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In Velez v. AR Management Company, et al., owners of a condominium unit rebuilt after a fire sued the condominium association, several association board members, the association’s property management company and the general contractor for the reconstruction work.

NJ Court Reaffirms Rule Against Coverage for Faulty Workmanship Claims and Finds Fraud Claims Inherently Intentional

Monday, September 20, 2021 — Anthony L. Miscioscia & Frank J. Perch, III - White and Williams LLP

Awarding summary judgment to an insurer under both liability and directors & officers (D&O) coverage parts, a New Jersey trial court reaffirmed the principle that claims of defective workmanship without resulting “property damage” are not covered under a general liability policy, and further dismissed claims for fraud and breach of fiduciary duty, finding that such claims were inherently intentional and do not state a covered “occurrence.”

In Velez v. AR Management Company, et al., 2021 N.J. Super. Unpub. LEXIS 1675 (Law Div. Bergen Co. Aug. 10, 2021), owners of a condominium unit rebuilt after a fire sued the condominium association, several association board members, the association’s property management company and the general contractor for the reconstruction work. The owners’ suit alleged faulty workmanship and incomplete repairs. In addition, the owners asserted fraud and breach of fiduciary duty claims against the management company, alleging conflicts of interest and self-dealing between the management company and the general contractor, which had common ownership.

In a third-party complaint, the management company sought coverage from the condo association’s liability and D&O insurer. The court dismissed the D&O coverage claim, noting that the management company was not a director or officer or otherwise entitled to insured status for the D&O coverage part.

Reprinted courtesy of Anthony L. Miscioscia, White and Williams LLP and Frank J. Perch, III, White and Williams LLP

Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Mr. Perch may be contacted at perchf@whiteandwilliams.com


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Attorney Tred R. Eyerly discusses No. 5 Walworth v. Engerman Contracting, Inc.

Wisconsin Court of Appeals Re-affirms American Girl To Find Coverage for Damage Caused by Subcontractors

Monday, September 20, 2021 — Tred R. Eyerly - Insurance Law Hawaii

The trial court's finding of no occurrence and no property damage due to faulty workmanship was reversed by the appellate court. No. 5 Walworth v. Engerman Contracting, Inc., 2021 Wis. App. LEXIS 401 (Wis. Ct. App, July 30, 2021).

Engerman was the general contractor on a construction project at a residence. Engerman was hired to build a poll complex. Engerman subcontracted the project to Downes Swimming Pool Co., Inc. Downes purchased shotcrete (sprayed concrete) from Otto Jacobs Company LLC for the swimming poll walls and base.

After completion, the pool immediately began leaking. An investigation determined that the shotcrete material was not installed correctly, contributing to cracking in the pool walls and the steel reinforcing bars were not sufficient to prevent cracks in the pool walls. The owner demolished the pool and constructed a new one. Thereafter, the owner sued Engerman, its insurers (General Casualty Company of Wisconsin and West Bend Mutual Insurance Company) and Downes and its insurer. Downes filed a third-party complaint against Jacobs and its insurer (Acuity Mutual Insurance Company) alleging Jacobs negligently provided inferior shotcrete to Downes.

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

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

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Attorney Garret Murai analyzes Remedial Construction Services, LP v. AECOM, Inc.

Court of Appeals Finds Arbitration Provision Incorporated by Reference Unenforceable

Monday, September 20, 2021 — Garret Murai - California Construction Law Blog

Subcontractors have gotten accustomed to incorporation clauses in their contracts. While an incorporation clause can incorporate any document, most typically, it’s the prime contract between the general contractor and the project owner. Subcontractors will sometimes even accept these documents sight unseen which can be a recipe for disaster. But not in the next case.

In Remedial Construction Services, LP v. AECOM, Inc., Case No. B303797 (June 15, 2021), the 2nd District Court of Appeal examined whether a subcontractor was bound to an arbitration provision contained in a prime contract that was incorporated by reference into the subcontractor’s contract. In this case, it was the prime contractor who was in for a surprise.

The Remedial Construction Case

In 2015, Shell Oil Products US, LLC entered into a prime contract with AECOM Technical Services, Inc. for the demolition, remediation and restoration of the Gaviota oil terminal in Goleta, California. AECOM in turn entered into a subcontract with Remedial Construction Services, LP to perform portions of the work. When AECOM refused to pay Remedial for delay costs asserted by Remedial, Remedial filed suit.

Reprinted courtesy of Garret Murai, Nomos LLP

Mr. Murai may be contacted at gmurai@nomosllp.com

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Build Group to Use Buildots’ AI Technology for Three Construction Projects

September 20, 2021 — Aarni Heiskanen - AEC Business

Build Group Inc. will use Buildots’ technology on three projects in the US, including a 19-story M2 tower which is part of the wider 5M development in San Francisco. Buildots’ AI computer vision will collect, analyze, and leverage data to ensure these projects are delivered on time and under budget.

“The complex nature of managing thousands of details and dozens of trades on a construction site is the biggest challenge to finishing a project on time and within the budget,” said Chad Krause, Vice President of Operations, Build Group Inc.

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

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Understanding Builder's Risk Insurance Coverages and Exclusions

September 20, 2021 — Erin Rotz - Construction Executive

With all the questions a builder may have for a developer, architect, designer and property owner, there are some inquiries that should be addressed first to help identify and understand any climate, accidental and unforeseen risks to a project. Understanding the type of protections builders should consider before starting a job can make all the difference in the success of a project and make sure the right insurance protection is in place.

Builders should consider all the exposures before purchasing coverage though. It is important to do an inventory of all the specific project’s exposures at different phases of the project, including those at the construction site, in transit or at a temporary storage site. A builder may choose to get broad protection for property of all kinds at all locations or narrow coverage to a specific property and risks. Regardless of the level chosen, a builder will need to review the policy to mitigate any coverage gaps.

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

Ms. Rotz may be contacted at Erin.Rotz@thehartford.com

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Angry Evergrande Homebuyers Protest Against Construction Halt

September 20, 2021 — Bloomberg News

Disgruntled China Evergrande Group customers staged a protest in Guangzhou demanding that the cash-strapped developer restart stalled construction work and urging the local government to intervene.

More than 100 homebuyers in white T-shirts emblazoned with the phrase “Resume construction, Evergrande” lined up before the housing bureau of the city’s Nansha district on Thursday, according to people who attended the protest and asked not to be named because of fear of retribution. They said building of units they purchased in Evergrande Peninsula, a project of almost 5,000 apartments, has been halted since May.

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The 27th West Coast Casualty Construction Defect Seminar Approaches

September 20, 2021 — Beverley BevenFlorez – CDJ Staff

This year’s West Coast Casualty Construction Defect Seminar will take place next month in Las Vegas (the delay and change of venue are due to the COVID pandemic). The seminar includes keynote speakers and panelists as well as breakout sessions, networking opportunities, and exhibitors. The Ollie and Legends awards will also be presented during the event. Every year, the West Coast Casualty Seminar chooses deserving charities to support, and this year it will support Opportunity Village and Three Square.

October 6th-8th, 2021
Aria Resort & Casino
3730 S Las Vegas Blvd
Las Vegas, NV 89158

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The Conway decision represents a contractor-friendly decision from a Court that has generally leaned toward owners.

Contractor Succeeds At the Supreme Court Against Public Owner – Obtaining Fee Award and Determination The City Acted In Bad Faith

Monday, September 20, 2021 — Lindsay T. Watkins - Ahlers Cressman & Sleight PLLC

A contractor won a rare but much-deserved victory at the Supreme Court on July 8, 2021 in Conway Construction Co. v. City of Puyallup, 197 Wn.2d 825, 490 P.2d 221 (2021). The case, which involved an aggressive stance by a public owner:

  • confirmed that the public owner bears the burden of demonstrating a termination for default is justified,
  • reaffirmed the requirement to provide an opportunity to cure, and
  • rejected the public owner’s attempts to escape its own contract language that the contractor relied upon.

John Ahlers and Lindsay Watkins of Ahlers Cressman and Sleight and Jamie Becker of Osborne Construction submitted the Amicus Brief for the Associated General Contractors (AGC) of Washington in support of Conway to the Supreme Court.

Reprinted courtesy of Lindsay T. Watkins, Ahlers Cressman & Sleight PLLC

Ms. Watkins may be contacted at Lindsay.Watkins@acslawyers.com

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The dispute resolution provision in your contract is important and should not be overlooked.

Understand the Dispute Resolution Provision You Are Agreeing To

Monday, September 20, 2021 — David Adelstein - Florida Construction Legal Updates

When negotiating a contract, do not overlook the dispute resolution provision. It is one of the more important provisions in your construction contract. This provision will come into play and have ramifications if there is a dispute, which is certainly not uncommon on a construction project.

In dispute resolution provisions in subcontracts on federal projects, it is not unusual for that provision to include language that requires the subcontractor to STAY any dispute that concerns actions or inactions of the owner pending the resolution of any dispute between the owner and prime contractor relating to that action or inaction. A provision to this effect should be included for the benefit of the prime contractor. For instance, the provision may say the subcontractor agrees to stay any such claim against the prime contractor or prime contractor’s surety pending the outcome of any pass-through claim (or otherwise) submitted under the Contract Disputes Act.

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

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

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Mediation works.

Personal Thoughts on Construction Mediation

Monday, September 20, 2021 — Christopher G. Hill - Construction Law Musings

Construction Mediation WorksAs I left a mediation last week at 8:30 at night, I realized something that I knew all along. Mediation works.

Why does mediation work? For several reasons that I can think of.

The first, and likely most important is that lawyers are expensive. In most construction cases, we charge by the hour and those hours build up, especially close to a trial date. A mediated settlement can avoid this sharp uptick in attorney fees that always occurs in the last month before trial. Therefore the earlier the better.

The second is the flexibility to make a business decision. Commercial contractors and subcontractors are in a business, and they should be making business decisions. While one such decision can be to go to litigation; litigation is not always the best solution from a financial, or stress perspective. Construction professionals, with the assistance of construction attorneys, can come up with a creative way to deal with a problem and solve it.

Reprinted courtesy of The Law Office of Christopher G. Hill

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

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CONSTRUCTION DEFECT NEWS
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Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence.

10 Haight Lawyers Recognized in Best Lawyers in America© 2022 and The Best Lawyers: Ones to Watch 2022

Monday, September 20, 2021 — Haight Brown & Bonesteel LLP

Three Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers in America© 2022.

Seven Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers®: Ones to Watch 2022.

Reprinted courtesy of Haight Brown & Bonesteel LLP
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Hawbaker noted in a statement it did not plead guilty to the charges.

Pa. Contractor Pleads No Contest to Prevailing-Wage Charges, Pays Workers $20.7M

Monday, September 20, 2021 — Tom Ichniowski - Engineering News-Record

Pennsylvania construction contractor Glenn O. Hawbaker Inc. has pleaded no contest to counts of theft of worker pay—in alleged violation of state prevailing-wage laws—and will pay 1,267 workers restitution of $20.7 million in unpaid wages, Pennsylvania Attorney General Josh Shapiro said.
The company entered its plea to four felony counts of “theft by failure to make required disposition of funds received” on Aug. 3 before President Judge Pamela A. Ruest of the Centre County Court of Common Pleas in Bellefonte, Pa.

Reprinted courtesy of Tom Ichniowski, Engineering News-Record

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

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John O’Meara was selected as one of America’s Top 100 Civil Defense Litigators.

Congratulations to Partner John O’Meara for Being Named as One of America’s Top 100 Civil Defense Litigators for Three Consecutive Years!

Monday, September 20, 2021 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

Please join Bremer Whyte Brown & O’Meara, LLP in congratulating Woodland Hills Partner John O’Meara for being selected as one of America’s Top 100 Civil Defense Litigators for the third year in a row!

Membership among America’s Top 100 Civil Defense Litigators highlights the accomplishments of the nation’s most esteemed and skilled Civil Defense attorneys. Only 100 attorneys in each state receive this honor and candidates for membership are identified through third-party research or peer nominations by America’s Top 100 or elite attorneys in the community. Candidates are judged by the attorney’s lifetime legal achievements, professional experience, significant case results, peer reputation, client satisfaction, other notable honors, media notoriety, and community impact.

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

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Several Injured in Casino Explosion in Hollywood, Florida

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CONSTRUCTION DEFECT NEWS
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Each attorney was allowed to recommend up to three colleagues in each given legal specialty.

16 Wilke Fleury Attorneys Featured in Sacramento Magazine 2021 Top Lawyers!

Monday, September 20, 2021 — Wilke Fleury LLP

Congratulations to Wilke Fleury’s featured attorneys who made the Sacramento Magazine’s Top Lawyer List for 2021!

The voting for Professional Research Services’ survey to determine the top attorneys in 2021 for Sacramento Magazine was open to all licensed attorneys in Sacramento, Calif. Attorneys were asked whom they would recommend among 56 legal specialties, other than themselves, in the Sacramento area. Each attorney was allowed to recommend up to three colleagues in each given legal specialty. Once the online nominations were complete, each nominee was carefully evaluated on the basis of the survey results, the legitimacy of their license, and their current standing with the State Bar of California. Attorneys who received the highest number of votes in each specialty are reflected in the following list. – Sacramento Magazine

Reprinted courtesy of Wilke Fleury LLP
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It is important to keep an eye on how the pandemic has impacted construction materials when addressing cost of repair estimates in construction litigation.

Pandemic-Related Construction Materials Pricing Poses Challenges in Construction Lawsuits

Monday, September 20, 2021 — Nick Stewart - Construction Executive

During the global pandemic the construction industry saw unprecedented inflation in the cost of building supplies as a result of a myriad of issues. On May 7, 2021, lumber prices hit a record high at $1,670.50 per thousand board feet. This was more than six times their pandemic low in April 2020. This significant price spike was related to closure of sawmills during the height of the pandemic, low supply, soaring demand to expand existing homes or purchase new construction, the western U.S. wildfires and tariffs.

More recently, lumber prices have fallen but they are still up nearly 100% from spring 2020. Some experts believe that the recent wildfires in the western United States and upcoming hurricane season will cause prices to jump back up in the upcoming months.

Additionally, since March 2020, steel prices are up roughly 200%. The increase in steel prices is a result of many of the same factors causing lumber pricing spikes. Many steel mills shut down production or drastically reduced production during the early days of the pandemic expecting a deep recession and/or to comply with restrictive government mandates. Despite these industry expectations, demand for steel -elated products like grills and home appliances soared. These household demands for steel-based products impacted the price of steel for construction projects. Prior to the pandemic, hot-rolled steel traded between $500 and 800 per ton but hit an all-time high of $1,825 per ton in early July 2021.

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


Mr. Stewart may be contacted at nstewart@turnerpadget.com

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United States District Judge John Antoon II agreed with the arguments presented by Mr. Smith and Ms. Keller and issued an Order granting the Motion.

Traub Lieberman Attorneys Burks Smith and Katie Keller Win Daubert Motion Excluding Plaintiff’s Expert’s Testimony in the Middle District of Florida

Monday, September 20, 2021 — Burks A. Smith, III & Kathryn Keller - Traub Lieberman

Traub Lieberman Partner, Burks Smith, and Associate, Katie Keller, represented a national property insurer in a breach of contract action brought by a homeowner in the Middle District of Florida for substantial property damage alleged to have been caused by hail and wind. Throughout the course of litigation, the homeowner disclosed his expert, which is the same individual that prepared the homeowner’s estimate of damages and causation report. The expert’s credentials list that he is a general contractor, independent adjuster, and inspector. Mr. Smith and Ms. Keller moved under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) and Federal Rule of Evidence 702 to exclude testimony and introduction of any evidence prepared by the homeowner’s expert. Mr. Smith and Ms. Keller argued that the homeowner’s expert was not qualified to render expert testimony in this case, as he did not have the requisite qualifications to render an expert opinion, the methodology utilized by the expert to form his opinion was not sufficiently reliable, and his anticipated testimony was not helpful in the case, as it is imprecise and unspecific. Therefore, the expert’s opinions did not meet the standards for admission of expert testimony as set forth in Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), and should not be admitted as expert testimony at trial.

Reprinted courtesy of Burks A. Smith, III, Traub Lieberman and Kathryn Keller, Traub Lieberman

Mr. Smith may be contacted at bsmith@tlsslaw.com
Ms. Keller may be contacted at kkeller@tlsslaw.com



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Quail provides an interesting example of the potentially wide discretion that a trial court has in directing a receiver’s actions.

Can a Receiver Prime and Strip Liens Against Real Property?

Monday, September 20, 2021 — Ben Reeves - Snell & Wilmer Real Estate Litigation Blog

Courts overseeing receivers generally enjoy broad discretion in directing and approving a receiver’s proposed actions. But does that authority extend to a receiver not only granting a super-priority lien ahead of existing liens, but also selling the real property free and clear of all liens? In County of Sonoma v. Quail, 56 Cal.App.5th 657 (Ct. App. 2020), the California Court of Appeals answered that question in the affirmative.

Quail involved a 47,480 square-foot lot with two houses, a few garages, several outbuildings, and numerous trailers surrounded by a veritable junk yard. Despite many of these structures being uninhabitable, unsanitary, and dangerous, multiple families resided on the lot. Although Sonoma County (the “County”) ordered the owner to remediate the property several times, he failed and refused to do so. After several years of these violations going unabated, the County ultimately sought and obtained the appointment of a receiver over the real property.

To obtain funds necessary to repair the property, the receiver asked the court for permission to borrow money through the issuance of a receivership certificate to be secured by a super-priority lien—i.e., a lien ahead of all other liens—against the real property. Although the trial court initially declined to prime existing liens, when the receiver could find no one to lend money (since the land lacked equity), the trial court relented and approved a super-priority lien despite the senior secured lender’s objection (the “lender”).

Reprinted courtesy of Ben Reeves, Snell & Wilmer

Mr. Reeves may be contacted at breeves@swlaw.com

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Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

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