CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - FRIDAY, APRIL 11, 2025

Handshake over gavel

The Court awarded BWB&O’s client more than $74 million in unpaid construction fees, while also finding that BWB&O’s client was responsible for no delay and only $144,894 for minor defects.

BWB&O’s Colorado Lawyers Successfully Defend Damages of more than $150 Million in Historic Construction Lawsuit!

April 8, 2025
Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

Partner Devin Brunson and Associate Trevor Alexander played a critical role together as part of the multi-firm litigation team that obtained a judgment of more than $74 million (one of the highest awards in the history of the Denver District Court), while successfully defending more than $150 million in alleged damages!

This case arises from the construction of a 23-story hotel and casino in Blackhawk, Colorado. BWB&O’s client was the construction manager for the project. When the Owner stopped paying for its ongoing work, BWB&O’s client was forced to commence the litigation. In response, the Owner asserted counterclaims alleging more than $150 million in damages related to construction defects and delay. The case culminated in a 7-week bench trial in the fall of 2023 and months of extensive post-trial briefing.

After considering its decision for over a year, the Court awarded BWB&O’s client more than $74 million in unpaid construction fees, while also finding that BWB&O’s client was responsible for no delay and only $144,894 for minor defects.

Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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CDJ NEWS THIS WEEK



Colorado community homes with mountain in background

This post provides a comprehensive breakdown of the bill’s key provisions, as amended on second reading, and explains why one new element--a fee-shifting provision tied to settlement negotiations--may have unintended and counterproductive consequences.

The “Colorado American Dream Act:” H.B. 25-1272’s Construction Defect Reforms

April 8, 2025 — David McLain - Colorado Construction Litigation Blog

On March 28, 2025, the Colorado House passed House Bill 25-1272 on second reading with floor amendments. The bill -- titled the “Colorado American Dream Act” -- seeks to address Colorado’s housing crisis by encouraging construction of for-sale multifamily housing, such as condominiums and townhomes, through targeted legal reforms.

H.B. 25-1272 would create a new, voluntary framework under C.R.S. § 13-20-803.3: the Multifamily Construction Incentive Program. Projects built under this program would be governed by a separate set of litigation rules, designed to reduce construction defect claims, and encourage builder participation in the entry-level housing market.

This post provides a comprehensive breakdown of the bill’s key provisions, as amended on second reading, and explains why one new element -- a fee-shifting provision tied to settlement negotiations -- may have unintended and counterproductive consequences. The current version of the bill is available here.

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

Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell

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Words Warranty Contract Law Business Misrepresentation

A question arises as to whether the Spearin doctrine can apply in the design-build context where the contractor is responsible for both the design and construction.

Spearin Doctrine Can Apply in Design-Build Context

April 8, 2025 — David Adelstein - Florida Construction Legal Updates

The Spearin doctrine is a doctrine in the construction industry that broadly means the owner impliedly warrants the constructability of the plans and specifications given to the contractor. This implied warranty attaches to a design specification, but not a performance specification. A question arises as to whether the Spearin doctrine can apply in the design-build context where the contractor is responsible for both the design and construction. It can, as discussed in the case below.

In Balfour Beatty Construction, LLC v. Administrator of the General Services Administration, 2025 WL 798865 (Fed. Cir. 2025), a design-build contractor appealed a decision from the Civilian Board of Contract Appeals (Board) claiming it was entitled to recover for design errors in the government’s bridging documents. In other words, the contractor claimed there was a design defect in the government’s bridging documents and, pursuant to the Spearin doctrine, the government should be liable for the contractor’s increased costs.

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

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

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Dark billowing smoke

On October 8, 2017, a series of fires began in the area.

Smoke and Soot Constitute Direct Physical Loss

April 8, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The federal district court found that smoke and soot contamination rendered the property unfit for normal use, meeting the standard for "direct physical loss" under the policy language for recovery of business income. Bottega, LLC, et al. v. National Surety Corporation-Chicago, Il, 2025 U.S. Dist. LEXIS 5666 (N.D. Cal. Jan. 10, 2025).

Bottega, a restaurant in Northern California, held a policy issued by National Surety which provided for loss of Business Income due to the necessary suspension of operation. The policy provided, "The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations."

On October 8, 2017, a series of fires began in the area. The following day, the governor proclaimed a state of emergency closing various roads from approximately October 9 to 18, 2017, restricting access to the insured property. The fires did not reach the insured's property, but came very close. Bottega closed on October 9, 2017. The restaurant partially reopened the following day so that food could be provided and served to first responders. Bottega remained in operation throughout the fires except for the closure on October 16, 2017.

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

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

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Billowing smoke over community

The California Court of Appeal affirmed the trial court's grant of summary judgment to the insurer regarding the insureds' claim for loss due to smoke damage.

California Court of Appeal Finds Lingering Smoke From Wildfire is not Direct Physical Loss

April 8, 2025 — Tred R. Eyerly - Insurance Law Hawaii

On the heals of a decision from a federal district court that smoke damaged was a direct physical loss, the California Court of Appeal affirmed the trial court's grant of summary judgment to the insurer regarding the insureds' claim for loss due to smoke damage. Gharibian v. Wawanesa General Ins. Co., 2025 Cal. App. LEXIS 64 (Cal. Ct. App. Feb. 7, 2025). The prior, federal case, Bottega, LLC, et al. v. National Surety Corporation-Chicago, IL, 2025, U.S. Dist. LEXIS 5666 (N.D. Cal. Jan. 10, 2025) is here.

On October 10, 2019, the Saddle Ridge wildfire began in the foothills of northern Los Angeles County. The fire burned about half a mile away from plaintiffs' property. Plaintiffs' property did not suffer any burn damage. Debris still entered their home, however, with more debris falling outside their home and in their swimming pool. While there was the smell of wildfire smoke, it dissipated over time.

Plaintiffs' insurer, Wawanesa General Insurance Company, sent PuroClean to inspect the property. PuroClean prepared an estimate of $4,308.90 for what it would cost to clean the property. Plaintiffs did not hire PuroClean to do the work.

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

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

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Contract Signing at meeting

While not every contract is the same, there are certain elements that should always be included in every agreement to protect your business.

What Clauses Must a Contract Include?

April 8, 2025 — Scott L. Baker - Los Angeles Litigation Blog

As a business owner, you know very well how important contract negotiations are. In order to preserve the benefits of the bargain you just negotiated, its equally important to make sure the terms of the negotiation are memorialized fully and accurately in the contract, which will guide every aspect of the deal.

While not every contract is the same, there are certain elements that should always be included in every agreement to protect your business.

5 Clauses a Contract Needs
Regardless of the specifics of this contractual relationship, these are some key clauses to include:

  1. Dispute resolution or mediation clauses: Whether minor or major, disputes are almost inevitable. Establishing guidelines for how to approach and effectively resolve those disputes will be critical to reduce risk. While mediation clauses can rarely go wrong, in certain circumstances it may be beneficial to have an arbitration clause to avoid having the dispute go through the court system.
  2. Force majeure clause: There are some things neither party can control, but which could impact the ability to fulfill the terms of the contract. This clause helps to protect your business from such matters outside of your influence, such as employee strikes and natural disasters.

Mr. Baker may be contacted at slb@bakerslaw.com

Reprinted courtesy of Scott L. Baker, Baker & Associates

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Spotlight on empty chair

A recent decision by the United States Fifth Circuit Court of Appeals underscores the real concern regarding the proverbial “empty chair” in arbitrations.

Staying Single?

April 8, 2025 — Daniel Lund III - Lexology

A recent decision by the United States Fifth Circuit Court of Appeals underscores the real concern regarding the proverbial “empty chair” in arbitrations: when parties tangentially or even directly involved in the circumstances of a claim cannot be compelled to arbitrate in a single arbitration. The case involved multiple parties and a series of arbitrations that resulted in conflicting awards.

The arbitration provision at issue incorporated the American Arbitration Association (AAA) Commercial Arbitration Rules (although the arbitrations were not administered by the AAA, per the agreement among the parties), which was pivotal in delegating significant questions to the arbitrators. In part, the appellate court addressed the enforceability of a contractually imposed four-month deadline to complete arbitration and the permissibility of simultaneous arbitrations, both of which were questions adjudged to have been delegated to the arbitrators. The arbitrators deemed the deadline “unconscionable” and also allowed multiple arbitration proceedings, demonstrating the broad discretion arbitrators possess under such agreements.

Mr. Lund may be contacted at daniel.lund@phelps.com

Reprinted courtesy of Daniel Lund III, Phelps

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Gavel resting on Court Cases Book

White and Williams LLP firm discusses recent industry-related cases.

Top Developments - 2025, Issue 1

April 8, 2025 — John Anooshian, Paul Briganti, Gianna Martorano, Alison Bennett, Robert Drummond, Jeremy Koepf, Morgan Liptak - The Complex Insurance Coverage Reporter

MOLD EXCLUSION

American Guar. & Liab. Ins. Co. v. Victory Highlands Condo. Assoc’n, 2024 N.J. Super. Unpub. LEXIS 3128 (N.J. Super. Ct., App. Div., Dec. 26, 2024)

New Jersey appeals court concludes that claims by a condominium resident alleging injury from indoor exposure to mold did not fall within a “consumption” exception to mold exclusions* in CGL policies where the resident demonstrated only that mold was present on his food and not that he was injured by eating mold on the food. It reasoned that, if the resident needed to prove only that there was mold on his food, and not that he was injured by eating the mold, “the exception [would] swallow the exclusion.” The court further determined that, although the exclusions in certain policies did not include anti-concurrent causation clauses, they were not subject to the efficient proximate cause doctrine** because, under their unambiguous language, “it is irrelevant how the mold came to exist; rather, it matters only whether the mold is the direct or indirect cause of the alleged damages.” Because the exclusions barred coverage, the court found it unnecessary to review the lower court’s determination that the resident’s claims were subject to the “first manifestation trigger” rather than the “continuous trigger.”

Reprinted courtesy of John S. Anooshian, White and Williams LLP, Paul A. Briganti, White and Williams LLP, Gianna Martorano, White and Williams LLP, Alison Bennett, White and Williams LLP, Robert Drummond, White and Williams LLP, Jeremy J. Koepf, White and Williams LLP and Morgan Liptak, White and Williams LLP

Mr. Anooshian may be contacted at anooshianj@whiteandwilliams.com
Mr. Briganti may be contacted at brigantip@whiteandwilliams.com
Ms. Martorano may be contacted at martoranog@whiteandwilliams.com
Ms. Bennett may be contacted at bennettal@whiteandwilliams.com
Mr. Drummond may be contacted at drummondr@whiteandwilliams.com
Ms. Liptak may be contacted at liptakm@whiteandwilliams.com

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Lawyer going to court

A recent case out of the Eastern District of Virginia federal court is yet another reminder that you should always, always respond to lawsuits.

Yet Another Reminder to ALWAYS Show Up for Court

April 8, 2025 — Christopher G. Hill - Construction Law Musings

If there’s one admonishment I’ve given a lot at this construction law blog, it is to be very careful with mechanic’s liens. This post is not about that. This post is about another major piece of advice that has been set out here at Construction Law Musings, namely, always show up for court and respond to lawsuits.

A recent case out of the Eastern District of Virginia federal court is yet another reminder that you should always, always respond to lawsuits. In Great Midwest Ins. Grp. v. WB Constr. Grp., Inc., the Court was considering a payment bond claim that was partially paid by Great Midwest. As is the case with all suretys, Great Midwest had an indemnity agreement with a principal of WB Construction, Ms. Biggers. The Surety then sued to enforce its general indemnity against Ms. Biggers after neither the indemnitor nor WB Construction repaid the $600,163.10 that the Surety paid out under the payment bond. The Surety then posted service on Ms. Biggers and mailed a copy of the complaint to her address, thus achieving proper service.

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

Reprinted courtesy of The Law Office of Christopher G. Hill

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Tornado damage house destroyed

Extreme weather conditions were forecast to affect an area that is home to more than 100 million people.

At Least 32 Dead in Massive US Storm, Extreme Risks Remain

April 8, 2025 — The Associated Press - Bloomberg

PIEDMONT, Mo. (AP) — Violent tornadoes ripped through parts of the U.S., wiping out schools and toppling semitractor-trailers in several states, part of a monster storm that has killed at least 32 people as more severe weather was expected late Saturday.

The number of fatalities increased after the Kansas Highway Patrol reported eight people died in a highway pileup caused by a dust storm in Sherman County on Friday. At least 50 vehicles were involved.

In Mississippi, Gov. Tate Reeves announced that six people died in three counties and three more people were missing. There were 29 injuries across the state, he added in a nighttime post on the social platform X.

Reprinted courtesy of Bloomberg

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Exterior Condo building

The Plaintiffs alleged that the Owners were negligent and breached the Declaration of Condominium for failing to maintain their windows, which the Plaintiffs alleged caused damage to the Plaintiffs’ unit.

Traub Lieberman Partner Ryan Parker and Associate Melina Lowe Win Verdict Finding No Liability in Favor of Condo Owners

April 8, 2025 — Ryan S. Parker & Melina Lowe - Traub Lieberman

Traub Lieberman Partner Ryan Parker and Associate Melina Lowe obtained a defense verdict following a five-day jury trial in Volusia County. The lawsuit was filed against Traub Lieberman’s clients, owners of a condo unit (the”Owners”) located above the Plaintiffs’ unit. The Plaintiffs alleged that the Owners were negligent and breached the Declaration of Condominium for failing to maintain their windows, which the Plaintiffs alleged caused damage to the Plaintiffs’ unit. The Plaintiffs sought over $250,000 for loss of use of their property in addition to other damages. After the Plaintiffs rested their case in chief, Mr. Parker and Ms. Lowe moved for directed verdict on several issues—and a partial directed verdict was granted—which reduced a portion of the Plaintiffs’ damages. After a lengthy trial—which included testimony from more than twelve witnesses—the Jury returned a verdict finding no liability on the part of Traub Lieberman’s clients. As a result of the verdict, the Owners have a basis to recover their attorney’s fees and costs.

Reprinted courtesy of Ryan S. Parker, Traub Lieberman and Melina Lowe, Traub Lieberman

Mr. Parker may be contacted at rparker@tlsslaw.com
Ms. Lowe may be contacted at mlowe@tlsslaw.com

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Caution wet floor sign

Wright and Ahmed argued that the restaurant adequately warned of a condition as there was a clearly identifiable warning sign in the immediate vicinity of the condition.

Kahana Feld Texas Team Obtains a Summary Judgment Motion

April 8, 2025 — Linda Carter - Kahana Feld

Kahana Feld is pleased to announce partner Elliott Wright and senior attorney Farrah Ahmed received a Traditional Summary Judgment motion on a premises liability case in the 40th Judicial District Court in Ellis County, Texas. The matter involved a Claimant who slipped and fell in a restaurant and claimed over $100,000 in medical damages. During an intense line of questioning, Kahana Feld attorneys Wright and Ahmed were able to get the Claimant to admit that she saw a well-placed “Caution” sign prior to her fall.

Ms. Carter may be contacted at lcarter@kahanafeld.com

Reprinted courtesy of Linda Carter, Kahana Feld

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Man on top of mountain

AEC Business has been recognized as one of the Top 90 Construction Blogs by Feedspot.

AEC Business Among Top Construction Blogs

April 8, 2025 — Aarni Heiskanen - AEC Business

I’m honored to share that AEC Business has been recognized as one of the Top 90 Construction Blogs by Feedspot. This acknowledgment places us alongside esteemed industry publications such as Construction Dive, Engineering News-Record Magazine, and ConstructConnect Blog.

Feedspot’s comprehensive list celebrates the internet’s most influential and insightful construction blogs. Being featured among these top-tier resources is a testament to our commitment to delivering quality content on construction innovation and technology.

Reprinted courtesy of Aarni Heiskanen, AEC Business

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Illustration of Businessman with magnifying glass looking at house on hand

Pulte Confirmed to Lead FHFA Amid Questions Over Fannie’s Future

April 8, 2025 — Patrick Clark - Bloomberg

Bill Pulte was confirmed as director of the Federal Housing Finance Agency after a majority of the Senate backed him to lead an agency that plays a key role in the US housing market through its oversight of Fannie Mae and Freddie Mac.

Pulte was cleared by a vote of 56-43 on Thursday and will take the reins of the FHFA amid mounting calls for the agency to end its oversight of the two entities. The companies, which play a crucial role in the market for mortgage-backed securities, have been under conservatorship since they were bailed out by the federal government during the 2008 financial crisis.

Reprinted courtesy of Patrick Clark, Bloomberg

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Construction worker in harness

Are New York Construction Workers Safer? Depends on How You Count

April 8, 2025 — Richard Korman - Engineering News-Record

On the afternoon of November 6, 2023, Francisco Lumbreras, 52, was working for a site preparation contractor in the Bronx applying grease with a grease gun to a fitting located in the back of a ready-mix delivery truck. He took a step or two back, according to federal safety records, when his clothes were caught by the rotating shaft that drives the vibration air valves. He tried to free himself from the spinning shaft, and a coworker heard him shout and turned off the power. But by then Lumbreras had been pulled in, cutting and crushing his upper body, killing him.

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

Reprinted courtesy of Richard Korman, ENR

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Insurance hike laptop house

California Insurance Chief Backs 22% State Farm Rate Hike

April 8, 2025 — Eliyahu Kamisher - Bloomberg

California Insurance Commissioner Ricardo Lara said he plans to approve a 22% emergency rate increase for State Farm policyholders, pending a public hearing next month, in a move aimed at stabilizing the state’s insurance market after the Los Angeles area’s devastating wildfires.

The provisionally approved rate hike would provide financial relief to State Farm’s California subsidiary, which has said it needs to shore up confidence with solvency regulators and ratings agencies. In the aftermath of January’s Palisades and Eaton blazes, the insurer has already paid out more than $2 billion in claims.

Reprinted courtesy of Eliyahu Kamisher, Bloomberg

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Webinar

AGC’s Two-Part Webinar Series: Recognizing and Managing Legal and Practical Risks When Implementing Technology Policies and Procedures

April 8, 2025 — Beverley BevenFlorez – CDJ Staff

This webinar “will explore some emerging construction technologies and identify legal and practical risks to contractors as they implement new technologies into their businesses.” The seminar “will offer practical advice on managing those risks and will utilize one company’s technology implementation process as an example of how to minimize and manage risks while still integrating emerging technologies into your companies and on your projects.”

April 23rd-24th, 2025
Virtual Event

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NTSB Says Iconic Bridges Need Urgent Risk Assessment

NBC News’ Tom Costello reports the NTSB is now recommending 68 other bridges undergo urgent risk assessments, including the Golden Gate Bridge and the Brooklyn Bridge.

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Dangerous Flood Emergency Unfolds Across the South

A dangerous flood emergency unfolded across the middle of the country on Sunday, after a days-long run of deadly storms drenched the parts of the South and Midwest. NBC News' Maggie Vespa has more.

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