Application of Set-Off When Determining Prevailing Party for Purposes of Attorney’s Fees

Pencil resting on fee statement

In Hayward Baker, the subcontractor recovered a final judgment of $290,000 against the general contractor and payment bond surety.

February 22, 2021
David Adelstein - Florida Construction Legal Updates

The recent opinion from the Second District Court of Appeal in Hayward Baker, Inc. v. Westfield Ins. Co., 2020 WL 7767859 (2nd DCA 2020) demonstrates that the significant issues test for determining the prevailing party for purposes of attorney’s fees applies to disputes involving payment bonds under Florida’s Lien Law (Florida Statutes Chapter 713). The significant issues test is more or less a subjective test where the party that is deemed to have prevailed on the significant issues in the case is the prevailing party for purposes of attorney’s fees in the case. A trial court has discretion to determine the prevailing party which will not be disturbed absent an appellate court finding the trial court abused that discretion. This significant issues test is an important consideration so that parties understand just because money ends up going their way does not necessarily mean they prevailed on the significant issues in the case. It could mean that. But it may not based on the claims and moneys involved in the dispute.

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


Construction Managers, Are You Exposing Yourselves to Labor Law Liability?

Question marks on cement

Given the near strict liability nature of Labor Law section 240(1), it is critical to identify whether a party is a proper Labor Law defendant from the get-go.

February 22, 2021
Timothy P. Welch - Hurwitz & Fine, P.C.

When dealing with construction site accidents, who a party is matters. Under Labor Law sections 200, 240(1) and 241(6) owners, contractors, and their agents have a non-delegable duty to provide reasonable and adequate protection to workers from risks inherent at work sites, with a specific emphasis placed on elevation-related hazards. Given the near strict liability nature of Labor Law section 240(1), it is critical to identify whether a party is a proper Labor Law defendant from the get-go.

While identifying the owner (and usually the contractor) may be relatively straightforward, identifying “their agents” has proven to be a more complex undertaking. It should be noted that the requirements set forth in the Labor Law are non-delegable from the standpoint of the owner or contractor, however, the duties themselves can be assigned to “agents” of an owner or “agents” of a contractor. When such an assignment occurs, the same non-delegable duty held by the owner or contractor is imposed on the agents as well. Moreover, “once an entity becomes an agent under the Labor Law it cannot escape liability to an injured plaintiff by delegating the work to another entity.[1]”

An entity that often skirts the line between being an agent and not, is the Construction Manager. Traditionally, the Construction Manager has been found to be outside the purview of the Labor Law when its scope of work is narrowly focused on scheduling and general coordination of the construction process. However, when a Construction Manager’s scope expands, so does its risk that it may, in fact, become a proper Labor Law defendant.

Mr. Welch may be contacted at tpw@hurwitzfine.com


OSHA Issues Guidance on Mitigating, Preventing Spread of COVID-19 in the Workplace

Rules word on side of notebook

The guidance contains a few new and updated recommendations that employers should note.

February 22, 2021
Amy R. Patton & Blake A. Dillion - Payne & Fears

On January 29, 2021, the Occupational Safety and Health Administration (“OSHA”) issued new employer guidance on mitigating and preventing the spread of COVID-19 in the workplace. This guidance is intended to help employers and workers outside the healthcare setting to identify risks of being exposed to and of contracting COVID-19 and to determine any appropriate control measures to implement. While this guidance is largely duplicative of prior OSHA and Centers for Disease Control and Prevention (“CDC”) guidance and recommendations, it contains a few new and updated recommendations that employers should note:

Face Coverings
OSHA recognizes that face coverings, either cloth face coverings or surgical masks, are simple barriers that help prevent the spread of COVID-19, and are beneficial for the wearer as well as others. OSHA recommends that employers should provide all workers with face coverings, unless their work task requires a respirator. These face coverings should be provided at no cost and should be made of at least two layers of tightly woven breathable fabric, and should not have exhalation valves or vents. Employers should also require any other individuals at the workplace (i.e., visitors, customers, non-employees) to wear a face covering unless they are under the age of 2 or are actively consuming food or beverages on site. Wearing a face covering does not eliminate the need for physical distancing of at least six feet apart.

Employers must discuss the possibility of “reasonable accommodations” for any workers who are unable to wear or have difficulty wearing certain types of face coverings due to a disability. In workplaces with employees who are deaf or have hearing deficits, employers should consider acquiring masks with clear coverings over the mouth.

Reprinted courtesy of Amy R. Patton, Payne & Fears and Blake A. Dillion, Payne & Fears

Ms. Patton may be contacted at arp@paynefears.com
Mr. Dillion may be contacted at bad@paynefears.com


How Artificial Intelligence Can Transform Construction

Finger on digital hologram

“This shift is about removing the subjectiveness in decisions and moving to a more scientific approach.”– Hrishi Maha, Data Analytics Leader, DPR

February 22, 2021
Jeff Rubenstone - Engineering News-Record

Artificial intelligence and machine-learning algorithms have struggled to make sense of chaotic construction jobsites, but recent years have seen industry firms build the vast data lakes and analytics systems necessary for these machines to provide useful advice on how to plan, schedule and execute projects. In some cases, these AI advisors have become a standard part of some firms’ project delivery methods. But it’s still a challenge to convince construction professionals to listen to these AI advisors, and there are emerging questions of how risk will be allocated once algorithm-driven decisions start to steer projects.

Reprinted courtesy of Jeff Rubenstone, Engineering News-Record

Mr. Rubenstone may be contacted at rubenstonej@enr.com

Read the full story...


Todd Seelman Recognized as Fellow of Wisconsin Law Foundation

Word success ladder

Mr. Seelman's peers have recognized him for his outstanding professional achievements and devotion to the welfare of his community, state, and country, as well as the advancement of the legal profession.

February 15, 2021
Todd Seelman - Lewis Brisbois Newsroom

Denver Managing Partner Todd R. Seelman has been recognized as a Fellow of the Wisconsin Law Foundation, joining a select group of attorneys who comprise no more than 2.5% of the entire membership of the Wisconsin Bar. Mr. Seelman's membership in the Fellows organization represents that his peers have recognized him for his outstanding professional achievements and devotion to the welfare of his community, state, and country, as well as the advancement of the legal profession.

“I am grateful for this honor and opportunity to become a member of an exceptional group of lawyers," Mr. Seelman said. "I look forward to working to advance the Fellows’ important goals, including promoting justice and improving legal education.

The Fellows organization was created to honor members of the Wisconsin Bar who have achieved significant professional accomplishments and contributed leadership and service to their communities.

Mr. Seelman may be contacted at Todd.Seelman@lewisbrisbois.com


Europe’s Satellites Could Help Catch the Next Climate Disaster

Storm over city

The European Space Agency has taken the lead in building planetary simulations to predict major climate disruption.

February 15, 2021
Jonathan Tirone - Bloomberg

Spain began the new year battling Storm Filomena, a once-in-a-generation weather event that blanketed Madrid in snow and paralyzed the economy. Health workers were stranded, supermarkets shut, and the army was called in. At least four people died.

“Now, consider a government or company that knew two weeks ago there was a risk that this would happen,” said Francisco Doblas-Reyes, a physicist at Barcelona’s Supercomputing Center. “Knowing the risk that a 1-in-20-year event was going to happen would have given more possibilities to prepare.”

Doblas-Reyes and his team are working on complex models that they hope can better detect the next Filomena, a job that’s become increasingly important as climate change makes weather more unpredictable — and extreme. The data collected by European satellites is at the heart of the continent’s multibillion-euro Destination Earth program seeking to develop the world’s best digital simulation of Earth.


Wall Street’s Favorite Suburban Housing Bet Is Getting Crowded

People dancing in living room

Builders, apartment firms push into hot corner of market.

February 15, 2021
Patrick Clark - Bloomberg

Wall Street’s zest for a corner of suburban real estate long left to small landlords is reaching new heights, attracting institutional investors, homebuilders and apartment managers during a pandemic that has ignited demand for larger homes.

The pension manager for the Canadian Mounties is the latest investor in single-family rentals, joining JPMorgan Chase & Co.’s asset-management arm and Nuveen Real Estate in a bet that there are lots of Americans who want spare bedrooms and backyards, but don’t have cash for down payments.

“It’s really an inflection point in SFR,” said Michael Carey, a senior director for Altus Group, an advisory firm. “It used to be an alternative asset class. Now people look at it as a solution.”


E-Commerce Trends for Commercial Construction

February 15, 2021
Joe Altieri - Construction Executive

Change burst onto the scene in 2020 like a wrecking ball and smashed norms without discrimination. The pandemic, and subsequent closures and lockdowns, brought Godzilla-sized destruction world-wide. But it didn't take long to realize that the construction industry would largely escape the devastation and even thrive through the chaos.

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


Hybrid Contracts for The Sale of Goods and Services and the Predominant Factor Test

Businessman holding contract

Does the UCC or common law apply to a hybrid contract?

February 15, 2021
David Adelstein - Florida Construction Legal Updates

Florida’s Uniform Commercial Code (also known as the UCC) applies to transactions for goods. “Goods” is defined by Article II of the UCC as “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (chapter 678) and things in action.” Fla. Stat. s. 672.105(1).

The UCC does NOT apply to transactions for services. Transactions for services are governed by common law.

Oftentimes, transactions or contracts include BOTH goods and services. In this scenario, referred to as a hybrid contract, does the UCC or common law apply? In this scenario, courts apply the predominant factor test to determine whether the UCC or common law governs the transaction:

Whether the UCC or the common law applies to a particular hybrid contract depends on “whether the[ ] predominant factor, the [ ] thrust, the[ ] purpose [of the contract], reasonably stated, is the rendition of service, with goods incidentally involved (e.g., contract with artist for painting) or is a transaction of sale, with labor incidentally involved (e.g., installation of a water heater in a bathroom).” In such instances, the determination whether the “predominant factor” in the contract is for goods or for services is a factual inquiry unless the court can determine that the contract is exclusively for goods or services as a matter of law.

Allied Shelving & Equipment, Inc. v. National Deli, LLC, 154 So.3d 482, 484 (Fla. 3d DCA 2015) (citations omitted).

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


Renovation Makes Old Arena Feel Brand New

Old book opened and gold dust flows out

A $230-million renovation that will transform one of the National Basketball Association’s oldest and smallest venues into one of its most modern.

February 15, 2021
Jim Parsons - Engineering News-Record

Since opening its doors in 1992, Phoenix’s downtown sports and entertainment arena has hosted hundreds of exciting contests involving the hometown Phoenix Suns and Phoenix Mercury professional basketball teams as well as high-profile concerts and other events.

Reprinted courtesy of Jim Parsons, Engineering News-Record

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

Read the full story...


Seth Friedman, Christopher Meeks to Participate at ABA Virtual Insurance Coverage Litigation Seminar

February 15, 2021
Seth Friedman & Christopher Meeks - Lewis Brisbois Newsroom

Atlanta Partners Seth M. Friedman and Christopher Meeks will both participate at the American Bar Association’s (ABA) 2021 Virtual Insurance Coverage Litigation Committee CLE Seminar taking place March 3-19.

As co-chair of the ABA’s Insurance Coverage Litigation Committee’s Annual Conference, Mr. Friedman is one of the leaders of the team responsible for the planning and preparation of this seminar and will guide the event as it takes place throughout March.

On the final day of the seminar, Friday, March 19, at 3:30 p.m. ET, Mr. Meeks will lead a breakout session titled “What's an ‘Occurrence’ Today?” The session will discuss recent appellate decisions and posit a series of hypotheticals concerning whether conduct that is seemingly intentional is “accidental” and, thus, qualifies as an “occurrence.”

Reprinted courtesy of Seth Friedman, Lewis Brisbois and Christopher Meeks, Lewis Brisbois
Mr. Friedman may be contacted at Seth.Friedman@lewisbrisbois.com
Mr. Meeks may be contacted at Christopher.Meeks@lewisbrisbois.com

March 3rd-19th, 2021
Virtual Event


California Superior Court Overrules Insurer's Demurrer on COVID-19 Claim

Lawyer talking to judge illustration

The complaint expressly alleged that the coronavirus and COVID-10 caused direct physical loss and damage to the insured's property.

February 15, 2021
Tred R. Eyerly - Insurance Law Hawaii

A Superior Court in California overruled the insurer's demurrer to the policy holder's complaint seeking business interruption coverage after government shutdown orders were issued because of the coronavirus pandemic. Goodwill Industries of Orange County, California v. Philadelphia Indemnity Ins. Co., Cal. Superior Ct., Civil No. 30-2020-01169032-CU-IC-CXC (Minute Order Jan. 28,, 2021). The minute order is here [Goodwill Decision].

The insurer demurred on the ground that the insured had not alleged sufficient facts to show "direct physical loss" under the business income, extra expenses and civil authority provisions in the policy because coronavirus and COVID-19 did not physically alter the structure.

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


Arizona Is the No. 1 Merit Shop Construction State, According to ABC’s 2020 Scorecard

Woman smiling and doing okay sign with hand

Arizona topped the rankings for the first time this year based on the state’s promotion of free enterprise and investment in tomorrow’s construction workforce.

February 15, 2021
ABC - Construction Executive

Associated Builders and Contractors released its 2020 Merit Shop Scorecard, an annual ranking based on state policies and programs that encourage workforce development, strengthen career and technical education, grow careers in construction, and promote fair and open competition for taxpayer-funded construction projects.

Arizona topped the rankings for the first time this year based on the state’s promotion of free enterprise and investment in tomorrow’s construction workforce, a top priority for ABC. Georgia followed Arizona in second place this year, up from fifth in 2019. Florida, a year-to-year high performer, remained in the top five after two years in the top rank in 2018 and 2019.

“A foundational pillar of ABC is building the next generation of craft professionals, and the top states in this year’s rankings lead the country in workforce development policies,” said Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs. “The merit shop contractor can flourish in free enterprise environments created in states like Arizona and Florida, which has positive ripple effects on a state’s overall economic growth.”

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


Arbitration Denied: Third Appellate District Holds Arbitration Clause Procedurally and Substantively Unconscionable

Red x next to Denied

Attorneys Stephen M. Tye and Lawrence S. Zucker II analyze Cabatit v Sunnova Energy Corporation.

February 15, 2021
Stephen M. Tye & Lawrence S. Zucker II - Haight Brown & Bonesteel

In Cabatit v Sunnova Energy Corporation, the Third Appellate District held that an arbitration clause in a solar power lease agreement was unenforceable because it was procedurally and substantively unconscionable.

In Cabatit, Mr. and Ms. Cabitat entered into a solar power lease agreement (the “Agreement”) with Sunnova Energy Corporation (“Sunnova”). Ms. Cabitat, who signed the agreement, speaks English but does not understand complicated or technical terms. The salesperson scrolled through the agreement language and Ms. Cabatit initialed where the salesperson indicated, even though she did not understand most of what he was saying. The salesperson did not explain anything about the arbitration clause nor did he provide Ms. Cabatit with a copy of the Agreement.

Reprinted courtesy of Stephen M. Tye, Haight Brown & Bonesteel and Lawrence S. Zucker II, Haight Brown & Bonesteel
Mr. Tye may be contacted at stye@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com


Autovol’s Affordable Housing Project with Robotic Automation

Robot holding screwdriver

First-of-its kind Idaho factory nears completion of a five-story San Jose, CA apartment building.

February 15, 2021
Aarni Heiskanen - AEC Business

Just over two years since breaking ground, Autovol is now using automation in new ways as it nears completion of its first major affordable housing project. The project, Virginia Street Studios, will make high-quality apartment homes more affordable to seniors in San Jose, one of America’s 10 most expensive cities.

The 400,000 square foot Autovol factory has now successfully deployed its unique combination of construction trades and robotic automation. Autovol has hired more than 100 employees, which the company calls Solutioneers. Led by CEO Rick Murdock and co-developed by The Pacific Companies, Autovol is pioneering a new kind of modular construction.

Robotics lead into the future of housing

“Automation and robotics will lead the world into the future of housing,” Murdock said. “What we’re doing hasn’t been attempted before. Our investors and Solutioneers leaned in with lots of confidence, and now we’re seeing great results that prove they were right.”

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


Ninth Circuit Finds Excess Carrier Can Challenge Primary Insurer's Settlement Payment and Erosion of Limits

February 15, 2021
Tred R. Eyerly - Insurance Law Hawaii

The court found that the excess carrier had grounds to challenge the primary carrier's allocation of a settlement payment. Scottsdale Ins. Co. v. Certain Underwriters at Lloyds, London, 2020 U.S. App. LEXIS 39771 (9th Cir Dec. 18, 2020).

In the underlying case, Underwriters settled on behalf of the insured law firm under a professional liability policy. Scottsdale sued Underwriters for a declaratory judgment that the settlement did not erode the limits. Underwriters counterclaimed seeking equitable contribution. On cross motions for summary judgment, the district court concluded that: (1) Scottsdale could not challenge Underwriters' settlement payment and the corresponding erosion of policy limits, and (2) Underwriters was not entitled to equitable contribution from Scottsdale.

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


The Basics of Subcontractor Defaults – Key Considerations

Children in construction worker garb

General contractors walk a fine line when balancing their relationships with owners and subcontractors in order to effectively deliver projects on time and within budget.

February 15, 2021
Gerard J. Onorata - Peckar & Abramson, P.C.

The success of general contractors in completing a construction project is often dependent upon the performance of their subcontractors. General contractors have frequently said exactly this. Traditionally, the key subcontractors on a project are the electrical, plumbing, HVAC and structural steel subs. Due to the fundamental nature of the work performed by these trades, the risk of defaulting and terminating one or more of them is likely to have a substantial impact on the project, more so than with the trade contractors that perform their work after a building is made weather tight (i.e., drywall, tile, painting).

Most general contractors have, over a period of years, established longstanding relationships with certain subcontractors that they have come to depend upon. The risk of having to default and terminate one of these subs is minimal. Nevertheless, there will inevitably arise occasions when even a once reliable subcontractor fails to perform and it becomes necessary to invoke the remedies of default and termination. Areas ripe for controversy with subcontractors that often can lead to default and termination often involve disputes over change orders and the scope of work, the installation of defective work and the back-charges that ensue therefrom, and, to a lesser extent, conflicts that arise from ambiguous plans and specifications and the extra work and delays caused by the discovery of unforeseen site conditions.

Mr. Onorata may be contacted at gonorata@pecklaw.com


Energy Company Covered for Business Interruption Losses Caused by Fire and Resulting in Town-Ordered Shutdown

Fire flames

The case involved NextSun, which operated solar panel arrays providing electricity to the town of Littleton, Massachusetts.

February 15, 2021
David G. Jordan - Saxe Doernberger & Vita, P.C.

In the case of NextSun Energy Littleton, LLC v. Acadia Ins. Co., the United States District Court of Massachusetts held that once direct physical damage from a covered peril causes a covered business interruption loss, any increase in the duration of such business interruption, due to the enforcement of an ordinance or law, extends the coverage period provided for lost income. The Court further held that a policy exclusion for business interruption due to the enforcement of any ordinance or law not in force at the time of the loss only applies when the ordinance or law itself, not the enforcement action that it authorizes, was not in force at the time of the loss.

The case involved a solar panel company, NextSun Energy Littleton (NextSun), that operated solar panel arrays providing electricity to the town of Littleton, Massachusetts. Due to a fire, 88 of the solar panels were damaged, and the Town immediately issued a “red-tag” order halting all energy-generating activity pending a safety inspection. The plaintiff purchased insurance for its panels along with “Energy Generating Income” (EGI) coverage, from the defendant, Acadia Ins. Co. (Acadia). The EGI policy covered “direct physical loss or damage” to “renewable energy generating equipment” and also covered the actual loss of surplus power income incurred during the interruption period. However, it excluded interruption of energy-generating income “caused by the enforcement of any ordinance, law, or decree … not in force at the time of loss.”

Mr. Jordan may be contacted at DJordan@sdvlaw.com


New York Court Finds No Coverage Owed for Asbestos Losses Because Insured Failed to Prove Material Terms

Law books on shelf

The case provides a good analysis of what an insured must do to establish coverage under a “lost” or “missing” policy.

February 15, 2021
Gregory S. Capps & Marianne E. Bradley - White and Williams LLP

In the long-tail insurance context, it is not unusual to have issues arise addressing “lost” or “missing” policies. In an opinion issued on January 22, 2021, a New York court ruled that an insurer did not owe coverage to its insured for underlying asbestos claims because the insured had failed to establish the material terms of a “lost” policy under which it sought coverage for the underlying claims. The lawsuit, Cosmopolitan Shipping Company, Inc. v. Continental Insurance Company,[1] arose out of a coverage dispute between Plaintiff Cosmopolitan Shipping Co., Inc. (Cosmopolitan) and its insurance carrier, Continental Insurance Company (CIC), in connection with bodily injury claims arising out of asbestos exposure. The case provides a good analysis of what an insured must do to establish coverage under a “lost” or “missing” policy.

During and after World War II, Cosmopolitan chartered and operated a number of shipping vessels on behalf of United Nations Relief and Rehabilitation Administration (UNRRA). In the 1980s, seamen who had worked on board Cosmopolitan’s vessels between 1946 and 1948 filed lawsuits against Cosmopolitan seeking damages for injuries arising out of alleged exposure to asbestos on Cosmopolitan’s vessels. Cosmopolitan sought coverage from CIC for the claims, alleging that CIC had insured Cosmopolitan’s vessels during the relevant time period under a protection and indemnity policy issued to the UNRAA (the P&I Policy).

Reprinted courtesy of Gregory S. Capps, White and Williams LLP and Marianne E. Bradley, White and Williams LLP
Mr. Capps may be contacted at cappsg@whiteandwilliams.com
Ms. Bradley may be contacted at bradleym@whiteandwilliams.com


A Court-Side Seat: Coal-Fired Limitations, the Search for a Venue Climate Change and New Agency Rules that May or May Not Stick Around

Trial judge sitting behind bench (illustration)

A brief review of recent significant environmental and administrative law rulings and developments.

February 15, 2021
Anthony B. Cavender - Gravel2Gavel

This is a brief review of recent significant environmental and administrative law rulings and developments. With the change in presidential administrations, the fate of at least some of the newly promulgated rules is uncertain.

THE U.S. SUPREME COURT

BP PLC v. City and County of Baltimore
On January 19, 2021, the Court heard oral argument in BP PLC v. City and County of Baltimore. The respondents filed a Greenhous Gas Climate Change lawsuit in state court, alleging that BP, like other energy companies, is liable for significant damage caused by the sale and promotion of petroleum products while knowing that the use of these products and the resulting release of greenhouse gases damages the environment and public property. Several similar lawsuits have been filed in state courts, pleading common law violations as well as trespass and nuisance law violations The energy companies have tried, unsuccessfully to date, to remove these cases to federal court. The petitioners argue that the federal removal statutes allow the federal courts of appeal to review the lower court’s remand, thus opening the possibility that some of the issues presented in these cases can be tried in federal court, presumably a friendlier forum. A decision on this procedural issue should be rendered in a few months.

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



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