CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - FRIDAY, SEPTEMBER 26, 2025

Design plans on computer meeting

The decision serves as a critical reminder to contractors and government agencies alike about the legal consequences of ambiguous or incomplete design documents in federal construction contracts.

Federal Circuit Clarifies Limits of Design Liability in GSA Contract Dispute

September 23, 2025
Keith E. Smith & Domingo R. Tan - Wood Smith Henning & Berman LLP

The U.S. Court of Appeals for the Federal Circuit recently issued a decision that reinforces the boundaries of the government's liability for design defects in federal construction contracts using the design-build bridging project delivery method. In Balfour Beatty Construction v. General Services Administration, the court partially overturned a ruling by the Civilian Board of Contract Appeals (CBCA), finding that the bridging documents of the General Services Administration (GSA) contained design specifications that carried an implied warranty under the well-established Spearin doctrine.

Specifically, the court held that GSA was responsible for design defects relating to the thickness of the project's mat slab foundation. However, the court affirmed the CBCA's denial of claims related to ventilation requirements, concluding those were governed by performance specifications for which no design warranty applied. The decision serves as a critical reminder to contractors and government agencies alike about the legal consequences of ambiguous or incomplete design documents in federal construction contracts.

Reprinted courtesy of Keith E. Smith, Wood Smith Henning & Berman LLP and Domingo R. Tan, Wood Smith Henning & Berman LLP

Mr. Smith may be contacted at kesmith@wshblaw.com
Mr. Tan may be contacted at dtan@wshblaw.com

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CDJ NEWS THIS WEEK

Lawyer with Lady Law and House

The most important lesson from Zelenik is that underlicensing is just as dangerous as unlicensing.

Tenn. Court of Appeals Finally Clarifies Contractor Licensing Laws, Holding An “Underlicensed” Contractor Is Violation of Tennessee’s Consumer Protection Act

September 23, 2025 — Matthew DeVries - Best Practices Construction Law

The title of this post says it all. No need for a catchy story about my kids or a play on words. In what had been an often debated issue in trial courts across Tennessee, the Court of Appeals recently weighed in on the issue of whether an underlicensed contractor (one who contracts beyond the monetary limitation of its license) can form the basis of a claim under the Tennessee Consumer Protection Act (“TCPA”), Tenn. Code Ann. 47-18-101 et seq.

The Setup. In Zelenik v. Crowell Homebuilding LLC, (Aug. 14, 2025), the Court held that a contractor that exceeds its monetary licensing limit at the time of contracting violates the Contractor’s Licensing Act (“CLA”), Tenn. Code Ann. 62-6-101 to -139 (2019 & Supp. 2024). The Court went on to hold that the trial court properly held that a violation of the CLA, in turn, constituted a violation of the TCPA.

Mr. DeVries may be contacted at mdevries@buchalter.com

Reprinted courtesy of Matthew DeVries, Buchalter

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Man running from clock rolling down hill

The moral of the fable is that “the race is not always won by the swiftest.”

How Slow and Steady Can Lose the Race - Pacing and Delay Claims

September 23, 2025 — Curt Martin & Lee Banta - ConsensusDocs

In the well-known fable, the tortoise’s slow and steady pace prevailed. But how often do your construction projects resemble a fairy tale? The practice of “pacing” makes common sense in construction just as it does in racing. But pacing can be misunderstood in the context of a delay claim and can even cause the contractor to lose its claim for delay damages. Here’s a cautionary look at pacing and delay claims.

The concept of liability for delay is familiar, but important to restate as a foundation of this discussion. Delays fall into one of four categories, with differing outcomes.

  • Owner-caused delays are often called “compensable delays.” The contract and/or common law typically allows the contractor relief for added time and cost for these delays. (This is contemplated in Section 6.3.2 of ConsensusDocs 200.)

Reprinted courtesy of Curt Martin, Peckar & Abramson, PC and Lee Banta, Peckar & Abramson, PC

Mr. Martin may be contacted at cmartin@pecklaw.com
Mr. Banta may be contacted at lbanta@pecklaw.com

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Hurricane Season Ahead

Handling the aftermath of a hurricane can be chaotic and can cost associations more than they expected to repair.

Preparation Is Key: How Condo and Homeowner Associations Can Protect Their Communities Amid Hurricane Season

September 23, 2025 — Franchesco Soto & Amanda L. Gonzalez - Daily Business Review

As the hurricane season ramps up in Florida and forecasters predict an above-average number of storms as late summer and fall approaches, condominium and homeowner associations must be strategic and prepared to protect their communities and mitigate risk. In the last 20 years, Florida has been hit by devastating hurricanes, including Hurricane Katrina (2005), Hurricane Wilma (2005), and Hurricane Irma (2017), which have caused significant damage and disruption to condominium associations and homeowners associations in the Miami area. On its own, Hurricane Irma is estimated to have caused $50 billion in damage. Due to their strong winds, heavy rainfall, and even storm surges, these hurricanes caused widespread flooding, power outages, and property damage for owners and tenants who own or reside within a condominium association or homeowner association. Handling the aftermath of a hurricane can be chaotic and can cost associations more than they expected to repair. Although preparing for hurricane season in South Florida is second nature for most, here are some key steps associations should consider when conducting their storm preparation reviews.

Reprinted courtesy of Franchesco Soto, Ball Janik LLP and Amanda L. Gonzalez, Ball Janik LLP

Mr. Soto may be contacted at fsoto@balljanik.com
Ms. Gonzalez may be contacted at agonzalez@balljanik.com

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Changes in legislation

It is crucial for developers and contractors to understand the nuances associated with the new law so that the necessary changes to qualifying contracts are made prior to the new law taking effect.

New Law Limits Withheld Retention on Qualified Private Works Projects to 5% Effective 2026

September 23, 2025 — Garret M. Mandel - Porter Law Group

Your inbox has likely been full of messages in the past few weeks informing you that California Senate Bill 61 (Cortese) was recently signed into law by the Governor of California on July 14, 2025, which limits the amount of retention that can be withheld on private works of improvement to five percent (5%). You also have likely read that this is a significant change in the California law affecting many contractors doing business in this State. However, none of these communications likely explain the specific changes that are taking place, the specific types of private works projects to which the new requirement applies, or how the new changes can be addressed once the law takes effect as of January 1, 2026.

Background: California Senate Bill 61, signed into law on July 14, 2025, introduces changes to the California Civil Code by adding section 8811 to cap retention payments on private works projects at five (5%) for contracts entered into on or after January 1, 2026. More specifically, the new Civil Code 8811 will state as follows:

8811.

(a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.

Mr. Mandel may be contacted at gmandel@porterlaw.com

Reprinted courtesy of Garret M. Mandel, Porter Law Group

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Lit lightbulb on open book

In government contracting claims, the contractor may argue the government had superior knowledge as to key facts and failed to share its superior knowledge with the contractor, which ultimately cost the contractor more money/time.

Doctrine of Superior Knowledge in Government Contracting

September 23, 2025 — David Adelstein - Florida Construction Legal Updates

In government contracting claims, the contractor may argue the government had superior knowledge as to key facts and failed to share its superior knowledge with the contractor, which ultimately cost the contractor more money/time. “Under the doctrine of superior knowledge, the Government has ‘an implied duty to disclose to a contractor otherwise unavailable information regarding some novel matter affecting the contract that is vital to its performance.’ A superior knowledge claim ‘focuses … upon the Government’s knowledge of vital information prior to contract award and its failure to share it with an unknowing contractor.’” Troop Contracting, Inc. v. Department of Veteran Affairs, CBCA 8000, 2025 WL 2164974 (CBCA July 2025). The underlined “prior to contract award” is key.

In Troop Contracting, the contractor argued the government failed to share its superior knowledge of the prevalence of lead based paint in the building it was hired to renovate. As a result, the contractor had to perform lead based paint testing and abatement, which cost additional money. However, and unfortunately for the contractor:

[T]he contract plainly stated that [the contractor] must assume that any and all painted surfaces encountered and disturbed contain LBP [lead based paint] and that [the contractor] must treat these painted surfaces per the specifications. [The contractor] therefore knew or should have known that the specifications set forth in the solicitation (which were subsequently incorporated into the contract) advised that all painted surfaces must be assumed to contain LBP and that [the contractor] would be required to address any disturbed paint pursuant to the LBP section.

Troop Contracting, supra.

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Testifying Construction and Building Industry Standard of Care Expert Witness

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Gavel with hardhats in background

At the close of the hearing, the arbitrator awarded BWB&O’s client approximately $1,000,000.00 in damages, interest, attorney’s fees, and arbitration costs, and denied the owner’s claim in its entirety.

The Court Rules in Favor of Partners Benjamin Price and Ajay Ahluwalia’s Arbitration Ruling Awarding Damages!

September 23, 2025 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

The action involved a large-scale tenant improvement project for a manufacturing facility in Los Angeles County. BWB&O’s client served as the general contractor for the project. During the project, the owner terminated the construction contract for cause. The general contractor, through BWB&O, initiated arbitration proceedings asserting claims for Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing.

BWB&O argued there was no basis for termination and thus, per the terms of the contract, the owner was liable for approximately $700,000.00 in termination costs incurred by BWB&O’s client. The owner asserted counterclaims against BWB&O’s client for Breach of Contract, Negligence, Breach of Duty of Good Faith and Fair Dealing, Malicious Prosecution, and Declaratory Relief, seeking no less than $1,500,000.00.

Reprinted courtesy of Bremer Whyte Brown & O'Meara LLP

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California shore

The Superior Court granted summary judgment to a policy holder who was issued a policy by the California's insurer of last resort, known as the FAIR Plan.

Court Finds California FAIR Plan Unlawful

September 23, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The Superior Court granted summary judgment to a policy holder who was issued a policy by the California's insurer of last resort, known as the FAIR Plan. Aliff v. California FAIR Plan Association, No. 21STCV200095 (Super. Ct. California June 24, 2025).

Plaintiff sued the California Fair Plan Association (CFP) arguing that the property policies it issued unlawfully restricted claims for smoke damage after a fire. The second amended complaint asserted causes of action for declaratory relief and unfair business practices under California statute. Plaintiff moved for summary judgment.

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

Reprinted courtesy of Tred Eyerly, Damon Key Leong Kupchak Hastert

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People meeting over laptop charts hardhats

This post outline several of the most significant considerations that arise when U.S. forms cross international borders.

Adapting Standard Construction Forms for Use in Overseas Hospitality Renovations

September 23, 2025 — Sara Beiro Farabow & Steve Kmieciak - The Construction Seyt

One of the earliest issues to decide on a hospitality renovation abroad – whether it’s a branded resort in Europe, a hotel in Asia, or a mixed-use property in Latin America – is the selection of the appropriate project contracts. The design and construction contracts in wide use in the US are sometimes appropriate for adaptation for use abroad.

This was the focus of our recent webinar, Adapting Standard Construction Forms for Use in Overseas Hospitality Renovations. Below, we outline several of the most significant considerations that arise when U.S. forms cross international borders.

Reprinted courtesy of Sara Beiro Farabow, Seyfarth Shaw LLP and Steve Kmieciak, Seyfarth Shaw LLP

Ms. Farabow may be contacted at sfarabow@seyfarth.com
Mr. Kmieciak may be contacted at skmieciak@seyfarth.com

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Illustration of three people celebrating with trophy

59 Lewis Brisbois attorneys across 27 offices have been named to the 6th edition of “Best Lawyers: Ones to Watch in America.”

Over 50 Lewis Brisbois Attorneys Recognized in 6th Edition of Best Lawyers: Ones to Watch in America

September 23, 2025 — Lewis Brisbois Newsroom

(August 21, 2025) – 59 Lewis Brisbois attorneys across 27 offices have been named to the 6th edition of “Best Lawyers: Ones to Watch in America.” Congratulations to the following attorneys on this recognition!

You can see the list of Lewis Brisbois attorneys named to Best Lawyers' 31st edition of The Best Lawyers in America here.

Reprinted courtesy of Lewis Brisbois

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News

Pillsbury's Real Estate and Construction Law Team discusses AI cuts disaster infrastructure losses, multifamily drives increase in CRE delinquency rates, commercial services firms lead in office and industrial leasing activity, and more.

Real Estate & Construction News Roundup (8/20/25) – Hotel Growth Forecast, Data Center Availability and an AI Rental Revolution

September 23, 2025 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog

In our latest roundup, AI cuts disaster infrastructure losses, multifamily drives increase in CRE delinquency rates, commercial services firms lead in office and industrial leasing activity, and more!

  • AI applications such as predictive maintenance and digital twins could prevent 15% of projected natural disaster losses to power grids, water systems and transportation infrastructure. (Robyn Griggs Lawrence, Construction Dive)
  • U.S. hotel growth forecast has been downgraded amid continued underperformance and elevated macroeconomic concerns. (Noelle Mateer, Hotel Dive)
  • Multifamily was the only major commercial real estate sector to post increases in delinquency and servicing rates in July. (Leslie Shaver, Multifamily Dive)

Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Accessible route sign

From May through October, Blitz Build weekends give HBF clients, those living with physical disabilities, access to something many of us take for granted: safe, accessible entries and pathways in their own homes.

HHMR Joins Forces with HBF at 2025 Blitz Build: Building More Than Just Ramps

September 23, 2025 — David McLain - Colorado Construction Litigation Blog

This past Blitz Build season, the Home Builders Foundation (“HBF”) once again brought together builders, tradespeople, volunteer crews, and sponsors from across the Front Range for their signature program: Blitz Build. From May through October, Blitz Build weekends give HBF clients, those living with physical disabilities, access to something many of us take for granted: safe, accessible entries and pathways in their own homes.

This year, a volunteer team from HHMR was happy to ditch a day at the office to roll up their sleeves, bring skill and heart, and help transform lives through their work on help create a now porch and ramp in an effort to restore independence and dignity.

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

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

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Data center

The U.S. Energy Dept. said last year that data centers already account for more than 4% of U.S. electricity use, which could grow to 12% by 2028.

Power Hungry: AI-Fueled Data Center Boom Sets Energy Delivery’s New Course

September 23, 2025 — Debra K. Rubin & Johanna Knapschaefer - Engineering News-Record

The statistics seem astounding, as forecasts for artificial intelligence demand push expansion of data center and power infrastructure into hyper-blitz in the U.S., and beyond.

Reprinted courtesy of Debra K. Rubin, Engineering News-Record and Johanna Knapschaefer, Engineering News-Record

Ms. Rubin may be contacted at rubind@enr.com

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Consulting Design and Architecture Expert Witness

Forensic Architect CA, AZ, NV, CO, TX, UT, FL, NM, OK - NCARB - National Council of Architectural Registration Boards

California Architectural Registration Board Supplemental Examination Commissioner

(800) 482-1822

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Insurance policy

Quick Note: Doctrine of Reasonable Expectations Does Not Apply to Insurance Policies

September 23, 2025 — David Adelstein - Florida Construction Legal Updates

The doctrine of “reasonable expectations” does NOT apply to insurance policies. Catalina West Homeowners Association, Inc. v. First Community Ins. Co., 50 Fla.L.Weekly D1318a (Fla. 3d DCA 2025). ” ‘Under this doctrine, the insured’s expectations as to the scope of coverage is upheld provided that such expectations are objectively reasonable.’ The insured is entitled to all the coverage he or she may have reasonably expected - without due regard to the actual language provided by that policy or the risk underwritten.” See id. (internal citations omitted).

However, in Florida, this doctrine of reasonable expectations has been rejected by Florida’s Supreme Court when it comes to interpreting insurance policies. See, supra, Catalina West Homeowners Association. “Instead, Florida courts must focus on the plain language of the insurance policy and give effect to those express terms. The parties’ unexpressed intent or desires have no effect. We strongly reject any attempts to revive this doctrine or fundamentally change how Florida courts interpret insurance policies.” See id. (internal citations omitted).

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Scissors cutting Giant Percentage Symbol

Mortgage Rates Fall Slightly, Sending 30-Year Loans to 6.56%

September 23, 2025 — Prashant Gopal - Bloomberg

Mortgage rates in the US fell, keeping home-loan costs at a 10-month low.

The average for 30-year, fixed loans was 6.56%, down from 6.58% last week, Freddie Mac said in a statement.

House hunters have largely been holding out for lower rates and prices, keeping transaction numbers subdued. A measure of contracts to buy US resale homes fell for a second month in July, the National Association of Realtors reported Thursday.

Reprinted courtesy of Prashant Gopal, Bloomberg

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Construction worker hooking

Construction Safety Culture Trends of 2025

September 23, 2025 — Clayton Jones - Construction Executive

In 2025, construction safety is no longer treated as a regulatory box to check. It is woven into the daily operations, culture and long-term strategy of successful construction companies. Leading firms are demonstrating that safety in the construction industry goes well beyond personal protective equipment and general safety practices. While these are still important and necessary aspects of safety on the jobsite, offsite safety education and training are imperative for a true culture of safety. Building a culture of safety within an organization can be the key to ensuring everyone is confident and protected in the workplace.

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

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Conference

2026 NAHB International Builders’ Show

September 23, 2025 — Beverley BevenFlorez – CDJ Staff

Registration is now open for next year’s National Association of Home Builders’ (NAHB) annual International Builders’ Show (IBS). The event brings together “70,000+ industry pros from 100+ countries, 1,700+ top companies and brands and 120+ powerhouse education sessions.” Attendees will be able to “explore the latest products, connect with the best in the business and gain” valuable insights.

February 17th-19th, 2026
Orange County Convention Center
9860 Universal Blvd
Orlando, FL 32819

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California Fault Lines, Crumbling Cliffs Are Tearing This Coastal Neighborhood Apart

Along the San Mateo County coast, cliffs are crumbling with remarkable speed in the Seal Cove neighborhood, and fault lines are also wreaking havoc, San Francisco Chronicle.

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Family’s $241,000 Remodel Gone Wrong Likely Needs Rebuilding Despite Passing County Inspections

From the outside, the Abernathys’ new home is beautiful. It is a bright white, two-story house in a quiet, wooded area. But as the saying goes, it’s what’s on the inside that counts, WTHR reported.

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