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DIRECTORY AND CAPABILITIES

New York Revises Retainage Requirements for Private Construction Contracts: Overview of the “5% Retainage Law”

January 22, 2024 — Levi W. Barrett, Patrick T. Murray, Skyler L. Santomartino & Mark A. Snyder - Peckar & Abramson, P.C.
On November 17, 2023, the State of New York enacted the “5% Retainage Law.” This legislation effectively limits the amount of retainage that can be held from general contractors and subcontractors to no more than 5%. It applies to many but not all construction contracts. In addition, the new law revises late stage billing requirements, enabling contractors to invoice for retainage at substantial completion. Previously, the parties to a construction contract were free to negotiate any retainage amount, limited only by an unspecified “reasonable amount” that would be released as the parties contractually set forth. Summary The new law amends Sections 756-a and 756-c of the General Business Law (part of Article 35E of the GBL, known as the “Prompt Pay Act”), and applies to private construction contracts “where the aggregate cost of the construction project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars.” Reprinted courtesy of Levi W. Barrett, Peckar & Abramson, P.C., Patrick T. Murray, Peckar & Abramson, P.C., Skyler L. Santomartino, Peckar & Abramson, P.C. and Mark A. Snyder, Peckar & Abramson, P.C. Mr. Barrett may be contacted at lbarrett@pecklaw.com Mr. Murray may be contacted at pmurray@pecklaw.com Mr. Santomartino may be contacted at ssantomartino@pecklaw.com Mr. Snyder may be contacted at msnyder@pecklaw.com Read the full story...

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Real Estate & Construction News Roundup (1/16/24) – Algorithms Affect the Rental Market, Robots Aim to Lower Construction Costs, and Gen Z Struggle to Find Their Own Space

February 12, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, New York’s Prompt Payment Act comes into question, vacancy rates rise in commercial office space, the Biden administration applies project labor agreements on certain federal construction projects, and more!

• The Biden administration announced the implementing on an executive order that will require project labor agreements on federal construction projects costing $35 million or more, likely resulting in PLAs being required on a majority of large federal jobs. (Zachary Phillips, Construction Dive)
• Boeing plans to increase quality inspections of its 737 Max 9 aircraft, following a series of manufacturing flaws that have led some airlines to hold off aircraft purchases or go with its European rival, Airbus. (Ken Sweet, AP)
• 31% of Generation Z (generally defined as those born between 1996 and 2012) adults live at home with parents because they can’t afford to buy or rent their own space. (Jessica Dickler, CNBC)

Read the full story...
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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AMLO Hits Back at Vulcan, Threatens to Use Environmental Decree

December 04, 2023 — Maya Averbuch & Eric Martin - Bloomberg
Mexico’s president threatened to declare a disputed property owned by Vulcan Materials Co. an environmentally protected area, after failing to reach an agreement with the US construction firm. Andres Manuel Lopez Obrador said Vulcan continued work at the site even while in talks with his government over its potential purchase of the property, which was occupied by Mexican marines in March. Accusing the company of “vile trickery,” AMLO — as the president is known — told reporters Friday that he would act by decree if necessary to halt the destruction in “one of the most beautiful areas in the world.” His comments came a day after Bloomberg reported that the Alabama-based firm was seeking the Biden administration’s protection from what it sees as the threat of a hostile takeover of its property. The 2,400 hectare (5,930 acre) plot south of the resort city of Playa del Carmen includes a port and a quarry. Reprinted courtesy of Maya Averbuch, Bloomberg and Eric Martin, Bloomberg Read the full story...

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Wreckage Removal Underway at Site of Collapsed Key Bridge in Baltimore, But Weather Slows Progress

April 15, 2024 — Jim Parsons - Engineering News-Record
Note: The text of this article was updated 4/3/24 to reflect new information. Weather and water conditions are hampering the piece-by-piece process of cutting and removing wreckage from the collapsed Francis Scott Key Bridge in Baltimore, while officials consider potentially utilizing progressive design-build for a replacement bridge. Officials remain uncertain as to how long the meticulous effort to clear the key shipping channel will take. Reprinted courtesy of Jim Parsons, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story...

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Construction Litigation Roundup: “Stuck on You”

March 04, 2024 — Daniel Lund III - Lexology
A “contract of adhesion” is referred to as a standard form contract – usually preprinted – “prepared by a party of superior bargaining power for adherence or rejection of the weaker party.” Yet, it is not the nature of the contract alone which determines its enforceability, but, instead, “whether a party truly consented to all of the printed terms.” A Louisiana plaintiff fighting a forum selection clause in a construction contract sought to have the clause nullified, urging that the clause was “buried” in the agreement and in small font, arguing also that the contractor had “superior bargaining position at the time of entering into the contract… because [plaintiff] needed to repair the hurricane damage” to his home as soon as possible. In response, the contractor urged that the contract was not executed under rush conditions, and that, in any event, the contract was only two pages long – and the forum selection clause was not hidden and was in the same font as all of the other provisions in the contract. 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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Insurer’s Broad Duty to Defend in Oregon, and the Recent Ruling in State of Oregon v. Pacific Indemnity Company

January 02, 2024 — Keith Sparks - Ahlers Cressman & Sleight PLLC
Oregon law mandates a broad duty to defend, requiring insurers to provide legal representation to their policyholders whenever there is a potential for coverage under the policy. The significance of this broad interpretation means that an insurer has a duty to defend an insured even in situations where the alleged facts only imply a covered claim, and even in situations where the underlying claim is ultimately not covered by the policy. The insurer’s duty to defend is triggered if the allegations of the complaint, reasonably interpreted, could result in the insured being held liable for damages covered by the policy. This is referred to as the “four-corners” rule; it is also sometimes referred to as the eight-corners rule (for the four corners of the complaint plus the four corners of the policy). Oregon’s adoption of a broad interpretation of the duty to defend affirmatively places the onus on insurers to err on the side of coverage. This broad duty to defend is based on the principle that an insured should not have to bear the expense of defending a lawsuit that the insurer may ultimately have to pay for. The duty to defend is also important because it helps ensure that insureds have access to legal representation when faced with a lawsuit. Read the full story...
Reprinted courtesy of Keith Sparks, Ahlers Cressman & Sleight PLLC
Mr. Sparks may be contacted at keith.sparks@acslawyers.com

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Real Estate & Construction News Roundup (1/24/24) – Long-Term Housing Issues in Hawaii, Underperforming REITs, and Growth in a Subset of the Hotel Sector

February 19, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, commercial real estate’s relationship with technology, towns and cities across the country prevent dollar stores from opening, empty offices and other commercial buildings are reused for housing, and more!

• Between 1988 and September 2023, the hotel room supply in the select service and extended stay hotel sector has increased by 60% greater than full-service hotel room supply growth. (Michele Laufik, Hotel Dive)
• With high mortgage rates and home prices, would-be buyers are understandably looking for deals — even if they need to move to a different city, state or region to find them. (Ana Teresa Solá, CNBC)
• Roughly 60 towns and cities have made changes to their zoning laws since 2018 to prevent dollar stores from opening within their limits. (Alex Bitter, Business Insider)

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

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Traub Lieberman Partner Kathryn Keller and Associate Steven Hollis Secure Final Summary Judgment in Favor of Homeowner’s Insurance Company

April 02, 2024 — Kathryn Keller & Steven A. Hollis - Traub Lieberman
Traub Lieberman Partner Kathryn Keller and Associate Steven Hollis obtained summary judgment on behalf of a major homeowners’ insurer in a breach of contract action in the Ninth Judicial Circuit in and for Osceola County, Florida. The underlying claim involved a water loss in a bathroom of the Plaintiff’s property allegedly resulting in substantial damage to the home. The claim had been reported by Plaintiff’s counsel. The Plaintiff had retained counsel and two vendors before giving notice to the insurer. In addition, the insurer’s field adjuster was not provided the opportunity to inspect the plumbing parts that had been allegedly damaged. Specifically, the drainage system had been completely removed and replaced. The insurer retained an engineer, who concluded that the removal of the original plumbing components hindered the ability of the engineer to determine their conditions prior to removal. Meanwhile, the surface conditions of the white PVC pipe appeared bright and shiny as compared to other piping. The insured had also failed to provide a signed, sworn proof of loss within sixty days after the loss. Reprinted courtesy of Kathryn Keller, Traub Lieberman and Steven A. Hollis, Traub Lieberman Ms. Keller may be contacted at kkeller@tlsslaw.com Mr. Hollis may be contacted at shollis@tlsslaw.com Read the full story...

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