CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - TUESDAY, OCTOBER 20, 2026

Human hand touching robotic hand

This article covers dispute-related risks that arise when project or commercial managers use generative AI for quick feedback or gut checks on real-time project issues.

Could Your Project-Level AI Prompt Become the Other Side’s Smoking Gun?

October 20, 2026
Ryan Glass - ConsensusDocs

A dispute is brewing on the project. Wanting a quick assessment, the project manager opens ChatGPT, Claude, or another generative artificial intelligence (“AI”) platform. The project manager types the dispute background into the prompt, including concerns, explanations, and a frank discussion of what may have gone wrong on the contractor-side. The AI response identifies potential weaknesses in the contractor’s position, including possible failures to meet contractual obligations. Unhappy with the answer, the project manager starts a new chat, revises the prompt, and tries again. If the dispute escalates to arbitration or litigation, can the owner force the contractor to provide these prompts and the resulting responses?

Frustratingly, the answer is: it depends. Courts have reached different conclusions. For now, the safest course is to involve your counsel before using AI to evaluate a demand letter, default notice, or threatened lawsuit, or before using AI to draft dispute-related emails, claim letters, or other communications that contain project-specific facts. Otherwise, what feels like a private conversation may later become key evidence for the opposing party.

Mr. Glass may be contacted at rglass@joneswalker.com

Reprinted courtesy of Ryan Glass, Jones Walker LLC

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CDJ NEWS THIS WEEK



Email on cell

Colorado’s construction defect statutes establish specific requirements for notices of claim and statutory tolling. It is time for courts and arbitrators to enforce them.

Not All Warranty E-Mails Are Notices of Claim

October 20, 2026 — David McLain - Colorado Construction Litigation Blog

There is a frustrating tendency in some Colorado construction defect litigation to treat virtually any written complaint about construction work as a statutory notice of claim under the Construction Defect Action Reform Act (“CDARA”). An e-mail complaining about cracked concrete. A request for warranty service. A message asking a builder to come inspect a leaking window. Years later, when the homeowner faces a statute-of-limitations defense, these routine communications are suddenly characterized as statutory notices of claim, with the convenient consequence that an otherwise untimely lawsuit becomes timely.

Enough is enough.

A warranty complaint is not a statutory notice of claim simply because a homeowner complains about construction. Courts and arbitrators should stop treating the two as interchangeable.

Mr. McLain may be contacted at mclain@hhmrlaw.com

Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC

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Gavel law book and scale

The federal district court found that the additional insureds had to meet the policy’s self-insured retention before a duty to defend was triggered.

Additional Insureds Obligated to Meet Self-Insured Retention

October 20, 2026 — Tred R. Eyerly - Insurance Law Hawaii

The federal district court found that the additional insureds had to meet the policy’s self-insured retention before a duty to defend was triggered. Amerisure Ins. Co. v. Premier Design & Build Group, LLC, 2026 U.S. Dist. LEXXIS 170741 (N.D. Ill. July 31, 2026).

Amerisure issued CGL and umbrella policies to Premier Design & Build Group, LLC. Amerisure had the right and duty to defend in certain suits for property damage under both policies.

Premier contracted with MG East, LLC (MGE) to build three buildings. After the buildings were constructed, MG filed suit against Premier in state court, seeking recovery for allegedly defective installation of the roof, flashing, and gutters on each of the buildings. Premier had subcontracted with Tecta American Sough Florida, Inc. to install the flashing.

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 running through tunnel

This article considers the purpose and interpretation of NICs in the context of the property damage claims to which they are most often relevant.

The Great Escape: Non-Invalidation Clauses and Property Damage Claims

October 20, 2026 — Abigail Smith & Kaarthiga Manimaran - SDV Fenchurch

At their core, non-invalidation clauses (“NICs”) recognise an important commercial reality: an insured cannot control everything that happens at its premises.

In the event that an insured finds itself in breach of a condition or warranty owing to events that have increased the risk of damage to its property, but which were outside its authority, knowledge or beyond its control, a NIC may prevent the insurer from avoiding the claim. For that reason, they’re an important tool in an insured’s coverage arsenal.

Although there is relatively little caselaw on NICs, their purpose was recognised in The Seashell of Lisson Grove Ltd v Aviva Insurance Ltd [2011] EWHC 1761 (Comm) (on which we wrote a previous article – The Good, the Bad & the Ugly: #26 The Good: The Seashell of Lisson Grove Ltd v Aviva)

Reprinted courtesy of Abigail Smith, SDV Fenchurch and Kaarthiga Manimaran, SDV Fenchurch

Ms. Smith may be contacted at abigail.smith@sdvfenchurch.uk
Ms. Manimaran may be contacted at kaarthiga.manimaran@sdvfenchurch.uk

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Licenses named folder

Governor Newsom signed Senate Bill 342, which amends Business and Professions Code section 7031 and significantly limits the draconian consequences traditionally associated with temporary contractor licensing lapses on many larger construction projects.

California Contractors Get a Much-Needed Break: SB 342 Softens the Harsh Consequences of Contractor License Lapses

October 20, 2026 — Heather Frisch - The Construction Seyt

Imagine completing a multimillion-dollar project, performing quality work, paying your subcontractors, and satisfying the owner, only to discover that a temporary contractor license lapse could prevent you from recovering payment for that work or pursuing claims for extra work. For decades, that was the reality under California Business and Professions Code section 7031.

A contractor that allowed its license to lapse, even briefly, could face catastrophic consequences completely disconnected from the quality of its work. In some cases, a contractor that performed otherwise flawless work could be barred from recovering payment and even be ordered to disgorge compensation already received – even if the owner knew the contractor had a lapse in its licensing and allowed it to continue construction.

That reality is about to change.

Ms. Frisch may be contacted at hfrisch@seyfarth.com

Reprinted courtesy of Heather Frisch, Seyfarth

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Contract being ripped

Every time project documents are uploaded into a third-party AI tool, contractual confidentiality obligations may be implicated — or outright breached — exposing companies to potentially substantial and uncapped liability.

Your AI Tool Could Be Your Next Breach of Contract

October 20, 2026 — Laurie Choi & Christian Fernandez - Snell & Wilmer

Like many industries, the construction industry is rapidly adopting artificial intelligence. AI-powered tools now help construction teams estimate costs, transcribe meetings, summarize RFIs, model schedules, and manage project documents faster than ever before. But amid this rush toward efficiency, a serious risk hides in plain sight: every time project documents are uploaded into a third-party AI tool, contractual confidentiality obligations may be implicated — or outright breached — exposing companies to potentially substantial and uncapped liability.

General contractors often face strict confidentiality and nondisclosure obligations, whether under the prime construction contract or a separate NDA. This is especially true for complex projects or those involving proprietary technology — such as data centers, medical or scientific facilities, and energy generation and storage facilities. These confidentiality clauses typically define “confidential information” broadly to encompass all non-public information provided for the project, including plans, specifications, pricing, schedules, RFPs, and even the contract terms themselves. These confidentiality obligations almost always flow down to subcontractors.

Reprinted courtesy of Laurie Choi, Snell & Wilmer and Christian Fernandez, Snell & Wilmer

Ms. Choi may be contacted at lchoi@swlaw.com
Mr. Fernandez may be contacted at cfernandez@swlaw.com

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Climate Law Gavel

Both courts held that the Clean Air Act (CAA) preempts New York’s effort to impose strict liability through a climate attribution and cost recovery framework based on interstate greenhouse gas (GHG) emissions.

New York Climate Superfund Rulings Put Vermont Law in Focus

October 20, 2026 — Amanda G. Halter, Ashleigh K. Myers, Jillian Marullo & Marcus Manca - Pillsbury

A second federal judge has struck down New York’s Climate Change Superfund Act and barred its enforcement. On September 23, 2026, Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York issued a decision granting summary judgment to the United States and the U.S. Environmental Protection Agency (EPA), declaring the Act unconstitutional, and permanently enjoining New York officials from enforcing it in United States v. New York, No. 1:25-cv-03656 (S.D.N.Y. Sept. 23, 2026).

Judge Castel’s decision closely tracks the Northern District of New York’s August 31 decision in West Virginia v. James, Case No. 1:25-cv-00168 (N.D.N.Y. Aug. 31, 2026). Both courts held that the Clean Air Act (CAA) preempts New York’s effort to impose strict liability through a climate attribution and cost recovery framework based on interstate greenhouse gas (GHG) emissions. Both also held that the foreign affairs doctrine preempts the Act as applied to fossil fuel activity outside the United States. On September 24, the Northern District entered Rule 54(b) judgment implementing its August 31 decision, enjoining Attorney General Letitia James and DEC Commissioner Amanda Lefton from implementing or enforcing the Act and permitting an immediate appeal of the preemption claims.

Reprinted courtesy of Amanda G. Halter, Pillsbury, Ashleigh K. Myers, Pillsbury, Jillian Marullo, Pillsbury and Marcus Manca, Pillsbury

Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Ms. Myers may be contacted at ashleigh.myers@pillsburylaw.com
Ms. Marullo may be contacted at jillian.marullo@pillsburylaw.com
Mr. Manca may be contacted at marcus.manca@pillsburylaw.com

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The conversation explores how careful contract review, thorough project documentation, timely notice, and proactive risk management can help contractors safeguard their rights and more effectively address potential conflicts.

When Projects Go Off Schedule: Navigating Construction Delays and Disputes

October 20, 2026 — Shay Kulkarni - Peckar & Abramson, P.C.

Shay Kulkarni, Partner in P&A’s San Diego office, was recently featured on Racho Mesa Insurance Services’ StudioOne™ Safety and Risk Management Podcast Network, in an episode titled, “When Projects Go Off Schedule: Navigating Construction Delays and Disputes.” During the episode, Shay joins Josh Hill, Surety Account Executive at Rancho Mesa, to discuss the best practices for navigating delays, disruptions, and disputes that arise during construction projects. The conversation explores how careful contract review, thorough project documentation, timely notice, and proactive risk management can help contractors safeguard their rights and more effectively address potential conflicts.

Mr. Kulkarni may be contacted at skulkarni@pecklaw.com

Reprinted courtesy of Shay Kulkarni, Peckar & Abramson, P.C.

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Hands reaching for a money

Dispute dates back to flooding of NYC hospital during Superstorm Sandy.

Court Rules Insurer AIG Can't Claw Back $50M Storm Payout From Turner

October 20, 2026 — Richard Korman - Engineering News-Record

A Delaware court judge ruled earlier this month that insurer AIG cannot claw back $50 million from Turner Construction for two insurance claim payouts it has made to New York University's Langone Medical Center. The dispute relates to the 2012 flooding of the university's Manhattan hospital center during Superstorm Sandy in October 2012.

Mr. Korman may be contacted at kormanr@enr.com

Reprinted courtesy of Richard Korman, Engineering News-Record

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Year in Review Reflection

LEED v5 shifts policy toward outcomes based on decarbonization, social equity and ecosystem restoration.

One Year In: A Look at the Initial Impacts of LEED v5 on the Built Environment

October 20, 2026 — Eric Haggstrom - Construction Executive

As federal climate policies shift, the built environment has entered a period of uncertainty where developers, designers and owners need to find pragmatic, forward-looking approaches to sustainability. A year after its launch on April 28, 2025, LEED v5 is helping lead that charge by pushing the industry toward a stronger long-term focus on carbon reduction, climate resilience and building performance. The framework of this certification provides a snapshot of the current state of the industry and an indication of where it may be headed in the future.

LEED v5’s introduction has helped to begin reframing and informing the approaches of both mission-driven and cost-conscious clients, providing a framework to align their decisions more closely with sustainable priorities by emphasizing carbon reduction, energy efficiency and electrification. These standards can help teams make investments strategically by phasing in upgrades, planning for future technologies and demonstrating how the rating system is influencing long-term decision-making across projects.

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

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Congratulations toast

Lewis Brisbois New York Partner Ian B. Lane has been elected president of the Southern New York Chapter of the American Board of Trial Advocates for the 2027-2028 term.

Lewis Brisbois Partner and National Trial Team Member Ian B. Lane Elected President of ABOTA’s Southern New York Chapter

October 20, 2026 — Lewis Brisbois

Lewis Brisbois is pleased to announce that New York Partner Ian B. Lane, a member of the firm’s National Trial Team, has been elected president of the Southern New York Chapter of the American Board of Trial Advocates (ABOTA) for the 2027-2028 term. In this role, Mr. Lane will help lead the organization's efforts to promote excellence in trial advocacy, to foster professionalism within the legal profession, and to advance the chapter's educational, professional, and public service initiatives. Lewis Brisbois has nearly 40 ABOTA members across the country.

"I am deeply honored by the confidence my colleagues have placed in me," said Mr. Lane. "ABOTA plays a vital role in preserving the right to trial by jury and promoting the highest standards of professionalism, civility, and advocacy. I look forward to working with our members to advance those goals, support the development of the next generation of trial lawyers, and strengthen the important role of the civil justice system."

Reprinted courtesy of Lewis Brisbois

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Data Center Under Construction

With labor shortages already delaying projects and delays costing up to $14.2 million per month for a 60 MW data center, early logistics planning is becoming critical.

Texas Prepares to Restart Data Center Construction, with Around 300 Projects Under Review And 6,608 MW Awaiting Energization Approval, Driving Demand for Rapid-Response Lifting Operations

October 20, 2026 — Sarens

Texas is experiencing an unprecedented increase in power demand. The ERCOT (Electric Reliability Council of Texas) power grid reached a record peak demand of 91.1 GW in summer 2026, 6% above the previous record, according to the U.S. Energy Information Administration (EIA). This is compounded by interconnection requests totaling around 474 GW, more than five times the record peak, with approximately 90% of these requests related to data centers, according to the Office of the Governor of Texas. Within this context, authorities have launched a comprehensive review process. In August , the Governor directed the Public Utility Commission of Texas (PUCT) and ERCOT to audit all data centers progressing toward grid connection, covering around 300 projects. ERCOT has also suspended approvals to energize data centers of 75 MW or more and has set December 10 as the date for the publication of its reports.

For the industry, this pause creates a valuable planning window. Goldman Sachs notes that it takes 18 to 24 months to build a data center once permits have been secured, while only 50% to 60% of planned capacity is delivered on schedule. Supply chain constraints and labor shortages are among the most common causes of delays. In this context, construction agility is becoming increasingly critical. A one-month delay at a typical 60 MW U.S. data center is estimated to cost up to $14.2 million in lost revenue, additional costs and penalties, according to STL Partners data. Against this backdrop, Sarens, which has operated in the U.S. since 2009 and is headquartered in Houston, with offices also in Odessa and Beaumont, positions as a logistics partner for developers and contractors preparing for the execution phase.

Reprinted courtesy of Sarens

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Bag of cash money

Amazon commits to spend more than $1 billion over the next five years on initiatives for the communities near its server farms.

Amazon’s Latest Response to AI Data Center Backlash: $1 Billion

October 20, 2026 — Matt Day – Bloomberg

Amazon.com Inc.’s latest attempt to address the intensifying blowback to an unprecedented buildout of computing infrastructure: a commitment to spend more than $1 billion over the next five years on initiatives for the communities near its server farms.

Reprinted courtesy of Matt Day, Bloomberg

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Marana Arizona

Mattamy Homes Announces the Acquisition of Twin Peaks Crossings in Marana, Arizona

October 20, 2026 — Mattamy Homes

TUCSON, Ariz., Sept. 29, 2026 /CNW/ -- Mattamy Homes, the largest family-owned homebuilder in North America, has acquired 154 homesites for Twin Peaks Crossings, a new home community planned for Marana, Arizona, further expanding its presence in the Tucson region.

The purchase represents another milestone in Mattamy's investment along the Twin Peaks corridor, one of the Tucson area's fastest-growing locations. Twin Peaks Crossings builds on Mattamy's growing presence in Marana, joining Tavira at Twin Peaks, which opened in September 2025, and Silverbell Ridge which opened in February 2026.

Community at a Glance

  • Community name: Twin Peaks Crossing
  • Homesites: 154 single-family homesites
  • Acquisition closed: September 3, 2026
  • Sales anticipated to begin: September 2027
  • First homeowners anticipated: November 2027
  • Home designs: Five floorplans featuring one- and two-story homes

For more information about Mattamy Homes communities in the Tucson area, visit www.mattamyhomes.com/tucson.

About Mattamy Homes
Mattamy Homes is the largest family-owned homebuilder in North America, with more than 48 years of operations history across the United States and Canada. Every year, Mattamy helps 8,000 families realize their dream of homeownership. In the United States, the company is represented in 11 markets: Charlotte, Raleigh, Phoenix, Tucson, Jacksonville, Orlando, Tampa (where its U.S. head office is located), Sarasota, Naples, Dallas and Southeast Florida. In Canada, its communities stretch across the Greater Toronto Area, Ottawa, Calgary and Edmonton. Visit www.mattamyhomes.com for more information.

Metro tracks

Consertus Expands California Footprint With Buy of S2 Engineering

October 20, 2026 — Emell D. Adolphus - Engineering News-Record

Miami-based professional services firm Consertus Inc. is expanding its West Coast footprint by purchasing Cucamonga, Calif.-based engineering, construction management, inspection and materials testing firm S2 Engineering, which has a portfolio of public infrastructure projects.

Mr. Adolphus may be contacted at adolphuse@enr.com

Reprinted courtesy of Emell D. Adolphus, Engineering News-Record

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Global network earth

Global Insights Center: Monthly Newsletter

October 20, 2026 — Global Insights Center Staff - The Hartford

September in Review
Business startup activity continues to rise and is expected to reach record levels over the coming year. The startup ecosystem has advanced through several distinct phases over the past decade, with each period producing higher levels of business formation. The first major increase was driven by the pandemic-era surge in entrepreneurship, while the latest wave has been led by retail, software, professional services, and a broad range of other industries. These trends align with recent evidence showing improved small business profitability. The biggest drivers have been tariff refunds, which provided short-term cash support, and easing input-cost inflation.

Reprinted courtesy of Global Insights Center Staff, The Hartford

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Seminar

Construction Project Scheduling & Delay Claims Seminar

October 20, 2026 — Beverley BevenFlorez – CDJ Staff

This one-day event “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 faculty “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 21st, 2027
Marina del Rey, CA
Location TBD

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Wildfire Burns Homes and Forces Evacuations

A fast-moving fire is torching homes and forcing evacuations in Orange County, California. Millions in the state are now under critical risk for dangerous fire conditions. NBC News’ Dana Griffin is in the fire zone.

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Crack on Beach Cliff Supporting PCH Draws Concern

Erosion has caused a large crack to appear in the cliffside under a stretch of the Pacific Coast Highway near Laguna Beach, KTLA 5 News.

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