4] Florida’s Second District Court of Appeal cited to Florida Supreme Court precedent in holding that a home builder was on the hook for the entire contract value of a home he contracted to build for the Plaintiff, when it was revealed the home was a “Lemon”, or as the evidence at trial showed, “valueless.”

Mr. Greenberg may be contacted at haldon.greenburg@csklegal.com


Unlocking the Data Treasure Chest

September 1, 2016
Tom Sawyer – Engineering News-Record

Construction technology leaders and software developers are preparing for a massive storm of innovation as the industry moves its data and processes to the cloud. The trend is breaking down data silos and opening company operations to penetrating, real-time analysis of the rivers of data flowing from traditional software processes, as well as newer ones supported by an explosion of field-collected data and mobile devices. The data is revealing how construction actually works and how projects really get built.

Mr. Sawyer may be contacted at sawyert@enr.com


Reinventing the Building Envelope – Interview with Gordon A Geddes

September 1, 2016
Aarni Heiskanen – AEC Business

In this interview with Gordon A Geddes, CEO of Lynx Systems, we talk about reinventing the building envelope. Gordon also gives great advice to innovators in the construction industry.

Mr. Heiskanen may be contacted at aarni@aepartners.fi


Should CGL Insurer have Duty to Defend Insured During Chapter 558 Notice of Construction Defects Process???

September 1, 2016
David Adelstein – Florida Construction Legal Updates

Does a CGL insurer have a duty to defend its insured-contractor during Florida Statutes Chapter 558 notice of construction defects pre-suit process? This answer is currently undecided and will be up to the Florida Supreme Court to decide. (It is on appeal stemming from a federal district court saying that an insurer does not have a duty to defend its insured-contractor in the 558 process based on the definition of the word “suit” in the CGL policy.)

Why is this an important issue?

The 558 pre-suit notice of construction defects process is designed to facilitate an avenue for construction defect lawsuits to get resolved without having to file a lawsuit or, at least, have issues narrowed before a lawsuit needs to be filed. (Check here for a summary of the 558 process.) It requires pre-suit notifications so that implicated parties can become aware of the defects and have an opportunity to inspect the defects / damage, test the defects / damage, and respond to the notice of construction defects; it provides an avenue for beneficial pre-suit discovery. Through participating in the 558 process, the contractor and/or design professional (and those downstream from them) can: (i) offer to remedy the defect, (ii) settle the defect, whether through money or a combination of money and repairs, (iii) dispute the defect, or (iv) advise that available insurance proceeds will be determined by its liability insurer. See Fla. Stat. s. 558.004.

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


Eleven WSHB Attorneys Honored on List of 2016 Rising Stars

September 1, 2016
Beverley BevenFlorez-CDJ STAFF

Wood Smith Henning & Berman LLP (WSHB) announced that eleven of their lawyers were recognized on the list of 2016 Rising Stars®:

  • Raymond Babaian: Partner, Rancho Cucamonga
  • Emil Macasinag: Senior Counsel, Los Angeles
  • Amy Pennington: Partner, Los Angeles
  • Christopher Perez: Senior Counsel, Rancho Cucamonga
  • Keith Smith: Partner, Riverside
  • Kevin Gillispie: Partner, Concord
  • Alicia Kennon: Senior Counsel, Concord
  • Eugene Zinovyev: Senior Associate, Concord
  • Timothy Repass: Partner, Seattle and Portland
  • Jodi Mullis: Senior Associate, Phoenix
  • Vincent Beilman: Partner, Tampa and Miami
  • “We are pleased to have 11 of our best selected for this year’s lists,” Dan Berman, Firm Chairman and Founding Partner stated. “We value our selections to Rising Stars because the choices come from our peers. It is truly an honor and a validation of all of the great work we do at WSHB.”


New Jersey Supreme Court Rules that Subcontractor Work with Resultant Damage is both an “Occurrence” and “Property Damage” under a Standard Form CGL Policy

September 1, 2016
Beverley BevenFlorez-CDJ STAFF

According to a client alert by the firm Peckar & Abramson, P.C. (P&A), “In a recent significant decision, the Supreme Court of New Jersey held that defective work of a subcontractor that causes consequential property damage is both an ‘occurrence’ and ‘property damage’ under the terms of a standard form commercial general liability (“CGL”) insurance policy.”

Patrick J. Greene, Jr., and Frank A. Hess of P&A wrote that the Cypress Point Condominium Assoc., Inc. v Adria Towers, LLC, 2016 N.J. Lexis 847 (Aug.4,2016) “decision is important in New Jersey and in other jurisdictions that had relied upon the influential New Jersey case, Weedo v. Stone–E–Brick, Inc., 81 N.J. 233 (1979), that had determined that such claims involved non-insured ‘business risks.’”


Unpaid Subcontractor Walks Off the Job and Wins

September 1, 2016
John P. Ahlers – Ahlers & Cressman PLLC

Make the following inquiry of your constructional lawyer, watch him/her sit up in his/her chair and give your question immediate attention: “I haven’t been paid, can I walk off the job?” The answer to this question is a strong “maybe, but it’s risky.” Walking off the project has a significant downside. The risk is that the judge who reviews your decision, sometimes years after the event, may not agree that the non-payment was a material breach and, thus, suspension of performance (walking off) is not justified.

A breach of contract occurs where, without legal justification, a party fails to perform any promise that forms a whole or part of the contract. Not all breaches are equal. Some failures to perform a promise are “nominal,” “trifling” or “technical.” These breaches do not excuse performance under the contract by the non-breaching party. If the breach is “material,” that is, goes to the essential purpose of the agreement, is a question that only a judge decides, and only after the decision was made as to whether to walk off the job or not. Therefore, before deciding whether to walk off the job, you have to second guess what a judge may decide under the circumstances. Since not all judges see things the same way, the decision is fraught with uncertainty and risk.

Mr. Ahlers may be contacted at jahlers@ac-lawyers.com


Bremer Whyte Brown & O’Meara LLP Attorneys to Speak at the 2016 National Construction Claims Conference

September 1, 2016
Beverley BevenFlorez-CDJ STAFF

Bremer Whyte Brown & O’Meara, LLP (BWBO), announced that Keith G. Bremer, Founding Partner and John H. Toohey, Partner, will be speaking at the CLM National Construction Claims Conference being held September 28-30th this year. More than 500 professionals will gather at the conference location, the Manchester Grand Hyatt in San Diego, California.

According to BWBO’s release, “the CLM will hold the most comprehensive construction claims conference ever. In addition to addressing construction defect claims, conference sessions will also address facets of construction-related claims including construction site accidents/injuries, coverage issues, subcontractor issues, and new technologies. Sessions will also address issues on the national, regional, and state levels.”


Two Firm Members Among the “Best Lawyers in America”

September 1, 2016
A&C Crew – Ahlers & Cressman PLLC

We are excited to announce that John P. Ahlers has been selected as a “Lawyer of the Year” in Construction Law, and John P. Ahlers and Paul R. Cressman, Jr. have been selected as “Best Lawyers in America” in Construction Litigation by Best Lawyers for 2017. Best Lawyers has recognized Mr. Ahlers and Mr. Cressman as “Best Lawyers in America” since 2007 and 2013, respectively.


Construction July Spending Flat from June, Up Year Over Year

September 1, 2016
Tom Ichniowski – Engineering News-Record

Construction spending in July was virtually even with the June level but rose 1.5% from the year-earlier total, as private-sector work increased and public-sector volume declined, the Commerce Dept. has reported.

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


“Rip and Tear” Damage Remains Covered Under CGL Policy as “Accident”—for Now.

September 1, 2016
Michael Lindsay & Luke Mecklenburg – Snell & Wilmer Real Estate Litigation Blog

The Colorado Supreme Court has approved a settlement between the parties to an appeal of the 2012 Colorado Pool Systems v. Scottsdale Insurance Company Court of Appeals case, leaving that ruling intact. The ruling parses a fine line between uncovered costs of repairing defective work and covered costs of damage caused to nondefective work while repairing defective work. This nuanced opinion, which is now established Colorado law, is worth a second look.

In Colorado Pool Systems, Inc. v. Scottsdale Insurance Company, the Colorado Court of Appeals determined that so-called “rip and tear” damage caused by a construction professional to nondefective work while correcting defective work is covered as an “accident” under standard Commercial General Liability insurance language. 317 P.3d 1262 (Colo. App. 2012). A pool company excavated and built a rebar frame in order to construct a pool, but it hired a subcontractor to pour the concrete. An inspector later noticed that some of the rebar was too close to the surface, and the pool company agreed to demolish and replace the pool after an agent of its insurer represented that this loss would be covered. But the agent was wrong, the insurer denied coverage, and litigation ensued.

Reprinted courtesy of Michael Lindsay, Snell & Wilmer and Luke Mecklenburg, Snell & Wilmer
Mr. Lindsay may be contacted at mlindsay@swlaw.com
Mr. Mecklenburg may be contacted at lmecklenburg@swlaw.com


Video: Contractors’ Update on New Regulations Governing Commercial Use of Drones

September 1, 2016
David R. Cook Jr. – AHHC Construction Law Blog

At a presentation before the AGC of Georgia, AHHC attorneys Mark Hanrahan, David Cook, and Chadd Reynolds covered “Contractors’ Update on New Regulations Governing Commercial Use of Drones.” View the presentation here: https://vimeo.com/177566370

On June 23, 2016, the Department of Transportation and Federal Aviation Administration issued new regulations regarding non-hobby and non-recreational civil operation of small unmanned aircraft systems. These regulations are intended to limit interference with federal airspace while advancing research and safety in commercial industries. They also addressed practical implications and how to comply by the August 29, 2016 deadline.

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


The Overlooked Nevada Rule In an Arena Project Lawsuit

August 4, 2016
Scott Van Voorhis – Engineering News-Record

When crunching the numbers on the construction wrap-up program for the T-Mobile Arena project outside Las Vegas, insurance broker Aon Risk Services South allegedly failed to take into account a Nevada workers’ compensation rule, one of many intricate features of the state’s workers’ compensation regulations. Others had apparently missed this aspect of the rule, too. “Many business owners and executives are unaware of this regulation and … are paying more premium to their workers’ compensation carriers than they should be,” warned Bradley Rowe, a commercial insurance broker in Las Vegas, in a blog post in 2014. Two years later, the prime contractor joint venture on the completed $230-million arena is battling in court with Aon, charging the broker with professional negligence and breach of contract, according to court documents filed in U.S. District Court in Nevada.

You may send questions or comments to enr.com@bnpmedia.com



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