CONSTRUCTION DEFECT JOURNAL

"News and Information for Construction Defect and Claims Professionals"

CONSTRUCTION DEFECT JOURNAL - ISSUE 242749 - FRIDAY, MAY 9, 2025

Courthouse

No Exception for Willful and Wanton Conduct: Colorado Supreme Court Clarifies the Economic Loss Rule

May 6, 2025
David McLain - Colorado Construction Litigation Blog

In its recent decision in Mid-Century Insurance Co. v. HIVE Construction, Inc., 2025 CO 17, the Colorado Supreme Court definitively closed the door on an often-litigated theory: that the economic loss rule does not bar tort claims based on willful and wanton conduct. The ruling clarifies a lingering ambiguity in Colorado law and underscores the importance of contractual risk allocation in construction projects.

Background
HIVE Construction served as the general contractor for the build-out of Masterpiece Kitchen, a Denver-area restaurant. The project’s architectural plans called for two layers of drywall on a wall separating the kitchen and dining area to enhance fire resistance. Instead, HIVE substituted one layer with plywood — without seeking approval or issuing a change order. The plywood, being combustible, contributed to a fire that caused significant property damage.

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

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

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CDJ NEWS THIS WEEK



Person standing on cliff edge looking over it

The project is off to a great start. But a storm is brewing.

Living on The Edge: The Unacknowledged Delay/Acceleration

May 6, 2025 — Curt Martin & Joshua Pruett - ConsensusDocs

Picture this: you were the successful bidder on a state highway project. The project is scheduled to take about two years. Notice to proceed was issued six months ago, you have procured equipment and supplies, your subcontractors are lined up, and work is underway. The project is off to a great start. But a storm is brewing.

A couple days ago you received an e-mail from the project engineer showing “minor” adjustments to the project plans and specifications. On closer inspection, you realize this “minor” update could result in at least three months of delay on the project, and your suppliers have given you a four-week lead time on the materials you need to accomplish the change. You just finished a conference call with the owner and the engineer where you explained the three-month delay. The owner’s reply: “It’s still early. I think you can get it done within the existing schedule. Let’s move forward and see how it works out.” You have a schedule update due next week. What do you do? Do you move forward, hope for the best, and risk being placed in default when the schedule runs over? Do you accelerate the project?

Reprinted courtesy of Curt Martin, Peckar & Abramson PC and Joshua Pruett, Peckar & Abramson PC

Mr. Martin may be contacted at cmartin@pecklaw.com
Mr. Pruett may be contacted at jpruett@pecklaw.com

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Window installer

Three weeks after the job was completed, a rainstorm struck and several of the windows leaked.

No Coverage for Faulty Installation of Windows

May 6, 2025 — Tred R. Eyerly - Insurance Law Hawaii

The federal district t court granted summary judgment to the insurer, agreeing there was no "occurrence" nor "property damage" resulting from the faulty installation of windows. Employers Mut. Casualty Co. v. Knipp Equipment Inc., 2025 U.S. Dis. 24400 (D. Kan. Feb. 11, 2025).

Edwards County and Knipp entered into a contract for the removal and replacement of the Courthouse's 113 windows. Three weeks after the job was completed, a rainstorm struck and several of the windows leaked.

Edwards County filed a Statement of Claim with the American Arbitration Association, claiming Knipp breached its duty to perform the work and render the services owed to Edwards County in a good and workmanlike manner. Edwards County alleged that the windows had to be removed, re-sized, and re-installed, at the estimated cost of $420,000.

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

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

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Gavel next to scale and files

White and Williams LLP attorneys summarize recent industry cases.

Top Developments: 2025 - Issue 2

May 6, 2025 — John S. Anooshian, Paul A. Briganti, Gianna Martorano, Tracey M. Jervis, Ingrid Lopez Martinez & Austin D. Moody - The Complex Insurance Coverage Reporter

ENSUING LOSS CLAUSE

Bob Robison Com. Flooring Inc. v. RLI Ins. Co., 2025 U.S. App. LEXIS 6369 (8th Cir., Mar. 19, 2025)
Eighth Circuit, predicting Arkansas law, concludes that an ensuing loss exception to a “Defects, Errors, Or Omissions” exclusion* in a builder’s risk policy installation floater did not “restore” coverage for costs incurred by a contractor-insured to remove and replace flooring it installed in a gym that was damaged by a subcontractor’s faulty painting work. It was undisputed that faulty workmanship was the sole and exclusive cause of loss which occurred when paint was misapplied to the floor. The insured argued the ensuing loss clause restored coverage because the damage to the floor was a covered peril that resulted from the sub’s work and the language defining “covered peril” rendered the clause “nonsensical and its coverage illusory.”

Reprinted courtesy of John S. Anooshian, White and Williams LLP, Paul A. Briganti, White and Williams LLP, Gianna Martorano, White and Williams LLP, Tracey M. Jervis, White and Williams LLP, Ingrid Lopez Martinez, White and Williams LLP and Austin D. Moody, White and Williams LLP

Mr. Anooshian may be contacted at anooshianj@whiteandwilliams.com
Mr. Briganti may be contacted at brigantip@whiteandwilliams.com
Ms. Martorano may be contacted at martoranog@whiteandwilliams.com
Mr. Moody may be contacted at moodya@whiteandwilliams.com

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Worried construction worker

The homeowner argued the contractor should not be entitled to assert affirmative defenses because of the contractor’s lack of construction license.

Wary to the Unlicensed Contractor – You Are Sh*T Out of Luck

May 6, 2025 — David Adelstein - Florida Construction Legal Updates

Constructing licensing is governed under Florida Statutes Chapter 489. Under Florida Statute s. 489.128, an unlicensed contractor has NO rights or remedies. Stated differently, an unlicensed contractor is “sh*t out of luck!”. However, what’s been complicated, and it really shouldn’t be, is what contractors need to be licensed through the state of Florida by the Construction Industry Licensing Board (known as the CILB). A recent case out of Florida’s Third District Court of Appeal adds to the complication and serves as a reminder for contractors to be licensed in Florida.

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

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

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Contract dispute

The Louisiana Fifth Circuit Court of Appeal was faced with a residential construction contract dispute concerning the construction of a new home.

You’ve Made Your Bed…Maybe Don’t Lie in It (Yet)!

May 6, 2025 — Daniel Lund III - Lexology

The Louisiana Fifth Circuit Court of Appeal was faced with a residential construction contract dispute concerning the construction of a new home. Pivotal to the dispute was an occupancy clause in the general contract, which declared: "Owner agrees not to occupy the Home until contractor is paid in full." Yet, the owner moved into the home even though the work was alleged to be poor in certain aspects and the final payment had not been made to the general contractor.

Hence, when a dispute concerning the construction project arose, the contractor argued that the fact of the owner’s actual occupancy signaled total satisfied the contractor’s contractual obligations – as the occupancy clause implied acceptance of the work and completion of payment terms. Nonetheless, the lower court initially ruled in favor of the homeowner and against the general contractor, awarding her $23,211.25 for breach of contract, citing substandard workmanship and unpaid subcontractor liens. The general contractor – which had filed a counterclaim for unpaid amounts under the contract, a claim which was dismissed by the trial court – appealed.

Mr. Lund may be contacted at daniel.lund@phelps.com

Reprinted courtesy of Daniel Lund III, Phelps

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Good Better Best

Mr. Walton is national chair of the Architects & Engineers Practice.

Ken Walton Named a 2025 Massachusetts “Go To Lawyer” for Construction Law

May 6, 2025 — Lewis Brisbois Newsroom

Boston, Mass. (April 29, 2025) – Boston Managing Partner Kenneth B. Walton has been named a 2025 Massachusetts “Go To Lawyer” for Construction Law by Massachusetts Lawyers Weekly.

Massachusetts Lawyers Weekly’s “Go To Lawyers” list recognizes leading attorneys in specific practice areas who are highly experienced, well-respected by peers, and known for their expertise, creative thinking, and consistent success. Honorees are nominated by colleagues and selected by a panel from the publication.

Reprinted courtesy of Lewis Brisbois

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Top 100

GRSM surged 32 spots on the Am Law 100 rankings, rising from #103 in 2019 to #71 in 2025, including a 10-place jump in the past year alone.

GRSM Marks Sixth Anniversary as First and Only Full-Service Law Firm in All 50 States, Jumps 10 Spots to #71 on Am Law 100

May 6, 2025 — Gordon Rees Scully Mansukhani, LLP

Gordon Rees Scully Mansukhani proudly celebrates the sixth anniversary of becoming the first and only full-service law firm with offices and attorneys in all 50 states. Since launching its innovative 50-state platform in April 2019, GRSM has experienced extraordinary growth.

In just six years, GRSM has expanded its attorney headcount by 76%, from 940 to more than 1,650 lawyers. The firm has climbed from the 40th to the 14th largest law firm in the United States, according to Law360, and surged 32 spots on the Am Law 100 rankings, rising from #103 in 2019 to #71 in 2025, including a 10-place jump in the past year alone. GRSM has served nearly half of the Fortune 500, a testament to its deep bench of lawyers and national capabilities.

Reprinted courtesy of Gordon Rees Scully Mansukhani, LLP

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Nice to meet you

Editor-in-Chief Marissa L. Downs interviews ADR neutral Matthew W. Argue.

Meet the Forum's Neutrals: MATTHEW W. ARGUE

May 6, 2025 — Marissa L. Downs - The Dispute Resolver

Company: Arbitration Mediation Conciliation Center (“AMCC”)
Office Location: San Diego, CA
Email: mattargue@onemediator.net
Law School: University of Southern California Gould Law Center (1989)
Types of ADR services offered: Mediation, Arbitration, Discovery Referee
Affiliated ADR organizations: AMCC, AAA
Geographic area served: California, Nevada, Washington, Texas (and other jurisdictions via Zoom)

Q: Describe the path you took to becoming an ADR neutral.
A: My path to mediation was heavily influenced by outside life events. I have been diagnosed with 3 different types of cancer over a 10-year period. After cancer #2, I decided continuing as a trial lawyer working 60+ hours per week was not healthy or wise. I took several years off to recover and rebuild my health, then my former law firm invited me to an annual firm dinner. While reconnecting with old friends, several former partners suggested I consider transitioning to a full-time mediator. A retired Federal District Court judge in San Diego who was doing high-level mediation allowed me to work as a mediation extern for 8 months to kick start my mediation practice. I also spent time observing Randy Wulff, Ross Hart, and other experienced mediators to gain mediation insights.

Ms. Downs may be contacted at mdowns@lauriebrennan.com

Reprinted courtesy of Marissa L. Downs, Laurie & Brennan, LLP

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Super

Christopher G. Hill has been selected for the ninth straight year to the Virginia Super Lawyers in the Construction Litigation category.

Thanks to All for My 9th Straight Super Lawyers Election

May 6, 2025 — Christopher G. Hill - Construction Law Musings

It is with humility and a sense of accomplishment that I announce that I have been selected for the ninth straight year to the Virginia Super Lawyers in the Construction Litigation category for 2025. Add this to my recent election to the Virginia Legal Elite in Construction and I’ve had a pretty good year. As always, I am thrilled to be included on these peer-elected lists. Your confidence in my work is very gratifying.

So without further ado, thank you to my peers and those on the panel at Virginia Super Lawyers for the great honor. I feel quite proud to be part of the 5% of Virginia attorneys that made this list for 2025.

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

Reprinted courtesy of The Law Office of Christopher G. Hill

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Ballroom chairs

A critical analysis of the ongoing labor crisis, shrinking workforce, and difficulty hiring and retaining people.

Don’t Miss Bremer Whyte Attorneys at West Coast Casualty’s Construction Defect Seminar in Downtown Disney!

May 6, 2025 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP

BWBO is thrilled to announce that Partner Daniel Crespo and Senior Associate Max Higgins are featured speakers during West Coast Casualty’s Construction Defect Seminar at The Disneyland Resort Hotel on Friday, May 16, 2025. To connect with our team or set up a meeting during the seminar, please email marketing@bremerwhtye.com.

Join Daniel Crespo and his panel, Jason Feld of Kahana Feld, Benjamin Dowers of Gunther Legal, Linda Pretzel of the Riverstone Group, Toby Donoway of United Fire Group, and James Cole of James Cole Consulting at 9:30 AM in the Grand Ballroom.

Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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Prison

Cases involving other contractors remain unresolved.

Michigan Bid-Rig Plea Lands Former Asphalt Paving Executive in Prison

May 6, 2025 — Elaine Silver - Engineering News-Record

A federal judge has sentenced one of several people charged in a Michigan asphalt paving price-fixing scheme to prison.

Reprinted courtesy of Elaine Silver, Engineering News-Record

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Sustainability

James O’Callaghan has been crucial in designing the world’s tallest hybrid timber building: the Atlassian Tower in Sydney.

Building Bold and Sustainable: A Talk with James O’Callaghan

May 6, 2025 — Aarni Heiskanen - AEC Business

James O’Callaghan, the co-founder of Eckersley O’Callaghan, is widely regarded as a leading pioneer in structural glass. More recently, he has been crucial in designing the world’s tallest hybrid timber building: the Atlassian Tower in Sydney.

Ahead of his keynote at the Nordic Facade Forum 2025 in Helsinki, I had the pleasure of sitting down with James to explore the ideas that continue to reshape the built environment.

A Career Built on Curiosity
James’s journey as a structural engineer has been anything but conventional. While trained, he quickly developed a deep appreciation for architecture and innovative use of materials, particularly structural glass.

“Transparent structures highlight bad details quite well,” James noted with a smile. His attention to detailing has become part of the DNA of Eckersley O’Callaghan’s culture. Good detailing makes architecture. And that curiosity about detail, rigor, and materials underpins the company’s practice and his professorship at the Technical University of Delft.

Reprinted courtesy of Aarni Heiskanen, AEC Business

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Consulting Design and Architecture Expert Witness

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

California Architectural Registration Board Supplemental Examination Commissioner

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Home trends rise

US New-Home Sales Rise Slightly Following Weather-Related Plunge

May 6, 2025 — Michael Sasso - Bloomberg

Sales of new homes in the US bounced back slightly last month from a rocky start to 2025 as homebuilders benefited from better weather while leaning on generous sales incentives to stoke demand.

Contract signings on new single-family homes increased 1.8% in February to a 676,000 annualized rate, after slumping a month earlier during a bout of severe winter storms. The median estimate in a Bloomberg survey of economist was for a 680,000 annual rate.

Sales in the South, the US’s biggest homebuilding region, rose 6.6% last month after heavy snowfall kept buyers on the sidelines a month earlier. Purchases also rose in the Midwest, according to Commerce Department data released Tuesday.

Reprinted courtesy of Michael Sasso, Bloomberg

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Construction safety sign on fence

ABC Construction Safety Report: Jobsites Can Be Nearly 7 Times Safer With Health and Safety Best Practices

May 6, 2025 — Associated Builders and Contractors

WASHINGTON, May 01, 2025 (GLOBE NEWSWIRE) -- Associated Builders and Contractors today released its 2025 Health and Safety Performance Report, an annual guide to construction jobsite health and safety best practices. As a proud sponsor, ABC published the report ahead of Construction Safety Week 2025, May 5-9, to support its industrywide call to action for safer jobsites and a stronger safety culture.

The report shows the positive impacts of construction companies participating in ABC's STEP® Health and Safety Management System, which enables top-performing ABC members to achieve incident rates 658% safer than the U.S. Bureau of Labor Statistics construction industry average, reducing total recordable incident rates by 85%. Established in 1989, STEP provides contractors and suppliers with a robust, no-cost framework for measuring health and safety data and benchmarking with peers in the industry.

Basketball Court

Full-Court Coverage for Risks Associated With Major Sporting Events

May 6, 2025 — Rachel E. Hudgins & Jae Lynn Huckaba - Hunton Insurance Recovery Blog

NCAA March Madness tournaments are among the most anticipated and exciting events in American sports, drawing millions of viewers and generating significant economic activity. But the massive popularity of the tournaments comes with risks that can affect participants, venues, sponsors, and fans. From injuries to property damage and event-related cancellations, this post explores the potential risks and the insurance products available to mitigate the risks associated with major sporting events, concerts, or festivals.

Common Risks
Injury Risks: March Madness, as a high-stakes basketball tournament, inherently involves physical risks for players. Injuries to athletes, whether from collisions, falls, or overexertion, can have serious consequences for the individuals involved and the tournament’s operations.

Reprinted courtesy of Rachel E. Hudgins, Hunton Andrews Kurth LLP and Jae Lynn Huckaba, Hunton Andrews Kurth LLP

Ms. Hudgins may be contacted at rhudgins@hunton.com
Ms. Huckaba may be contacted at jhuckaba@hunton.com

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Conference

2025 Florida RIMS Educational Conference

May 6, 2025 — Beverley BevenFlorez – CDJ Staff

The Risk Management Society’s (RIMS) annual conference is comprised of daily educational sessions, a Golf Tournament, Receptions, and other networking opportunities. A few of the many topics to be covered are Property Risks, Legal & Regulation Updates, and Claims Management. Cheryl L. Kozdrey of Saxe Doernberger & Vita, P.C. will be leading a session on Fires, Storms, and Property Coverage Forms: Trending Claims and Coverage Issues.

July 29th-August 2nd, 2025
The Ritz-Carlton, Naples
280 Vanderbilt Beach Road
Naples, FL 34108

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At Least 4 Killed, Hundreds of Thousands Without Power as Massive Storm Moves East

The damaging storm system stretching from Texas to New York has left more than 500,000 without power and has killed at least four people, ABC News reported.

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Compass CEO: New Construction Homes Are Getting Cheaper Than Existing Homes

Robert Reffkin, Compass co-founder and CEO, joins CNBC's 'Squawk on the Street' to home pricing dynamics, when housing may see impact from tariffs, and more, CNBC Television reported.

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