CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - TUESDAY, FEBRUARY 10, 2026

Man with empty wallet

A Superior Court ruling illustrated the potentially draconian consequences of a violation: finding an insurer liable for more than $90 million in bad faith damages, in a case that might have settled under $3 million with proper handling.

Massachusetts Nuclear Verdict Leads To $90M Bad Faith Award

February 10, 2026
Eric B. Hermanson & Timothy J. Langan - White and Williams

Insurers in Massachusetts have long struggled with the demands of MGL ch. G.L.c 176D, § 3(9)(f), which requires “prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” Last month a Superior Court ruling illustrated the potentially draconian consequences of a violation: finding an insurer liable for more than $90 million in bad faith damages, in a case that might have settled under $3 million with proper handling.

The claimant, John Rooney, was a mason who fell off a scaffold at a construction site. He sued the general contractor. The general contractor, in turn, sought coverage as an additional insured under a series of Liberty Mutual policies issued to Rooney’s employer – the masonry company – with combined aggregate limits of $19.5 million.

Reprinted courtesy of Eric B. Hermanson, White and Williams and Timothy J. Langan, White and Williams

Mr. Hermanson may be contacted at hermansone@whiteandwilliams.com
Mr. Langan may be contacted at langant@whiteandwilliams.com

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CDJ NEWS THIS WEEK



Small lawyer challenging giant gavel (illustration)

The plaintiff homeowners challenged the association’s decision in court, and after extensive—and costly—litigation, the court ultimately determined that the dispute was not yet ripe for judicial review.

Midwest Team Secures Resolution of Matter for Homeowners’ Association Client, Recovery of Attorneys’ Fees

February 10, 2026 — Lewis Brisbois Newsroom

Kansas City/Wichita Partner Alan L. Rupe and Kansas City Associate Delaney McCoy recently achieved a victory on behalf of their client, a homeowners’ association that was sued after denying a solar panel application. The plaintiff homeowners challenged the association’s decision in court, and after extensive—and costly—litigation, the court ultimately determined that the dispute was not yet ripe for judicial review.

With that threshold issue resolved, the parties were able to work collaboratively to address the solar panel matter itself. But one significant question remained: whether the association was entitled to recover its legal fees under the declaration, despite the American Rule, which generally requires each party to bear its own costs. The client felt understandably taken advantage of because this issue could—and should—have been resolved without litigation. Considerable time and resources were diverted from the community for the advantage of a single household, so the Lewis Brisbois team continued to advocate for the association’s contractual right to recover fees. After oral argument, the Court agreed, enforcing the fee‑shifting provisions in the governing documents and ruling in favor of the homeowners’ association.

Reprinted courtesy of Lewis Brisbois

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Palm Trees swaying in Hurricane

They reported trees collapsing onto the house and blocking the front door, broken windows and doors, water damage and the roof collapsing in certain rooms of the house.

Insurer Granted Summary Judgment, in Part, After Partial Payment of Claim

February 10, 2026 — Tred R. Eyerly - Insurance Law Hawaii

The insurer was awarded summary judgment, in part, after paying a portion of the insured’s claim for hurricane damage. Taylor v. State Farm Fire & Cas. Co., 2025 U.S. Dist. LEXIS 231406 (S.D. Ala. Nov. 24, 2025).

The Taylors’ home was damaged by Hurricane Sally. They submitted a claim under their homeowners’ policy to State Farm. They reported trees collapsing onto the house and blocking the front door, broken windows and doors, water damage and the roof collapsing in certain rooms of the house.

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

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Construction plans hardhat pencil

Typically, when discussing rework, one thinks of the labor and material costs, but there are other costs associated with rework that are less easily quantified.

Reducing Rework on Construction Projects Benefits Budget, Schedule and Financial Loss

February 10, 2026 — Brian Clarke - Construction Executive

The costs of not building it right the first time is statistically staggering—some research suggests up to 20% of the total project costs. This article highlights the costs of re-work, provides a financial worksheet to track the costs of re-work, and a trusted tool to help reduce the impact of re-work.

Typically, when discussing rework, one thinks of the labor and material costs, but there are other costs associated with rework that are less easily quantified:

  • Liquidated damages and related legal costs
  • Potential for increasing safety incidents associated with rework
  • Morale loss due to performing rework
  • Loss of previously trained workers due to delays caused by rework
  • Reputational loss and the inability to bid on future work
  • Challenges of future work to be performed due to schedule delays on a current project

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

Mr. Clarke may be contacted at brianclarke1121@aol.com

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Pen and Gavel lying next to Contract

The words in contracts matter and, in Virginia (as well as other states), most provisions, if not all will be enforced to the letter.

Yet Another Reason That Your Contract Matters

February 10, 2026 — Christopher G. Hill - Construction Law Musings

I have discussed on several occasions the fact that construction contracts matter. The words in contracts matter and, in Virginia (as well as other states), most provisions, if not all will be enforced to the letter. Recently, the Western District of Virginia federal court ruled in a way that reminded me of another reason for a well-drafted contract.

In Rockingham Precast, Inc. v. American Infrastructure – Maryland, Inc. the Western District of Virginia Court considered a motion to transfer the venue to Maryland filed by American Infrastructure. The plaintiff, Rockingham Precast, a Virginia-based company sued in Virginia. American Infrastructure conceded that VA could be a proper forum for the lawsuit but argued that the form was much too inconvenient and costly for the party and non-party witnesses and that the cost made the forum an unfair place to try the case.

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

Reprinted courtesy of The Law Office of Christopher G. Hill

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Negotiation during meeting

Remember, when it comes to contracts, the time to negotiate and enter into mutually agreed upon bargains is on the front end.

Time to Negotiate Limitation on Remedies and Damages Is on the Front End

February 10, 2026 — David Adelstein - Florida Construction Legal Updates

Remember, when it comes to contracts, the time to negotiate and enter into mutually agreed upon bargains is on the front end. And, if the contract is not negotiable, at least you know that and can make the business decision whether you want to accept the bargains and risks. If you don’t, well, you can walk away. Move onto another deal. If you do, then you make the business decision as to the bargains or risk transfers and accept them moving forward. One of those bargains and risks deals with a limitation on damages and remedies.

In a recent dispute dealing with the sale of an aircraft, there was a provision dealing with the buyer and seller’s remedies in the event of a breach. (Similar to a real estate transaction or other buyer-seller scenario.) “Contract section 10.4(a) stated that if the buyer defaulted, the seller’s “exclusive remedies” were to keep the aircraft and the buyer’s deposit. Section 10.4(b) stated that if the seller defaulted by “fail[ing] to deliver the [aircraft] in accordance with the terms of [the contract],” the buyer’s “sole remedies” were the seller’s reimbursement of the buyer’s inspection costs.” Sky Aviation Holdings, LLC v. Aviation Unlimited, 50 Fla.L.Weekly D2658c (Fla. 4th DCA 2025). As you can see, there was a limitation on the seller’s damages.

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Homebuilder woman looking worried

Builders have been seeking ways to work with the White House to improve housing affordability.

White House Explores Opening Antitrust Probe on Homebuilders

February 10, 2026 — Patrick Clark & Leah Nylen - Bloomberg

Trump administration officials are exploring opening an antitrust investigation into US homebuilders as the White House sharpens its focus on tackling the country’s housing affordability crisis.

The Department of Justice could open the probe in the coming weeks, according to people familiar with the discussions. No decision has been made and the administration may abandon the effort without launching an investigation, the people said, asking not to be identified discussing non-public information.

Reprinted courtesy of Patrick Clark, Bloomberg and Leah Nylen, Bloomberg

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Colorado River

With operating rules unsettled, designers and owners are committing to dam, pipeline and pumping projects shaped by physical limits, not governance.

At Lake Powell, Engineering Is Outpacing Colorado River Policy

February 10, 2026 — Bryan Gottlieb - Engineering News-Record

Arizona’s Lake Powell is in trouble. U.S. Bureau of Reclamation modeling shows the reservoir dropped roughly 36 ft between December 2024 and December 2025, a decline that is no longer a warning but an operating condition engineers are designing around.

Mr. Gottlieb may be contacted at gottliebb@enr.com

Reprinted courtesy of Bryan Gottlieb, Engineering News-Record

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Executive Order notebook

The Order mandates expedited federal environmental and historic preservation reviews, directs the development of legislative proposals, and orders an audit of California’s use of HGMP funding.

Executive Order Addresses Wildfire Rebuilding Delays Through Federal Preemption of State and Local Permitting

February 10, 2026 — Olivia LaCasto & Josh Schneiderman - Snell & Wilmer

Quick Take
On January 23, 2026, one year after the Los Angeles wildfires, the President issued Executive Order 14377 directing the Secretary of Homeland Security, acting through the Administrator of the Federal Emergency Management Agency (FEMA), and the Administrator of the Small Business Administration (SBA) to consider regulations that would preempt state and local permitting requirements for federally funded reconstruction projects in the Pacific Palisades and Eaton Canyon areas. The Order mandates expedited federal environmental and historic preservation reviews, directs the development of legislative proposals, and orders an audit of California’s use of Hazard Mitigation Grant Program (HGMP) funding.

Key Provisions
Federal Preemption of State and Local Permitting
The Order directs FEMA and the SBA to consider promulgating regulations that would preempt state or local permitting processes found to have “unduly impeded” the timely use of federal emergency-relief funds by homeowners, businesses, or houses of worship seeking to rebuild. Under the proposed framework, preempted permitting regimes would be replaced with a self-certification requirement, whereby builders would certify to a federal designee that they have complied with all applicable substantive state and local health and safety standards. FEMA would retain authority to review all repairs and construction for compliance with applicable health and safety standards. Proposed regulations must be published within 30 days, with final regulations due within 90 days.

Reprinted courtesy of Olivia LaCasto, Snell & Wilmer and Josh Schneiderman, Snell & Wilmer

Ms. LaCasto may be contacted at olacasto@swlaw.com
Mr. Schneiderman may be contacted at jschneiderman@swlaw.com

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Cash with clock

In 2023 New York overhauled its Prompt Payment Act.

New York Amends Prompt Payment Act: Retainage Above 5% in Private Construction Contracts Now Void

February 10, 2026 — Mark A. Snyder, Levi W. Barrett, Patrick T. Murray & Skyler L. Santomartino - Peckar & Abramson, P.C.

In 2023 New York overhauled its Prompt Payment Act. The 2023 amendments, largely aimed at restricting the amount of retainage that can be withheld on private projects, were unclear about whether parties could contract around the statute, as they can with other provisions of the statute. The State Legislature recently clarified that issue.

On December 19, 2025, New York enacted a new law, tightening the State’s Prompt Payment Act retainage laws by amending the Prompt Payment Act under General Business Law § 757. Under § 757, the new law renders void any contract provision in private construction contracts that requires retainage in excess of 5% of the total contract sum, meaning owners cannot hold more than 5% from their prime contractors and prime contractors cannot hold more than 5% from their subcontractors.

Reprinted courtesy of Mark A. Snyder, Peckar & Abramson, P.C., Levi W. Barrett, Peckar & Abramson, P.C., Patrick T. Murray, Peckar & Abramson, P.C. and Skyler L. Santomartino, Peckar & Abramson, P.C.

Mr. Snyder may be contacted at msnyder@pecklaw.com
Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Murray may be contacted at pmurray@pecklaw.com
Mr. Santomartino may be contacted at ssantomartino@pecklaw.com

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Dispute Woman Lawyer Mediating

Make your decisions on not just your heart, but your economic brain as well.

Don’t Hire Me! (Principle Is Expensive, and Lawsuits Based on Principle Are Even More Expensive)

February 10, 2026 — Melissa Dewey Brumback - Construction Law in North Carolina

I spend a lot of time trying to convince my clients to NOT hire me. I’m not crazy—let me explain. Litigation is costly. Very costly. And it is time consuming. Don’t get me wrong—I will go to Court and fight just as hard as you want me to, but I want you to know what you are facing before you go down that road.

Now, obviously, if you are the one that is being sued, you have no choice but to defend yourself and your Firm. But if you are considering suing someone else, think long and hard about it before you pull the trigger. There are ways to reduce cost, time, and risk: for example, pre-suit or early mediation, or agreeing to arbitration in lieu of trial. But I always want my clients to know that real law is not like Law & Order. Things take time. A trial is often a year or more away from when you first file the lawsuit. Make your decisions on not just your heart, but your economic brain as well.

Ms. Brumback may be contacted at mbrumback@rl-law.com

Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC

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Hand holding Net Zero icons

These actions are part of a broader strategy to maintain grid reliability and meet both escalating energy demand and the state’s ambitious greenhouse gas reduction and zero carbon goals.

ZEC 2.0: New York’s Zero Emissions Credit Program Gets an Extension and a Reboot

February 10, 2026 — Stephen J. Humes & Jason Drogin Atwood - Gravel2Gavel Construction & Real Estate Law Blog

In a landmark move that could shape New York’s energy landscape for decades, state officials have taken steps to both preserve its existing nuclear power facilities and significantly expand its advanced nuclear capacity. These actions are part of a broader strategy to maintain grid reliability and meet both escalating energy demand and the state’s ambitious greenhouse gas reduction and zero carbon goals.

Renewing the Zero Emissions Credit Program
On January 22, 2026, the New York Public Services Commission (PSC) unanimously voted to extend and reboot the Zero Emissions Credit program (now called ZEC 2.0) to ensure that New York’s four upstate nuclear reactors maintain operations through 2049. The program, which began in 2016, is designed to provide revenue subsidies for legacy nuclear facilities that have been facing financial difficulties in New York’s competitive wholesale power markets. State officials have stated that the benefits of ensuring the continued operations of these reactors far outweigh the costs due to the lack of zero-emissions alternatives and the importance of ensuring grid reliability in the face of escalating energy demand from large loads like data centers.

Reprinted courtesy of Stephen J. Humes, Pillsbury and Jason Drogin Atwood, Pillsbury

Mr. Humes may be contacted at stephen.humes@pillsburylaw.com
Mr. Atwood may be contacted at jason.atwood@pillsburylaw.com

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Robot looking at plans

Recent research suggests that the question is less about whether robots can work and more about when and why they deliver real value.

Why and When Construction Robotics Makes Sense

February 10, 2026 — Aarni Heiskanen - AEC Business

In construction, robotics is often discussed in terms of technology: better AI, more capable machines, and robots on job sites. Recent research suggests that the question is less about whether robots can work and more about when and why they deliver real value.

An Aalto University research paper on computer-vision-driven robotic waste sorting offers a valuable lens into this. The researchers use ZenRobotics’ computer-vision-enabled automated system as a case study. The Finnish startup was acquired by Terex, a U.S. company, in 2022.

At first glance, waste sorting might seem like a niche application. But it illustrates a broader economic logic that aligns with findings across the broader body of research on construction robotics.

Mr. Heiskanen may be contacted at aec-business@aepartners.fi

Reprinted courtesy of Aarni Heiskanen, AEC Business

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Consulting Design and Architecture Expert Witness

Forensic Architect CA, AZ, NV, CO, TX, UT, FL, NM, OK - NCARB - National Council of Architectural Registration Boards

California Architectural Registration Board Supplemental Examination Commissioner

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Red arrow reversing course

Dismissal of Negligence Claim against Broker Reversed

February 10, 2026 — Tred R. Eyerly - Insurance Law Hawaii

The Second Circuit reversed the district court’s dismissal of a negligence claim against the insured’s broker for failure to give notice to the insurer. Paro Management Co., Inc. v Willis of New Jersey, Inc., 2025 U.S. App. LEXIS 29289 (2nd Cir. Nov. 5, 2025).

Paro Management Company, Inc. sued its insurance broker, Willis of New Jersey, Inc,, for failing to deliver to Paro’s insurer a notice regarding the presence of lead paint on Paro’s residential property. Paro’s complaint alleged that it instructed Willis to convey the notice to its insurer and Willis promised to do so but did not follow through. Former tenants later sued Paro for damages arising from exposure to lead paint, and Paro’s insurer disclaimed coverage on the ground that it had not been timely notified of the lead paint issue. Paro then sued the insurer seeking a declaration of coverage. Both the former tenants’ lawsuit and the coverage action were pending in New York state court.

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

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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Volume dial at max

Lutnick Met Homebuilders as Trump Dials Up Affordability Push

February 10, 2026 — Sridhar Natarajan, Josh Wingrove & Katy O'Donnell - Bloomberg

Commerce Secretary Howard Lutnick recently met with executives from major homebuilding companies, according to people familiar with the matter, part of President Donald Trump’s push to bolster his standing with voters on the economy.

The administration has held meetings in recent weeks aimed at sounding out the builders on ways to improve housing affordability, according to the people, who asked not to be identified discussing internal matters. Part of those talks centered on what kind of incentives the administration could offer to spur a commitment to construct more homes, one of them said.

Reprinted courtesy of Sridhar Natarajan, Bloomberg, Josh Wingrove, Bloomberg and Katy O'Donnell, Bloomberg

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Upward trend

ABC's Backlog Indicator Rises Slightly in December

February 10, 2026 — Alisa Zevin - Engineering News-Record

The Associated Builders and Contractors' Construction Backlog Indicator reached 8.2 months in December, according to a survey conducted by the organization. The figure rose 0.1 since November but is down 0.1 since December 2024.

Ms. Zevin may be contacted at zevina@enr.com

Reprinted courtesy of Alisa Zevin, Engineering News-Record

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Webinar

BARBRI CLE Live Webinar: Horizontal vs. Vertical Exhaustion of Insurance: Priority of Coverage and Settlement for Below Policy Limits

February 10, 2026 — Beverley BevenFlorez – CDJ Staff

This one-day webinar “will provide insurance counsel with a review of essential issues in horizontal and vertical exhaustion, the interrelationship between the primary carrier's obligation and those of the excess insurer, and best practices to resolve coverage priority disputes.” Attorneys Anna M. Perry of Saxe Doernberger & Vita, P.C. and Scott M. Seaman of Hinshaw & Culbertson LLP will discuss “vertical and horizontal insurance coverage principles, triggering excess policies, and resolving issues with the excess carrier when the primary carrier settles for less than the policy limits.”

June 30th, 2026
Virtual Event

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