CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - FRIDAY, MARCH 28, 2025

Woman Shadow Arm Raised in Triumph

"This recognition underscores the extraordinary breadth and depth of Sheila Fix's accomplishments, both as an attorney and a leader," said founding partner Stephen Henning.

WSHB Partner Sheila Fix Selected as Los Angeles Business Journal's Woman of Influence in Construction, Engineering, and Architecture

March 25, 2025
Sheila E. Fix - Wood Smith Henning & Berman Newsroom

Wood Smith Henning & Berman is proud to announce that Sheila Fix, a partner in the firm's Glendale, California, office, has been selected for the Los Angeles Business Journal's prestigious Woman of Influence in Construction, Engineering, and Architecture. The January 20, 2025 issue will feature Sheila among a distinguished group of women who had made significant contributions to their industries through significant expertise, leadership, and innovation.

Bringing decades of experience as a high impact trial attorney and a former active-duty judge advocate in the U.S. Navy JAG Corps, Sheila focuses her legal practice on catastrophic injury, employment, construction, professional liability, and toxic tort litigation. She frequently handles complex actions involving sureties, including payment and performance bond claims, defaults on construction projects, and mechanics lien release binds. Her extensive construction law experience includes successfully litigating cases involving public works projects, residential construction, and landslide and subsidence claims.

Ms. Fix may be contacted at sfix@wshblaw.com

Reprinted courtesy of Sheila E. Fix, Wood Smith Henning & Berman

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CDJ NEWS THIS WEEK



Hourglass

This case underscores the importance of understanding the statutory framework governing construction defect litigation and highlights the complexities of determining when claims accrue under Colorado law.

Navigating Construction Defect Claims and Statutes of Limitation: Key Lessons from Stoecklein v. Fayette Farms

March 25, 2025 — David McLain - Colorado Construction Litigation Blog

In the recent Colorado Court of Appeals decision Stoecklein v. Fayette Farms, LLC (2024 WL 5098330), the Court addressed critical issues surrounding construction defect claims, statutes of limitations, and the interplay between the Colorado Consumer Protection Act (“CCPA”) and the Construction Defect Action Reform Act (“CDARA”). This case underscores the importance of understanding the statutory framework governing construction defect litigation and highlights the complexities of determining when claims accrue under Colorado law.

Background of the Case
Lindsey and Chance Stoecklein entered into a contract with Redline Construction Corporation for the construction of a manufactured home. Redline subsequently assigned its responsibilities to High Country Construction & Development, LLC, which then subcontracted Fayette Farms, LLC, to install the home.

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

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

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Maui Lahaina Hawaii Fire

The Hawaii Supreme Court issued its full opinion, explaining its answers to the reserved questions addressed in the order.

Decision from Hawaii Supreme Court Amplifies Reasoning for its Prior Order in Maui Fire Cases

March 25, 2025 — Tred R. Eyerly - Insurance Law Hawaii

Following its order dated February 10, 2025, the Hawaii Supreme Court issued its full opinion, explaining its answers to the reserved questions addressed in the order. In the Matter of the Petition for the Coordination of Maui Fire Cases, Haw Sup. Ct., SCRQ-24-0000602 (March 17, 2025) [Prior post on order here].

The global settlement reached by the individual and class plaintiffs and defendants required, as a condition precedent, either a release by insurance carriers of all subrogation claims against the defendants, or a final, unappealable order and judgment that the insurers' exclusive remedy for all subrogation claims would be a lien against the settlement under Haw. Rev. Stat. 663-10.

Mediation between the individual action plaintiffs, consolidated class plaintiffs, defendants, and subrogation insurers resulted in a settlement term sheet signed by all parties except the subrogation insurers. The term sheet contemplated a global settlement that resolved all claims against the defendants. The term sheet also required an agreement or judgment resolving the subrogating insurers' claims against the defendants as a condition precedent to the proposed settlement.

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

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

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Powerlines fire in background

LA County sued Edison to recoup its losses from a January wildfire that was one of the most destructive in California history.

Los Angeles County Sues Utility Edison Over Deadly Wildfire

March 25, 2025 — Mark Chediak - Bloomberg

Los Angeles County sued Edison International to recoup its losses from a January wildfire that was one of the most destructive in California history.

The suit alleges that equipment owned by the company’s Southern California Edison utility caused the Eaton Fire. The county claims it’s been saddled with hundreds of millions of dollars in costs to respond to the blaze and repair damaged infrastructure and property. The cities of Pasadena and Sierra Madre filed separate suits against Edison in Los Angeles County Superior Court.

Edison is facing mounting scrutiny for the possible role its power lines may have played in the Eaton wildfire that burned more than 14,000 acres, destroyed about 9,400 structures and resulted in 17 deaths. The company already faces dozens of lawsuits alleging its equipment sparked the blaze in the Pasadena foothills that was fanned by high winds during an outbreak of wildfires that charred parts of the Los Angeles area.

Reprinted courtesy of Mark Chediak, Bloomberg

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Dispute resolution notebook on desk

The buyer filed a lawsuit against the seller for negligence without complying with the pre-suit mediation requirement.

Follow the Dispute Resolution Provision(s) in Your Contract

March 25, 2025 — David Adelstein - Florida Construction Legal Updates

When you are in a dispute, one of the first things you want to look at is the dispute resolution provision(s) in your contract. What does the provision(s) say? (There could be more than one provision.) Do you need to mediate first? Are disputes decided via arbitration or litigation? Is there a venue provision? Is there a waiver of jury trial? Is there an attorney’s fees provision? Is there a choice of law provision? You want to know this BEFORE you proceed with escalating the dispute. Not following the dispute resolution provision(s) can have consequences. Below is an example.

In Pesantes v. Kelley, 50 Fla. L. Weekly D519a (Fla. 3d DCA 2025), a residential buyer and residential seller were in a dispute. The parties entered into an as-is residential contract. The contract included a dispute resolution provision that required the parties to mediate their disputes and if they were unable to settle through mediation, then the parties could litigate their dispute. There was also a prevailing party attorney’s fees provision that stated, “In any litigation permitted by this Contract, the prevailing party shall be entitled to recover from the non-prevailing party costs and fees, including reasonable attorney’s fees, incurred in conducting the litigation.” Pesantes, supra.

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

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

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Sewage contaminated water sign near border

Mexico construction accident is believed to have sent millions of gallons of raw sewage into the Tijuana River on March 9.

Raw Sewage Spill Fouls Waters Between San Diego and Tijuana, Mexico

March 25, 2025 — Jeff Yoders - Engineering News-Record

Crews performing repairs to a system of pipes meant to send sewage flows from the Tijuana, Mexico, area to treatment plants on both sides of the U.S.-Mexico border reported a rupture beginning the night of March 8 that sent millions of gallons of sewage into the Tijuana River Valley and, eventually, into the Pacific Ocean on the U.S. side of the border.

Mr. Yoders may be contacted at yodersj@enr.com

Reprinted courtesy of Jeff Yoders, ENR

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Person ripping contract

This article focuses on the termination for convenience process and some of the things contractors need to consider if their contract is terminated for convenience.

Federal Contract Termination For Convenience

March 25, 2025 — Michael Yelle - Ahlers Cressman & Sleight PLLC

The Trump Administration has undertaken a series of contract terminations to realign federal spending with the Administration’s goals.[1] The Federal Acquisition Regulations (“FAR”) outline the process for contract termination. If a contract is terminated, contractors must be aware of the steps they can take to maximize recovery of termination costs.

In a federal contract, there are two types of termination, termination for default and termination for convenience. A contract may be terminated for default when the contractor fails to perform its obligations, such as by failing to make adequate progress on the project.[2] In a termination for default, the government is generally required to give notice and provide the opportunity for the contractor to “cure” or correct the problem before a termination decision is made.

Mr. Yelle may be contacted at michael.yelle@acslawyers.com

Reprinted courtesy of Michael Yelle, Ahlers Cressman & Sleight PLLC

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Judge with gavel

The somewhat narrow ruling prohibits the EPA from using nonspecific requirements in its permits which make the permittee liable for the resulting condition of the receiving body of water.

Supreme Court Limits EPA’s Options for Wastewater Discharge Permits

March 25, 2025 — Edward J. Corwin & Samuel Alhadeff - Lewis Brisbois Newsroom

Summary: The U.S. Supreme Court has restricted the Environmental Protection Agency’s options for controlling wastewater dischargers under the Clean Water Act in a decision issued March 4, 2025. The somewhat narrow ruling prohibits the EPA from using nonspecific requirements in its permits which make the permittee liable for the resulting condition of the receiving body of water.

Temecula, Calif. (March 6, 2025) - On March 4, 2025, the U.S. Supreme Court issued an opinion limiting what the EPA can require in its National Pollutant Discharge Elimination System (NPDES) permits regulating the discharge of pollutants into United States waters. In City and County of San Francisco, California v. Environmental Protection Agency, No. 23-753, the Court held in a 5-4 decision that the Clean Water Act does not authorize the EPA to issue a NPDES permit that not only dictates what steps the permittee must take to meet water quality standards, but also makes the permittee responsible for the “end result” quality of the receiving body of water.

Reprinted courtesy of Edward J. Corwin, Lewis Brisbois and Samuel Alhadeff, Lewis Brisbois

Mr. Corwin may be contacted at Edward.Corwin@lewisbrisbois.com
Mr. Alhadeff may be contacted at Samuel.Alhadeff@lewisbrisbois.com

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Construction site at sunset

Contractors on federal projects must understand the current state of PLAs before submitting bids for these projects.

The Potential (Second) Death of Project Labor Agreements

March 25, 2025 — W. Tyler Lloyd - The Dispute Resolver

The back-and-forth over project labor agreements (“PLAs”) continues during the second Trump Administration. These pre-hire collective bargaining agreements generally set the terms and conditions of employment for a specific project and have been the subject of several executive orders dating back to the early 1990s. The executive orders have varied between a complete prohibition of the PLA requirement by President George H.W. Bush in 1992 to a mandate that agencies include PLAs with labor organizations in all government construction contracts exceeding $35 million by President Biden in 2022. Although President Trump has issued several executive orders since taking office in January, he has not specifically addressed the continued tug-of-war over PLAs. However, federal agencies and courts have redrawn the lines for PLAs, leaving the construction industry waiting for further guidance.

The first domino fell when the United States Court of Federal Claims issued a ruling in MVL USA, Inc. et al. v. United States, 174 Fed. Cl. 437 (U.S. Ct. Cl. 2025). Here, 12 large construction contractors filed pre-bid award protests, challenging federal agencies’ authority to mandate that prospective bidders enter PLAs to be considered eligible for award of federal construction projects exceeding $35 million, allegedly in violation of the Competition in Contracting Act (“CICA”), as based on President Biden’s Executive Order and Federal Acquisition Regulation (“FAR”) implementing the Executive Order. In its decision, the court struck down President Biden’s executive order. The Federal Claims Court held that the PLA mandate violated the CICA’s full and open competition requirement. It further held that the mandate violated the CICA because it allows agencies to reduce competition to PLA-contracts, a limitation that has no relation to the substance of the solicitation or performance at issue. The court also that that the agencies’ decisions to proceed with PLAs as a mandate based solely on a President’s policy were “arbitrary and capricious.” Since this decision was rendered in late January, some federal agencies have begun adopting policies consistent with the court’s rationale.

Mr. Lloyd may be contacted at tlloyd@stites.com

Reprinted courtesy of W. Tyler Lloyd, Stites and Harbison, PLLC

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Supply chain ship port jet

Despite their vast importance and usefulness, the US remains heavily dependent on foreign sources—particularly China—that dominate the global supply chain for critical minerals.

Beyond the Executive Orders: Legislative Proposals to Strengthen the U.S. Critical Minerals Supply Chain

March 25, 2025 — Ashleigh Myers, Robert A. James, Allan C. Van Vliet, Amanda G. Halter, Kelsey Parker & Sahar J. Hafeez - Gravel2Gavel

Critical minerals are the backbone of modern technologies and national security, powering everything from advanced semiconductors and electric vehicle batteries to missile guidance systems and renewable energy infrastructure. As the global economy transitions to more diverse energy technologies, the demand for these essential materials has surged. Despite their vast importance and usefulness, the United States remains heavily dependent on foreign sources—particularly China—that dominate the global supply chain for critical minerals. This reliance threatens supply chain stability, leaving key American industries vulnerable to disruptions, price manipulations and political leverage.

We have witnessed a multitude of actions from the White House in recent weeks ranging from new executive orders to the repeal of old ones. This includes the Trump administration’s Day One Executive Order entitled Unleashing American Energy, which directs U.S. government agencies to assess several trade and national-security-related actions (including stockpiling), prioritize geological mapping, and consider support for processing of critical minerals, among other things. That is not the entire federal government response, however. A number of congressional bills—many of them with bipartisan support—have been proposed in the 2025 legislative session in an effort to boost domestic extraction, refining and production of critical minerals.

Reprinted courtesy of Ashleigh Myers, Pillsbury, Robert A. James, Pillsbury, Allan C. Van Vliet, Pillsbury, Amanda G. Halter, Pillsbury, Kelsey Parker, Pillsbury and Sahar J. Hafeez, Pillsbury

Ms. Myers may be contacted at ashleigh.myers@pillsburylaw.com
Mr. James may be contacted at rob.james@pillsburylaw.com
Mr. Van Vliet may be contacted at allan.vanvliet@pillsburylaw.com
Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Ms. Parker may be contacted at kelsey.parker@pillsburylaw.com
Mr. Hafeez may be contacted at sahar.hafeez@pillsburylaw.com

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Compass

Navigating federal government contracts under newly imposed tariffs requires contractors to take proactive measures to manage cost increases, supply chain disruptions, and regulatory compliance challenges.

Navigating Federal Government Contracts Under Newly Imposed Tariffs

March 25, 2025 — Brandon Regan & Amanda Z. Sin - ConsensusDocs

Introduction
The imposition of new tariffs can create significant challenges for federal government contractors. Tariffs on imported goods such as steel, aluminum, and other materials may lead to higher procurement costs and disruption in supply chains. For contractors working under federal contracts, understanding how to navigate these new tariffs is essential to minimize financial strain and ensure compliance with contract terms. This article explores key considerations and strategies for contractors to effectively manage the impacts of newly imposed tariffs on federal contracts.

Understanding the Impact of Tariffs on Government Contracts
As a threshold matter, certain federal government purchases are exempt from tariffs. The Harmonized Tariff Schedule lists these exemptions and should be consulted first, as the FAR requires that agencies use these exemptions “where anticipated savings to appropriated funds will outweigh the administrative costs associated with processing required [exemption-related] documentation.” See FAR 25.901, 25.903.

Reprinted courtesy of Brandon Regan, Watt, Tieder, Hoffar & Fitzgerald LLP and Amanda Z. Sin, Watt, Tieder, Hoffar & Fitzgerald LLP

Mr. Regan may be contacted at bregan@watttieder.com
Ms. Sin may be contacted at asin@watttieder.com

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Diverse team joining hands

GRSM’s unique presence in all 50 states provides a powerful foundation for creating an inclusive, supportive, diverse workplace.

GRSM Houston Office Recognized as Outstanding Diverse Organization by Houston Business Journal

March 25, 2025 — Laura E. De Santos - Gordon Rees Scully Mansukhani, LLP

Gordon Rees Scully Mansukhani’s Houston office has been recognized as an Outstanding Diverse Organization by the Houston Business Journal. Honored organizations are celebrated for their diverse workforces and their proactive efforts to promote and champion diversity within their communities and industries.

“It is a tremendous honor for Gordon Rees Scully Mansukhani to be recognized by the Houston Business Journal as an Outstanding Diverse Organization,” said Laura De Santos, Office Managing Partner of the firm’s Houston office. “At GRSM, we believe that diversity strengthens our firm, enhances our client service, and drives meaningful progress within the legal profession.”

Ms. De Santos may be contacted at ldesantos@grsm.com

Reprinted courtesy of Laura E. De Santos, Gordon Rees Scully Mansukhani, LLP

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Construction workers using technology on site

The research examined how three tiers of companies and various roles within those companies see the present and future of emerging technologies.

The Tech Divide: How Construction Firms Embrace Emerging Technologies

March 25, 2025 — Aarni Heiskanen - AEC Business

A new study from the University of Sydney’s School of Engineering analyzes how digital tools shape construction practices in Australia. The research examined how three tiers of companies and various roles within those companies see the present and future of emerging technologies.

An observation that stands out is that the smallest companies rate the importance of new technology much lower than the larger ones.

How they studied
The researchers gathered insights from 8 expert interviews and 66 survey respondents. The number of experts reached is moderate, so the results offer meaningful insights rather than a definitive overall picture of the Australian industry.

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

Reprinted courtesy of Aarni Heiskanen, AEC Business

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Downward Arrow Homes

US Homebuilder Sentiment Drops to Seven-Month Low on Costs

March 25, 2025 — Michael Sasso - Bloomberg

Confidence among US homebuilders slid this month to the lowest level since August, dragged down by worry over tariffs, higher construction costs and economic uncertainty heading into the spring selling season.

An index of housing market conditions from the National Association of Home Builders and Wells Fargo fell 3 points to 39 in March. That was weaker than all estimates in a Bloomberg survey of economists.

Measures of current sales of single-family homes and prospective-buyer traffic, dropped to their lowest levels since the end of 2023. Meantime, a gauge of expectations for the next six months held at 47.

Reprinted courtesy of Michael Sasso, Bloomberg

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Money crane holding house

Construction Futures: February 2025 Economic Roundup

March 25, 2025 — Construction Executive

WHAT WE LEARNED IN JANUARY: CONTRACTORS OPTIMISTIC DESPITE COOLING MOMENTUM
The construction industry’s momentum faded somewhat over the past few months. Nonresidential spending growth has stalled, employment growth has slowed to a crawl and materials prices jumped higher in January. Interest rates, which appear set to remain higher for longer, continue to weigh on the construction industry. Despite all this, however, contractors remain optimistic about the next two quarters.

MATERIALS PRICES SURGE IN JANUARY
Construction input prices rose 1.4% in January, the largest month-over-month rise in two years. Higher energy prices and start-of-year price increases explain some of the sharp rise, and purchasers rushing to buy inputs before tariffs go into effect also put upward pressure on prices. With demand expected to increase and ongoing uncertainty regarding trade policy, input prices will likely trend upward over the next several months.

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

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Earth storm from space

A Bay Area City Pioneers Urban-Scale Insurance for Climate Disasters

March 25, 2025 — Leslie Kaufman - Bloomberg

“Fire took everything, please help.”

The headline was one of hundreds like it on GoFundMe campaigns that launched even as the embers of the fires in the Pacific Palisades and Altadena were still smoldering. They were a grim reminder that even in more affluent areas of the US, there are always people who are uninsured or, despite having insurance, still need help with immediate needs like clothing and shelter after a disaster.

Three-hundred and fifty miles to the north of Los Angeles, another California city is pioneering a form of disaster insurance that could provide more reliable relief than the kindness of strangers.

Reprinted courtesy of Leslie Kaufman, Bloomberg

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Person paying lawyer during meeting

Alecia Walters-Hinds and Michelle Gorman to Speak on Litigation Funding at CLM Conference

March 25, 2025 — Lewis Brisbois Newsroom

Dallas, Tex. (March 5, 2025) – New York Administrative Partner Alecia Walters-Hinds and Weirton Managing Partner Michelle L. Gorman will present on the complexities of litigation funding at the upcoming Claims and Litigation Management (CLM) Annual Conference, taking place in Dallas, Texas on April 10 at 10:00 a.m. CT.

In this informative 60-minute panel, titled “Identifying and Combating Third-Party Litigation Funding,” Ms. Walters-Hinds and Ms. Gorman will be joined by Rose Charles (Sompo International Insurance) and Diane Messerschmitt (Triton Claims Management, LLC) to explore litigation funding, focusing on how to identify cases involving third-party financing and its impact on litigation costs and resolutions. Panelists will discuss why plaintiffs use litigation funding, the challenges it creates for defendants, and strategies for effectively managing its influence on claims. Lewis Brisbois is a proud sponsor of this CLE event.

April 10th, 2025
Gaylord Texan Resort and Convention Center
1501 Gaylord Trl
Grapevine, TX 76051

Reprinted courtesy of Lewis Brisbois

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Dangerous Wildfires Burn Across Several States

Dangerous wildfires burned across several states on Sunday, with a state of emergency in South Carolina, as fire officials work to contain other blazes in North Carolina and New Jersey. NBC News’ Kathy Park reports from the fire zone in South Carolina.

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New Maps Show Where Wildfires Will Most Likely Happen In Los Angeles

Cal Fire released updated maps that show where wildfires are most likely to occur within the next several decades.

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