Are Construction Contract Limitation of Liability Clauses on the Way Out in Virginia?
March 11, 2024 —
Christopher G. Hill - Construction Law MusingsRemember BAE Systems and Fluor? This post is the third here at Construction Law Musings relating to this case which is a seemingly never-ending source for content. In the prior post discussing this case, the Court found that Va. Code 1-4.1:1 which bars waiver of a right to payment before work is performed did not apply because Fluor had provided work before execution of the contract or any change orders.
In the most recent opinion in this long-running litigation, and after a motion to reconsider by Fluor that was granted, the Court re-examined this finding along with the contractual language found in the Limitation of Damages (LOD) clause and came to the opposite conclusion regarding certain change orders that remained unpaid by BAE.
The Court first looked to the language of the contract itself and specifically the language in the LOD provision that states “Except as otherwise provided in this Subcontract.” The Court then looked at the change order provision and its typical equitable adjustment language and the mandatory nature of the equitable adjustment language. The Court found that the LOD provisions did not apply to change orders both because price increases due to change orders are not “damages” and because of the exception language in the LOD provision itself.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Governmental Action Exclusion Bars Claim for Damage to Insured's Building
November 27, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe lower court's decision finding no coverage based upon the governmental action exclusion was affirmed by the Appellate Court of Illinois. McCann Plumbing, Heating & Cooling v. Pekin Ins. Co., 2023 Ill.App. LEXIS 300 (Ill. App. Ct. Aug. 23, 2023).
McCann purchased a building to use for its heating, ventilation, and air conditioning business. The building was surrounded by two unihhabited properties which often flooded. The city determined that a building on the adjacent property had to be demolished. In the course of destruction, the McCann's building was damaged, leaving a portion of their building open to the elements.
McCann sought coverage from Pekin for damage incurred in the demolition. The policy provided coverage for "direct physical loss of or damage to" the covered property. Pekin denied coverage under the policy's governmental action exclusion, which provided,
We will not pay for loss or damage caused directly or indirectly by any of the following:
. . .
c. Governmental Action
Seizure or destruction of property by order of governmental authority . . .
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Congratulations to BWB&O’s Newport Beach Team on Obtaining a Defense Verdict in Favor of their Subcontractor Client!
April 02, 2024 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara’s Newport Beach Partner Morgan Stiefel and Associate Brandon Cook obtained a defense verdict after years-long litigation in favor of their subcontractor client.
This lawsuit stemmed from a claim made by Plaintiff for eye injuries arising out of claimed negligence and strict liability associated with our client’s performance of a sandblasting job at a construction site adjacent to Plaintiff’s home. Plaintiff alleges that while she was in her backyard, sand hit her in the eyes at a high velocity speed, resulting in permanent damage to her eyes.
We argued our clients took all necessary safety precautions in the performance of this job, and Plaintiff’s eye irritation symptoms could not have been caused by our client. All of her alleged injuries were either pre-existing or could be explained by circumstances other than our client’s actions. Through expert testimony and our arguments, we were able to show the jury that Plaintiff lied about the sand entering her eyes at a high velocity and her symptoms being caused by our clients’ performance of the sandblasting job.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
You Say Tomato, I Say Tomahto. But When it Comes to the CalOSHA Appeals Board, They Can Say it Any Way They Please
January 08, 2024 —
Garret Murai - California Construction Law BlogWe lawyers do a fair amount of reading. Documents. Court decisions. Passive aggressive correspondence from opposing counsel. As well as statutes, regulations and administrative guidance. And you might be surprised how often words can be ascribed very different meanings depending on who is reading it. Such, I suppose, is the nature of language. When it comes to public agency interpretations of its own regulations, however, you would be well to heed that authors are often the best interpreters of their own works, or at least that’s how the courts tend to view it, as in the next case L & S Framing Inc. v. California Occupational Safety and Health Appeals Board, Case No. C096386 (July 24, 2023).
The L & S Framing Case
Martin Mariano, an employee of L & S Framing, Inc., suffered a brain injury when he fell from the “second floor” while working on a single family house. What, exactly, this “second floor” was, was a point of a contention in the legal case that followed.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Court Strikes Expert Opinion That Surety Acted as a “De Facto Contractor”
November 27, 2023 —
David Adelstein - Florida Construction Legal UpdatesDesignating and admitting experts is a vital component of any construction dispute. Many construction disputes require experts. Many construction disputes can only be won with the role of an expert. Thus, experts and construction disputes go hand-in-hand. No doubt about it! Time needs to be spent on developing the right expert opinions to support your burden of proof. This means you want to designate the right expert that can credibly and reliably render an expert opinion.
It is common for one party to move to strike the testimony and expert opinions of another party. This is referred to as a Daubert motion. Sometimes the motion is about gamesmanship. Sometimes it is to see how the judge rules on the issue. Sometimes there is a legitimate reason associated with the expert opinion. And, sometimes, it is a combination of the above. Regardless of the reason, parties know the weight expert opinions can have and, therefore, treat the opinions seriously prompting the Daubert motion.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Sweat the Small Stuff – Don’t Overlook These Three (3) Clauses When Negotiating Your Construction Contract
April 08, 2024 —
Bill Shaughnessy - ConsensusDocsReviewing and understanding the terms of your construction contract before signing on the dotted line (ideally with counsel involved) is an obvious best practice – whether you are owner, general contractor, design-professional or down-tier subcontractor or supplier. Typically, during this review process, parties pay closest attention to terms relating to price, scope, schedule, insurance, indemnification, and damages. And rightfully so, as these are just some of the most fundamental and important clauses of any construction contract.
But during this review and understanding process, parties often overlook and fail to fully review and understand several notably important contract provisions (other than the examples above) which can have just as significant an impact on the project and even unintended consequences once construction starts. This article discusses three (3) of these often-overlooked provisions which should also be carefully reviewed to ensure the project runs smoothly and to avoid unintended consequences or even disputes (and litigation) during construction:
- Incorporation by reference clause;
- Order of precedence or higher standard clause; and
- Choice of law clause.
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Bill Shaughnessy, Jones Walker LLP (ConsensusDocs)Mr. Shaughnessy may be contacted at
bshaughnessy@joneswalker.com
To Ease Housing Crunch, Theme Parks Are Becoming Homebuilders
January 29, 2024 —
Patrick Sisson - BloombergFor visitors, Universal Studios Florida offers a chance to visit a fantastical land full of wizards, Minions and various characters from NBC Universal’s many film and television properties. But for the roughly 28,000 men and women who work at the 840-acre theme park and resort complex in Orlando, the troubles of the real world — like the rising cost of housing — are not far away.
Central Florida has seen some of the nation’s fastest pandemic-era rent increases, thanks to a confluence of job growth, migration and housing underproduction that has put a strain on residents. The average tenant in the region saw their monthly rent jump by $600 between early 2020 and early 2023. According to the National Low Income Housing Coalition, the Orlando-Kissimmee-Sanford metro area has one of the worst affordable housing shortages in the US, with only 15 available units for every 100 extremely low-income renter households.
The dire need for workforce housing is behind the entertainment conglomerate’s latest project in Central Florida: a 1,000-unit mixed-use development, set to open in 2026, that promises to give tenants who work in the service industry a short commute to the constellation of tourist attractions and hotels nearby. To launch the project, Universal donated 20 acres of land adjacent to the Orange County convention center. Called Catchlight Crossings and built in partnership with local developer Wendover Housing Partners, the project broke ground in November.
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Patrick Sisson, Bloomberg
Competitive Bidding Statute: When it Applies and When it Does Not
April 15, 2024 —
Mason Fletcher - Ahlers Cressman & Sleight PLLCThe University of Washington (UW), a public university, aimed to secure a real estate developer for a new building on its campus. The proposal involved an 80-year ground lease (the “Lease”), and developers submitted bids. The selected developer would demolish an existing building, construct a new one, own it during the Lease at its own cost, and UW would lease back a portion, with ownership reverting to UW at the Lease’s end. Alexandria Real Equities, Inc. (ARE) was a finalist but ultimately was not selected, and the Lease was awarded to Wexford Science and Technology, LLC (Wexford). As a result, ARE filed suit against UW asserting three claims: 1) UW lacked authority to execute the Lease, 2) UW didn’t follow required competitive bidding procedures, and 3) UW’s developer selection process was arbitrary and capricious. None of these claims were successful and ARE appealed.
Division II of the Washington Court of Appeals affirmed in Alexandria Real Estate Equities Inc. v. Univ. of Wash., __ Wn. App. __, 539 P.3d 54 (2023), a published decision. The Court concluded, based on the facts in that case, that because construction was not publicly funded, UW did not have to follow competitive bidding requirements that were laid out in a statute relevant to state universities. Still, the Court applied the “bright-line cutoff point” that prohibits disappointed bidders from challenging an award once a contract has been executed. See Dick Enterprises, Inc. v. Metro. King County, 83 Wn. App. 566, 572, 922 P.2d 184 (1996).
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Mason Fletcher, Ahlers Cressman & Sleight PLLCMr. Fletcher may be contacted at
mason.fletcher@acslawyers.com
