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DIRECTORY AND CAPABILITIES

Construction Defect Claim Survives Insurer's Summary Judgment Motion Due to Lack of Evidence

December 23, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The court denied the insurer's motion for summary judgment on a construction defect claim due to lack of evidence. Statesboro Erectors, Inc. v. Owners Ins. Co., 2024 U.S. Dist. LEXIS 176555 (N.D. Ga. Sept. 30, 2024). Griffco was the general contractor for a construction project. King Steel was hired as the "steel fabricator." King Steel subcontracted with Statesboro Erectors to complete certain construction work at the site. Statesboro agreed to the complete, proper and safe erection of the structural steel. A steel collapse occurred at the construction site. According to King Steel, the collapse "appeared to have occurred due to lack of temporary cables or bracing for steel columns." Because of the collapse, King Steel was required to supply additional materials to replace the structural damage caused by the collapse. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Construction Professionals Could Face More Liability Exposure Following California Appellate Ruling

December 17, 2024 — Jamison Rayfield & Brian Slome - Lewis Brisbois
San Diego/San Francisco, Calif. - The California Court of Appeal recently reversed a summary judgment ruling in favor of a geotechnical engineering firm that had conducted a brief inspection of a residential construction project's footing trench for $360. The case arose when homeowner Cheryl Lynch experienced significant property damage after her home's foundation failed and the structure began subsiding into a slope. Lynch sued Peter & Associates for professional negligence and nuisance, despite having no direct contractual relationship with the firm, which had been hired by her contractor to perform the geotechnical inspection. The court distinguished this case from Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, which had limited auditors' professional duty to third parties, noting that Bily dealt with purely economic damages, whereas Lynch involved physical property damage, making Bily's policy concerns about unlimited liability inapplicable. The court emphasized that construction professional negligence cases, particularly those involving residential property damage, warrant a different analysis than cases involving economic loss. Reprinted courtesy of Jamison Rayfield, Lewis Brisbois and Brian Slome, Lewis Brisbois Mr. Rayfield may be contacted at Jamison.Rayfield@lewisbrisbois.com Mr. Slome may be contacted at Brian.Slome@lewisbrisbois.com Read the full story...

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Slow Down?

December 03, 2024 — Daniel Lund III - Lexology
Absolutely not, said the Louisiana Fifth Circuit Court of Appeal to a masonry subcontractor being sued for allegedly improperly refusing to honor a subcontract bid. A general contractor preparing its overall bid for a public project in Jefferson Parish relied in the process on the defendant masonry subcontractor’s bid. After a public bid process and receiving the award of the project, the general contractor was informed by the subcontractor that it believed that the unit price form that had been supplied to the sub “contained inaccuracies.” Notwithstanding offers by the GC to endeavor to address the purported “inaccuracies” during the project, most likely by a change order, the subcontractor refused to execute its subcontract. The general contractor then awarded the masonry work to another subcontractor for $368,222 more than the original sub’s bid. The GC filed suit – for recovery of $368,222 – against the defendant subcontractor during the course of the public project. The defendant sub objected, arguing to the court that the lawsuit was “premature.” At the heart of the prematurity argument: the sub urging that the general contractor filed suit before its right to recover damages had accrued. Read the full story...
Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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Courthouse Reporter Series: Louisiana Supreme Court Holds Architect Has No Duty to Safeguard Third Parties Against Injury, Regardless of Knowledge of Dangerous Conditions on the Project

July 31, 2024 — Stu Richeson - The Dispute Resolver
In Bonilla v. Verges Rome Architects, 2023-00928 (La. 3/22/24); 382 So.3d 62, the Louisiana Supreme Court held because the terms of the agreement between the architect and the public owner did not give the architect responsibility for the means and methods of construction or for safety on the project, the architect did not have a duty to safeguard third parties against injury, regardless of whether the architect may have had knowledge of dangerous conditions on the project. In Bonilla, the City of New Orleans entered into a contract for the renovation of a building owned by the city. The city also entered into an agreement with Verges Rome Architects (“VRA”) to serve as the project architect. The general contractor on the project subcontracted the demolition work to Meza Services, Inc. (“Meza”). An employee of Meza was injured while attempting to demolish a “vault” on the project. The vault was a ten-foot by ten-foot cinderblock room with a nine-foot-high concrete slab ceiling located on the second floor of the building. The walls of the vault had been partially demolished when one of the employees of Meza was directed by his supervisor to stand on the ceiling of the vault with a jackhammer to continue the demolition. Shortly after beginning the task, the vault structure collapsed and caused the employee to suffer significant injury. Read the full story...
Reprinted courtesy of Stu Richeson, Phelps
Mr. Richeson may be contacted at stuart.richeson@phelps.com

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Benefit of the Coblentz Agreement and Consent Judgment

August 26, 2024 — David Adelstein - Florida Construction Legal Updates
If you are not familiar with the concept of what is commonly known as a Coblentz agreement relative to an insurance coverage dispute, review these prior postings (here and here and here). This is a good-to-know agreement if you are a claimant and need to consider an avenue of collection if the insured’s carrier denies coverage out of the gate (meaning the carrier has denied both the duty to defend and the duty to indemnify). A recent Eleventh Circuit Court of Appeals opinion demonstrates the Coblentz agreement concept. In Barrs v. Auto-Owners Ins. Co., 2024 WL 3673089 (11th Cir. 2024), an owner asserted a construction defect claim against its contractor. The owner hired the contractor to deconstruct a building and the contractor hired a demolition subcontractor. The owner noticed work was not being performed and materials (e.g., lumber) were missing; the demolition subcontractor had stolen materials. The subcontractor was terminated, and the owner claimed the contractor’s negligence allowed the theft and delayed his project. The contractor’s commercial general liability (CGL) insurer notified the insured-contractor that coverage did not exist and refused to defend the contractor. The owner sued the contractor under various theories of liability. The owner and contractor entered into a settlement agreement (i.e., the Coblentz agreement) where the contractor “admitted liability in the amount of $557,500.00….A consent judgment was entered against [the contractor] that closely tracked the settlement agreement but did not indicate which portion of the damages award was attributed to which claims. The agreement also assigned [owner] and all of [the contractor’s] rights to claim coverage and to recover available funds under [the contractor’s CGL policy].” Read the full story...
Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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The 2023 Term of the Supreme Court: Administrative and Regulatory Law Rulings

December 03, 2024 — Anthony B. Cavender - Gravel2Gavel Construction & Real Estate Law Blog
It is instructive to review the Supreme Court’s record in its most recent term, concentrating on regulatory and administrative law cases, which are usually back-burner issues. But not this term. The Supreme Court began the current term on October 7, 2024. The Court has already chosen many cases to review in the new term, and it promises to be as interesting as the 2023 term, which produced several significant rulings affecting regulatory and administrative law, chiefly the Loper Bright Enterprises ruling. Loper Bright overturned the Court’s landmark administrative law ruling of Chevron, USA v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Background to Loper Bright In 1984, the Supreme Court decided Chevron USA, Inc. v. National Resource Defense Council. (See 467 U.S. 839 (1984).) The unanimous decision, written by Justice Stevens, reversed then-D.C. Circuit Judge Ruth Bader Ginsburg’s ruling that set aside EPA’s Clean Air Act “bubble policy,” which was intended to provide regulatory relief from certain EPA permitting requirements. Read the full story...
Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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Five Issues to Consider in Government Contracting (Or Any Contracting!)

September 02, 2024 — David Adelstein - Florida Construction Legal Updates
The appeal of Appeals of – Konecranes Nuclear Equipment & Services, LLC, ASBCA 62797, 2024 WL 2698011 (May 7, 2024) raises interesting, but important, issues that should be considered. In this case, the government (in a supply contract) procured four portal cranes from the claimant. After an initial test of one of the cranes failed, the government refused to accept delivery even after the issue was addressed by the claimant. The government did not accept the manner in which the claimant addressed the issue and would only accept cranes if the claimant employed “an unnecessary alternative solution [that] caused further delay and increased [claimant’s] costs.” On appeal, it was determined the government’s decision to delay delivery based on its demand for the alternative solution was not justified, i.e., constituted a breach of contract. Below are five issues of consideration in government contracting, or, for that matter, any contracting. Issue #1- Patently Ambiguous Specifications The government argued that the specifications were patently ambiguous and because the claimant failed to inquire regarding the ambiguous specifications prior to performance, its interpretation of the ambiguous specifications should govern. The contractor countered that the specifications were unambiguous and it met the specifications. Read the full story...
Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Newport Beach Partners Jeremy Johnson, Courtney Serrato, and Associate Joseph Real Prevailed on a Demurrer in a Highly Publicized Shooting Case!

November 11, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Bremer Whyte Brown & O’Meara’s Partners Jeremy Johnson, Courtney Serrato, and Associate Joseph Real prevailed on a Demurrer in a highly publicized shooting case. Plaintiffs filed a lawsuit alleging negligence, negligent hiring, supervision and retention, and public nuisance against BWB&O’s clients, a highly recognized hospitality and lifestyle company with nightlife and restaurant venues, in addition to other celebrity defendants. Plaintiffs were the victims of a shooting that occurred by an unknown individual(s) outside and near the restaurant/venue owned by BWB&O’s clients. Plaintiffs alleged it was BWB&O’s clients that were responsible for the third parties’ criminal acts because BWB&O’s clients attracted more people than the venue’s capacity, causing people to occupy the street, sidewalk, and property nearby. Plaintiffs further alleged that BWB&O’s client should have anticipated or known that criminal conduct, including gun violence, would take place. Read the full story...
Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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