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CONSTRUCTION DEFECT NEWS
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Under Kentucky law, if the insured did not intend the event or result to occur, and the event or result that occurred was a chance event beyond the control of the insured, then CGL coverage for accidents would apply to the benefit of the insured.

No Duty to Defend Construction Defect Claims under Kentucky Law

Monday, March 25, 2024 — Tred R. Eyerly - Insurance Law Hawaii

The federal district court determined that the insurer was not obligated to defend construction defect claims under Kentucky law. Westfield Ins. Co. v. Kentuckiana Commercial Concrete, LLC, 2023 U.S. Dist. LEXIS 222674 (W.D. Ky. Dec. 14, 2023).

HRB, the owner of an apartment complex, filed an arbitration demand against the general contractor, Doster Commercial Construction, for allegedly doing faulty concrete work in the construction of the apartments. Doster added its concrete subcontrator Kentuckiana Commercial Concrete - and 16 other subcontractors - to the arbitration. Kentuckiana tendered the claim to its insurer, Westfield. Wesfield defended. Doster claimed it was an additional insured under the Westfield policy and also sought coverage. Westfield refused the defend Doster. Westfield argued there was no "occurrence."

Westfield then sued both Doster and Kentuckiana in federal court, seeking a declaration that it had no duty to defend either. Westfield moved for a judgment on the pleadings.

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

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

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Representatives Parenti and Bacon seek to extend Colorado’s statute of repose for construction defect actions from 6+2 years to 10+2 years.

Action Needed: HB24-1230 Spells Trouble for Colorado Construction Industry and its Insurers

Monday, March 25, 2024 — David McLain - Higgins, Hopkins, McLain & Roswell, LLC

In an apparent gift to plaintiffs’ construction defect lawyers, Representatives Parenti and Bacon introduced House Bill 24-1230 on February 12, 2024. The bill was assigned to the House Judiciary Committee and is scheduled for hearing on March 6th, during the afternoon session beginning at 1:30 pm. To date, the bill does not have any senate sponsors, perhaps because the senators are more interested in serving their constituents’ needs for attainable housing than in lining the pockets of their plaintiffs’ construction defect attorney friends.

According to the bill’s summary, HB 24-1230 contains the following provisions:

Current law declares void any express waivers of or limitations on the legal rights or remedies provided by the “Construction Defect Action Reform Act” or the “Colorado Consumer Protection Act.” Sections 1 and 4 make it a violation of the “Colorado Consumer Protection Act” to obtain or attempt to obtain a waiver or limitation that violates the aforementioned current law.

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

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

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Consult with an insurance broker that understands construction and, importantly, your specific industry, to provide you coverage within your industry.

Don’t Fall in Trap of Buying the Cheapest Insurance Policy as it May be Bad for Your Business Risks and Needs

Monday, March 25, 2024 — David Adelstein - Florida Construction Legal Updates

Don’t fall in the trap of buying the cheapest insurance policy. It will come and bite you in the butt big time! Consult with an insurance broker that understands construction and, importantly, your specific industry, to provide you coverage within your industry. Otherwise, you’ll be paying for a policy that may (i) not be a good policy, and (ii) may provide you minimal to no value for your industry’s RISKS and NEEDS when factoring in exclusions. When procuring insurance, think of the old adage “penny wise and pound foolish,” and don’t make decisions that fit within this adage!

The recent decision in Nautilus Ins. Co. v. Pinnacle Engineering & Development, Inc., 2024 WL 940527 (S.D. Fla. 2024) serves as an example. Here, a subcontractor was hired by a general contractor to perform underground utility work for a townhome development which consisted of 57 townhome units included in 18 detached structures. The subcontractor’s underground work was defective which caused damage to the property’s water line, sewer system, plumbing lines, pavers, etc. The general contractor was liable to the owner for this defective work. Although the general contractor was an additional insured under the subcontractor’s commercial general liability (CGL) policy, the subcontractor’s CGL carrier denied the duty to defend and initiated an insurance coverage lawsuit. Motions for summary judgment were filed.

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

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

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Construction Adds 23,000 Jobs in February for 11th Straight Monthly Gain

March 25, 2024 — Tom Ichniowski - Engineering News-Record

Construction posted another monthly employment gain–the industry’s 11th consecutive monthly increase–adding 23,000 jobs in February, the Bureau of Labor Statistics has reported.

Reprinted courtesy of Tom Ichniowski, Engineering News-Record

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

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Court Finds Matching of Damaged Materials is Required by Policy

March 25, 2024 — Tred R. Eyerly - Insurance Law Hawaii

The court granted, in part, the insured's motion for summary judgment by finding that matching roof tiles were required under the policy. Bertisen v. Travelers Home and Marine Ins. Co., 2024 U.S. Dist. LEXIS 3907 (D. Colo. Jan. 8, 2024).

The insureds sued Travelers for breach of contract, common law bad faith, and unreasonable delay or denial of benefits. They alleged that their residence was damaged by a hailstorm and that Travelers breached their policy and acted in bad faith in the handling of the claim. The insureds demanded an appraisal to determine the "amount of loss" under the policy and an appraisal award was issued. Travelers then denied payment for all roof tiles that were contemplated by the appraisal award.

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

British Columbia Hatches $1.5 Billion Loan Plan to Boost Homebuilding

March 25, 2024 — Thomas Seal - Bloomberg

British Columbia’s government launched a program to accelerate the construction of thousands of affordable homes, backed with a C$2 billion ($1.5 billion) lending commitment and C$950 million in spending.

BC Premier David Eby said the new body will identify owners of low-cost land, bring them together with contractors and developers, then work with local governments to expedite planning approval.

ABA’s Construction Defects: Insurance Coverage [CC]

March 25, 2024 — Beverley BevenFlorez – CDJ Staff

The ABA Construction Forum recently updated their Construction Defects Book. This one-day seminar “will discuss the specifics of what to look for in evaluating insurance coverage positions in a construction defect case.” In addition, the event will cover “alternative dispute resolution in this type of litigation and how insurance coverage analysis affects resolution pathways to these types of cases.”

May 1st, 2024
Virtual Event

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Valor Security and Investigations allegedly faked required safety certifications for thousands of workers.

NY Construction Safety Firm Falsely Certified Workers, Says Manhattan DA

Monday, March 25, 2024 — Johanna Knapschaefer - Engineering News-Record

A New York-based construction safety firm and 25 individuals were indicted Feb. 28 for allegedly operating a bogus safety training school, Manhattan District Attorney Alvin Bragg's office says. The firm, Valor Security & Investigations is also linked to “endangering the life” of Ivan Frias, who fell to his death from the 15th floor of a New York City construction site in 2022.

Reprinted courtesy of Johanna Knapschaefer, Engineering News-Record

Ms. Knapschaefer may be contacted at knapj@enr.com

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This decision serves as a warning to subrogation professionals in New Jersey to be sure to check with the insured for any claims or lawsuits relating to the same set of facts giving rise to the subrogation claim.

A Matter Judged: Subrogating Insurers Should Beware of Prior Suits Involving the Insured

Monday, March 25, 2024 — Gus Sara - The Subrogation Strategist

In New Jersey Mfrs. Ins. Co. v. Lallygone LLC, No. A-2607-22, 2024 N.J. Super. Unpub. LEXIS 120, the Appellate Division of the Superior Court of New Jersey (Appellate Division) considered whether New Jersey Manufacturers Insurance Company (the carrier) could bring a subrogation action after its insured, Efmorfopo Panagiotou (the insured), litigated and tried claims related to the same underlying incident with the same defendant, Lallygone LLC (the defendant). The Appellate Division affirmed the trial court’s finding that the prior lawsuit extinguished the carrier’s claims.

In Lallygone LLC, the insured hired the defendant to renovate a detached garage on his property. In March 2022, while the defendant’s employees were removing existing concrete slabs, the garage collapsed. After the incident, the insured stopped paying the defendant. In addition, the insured filed a claim with the carrier, which ultimately paid the insured over $180,000 for the damage under its property policy. The carrier sent a subrogation notice letter to the defendant.

Reprinted courtesy of Gus Sara, White and Williams

Mr. Sara may be contacted at sarag@whiteandwilliams.com

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These coverage cases often turn on narrow, nuanced factual distinctions.

Liability Coverage For Construction Claims May Turn On Narrow Factual Distinctions

Monday, March 25, 2024 — Scott S. Thomas - Payne & Fears

In a recent trial court decision, a Montana federal court reminds us how fragile insurance coverage can be for construction-related insurance claims. Specifically, this case illustrates how seemingly small factual nuances can make or break coverage. The case turned on the application of policy provisions familiar to all who deal with these kinds of cases. (See Nautilus Ins. Co. v. Farrens, No. CV 22-193-M-DWM, 2024 WL 885109 (D. Mont. Mar. 1, 2024))

First, the court rebuffed the insurer’s argument that damage resulting from defective workmanship (in this case, the flawed design and installation of an elaborate floating-floor pool system) is not “caused by an occurrence.” The court correctly applied the test followed by most states: if either act causing injury is unintentional or the resulting injury is unexpected or unintended, the “occurrence” requirement is met. Fortunately, the court distinguished sloppy language from earlier Montana federal court decisions suggesting otherwise.

Reprinted courtesy of Scott S. Thomas, Payne & Fears

Mr. Thomas may be contacted at sst@paynefears.com

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CONSTRUCTION DEFECT NEWS
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In December 2015, general contractor Stronghold Engineering Incorporated entered into a construction contract with the City of Monterey for the renovation of the City’s conference center and an adjacent city-owned plaza.

Government Claims Act Does Not Apply to Actions Solely Seeking Declaratory Relief and Not Monetary Relief

Monday, March 25, 2024 — Garret Murai - California Construction Law Blog

Perhaps it should come as no surprise, but public entities get special treatment under the law, and when filing a claim against a public entity, in most cases, a claimant is required to file a claim with the public entity before filing suit under the Government Claims Act (Gov. Code §810 et seq.).

But, as the next case demonstrates, that’s not always the case. In Stronghold Engineering Incorporated v. City of Monterey, 96 Cal.App.5th 1203 (2023), the 6th District Court of Appeals examined whether a public works contractor that alleged an extended overhead claim was required to file a Government Claims Act claim before filing suit when its initial complaint was limited to a claim for declaratory relief.

The Stronghold Case
In December 2015, general contractor Stronghold Engineering Incorporated entered into a construction contract with the City of Monterey for the renovation of the City’s conference center and an adjacent city-owned plaza. The construction contract provided that any modification to the construction contract had to be approved by the City through a written change order. No surprise there.

Reprinted courtesy of Garret Murai, Nomos LLP

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

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The DOI published a proposed rule aimed at modernizing and streamlining the “Type A” NRDA regulations under the CERCLA and the CWA.

DOI Aims to Modernize its “Inefficient and Inflexible” Type A Natural Resource Damages Assessment Regulations

Monday, March 25, 2024 — Amanda G. Halter, Jillian Marullo & Ashleigh Myers - Gravel2Gavel Construction & Real Estate Law Blog

The U.S. Department of the Interior (DOI) published a proposed rule aimed at modernizing and streamlining the “Type A” Natural Resource Damage Assessment (NRDA) regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Clean Water Act (CWA). (The comment deadline was later extended.) The revisions, first previewed in a January 2023 Advanced Notice of Proposed Rulemaking (ANPR), are intended to fulfill “the original statutory purpose of providing a streamlined and simplified assessment process” with the overarching goal of facilitating settlements and expediting restoration efforts following injury resulting from pollution in a broader range of cases.

The NRDA regulations provide two paths to assessing natural resource damages (NRD): (1) the more complex, site-specific Type B procedures for detailed NRDAs and (2) what is intended to be the standard, simplified Type A assessment procedures requiring minimal field observation. Particularly, the Type A process is reserved for two specific aquatic environments (coastal and marine areas or Great Lakes environments) when a relatively minor release of a single hazardous substance occurs, resulting in a smaller scale and scope of natural resource injury, and the rebuttal presumption for the Type A procedure is limited to damages of $100,000 or less under the current version of the rule.

Reprinted courtesy of Amanda G. Halter, Pillsbury, Jillian Marullo, Pillsbury and Ashleigh Myers, Pillsbury

Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Ms. Marullo may be contacted at jillian.marullo@pillsburylaw.com
Ms. Myers may be contacted at ashleigh.myers@pillsburylaw.com


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With an increase in technology comes a risk of cybersecurity and data-related losses.

CGL Policy May Not Cover Cybersecurity and Data-Related Losses

Monday, March 25, 2024 — Susana Arce - Saxe Doernberger & Vita, P.C.

The construction industry, like many other industries, has experienced an increased reliance on, and implementation of, technology in the past few years. Smart phones and tablets are used on most project sites, computers are an integral part of the planning process, and various software programs are used throughout the construction process. Likewise, much of the machinery and equipment used during construction (e.g., total stations, trucks, tower cranes) is interconnected, and in some cases, operated or monitored remotely.1

With an increase in technology comes a risk of cybersecurity and data-related losses. Many large businesses purchase Commercial General Liability (“CGL”) insurance and assume cybersecurity and data-related losses are covered. Unfortunately, this is generally not the case. CGL policies typically cover three general types of damage: bodily injury, property damage, and advertising injury.

Reprinted courtesy of Susana Arce, Saxe Doernberger & Vita, P.C.

Ms. Arce may be contacted at SArce@sdvlaw.com

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3 Corporations Own 19,000 Metro Atlanta Homes. What Does that Mean for the Housing Market?

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CONSTRUCTION DEFECT NEWS
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Editor-in-Chief Marissa L. Downs interviews ADR Neutral Tom Nocar.

Meet the Forum's ADR Neutrals: TOM NOCAR

Monday, March 25, 2024 — Marissa L. Downs - The Dispute Resolver

Company: Hahn Loeser & Parks, LLP
Office Location: Columbus, Ohio
Email: tnocar@hahnlaw.com
Website: https://www.hahnlaw.com/professionals/j-thomas-nocar/
Law School: The Ohio State University Moritz College of Law
Types of ADR services offered: Arbitration and Mediation
Affiliated ADR organizations: AAA Construction Panel
Geographic area served: Nationwide

Q: Describe the path you took to becoming an ADR neutral.

A: I am a former builder turned construction attorney. I spent 26 years building before going to law school. I’ve worn every hat in the industry—D/B business owner, owner’s rep, CM at risk, GC, design/builder, subcontractor, and vendor at some point in my prior career. I chose to adapt these experiences to a law career in 2009 with the focus of practicing construction law. Now I commonly represent commercial builders and developers. AAA added me to the Construction Roster in 2022.

Reprinted courtesy of Marissa L. Downs, Laurie & Brennan, LLP

Ms. Downs may be contacted at mdowns@lauriebrennan.com

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Even a market as sure as surety bonding is expecting trends and uncertainties in 2024. From interest rates and credit availability to labor and insurance, challenges and opportunities abound.

Surety Trends to Keep an Eye on in the Construction Industry

Monday, March 25, 2024 — Oliver Craig - Construction Executive

Reflecting on the dynamics of the 2023 construction and surety industries, it is evident that opportunities and challenges have emerged for contractors that will shape the landscape for the year ahead. Contractors can not only capitalize on these trends but protect the successful companies they have already built.

PROJECT OPPORTUNITIES
There has been a notable increase in public works opportunities, driven by increased government spending and the aging infrastructure in the United States. This trend is expected to continue in 2024 and beyond, with a notable portion of work coming in transportation- and public-utility-related infrastructure.

Due to increased spending, many contractors are reporting historically high backlogs—and that often includes the largest project their company has contracted in their history. While increased spending presents more opportunity, it’s critical contractors be even more diligent about new opportunities, giving additional consideration to the following:

Job Selection: New geographies, scope, project owners and/or subcontractor relationships commonly come with a learning curve. With the current state of the market, it’s not the ideal time to be learning costly lessons. Contractors should focus on having a proactive go/no-go strategy when reviewing potential projects to identify risks early and plan accordingly.

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



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The case against the realtor defendants proceeded to trial in downtown LA on claims of intentional and negligent misrepresentation of facts, concealment, professional negligence and breach of fiduciary duty.

Orange County Team Obtains Unanimous Defense Verdict in Case Involving Failed Real Estate Transaction

Monday, March 25, 2024 — Lewis Brisbois Newsroom

Orange County, Calif. (March 4, 2024) - Orange County Partners Esther P. Holm and Alexandra Anast obtained a unanimous defense verdict in a real estate matter involving a failed real estate transaction. The property at issue, which was located in the West Hollywood Hills and had beautiful views, was undergoing extensive remodeling. There were several bids for its purchase. Ultimately, the plaintiff, a real estate investor, was awarded the purchase.

The plaintiff and the seller entered into a real estate purchase agreement, but the plaintiff failed to release the physical contingencies within the 17-day period prescribed by the contract. Instead, the plaintiff demanded a reduction in price, which the seller rejected. The plaintiff then filed a lis pendens on the property, clouding the title and making it impossible for the sellers to sell the property to anyone else. The buyer and seller subsequently engaged counsel. The plaintiff filed the lawsuit against the seller as well as the real estate company and its agents. Prior to trial, the plaintiff and the seller reached a settlement.

Reprinted courtesy of Lewis Brisbois
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A new academic paper suggests introducing a higher number to categorize ocean-born storms, as global warming makes them gustier. Yet often times it’s not wind that kills.

Calling Hurricanes a Category 6 Risks Creating Deadly Confusion

Monday, March 25, 2024 — Brian K Sullivan - Bloomberg

Category 5 has become part of the world’s lexicon to describe a disaster of monumental proportion.

Now, thanks to climate change, a pair of scientists don’t think that is a dire enough level to describe hurricanes. They raise the possibility, on a “hypothetical” basis, for a Category 6.

Global warming has increased the energy available for storms to grow stronger, according to a paper by Michael Wehner, senior scientist at the Lawrence Berkeley National Lab, and James Kossin, climate and atmospheric professor at the University of Wisconsin. Their work was published in Proceedings of the National Academy of Sciences of the US.

The scientists make a case for adjusting the five-step, Saffir-Simpson Hurricane Wind Scale, which is used to describe hurricane power. A Category 5 is assigned when storm winds reach 157 miles per hour, and today that goes up to the limit of physics. Wehner and Kossin suggest considering anything over 192 mph a Category 6.

Reprinted courtesy of Brian K Sullivan, Bloomberg
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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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