Anaheim California Building Consultant Directory

Insurer Waives Objection to Appraiser's Partiality by Waiting Until Appraisal Issued

October 21, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The Eleventh Circuit affirmed the district court's denial of the insurer's objections on partiality grounds to the insured's appraiser. Biscayne Beach Club Condominium Association, Inc. v. Westchester Surpus Lines Ins. Co., 2024 U.S. App. LEXIS 19663 (11th Cir. Aug. 6. 2024). Storms damaged buildings at Biscayne Beach Club Condominium. Biscayne Beach filed claims with its insurer, Westchester. Unsatisfied with Westchester's payments, Biscayne Beach sued. Westchester then invoked the appraisal provision in the policy. The district court abated the action so the parties could pursue appraisal. Biscayne Beach appointed Lester Martin, its public adjuster, as its appraiser on a 10 percent contingency fee. Westchester objected because Martinez's retainer created a conflict of interest that would hinder his impartiality. Biscayne Beach then retained Blake Pyka as its appraiser. Westchester appointed its appraiser and and umpire was selected by the parties' two appraisers. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

NLRB Finalizes Rule for Construction Industry Unions to Obtain Majority Support Representational Status

September 23, 2024 — Aaron C. Schlesinger - Peckar & Abramson, P.C.
On July 26, 2024, the National Labor Relations Board (“NLRB”) issued its Fair Choice – Employee Voice Final Rule (“Final Rule”), which takes effect September 30, 2024. The Final Rule eases the process for unions in the construction industry to convert their status as collective bargaining representative of bargaining unit employees from Section 8(f) to 9(a) of the National Labor Relations Act (“Act”) simply by placing certain recognitional acceptance language in their collective bargaining agreements. As a result, construction industry employers should review their collective bargaining agreements prior to signing to determine if such language exists. Section 9(a) Non-Construction Industry Employers In most industries, not including construction, union recognitional status as collective bargaining representative of the employer’s employees is governed by Section 9(a) of the Act. In order for a Union to obtain recognitional status under Section 9(a), the union must either: (1) file a petition with the NLRB showing support of 30% of the proposed bargaining unit via employee executed authorization cards and win an election of 51% of the employees in the proposed bargaining unit who actually vote; or (2) by reaching an agreement with the employer that the union possesses employee executed authorization cards from 51% of the proposed bargaining unit, which has been confirmed by a neutral arbitrator pursuant to a card count. Once such status is achieved, the union and employer are required to meet and bargain towards reaching a collective bargaining agreement covering the terms and conditions of employment of the union represented employees. A Section 9(a) union cannot have its recognitional status revoked absent the loss of majority support of the employees it represents. Read the full story...
Reprinted courtesy of Aaron C. Schlesinger, Peckar & Abramson, P.C.
Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com

“A No-Lose Proposition?”

October 07, 2024 — Daniel Lund III - Lexology
A Miller Act payment bond surety and its principal general contractor both sued in federal court in New Orleans by a project subcontractor sought to compel arbitration the claims against both contractor and surety based on an indisputably enforceable arbitration clause in the subcontract. This was urged to avoid separate actions against the contractor (arbitration) and its surety (litigation), even though the surety was not a party to the subcontract and, therefore, not a party to the arbitration clause. In the face of the lack of an express agreement to arbitrate, the contractor and contractor argued that “no federal statute or policy prohibits all of Plaintiff’s claims from proceeding to arbitration….” Additionally, those parties urged that the surety should be allowed to affirmatively compel arbitration because the surety “would otherwise have the ability to assert the right to compel arbitration as a defense….” The New Orleans federal district court was unpersuaded:

“[D]istrict courts within this circuit have recognized that ‘Miller Act claims by a subcontractor for unpaid labor and materials are separate and distinct from those for general breach of contract… [and] arbitration and Miller Act suits, are not, per se, inconsistent with one another.’…[A]bsent express contractual intent to subject Miller Act claims to arbitration, the court [will] not force the parties to arbitrate claims against nonparties to the contract at issue…. [C]laims against a surety, which was a non-signatory to the contract, would not be subject to arbitration without any contractual basis to do so.”

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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Deferred Maintenance?

December 17, 2024 — Daniel Lund III - Lexology
A Tennessee-based “outsourced maintenance vendor” to an engine company filed suit in Louisiana state court seeking to recover nearly $150,000 on “open account,” for work previously performed. The engine company removed the case to the Federal District Court in New Orleans and asserted as a defense that the vendor lacked a proper Louisiana construction contractor’s license. The engine company filed a motion for summary judgment based on the defense. Under Louisiana law, a contract between parties is “absolutely null”--considered to have never existed--where one of the parties performed services without a required Louisiana contractor’s license, and the combined work reaches a $50,000 threshold. The engine company asserted that the vendor performed typical construction contractor work, including plywood flooring, applied epoxy to concrete flooring, erected part of a commercial carport, undertook certain heavy demolition, and installed fences, guardrails, and wire racks. Read the full story...
Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Incorrect Information Provided on Insurance Application Defeats Claim for Coverage

July 31, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The Eleventh Circuit affirmed the district court's finding of no duty to defend or indemnify because of an answer on the insured's application for insurance. Snell v. United Specialty Ins. Co., 2024 U.S. App. 12733 (11th Cir. May 28, 2024). Snell was hired by a family, the Westons, to turn an above ground trampoline into a ground level trampoline. This involved various tasks like tree pruning and removal, installation of shrubs, trees, and sod, and setting up a sprinkler irrigation system. The trampoline aspect of the project involved site work to make a place for the trampoline and assembly and installation of the trampoline. The site work included excavation of a pit, installation of a drain and drainage sand, excavation of a trench to install a drainage pipe, installation of the drainage pipe and of a drain pump, construction of concrete block retainer walls and installation of a wood cap on the retainer walls. Then, Snell unboxed the trampoline, assembled it, and lowered it into the pit. A few years later, a visitor to the Weston home sued the Westons for injuries to his daughter suffered on the trampoline. The complaint alleged the daughter was injured when she "fell off of the trampoline and struck her face on the wooden board" surrounding the tramline. The complaint was later amended to add Snell as a defendant. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Takeaways From Schedule-Based Dispute Between General Contractor and Subcontractor

September 09, 2024 — David Adelstein - Florida Construction Legal Updates
A recent opinion out of the Southern District of Florida, Berkley Insurance Co. v. Suffolk Construction Co., Case 1:19-cv-23059-KMW (S.D.Fla. July 22, 2024), provides valuable takeaways on schedule-based disputes between a general contractor and subcontractor on a high-rise project. In a nutshell, the general contractor’s original project schedule was abandoned due to project delays and the project wasn’t being built by any updated project schedule. The subcontractor claimed the general contractor was mismanaging the schedule putting unreasonable manpower and supervision constraints on it, i.e., it was working inefficiently. A bench trial was conducted and the Court found in favor of the subcontractor’s arguments. The Court found the general contractor had unrelated delays and that work activities were no longer methodical but, simply, piecemeal demands. The Court also rejected any inadequate manpower arguments finding the subcontract did not place any manpower requirements on the subcontractor. Read the full story...
Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Ensuing Loss Provision Salvages Coverage for Water Damage Claim

September 16, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The Court of Appeals for the D.C. Circuit reversed the district court's finding of no coverage and found that the ensuing loss provision provided coverage for water damage. 3524 East Cap Venture, LLC, et al. v. Weschester Fire Ins. Co., et al., 104 F. 4th 193 (D.C. Cir. 2024). Plaintiff 3534 East Cap Venture, LLC, a real-estate developer, hired plaintiff McCullough Construction, LLC, to build a residential and retail complex. Defendants Westchester Fire Insurance Company and Endurance American Insurance Company issued identical builders' risk policies, which covered the building while it was under construction. Each insurer was responsible for half of any qualifying losses. The policies covered loss caused by or resulting from water damage. The policies, however, excluded loss caused by "dampness of atmosphere" or by "[e]xtremes or changes in temperature." But the exclusions contained an exception if "loss by an insured peril ensues." Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

The Ghosts of Tariffs Past May Help Us in the Future

January 07, 2025 — Kellie Ros - ConsensusDocs
The havoc material tariffs have caused the construction industry is nothing new. President-Elect Donald Trump imposed heavy tariffs on steel and aluminum in his first administration in 2016. While the tariffs themselves were not wholly unexpected, the ripple effect of those tariffs (coupled with the impacts of the COVID-19 pandemic) caused unexpected challenges for the construction industry. Those included allocating the risk of the additional costs caused by tariffs, supply and demand issues, grappling with escalation clauses, and navigating fixed price projects. The industry must now utilize the lessons learned from the rear-view mirror to strategically prepare for what was promised to be a second round of tariffs come January 2025. Tariffs’ Impacts on Material Prices Everywhere New or increased tariffs have the potential to raise prices for a wide range of construction inputs. Based on simple supply and demand principles, this includes inputs produced domestically that compete with foreign imports. For example, if a 20% tariff is imposed on Chinese steel, contractors may look to procure Brazil or U.S. steel in an effort to cut their costs. Such a rush to those less-costly alternatives may result in a supply shortage or an increase in prices in the marketplace across the globe. This occurred in 2016 when material prices indirectly related to the inputs on which the tariffs were imposed even increased. Contractors may be well served to get ahead of anticipated price increases and purchase materials now or take other actions in negotiating contracts to protect themselves. Read the full story...
Reprinted courtesy of Kellie Ros, Peckar & Abramson, P.C.
Ms. Ros may be contacted at kros@pecklaw.com

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