The Natural Effect of Recording a Lien Bond

Common sense suggests that when a lien has been bonded off, the owner of the real estate need no longer be a party to the lien claim lawsuit.  The Rhode Island Supreme Court has followed the common sense route, dismissing the property owner from a subcontractor’s lawsuit – over the sub’s objection – after a lien bond was recorded.[Read More]

Property Owner Is Strictly Liable for Building Code Violation

The owner of a building open to public use will be strictly liable for damage or injury resulting from a code violation, under a decision issued by Massachusetts’ highest court.  Overruling a 15-year precedent, the court held that strict liability is not limited to code violations affecting fire safety (the essence of a 1999 decision), but applies to any code violation of a building open to public use.[Read More]

Duane Morris Partner Albert Bates, Jr. to Present at the Deloitte Energy Conference

Duane Morris partner Albert Bates, Jr., will be presenting at the 2014 Deloitte Energy Conference: A Global Industry . . . Competing Locally, which will be held on Tuesday, May 13, and Wednesday, May 14, 2014, at the Gaylord National Resort and Convention Center in National Harbor, Maryland. Mr. Bates will serve as a panelist during the Elective Session – Sector Breakouts on Power on May 14, 2014, where he will discuss strategic considerations of major capital projects, including evolving project delivery systems and inherent risks, as well as proactive project risk management and controls[Read More]

Property Owner’s Liability under CERCLA for Unpaid Remediation Subcontractor

A federal appeals court ruled that a landowner is not liable under CERCLA[1] for amounts due to a subcontractor, when the owner had already paid the prime contractor for cleanup work.  The prime contractor, fully paid, failed to make payment to subs and then went out of business.  Although the sub argued that CERCLA required the property owner to pay for cleanup, the court held (decision available here) that the property owner had discharged its obligations under CERCLA when it fully paid the prime contractor for the cleanup work.  The sub still retained lien rights against the property (which allowed partial recovery), but could not rely on the federal cleanup statute as a mechanism to ensure payment from the property owner in these circumstances.

[1]  Comprehensive Environmental Response, Compensation and Liability Act.  The federal law imposes liability on a property owner for the cost of cleaning up contamination on the property. 


Construction Workforce Trends Point to Increased Risk on Construction Projects

Tony Dungy once stated, "It’s not necessarily who has the most talent but what team sticks together and executes their fundamentals the best." This success principle – executing on the fundamentals – applies unforgivingly in construction, an industry where every mistake must be corrected, every cost accounted for and every delay in work comes at significant costs.  Numerous construction professionals have pointed out that executing fundamentals has become more difficult in the construction industry for a number of reasons, including contractor and subcontractor defaults, international procurement, transitions in how risks are contractually apportioned, and increasingly specialized construction materials and methods of construction, among others.  And by numerous accounts, keeping a "team [that] sticks together" will become increasingly difficult too, as workforce availability problems look to be both abrupt and sustained. 

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Waiver of Subrogation – “Work” versus “Non-Work”

The Indiana Court of Appeals has been busy addressing the scope of subrogation waivers.  The latest decision is an argument over whether the waiver extends to property that is not part of the contractor’s “Work” (as defined in the AIA contract form used by the parties).  The court[1] decided to follow what has been referred to as the majority rule on this issue, and held that the waiver of subrogation bars subrogated claims concerning non-Work property.  I wrote about a similar case on a related issue just last month.

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Managing Snow and Weather Related Delays on a Construction Project

This winter it seems like no one has been able to escape the fury of Mother Nature.  As a result, construction projects all over the country are now behind schedule.  Because “time is money” for all of the project participants, disputes related to time extensions, liquidated damages, acceleration claims, and other delay damages are expected.  In anticipation of these disputes, contractors and owners should review their contracts and consult with an attorney before submitting or responding to a weather related claim.

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Recent Changes in New York City's Standard Construction Contract

With its new Standard Construction Contract, issued in December 2013, the City of New York (the "City") has implemented numerous significant changes as compared with its 2008 standard contract.[Read More]

Arbitrator Jurisdiction: Don’t Just Talk the Talk, But Walk the Walk

Can a party repeatedly object to the arbitrator’s jurisdiction, continue in the arbitration process, and then contest the arbitration award after the fact?  That issue was recently considered by a federal court in Michigan.[1]  The court held that a subcontractor who filed a counterclaim and participated in discovery and arbitration hearings, had waived its rights to contest the jurisdiction of the arbitrator, despite written objections periodically placed on the record.  This is another warning to those who want or need to seriously challenge the jurisdiction of arbitrators: don’t continue in the process if you’re going to object to arbitrability!

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Bertha and the Big (or not so big) Warranty

The tunnel-boring machine Bertha has been halted underneath Seattle for more than two months.  The most recent news is that seals protecting the TBM’s bearings may need to be repaired or replaced.  Another tidbit of news is that Bertha is still under warranty.  Do you think Bertha will be extracted from the partially-completed tunnel, packed up and shipped back to the manufacturer for repair or replacement?  You laugh, but the scope of a construction-related warranty is the stuff of major battles.[Read More]

Waiver of Subrogation – Two Reminders

Diesel fuel is spilled during renovation of a library, damaging both the work in progress and the surrounding building or land.  Damages may exceed $500,000, but the owner’s pollution coverage is apparently limited to $5,000.  Is the owner barred from pursuing the contractor and others based on the waiver of subrogation language in the contract?  The Indiana Court of Appeals focused on one issue in its analysis:[1] that the waiver of subrogation applies only to claims paid relative to the “Work”, and not to other surrounding elements that were damaged.  A second issue seems to an outsider to be equally if not more important: the waiver does not apply if the insurance policy has not covered the damage.[Read More]

Duane Morris' Robert Hendrickson and Ron Oliner on "Public Works Projects and Municipal Bankruptcies"

The good news is that public works construction projects for municipalities are projected to remain a major sector of construction activity for the foreseeable future. The not-so-good news is that municipal bankruptcy filings are on the rise, and they are likely to increase. [Read More]

Lifespan of a Bridge Span

Reports of the prematurely-deteriorating Champlain Bridge in Montreal have sparked renewed discussion about the lifespan of major bridges.  The Champlain Bridge, completed in 1962 with an expected lifespan of 100 years, has had significant deterioration, much attributed to a $2 million savings at the time of its construction; see commentary here.  In short, the combination of pre-stressed concrete girders and the lack of a drainage plan resulted in an influx of salt-infused water from winter road-salting operations, and deterioration of the pre-stressing cables.  The replacement is estimated to cost between $3 and $5 billion.[Read More]

Personal Privacy vs Public Records Laws (prevailing wage version)

Contractors on prevailing wage projects must submit certified payroll reports to the public authority.  To what extent is that information subject to a public records request?  A New York appellate court recently confronted that issue and ruled in favor of privacy.[1][Read More]

Strict Liability Standard for Prevailing Wage Law Violation

The Massachusetts high court has applied a strict liability standard to the prevailing wage law, similar to standards applicable to other employment wage laws.  The fact that one violation arose from a clerical error, discovered and rectified even before the citation issued, was no defense.  A contractor can be liable for penalties even for unintentional violations.  This is a cautionary tale for all contractors.

[Read More]

Duane Morris Construction Law

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

« April 2014
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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.