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CONSTRUCTION DEFECT NEWS
Construction worker injured

In 2019, Jason Standiford, and Air Control employee, filed a negligence lawsuit against CSI, alleging injuries from a 2017 incident where a CSI employee allegedly drove a scissor lift into a ladder Standiford was on, causing him to fall.

Contractor Definition Central to Coverage Dispute

Monday, July 22, 2024 — Stacy R. Goldscher & Tracy M. Lewis - Wood Smith Henning & Berman

How do you define the term "contractor?" In the case of California Specialty Insulation Inc. v. Allied World Surplus Lines Insurance Company, No. B324805 (2024), the court ultimately honored the reasonable expectations of the insured and ordered that the insurer defend and indemnify in an underlying suit stemming from the policy. This case involves a commercial general liability insurance policy issued by Allied World Surplus Lines Insurance Company (Allied) to California Specialty Insulation, Inc. (CSI). The central issue is whether Allied World is obligated to defend and indemnify CSI against a negligence claim stemming from a construction site accident. The dispute hinges on the interpretation of a policy exclusion for bodily injury to employees of any "contractor," a term not defined in the policy.

Factual Background
In 2017 Air Control Systems. Inc. (Air Control) was contracted to perform improvement work at a Los Angeles building and subsequently hired CSI to install duct insulation. In 2019, Jason Standiford, and Air Control employee, filed a negligence lawsuit against CSI, alleging injuries from a 2017 incident where a CSI employee allegedly drove a scissor lift into a ladder Standiford was on, causing him to fall. CSI requested Allied World to defend it in the Standiford lawsuit. Initially, Allied World accepted the defense, but later withdrew, citing the Contractor Exclusion in the policy. CSI filed for declaratory relief, leading to cross-motions for summary judgment. The trial court ruled in favor of CSI, finding the term contractor ambiguous and construing it in CSI's favor. Allied World appealed the decision.

Reprinted courtesy of Stacy R. Goldscher, Wood Smith Henning & Berman and Tracy M. Lewis, Wood Smith Henning & Berman

Ms. Goldscher may be contacted at sgoldscher@wshblaw.com
Ms. Lewis may be contacted at tlewis@wshblaw.com


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Water

The contractor defended construction defect claims brought by an owner and then sued its insurer to recover $500,000 in defense costs for failing to provide a defense under the contractor’s policy.

Water Alone is Not Property Damage under a CGL policy in Connecticut

Monday, July 22, 2024 — Bill Wilson - Construction Law Zone

The Connecticut Appellate Court recently provided guidance on what does not constitute property damage under a typical contractor’s Commercial General Liability (CGL) insurance policy in Westchester Modular Homes of Fairfield County, Inc. v. Arbella Protection Ins. Co., 224 Conn App. 526 (2024). In this case, the contractor defended construction defect claims brought by an owner and then sued its insurer to recover $500,000 in defense costs for failing to provide a defense under the contractor’s policy. In Connecticut, an insurer is obligated to provide a defense based on what is alleged in a complaint and if it has actual knowledge of any facts establishing a reasonable possibility of coverage. The contractor provided extrinsic evidence for two defects claimed by the owner: (1) windows were installed improperly such that water was collecting and will continue to collect in the window soffit areas and eventually rot the wall, and (2) the vapor barrier was not installed in the second-floor ceiling which will result in water condensation and water damage to the roof structure if not remedied.

The insurer relied on typical provisions included in most CGL policies. The insurer has no duty to defend the insured against any suit seeking damages for property damage to which the insurance does not apply. The term “property damage” is defined as “physical injury to tangible property, including all resulting loss of use of that property.” Under well-established Connecticut law, the phrase “physical injury” unambiguously connotes damage to tangible property, causing an alteration in appearance, shape, color, or some other material dimension. It is also well-established that claims for property damage caused by defective work are covered under a CGL policy but claims for repair of the defective work itself are not. The insurer denied any duty to defend because no coverage was triggered under the liability policy. Both parties moved for summary judgment.

Reprinted courtesy of Bill Wilson, Robinson & Cole LLP

Mr. Wilson may be contacted at wwilson@rc.com

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Time hourglass

A contractor entered into a fixed price contract with the government to repair, replace, and modernize the site and building systems at a federal building.

Delays and Suspension of the Work Under Fixed Price Government Contract

Monday, July 22, 2024 — David Adelstein - Florida Construction Legal Updates

Here is an interesting fact pattern and case decided by the Civilian Board of Contract Appeals dealing with (1) force majeure type events and epidemics (Covid-19); (2) suspension of the work; and (3) delays. These are three topics important to all contractors including federal contractors.

In Lusk Mechanical Contractors, Inc. v General Services Administration, 2024 WL 1953697, CBCA 7759 (CBCA 2024), a contractor entered into a fixed price contract with the government to repair, replace, and modernize site and building systems at a federal building. The contractor commenced work right before Covid-19. When Covid-19 hit, the government issued the contractor a two-week suspension of work notice on March 27, 2020. The suspension of work allowed off-site administrative work to continue but suspended on-site physical work. The government extended the suspension of work three more times. The contractor could resume work on the exterior on June 1, 2020, but was not permitted to resume work on the interior until July 20, 2020. On the same date that the contractor was able to commence interior work, it submitted a modification for delay caused by the suspension – 64 days for the time period the entire site shutdown, and 51 days for the interior work shutdown.

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

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

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The White House Delivers a New Definition for Zero-Energy Buildings

July 22, 2024 — Kriston Capps - Bloomberg

The White House is rolling out a federal definition of zero-emissions buildings for the first time, outlining a new guide for top-tier building energy performance in the US that sets what it hopes will become an industry baseline.

While the guidance lacks any legal weight, the administration hopes this new yardstick will send a strong market signal about the future of sustainable building and energy performance nationwide.

Ninth Circuit Finds Thread That May Save COVID-19 Claim

July 22, 2024 — Tred R. Eyerly - Insurance Law Hawaii

The Ninth Circuit affirmed in part, denied in part, the district court's granting of the insurer's motion to dismiss the insureds' COVID-19 claim. Worthy Hotels, Inc., et al. v. Fireman's Fund Ins. Co., 2024 U.S. App. LEXIS 11747 (9th Cir. May 15, 2024).

A group of hotels and restaurants sought reimbursement from Fireman's Fund for business losses incurred because of the risk or presence of COVID-19 on their properties. The district court applying Washington law granted Fireman's Funds' motion to dismiss all claims and denied the insureds' motion for leave to amend.

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

LGI Homes Announces its Newest Community in Jacksonville, Florida

July 22, 2024 — LGI Homes, Inc.

JACKSONVILLE, Fla., June 19, 2024 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) today introduced its newest community in the Jacksonville market, Westport Landing. This community hosts gorgeous new-construction homes and on-site amenities that the whole family can enjoy.

Located just minutes from lively downtown Jacksonville, families will have plenty to do both inside and outside of the community. Placed conveniently at the front of the neighborhood are the dog park and children's playground, which are sure to provide hours of endless fun. Residents will also have access to the Villages of Westport Community Center, offering a pool, basketball courts, a playground and a multi-use field.

About LGI Homes
Headquartered in The Woodlands, Texas, LGI Homes, Inc. is a pioneer in the homebuilding industry, successfully applying an innovative and systematic approach to the design, construction and sale of homes across 36 markets in 21 states. As one of America's fastest growing companies, LGI Homes has closed over 70,000 homes since its founding in 2003 and has delivered profitable financial results every year. Nationally recognized for its quality construction and exceptional customer service, LGI Homes was named to Newsweek's list of America's Most Trustworthy Companies for the second consecutive year. LGI Homes' commitment to excellence extends to its more than 1,000 employees, earning the Company numerous workplace awards at the local, state and national level, including the Top Workplaces USA 2024 Award. For more information about LGI Homes and its unique operating model focused on making the dream of homeownership a reality for families across the nation, please visit the Company's website at www.lgihomes.com.

Construction Law in Florida Seminar

July 22, 2024 — Beverley BevenFlorez – CDJ Staff

Florida’s high paced “activity brings increased pressure on owners/developers, design professionals, contractors, subcontractors and their respective counsel. Construction professionals must continue to strive towards understanding and properly allocating risk.” Key issues to be discussed include “the variety of industry-standard contract forms; insurance products and how they relate to the allocation of risks; administration of contracts and management of issues that arise during the course of a construction project; performance and payment bonds and surety conventions employed when a project sours; and dispute resolution procedures.”

October 9th-10th, 2024
Virtual Event

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Several notable changes went into effect March 1, 2024, involving the scope of confidentiality, regular and fast track procedures, and updates to certain monetary thresholds.

AAA Revises Construction Industry Arbitration Rules and Mediation Procedures

Monday, July 22, 2024 — Patrick McKnight - The Dispute Resolver

The American Arbitration Association (AAA) recently revised its Construction Industry Arbitration Rules and Mediation Procedures (“the Rules”). Several notable changes went into effect March 1, 2024, involving the scope of confidentiality, regular and fast track procedures, and updates to certain monetary thresholds.

I. Revisions to Regular Track Procedures
Rule 45: Confidentiality
For the first time, confidentiality is now the default standard. Under Rule 45(a), arbitrators must keep all matters confidential unless otherwise required by law, court order or the agreement of the parties. Rule 45(b) allows a mediator to issue confidentiality orders and “take measures for protecting trade secrets and confidential information.”

Rule 7: Consolidation and Joinder
Under the new provisions, consolidation and joinder requests must be filed before confirmation of the Merits Arbitrator’s appointment. This language eliminates a previous option that allowed confirmation up to 90 days after filing of such requests. A failure to timely respond to a joinder request will result in a waiver of objections. Now, a party must establish both good cause and prejudice for a successful joinder request after confirmation of the arbitrator.

Reprinted courtesy of Patrick McKnight, Fox Rothschild LLP

Mr. McKnight may be contacted at pmcknight@foxrothschild.com

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The Equal Employment Opportunity Commission (“EEOC”) has issued guidance tailored to the construction industry regarding compliance with anti-harassment laws.

EEOC Issues Anti-Harassment Guidance To Construction-Industry Employers

Monday, July 22, 2024 — Christopher Kelleher & Andrew Scroggins - The Construction Seyt

Seyfarth Synopsis: The Equal Employment Opportunity Commission (“EEOC”) has issued guidance tailored to the construction industry regarding compliance with anti-harassment laws. This lines up with our prediction in early 2024 that the EEOC had put the construction industry squarely in its sights. The guidance is important for construction-industry leaders and employers to understand to prevent and remedy workplace harassment, and to avoid potential harassment liability.

On June 18, 2024, the EEOC issued its Promising Practices for Preventing Harassment in the Construction Industry. This guidance provides key recommendations that construction-industry leaders and employers should consider implementing to prevent and address harassment in the workplace, and avoid being the target of the EEOC’s enforcement efforts. The guidance is intended to supplement the EEOC’s Strategic Enforcement Plan (“SEP”) for fiscal years 2024-2028, which provides direction on the EEOC’s current objectives, principles, and enforcement efforts – among them, increasing diversity in the construction industry and remedying harassment. (We’ve written previously about the proposed and final SEP.)

Reprinted courtesy of Christopher Kelleher, Seyfarth and Andrew Scroggins, Seyfarth

Mr. Kelleher may be contacted at ckelleher@seyfarth.com
Mr. Scroggins may be contacted at ascroggins@seyfarth.com


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Money bills

The law nearly triples the amounts available to plaintiffs, which will continue to increase for inflationary adjustments beginning in 2028 and every two years thereafter.

Colorado Nearly Triples Damages Caps for Cases Filed in 2025, Allows Siblings to File Wrongful Death Claims

Monday, July 22, 2024 — Amy Johnson - Lewis Brisbois

Denver, Colo. (June 13, 2024) - On June 3, 2024, Colorado Governor Jared Polis signed HB24-1472 to increase the damages caps for personal injury and wrongful death claims. The law nearly triples the amounts available to plaintiffs, which will continue to increase for inflationary adjustments beginning in 2028 and every two years thereafter. These new damages caps affect not only claims that accrue in 2025 and beyond, but they also change the caps for any civil cases filed on or after January 1, 2025. This law was enacted as a compromise to a ballot measure that would have removed any cap on damages. The new caps are as follows:

  • The cap on noneconomic damages for personal injuries will be $1.5 million.
  • The cap on noneconomic damages for wrongful death will be $2.125 million.

Plaintiffs are likely to delay filing new actions through the rest of 2024 as long as they are not up against a statute of limitations deadline.

Reprinted courtesy of Amy Johnson, Lewis Brisbois

Ms. Johnson may be contacted at Amy.Johnson@lewisbrisbois.com

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CONSTRUCTION DEFECT NEWS
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“Nearshoring,” involves companies building new facilities or relocating existing facilities and operations in countries neighboring or close to consumer markets, rather than doing so from more distant locations.

Trends: “Nearshoring” Opportunities for the Construction Industry

Monday, July 22, 2024 — Jerry P. Brodsky & Roberto Hernandez - Peckar & Abramson, P.C.

“Nearshoring” is a hot topic throughout Latin America and is receiving increasing attention in the United States. We offer this introduction to “Nearshoring” and the opportunities it presents for your reference.

“Nearshoring” has become increasingly relevant in the context of the globalized economy. This phenomenon describes relocating production and service operations to countries geographically close to consumer markets, instead of opting for more distant locations as in traditional “offshoring”, considering, as dominant criteria, production conditions and costs.

Mexico, for example, given its strategic geographic closeness to the United States and its highly skilled labor force, is an attractive location for companies in a wide range of industries which are considering relocation or construction of new facilities and seeking to optimize costs, maintain efficiency and mitigate supply chain risks.

Reprinted courtesy of Jerry P. Brodsky, Peckar & Abramson, P.C. and Roberto Hernandez, Peckar & Abramson, P.C.

Mr. Brodsky may be contacted at jbrodsky@pecklaw.com


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Newspaper

Pillsbury's Construction and Real Estate Law Team discusses recent industry news.

Real Estate & Construction News Roundup (6/26/24) – Construction Growth in Office and Data Center Sectors, Slight Ease in Consumer Price Index and Increased Premiums for Commercial Buildings

Monday, July 22, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog

In our latest roundup, U.S. interest rates remain uncertain, construction firms continue to use artificial intelligence, New York City updates commercial zoning regulations, and more!

  • According to analysts, high vacancy rates and declining rents have hurt San Francisco’s office market so badly that it could take almost 20 years to recover. (Eric McConnell, Yahoo)
  • The New York City Council approved updated commercial zoning regulations that expand where businesses can be located in the city, more than double the space for small-scale clean manufacturing, and enable adaptive reuse projects involving existing buildings. (Joe Burns, Construction Dive)
  • The insurance industry is responding to the proliferation of extreme weather events and the risks associated with operating commercial buildings in vulnerable areas by increasing premiums. (Renea Burns, Tim Coy, Niall Williams, Deloitte)
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team
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Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.

BWB&O Attorneys are Selected to 2024 Southern California Super Lawyers Rising Stars

Monday, July 22, 2024 — Bremer Whyte Brown & O'Meara LLP

BWB&O is proud to announce Senior Family Law Associate Pamchal Deylami, Newport Beach Partner Kyle Riddles, Newport Beach Partner Courtney Serrato, Newport Beach Associate Kevin Moore, Woodland Hills Associate Brian Taylor have been selected to the 2024 Southern California Super Lawyers list as Rising Stars for their work in Family Law, Civil Litigation, Business Litigation, and Personal Injury.

SELECTED AS RISING STARS
Pamchal Deylami: 2020-2024
Kyle Riddles: 2024
Courtney Serrato: 2023-2024
Kevin Moore: 2021-2024
Brian Taylor: 2023-2024

Reprinted courtesy of Bremer Whyte Brown & O'Meara LLP
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Severe Storms Causes Damage Across Twin Cities

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CONSTRUCTION DEFECT NEWS
Credit loan mortgage signpost

Unique problems require unique solutions. In construction, that means certain projects can require alternative methods of financing.

Busting Major Alternative-Lending Myths

Monday, July 22, 2024 — Warren Miller - Construction Executive

Alternative capital is a broad term for financing provided by institutions or firms that typically fall outside of the purview of the larger, regulated institutions (i.e., not traditional banks). While these funding sources may not always be the first option for many businesses, alternative lending is a perfect option for many small and mid-sized capital-intensive companies, like construction companies, which often require fast access to capital that is incompatible with the stringent and laborious processes imposed by traditional banks.

Construction companies should take a closer look at alternative financing, understand its benefits, and evaluate its usefulness for achieving their unique funding requirements.

REALITY 1: ALTERNATIVE LENDING IS SAFE AND PROVEN
Private lending has been around for a long time, and has become increasingly common since the 1990s, when major consolidation took place in the banking industry. As the large, consolidated banks set their sights on providing loans to large enterprises, they left a gap in the small and mid-size market that was filled by alternative lenders. By 2000, alternative lenders had overtaken traditional banks for the majority of corporate loans. Stricter regulation of banks following the Global Financial Crisis of 2007 intensified underwriting standards for bank loans and further diminished banks’ appetites for SMB lending.

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



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Business people shocked around a computer

With billions in federal funds at stake, smaller cities are racing to compete for new clean energy and climate projects. That means filling out a lot of forms.

For US Cities in Infrastructure Need, Grant Writers Wanted

Monday, July 22, 2024 — Patrick Sisson - Bloomberg

It’s a big windfall of federal investment. Together, bills like the Inflation Reduction Act, the Bipartisan Infrastructure Law, and the CHIPS Act present a substantial shift in how the US government funds local economic development, clean energy and environmental justice efforts, potentially giving cities and towns a huge boost.

That is, if the nation’s 90,000-plus municipalities and tribal governments can finish filling out all the paperwork.

The trillion-dollar trifecta of Biden administration legislation from 2022 underscores just how important grant writing has become. In many ways, the ability of cities to enact new policies and tap federal resources rests on the desks of the staffers or contract workers who research, write and submit applications for funding. Uncle Sam will cheerfully write a check for cities to install solar panels via Clean Electricity Investment and Production Tax Credits, for example, or provide tax credits for buying electric vehicles. But first, you have to ask.

Reprinted courtesy of Patrick Sisson, Bloomberg
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Businessman pointing at digital highrise model

If the agents will change our lives as fundamentally as Gates envisions, many questions arise.

Will AI Completely Transform Our Use of Computers?

Monday, July 22, 2024 — Aarni Heiskanen - AEC Business

Last November, I received a newsletter from Bill Gates titled “AI is about to completely change how we use computers.”

Gates begins his letter with a prediction:

“Five years from now, you won’t have to use different apps for different tasks. You’ll simply tell your device, in everyday language, what you want to do—whether it’s drafting a document, making a spreadsheet, scheduling a meeting, analyzing data, sending an email, or even buying movie tickets.“

Gates dives deeper into the topic in his blog post.

Revolution in Computing
Gates discusses the revolutionary impact of AI on computing, comparing it to the transformative effects of mobile phones and the Internet.

Reprinted courtesy of Aarni Heiskanen, AEC Business

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

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Construction worker holding plans

Disney committed for an initial $8-billion capital investment over the next 10 years.

$17B Agreement Streamlines Disney World Development Plans

Monday, July 22, 2024 — Derek Lacey - Engineering News-Record

Walt Disney Parks and Resorts received the green light on $17 billion in development plans in and around Walt Disney World in Orange County, Fla,, garnering approval June 12 from the board of the Central Florida Tourism Oversight District (CFTOD) for its sprawling capital plan.

Reprinted courtesy of Derek Lacey, Engineering News-Record

Mr. Lacey may be contacted at laceyd@enr.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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