Duane Morris Construction Law

June 9, 2025June 9, 2025 by Jose A. Aquino

If It’s Not In The Contract, Don’t Count On Consequential Damages

A recent decision by the New York State Supreme Court, Appellate Division, Fourth Department, in James Vermillion v. The Roofing Guys, Inc., sheds light on the limitations of consequential damages in breach of contract cases. The ruling reinforces the principle that damages are only recoverable if they were reasonably contemplated by both parties at the time the contract was formed.

In this case, the plaintiff hired the defendant to reroof his home. During construction, however, a severe storm caused extensive water damage. The plaintiff sought to introduce expert testimony on damages related to delays—such as increased mortgage rates, rising material costs, and disruptions to financing. However, the trial court excluded this evidence, and the appellate court unanimously upheld that decision.

The appellate court emphasized that consequential damages require clear evidence that both parties anticipated such risks when entering the contract. Here, the agreement focused solely on roofing services and did not address financing risks or potential delays. Because the contract didn’t mention these damages and there was no evidence the parties expected them, the court didn’t allow the plaintiff to recover them.

This ruling underscores the importance of drafting contracts that clearly define the scope of potential damages, especially in construction projects where external factors like weather can significantly impact timelines and costs. To protect against such risks, parties must include specific clauses addressing delays, financing impacts, or other foreseeable complications.

Ultimately, Vermillion reaffirms that courts will enforce contracts as written. If consequential damages are not expressly included, parties may be limited to recovering only direct losses.

Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel at Duane Morris LLP’s New York office, where he is a member of Construction Group, specializing in construction law, lien law, and government procurement law. He is also a member of the Cuba Business Group.

June 6, 2025June 6, 2025 by Jose A. Aquino

Preserving Evidence vs. Protecting Property: A Court’s Perspective

The Appellate Division First Department of the Supreme Court of the State of New York recently issued an order affirming the denial of defendants’ renewed motion for spoliation sanctions in Blinbaum v. Chan. The decision arose from a dispute between neighboring townhouse owners regarding damages allegedly caused by construction work.

In January 2018, the plaintiff and defendants entered into a license agreement granting the defendants temporary access to the plaintiff’s property to complete renovations on defendants’ adjoining townhouse. Under the agreement, the plaintiff had sole discretion over any necessary repairs if damage resulted from the defendants’ work. In January 2020, Plaintiff filed a lawsuit asserting that water infiltration in August 2018 had harmed his townhouse. When additional water infiltration occurred in July 2021, the plaintiff repaired the roof.

Defendants sought spoliation sanctions in May 2022, arguing that plaintiff’s July 2021 repairs violated a court order that allowed an expert inspection of the roof. The trial court denied their motion without prejudice, directing another inspection by June 30, 2023. After the inspection, defendants renewed their motion, submitting an expert affidavit stating that the prior repairs had obstructed a proper assessment. Plaintiff opposed with evidence showing that defendants’ insurer, accompanied by their attorney, had inspected the roof and taken photographs in October 2018, just two months after the plaintiff first reported water damage. Additional inspections were made in 2021 and 2023, with sections of the roof removed at the request of defendants’ expert to provide access.

The First Department concluded that the trial court properly exercised its discretion in denying the defendants’ renewed motion for sanctions. The defendants failed to show that the missing evidence was their only means of defending against the plaintiff’s claims or that the July 2021 repairs impaired their ability to challenge allegations that their construction work caused the damage. Notably, they did not dispute that their insurer and counsel had inspected and documented the roof conditions as early as October 2018. Furthermore, their expert acknowledged during a June 2023 inspection that he could distinguish between the July 2021 repairs and earlier ones.

The appellate court also found that the plaintiff acted within his rights under the license agreement in repairing his roof. Given his assertion that water infiltration had continued since August 2018, the court determined that the repairs did not amount to spoliation. The record further supported that the repairs were undertaken to mitigate ongoing damage, not in bad faith.

The decision highlights the balance courts must maintain between preserving evidence and allowing property owners to protect their homes from further damage. By affirming the trial court’s decision, the First Department reinforced the principle that necessary repairs made in good faith should not be penalized under spoliation doctrine.

This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed herein are those of the author and do not necessarily reflect the views of Duane Morris LLP or its individual attorneys.

June 5, 2025June 5, 2025 by Duane Morris

Chambers USA Recognizes Duane Morris Construction Group and Ten Individual Construction Team Members

Duane Morris is pleased to announce that Chambers USA has once again nationally recognized our Construction Group as well as construction attorneys across the country. We share this honor with our clients and colleagues whose support makes this possible.

Austin

Benton T. Wheatley, Construction

Chicago

Jeffrey L. Hamera, Construction

Charles B. Lewis, Construction

Miami

Scott D. Kravetz, P.A., Construction

New York

Mark Canizio, Construction

Frederick Cohen, Construction

Kenneth H. Lazaruk, Construction and Construction: Mediators

Allen J. Ross, Construction: Mediators

Brian A. Shue, Construction

Philadelphia

Patrick J. Kearney, Construction

June 4, 2025 by Duane Morris

Duane Morris Recognized as a Top 50 Construction Law Firm by Construction Executive

Duane Morris was ranked in the top 10 among the 2025 Top 50 Construction Law Firms by Construction Executive. Selected for excellence and prominence in the field of construction law, this marks the firm’s fifth consecutive appearance in the top 50 list.

Construction Executive is the leading source for news, market developments and business issues impacting the construction industry. To determine the ranking, published in the June 2025 issue, Construction Executive asked hundreds of U.S. law firms with a construction practice to complete a survey. Data collected included: 1) 2024 revenues from the firm’s construction practice; 2) number of attorneys in the firm’s construction practice; 3) percentage of firm’s total revenues derived from its construction practice; 4) number of states in which the firm is licensed to practice; 5) year in which the construction practice was established; and 6) the number of AEC clients served during fiscal year 2024. The ranking was determined by an algorithm that weighted these factors in descending order of importance.

Duane Morris’ Construction Group is nationally ranked by Chambers USA among the leaders in the industry and recognized as a Leading Law Firm in Construction by The Legal 500.

June 3, 2025 by Jose A. Aquino

Construction Liability and Insurance: How State Law Shapes Policy Exclusions

The Arkansas Court of Appeals recently issued a ruling determining that insurance coverage must be provided for both defense and indemnification in a dispute arising from faulty workmanship during flooring installation. The decision, in Nationwide Mutual Insurance Co. v. NWA Restore-It, Inc., 2025 Ark. App. 218, 710 S.W.3d 475 (Ark. Ct. App. 2025), clarifies how exclusions related to completed work and intended use apply in cases where damage occurs during installation rather than afterward.

The dispute began when a contractor installed replacement flooring after a water damage event. Approximately six months after the installation was completed, the flooring started exhibiting defects such as rippling and cracking. Attempts to repair the damage were unsuccessful, leading to a lawsuit alleging improper installation.

The contractor was listed as an additional insured under the installation subcontractor’s commercial general liability policy. After coverage was denied, the contractor sought a judicial declaration that defense and indemnification should be provided. The insurer contested coverage, citing policy exclusions that bar liability for property damage occurring after work has been completed or put to its intended use.

The court rejected these arguments, citing state law that explicitly defines an “occurrence” to include property damage resulting from faulty workmanship. The court found that the underlying complaint alleged damage occurring during installation rather than after completion, meaning that the cited exclusions did not apply.

The ruling distinguished the case from others in which damages were confined to the contractor’s own product. Here, the damage stemmed from the installation, rather than the product itself, which resulted in the court determining that the exclusions did not preclude coverage.

This ruling underscores the significance of statutory definitions in resolving insurance coverage disputes in construction. It establishes that insurers cannot rely solely on policy exclusions when state law has its own definition of covered occurrences.

Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel at Duane Morris LLP’s New York office, where he is a member of both the Construction Group and of the Cuba Business Group, specializing in construction law, lien law, and government procurement law.

April 4, 2025April 4, 2025 by Jose A. Aquino

Court Reinforces Limits on “Piggybacking” in Public Bidding

In New York, “piggybacking” refers to a procurement method authorized by General Municipal Law §103(16), which allows a municipality or school district to purchase goods or services through another governmental entity’s contract without conducting its own bidding process, if certain conditions are met. The original contract must have been awarded through competitive bidding or a process that satisfies the legal equivalent under New York law, and it must permit other public entities to make purchases from it. While intended to promote efficiency and cost savings, piggybacking is strictly limited in scope and is not a blanket exemption from public bidding requirements.

On February 13, 2025, the Supreme Court of New York, Broome County, issued decision in Daniel J. Lynch, Inc. v. Board of Ed. of the Maine-Endwell Central School Dist., addressing the limits of “piggybacking” under General Municipal Law (GML) §103(16) in the context of public construction contracts.

The case arose from a capital improvement project for which the School District awarded a sitework contract to Smith Site Development, LLC. Several contractors, including plaintiff, challenged the award, arguing that the District improperly relied on a piggybacking arrangement to avoid traditional competitive bidding procedures. Specifically, the District piggybacked on a municipal contract that had not been awarded through sealed bidding as required by GML §103.

The Court held that the District’s use of piggybacking was impermissible. The Court found that GML §103(16) only authorizes piggybacking when the original contract was awarded through a process compliant with GML §103’s requirements – namely, public advertisement and sealed competitive bidding. Furthermore, the Court interpreted the statutory term “vendor” as applying only to suppliers of apparatus, materials, equipment, or related services, and not to contractors performing construction or alteration of buildings. Because the original contract did not meet these criteria, the piggybacking arrangement was invalid.

This decision cautions that piggybacking under GML §103(16) is restricted to eligible vendor contracts and cannot be used to bypass competitive bidding rules for construction projects. The ruling provides a clear precedent for challenging awards made through improper reliance on piggybacking.

March 24, 2025 by Jose A. Aquino

Legal Doctrines: The Role of Res Judicata and Election of Remedies in a Construction Dispute

On February 13, 2025, the Appellate Division of the Supreme Court of the State of New York entered a ruling in the case of Alarcon v. Henry, highlighting the significance of adhering to the doctrines of res judicata and election of remedies.

The plaintiff entered into a contract with HKH Construction, Inc., owned and operated by Matthew Henry, for the reconstruction of plaintiff’s home. Alleging that the defendants failed to complete the contracted work, plaintiff filed a complaint with the Nassau County Department of Consumer Affairs (DCA) in April 2019. DCA held an administrative hearing in November 2019, which the defendants did not attend. Consequently, DCA issued a default judgment against the defendants, awarding plaintiff $100,000 and assessing $8,500 in fees.

In response, the defendants initiated a proceeding under CPLR article 78 to review the DCA’s determination. The Supreme Court partially annulled the DCA’s default judgment against Henry but upheld the judgment against HKH Construction.

This appellate court reversed the previous order from the Supreme Court which had denied the defendants’ motion for summary judgment dismissing the complaint. The appellate court’s decision hinged on two key doctrines: res judicata (claim preclusion) and election of remedies.

Res judicata prevents the relitigation of claims that have already been resolved in a prior proceeding. The court noted that the claims raised by plaintiff were previously addressed in the administrative proceeding and the CPLR article 78 proceeding. Despite the default judgment, the court affirmed that such a judgment is considered a judgment on the merits.

Election of remedies bars a plaintiff from pursuing multiple remedies for the same wrong. Plaintiff had the option to file a plenary action but chose to file a complaint with DCA. By fully participating in the administrative process, plaintiff waived the right to seek relief through other procedural avenues.

The decision highlights the finality of default judgments and the necessity for parties to actively participate in legal proceedings.

March 18, 2025 by Jose A. Aquino

Court Upholds Sanctions for Frivolous Filing of Notice of Pendency

In Consumer Protection Restoration, LLC v. Hickory House Tenants Corp., the Second Department of the New York Appellate Division upheld a trial court’s decision to impose sanctions and legal fees on the plaintiffs for filing a frivolous notice of pendency. The plaintiffs initially sought to foreclose on two mechanic’s liens and recover damages for breach of contract and unjust enrichment against the defendant, Hickory House Tenants Corp. (hereinafter “Hickory House”). However, the Supreme Court of Rockland County had previously directed the expungement of the mechanic’s liens under Lien Law § 39, ruling that they were willfully exaggerated.

Subsequently, the plaintiffs filed a notice of pendency against Hickory House’s cooperative apartment complex in relation to their sole remaining claim for unjust enrichment. Hickory House moved to impose sanctions, arguing that the notice of pendency was frivolous.

The Second Department affirmed the lower court’s ruling that the plaintiffs’ notice of pendency was frivolous and upheld the imposition of sanctions. The court reiterated that a notice of pendency is proper only when a plaintiff’s claim directly affects the title, possession, use, or enjoyment of real property. In this case, the plaintiffs’ unjust enrichment claim did not implicate a property interest in a manner that justified filing a notice of pendency.

The ruling underscores the judiciary’s willingness to impose financial consequences on litigants who file a notice of pendency without a legitimate property interest claim.

March 5, 2025March 5, 2025 by Jose A. Aquino

The Impact of Corrective Work on Performance Bond Deadlines: A Case Study

The recent decision in BCC Housing Development Corp. v. LPCiminelli, Inc., entered on February 27, 2025, by the New York Supreme Court, Appellate Division, Third Department, addresses the enforcement of contractual time limits in performance bonds and clarifies when a contractor’s work is considered complete under a construction contract.

BCC Housing Development Corp. (“BCC”) engaged LPCiminelli, Inc. (“LPCiminelli”) to construct student housing for SUNY Broome Community College. As required by the contract, LPCiminelli executed a performance bond issued by defendant Liberty Mutual Insurance Company, as surety. The bond required that any action on the bond be commenced within two years after the contractor stopped work. Substantial Completion of the project occurred in August 2014. The building housed students starting in the 2014–2015 academic year. The Final Payment was made in June 2015. However, construction defects required LPCiminelli to perform corrective work until September 2017. After LPCiminelli stopped performing corrective work without rectifying all the defects, BCC commenced an action against the performance bond in August 2019.

Under the construction contract, the LPCiminelli was responsible for correcting non-conforming work discovered after Final Payment. LPCiminelli was required to promptly correct work rejected by BCC or failing to conform to the contract documents, whether discovered before or after Substantial Completion. If non-conforming work was found within a year of Substantial Completion, the contract required LPCiminelli to correct it.

Defendants argued the lawsuit was untimely, claiming the two-year period started with Substantial Completion or Final Payment. BCC countered that the deadline should run from September 2017, when corrective work stopped. The trial court ruled in favor of BCC, finding that the contractor’s continued performance of corrective work rendered the lawsuit timely. Defendants appealed.

The appellate court affirmed, emphasizing that the terms of the contract must be interpreted according to their plain meaning. Since LPCiminelli was required to remedy defects discovered after completion, its corrective work was part of the contract. The court stated:

“[I]t is manifest that the terms of the contract placed a continuing obligation on LPCiminelli to perform corrective work, which it had done until September 2017. As such, substantial completion was not synonymous with cessation of work nor was the fact that final payment had become due indicative of the same.”

Performance bonds are strictly construed against the surety. Given the contract’s wording, the lower court determined that the work terminated in September 2017, when LPCiminelli stopped corrective work. Since BCC filed suit in August 2019, within the two-year contractual limitations period, the claim was timely. The appellate court upheld the denial of defendants’ summary judgment motion, emphasizing that corrective work can extend the timeframe for performance bond claims.

The decision underscores the role of contract language in determining claim deadlines under performance bonds. Notably, depending on the terms of the contract, ongoing defect correction work can extend the limitations period, thereby affecting the timing of actions against the bond.

Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Cuba Business Group. Mr. Aquino focuses his practice on construction law, lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.

February 24, 2025February 24, 2025 by Jose A. Aquino

FEMA’s Withdrawal from Building Code Development

For approximately 25 years, the Federal Emergency Management Agency (FEMA) has been involved in developing building codes to help homes withstand natural disasters. However, the Trump Administration has recently halted these efforts, withdrawing FEMA’s involvement from the latest building code improvements.

National Public Radio (NPR) reported that FEMA is withdrawing from the latest effort to improve building codes. This decision has raised concerns among disaster experts about the potential impact on safety and property protection.

Building codes, reviewed every three years by the International Code Council (ICC), are important for disaster resilience. The ICC convenes experts and stakeholders in the building industry to review and improve these codes and is currently developing a new set of standards. The ICC’s International Codes are being updated for a 2027 version. FEMA’s involvement has encouraged states to adopt stronger codes. According to FEMA’s “Building Codes Save: A Nationwide Study,” modern building codes have led to significant reductions in property losses from natural disasters, avoiding at least $32 billion in losses over a 20-year period.

The decision to cease work on stronger building codes could affect efforts to improve construction practices, potentially leaving a gap in disaster preparedness and response.