CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - TUESDAY, JUNE 9, 2026

Gavel scale

The claim was based on rain and wind that caused extensive water intrusion into the Sanctuary, damaging its plaster walls and ceilings and fresco paintings.

Bad Faith Claim Survives Summary Judgment

June 8, 2026
Tred R. Eyerly - Insurance Law Hawaii

The court denied the insurer’s motion for partial summary judgment on the insured’s bad faith claim, but granted the motion on the insured’s claim for punitive damages. Serbian Orthodox Church v. Brotherhood Mut. Ins. Co., 2026 U.S. Dist. LEXIS 58234 (S.D. Cal. March 19, 2026).

On February 1, 2023, the Church filed a claim for water damage with Brotherhood Mutual Insurance Company (BMIC). The claim was based on rain and wind that caused extensive water intrusion into the Sanctuary, damaging its plaster walls and ceilings and fresco paintings. The claim was assigned to Patrick Hurley. Hurley sent a letter discussing potential bars to coverage and requesting further information and documents from the Church.

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

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

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CDJ NEWS THIS WEEK

Signing contract

Attorney-client privilege is a critical protection to safeguard your interests, especially your construction interests.

Safeguarding Your Privileged Construction Information With a Clawback Agreement

June 8, 2026 — Laura Fraher - Construction Executive

For contractors and construction executives, a dispute that escalates to litigation brings risks that go well beyond the jobsite. When a dispute escalates to litigation, the attorney-client privilege is a critical protection to safeguard your interests. Disclosing privileged material can undermine your litigation position and, in some cases, negatively impact your business. In the construction context, this often includes sensitive communications about project delays, defect investigations, safety incidents or payment disputes—materials that can significantly impact both liability and reputation.

During litigation, the discovery process requires the exchange of documents and data with your adversary. If privileged materials are disclosed to your adversary during discovery you risk the waiver of your privilege, which in plain terms means you lose the protection of the privilege and make the privileged information, and in some cases all other information related to the same subject matter, available to your adversary. It is critical that your attorney take steps to protect against the unintentional disclosure of privileged materials during discovery to avoid a waiver.

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

Ms. Fraher may be contacted at lfraher@barclaydamon.com

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Illustration of person pulling electrical plug

One important consideration, which this article focuses on, is navigating termination of a modular subcontractor.

Pulling the Plug, Preserving the Product: Protecting Rights to a Modular Subcontractor’s Work Post-Termination

June 8, 2026 — Paul Williamson - ConsensusDocs

Volumetric Modular Construction (VMC) is a building method where a structure is divided into large components or modules, fabricated in an offsite factory and then transported to a construction site for assembly.[1] Proponents of VMC hail it as a cost-efficient alternative to traditional building methods that leads to more consistent quality and shorter construction duration.[2] Due to a growing labor shortage, high demand for compressed project schedules, and stagnant construction productivity rates, the construction industry is embracing VMC.[3] A recent report on the market size of prefabricated construction estimates that from 2026 to 2031, VMC will grow at a compound annual growth rate of 7.16% and become a 413.11-billion-dollar industry.[4]

As VMC becomes more prevalent, owners, general contractors, and subcontractors must consider how to effectively contract for modular construction. One important consideration, which this article focuses on, is navigating termination of a modular subcontractor.

Mr. Williamson may be contacted at pwilliamson@pecklaw.com

Reprinted courtesy of Paul Williamson, Peckar & Abramson, P.C.

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Stars Celebration

This marks two consecutive years of recognition for Masters by this prestigious international attorney rating resource.

Newmeyer Dillion Partner Jeff Masters Recognized by Chambers USA for Representation of Insurance Policyholders

June 8, 2026 — Newmeyer Dillion

NEWPORT BEACH, Calif. – June 4, 2026 – Newmeyer Dillion is proud to announce that litigation partner Jeffrey D. Masters has been ranked among a select group of California lawyers representing insurance policyholders in the 2026 edition of Chambers USA.

This marks two consecutive years of recognition for Masters by this prestigious international attorney rating resource.

"This recognition by Chambers and Partners is a testament to Jeff’s dedication to our clients," said Managing Partner, Paul Tetzloff. "We are thrilled to see his hard work acknowledged and the level of passion and care that he delivers to clients fully recognized."

Reprinted courtesy of Newmeyer Dillion

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Delayed flight

The statute establishes a timeframe within which a policyholder must submit a claim for hurricane damage.

Delay Matters: Florida’s Fourth DCA Reverses Hurricane Irma Dismissal

June 8, 2026 — Andrea DeField, Machaella Reisman & Cary D. Steklof - Hunton Insurance Recovery Blog

The mantra “delay, deny, defend” is frequently referenced in discussions of insurance claims handling, though insurers will invariably disavow these tactics. While it would be facially improper for an insurer to delay a coverage decision to gain a tactical advantage, empirical examples nonetheless exist. This very dynamic was addressed by Florida’s Fourth District Court of Appeals when it handed policyholders a win in Hypoluxo Mariner’s Cay Condo. Assoc’n, Inc. v. Underwriters at Lloyd’s London, No. 4D2024‑2250 (Fla. 4th DCA Apr. 1, 2026), reversing a trial court order dismissing a condominium association’s Hurricane Irma coverage lawsuit against its property insurer.

Delay to Run the Statute of Limitations
Following Hurricane Irma, a condominium association suffered roof and exterior envelope damage, reported an insurance claim, and submitted a sworn proof of loss to its property insurer in compliance with Florida Statute § 627.70132 (2020). The statute establishes a timeframe within which a policyholder must submit a claim for hurricane damage.

Reprinted courtesy of Andrea DeField, Hunton Andrews Kurth LLP, Machaella Reisman, Hunton Andrews Kurth LLP and Cary D. Steklof, Hunton Andrews Kurth LLP

Ms. DeField may be contacted at adefield@hunton.com
Ms. Reisman may be contacted at reismanm@hunton.com
Mr. Steklof may be contacted at csteklof@hunton.com

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Question Mark

The financial hardship damages included personal damages to the contractor’s president and his wife. Are these damages recoverable?

Are “Financial Hardship” Damages Recoverable?

June 8, 2026 — David Adelstein - Florida Construction Legal Updates

In a case out of the Civilian Board of Contract Appeals, F.O.G., LLC v. Department of the Interior, CBCA 8203, 2026 WL 1191881 (CBCA 2026) a contractor claimed damages that included “financial hardship” damages due to slow payments. The financial hardship damages included personal damages to the contractor’s president and his wife. Are these damages recoverable? Drumroll…The Board ruled that the contractor cannot recover such financial hardship damages.

As it relates the personal financial hardship damages, the Board ruled, “Neither [the contractor’s] president nor his wife are a party to this contract, are in privity of contract with [the government], or are the beneficiaries under this contract. [The contractor], therefore, cannot recover for any losses that either one has suffered individually and that [the contractor] claimed in this appeal.” F.O.G., LLC, supra.

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Testifying Construction and Building Industry Standard of Care Expert Witness

General Construction Investigation - Licensed General Building Contractor CA, AZ, UT, FL

Certified Professional Estimator (ASPE) American Society of Professional Estimators

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Energy electricity and solar

Energy companies cannot afford to view federal and state regulatory strategy in isolation.

Navigating the New Frontier of Federal-State Energy Regulation: What Energy Companies Need to Know

June 8, 2026 — Ryan J. Regula - Snell & Wilmer

Introduction
The jurisdictional boundary between the Federal Energy Regulatory Commission (FERC) and the states is being actively contested, from challenges to landmark transmission planning rules to disputes over emergency cost-allocation orders, in ways that carry significant legal, financial, and operational implications for energy companies. For utilities, independent power producers, and transmission developers, understanding these dynamics is now a strategic imperative.

The Jurisdictional Divide: A Bright Line That Isn’t
The Federal Power Act divides authority between FERC and the states: FERC exercises jurisdiction over interstate transmission and wholesale electricity sales, while states retain authority over generation facilities, retail rates, and decisions about resource mix. The D.C. Circuit has regularly been called upon to “referee the Federal Power Act’s jurisdictional line separating [FERC’s] jurisdiction over the federal wholesale market and States’ jurisdiction over facilities used in local distribution.”1

Mr. Regula may be contacted at rregula@swlaw.com

Reprinted courtesy of Ryan J. Regula, Snell & Wilmer

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Data center interior

Blackstone, PIMCO back Related Digital's Oracle campus as Michigan attorney general challenges state regulators' expedited approval of DTE Energy's supply agreements.

Oracle's $16B Michigan Data Center Secures Financing as Power Contracts Face Appeals

June 8, 2026 — Bryan Gottlieb - Engineering News-Record

A $16 billion hyperscale data center under construction outside Ann Arbor, Mich., has secured financing backed by Blackstone and other institutional investors, even as the project's power supply agreements now face a legal challenge before the Michigan Court of Appeals.

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

Reprinted courtesy of Bryan Gottlieb, Engineering News-Record

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Human hand touching AI hand

While there are personal benefits for lawyers who have clients who use AI to ask sophisticated questions, there's also a downside.

My Current Love-Hate Relationship with AI

June 8, 2026 — Garret D. Murai - California Construction Law Blog

It’s early in the relationship, I know. But still, there are some things that bug me. Yet, I also know that it’s a relationship in which leaving is not an option, and even if I could, it’s not to the point where it’s so bad that I would do so. So, if you would, let me gripe a bit.

While there’s been much discussion about AI and, at least in my neck of the woods, a fair amount of discussion about how lawyers can, should, and must use AI or risk becoming discarded into the dustbin of history, much less has been written about clients’ use of AI.

Increasingly, I’ve gotten the sense that my clients are using AI. For example, I had a client ask for confirmation that if he disagreed with an administrative decision that he could file a writ of mandate, and if so, whether that deadline was 30, 60 or 90 days after the administrative decision. The answer to the first question was yes, and as to the second question, the answer was 90 days. This was from a client who, smart as he is, probably didn’t know this off the top of his head.

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

Reprinted courtesy of Garret D. Murai, Nomos LLP

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Five star ranking

Lewis Brisbois, whose Los Angeles office is led by Co-Managing Partners Jana I. Lubert and Kathleen Walker, has 273 attorneys working in LA County, including 167 partners.

Los Angeles Times Ranks Lewis Brisbois Third Largest Firm in LA County, Largest for Litigation

June 8, 2026 — Lewis Brisbois

The Los Angeles Times has ranked Lewis Brisbois the third largest firm in LA County by attorney headcount, and first for number of litigation attorneys.

Lewis Brisbois, whose Los Angeles office is led by Co-Managing Partners Jana I. Lubert and Kathleen Walker, has 273 attorneys working in LA County, including 167 partners.

The firm ranked No. 1 for Litigation in the county, with 206 attorneys under the leadership of Partner Craig Holden.

Reprinted courtesy of Lewis Brisbois

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PFAs Test

Because reporting obligations apply retroactively to the start of the year, affected facilities must quickly evaluate their compliance and recordkeeping practices.

EPA Expands PFAS Reporting Requirements with Addition of New Chemical to Toxics Release Inventory, Published by Law360

June 8, 2026 — Gordon Rees Scully Mansukhani

The U.S. Environmental Protection Agency’s (EPA) addition of sodium perfluorohexanesulfonate (PFHxS-Na) to the Toxics Release Inventory (TRI) introduces new federal reporting requirements for businesses that manufacture, process, or use the chemical. Because reporting obligations apply retroactively to the start of the year, affected facilities must quickly evaluate their compliance and recordkeeping practices.

In a recent Law360 article, Gordon Rees Scully Mansukhani Senior Counsel, Ayodeji Ayolola, explains why PFHxS-Na was automatically added to the TRI, how the EPA’s public reporting system works, and which businesses may be affected by the new rule. The article also touches upon key compliance considerations, including supply chain reviews, reporting thresholds for chemicals of special concern, and preparation for public disclosure requirements.

Reprinted courtesy of Gordon Rees Scully Mansukhani

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New Office

The expansion marks another milestone in the firm’s continued growth and deepens SDV’s ability to serve clients across the region.

Saxe Doernberger & Vita, P.C. Expands with New Office in Foxborough, Massachusetts

June 8, 2026 — Saxe Doernberger & Vita, P.C.

Foxborough, MA — April 1st, 2026— Saxe Doernberger & Vita, P.C. (SDV), a national law firm focused exclusively on representing policyholders in insurance coverage disputes, is pleased to announce the opening of its new office in Foxborough, Massachusetts. The expansion marks another milestone in the firm’s continued growth and deepens SDV’s ability to serve clients across the region.

The new location strengthens SDV’s presence in Massachusetts and expands the firm’s capacity to support both existing and anticipated client needs in an increasingly complex insurance landscape.

Reprinted courtesy of Saxe Doernberger & Vita, P.C.

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User Guide

The 2026 edition expands and updates energy-focused content to reflect the increasingly central role of power procurement, interconnection and long-term energy strategy in data center development.

Introducing the Updated 2026 Pillsbury Guide to Data Centers

June 8, 2026 — Gravel2Gavel Team - Gravel2Gavel Construction & Real Estate Law Blog

Since the initial publication of the Pillsbury Guide to Data Centers in 2025, the market has continued to evolve—most notably with respect to power availability, energy strategy, tax and incentives planning, and investment activity across the sector. While many of the legal, commercial and regulatory frameworks addressed in the original Guide remain durable and relevant, recent developments warranted targeted updates and additions.

The 2026 edition expands and updates our energy-focused content to reflect the increasingly central role of power procurement, interconnection and long-term energy strategy in data center development. We have incorporated new materials addressing power purchase and interconnection agreements, solar and other renewable energy solutions, advanced reactor designs, and nuclear-powered data centers projects, including an updated project tracker. We have also added new analysis covering state and local tax considerations and incentive structures relevant to data center development and operations, as well as current M&A and private equity trends shaping investment in the sector.

Reprinted courtesy of Gravel2Gavel Team

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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

(800) 482-1822

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Welcome to Polk County

LGI Homes Introduces New Community to the Growing Polk County, Florida Market

June 8, 2026 — LGI Homes, Inc.

LAKE WALES, Fla., April 21, 2026 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) is proud to announce the grand opening of Citrus Place, a remarkable new community in the charming town of Babson Park within Polk County, in the heart of Central Florida. Homes start in the high-$200s, providing exceptional value to area homebuyers.

Citrus Place offers homeowners a unique opportunity to own a brand-new home in a peaceful setting while maintaining close proximity to everyday conveniences. Ideally located in southern Polk County just minutes from Highway 17 and less than ten minutes from Downtown Lake Wales, residents will enjoy easy access to local shopping, dining, entertainment and major employment centers, making it an ideal location for families and professionals alike.

Reprinted courtesy of LGI Homes, Inc.

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San Francisco Skyline at Sunrise

San Francisco Feels the Headwinds of the AI Wave

June 8, 2026 — C.J. Schexnayder - Engineering News-Record

Those animal spirits have spilled over to the AEC sector, according to Swinerton’s Peter Hau. “San Francisco serves as the epicenter of AI, leading to stronger office-related construction than neighboring markets,” he explains.

Mr. Schexnayder may be contacted at schexnayderc@enr.com

Reprinted courtesy of C.J. Schexnayder, Engineering News-Record

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Global network

Global Insights Center: Monthly Newsletter

June 8, 2026 — Global Insights Center Staff - The Hartford

May in Review
Last month, inflation moved higher, with Consumer Price Index (CPI) inflation rising to 3.8% year over year, up from 3.3% the prior month. The increase was driven primarily by energy prices, particularly gasoline, reflecting ongoing disruptions tied to the Middle East conflict.

Labor market data were broadly stable. The unemployment rate remained unchanged at 4.3%, wage growth increased modestly to 3.6%, while job growth continued to be geographically concentrated in the Southern states, particularly cities in Texas. On an occupational basis, healthcare once again led job gains, especially in home health services, a trend we have consistently highlighted. Business formations increased during the month, with notable strength in e commerce and digital services firms. Manufacturing activity also improved, particularly in semiconductors, IT equipment, and natural gas–related energy infrastructure.

Reprinted courtesy of Global Insights Center Staff, The Hartford

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Seminar

Washington Construction Law Seminar

June 8, 2026 — Beverley BevenFlorez – CDJ Staff

This two-day seminar “provides vital updates and in-depth analysis of the latest developments in both Washington State and federal construction law.” Topics to be discussed include “alternative dispute resolution, bankruptcy and receivership, electronic discovery and AI in construction, construction defect litigation, public works bidding, and more.” Attendees will come away “with the knowledge they need to navigate the complexities of the industry, from the nuances of subcontracting and design updates to insurance considerations and legal ethics.”

September 24th-25th, 2026
Courtyard Marriott Seattle Downtown/Pioneer Square
612 2nd Ave
Seattle WA, 98104

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