CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - TUESDAY, JUNE 2, 2026

Data on laptop AI

Aarni Heiskanen interview with Pavlina Nikolova of Egnyte: What the AEC firms' memory problem is, what causes it, and how to solve it to become AI-ready.

Your AEC Firm Has a Memory Problem. Here Is How to Fix It

June 1, 2026
Aarni Heiskanen - AEC Business

AEC companies trying to operationalize AI often find they lack the data foundation on which to build. There may be an abundance of data hidden in documents, but you can’t reliably use it for AI.

The lack of data quality was a key topic discussed at the AI in AEC 2026 conference. During the event, I met many experts working to solve this problem, including Pavlina Nikolova, Egnyte‘s EMEA AEC Practice Lead. The chat and her presentation highlighted the challenges and ways to overcome them.

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

Reprinted courtesy of Aarni Heiskanen, AEC Business

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CDJ NEWS THIS WEEK



Moon Landing photo

The technology that comes out of space programs like Artemis, also needs to be patented for terrestrial uses.

Navigating Timelines and Technology: Patent Strategies for Space and Earth

June 1, 2026 — Kate Nuehring Su & Vanessa Wang - Engineering News-Record

More than half a century after the Apollo 11 landing fulfilled President John F. Kennedy’s bold vision, the global race back to the Moon is no longer theoretical. With renewed attention on NASA’s Artemis program and a surge of commercial investment in space infrastructure, lunar exploration is again shaping technology priorities here on Earth.

Reprinted courtesy of Kate Nuehring Su, Engineering News-Record and Vanessa Wang, Engineering News-Record

ENR may be contacted at enr@enr.com

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Storm damage sign on roof

The insureds’ commercial property sustained windstorm damage during Hurricane Ian.

Insurer Granted Summary Judgment on Claim for Roof Damage Caused by Windstorm

May 26, 2026 — Tred R. Eyerly - Insurance Law Hawaii

The insurer successfully moved for summary judgment, eliminating the insured’s claim for roof damage due to windstorm. Mulas v. Westchester Surplus Lines Ins. Co., 2026 U.S. Dist. LEXIS 20537 (Jan. 30, 2026).

The insureds’ commercial property sustained windstorm damage during Hurricane Ian. Westchester denied the claim. The insureds believed Westchester wrongfully denied coverage for roof damage and various interior damage to property. The insureds also argued that Westchester’s actual cash value (ACV) payment did not reflect the fully insured loss.

The insureds sued and Westchester moved for summary judgment. Westchester argued the roof damage was not covered because Hurricane Ian did not cause the damage. Westchester hired an engineer who determined the roof damage was not caused by wind from Hurricane Ian. Westchester pointed out that the insureds’ expert also found no wind damage on the roof. The insureds offered no other evidence suggesting the hurricane caused roof damage. Therefore, the insureds could not show that Westchester breached the policy by denying coverage.

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

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

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Spotlight on stage

This recognition underscores Newmeyer Dillion's position as a key player in the legal landscape, offering access to high-quality legal representation while holistically partnering with clients at every stage of their business.

Newmeyer Dillion Ranked in Chambers Spotlight California 2026 Guide

May 26, 2026 — Newmeyer Dillion

NEWPORT BEACH, Calif. – May 14, 2026 - Prominent business and real estate law firm Newmeyer Dillion has been ranked in Chambers Spotlight California 2026 guide and recognized as a leading firm in Litigation: General Commercial for Orange County.

Newmeyer Dillion was selected based on an independent and in-depth market analysis, coupled with an assessment of the firm’s experience, expertise and caliber of talent where the firm stood out for its exceptional work and is recognized in Litigation: General Commercial.

Managing Partner Paul Tetzloff expressed the firm's gratitude: “It is an honor for our firm to be recognized by Chambers and Partners in their Spotlight California 2026 guide. This acknowledgment reflects our commitment to providing high quality legal services tailored to the unique needs of our clients.”

Reprinted courtesy of Newmeyer Dillion

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Dredging ocean

The government had “superior knowledge” that there was rock in an adjacent location based on a prior claim from a contractor, yet the government did not disclose the possibility that rock could be encountered.

Inaccurate Representations Can Lead to Differing Site Conditions Claim

May 26, 2026 — David Adelstein - Florida Construction Legal Updates

In the prior posting, I discussed a case dealing with a differing site condition. In that case, the owner did not have an affirmative duty to make a representation and there was no inaccurate representation made by the owner that misled the contractor.

Well, what about when there is an inaccurate misrepresentation regarding the site? This was the circumstance in an older Florida case where a dredging contractor had a successful differing site conditions claim. See Jacksonville Port Authority v. Parkhill-Goodloe, Co., Inc., 362 So.2d 1009 (Fla. 1st DCA 1978).

The government provided inaccurate information as to the lack of rock that would be encountered during the dredging that was relied on by the dredging contractor. But the government had “superior knowledge” that there was rock in an adjacent location based on a prior claim from a contractor, yet the government did not disclose the possibility that rock could be encountered.

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

Reprinted courtesy of David Adelstein, Kirwin Norris

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Green Signal

The Order includes several key provisions that developers and homebuilders should be aware of moving forward.

A Green Light for Housing? What Executive Order 14394 Means for Your Next Project

May 26, 2026 — Bennett Houck, Miranda Martinez & Byron Sarhangian - Snell & Wilmer

On March 13, 2026, President Trump signed Executive Order 14394, “Removing Regulatory Barriers to Affordable Home Construction” (the “Order”). The Order directs federal agencies to reduce regulatory burdens on residential development, streamline environmental permitting, and encourage state and local governments to adopt housing-friendly policies.

The Order includes several key provisions that developers and homebuilders should be aware of moving forward.

Key Provisions
The Order targets four main areas:

1. Federal Environmental Regulations
First, it directs the Secretary of the Army and Environmental Protection Agency (EPA) to revise permitting standards, including stormwater permits, wetlands permits under Section 404 of the Clean Water Act, and related construction-site requirements. The Order also targets energy-efficiency mandates for U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA) financed housing. For developers and homebuilders, these revisions could reduce project delays and compliance costs associated with stormwater management, wetlands mitigation, and energy-efficiency upgrades, expenses that often add significant time and cost to residential development projects.

Reprinted courtesy of Bennett Houck, Snell & Wilmer, Miranda Martinez, Snell & Wilmer and Byron Sarhangian, Snell & Wilmer

Mr. Houck may be contacted at bhouck@swlaw.com
Ms. Martinez may be contacted at mimartinez@swlaw.com
Mr. Sarhangian may be contacted at bsarhangian@swlaw.com

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Aerial view of Prescott Square Arizona

The lawsuit centered on a 13-project, $1.4 billion development pipeline originated and planned by Gray Development Group over more than a decade.

Arizona Court Enters $323 Million Judgment Against ZOM Living Following Unanimous Jury Verdict

May 26, 2026 — Gray Development Group

PHOENIX, May 19, 2026 /PRNewswire/ -- A Maricopa County court has entered a $323 million compensatory damages judgment in favor of Gray Development Group against ZOM Holding Inc., doing business as ZOM Living, following a 12-day trial, a unanimous jury verdict and post-trial proceedings related to a proposed business transaction.

The jury found ZOM liable on claims of breach of contract and breach of the implied covenant of good faith and fair dealing stemming from a proposed joint venture tied to a planned pipeline of luxury multifamily and commercial projects in Phoenix and Scottsdale.

The lawsuit centered on a 13-project, $1.4 billion development pipeline originated and planned by Gray Development Group over more than a decade. In 2019, Gray invited Florida-based ZOM to participate in a joint venture involving the completion of five projects, which would have marked ZOM's entry into the Arizona market.

According to court findings presented at trial, the companies entered into a mutual confidentiality and non-circumvention agreement before Gray shared extensive sensitive and proprietary information related to the projects, including planning, market analysis, costs, financial data, local business relationships and operational strategies developed by Gray over decades in Arizona.

Evidence presented during trial showed that over a 10-month period while under contract, ZOM made hundreds of requests for confidential project and market information before circumventing Gray and pursuing the projects independently, ultimately displacing Gray from projects it spent years planning and developing.

ZOM Living, headquartered in Orlando, develops multifamily and senior housing communities across the United States and operates regional offices in Boston, Dallas, Fort Lauderdale, Nashville, Phoenix, and Raleigh. ZOM is owned by Timeless Investments, the Amsterdam-based family office of Dutch businessman Hans van Veggel, which acquired the company in 1997.

About Gray Development Group
Gray Development Group was founded by architect Bruce Gray in 1991. The Phoenix-based company was the top-ranked multifamily developer in Arizona for more than a decade. The company designed and developed more than 15,000 apartment and condominium units throughout metropolitan Phoenix. Two Gray-designed developments — a Tempe midrise and a San Diego high-rise — received National Apartment Community of the Year awards.

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Worker filling out form

Extra care when completing the registration renewal process is warranted, because the consequences of a misstep can be significant and disruptive.

NJ Public Works Contractors Beware – Pay Special Attention When Submitting Your Public Works Contractor Registration

May 26, 2026 — Levi W. Barrett & Aaron C. Schlesinger - Peckar & Abramson, P.C.

While it is always important to be careful when making submissions to government agencies, recent activity by the New Jersey Department of Labor and Workforce Development (“NJDOL”) reveals considerably increased scrutiny in connection with contractors renewing their New Jersey Public Works Registration. Extra care when completing the registration renewal process is warranted, because the consequences of a misstep can be significant and disruptive.

The New Jersey Public Works Contractor Registration Act requires all contractors bidding on or engaging in construction-related public works projects to register with the NJDOL. This registration, which must be resubmitted every 1-2 years, requires contractors to make a number of detailed disclosures relating to, among other things, the entity’s ownership structure, prior state and federal labor law violations, details regarding interests in other businesses, unlawful acts by owners/officers, and participation in apprenticeship programs.

Reprinted courtesy of Levi W. Barrett, Peckar & Abramson, P.C. and Aaron C. Schlesinger, Peckar & Abramson, P.C.

Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com

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New York emblem in courtroom

New York Associate Nicole Koch and Partner Jennine Gerrard recently secured a complete dismissal of a plaintiff’s claims for injuries following a fall in front of a client’s business at an outdoor mall.

New York Team Secures Dismissal of Premises Liability Action Against Client

May 26, 2026 — Lewis Brisbois

New York Associate Nicole Koch and Partner Jennine Gerrard recently secured a complete dismissal of a plaintiff’s claims for injuries following a fall in front of a client’s business at an outdoor mall.

The plaintiff alleged that she was walking on the sidewalk outside of the client's hair care supply store in the Bronx in May 2024 when she tripped and fell on a broken/defective portion of the sidewalk. As a result of the accident, the plaintiff suffered injuries to her spine, hip, wrist, and both knees. She proceeded to file suit in New York County Supreme Court against Lewis Brisbois’ client and the landlord for the property.

Reprinted courtesy of Lewis Brisbois

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City network

As U.S. cities have expanded in size and population density, the strategies for addressing mobility have evolved.

Micromobility in Smart Cities: Keeping the Wheels in Motion

May 26, 2026 — James P. Bobotek - Gravel2Gavel Construction & Real Estate Law Blog

Mobility is the lifeblood of any city. How people are able to travel in, out and within a metropolitan area is vital to its citizens, businesses, supply chains and social services. And as U.S. cities have expanded in size and population density, the strategies for addressing mobility have evolved. Many have taken different approaches to public transit, and each city boasts a dense tapestry of roadways, walking paths and various parking options. But as cities continue to reexamine infrastructure strategies through smart city technology, a new field of transportation has emerged—micromobility.

Designed for short-distance travel using lightweight vehicles (bikes, e-bikes, e-scooters, etc.), the industry’s global net worth has grown exponentially in recent years to the tune of hundreds of billions, with one forecast predicting it could reach $340 billion by 2030. Micromobility also finds itself at the forefront of various smart city technological improvements. Geofencing has been implemented in U.S. cities to determine where micromobility vehicles can operate, control speed limits, and park utilizing the vehicles’ GPS location. Internet of Things (IoT) technologies (satellite-based location receivers, cloud communication, internet links, etc.) have improved vehicle lifespans by keeping track of when vehicles require service and prevent vandalism and theft. Data collected from vehicles’ location tracking is routinely used for urban planning and smart city development.

Mr. Bobotek may be contacted at james.bobotek@pillsburylaw.com

Reprinted courtesy of James P. Bobotek, Pillsbury

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Hand stopping falling dominoes

The top business risks of 2026 as cited by construction and engineering companies all have one thing in common.

2026 Top Business Risks for Construction and Engineering Companies

May 26, 2026 — Darren Tasker - Construction Executive

The 2026 Allianz Risk Barometer revealed some surprising findings for construction and engineering businesses. Now in its fifteenth year, this annual business risk ranking by corporate insurer Allianz Commercial incorporates the views of 3,338 global risk management professionals on the main perils on their radar for the year.

Survey respondents included construction and engineering risk experts who identified the threats keeping them up at night. Here is how they ranked the top industry risks for 2026:

Natural Catastrophes
Natural catastrophe risk retains the top spot, with 38% of construction and engineering respondents citing this risk as their leading concern for 2026. From the insurance perspective, economic and insured losses remained high, albeit lower than the 10-year average. The evolving nature of natural catastrophes continues to pose significant challenges to businesses and the (re)insurance industry. Insured losses from natural catastrophes are set to reach $107 billion for 2025, according to Swiss Re—the sixth year in a row they have exceeded $100 billion, while economic losses are well in excess of $200 billion.

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

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Construction workers meeting over plans

The ACEC, the business voice of America’s engineering and design services industry released the following statement on the BUILD America 250 Act.

ACEC Supports BUILD America 250 Act as Important First Step on Surface Reauthorization

May 26, 2026 — The American Council of Engineering Companies

WASHINGTON -- The American Council of Engineering Companies (ACEC), the business voice of America’s engineering and design services industry released the following statement on the BUILD America 250 Act:

"Chairman Graves and Ranking Member Larsen have taken an important bipartisan step toward reauthorizing the federal surface transportation programs that are critical to economic growth in every state. The BUILD America 250 Act provides five years of stability in funding road and transit projects, raises new revenues to address the solvency of the Highway Trust Fund, and includes meaningful provisions to strengthen project delivery, advance digital infrastructure, and improve the contracting framework that engineering firms rely on every day. ACEC will continue to advocate for investment levels that keep pace with the country's growing infrastructure needs, and we urge the Committee to keep this process moving forward."

The American Council of Engineering Companies (ACEC) is the business association of America’s engineering industry, representing more than 5,500 independent engineering firms and more than 650,000 professionals throughout the United States engaged in the development of America’s transportation, water, and energy infrastructure, along with environmental, industrial, and other public and private facilities. Founded in 1906 and headquartered in Washington, D.C., ACEC is a national federation of 51 state and regional organizations.

Notebook writing

Radmacher authors Chapter 8, Contractor Delay Damages, offering practical insight into one of the most contested issues in construction litigation and arbitration.

Brenda Radmacher Authors Chapter in ABA Publication on Construction Delays

May 26, 2026 — Brenda Radmacher - The Construction Seyt

Brenda Radmacher, a partner in Seyfarth’s Construction Law practice and a mediator and arbitrator serving on the American Arbitration Association’s panels, is among the contributing authors to the American Bar Association’s forthcoming guide on construction disputes: Time – The Legal Implications of Project Delay in Construction.

Drawing on three decades of experience, Radmacher authors Chapter 8, Contractor Delay Damages, offering practical insight into one of the most contested issues in construction litigation and arbitration.

Reprinted courtesy of Brenda Radmacher, Seyfarth Shaw LLP

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

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Houston Texas Skyline

Toll Brothers Announces New Houston-area Luxury Home Community Coming Soon to Richmond, Texas

June 1, 2026 — Toll Brothers, Inc.

RICHMOND, Texas, April 15, 2026 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation's leading builder of luxury homes, today announced its newest Houston-area luxury home community, Toll Brothers at Revera, is coming soon to Richmond, Texas. Offering spacious homes on 50- and 60-foot-wide home sites, this master-planned community will feature exclusive resort-style amenities and a picturesque setting ideal for exceptional living. Site work is underway at 1615 Seaside Horizon Lane in Richmond, and the community is anticipated to open for sale in summer 2026.

Home shoppers at Toll Brothers at Revera will enjoy a thoughtfully designed community that combines modern architecture with luxurious finishes. Floor plans will range up to 3,175+ square feet for homes in the Costa Collection and 3,900+ square feet for homes in the Oasis Collection. Prices are anticipated to start in the mid-$400,000s.

Reprinted courtesy of Toll Brothers, Inc.

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2025 turning to 2026 Trends blocks

Selective Growth: FMI’s 2026 North American Engineering & Construction Outlook

June 1, 2026 — Construction Executive

Construction activity in North America is expected to stabilize but grow modestly in 2026 as the industry navigates high interest rates, uneven private development and strong infrastructure demand, according to FMI’s 2026 North American Engineering & Construction Outlook. While overall spending is projected to rebound slightly, growth will vary significantly by sector as contractors balance risk, financing constraints and shifting project pipelines.

Key findings from the report include:

  • Modest spending growth: Total U.S. construction put in place is forecast to increase about 1% in 2026 to roughly $2.2 trillion after a slight decline in 2025.
  • Sector divergence: Public infrastructure and government-funded projects are expected to remain relatively strong, helping offset weaker activity in several private building segments.

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

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AI contours

The Evolving Contours of Artificial Intelligence as a D&O Exposure

June 1, 2026 — Geoffrey B. Fehling, Michael S. Levine & Yaniel Abreu - Hunton Insurance Recovery Blog

A recent securities class action, Dunn v. Upstart Holdings, Inc., brought against Upstart – a fintech lender – underscores emerging AI-related D&O risks. Filed April 2026 in California federal court, the suit alleges that Upstart and its executives misled investors about the performance of its AI loan underwriting model. When Upstart’s AI Model 22 underperformed, the company’s stock plunged, prompting an investor lawsuit claiming that management knew about calibration failures. The case spotlights the D&O insurance implications of artificial intelligence in corporate operations. Company executives face new exposures if AI algorithms malfunction or produce biased outcomes. For policyholders, D&O policies may provide coverage for defense and, possibly, liability in securities suits alleging misrepresentations about AI systems. Insurers, however, are starting to add AI exclusions or sublimits, wary of the unpredictable liability posed by opaque AI models.

Reprinted courtesy of Geoffrey B. Fehling, Hunton Andrews Kurth LLP, Michael S. Levine, Hunton Andrews Kurth LLP and Yaniel Abreu, Hunton Andrews Kurth LLP

Mr. Fehling may be contacted at gfehling@hunton.com
Mr. Levine may be contacted at mlevine@hunton.com
Mr. Abreu may be contacted at mlevine@hunton.com

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Webinar laptop

ABA Webinar: AI as Ammo

June 1, 2026 — Beverley BevenFlorez – CDJ Staff

This ABA Webinar discusses AI and how it is used in eDiscovery. The event “will cover the key applications, benefits, and ethics an eDiscovery approach plays a decisive role for real estate and construction practitioners in today's litigation world.” Learning Objectives include “The distinct types and uses of AI available and accepted by Courts,” “Overview of the cases where courts have adopted the use of AI by parties,” and “When AI goes wrong: hallucinations, disputes, and court rulings” and more.

June 17th, 2026
Virtual Event

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Much Of $2.5B Fire Relief Did Not Reach Eaton, Palisades Victims

NBC4 Investigates learned at least 60% of the money was not spent while January wildfire victims grappled with financial struggles. Eric Leonard reports for the NBC4 News.

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Victim of OC Chemical Tank Crisis Says His Insurance Claim Was Denied

Businessowners who were negatively impacted by the emergency are also seeking financial assistance. Hetty Chang and Amber Frias report for the NBC4 News.

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