CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - MONDAY, MAY 19, 2025

Seminar

Their presentation, the Six Pain Points in Construction Contracts, will offer fellow legal counsel practical strategies for navigating high-stakes construction contract issues.

WSHB to Present on Top Six Construction Contract Pain Points at Virtual CLE Conference

May 19, 2025
Wood Smith Henning & Berman

Virtual
Event Sponsor: NBI

Wood Smith Henning & Berman is pleased to announce the partners Keith Smith and Ian Baldwin will be featured speakers at the upcoming advanced-level CLE course Tackle the Trickiest Construction Contracts, a virtual construction law conference for seasoned practitioners. Their presentation, the Six Pain Points in Construction Contracts, will offer fellow legal counsel practical strategies for navigating high-stakes construction contract issues. The presentation will take place on June 5, 2025 at 10:00 a.m. and will kick off the day-long conference.

"Our session will take a deep dive into recurring issues that cause the most friction in construction contracts," said Smith. "By identifying where things most often go awry, we can empower construction participants to build stronger, clearer contracts that will withstand scrutiny."

The conference is designed to address the most pressing challenges attorneys face in drafting and negotiating construction agreements, including such issues as indemnity clauses, scope of work documentation, government procurement hurdles, change orders, and liability in circumstances of force majeure. Attendees will walk away with real-world insights and case law updates tailored to help them mitigate disputes and protect client interests.

Reprinted courtesy of Wood Smith Henning & Berman

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CDJ NEWS THIS WEEK



Water leaking from pipe

A water leak from a drain valve on the tenth floor caused damage to the building.

Insureds Prevail on Summary Judgment Addressing Responsibility for Water Leak

May 19, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The court granted summary judgment to the insureds, finding they were not responsible for a water leak from a drain valve on the tenth floor of the building. Charter Oak Fire Ins. Co. v. Bremermann Mech., Inc., et al., 2025 U.S. Dist. LEXIS 59871 (E.D. La. March 31, 2025).

The General Services Administration (GSA), the building owner, contracted with Wright Brothers, LLC (WB) to serve as the general contractor to create office space on the tenth floor of the building. Under the general contract, WB was responsible for providing all materials, services and labor to both design and construct the office space. WB subcontracted with Bremermann Mechanical, Inc. (BMI) to provide HVAC installation. BMI, in turn, subcontracted with Siemens to provide products and services to facilitate the installation.

A water leak from a drain valve on the tenth floor caused damage to the building. Charter Oak and Travelers were Plaintiffs as subrogees of WB and BMI. Siemens and its insurer, HDI Global Insurance Company, and BMI and its insurer, Kinsale Insurance Company, were defendants.

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

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

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Lawyer giving advice

In this case, plaintiff sued a person d/b/a (doing business as) a fictitious company that focuses on kitchen countertops.

Admissions In Answers to Construction Lawsuits Matter

May 19, 2025 — David Adelstein - Florida Construction Legal Updates

Ogden v. Defelice, 50 Fla.L.Weekly D937d (Fla. 5th DCA 2025), is a construction case that doesn’t talk about construction issues. Go figure. Nonetheless, it does touch upon two worthy considerations: (i) admissions in answers to lawsuits; and (ii) fictitious names. Both issues apply to construction disputes.

In this case, plaintiff sued a person d/b/a (doing business as) a fictitious company that focuses on kitchen countertops. After an amended complaint, the person filed an answer to the lawsuit that admitted the allegation regarding him doing business as a fictitious company. The case proceeded to a bench trial and the person got a judgment entered against him. The person later tried to vacate the judgment arguing that the judgment never should have been entered against him, but another company.

This argument was rejected:
Admissions in pleadings “are accepted as facts without the necessity of supporting evidence. Phrased differently, a pleading admission has “ ‘the effect of withdrawing a fact from contention.’” It “release[s] the opposing party from its burden to prove” that fact.

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

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

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Tornado on plains

As the 2025 peak tornado season begins, Home Gnome uncovered which U.S. counties are most at risk for tornado damage.

Top U.S. Counties Most at Risk for Tornado Damage in 2025

May 19, 2025 — Kimberly Magerl - Home Gnome

Tornado frequency across the US varies, and some counties are in more danger than others.

As the 2025 peak tornado season begins, Home Gnome uncovered which U.S. counties are most at risk for tornado damage.

Using FEMA data, we analyzed nearly 950 counties with moderate to very high tornado risk. We considered six key factors, including tornado frequency, expected annual losses, average home age, and whether local building codes account for tornado resilience.

For details on how we calculated the scores, see our methodology.

Reprinted courtesy of Kimberly Magerl, Home Gnome

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Signing document into law

This landmark legislation, which was widely supported by Georgia’s business community, makes a host of changes to Georgia law in the areas of civil practice, evidentiary matters, damages, and liability in tort actions.

Georgia Gov. Kemp Signs Sweeping Tort Reform Legislation into Law

May 19, 2025 — Lewis Brisbois Newsroom

Atlanta, Ga. (May 6, 2025) - On April 22, 2025, Georgia Gov. Brian Kemp signed into law Senate Bills 68 and 69 (collectively dubbed the “Comprehensive Tort Reform Legislation”), with the aim of curbing lawsuit abuse and the explosion of outsized nuclear verdicts in the state’s courts. This landmark legislation, which was widely supported by Georgia’s business community, makes a host of changes to Georgia law in the areas of civil practice, evidentiary matters, damages, and liability in tort actions.

Below is a summary of key changes made by the law.

Anchoring
Plaintiffs’ attorneys can no longer arbitrarily argue the monetary value of non-economic damages (such as pain and suffering) during the closing arguments of a trial. Instead, the new law requires that their arguments concerning non-economic damages be related to actual evidence. Moreover, if the plaintiff's attorney suggests a number, they must do so in their initial closing and cannot change it in rebuttal closing. However, the law does not impose a cap on the total amount of damages a jury can award.

Reprinted courtesy of Lewis Brisbois

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Top Ten

This year's program was focused on general contractors entitled “Return of the Contractors - Transforming the Construction Landscape."

Top 10 Take-Aways from the 2025 Annual Meeting in Austin

May 19, 2025 — Kendall E. Woods - The Dispute Resolver

The ABA Forum on Construction Law convened last week in Austin, Texas for its Annual Meeting. This year's program was focused on general contractors entitled “Return of the Contractors - Transforming the Construction Landscape”. Kudos to Carmela Mastrianni, Dorsey Carson, Keith Bergeron, and Neale Johnson for putting together an insightful slate of plenaries and activities. While it would be impossible to sum up everything I learned, below are my top 10 take-aways.

10. Surety bonds are NOT insurance. The surety’s role on a project is to guarantee that the contractual obligations the principal has to the obligee will be fulfilled. Ashley Robinson and Douglass Wynne provided insight into the surety’s perspective when a bond is implicated in a project. The three main surety bonds on construction projects are the bid bond (to guarantee the general contractor will enter into the underlying contract if it wins the bid); the performance bond (to guarantee performance of the contractor’s scope of work); and the payment bond (to guarantee payment to subcontractors and suppliers). For all of these bonds, the surety’s right to be reimbursed by the principal is fundamental to the surety-principal relationship. If a surety has to make payments pursuant to bonds, the surety will pursue the principal (and often individuals at the principal who were required to sign indemnification agreements for the bond) for those funds. This relationship gives the surety leverage to encourage the principal to perform its obligations. Arguably one of the more challenging bonds is the performance bond as it puts the obligation of project completion on the surety if the principal defaults. Litigation often arises over issues such as whether proper notice was provided; whether the obligee properly placed the principal in default or properly terminated the principal; and whether the obligee performed all of its responsibilities under the contract. It is critical to review the surety bond and the underlying contract to determine whether all of the proper steps have been followed and provide the surety with sufficient notice of the default. Similarly, under payment bonds, notice and timing are critical to a successful claim.

Ms. Woods may be contacted at kwoods@lauriebrennan.com

Reprinted courtesy of Kendall E. Woods, Laurie & Brennan, LLP

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Construction tools

Education, innovation and open conversation with tradespeople is helping break barriers in the evolution of jobsite safety.

The Evolution of Construction Jobsite Safety: Lessons From the Field

May 19, 2025 — Milwaukee Tool - Construction Executive

Each year, Construction Safety Week offers the construction industry an opportunity to pause and refocus on the most important goal: ensuring every worker returns home safely. Mike Spensieri, who leads jobsite safety initiatives at Milwaukee Tool, shared observations from the field about how safety engagement is evolving—and where it needs to go next.

BROADENING THE CONVERSATION AROUND SAFETY
Spensieri’s work spans personal protective equipment and safer tool usage practices. Throughout the year, his team works with contractors and safety directors to support jobsite safety programs across the country.

“During Safety Week, we focus more directly on tradespeople themselves,” he explained. “We meet crews where they are—from small sites to megaprojects—and talk about real-world practices: everything from ergonomic tool use to OSHA dust regulations.”

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

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Money exchanged under a table

Former associates of the Mace Group, a London-based construction group, and infrastructure firm Blu-3 are the subjects of the SFO’s investigation.

UK SFO Makes Arrests in European Data Center Bribery Probe

May 19, 2025 — Lucca De Paoli - Bloomberg

The Serious Fraud Office has made three arrests and searched multiple properties in England and Monaco as part of an investigation into bribes paid by a construction firm to win a contract to help build a data center for Microsoft Corp.

Former associates of the Mace Group, a London-based construction group, and infrastructure firm Blu-3 are the subjects of the SFO’s investigation, according to an announcement on Wednesday. Individuals at Blu-3 are accused of paying over £3 million ($4 million) in bribes to Mace associates to win contracts to help build the data center in the Netherlands.

More than 70 SFO staff searched four homes and one commercial property across London, Kent, Surrey and Somerset to seize evidence, the SFO said.

Reprinted courtesy of Lucca De Paoli, Bloomberg

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High Rise Under Construction

The Chinese government remains silent about why it has permitted construction to resume on a 117-story skyscraper in Tianjin city nearly a decade after it was abandoned.

China Allows Construction to Resume of High-Rise Stopped for Last Decade

May 19, 2025 — Saibal Dasgupta - Engineering News-Record

The Chinese government remains silent about why it has permitted construction to resume on a 117-story skyscraper in Tianjin city nearly a decade after it was abandoned, China media are reporting, with a goal to complete it by 2027. The project's $78-million construction permit has caused some surprises because China’s property sector is struggling to find buyers amid an economic slowdown. The building, originally named Goldin Finance 117, has remained the world’s tallest unoccupied building since 2015, when financial fallout from a Chinese stock market crash forced the project's Hong Kong-based real estate developer to liquidate.

ENR may be contacted at enr@enr.com

Reprinted courtesy of Saibal Dasgupta, Engineering News-Record

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Data Center buildings

Crypto mines and data centers share certain foundational elements—facilities with a large footprint and the need for high power capacity and cooling.

Designing, Constructing and Converting Data Centers and Crypto Mines

May 19, 2025 — James P. Bobotek, Robert A. James, Arielle L. Murphy & Polly Gomez - Gravel2Gavel Construction & Real Estate Law Blog

The ever-increasing demand for digital infrastructure, coupled with continuing cryptocurrency demand volatility, has generated significant interest in transforming building improvements housing crypto mining farms into modern high-capacity data centers. Crypto mines and data centers share certain foundational elements—facilities with a large footprint and the need for high power capacity and cooling—but they have different functions, and their operational models, technical requirements and regulatory considerations are correspondingly diverse. Below are some key distinctions between the two, as well as issues developers should anticipate, when designing and constructing either type of facility, or considering a crypto farm-to-data center conversion.

Built for Different Purposes
Crypto mines and data centers share a fundamental requirement—both demand enormous computational power, resulting in the need for massive amounts of power and cooling. Their distinct operational goals, however, result in facilities that look and operate differently. Despite their common infrastructure backbone, their distinct purposes result in differing technical and architectural configurations.

Reprinted courtesy of James P. Bobotek, Pillsbury, Robert A. James, Pillsbury, Arielle L. Murphy, Pillsbury and Polly Gomez, Pillsbury

Mr. Bobotek may be contacted at james.bobotek@pillsburylaw.com
Mr. James may be contacted at rob.james@pillsburylaw.com
Ms. Murphy may be contacted at arielle.murphy@pillsburylaw.com
Ms. Gomez may be contacted at polly.gomez@pillsburylaw.com

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2 Workers Looking at Powerlines

ESFI takes on the leading causes of electrical fatalities during national electrical safety month.

ESFI Spreads Awareness of Overhead Power Line Safety With "Always Look Up" Campaign

May 19, 2025 — Electrical Safety Foundation International

ARLINGTON, Va., May 14, 2025 (GLOBE NEWSWIRE) -- Data compiled and analyzed by the Electrical Safety Foundation International (ESFI) shows that the most significant category of workplace electrical fatalities is non-electrical workers coming into contact with overhead power lines. Many of these accidents involve workers with little or no electrical safety training. Contact with overhead power lines is also one of the leading causes of electrical fatalities outside of the workplace across the United States.

In fact, overhead power line contact accounts for 48% of all workplace electrical fatalities, 57% of electrical fatalities in non-electrical occupations, and 30% of all electrical fatalities that occur in the United States. The Centers for Disease Control (CDC) reports that between 2018 and 2023, there were 538 total fatalities caused by overhead power lines in the U.S. A large number of these incidents can be avoided with heightened awareness of outside surroundings. "Overhead power line contacts are unique because in many cases the fatality occurred when the power line was clearly visible," said Daniel Majano, ESFI's Program Director.

In response, ESFI launched an update to its "Always Look Up" campaign in May to spread awareness to key groups. This year, as part of its National Electrical Safety Month efforts, ESFI is releasing several new materials, including a new infographic, to remind the public to be aware of overhead power lines in their surroundings.

ABOUT ESFI
The mission of the Electrical Safety Foundation International (ESFI) is to prevent electrically related injuries, deaths, and fires through public education and outreach by being the trusted voice on electrical safety. For free safety materials that you can share throughout your community, visit esfi.org.

Construction workers on site

Mr. Heiskanen's recent conversation with three China Construction Third Engineering Bureau experts shed light on two breakthrough technologies that exemplify this shift.

Two Paths to Industrialized Construction: Lessons from China

May 19, 2025 — Aarni Heiskanen - AEC Business

Chinese construction has been in the headlines for record-breaking speed: a 10-story residential building erected in 28 hours and 45 minutes, or a 57-story skyscraper built in 19 working days. These projects rely on meticulous planning, extreme prefabrication, and clockwork execution.

Besides those unique showcase projects, I wanted to learn how Chinese AEC firms are industrializing construction at scale. My recent conversation with three China Construction Third Engineering Bureau (CSCEC 3rd Bureau) experts shed light on two breakthrough technologies that exemplify this shift.

Two strategies for industrialization
As the construction industry evolves, two powerful strategies are emerging to drive industrialization: bringing construction into the factory or bringing the factory to the construction site.

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

Reprinted courtesy of Aarni Heiskanen, AEC Business

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150 anniversary celebration

As part of the 150th celebration, MDP is hosting events in all of its regional markets, honoring the people and partnerships that have defined its legacy.

Maury Donnelly & Parr Celebrates 150 Years of Service, Growth, and Community Impact

May 19, 2025 — Maury Donnelly & Parr

BALTIMORE, May 14, 2025 /PRNewswire/ -- Maury Donnelly & Parr (MDP), a leading independent insurance firm, proudly announces its 150th anniversary—a milestone that honors its enduring legacy, exceptional client service, and commitment to the communities it serves.

"We're incredibly proud of this milestone and grateful to the clients and communities who have been part of our journey," said Brian Phoebus, Executive Vice President of Maury Donnelly & Parr. "From our roots in Baltimore to our rapid expansion along the East Coast, our mission has always been to deliver thoughtful, personalized insurance solutions while giving back in meaningful ways."

MDP has served countless businesses and families and gives back to many nonprofit and community organizations. The firm's culture of giving back is deeply embedded in its identity, with employees regularly volunteering and supporting causes in the neighborhoods where they live and work.

As part of the 150th celebration, MDP is hosting events in all of its regional markets, honoring the people and partnerships that have defined its legacy. These gatherings will spotlight the firm's enduring relationships with clients across industries such as real estate, construction, healthcare, and the nonprofit sector—reflecting MDP's long-standing commitment to helping businesses thrive.

About MDP
Founded in 1875 as a marine insurer to the businesses that utilized the Port of Baltimore, Maury, Donnelly & Parr, Inc. (MDP) operates today as an agent, consultant, broker, and risk manager in the insurance industry. As one of the oldest insurance firms in the Mid-Atlantic region, MDP celebrates its 150th anniversary in 2025. Through the years, our operations and services have grown, allowing our firm to provide insurance solutions to many different niche markets.

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Rocks balancing weighing near beach

US Homebuilder Sentiment Ticks Up But Tariffs Weigh on Outlook

May 19, 2025 — Michael Sasso - Bloomberg

US homebuilder confidence barely rose this month on a pickup in current sales, though demand expectations stumbled to a more than one-year low and prices of construction materials are climbing on the heels of higher tariffs.

A gauge of overall conditions from the National Association of Home Builders and Wells Fargo rose 1 point to 40 in April, hovering near some of the lowest levels since late 2023. The median estimate of economists surveyed by Bloomberg called for a reading of 38.

The index’s components, however, were mixed. Builder expectations for sales in the next six months slipped 4 points to 43, reaching its lowest level since November 2023. Meantime, measures of present sales of single-family homes and traffic of prospective buyers each ticked up slightly.

Reprinted courtesy of Michael Sasso, Bloomberg

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Upward trend

March Construction Employment Up Just 1.8% Year Over Year

May 19, 2025 — ABC - Construction Executive

WASHINGTON, April 4—The construction industry added 13,000 jobs on net in March, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by a mere 143,000 jobs, an increase of 1.8%.

Nonresidential construction employment increased by 22,300 positions on net in March, with growth in 2 of the 3 subsegments. Nonresidential specialty trade added the most jobs, with a monthly increase of 19,300 positions, while heavy and civil engineering added 3,400 jobs. The nonresidential building subsegment lost 400 positions.

The construction unemployment rate decreased to 5.4% in March and is unchanged from one year ago. Unemployment across all industries rose from 4.1% in February to 4.2% last month.

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

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Trend upward next to umbrella

Tariffs Threaten to Push US Home Insurance Rates Even Higher

May 19, 2025 — Leslie Kaufman - Bloomberg

With the Los Angeles fires in January and last week’s severe storms that brought flooding and tornadoes to the Midwest, extreme weather is already battering US homes in 2025. Homeowners should expect their insurance rates to jump accordingly, says Insurify, an insurance policy comparison website, in a new report.

The steep tariffs imposed by President Donald Trump will likely worsen the pain.

The average annual cost of home insurance will increase 8% nationally by the end of the year to $3,520 for a home worth $400,000, Insurify projects. Some states, including Louisiana, Iowa and Minnesota, will see double-digit increases.

Reprinted courtesy of Leslie Kaufman, Bloomberg

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Webinar

ABA’s GenAi in Construction Disputes: Document Analysis and Synthesis Webinar

May 19, 2025 — Beverley BevenFlorez – CDJ Staff

This one-day event presented by the American Bar Association “explores how generative AI reimagines document review methods in construction disputes; where projects generate 250,000+ documents and traditional review consumes +30% of legal budgets.” Participants will discover how “AI tools from leading platforms can reduce review time by up to 90% while maintaining compliance with ABA ethical guidelines and professional judgment.”

May 29th, 2025
Virtual Event

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Residents Forced to Evacuate Clearwater Condo Will Be Allowed to Go Get Belongings

Over the weekend, the dozens of residents that had to evacuate Tuesday, will be allowed back into their units, for 15-minutes, to get items they left behind, WFLA News reported.

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Inspection Underway at Clearwater Condos That Were Evacuated Due to Structural Concerns

Private engineers still need to finish their inspection to make sure everything is secure and then the city will have to come and do its own, 10 Tampa Bay News.

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