Construction Adds 110,000 Jobs in March

May 3, 2021
ABC - Construction Executive

The construction industry added 110,000 jobs in March, according to an Associated Builders and Contractors analysis of data released recently by the U.S. Bureau of Labor Statistics. The industry has added 931,000 jobs since April 2020, recovering 83.6% of the jobs lost during earlier stages of the COVID-19 pandemic.

The construction unemployment rate fell to 8.6% in March from 9.6% in February, but it is still 1.7 percentage points higher than in March 2020. Unemployment across all industries declined from 6.2% in February to 6.0% in March.

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


Mechanic’s Liens and Leases Don’t Often Mix Well

Businessmen across from table discussing contract

McCarthy Building Companies Inc. v. TPE Virginia Land Holdings LLC is a good primer on the interaction of leases and Virginia mechanic’s liens.

May 3, 2021
Christopher G. Hill - Construction Law Musings

As those who read my “musings” here at this construction law blog are well aware, the topic of Virginia mechanic’s liens is one that is much discussed. From the basic statutory requirements to the more technical aspects of these tricky beasts. One aspect of mechanic’s liens that I have yet to discuss in detail it how these liens attach in the situation where the contractor does work for a lessee and not for the owner of the underlying fee interest in the property.

A recent case out of the Western District of Virginia federal court, McCarthy Building Companies Inc. v. TPE Virginia Land Holdings LLC, discusses the interaction of Va. Code 43-20, work on a leasehold, and parties necessary to any litigation relating to a lien for the work on that leasehold. The basic facts, outlined more thoroughly in the linked opinion, are these. MBC provided certain work to TPE Kentuck Solar, LLC on property leased from TPE Virginia Land Holdings, LLC. The lease was for a fixed term and for a fixed amount regardless of the work performed at the property. MBC was unpaid by the Kentuck entity and then recorded a lien on the property and then sued to enforce that lien and for unjust enrichment against TPE Land Holdings. TPE Land Holding filed a motion to dismiss the mechanic’s lien and unjust enrichment counts.

Mr. Hill may be contacted at chrisghill@constructionlawva.com


Suzanne Pollack Elected to Lawyers Club of San Diego 2021 Board of Directors

Conference room

Ms. Pollack joined Lawyers Club in 2014, during her first year of practice, and has been actively involved ever since.

May 3, 2021
Suzanne Pollack - Lewis Brisbois

San Diego Associate Suzanne Pollack was recently elected to the 2021 Lawyers Club of San Diego Board of Directors for a three-year term that will begin on July 1, 2021. Founded in 1972, the mission of Lawyers Club - San Diego’s largest specialty bar association - is to advance the status of women in the law and society.

“I am honored to be joining Lawyers Club’s Board of Directors, particularly after this last year, during which we saw the dramatic impact that the pandemic had upon women in the workforce," said Ms. Pollack. "Promoting equality, diversity, and advocacy has never been more important, and I look forward to working with the Board to further these goals.”

Ms. Pollack may be contacted at Suzanne.Pollack@lewisbrisbois.com


Calling the Shots

Businesswoman with arms raised powerfully

Women Excel in Construction Leadership Roles

May 3, 2021
Construction Executive

As of 2019, women accounted for 10% of the total construction workforce. That’s 1.2 million women in the field, sculpting the built environment and calling the shots. A smaller percentage of the industry’s population does not mean less ability to achieve success. According to The National Association of Women in Construction, 44% of women in construction serve in a professional and management capacity.

As the pandemic lingers on, sourcing qualified candidates is becoming more difficult, and finding nuanced methods of retaining valuable employees remains at the forefront of modern business. One estimate cites a loss of 600,000 women from the overall U.S. workforce in September 2020.

However, data suggest that construction employment for women has remained steady, compared with struggling sectors such as retail and hospitality. Plus, salary disparities are becoming less prominent in the construction sector where, according to NAWIC, women earn 99.1% of what men make, and the female population has seen steady growth since 2012.

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


Mitigate Construction Risk Through Use of Contingency

Insurance notebook file

Contingency is important because it allows for money to be in the budget for the unexpected and to keep the project moving, which benefits everyone.

April 26, 2021
Laurie A. Stanziale - Construction Executive

Mitigation of risk and costs in a construction project are always priorities for owners. In some contracts, in particular, Guaranteed Maximum Price contracts, some of those monetary risks are shifted to the contractor. Contingency is important because it allows for money to be in the budget for the unexpected and to keep the project moving, which benefits everyone.

WHAT IS CONTINGENCY?

Contingency is an amount of money built into the contractor’s price to complete the project to address unforeseen (although sometimes very common) costs that arise. This sum of money is generally referred to as the contractor’s contingency. The amount of the contingency is a balance struck between having money on hand to address the unexpected while also not unnecessarily tying up money that could otherwise be used for the project. Contingency is typically 5-10% of the hard costs. However, how the money is actually allocated during the project is not always well thought out, which can be the source of problems during the project.

The contractor’s contingency is not to be confused with an owner’s contingency (or reserve) which is outside of the contractor’s budget and generally used for owner driven changes to the project, such as changes to scope, design and schedule.

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


Oklahoma Finds Policy Can Be Assigned Post-Loss

Losses red notebook

Johnson's property was damaged in a storm.

April 26, 2021
Tred R. Eyerly - Insurance Law Hawaii

Oklahoma joined the majority of court in finding that after a loss occurs, the insured can assign the policy to another. Johnson v. CSAA Gen. Ins. Co., 2020 Okla LEXIS 118 (Okla. Dec. 15, 2020).

Johnson's property was damaged in a storm. She filed a claim with her insurer. She also executed an assignment of her claim in order to repair the property with the execution of assignment to Triple Diamond Construction LLC. An appraiser retained by Triple Diamond determined the storm damage was $36,346.06. The insurer paid only $21,725.36 for the loss.

Johnson and Triple Diamond sued the insurer for breach of contract, seeking $14,620.70, not inclusive of interest, attorneys' fees and costs. The insurer filed a motion to dismiss, or an alternative motion for summary judgment to dismiss Triple Diamond as a party. The insurer argued that both the policy and an Oklahoma statute barred the assignment. The district court granted the insurer's motion.

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


Factory Mutual’s “Contamination” Exclusion Is Ambiguous; May Not Limit Coverage For COVID-19 Business Interruption Loss

April 26, 2021
Michael S. Levine - Hunton Andrews Kurth

On Wednesday, a federal judge in New York denied FM’s Rule 12(c) motion for judgment on the pleadings after finding the Contamination Exclusion in the Factory Mutual policy to be ambiguous as to whether it bars coverage for business interruption losses resulting from communicable disease. The case is Thor Equities, LLC v. Factory Mutual Ins. Co., No. 20 Civ. 3380 (AT) (SDNY). This is a critical decision under the Factory Mutual policy form, which is substantively the same as policies issued by Factory Mutual’s sister company, Affiliated FM Insurance Company. Factory Mutual and Affiliated FM have maintained that the contamination coverages are “exceptions” to this exclusion, with the exclusion precluding coverage for communicable disease loss under other policy coverages. But the ruling validates what policyholders have been arguing – that communicable disease “loss” is covered throughout the Factory Mutual policy, in addition to under the sublimited communicable disease emergency response coverages.

Mr. Levine may be contacted at mlevine@HuntonAK.com


US Court Disputes $1.8B AECOM Damage Award in ‘Remarkable Fraud’ Suit

Gold coins

“In 2008, unbeknownst to MK, defendants began what would become an intricate series of frauds designed to trade off, and indeed take over, the MK identity,” the suit says.

April 26, 2021
Mary B. Powers - Engineering News-Record

A federal appeals court has thrown out a $1.8-billion award granted by a lower court three years ago to an AECOM unit in a bizarre legal battle involving a Nevada company that claimed to have won multiple contracts using the name of Morrison Knudsen—the former well-known Boise-based construction contractor that was sold in 1996, and through acquisitions, became part of design-build giant AECOM in 2014.

Reprinted courtesy of Mary B. Powers, Engineering News-Record

ENR may be contacted at ENR.com@bnpmedia.com

Read the full story...


Why Biden’s Infrastructure Plan Is a Green Jobs Plan

Green leaves after rain

Jobs vs. environment is an old trope whose time has passed.

April 26, 2021
Gernot Wagner - Bloomberg

“Once you put capital money to work, jobs are created.”

These are not the words of President Joe Biden, announcing his administration’s infrastructure plan in Pittsburgh on Wednesday. Nor were they the words of Transportation Secretary Pete Buttigieg, standing on a train platform to announce expanded service, or of any of the administration’s economists charged with touting the virtues of the $2.25 trillion spending plan.

It was Michael Morris, then-CEO of Ohio utility American Electric Power, who uttered them on an investor call a decade ago. AEP was fighting an Environmental Protection Agency proposal to reduce mercury and other pollutants from power plants, citing the expense of creating jobs to install new scrubbers on smokestacks or build cleaner plants. Morris, taking his fiduciary responsibility to the utility’s investors seriously, argued these new roles would come at a cost to AEP and were, thus, bad. What he did not question, and correctly so, was whether more investments would indeed create more jobs.


Three Key Takeaways from Recent Hotel Website ADA Litigation

Number Three

The complaints allege that a hotel’s online reservation system failed to provide enough detail for individuals with disabilities to decide if the hotel meets their accessibility needs.

April 26, 2021
Shane Singh & Grace Mehta - Lewis Brisbois

Despite the COVID-19 pandemic and its chill on the hospitality industry, ADA-related digital lawsuits increased by approximately 23% in 2020. Many of these lawsuits are filed against hotels. The complaints allege that a hotel’s online reservation system failed to provide enough detail for individuals with disabilities to decide if the hotel meets their accessibility needs.

These plaintiffs will often claim that it is insufficient to describe an aspect of a hotel or room as “accessible” because the term is an opinion or conclusion. Plaintiffs argue that a hotel’s reservation system must report specific information, such as the dimensions of space under accessible desks and sinks, the slopes of surfaces, doorway clearance, and numerous other technical requirements under the ADA.

Many hotels are fighting back, arguing that the detail provided is sufficient and in compliance with the ADA. So far this year, in February 2021, two judges in the U.S. District Court for the Central District of California, Judge Percy Anderson and Judge Cormac Carney, agreed with the defendants, dismissing three cases with prejudice.

Reprinted courtesy of Shane Singh, Lewis Brisbois and Grace Mehta, Lewis Brisbois

Mr. Singh may be contacted at Shane.Singh@lewisbrisbois.com
Ms. Mehta may be contacted at Grace.Mehta@lewisbrisbois.com


Congratulations Devin Brunson on His Promotion to Partner!

Business partners raising arms in triumph

Devin Brunson has taken on a significant leadership role within the firm over the past several years and has been integral in growing the office to its current footprint.

April 26, 2021
Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

Bremer Whyte Brown & O’Meara, LLP is very proud to announce Devin Brunson has been promoted to the position of partner with the firm!

Mr. Brunson came to BWB&O from another civil litigation firm and helped start the Denver, Colorado office along with partners Lucian Greco, John Toohey and Peter Brown. He has taken on a significant leadership role within the firm over the past several years and has been integral in growing the office to its current footprint.

He is licensed to practice law in Colorado, District of Colorado, and in the U.S. District Court. His practice is focused in the areas of civil and business litigation, construction litigation, and employment law. Mr. Brunson has a diverse practice background that includes complex civil litigation and intellectual property disputes and has had the privilege of representing business owners, contractors, corporate executives, and professional athletes during the course of his career.


WebEd: Holy Smokes We Had an Incident, What Do I Do Now

April 26, 2021
Beverley BevenFlorez – CDJ Staff

This AGC webinar presented by Construction Risk Partners will discuss three areas of incidents and accidents including the Pre-incident, Incident, and Post-incident. The Pre-incident area will cover how to plan “for an incident from the smallest to the catastrophic.” The faculty will also explain “how to handle the first 24 hours of an incident or injury.” They will conclude with “how to control post incidents or injuries” including “how to work with the Insurance carriers or TPAS to properly report the incident, control cost, exposure, and bad PR.”

May 18th, 2021
Virtual Event


The Value of Photographic Evidence in Construction Litigation

Worker with camera and cell phone

If a picture is worth a thousand words, can it be worth a thousand dollars? Ten thousand?

April 26, 2021
Marie Mueller - Construction Executive

If a picture is worth a thousand words, can it be worth a thousand dollars? Ten thousand? Maybe, if it provides key evidence in a construction dispute. Litigating a construction case involves each side telling their story. Details and visual context make a story compelling. Evidence and corroboration make a story persuasive. Photographs can help on both of these fronts.

The Value of Photographic Evidence in Construction Litigation

Consider the following examples:

  • A dispute relates to the timeliness of particular work. An employee has a memory of a load of materials arriving to the site later than it should have, but the records are incomplete or ambiguous about when it actually occurred. If the employee also took a photo of the materials, on the day they arrived, they could match up the date of the photo to their memory and build a clear timeline.
  • A dispute relates to the presence or absence of obstructions in drilled shafts. There are no available photographs or videos of the work due to site restrictions. Presentation of this type of case may be severely limited by not being able to show photos depicting the size, shape and type of material removed from the shafts, and by the lack of video depicting the work.

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

Ms. Mueller may be contacted at mmueller@verrill-law.com


The Court-Side Seat: FERC Reviews, Panda Power Plaints and Sovereign Immunity

Basketball player shooting basket

A brief report on new environmental law decisions, regulations and legislation.

April 26, 2021
Anthony B. Cavender - Gravel2Gavel

This is a brief report on new environmental law decisions, regulations and legislation.

THE U.S. SUPREME COURT

Massachusetts Lobsterman’s Association v. Raimondo, Secretary of Commerce

On March 22, 2021, the Supreme Court rejected a petition to review a Presidential decision to invoke the Antiquities Act of 1906 to designate as a monument “an area of submerged land about the size of Connecticut” in the Atlantic Ocean. This action forbids all sorts of economic activity, which compelled the filing of litigation in the First Circuit challenging this designation. Chief Justice Roberts supported the Court’s denial of certiorari, but remarked that a stronger legal case may persuade the Court to review such liberal uses of the Antiquities Act.

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com


Housing Starts in U.S. Soar After Winter-Related Setback

April 26, 2021
Olivia Rockeman - Bloomberg

U.S. housing starts rebounded sharply in March to the highest since 2006, exceeding forecasts and indicating residential construction is getting back on track after a winter storm-related setback.

Residential starts jumped 19.4% last month to a 1.74 million annualized rate, according to government data released Friday. The median estimate in a Bloomberg survey called for a 1.61 million pace. Applications to build also climbed.


Cybersecurity "Flash" Warning for Construction and Manufacturing Businesses

Construction worker with laptop

Substantial Increase in Cyber Crime in the FBI’s 2020 Internet Crime Report – Companies Must Take Heed.

April 26, 2021
Jeffrey M. Dennis - Newmeyer Dillion

The FBI recently released its 2020 Internet Crime Report (Report), which details and analyzes complaints received through the FBI’s Internet Crime Complaint Center (IC3). In 2020, IC3 received a record number of complaints – nearly 800,000, with reported losses in excess of $4.1 billion. Companies must acknowledge that cybercrime is a real, dangerous threat to their business, and understand how, and why, these threats continue to escalate. At a minimum, businesses should take several proactive steps to protect themselves.

What is IC3?

IC3 is an online platform hosted by the FBI, which exists to provide the public with a trusted place to report cybercrime to the FBI. Since its inception in 2000, the IC3 has received 5.6 million complaints, and has averaged approximately 440,000 complaints over each of the last five years. The complaint figure for 2020 is nearly double that average.

Mr. Dennis may be contacted at jeff.dennis@ndlf.com


Nonresidential Construction Spending Stabilizes in January 2021, Down 5% Since January 2020, Says ABC

April 26, 2021
ABC - Construction Executive

National nonresidential construction spending increased 0.9% on a monthly basis in January 2021 but is down 5% since January 2020, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $799.1 billion for the month.

Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending increased 0.4% in January, while public nonresidential construction spending increased 1.6%. Only four nonresidential construction categories have experienced growth in spending on a year-over-year basis, all of which are primarily publicly financed segments.

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


Connecticut Appellate Court Breaks New Ground on Policy Exhaustion

Pen resting on insurance policy

The case marks a further step away from Judge Augustus Hand’s almost-century-old ruling in Zeig v. Massachusetts Bonding & Ins. Co.

April 26, 2021
Eric B. Hermanson & Austin D. Moody - White and Williams

The Connecticut Appellate Court recently issued a wide-ranging opinion, Continental Casualty Co. v. Rohr, Inc.,[1] which significantly extended the current restrictive view on when a general liability policy can be considered exhausted so as to trigger overlying excess coverage. The case marks a further step away from Judge Augustus Hand’s almost-century-old ruling in Zeig v. Massachusetts Bonding & Ins. Co.,[2] which held that an underlying policy could be “exhausted” by a below-limits settlement as long as the insured was willing to “fill the gap” between the settlement amount and the limits of the policy.[3]

In recent years, courts in California and elsewhere have increasingly walked back Zeig’s broad ruling – holding in Qualcomm v. Certain Underwriters,[4] for example, that an insured’s below-limits settlement with primary carriers does not exhaust the limits of primary coverage, or allow the insured to access overlying excess coverage.[5]

Reprinted courtesy of Eric B. Hermanson, White and Williams and Austin D. Moody, White and Williams

Mr. Hermanson may be contacted at hermansone@whiteandwilliams.com
Mr. Moody may be contacted at moodya@whiteandwilliams.com


Pass-Through Subcontractor Claims, Liquidating Agreements, and Avoiding a Two-Front War

Woman holding her temples

To avoid a two-front war, a general contractor should always consider whether a subcontractor’s claim is appropriate for pass-through to the owner and via a liquidating agreement or by relying on the subcontract’s “liquidating language.”

April 26, 2021
Bradley Sands, Jones Walker LLP - ConsensusDocs

Subcontractor claims happen. When those subcontractor claims are prompted by owner actions or responsibilities, the general contractor must always be vigilant to plan for and work to avoid a two-front war in which the general contractor is pushing the owner for recovery while at the same time disputing the subcontractor’s entitlement.

Cooperation between the general contractor and the subcontractor and avoiding that two-front war can be accomplished through pass-through claims and ideally liquidating agreements. A pass-through claim is a claim by the subcontractor who has suffered damages by the owner with whom it has no contract, presented by the general contractor. A liquidating agreement or subcontract “liquidating language” goes a step further than simply a pass-through claim by “liquidating” the general contractor’s liability for the subcontractor’s claim and limiting the general contractor’s liability to the value recovered against the owner. The distinction between pass-through claims generally and use of liquidating agreements or language is described in greater detail below.

Pass-through subcontractor claims are routine in construction and an important, common sense approach to deal with ever-present changes and the unexpected that can have cost and time implications. Despite the common sense basis for subcontractor pass-through claims, there are important legal considerations that must be addressed, and critical planning required, starting with the subcontract clauses.

Mr. Sands may be contacted at bsands@joneswalker.com


Clearly Determining in Contract Who Determines Arbitrability of Dispute

Businessman and woman back to back

The positives and negatives of arbitration should be considered during the contract negotiation process when dealing with the dispute resolution process in the contract.

April 26, 2021
David Adelstein - Florida Construction Legal Updates

As you know from prior postings: “Arbitration provisions are creatures of contract and must be construed ‘as a matter of contract interpretation.’ ” Fallang Family Limited Partnership v. Privcap Companies, LLC, 46 Fla.L.Weekly D639e (Fla. 4th DCA 2021) (citation omitted). Thus, if you prefer to arbitrate potential disputes, instead of litigating potential disputes, you want to include an arbitration provision in your contract. While there are positives and negatives to arbitration, no different than litigation, these positives and negatives should be considered during the contract negotiation process when dealing with the dispute resolution process in the contract.

Generally, under the law, the arbitrability of a dispute is determined by the court. However, this can be deferred to the arbitrator with clear and unmistakable language in the contract.

By way of example, the American Arbitration Association includes a rule that allows an arbitrator to rule on the arbitrability of the dispute, i.e., the claims asserted are subject to the governing arbitration provision in the contract. Recent law has suggested that if the objective is to authorize an American Arbitration Association arbitrator to make this determination, the contract clearly and unmistakably needs to state this intent and generally referring to the American Arbitration Association rules is not good enough. For this reason, I have included in arbitration provisions language that specifically states, “In the event of any dispute as to the arbitrability of any claim or dispute, the parties agree that an appointed arbitrator within the American Arbitration Association shall make this determination.” I have also included in arbitration provisions the converse so that if there is a dispute as to the arbitrability of a claim or dispute, the court, and not the arbitrator, will make this determination.

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



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