Anaheim California Building Consultant Directory

Real Protection for Real Estate Assets: Court Ruling Reinforces Importance of D&O Insurance

October 01, 2024 — Hunton Insurance Recovery Blog
Earlier this month, an Illinois federal district court held that a liability insurer had no duty to defend or indemnify a property management company or its owner in lawsuits that included allegations of intentional conduct. The suits accused the owner of concealing financial information from and engaging in a scheme to increase tax liability and decrease profit distributions to a minority owner. This case reinforces the importance of maintaining D&O insurance as part of a comprehensive liability insurance program to protect against potential gaps in coverage that could result from allegations of intentional or knowing acts. Background The court in Old Guard Insurance Company v. Riverway Property Management, LLC et al., No. 1:23-cv-01098 (C.D. Ill. Sep. 6, 2024) was asked to determine whether Old Guard Insurance Co. was required to defend or indemnify Riverway Property Management LLC or its owner under two commercial general liability policies in relation to state court lawsuits. The lawsuits alleged that Riverway’s owner intentionally and improperly misappropriated funds and that the property management company knowingly and substantially assisted with this wrongful scheme. Read the full story...
Reprinted courtesy of Hunton Andrews Kurth LLP

You Cannot Always Contract Your Way Out of a Problem (The Case for Dispute Resolution in Mega and Large Complex Construction Projects)

September 16, 2024 — Lisa D. Love - The Dispute Resolver
Most experienced commercial transaction and construction attorneys strive to negotiate a concisely written and well-drafted contract that addresses all scenarios and issues that creative and highly contemplative professionals can conjure. Although contracts are extremely important in construction projects, “you can’t generally contract your way out of a problem,” states Michael Loulakis, a founder of Capital Project Strategies, LLC and a nationally recognized expert on project delivery systems in complex public sector design-build projects and public-private partnership programs. Loulakis adds, “the contract certainly matters. But particularly when the losses are big, litigators prosecuting the contractors often find effective ways to argue that facts and circumstances trump the contract.” However, “the difference between the best construction projects and the worst construction projects is not the written words of the contracts but how the parties have committed to engage collaboratively and with trust to complete the project,” notes Robynn Thaxton, an attorney and consultant with Thaxton Parkinson PLLC and Progressive Design-Build Consulting, LLC and one of the leading experts in construction law and alternative procurement on a national basis.[i] In large, complex construction projects, the need for parties to collaboratively resolve disputes is highlighted by the judicial acceptance of the “Doctrine of the Contextual Contract”[ii] to interpret construction contracts. “As construction’s increasing technological and managerial complexity came to be recognized, some common law courts began turning away from strict interpretation of language within the four corners of a contract and moving toward recognizing in the enforcement of contracts the construction industry’s own experience, customs, practices and implied conditions and duties and the factual context underlying the contract. Courts [began the journey] along the road from ‘text’ to ‘context.’”[iii] Thus, the precise wording of the contract has become less important and industry practices and other conditions provide insight for resolving disputes. Consequently, despite the specific language of any construction contract and the clear allocation of responsibilities and risks, early dispute evaluation and resolution are critical to a successful project. Read the full story...
Reprinted courtesy of Lisa D. Love, JAMS

Colorado Court of Appeals’ Ruling Highlights Dangers of Excessive Public Works Claims

August 26, 2024 — David M. McLain – Colorado Construction Litigation
In the case of Ralph L. Wadsworth Construction Company, LLC v. Regional Rail Partners (2024 COA 78), the Colorado Court of Appeals reviewed a complex contract dispute related to the design and construction of a transit rail line. The project, commissioned by the Regional Transportation District (“RTD”), involved a collaboration between Regional Rail Partners and Ralph L. Wadsworth Construction Company (“Wadsworth”) to build the North Metro Rail Line between Denver Union Station and Thornton. Key Facts:

Contracts and Payments: Regional Rail Partners contracted with Wadsworth to perform specific construction tasks with a total contract value of $60,210,783. By the time of the trial, Regional Rail had paid almost $58 million of this amount.
Disputes and Delays: The project faced numerous delays and disputes, leading to Wadsworth claiming significant financial damages attributed to these disruptions. In April 2018, Wadsworth’s expert estimated that Regional Rail owed them $12,408,496.60.

Read the full story...
Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLain may be contacted at mclain@hhmrlaw.com

What You Need to Know to Protect the Project Against Defect Claims

October 28, 2024 — Scott L. Baker - Los Angeles Litigation Blog
If a property owner claims there is a construction defect, that not only brings the project’s integrity into question but also your business’s reputation. So, how can you take steps to prevent these claims from causing such damage? Here are three things to know before beginning a project to effectively protect it and manage construction defect claims. 1. Documentation is key California and Los Angeles County require certain permits and documents in order for a construction project to move forward. Los Angeles County will also conduct plan checks to ensure everything is up to code. Detailed documentation will be important while making your plans. However, keeping notes throughout every step of the project will also be essential. Documenting all aspects of the project helps you:

Stay updated and aware of the project’s progress
Proactively catch and handle issues that could result in disputes
Create a record of evidence that can help manage defect claims

Read the full story...
Reprinted courtesy of Scott L. Baker, Baker & Associates
Mr. Baker may be contacted at slb@bakerslaw.com

Can Businesses Resolve Construction Disputes Outside of Court?

August 19, 2024 — Scott L. Baker - Los Angeles Litigation Blog
Time is of the essence in any construction project. So, if a dispute arises at any point, business owners generally wish to avoid the chance of a time-consuming case going to court. Can California construction businesses manage these disputes effectively outside of court? It is possible in some cases. Business owners should carefully consider these three steps. 1. Go Back to the Contract Even if the contract is at the center of the dispute, it is important to refer to any details regarding dispute resolution included within the document. It is common for contracts to have some form of a dispute resolution clause. In such a case, both parties should follow the steps outlined in that agreement. Read the full story...
Reprinted courtesy of Scott L. Baker, Baker & Associates
Mr. Baker may be contacted at slb@bakerslaw.com

A Win for Policyholders: Court Finds Flood Exclusion Inapplicable to Plumbing Leaks Caused by Hurricane Rainfall

October 21, 2024 — Kelly A. Johnson & Damian S. Barquin - Saxe Doernberger & Vita, P.C.
A recent decision by a federal court helps clear the path to coverage for property owners this hurricane season. The Court deemed one property policy’s flood exclusion inapplicable to bar coverage for water damage from backed-up drainage and overflow caused by excessive rainfall. The case, styled G.E.M.S. Partners LLC v. AmGUARD Ins. Co., — F.Supp. 3d —, No. CV 22-1664, 2024 WL 3568932 (D.N.J. July 29, 2024)), involved a familiar dispute between the insured and insurer following damage to covered property after a named storm’s heavy rainfall. Here, G.E.M.S. Partners LLC (“Insured”) obtained a commercial property policy from AmGUARD Insurance Company (“AmGUARD”) to cover three neighboring buildings in Union, New Jersey. In September 2021, intense rainfall from Hurricane Ida overwhelmed the local infrastructure and sewer system, leading to water leakage from plumbing fixtures at the insured property. To secure coverage under its AmGUARD policy, the Insured wisely relied on its “Water Back-Up and Sump Overflow Endorsement” (“Back-Up/Overflow Endorsement”). Under this endorsement, AmGUARD promised to “pay for ... damage ... caused by ... water ... which backs up through or overflows or is otherwise discharged from a sewer.”1 Indeed, a plumber that inspected the buildings following Hurricane Ida described the root cause of the water damage as a “back up” of “sewer ... water.”2 Reprinted courtesy of Kelly A. Johnson, Saxe Doernberger & Vita, P.C. and Damian S. Barquin, Saxe Doernberger & Vita, P.C. Ms. Johnson may be contacted at KJohnson@sdvlaw.com Mr. Barquin may be contacted at DBarquin@sdvlaw.com Read the full story...

Hawaii Supreme Court Reaffirms an "Accident" Includes Reckless Conduct, Finds Green House Gases are Pollutants

November 18, 2024 — Tred R. Eyerly - Insurance Law Hawaii
Answering certified questions from the federal district court, the Hawaii Supreme Court reaffirmed its prior holding that reckless conduct is an "occurrence' or accident. The court further held that green house gas (GHG) emissions were pollutants under liability policies. Aloha Petroleum, Ltd. v. National Union Fire Ins. Co. of Pittsburg, PA., et al., 2024 Haw. LEXIS 179 (Haw. Oct. 7, 2024). [Disclosure - our office was co-counsel on an amicus brief in this case filed on behalf of the United Policyholders]. The City and County of Honolulu and the County of Maui sued several fossil fuel companies, including Aloha Petroleum, Ltd., for climate change-related harms. The suits alleged that the fossil fuel industry knew beginning in the 1960s that its products would cause catastrophic climate change. Rather than mitigate their emissions, defendants concealed their knowledge of climate change, promoted climate science denial, and increased their production of fossil fuels. Defendants' actions, the complaints alleged, increased carbon emissions, which caused significant damage to the counties. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Challenging a Termination for Default

September 23, 2024 — David Adelstein - Florida Construction Legal Updates
No contractor wants to be terminated for default. It is the harshest contractual recourse. It is a recourse that has implications, particularly in the public sector. However, a party needs to be in a position to support the basis of the termination for default, and the terminated party, in most instances, should not be in a position to imply accept the basis of the default. This applies regardless of the project. In the federal context: “When a contractor challenges a default termination, the government bears the burden of establishing the validity of the termination.” Sergent’s Mechanical Systems, Inc. v. U.S., 2024 WL 4048175, *7 (Fed.Cl. 2024) (internal quotation and citation omitted). Once the government establishes the default, “the contractor bears the burden of establishing that the default was excused by fault of the government.” Id. at *8 (internal quotation and citation omitted). Relevant considerations as to whether the contractor is in default include the contractor’s failure to meet contract specifications or the required schedule. Sergent’s Mechanical Systems, supra, at *8. “[T]here is ‘a requirement that the contractor give reasonable assurances of performance in response to a validly issued cure notice.” Id. (internal quotation and citation omitted). 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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