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In Wake of Maui Wildfires, Lawmakers Consider New Criminal Charges to Hold Corporations Accountable
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The case addressed whether a property damage exclusion barred coverage over an owner's claim that a condominium association and its property manager failed to obtain adequate insurance before the condominium's property was damaged by the Maui wildfire in August 2023.
Finding Insurer's Declaratory Relief Action Raises Unsettled Questions of State Law, Case is Dismissed
Tuesday, November 5, 2024
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Tred R. Eyerly - Insurance Law Hawaii
The federal district court for the District of Hawaii dismissed the insurer's action for declaratory relief because it raised issues that were unsettled by Hawaii courts. Association of Apartment Owners of Lahaina Residential Condominium, et al., No. 1-24-cv-00075-JAO-BMK, Order Granting AOAO's Motion to Dismiss (D. Haw. Aug. 29, 2024).
The case addressed whether a property damage exclusion barred coverage over an owner's claim that a condominium association and its property manager failed to obtain adequate insurance before the condominium's property was damaged by the Maui wildfire in August 2023. Great American filed suit seeking a declaration that it had no duty to defend or indemnify the Association and the property manage, Quam Properties Hawaiiana, Inc., in connection with a demand for mediation submitted to the Association and Quam on behalf of one of the owners.
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com
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On appeal, the contractor conceded that the arbitration provision was facially one-sided but still fair and reasonable and should be enforced.
New Mexico Holds One-Sided Dispute Resolution Provisions Are Unenforceable
Tuesday, November 5, 2024
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Bill Wilson - Construction Law Zone
Dispute resolution provisions that grant one party the unilateral right to choose either litigation or arbitration to resolve disputes are common in the construction industry. The main difference between the two forums is that courts are more likely to strictly enforce contract terms as written as well as the applicable law, while arbitrators make decisions on more equitable considerations, untethered to the contract terms and—to some degree—the law. The party with the sole discretion to select the dispute resolution procedure can select the process most beneficial to its interests based on the nature of the dispute, regardless of who brings the claims. In Atlas Electrical Construction, Inc. v. Flintco, LLC, 550 P.3d 881 (N.M. Ct. App. 2024), the Court of Appeals of New Mexico recently held that an arbitration provision in a subcontract, under which the contractor retained the exclusive right to choose whether disputes arising under the subcontract were litigated in court or arbitrated was unreasonably one-sided, substantively unconscionable, and unenforceable.
The Atlas Electrical case involved two sophisticated entities with equal bargaining strength to negotiate the terms of a subcontract. The parties agreed to a subcontract provision which provided in the relevant part:
In the event [contractor] and [subcontractor] cannot resolve the dispute through direct discussions or mediation … then the dispute shall, at the sole discretion of [contractor], be decided either by submission to (a) arbitration … or (b) litigation …
Reprinted courtesy of Bill Wilson, Robinson & Cole LLP
Mr. Wilson may be contacted at wwilson@rc.com
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More than 50,000 line workers were in the state restoring power, and the Florida Dept. of Transportation had more than 300 crews in the field and 150 bridge inspectors dispatched.
Assessments Underway After Hurricane Milton Rips Off Stadium Roof, Snaps Crane Boom in Florida
Tuesday, November 5, 2024
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James Leggate - Engineering News-Record
Hurricane Milton and tornados it spurred killed at least five people and knocked out power to 4 million homes and businesses in Florida after making landfall Oct. 9 near Siesta Key in Sarasota County. With assessments and rescues still underway, state officials say the damage was not as bad as it could have been.
Reprinted courtesy of James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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Mitigating Risk in Construction Site Preparation
November 5, 2024 — Joseph Willis - Construction Executive
In the realm of construction—where every project involves a multitude of moving parts, uncertainties and potential hazards—effective risk management is the key to preventing costly project interruptions. A well-executed site safety plan can help prevent tragic injuries. According to the U.S. Bureau of Labor Statistics, construction industry-related deaths due to falls, slips and trips increased 5.9% in 2021, and the industry comprises 46% of all workplace falls, slips and trips fatalities in the workforce at large.
Project delays due to jobsite incidents can also have far-reaching consequences, impacting budgets and client satisfaction. Having a thorough, job-specific plan will help minimize disruptions by addressing potential hazards before they escalate into costly incidents. A well-executed safety plan also streamlines workflows, reduces downtime and optimizes resource utilization. By promoting a culture of safety consciousness among workers, site-specific safety plans contribute to improve productivity and project outcomes.
Reprinted courtesy of Joseph Willis, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Insured Succeeds on Remand by Adding Non-Diverse Agent
November 5, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The court granted the insured's motion for remand by finding a cognizable claim was asserted against the non-diverse agent. Kamovitch v. Am. Econ. Ins. Co., 2024 U.S. LEXIS 150295 (W.D. Pa. Aug. 22, 2024).
American Economy Insurance Company issued a homeowners policy to the insured. The insured alleged that he retained Gilbert Insurance Agency, Inc. to determine the appropriate coverage for the property and that Gilbert advised the insured as to the amount and types of coverage to acquire. Gilbert then sold the insured the American Economy policy.
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US Housing Starts Increase to Fastest Pace Since April
November 5, 2024 — Michael Sasso - Bloomberg
US housing starts bounced back in August after tumbling a month earlier, illustrating uneven residential construction as builders weigh inventory levels against brighter demand prospects tied to falling borrowing costs.
Beginning home construction increased 9.6% last month to a 1.36 million annualized rate, the fastest since April, according to government figures released Wednesday. The median estimate of economists surveyed by Bloomberg called for a 1.32 million rate.
Construction Project Scheduling & Delay Claims Seminar
November 5, 2024 — Beverley BevenFlorez – CDJ Staff
This one-day event presented by the Seminar Group “will cover critical-path schedule and delay concepts and principles essential for understanding and presenting project delay issues and claims, as well as advanced technical and legal concepts and strategies for addressing schedule delay, disruption, and acceleration claims.” The panelists “will address the most challenging issues that arise in managing project schedules and delays and will present cutting-edge techniques for documenting, analyzing, and presenting project schedule delay events, providing guidance on how to avoid, negotiate, and resolve these disputes.”
January 16th, 2025
Marina del Rey Marriott
4100 Admiralty Way
Marina del Rey CA, 90292
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In connection with the requests to alter the award, the arbitrators examined the International Chamber of Commerce Rules, particularly at Rule 36 – and determined that the arbitrators possessed the ability to correct “computational errors.”
“It Just Didn’t Add Up!”
Tuesday, November 5, 2024
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Daniel Lund III - Lexology
Overturning arbitration awards in court is difficult. One of the few bases for a challenge to an award (under the Federal Arbitration Act, 9 U.S.C. 10(a)(4), as well as most state arbitration laws) is where the arbitrator is alleged to have “exceeded [his/her] powers” afforded the arbitrator by whatever rules and agreements are in place for the arbitration. Obviously, this places a burden on the arbitrator to “color within the lines” when serving as arbitrator and issuing rulings in the case.
“After extensive discovery and a 10-day hearing, the Tribunal rendered a 142-page” award, whereupon the parties both sought to have the arbitrators correct what the parties agreed was an error in the award – increasing the award by $47,710. One of the parties, however, went further, urging that the arbitrators “erroneously included damages for claims related to production revenue” that occurred before a certain date. According to the court, that party was urging that “the Tribunal erred by factoring into its award damages related to Claims 2 and 3, which the Tribunal never substantially addressed.”
Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com
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As climate-change related litigation continues to increase, carriers may increasingly look to similar “pollution” exclusions to bar or limit coverage.
Hawaii Supreme Court Finds Climate Change Lawsuit Barred by “Pollution Exclusion”
Tuesday, November 5, 2024
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Jason Taylor - Traub Lieberman Insurance Law Blog
On October 7, 2024, the Hawaii Supreme Court answered the question of whether an “accident” includes an insured’s reckless conduct in emitting harmful greenhouse gases (“GHGs”) and whether such emissions are “pollutants” as defined in a general liability policy’s pollution exclusion. In Aloha Petro., Ltd. v. National Union Fire Insurance Co. of Pitt., PA, No., 2024 Haw. LEXIS 179 (Oct. 7, 2024), the Hawaii Supreme Court answered in the affirmative as to both certified questions from the United States District Court for the District of Hawaii, holding that an insured’s reckless conduct can be an “accident” and that GHGs are “pollutants” under the policies’ pollution exclusions.
In the underlying case, the County of Honolulu and the County of Maui (the “Counties”) sued Aloha Petroleum, Ltd. (“Aloha”) and several other fossil fuel companies for climate change-related harms. Namely, the Counties alleged that the fossil fuel industry knew that its products would cause catastrophic climate change, and rather than mitigating their emissions, defendants concealed such knowledge, promoted climate science denial, and increased their production of fossil fuels. Aloha was allegedly on notice that its products caused harmful climate change through its former parent company, Phillips 66, and its current parent company, Sunoco. Given this knowledge, the District Court determined that the Counties allegations constituted reckless conduct by Aloha.
Reprinted courtesy of Jason Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com
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Florida state officials issued an emergency decree to all licensed insurance adjusters in the state to protect homeowners against “unfair and deceptive acts” and “post-storm fraud” by insurance carriers.
Florida Issues Emergency Fraud Prevention Rule to Protect Policyholders in Wake of Catastrophic Storms
Tuesday, November 5, 2024
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Geoffrey B. Fehling & Olivia G. Bushman - Hunton Insurance Recovery Blog
Last week, just before Hurricane Milton made landfall, Florida state officials issued an emergency decree to all licensed insurance adjusters in the state to protect homeowners against “unfair and deceptive acts” and “post-storm fraud” by insurance carriers. According to The Washington Post, the Florida Department of Financial Services is requiring that all claim adjusters provide an explanation for each change they make to a consumer’s loss estimate, document those changes, and retain all versions of the estimate and identify who made those revisions. When processing claims, adjusters must also use an electronic estimating system that provides an itemized report of all damage, as well as labor, materials, equipment and supplies. Those costs should be consistent with what a contractor or a repair company in that particular area would charge.
“Property damage from Hurricane Milton will be catastrophic and may result in billions of dollars in property losses,” the emergency rule states. “Fair and transparent loss estimates and claims adjustments will be crucial to ensure Floridians are properly and fairly compensated under the terms of their property insurance contracts, while also ensuring ongoing insurer solvency after potentially momentous financial losses.”
Reprinted courtesy of Geoffrey B. Fehling, Hunton Andrews Kurth and Olivia G. Bushman, Hunton Andrews Kurth
Mr. Fehling may be contacted at gfehling@HuntonAK.com
Ms. Bushman may be contacted at obushman@HuntonAK.com
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In the right situation, with the right mediator and willing parties, GCM can facilitate a rational, well-informed settlement as early as possible.
Toolbox Talk Series Recap - Guided Choice Mediation
Tuesday, November 5, 2024
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Douglas J. Mackin - The Dispute Resolver
In the September 26, 2024 edition of Division 1's Toolbox Talk Series, Clifford Shapiro presented on Guided Choice Mediation (“GCM”) and how it can lead to better outcomes in construction disputes. GCM is an approach to mediation that focuses on early and efficient dispute resolution, which prominent mediators created as a public interest project.
Shapiro described his particular variant of GCM based on his experience while acknowledging that other Guided Choice Mediators’ processes may differ from his in various ways. Shapiro’s brand of GCM focuses on ensuring that parties have reasonable expectations and appropriate settlement authority prior to arriving at a mediation. Some of the strategies to help accomplish these noble goals are (i) early mediator engagement, (ii) mediator facilitation of information exchange, (iii) mediator involvement with insurance issues (particularly important in construction defect cases, especially those with multiple defendants), (iii) pre-mediation ex parte meetings, and (iv) mediator participation in risk analysis. These strategies are not typical in the more traditional/historic approach to mediation in which mediation is scheduled based on a scheduling order, mediation statements are sent to the mediator roughly a week before the scheduled mediation (and sometimes not even shared with anyone other than the mediator), and the parties speak with the mediator for the first time on the day of the mediation.
Reprinted courtesy of Douglas J. Mackin, Cozen O’Connor
Mr. Mackin may be contacted at dmackin@cozen.com
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In Pillsbury's roundup, commercial mortgage bond market in trouble, commercial real estate investments, pressure on mortgage REITs, and more.
Real Estate & Construction News Roundup (10/1/24) – Hybrid Work Technologies, AI in Construction and the Market for Office Buildings
Tuesday, November 5, 2024
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Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, commercial mortgage bond market in trouble, commercial real estate investments, pressure on mortgage REITs, and more!
- Short-term issues facing U.S. commercial real estate have made it an investment opportunity and values have bottomed out. (CNBC)
- As organizations report plans to shake up their real estate portfolios, the flight to quality spurs interest in space planning, amenities and hybrid work technologies. (Joe Burns, Facilities Dive)
- The conversation about AI’s potential benefits and risks has been a common refrain in construction recently. (Matthew Thibault, Construction Dive)
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team
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Plaintiff filed a lawsuit alleging negligence and premises liability against BWB&O’s client, a general contractor of a multi-level construction project.
BWB&O’s Motion for Summary Judgment is Granted in a Premises Liability Matter
Tuesday, November 5, 2024
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Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Congratulations to Newport Beach Partner Courtney Serrato and Associate Joseph Real on Prevailing on a Motion for Summary Judgment for their Client!
Plaintiff filed a lawsuit alleging negligence and premises liability against BWB&O’s client, a general contractor of a multi-level construction project. Plaintiff was injured after a fall at the construction project and filed suit against BWB&O’s client and another subcontractor.
Plaintiff alleged BWB&O’s client was negligent and was responsible for causing Plaintiff’s fall. BWB&O filed a Motion for Summary Judgment arguing under the Privette Doctrine and its progeny, it neither owed nor breached any duty to Plaintiff and that no exception to the doctrine applied. Under the Privette Doctrine, when a person or entity hires an independent contractor to provide work or services, and one of the contractor’s employees is injured on the job, the hirer is generally not liable to the employee.
Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
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A Closer Look: Why Did Hurricane Helene Cause So Much Damage in Western North Carolina?
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It’s not enough to spread manufacturing work between countries. Concentrating in one part of the US puts companies at risk of extreme weather disruptions.
America’s Factories Weren’t Built to Endure This Many Hurricanes
Tuesday, November 5, 2024
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Brooke Sutherland - Bloomberg
America’s factories aren’t built for the current cascade of extreme weather events.
Dozens of industrial sites were in the zone of impact as Hurricane Milton slammed into Florida’s West Coast this week, including several concrete plants, speed boat manufacturing operations and facilities owned by Honeywell International Inc., Johnson Controls International Plc, General Electric Co. and Illinois Tool Works Inc., among others. Meanwhile, a Baxter International Inc. facility in Marion, North Carolina, that makes 60% of the intravenous fluids used in hospitals around the country was shuttered because of damage from Hurricane Helene just two weeks ago. Mines responsible for producing more than 80% of the world’s supply of commercial high-purity quartz in nearby Spruce Pine were also affected by severe flooding, raising the risk of disruptions to semiconductor production, which relies on the material.
Reprinted courtesy of Brooke Sutherland, Bloomberg
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The conference is recognized as the preeminent construction conference developed for mid to senior-level professionals working in legal and commercial construction markets.
Brenda Radmacher to Speak at Construction Super Conference 2024
Tuesday, November 5, 2024
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Brenda Radmacher - The Construction Seyt
Brenda Radmacher, partner in Seyfarth’s Construction group, will present and moderate panels at the 38thAnnual Construction Super Conference 2024 on December 9-11. The conference is recognized as the preeminent construction conference developed for mid to senior-level professionals working in legal and commercial construction markets.
Panel – Looking Around Corners: Emerging Trends and Proactive Solutions
Brenda will co-present a panel on innovative ways to engage experts in construction disputes, focusing on early expert involvement to aid in risk management, issue analysis, mitigation, and documentation for potential litigation.
Panel – Top 10 Issues to Address in Your ADR Process for a Better Solution in Construction Disputes
Reprinted courtesy of Brenda Radmacher, Seyfarth
Ms. Radmacher may be contacted at bradmacher@seyfarth.com
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As AI becomes increasingly integral to the construction industry, reports like this will serve as vital tools for contractors eager to adopt and implement cutting-edge technology solutions.
Construction and AI: What Contractors Need to Know from ABC’s New Report
Tuesday, November 5, 2024
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Aarni Heiskanen - AEC Business
The Associated Builders and Contractors (ABC) has just released its fourth annual construction technology report, which dives deep into AI’s evolving role in the construction industry.
“ABC contractor members and the overall contracting community want more information on AI and how it can help them improve safety, quality and profitability—and win more work,” said Matt Abeles, ABC vice president of construction technology and innovation. The newly released ABC AI Tech Report delivers on this need, highlighting AI-driven case studies, resources, and thought leadership from ABC’s Tech Alliance.
Understanding AI’s Role in Construction
The report provides a comprehensive AI Resource Guide, breaking down the basics of artificial intelligence and how it applies to construction. Understanding AI is key for contractors to stay competitive in the rapidly changing industry.
Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi
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As a result of user feedback, the ConsensusDocs Contract Content Advisory Council (CCAC) drafted this new architect/engineer change order.
New ConsensusDocs 242 Design Professional Change Order Form Helps Facilitate Compensation for Changes in Design Services
Tuesday, November 5, 2024
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Brian Perlberg - ConsensusDocs
ConsensusDocs is publishing a new ConsensusDocs 242 Change in Services and Compensation, a change order for design services by a design professional. In the design and construction industry, one thing is certain – change. The work scope included in basic design services an architect or engineer provides occurs somewhat regularly. Previously, ConsensusDocs did not have a standard contract document for changing design professionals’ prices. As a result of user feedback, the ConsensusDocs Contract Content Advisory Council (CCAC) drafted this new architect/engineer change order. The CCAC unanimously approved the new contract document and publication is set for October 14, 2024. The document will be available for most ConsensusDocs subscribers. The full, owner, design-professional, and short-form subscription packages will include the document. A subscription package can be purchased through ConsensusDocs here.
The design professional change order helps owners of construction projects keep track of additional services their design professionals perform. The design professional must provide itemized labor breakdowns for each invoice. The new ConsensusDocs 242 has options for compensation to be actual hours at the billing rate or a lump sum. The new contract document form also has a table for the remaining project deliverables and their respective due dates.
Reprinted courtesy of Brian Perlberg, ConsensusDocs Coalition
Mr. Perlberg may be contacted at bperlberg@ConsensusDocs.org
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