New York Considering Legislation That Would Create Statute of Repose For Construction

Woman head next to clock

New York currently remains the only state without a statute of repose for construction.

April 5, 2021
Richard W. Brown & Anna M. Perry - Saxe Doernberger & Vita, P.C.

New York is considering legislation, which, if enacted, would create a statute of repose limiting the number of years after completion of a construction project that legal action may be asserted against a contractor. New York currently remains the only state without a statute of repose for construction. Earlier this year, however, the New York State Legislature introduced Bills S04127 and A01706 (the “Bill”) , which would impose a 10-year period of repose in which an injured party may bring suit against a design professional and/or a contractor for bodily injury or property damage resulting from a construction defect.

Currently, contractors and design professionals have exposure to bodily injury and property damage claims resulting from construction defects for an unlimited number of years after completion of a project. If enacted, the Bill would limit the period of repose to 10 years after the project is completed, which is deemed to occur upon substantial completion or acceptance by the owner. An additional 1-year grace period is provided for an injured party to file suit where bodily injury or property damage occurs in the tenth year after completion. The Bill notably limits the applicability of the 10-year statute of repose to third-party actions and thereby preserves the existing 3-year and 6-year statutes of limitation applicable to actions asserted by an owner or client for professional malpractice and breach of contract, respectively.

Reprinted courtesy of Richard W. Brown, Saxe Doernberger & Vita, P.C. and Anna M. Perry, Saxe Doernberger & Vita, P.C.

Mr. Brown may be contacted at RBrown@sdvlaw.com
Ms. Perry may be contacted at APerry@sdvlaw.com


How Biden Can Build Back Better by Investing in Homes

April 5, 2021
Kriston Capps - Bloomberg

U.S. President Joe Biden just signed into law the American Rescue Plan, a $1.9 trillion relief package and his first major piece of legislation. The administration has signaled the next stimulus will focus on infrastructure — but it will have to tackle more than just better bridges and highways.

Infrastructure improvements need to start at home, according to climate advocates and industry executives. More specifically, they see residential investments as the key to jobs, equity and public health — fulfilling the president’s pledge to “build back better.” Grid weatherization, building efficiency upgrades, low-income energy assistance and rebates for retrofits should serve as the engine for the next infrastructure package, according to a new report from the Roosevelt Institute, a think tank, and the Evergreen Collaborative, a climate change advocacy group. They plan to offer lawmakers a suite of detailed policies and options to consider as they craft new legislation.


When Is an Arbitration Clause Unconscionable? Not Often

Question mark in maze

A recent case out of the Western District of Virginia, Marroquin v. Dan Ryan Builders Mid-Atlantic LLC, shows how high a hurdle it is to get a court to invalidate an arbitration provision.

April 5, 2021
Christopher G. Hill - Construction Law Musings

Here at Construction Law Musings, I have discussed the pros and cons of various forms of Alternative Dispute Resolution (ADR), including arbitration. I am a fan of most ADR, but less of one for arbitration than for mediation. However, where the arbitration can be done under a good set of cost-containing rules and with an arbitrator that is experienced in construction, arbitration can help with the resolution of construction claims. Of course, arbitration provisions in construction contracts are routinely upheld by the courts of Virginia with limited exceptions. One of these exceptions is where the arbitration clause is unconscionable and therefore unenforceable. A recent case out of the Western District of Virginia, Marroquin v. Dan Ryan Builders Mid-Atlantic LLC, shows how high a hurdle it is to get a court to invalidate an arbitration provision.

In this case, the Marroquins purchased a new construction home from the Defendants. As is often the case in such purchase transactions, Defendant provided a limited warranty agreement (in this case provided by Quality Builders Warranty Corporation (“QBW”)) that along with the sales contract contained a mandatory arbitration provision. The parties executed the limited warranty and the sale proceeded with the Marroquins taking possession. Over the next year or so, the County inspector’s office issued several correction orders to Defendant, and the Marroquins, through counsel, identified numerous defects in construction, many of which they alleged to remain unremedied. Needless to say, they sued for breach of statutory warranty and for breach of the limited warranty. Defendant removed the case to Federal District Court and then moved to compel arbitration.

Mr. Hill may be contacted at chrisghill@constructionlawva.com


Contractors Prepare for a Strong 2021 Despite Unpredictability

Man jumping and twisting

Despite the uncertainties that lay ahead, here are the few trends predicted to impact the sector 2021 and beyond.

April 5, 2021
Kenny Ingram - Construction Executive

A recent IFS study found many construction and engineering companies are reimagining their business models to ensure a secure future, using the pandemic-induced lull in business to prepare themselves to get back to operations on a strong footing.

The research shows 70% of businesses have increased or maintained digital transformation spend, despite the COVID-19 pandemic. In the infrastructure, engineering and construction sectors the figure is more than 75%.

There are many challenges the industry will face in the new year following the unpredictability of 2020, but there are also many opportunities. Despite the uncertainties that lay ahead, here are the few trends predicted to impact the sector 2021 and beyond.

Reprinted courtesy of Kenny Ingram, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.


New York Regulator Issues Cyber Insurance Guidelines

Businessman using laptop outside

The New York Department of Financial Services recently issued the first guidance by a U.S. regulator on cyber insurance—a Cyber Insurance Risk Framework.

March 29, 2021
Anne Kelley - Newmeyer Dillion

From the rise of ransomware attacks to the recent SolarWinds-based cyber espionage campaign that struck at the very heart of the U.S. Government, it is apparent that cybersecurity is more critical than ever. COVID-19 and the remote workplace has only served to embolden cyber criminals, and cyber risk now permeates nearly every aspect of modern life from health care data to national security.

Cyber insurance plays a critical role in managing cyber risk, and businesses increasingly rely on such coverage to minimize cyber losses. Because of surging cybercrime, it is estimated that the cyber insurance market will increase from $3.15 billion in 2019 to $20 billion by 2025. Having a robust cyber insurance market and ample available coverage is vital to U.S. businesses.

In recognition of this reality, the New York Department of Financial Services recently issued the first guidance by a U.S. regulator on cyber insurance—a Cyber Insurance Risk Framework. A key premise of the Framework is to drive improved cybersecurity and cyber risk management, thereby reducing cyberattacks and ensuring that cyber insurance premiums do not spiral out of control. The Framework recognizes the importance of ensuring a healthy cyber insurance market, and applies to all property/casualty insurers that write cyber insurance.

Ms. Kelley may be contacted at anne.kelley@ndlf.com


Drones: A Valuable Tool for the Construction Jobsite

March 29, 2021
Mike Sobola & Luisa Winters - Construction Executive

Aerial imaging and data gathering via drone is not just a luxury these days, it’s a necessity. Aerial drone data delivers valuable insights during every construction phase, from preconstruction bids to site handoff. There are many ways drones help construction managers save time and money every day.

Reprinted courtesy of Mike Sobola and Luisa Winters, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Sobola may be contacted at mike@midatlanticdrones.com
Ms. Winters may be contacted at luisa@midatlanticdrones.com


Five Steps Employers Should Take In the Second Year Of the COVID-19 Pandemic

Gold five under spotlight

As employers prepare to enter the second year of the COVID-19 pandemic, here are five things they should plan to do.

March 29, 2021
Laura H. Corvo - White and Williams LLP

For the past year, employers faced unprecedented difficulties as they navigated the twists, turns and ever-present challenges the COVID-19 pandemic dished out. A year later, new challenges face employers. The promise of vaccines, the fear of new variants, and the realization that “normal” will never look quite the same, leave many employers to wonder: “what next?”. As employers prepare to enter the second year of the COVID-19 pandemic, here are five things they should plan to do.

1. Update Workplace Safety Measures

At the onset of the pandemic, employers struggled to understand the safety obligations involved in preventing the spread of COVID in the workplace. As we approach the second year of the pandemic, clearer legal standards and better science exist requiring employers to update the steps they are taking to keep their workplaces safe.

Ms. Corvo may be contacted at corvol@whiteandwilliams.com


More on Duty to Defend a Subcontractor

Businessman in super hero pose wearing cape

Attorney Christopher G. Hill discusses Nautilus Ins. Co. v. Strongwell Corp.

March 29, 2021
Christopher G. Hill - Construction Law Musings

While we don’t often discuss insurance coverage issues here at Construction Law Musings, occasionally a case comes up that makes the grade for a post. One such case was Erie Insurance Exchange v. Salvi, where the question of an “occurrence” that warranted coverage and defense under an insurance policy was at issue. That case discussed this key question in a residential construction context based upon poor workmanship. A recent case out of the Western District of Virginia federal court analyzed this coverage issue in the commercial context.

In Nautilus Ins. Co. v. Strongwell Corp., the Court considered a challenge by the insurance company, Nautilus, to its duty to defend based on both the definition of “occurrence” and the definition of “property damage.” Nautilus filed a declaratory judgment action seeking a declaration that it need not either defend or indemnify because the extrinsic evidence (as distinguished from the “eight corners” of the policy) precluded coverage for the types of claims made by an owner and by extension a general contractor in a separate lawsuit.

Mr. Hill may be contacted at chrisghill@constructionlawva.com


California Construction Law Seminar

March 29, 2021
Beverley BevenFlorez – CDJ Staff

The 7th annual California Construction Law seminar will be a live webcast this year from Los Angeles, California. The event will “provide practical advice for real situations facing the industry today” and “will cover the latest developments and issues that you need to understand to complete a successful project.” The seminar is relevant for “contractors, subcontractors, owners (public and private), attorneys, construction managers, bond program managers, surety representatives, architects, and engineers.”

April 29th, 2021
Virtual Event


Ignoring Employee ADA Accommodation Requests Can Be Costly – A Cautionary Tale

Bills coming out of wallet

A recent ruling by the First Circuit Court of Appeals illustrates why employers have a very strong financial incentive to be proactive in adopting and rigorously enforcing their disability accommodation policies.

March 29, 2021
Peter Shapiro - Lewis Brisbois

As all employers should well know by now, the Americans with Disabilities Act (ADA) and many state and local counterparts may require employers to engage in an interactive process in response to a disabled employee’s request for a workplace accommodation. A recent ruling by the First Circuit Court of Appeals illustrates why employers have a very strong financial incentive to be proactive in adopting and rigorously enforcing their disability accommodation policies.

In Burnett v. Ocean Properties, decided on February 2, 2021, a wheelchair user employed by a hotel chain call center complained internally that the office’s entrance was not accessible to him. It had heavy doors beyond which was a downward slope that caused the plaintiff’s wheelchair to roll backwards as the door closed on him, requiring him to exert greater force as he struggled to enter. He asked that push-button automatic doors be installed. The employer did not take any meaningful steps to address the complaint with the plaintiff. Eventually he was injured as he tried to open the door. Still, the employer did not follow up on his accommodation request. The plaintiff eventually filed an administrative charge with the Maine Human Rights Commission. The employer met with the plaintiff at that time, but claimed lack of familiarity with ADA compliance requirements and took no action to address the complaint. The plaintiff eventually resigned and filed suit in federal court when the administrative process was completed.

Mr. Shapiro may be contacted at Peter.Shapiro@lewisbrisbois.com


Everybody Is Going to End Up Paying for Texas' Climate Crisis

Signs with credit loan mortgage

Americans already share the collective financial burden of climate change, even if they don’t realize it.

March 29, 2021
David R Baker & Mark Chediak - Bloomberg

Fallout from last month’s deadly deep freeze in Texas has quietly spread to people living hundreds of miles away. Minnesota utilities have warned that monthly heating bills could spike by $400, after the crisis jacked up natural gas prices across the country. Xcel Energy’s Colorado customers could face a $7.50 per month surcharge for the next two years.

This is a subtle demonstration of the way Americans already share the collective financial burden of climate change, even if we don’t realize it. The national bill for global warming is here, and it’s rising.

Perhaps it’s easier to see this dynamic playing out beyond February’s Texas cold snap. That disaster left dozens dead, stranded millions in dark homes, and sent a shockwave of higher gas prices across the nation. But since there remains scientific uncertainty over the role of global warming, let’s examine two other calamities for which the climate link is clearer: wildfires and tropical storms.


Revamp to Nationwide Permits Impacting Oil and Gas Pipeline, Utility and Telecom Line Work

Construction worker retro illustration on blue background

On January 13, 2021, the United States Army Corps of Engineers published a final rule that reissued and modified twelve existing NWPs and issued four new NWPs that will take effect on March 15, 2021.

March 29, 2021
Alex P. Prochaska, Jones Walker LLP - ConsensusDocs

To avoid delay costs and penalties, contractors involved in pipeline and utilities construction maintenance, repair and removal need to understand how the 43 year old Nationwide Permit (NWP) regime has changed specific to the NWP 12 and what is now required for compliance. This change is important for contractors who construct, maintain, or repair pipelines that cross or impact waters of the United States, including wetlands. NWPs are a useful tool to streamline construction of a pipeline project, but it is important for contractors to know when certain terms and conditions still apply to the particular NWP and those that have been eliminated.

On January 13, 2021, the United States Army Corps of Engineers (the Corps) published a final rule that reissued and modified twelve existing NWPs and issued four new NWPs that will take effect on March 15, 2021.1 The remaining 40 NWPs that were not reissued or modified under this rule will continue under the general conditions and definitions of the January 6, 2017 final rule.

Mr. Prochaska may be contacted at aprochaska@joneswalker.com


Seven Trends That Impact Commercial Construction Litigation in 2021

Business people staring at laptop screen with concern

These seven trends will have the greatest impact on commercial construction.

March 29, 2021
Jeffrey Kozek & E. Mitchell Swann - Construction Executive

2021 stands to bring sizeable change to the commercial construction industry as trends that had been on the horizon meet the impact of the pandemic. That means it will be even more important for architects, engineers, contractors and owners to prioritize revisiting their project plans as the industry adapts so that they can better reduce their likelihood of facing litigation down the line.

While many in the industry will struggle to react to the ongoing environment, building stronger contractual understanding and preparedness to adapt could be the difference in being able to complete the work and move onto the next project in a timely manner. Meanwhile, contractors are using a wider usage of technologies for improved project communication and efficiency.

In the coming year, there are seven trends will have the greatest impact on commercial construction.

Reprinted courtesy of Jeffrey Kozek and E. Mitchell Swann, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.


Unclear Sublimits Inapplicable to Superstorm Sandy Damage

March 29, 2021
Tred R. Eyerly - Insurance Law Hawaii

The Supreme Court of New Jersey found the policies' sublimits were not applicable to reduce coverage for property damage caused by Superstorm Sandy. N.J. Transit Corp. v. Certain Underwriters at Lloyd's London, 2021 N.J. LEXIS 4 (Jan. 27, 2021).

At the time Superstorm Sandy struck New Jersey, the New Jersey Transit Corporation (NJ Transit) had a $400 million multi-layered property policy program through eleven insurers. When NJ Transit sought coverage for water damage to its property caused by the storm, some of the insurers invoked the $100 million flood sublimit and declined to provide coverage up to the policy limit. NJ Transit filed suit for a declaratory judgment. The trial court found that the $100 million flood sublimit did not apply to NJ Transit's claims. Summary judgment was entered for NJ Transit.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Federal Judge Strikes Down CDC’s COVID-19 Eviction Moratorium

Gavel illustration

With this ruling, the most significant prohibition on residential evictions for nonpayment of rent is likely to be lifted, and many residential evictions halted or delayed under the Order may begin in earnest.

March 29, 2021
Zachary Kessler, Amanda G. Halter & Adam Weaver - Gravel2Gavel Construction & Real Estate Law Blog

A federal judge in Texas has declared the Centers for Disease Control and Prevention (CDC) eviction moratorium unconstitutional, holding that Article I’s power to regulate interstate commerce and enact laws necessary and proper for such regulation does not include the power to suspend residential evictions on a nationwide basis. While the court stopped short of issuing immediate injunctive relief, instead relying on the CDC to “respect the declaratory judgment” and withdraw the Order, the court stated that such relief would be available if the government does not comply with the decision. With this ruling, the most significant prohibition on residential evictions for nonpayment of rent is likely to be lifted, and many residential evictions halted or delayed under the Order may begin in earnest. While additional tenant protections remain in certain locales, this federal ruling increases the likely rate and pace of residential eviction activity across the country.

The CDC Eviction Moratorium was a nationwide order enacted under the Trump Administration in an effort to reduce the adverse economic impacts of the ongoing COVID-19 pandemic on residential tenants, and as a public health measure to prevent displacement of individuals into living situations conducive to the spread of the COVID-19. The Order allowed tenants facing eviction due to financial strains caused by the pandemic to certify in writing to their landlord that they are unable to pay full rent and that eviction would likely lead to homelessness or force the individual into unsafe congregate or shared living quarters. The CDC issued the order under its emergency pandemic powers under the Public Health Service Act. Initially in effect through December 31, 2020, the Order was subsequently extended through March 31, 2021.

Reprinted courtesy of Zachary Kessler, Pillsbury, Amanda G. Halter, Pillsbury and Adam Weaver, Pillsbury
Mr. Kessler may be contacted at zachary.kessler@pillsburylaw.com
Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Mr. Weaver may be contacted at adam.weaver@pillsburylaw.com


Dispute Resolution Provision in Subcontract that Says Owner, Architect or Engineer’s Decision Is Final

Angry senior couple having argument

Attorney David Adelstein analyzes F.H. Paschen, S.N. Nielsen & Associates, LLC v. B&B Site Development, Inc.

March 29, 2021
David Adelstein - Florida Construction Legal Updates

In subcontracts, it is not uncommon to see a provision that says something to the effect:

Should any dispute arise between the parties respecting the true construction or interpretation of the Plans, Specifications and/or the Contract Requirements, the decision of the Owner or the Owner’s designated representative as set forth in the General Contract shall be final.

This is a provision in a subcontract dealing with dispute resolution, typically when there is a dispute as to whether the subcontractor is performing extra-contractual or base contract work regarding an “interpretation of the Plans, Specifications, and/or the Contract Requirements.” It is not uncommon for there to be a dispute as to whether certain work is within the subcontractor’s scope of work or outside the subcontractor’s scope of work and subject to a change order.

Mr. Adelstein may be contacted at dma@kirwinnorris.com


The Housing Boom That Never Ends Already Wiped Out All the Short-Sellers

March 29, 2021
Ari Altstedter & Kevin Orland - Bloomberg

In December, Aaron Moore bought an unremarkable three-bedroom house in the Toronto suburb of Brampton and, after throwing on a fresh coat of paint and laying down new hardwood floors, put it right back on the market.

In March, he found a buyer. The price tag: C$810,000 (about $649,000), a stunning 28% more than he had just paid.


The Show Must Go On: Shuttered Venues Operators Grant Provides Lifeline for Live Music and Theater Venues

Theater red curtain over stage

On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was signed into law, creating a $15 billion fund for grants to shuttered venues to be administered by the SBA Office of Disaster Assistance.

March 29, 2021
David Rao - Snell & Wilmer Real Estate Litigation Blog

Although it’s been a tough twelve months for many live music venues, movie theaters, and performing arts organizations, help may finally be around the corner. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was signed into law, creating a $15 billion fund for grants to shuttered venues to be administered by the Small Business Administration’s (“SBA”) Office of Disaster Assistance. The law states that Shuttered Venues Operator Grants (“SVOGs”) will be made available to the following entities and individuals:

  1. Live venue operators or promoters;
  2. Theatrical producers;
  3. Live performing arts organization operators;
  4. Relevant museum operators, zoos, and aquariums which meet specific criteria;
  5. Movie theater operators;
  6. Talent representatives; and
  7. Each business entity owned by an eligible entity that also meets the eligibility requirements.

Mr. Rao may be contacted at drao@swlaw.com


Design Immunity Defense Gets Special Treatment on Summary Judgment

Business men and women in hardhats looking at blueprints

Attorney Garret Murai discusses Menges v. Department of Transportation.

March 29, 2021
Garret Murai - California Construction Law Blog

This may be one that is more for the lawyers than it is for the contractors or owners.

If you’ve ever filed a motion for summary judgment or summary adjudication you know the standard is clear. You’re going to lose if the court finds a disputed issue of material fact. In other words, since summary judgment or summary adjudication is such an extreme remedy – you win without having to go to trial after all – the standard is pretty high. Thus, if there’s a dispute as to a material fact (was the light green or was it red?) it’s enough that the court will deny your motion.

That is, unless you’re seeking summary judgment or adjudication on a design immunity defense as the next case, Menges v. Department of Transportation, Case No. G057643 (December 24, 2020), reveals.

Mr. Murai may be contacted at gmurai@nomosllp.com


Force Majeure Under the Coronavirus (COVID-19) Pandemic

Businesswoman holding contract

When events occur, however, that are beyond our control (such as a national pandemic), it is important to review and understand what contract provisions or avenues are available for potential relief.

March 29, 2021
Lindsay T. Watkins - Ahlers Cressman & Sleight PLLC

As COVID-19 disrupts work and life as we know it, the question many contractors have is what protections are available against the inevitable project impacts and delays? Generally, construction contracts require a contractor to timely perform work until project completion or potentially face damages (liquidated or actual) and possible termination. When events occur, however, that are beyond our control (such as a national pandemic), it is important to review and understand what contract provisions or avenues are available for potential relief.

  1. Review Your Contract For A Force Majeure Provision.
  2. A “force majeure” contract provision is commonly included in construction contracts, service agreements, purchase orders, etc. It typically covers events or conditions that can be neither anticipated nor controlled. These provisions, however, will vary greatly from contract to contract and may not include the language “force majeure” but rather may be included in general delay or impact clauses. For example, some common provisions include:

  • Washington State Department of Transportation Clause (2018 Standard Specifications for Road, Bridge and Municipal Construction): The Contractor shall rebuild, repair, restore, and make good all damages to any portion of the permanent or temporary Work occurring before the Physical Completion Date and shall bear all the expense to do so, except damage to the permanent Work caused by: (a) acts of God, such as earthquake, floods, or other cataclysmic phenomenon of nature, or (b) acts of the public enemy or of governmental authorities; or (c) slides in cases where Section 2-03.3(11) is applicable; Provided, however, that these exceptions shall not apply should damages result from the Contractor’s failure to take reasonable precautions or to exercise sound engineering and construction practices in conducting the Work.

Ms. Watkins may be contacted at Lindsay.Watkins@acslawyers.com



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