Has P3 Reached a Tipping Point in the United States?


A solution to an infrastructure problem is taking hold in this country, as a result of its adoption by influencers, and the timing and context are perfect for that idea to become really big.  The Moody’s press release is available here and refers to Moody’s recently released “Global P3 Landscape” report.

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Construction Contract Forms – A New Battleground?


The American Institute of Architects issued a press release this week touting a custom set of contract documents it has worked out with the Kentucky Department of Education.  Ten AIA contract forms have been customized for the state department.  This could become a new battleground in the document wars between the AIA and ConsensusDocs, another major construction industry document group representing a coalition of more than 40 industry associations.

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Reminder: False Claims Act Lessons Are Expensive


A contractor filing false prevailing wage certifications was reminded just how costly it can be to run afoul of a False Claims Act charge.  After a trial on damages, the federal court judge found that the contractor was paid $254,298.18 for the electrical portion of the project (the part involving the false wage certifications).  The government’s damages under the False Claims Act (FCA) are treble that amount, or $762,894.54.  There is no credit for value of work put in place, and no consideration of value to the government.  The damages are three times the amount paid by the government for the pertinent portion of the work, regardless of whether that amount was purely cost to the contractor, or included any profit.

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Liens with Intentionally Incorrect Information May Still Be Enforceable


Generally, lien waivers that contain fraudulent information are not enforceable. However, not all intentionally misleading statements are fraudulent. The crux of the issue is whether a lien waiver simply states that the subcontractor has been paid a specific amount or whether the subcontractor claims that the work completed is worth the amount stated in the waiver. 

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Massachusetts Passes Law Governing Retainage On Private Contracts


Massachusetts has just passed a law that governs the retainage process on private construction contracts.  It applies to projects of $3 million or more, entered into after November 8, 2014.  This law will fundamentally alter – and accelerate – project closeout on Massachusetts commercial projects. [Read More]
 
 
 
 

Three Strikes on Defective Work Insurance Claim


A federal appeals court recently retired, in short order, a contractor’s insurance claim arising from defective work.  The claim arose when scratches were noted on a glass storefront, shortly after installation by one sub but also after preliminary cleaning by another sub, and two days before the store was open to the public.  No cause for the scratches was identified, at least in the decision. 

Strike One.  The damage arose from work performed by one of the subs, thus coming within an exclusion on the contractor’s GL policy.  There was no evidence of any accident.

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Pennsylvania Mechanics' Lien Law Amended, Clarifying Open-End Construction Loan Mortgage Priority


On July 9, 2014, Pennsylvania Governor Tom Corbett signed into law Act 117 of 2014, which amends the Pennsylvania Mechanics' Lien Law (MLL), 49 P.S. 1101, et seq., to provide that a construction loan secured by an open-end mortgage where at least 60 percent of the proceeds are "intended to pay or used to pay" all or part of the "costs of construction" will have lien priority ahead of any filed mechanics' lien claims, even when the visible commencement of work was prior to the recordation of the open-end mortgage.

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California Supreme Court Addresses Architect's Duty of Care


The California Supreme Court issued a unanimous decision in Beacon Residential Community Association v. Skidmore, Owings & Merrill, S208173, on July 3, upholding a homeowners association's right to pursue a common law negligence claim against the project architects of a 595-unit condominium project in San Francisco. 

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Supreme Court’s Mixed Outcome on EPA Regs Means Coal-Plant Emissions Here to Stay . . .


Energy contractors know well that predicting energy demand, and how the demand would be met, has been more art than science the last several years.  The downward economic cycle, recent strides in energy efficiency, volatility in fuel costs and emissions concerns have not only made electricity demand difficult to gauge, they have made it difficult to predict what types of new energy construction the power producers should be building for their customer bases. The recent boom in natural gas has moved gas-fired plants to the head of the class for the time-being, leaving many to ponder the fate of the United States’ aging fleet of coal plants.

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Q: When Is a Monthly Release Not a Release?


A: When the issue is decided in arbitration.  An arbitrator’s decision that a periodic subcontractor release had not waived claims made in arbitration was upheld by the Rhode Island Supreme Court, although one could read between the lines to conclude that the court would have ruled otherwise on the merits.  This case highlights – with an issue that is controversial of its own accord – the distinction between arbitration and litigation.

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High-Stakes Nuke Case Remains Where the Contract Says


Duke Energy and Westinghouse Electric are battling over money due, or not due, for the cancelled Levy County nuclear power plant in Florida.  After Duke terminated the contract earlier this year, the two parties engaged in negotiation per their contract.  When those efforts failed, both sides filed suit, one day apart, in two different states.  Duke filed in North Carolina, per the contract, and Westinghouse filed the next day in Pennsylvania, where it had performed most of its work.  The NC federal court judge has just refused to transfer that case to PA, and has directed Westinghouse to file an answer in the NC case. 

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Legislation Proposed to Allow ERISA Trusts to Pursue Mechanics’ Liens


On April 17, 2014, the Supreme Court of Pennsylvania issued a decision in Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott's Development Company, et al., that held that union workers (employees of the primary contractor) were not "subcontractors" as that term is defined in the Pennsylvania's Mechanics' Lien Law of 1963, and that trustees of the union's employee benefits trust funds were not entitled to file mechanic's lien claims on the employees' behalf for unpaid contributions to the trust funds.

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"Everything But the Kitchen Sink" Theory of Litigation: Usually a Sign of Weakness


Lawsuits that proceed under, say, eight or more causes of action typically either (a) recite egregious acts by a group of defendants, or (b) mask a lack of substance in the plaintiff’s case.  A recent federal Court of Appeals decision describes the latter, in what might otherwise be a mundane case of terminated contractor battling public authority.

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The Service-Disabled Veteran-Owned Business Act Becomes Law in New York


The Service-Disabled Veteran-Owned Business Act (the “Act”) was signed into law by Governor Andrew M. Cuomo on May 12, 2014.  Under this new law, veteran business owners will be eligible to become certified as a New York State Service-Disabled Veteran-Owned Business (SDVOB).  The goal of the Act is to encourage and support eligible businesses to play a greater role in the economy of the State by increasing participation in New York State's contracting opportunities.  Towards that end, New York will award 6 percent of state contracts to businesses owned by disabled veterans and create the new Division of Service-Disabled Veterans' Business Development within the New York State Office of General Services (“OGS”) for the establishment of a statewide certification program. The Division will be responsible for certifying eligible SDVOBs, and assist and promote the compliance of SDVOB participation in the state's procurement activities. 

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Expanded Definition of "Occurrence" Did Not Convert Construction Defect Into Insured Claim


The terms of an owner-controlled insurance policy defined “occurrence” as “an accident, event, or happening, including continuous or repeated exposure to substantially the same general harmful conditions.”  A New York appellate court has held that this arguably expanded definition was still not sufficiently broad to encompass curtain wall deficiencies and improper workmanship.  So there was no insurance coverage for the damages and remedial work.

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Duane Morris Construction Law

Duane Morris’ acclaimed Construction Group shares insights on legal developments impacting the business of construction.

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