CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - MONDAY, OCTOBER 13, 2025

Woman holding up question mark sign

After the project is completed, the real process begins: discussions, mediation, arbitration or litigation?

Court or Arbitration? Why Contractors Can’t Afford to Get this Wrong

October 13, 2025
Matthew DeVries - Best Practices Construction Law

As a construction litigation lawyer, dispute resolution is a recurring issue. It starts before the project begins at the time of contract negotiation, where the parties decide whether to require litigation or arbitration of their disputes. During project performance, disputes can often be addressed formally or informally. And after the project is completed, the real process begins: discussions, mediation, arbitration or litigation?

The Tennessee Court of Appeals recently decided a case that shows how arbitration and litigation can overlap. In Carbon Fiber Recycling, LLC v. Spahn (Oct. 2, 2025), a Tennessee company sued one of its members for misusing confidential information. The company asked the court for damages, an injunction, and to expel the member from the business. The trial court dismissed the case, reasoning that the operating agreement required arbitration in Delaware.

On appeal, the court agreed in part and disagreed in part. It held that the claims for damages and expulsion had to go to arbitration because of the contract language. But it also held that the trial court was wrong to dissolve the temporary restraining order. Even though arbitration was required, the company could still go to court for injunctive relief to stop ongoing harm while the arbitration process moved forward.

Mr. DeVries may be contacted at mdevries@buchalter.com

Reprinted courtesy of Matthew DeVries, Buchalter

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CDJ NEWS THIS WEEK



Roof damage

The insureds claimed their home was damaged in a wind and hail storm.

Insurer Disposes of Bad Faith Claim on Summary Judgment

October 13, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The magistrate judge recommended that the insurer's motion for summary judgment regarding the insured's bad faith claims be granted. Thornton v. HJB State Farm Lloyds, 2025 U.S. Dist. LEXIS 151342 (W.D. Texas Aug. 5, 2025).

The insureds claimed their home was damaged in a wind and hail storm. A claim was submitted and State Farm inspected a couple of days later. The inspection report indicated neither wind nor hail damage to the roof's shingles, but instead noted wear and tear and general deterioration. The report did note "small dents'" on a single vent which was consistent with hail damage. State Farm did not inspect the interior the insureds' home. The insureds verbally described water damage in the kitchen and master bedroom.

State Farm denied the claim. The only covered losses were the dents to the single roof vent and the water damage to the kitchen and bedroom State Farm estimated the replacement cost value (RCV) for these losses was $2,541.81, less that the insureds' deductible. State Farm further stated that the remaining damage resulted from rot and deterioration, neither of which were covered losses under the policy.

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

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

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Man with hand raised in Don't or Stop gesture

There is arbitral immunity and if you were allowed to sue an arbitrator (or judge), it would open up Pandora’s box in a huge negative way.

Quick Note: Don’t Sue Your Arbitrator

October 13, 2025 — David Adelstein - Florida Construction Legal Updates

As you know from prior posts, arbitration is a creature of contract. This means if you want arbitration to resolve your disputes, then include a binding arbitration provision in your contract. If you don’t want to arbitrate disputes, then do NOT include a binding arbitration provision in your contract. But whether you arbitrate or litigate, you may not like the arbitrator or judge that presides over your case. And, you may not like the outcome or rulings made during the course of the dispute. This happens. However, this does NOT mean you can sue an arbitrator (or judge). There is arbitral immunity and if you were allowed to sue an arbitrator (or judge), it would open up Pandora’s box in a huge negative way. In a recent case, discussed here, a party sued an arbitrator. This was quickly disposed of on appeal because of arbitral immunity. Don’t be this party. If this concerns you, i.e., the person presiding over your case, then don’t agree to arbitrate, which does not have appellate rights. Agree to litigation and make it a dealmaker provision when negotiating your contracts.

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Rewrite blocks

The process for submitting a claim to the Contracting Officer and appealing a Final Decision remains the same, with fewer words and less confusion.

Executive Order 14275: Restoring Common Sense to Federal Procurement

October 13, 2025 — Gravel2Gavel Team - Gravel2Gavel Construction & Real Estate Law Blog

Under the President’s Executive Order 14275: Restoring Common Sense to Federal Procurement, the government is undertaking a comprehensive overhaul of the Federal Acquisition Regulation (FAR). Led by the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council), the initiative aims to “return the FAR to its statutory roots,” regulate in plain language, and remove superfluous words and references. On August 27, the FAR Council released its revisions to FAR Part 33, which addresses Bid Protests, Contract Claims and Appeals of Contract Claims. We completed our deep dive into the Subpart 33.2 portion of the rewrite, which addresses claims and appeals. Construction companies that perform government contracts should welcome the changes rather than fear them.

Reprinted courtesy of Pillsbury

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Workers compensation

Through investigation and extensive discovery, it was learned that the plaintiffs initially opened a workers’ compensation claim for the incident but decided not to continue with providing the appropriate information to pursue the claim.

Los Angeles Team Secures Summary Judgment for Client in Wrongful Death Lawsuit over Construction Incident

October 13, 2025 — Lewis Brisbois Newsroom

Los Angeles, Calif. (August 25, 2025) - Los Angeles Partner Heather Hamby and Orange County Partner Steven Gatley recently secured summary judgment in favor of an owner, property developer and project holding company, in a wrongful death lawsuit involving a construction project incident. The Los Angeles Superior Court judge found that there were no triable issues of fact concerning whether or not workers’ compensation coverage would cover the incident.

The lawsuit involved the claims of three plaintiffs, the children and dependents of the decedent, who alleged that the defendants were liable for the severe jobsite injuries and eventual death of their father from the injuries when lumbar beams fell on him while he was working at defendants’ jobsite. The plaintiffs argued that the workers’ compensation exclusivity doctrine did not apply to the workplace incident because the decedent was an independent contractor. They argued that the decedent used his own tools at work, was not paid through payroll, and that there was no workers’ compensation coverage available because it was initially denied when the claim was opened.

Reprinted courtesy of Lewis Brisbois

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California state capitol

The implementation of SB 61 marks a significant shift in risk allocation and cash management for owners, developers, contractors, and subcontractors in California.

California’s SB 61: New Limits on Retention Payments in Private Construction Contracts

October 13, 2025 — Erinn Contreras & Julia Anderson - Construction & Infrastructure Law Blog

Retention payments are a longstanding practice in construction contracts, serving as a form of financial security for project owners to ensure proper and timely completion of work. It is typical for Owners in private work contracts to withhold up to ten percent (10%) from each payment owed to contractors and subcontractors. While this practice was intended to guarantee quality and incentivize completion, it often resulted in considerable financial stress for contractors and subcontractors, particularly in an industry characterized by slim profit margins and steady ongoing obligations for payroll, benefits, and material costs. Recognizing these challenges, California legislators introduced and recently passed Senate Bill 61 (“SB 61”) to update retention laws for private construction projects, with the stated goal of fostering greater fairness and financial stability across the construction industry.

SB 61’s Modifications to Retention Rules
Under existing California law, parties contracting for private works of improvement are allowed to negotiate the percentage retention to be withheld. SB 61 offers greater financial protection to contractors and subcontractors by applying a five percent (5%) retention cap applicable to most private construction contracts. In particular, for contracts executed on or after January 1, 2026, owners, developers, direct contractors and subcontractors may withhold no more than five (5%) retention from progress payments, and the total amount of retention withheld may not exceed five (5%) of the total contract value. SB 61 also limits retention withheld from subcontractors by contractors and subcontractors to the same amount withheld from the contractor by the owner.

Reprinted courtesy of Erinn Contreras, Sheppard Mullin and Julia Anderson, Sheppard Mullin

Ms. Contreras may be contacted at econtreras@sheppardmullin.com
Ms. Anderson may be contacted at juanderson@sheppardmullin.com

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Downtown skyline of Louisville

Focused on all things contract negotiation and project start-up, it was fitting way to kick off the 2025-26 year of programmatic excellence.

Top 10 Take-Aways from the 2025 Fall Forum Meeting in Louisville

October 13, 2025 — Marissa L. Downs - The Dispute Resolver

Last week saw the first-ever meeting of the ABA Forum on Construction Law in Louisville, Kentucky. The event brought together over 500 attorneys, ADR neutrals and consultants for what was the first meeting helmed by incoming Forum Chair, Tracy James. Thanks to the hard work and dedication of countless individuals, including but not limited to Program Coordinators Colbie Campbell and Liz Kraengel, the program was an unbridled success. Focused on all things contract negotiation and project start-up, it was fitting way to kick off the 2025-26 year of programmatic excellence. As usual, the lessons learned were many and varied but read on for my top 10 take-aways.

10. The Kentucky Derby is the most-watched and most-attended horse race in the United States. The iconic Louisville race has been run every year since its inception in 1875. Traditionally held the first Saturday in May as the first leg of the Triple Crown, the Derby is referred to colloquially as the "run for the roses" and "the most exciting two minutes in sports." While the Derby event itself is brief, the Churchill Downs is a bustling city of racing-related activity for most of the year and stables over 1,400 horses annually. Travis Stone (the voice of the Kentucky Derby) and Derby bugler, Steve Buttleman (who has been playing the "call to the post" at Churchill Downs for over 30 years) opened the Fall Meeting in grand style with a live demonstration of their skills and a little bit of Derby spirit.

9. Don't settle for business as usual when it comes to arbitrator selection. When it comes to arbitrator selection in complex disputes, business as usual may no longer cut it. At the Division 1 lunch Wendy Venoit and Sean Dillon spoke of newer, more robust tools which parties can avail themselves to ensure that all of the arbitrator candidates they are presented with have the expertise and calendar availability needed to effectively resolve the dispute at hand. The AAA-ICDR offers an Enhanced Arbitrator Selection process on large, complex cases, which allows parties to receive additional information before making their selections. Gone are the days of having to stealthily suss out the predilections of your potential panel. . .if the parties agree, they can submit questions for candidates to answer, ask the AAA to pre-screen candidates by certain criteria, or the AAA can arrange for all parties to interview the candidates by telephone or video call.

Ms. Downs may be contacted at mdowns@lauriebrennan.com

Reprinted courtesy of Marissa L. Downs, Laurie & Brennan, LLP

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Business person opening suit like superhero

The publication, first released in 1991 by Law & Politics and later acquired by Thomson Reuters in 2010, continues to be a trusted resource for identifying distinguished attorneys.

Mountain States Super Lawyers Recognizes 19 Nevada Snell & Wilmer Attorneys in 2025 Rankings

October 13, 2025 — Snell & Wilmer

LAS VEGAS and RENO-TAHOE - Snell & Wilmer is pleased to announce that 19 attorneys from its Nevada offices have been named to the 2025 edition of Mountain States Super Lawyers. Among those honored, 13 attorneys earned recognition on the Rising Stars list.

Super Lawyers highlights attorneys across more than 70 practice areas who have achieved significant professional accomplishments and earned the respect of their peers. Selection is determined through a rigorous, multi-step process involving independent research, peer nominations, and peer evaluations. The publication, first released in 1991 by Law & Politics and later acquired by Thomson Reuters in 2010, continues to be a trusted resource for identifying distinguished attorneys.

Reprinted courtesy of Snell & Wilmer

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Drone flying over construction site

Chinese-manufactured DJI drones comprise an estimated 90% of all UAVs on U.S. construction jobsites. Proposed limitations on their use could have profound ripple effects on safety, cost and productivity across the sector.

Eyes on the Sky: Regulating DJI Drones on Federal and Private Construction Sites

October 13, 2025 — Maggie Murphy - Construction Executive

When Paul Hedgepath walks a construction site, he doesn’t just see steel beams, scaffolding and concrete. He sees the invisible data streams that help keep multimillion-dollar projects on schedule and under budget - much of it captured by drones buzzing silently overhead.

“Drones are on every jobsite we have,” says Hedgepath, director of innovation at MJ Harris Construction. “We use them for progress tracking, reporting to owners, safety and photogrammetry. They’ve become a daily part of how we build.”

That reliance, however, could soon face its biggest test yet. Nearly 90% of drones used in the U.S. construction industry are made by DJI, a Chinese company that dominates the global market. Policymakers in Washington, citing security concerns and data privacy issues, are weighing bans and restrictions on Chinese-made drones across federal projects - with ripple effects likely for private-sector contractors too.

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

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Business finger on success

The recognized firms were named directly by clients without any prompts or suggested names for their ability to deliver impressive results.

GRSM Named “Powerhouse in Litigation” in 2026 Industry Report

October 13, 2025 — Gordon Rees Scully Mansukhani, LLP

Gordon Rees Scully Mansukhani was named a “Powerhouse in Litigation” among law firms that clients recognize as leaders in the litigation market.

According to the BTI Litigation Outlook 2026 report, firms featured in this highly selective list are those that clients identified as best suited to meet their most pressing litigation needs. As litigation becomes more complex and firms grow increasingly aggressive, clients are investing more and reevaluating their legal partnerships based on innovative thinking, client service, proven performance, and the ability to stand up to aggressive opposing counsel. The recognized firms were named directly by clients without any prompts or suggested names for their ability to deliver impressive results.

Reprinted courtesy of Gordon Rees Scully Mansukhani, LLP

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Aerial view of snowy stadium cranes

The construction management team - led by a joint venture of Turner Construction and Gilbane Building Co. - has regularly faced weather restrictions and delays.

Project Team Battles Elements to Complete Buffalo Football Stadium for Next Season

October 13, 2025 — Bruce Buckley - Engineering News Record

Swirling winds and driving snow have played a significant role in innumerable Buffalo Bills home games during the 65-year history of the National Football League team based in the Buffalo, N.Y, area. It’s no surprise that the region's often inhospitable weather has proven to be a considerable factor during construction of the team’s $2.1-billion stadium.

ENR may be contacted at enr@enr.com

Reprinted courtesy of Bruce Buckley, Engineering News Record

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Business person climbing stair of success

White and Williams LLP has been recognized by BTI Consulting Group as a “Litigation Standout 2026.”

White and Williams LLP Named “Litigation Standout 2026” in Complex Commercial Litigation

October 13, 2025 — White and Williams LLP

White and Williams LLP has been recognized by BTI Consulting Group as a “Litigation Standout 2026” in Complex Commercial Litigation, placing us among the top 19% of litigation firms nationwide. BTI’s annual rankings are based on market analytics and direct feedback from corporate clients, highlighting firms that deliver exceptional results.

Our Commercial Litigation Department collaborates closely with business executives, in-house counsel, and colleagues across practice groups to provide top tier, client-focused legal solutions for high stakes business disputes. Our team includes seasoned lawyers who litigate and try complex commercial disputes throughout the country in state and federal courts and in private arbitrations.

Reprinted courtesy of White and Williams LLP

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Health and Safety at Work Blocks

National Recognition Underscores HEI Civil's Commitment to Continued Safety Initiatives

HEI Civil's Colorado Division is Awarded the 2024 NUCA William H. Feather Safety Award For 1,000,000+ Manhours

October 13, 2025 — HEI Civil

Castle Rock, Colorado, Oct. 07, 2025 (GLOBE NEWSWIRE) -- HEI Civil, a leading heavy civil construction company, is proud to announce that its Colorado Division has been honored with the 2024 William H. Feather Safety Award by the National Utility Contractors Association (NUCA). This esteemed award recognizes the team for achieving an exceptional safety record of over 1,000,000 manhours worked without a recordable incident, underscoring the company's deep commitment to its foremost critical success factor, safety.

The NUCA William H. Feather Safety Award is a national honor that celebrates companies demonstrating the highest commitment to creating and maintaining a safe work environment for their team members. HEI Civil's achievement in the 1,000,000+ manhours category highlights the success of its comprehensive safety programs and the dedication of every team member to upholding these vital standards.

"Earning the NUCA William H. Feather Safety Award validates our collective efforts to build and sustain an industry-leading safety culture," stated Luis Uresti, HEI Civil's Colorado Safety Manager. "Achieving over a million manhours without any incidents is a huge achievement that shows how much effort and care our team puts into every project. We are honored to be recognized for this commitment."

To learn more about the NUCA William H. Feather Safety Award, please visit: https://nuca.com/events/annual-awards/

Founded in 1973, HEI Civil is a leading heavy civil construction general contractor shaping infrastructure across Colorado, Texas and North Carolina. Driven by its mission to attract and build the best people, teams and projects, the company delivers exceptional results through its core values of GRIT: growth, raising the bar, integrity and teamwork. With a steadfast focus on safety, people, quality, client service, equipment and production, HEI Civil consistently executes the complex heavy civil projects crucial for developing thriving communities. For more information, visit https://www.heicivil.com.  

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Hand clenching orange

Squeezing Builders Isn’t the Way to Lower Housing Costs

October 13, 2025 — Conor Sen - Bloomberg

America’s large publicly traded homebuilders find themselves in the crosshairs of President Donald Trump and Federal Housing Finance Agency Director Bill Pulte. Trump recently took to social media to urge the “big homebuilders” to build more . Pulte was quick to join in, suggesting that their size carried with it “great responsibility .”

Read between the lines and there’s the implication that the nation’s big developers represent a cartel colluding to generate windfall profits rather than build the homes Americans need. Homebuilder earnings suggest the opposite.

Industry profits have been slumping and demand has been weak despite a decline in mortgage rates and the dangling of heavy buyer incentives. Everyone agrees that housing needs to be more affordable, but pressuring builders that are already struggling to try and achieve that would be counterproductive. Instead, the government should focus on making the inputs that go into building homes cheaper.

Reprinted courtesy of Conor Sen, Bloomberg

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Hand reaching out of pile of paperwork

New York Executives Blast State Over Regulatory ‘Black Hole’

October 13, 2025 — Laura Nahmias - Bloomberg

At a recent roundtable with New York executives, Heather Briccetti Mulligan remembers the frustration of a businessman who compared trying to file a permit for a $200 million construction project with ordering a pizza.

The pizza could be tracked by phone from the moment it was ordered to its arrival at his door, Mulligan, head of the Business Council of New York State, recalls the executive saying. The permit, on the other hand, “went into a black hole.”

“’There’s no one I can call,’” she remembered him saying. “’I don’t know when it’s going to be looked at. I have no idea if there’s anything wrong with it. And there’s no timeline.’”

Reprinted courtesy of Laura Nahmias, Bloomberg

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Woman under oath

Uh-EUO: How Examinations Under Oath May Impact Later Litigation

October 13, 2025 — Kevin V. Small, Rachel E. Hudgins & Charlotte Leszinske - Hunton Insurance Recovery Blog

Examinations under oath (EUOs) are a common coverage condition in property and other first-party insurance policies that can make or break an insurance claim. In theory, EUOs are straightforward: they’re an investigative tool for insurers to gather information about a claim.[1] But in practice, insurers often use them to poke holes in the policyholder’s story, identify grounds to challenge coverage, and even set up fraud claims.

Reprinted courtesy of Kevin V. Small, Hunton Andrews Kurth LLP, Rachel E. Hudgins, Hunton Andrews Kurth LLP and Charlotte Leszinske, Hunton Andrews Kurth LLP

Mr. Small may be contacted at ksmall@hunton.com
Ms. Hudgins may be contacted at rhudgins@hunton.com
Ms. Leszinske may be contacted at cleszinske@hunton.com

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Virtual seminar

Virtual Seminar Series with Sasha Jamshidi and NBI!

October 13, 2025 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

BWB&O is pleased to announce that Encinitas Associate Sasha Jamshidi will be a featured speaker at the National Business Institute’s Virtual Seminar on December 3, 2025.

How much do you know about the inner workings of insurance companies? What can you do to move the needle on claim value? In this program, dive deep into the world of adjusters with insights that will empower you to negotiate better settlements for your clients.

December 3rd, 2025
Virtual Event

Reprinted courtesy of Bremer Whyte Brown & O'Meara LLP

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Group Of Lake Las Vegas Homeowners Claim Million-Dollar Homes Falling Apart

Million-dollar homes with million-dollar views of Lake Las Vegas are falling apart. That is what a group of homeowners and their attorney claim, reported by FOX5 Las Vegas.

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State Fire Marshal Warns of Lithium-Ion Battery Dangers

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