Construction Industry Counselor

The Construction Practice Blog

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On June 29, 2020, the Michigan Supreme Court ruled that a subcontractor’s commercial general liability (CGL) insurance policy may provide a contractor listed as an additional insured on the CGL policy with insurance coverage for correcting the subcontractor’s faulty work. See Skanska USA Bldg. Inc…
Continue Reading Michigan Supreme Court: CGL Insurance Policy May Provide Contractor With Coverage for Subcontractor’s Faulty Work

In a unanimous decision, the U.S. Supreme Court recently ruled that a non-signatory to an agreement requiring arbitration for disputes might be able to compel arbitration under state law equitable estoppel arguments. The decision held that the New York Convention (“Convention”) does not conflict…
Continue Reading U.S. Supreme Court: Non-Signatories to an International Contract Might Be Able to Compel Arbitration

On May 26, 2020, the Court of Appeals of Maryland (Maryland’s highest court) held that where one of the two parties to an AIA contract sues or settles with a third party, the AIA contract’s mutual waiver of subrogation precludes that third party from claiming a right of contribution against the…
Continue Reading UPDATE: Maryland Court of Appeals Holds that an AIA Contract's Mutual Waiver of Subrogation Precludes Contribution Liability under Maryland Joint Tort-Feasors Act

This update tracks COVID-19s shutdown orders as of May 27, 2020, 12:00 p.m. EDT that affect construction projects in Delaware, the District of Columbia, Florida, Illinois, Massachusetts, Minnesota, New Jersey, New York and Pennsylvania—jurisdictions in which Saul Ewing Arnstein & Lehr LLP…
Continue Reading COVID-19 Shutdown Orders Allow Construction Work to Proceed in Some States but Limit it in Others – May 27 Update

On May 12, 2020, the United States Eight Circuit Court of Appeals, applying Missouri law, rejected a contractor’s contention that its commercial general liability (CGL) policy provided coverage for claims arising out of the contractor’s allegedly defective construction work.
Continue Reading U.S. Eighth Circuit Court of Appeals Holds No CGL Insurance Coverage for Damages Arising from Contractor’s Shoddy Work

This update tracks COVID-19 shutdown orders as of May 13, 2020, 12:00 p.m. EDT that affect construction projects in Delaware, the District of Columbia, Florida, Illinois, Massachusetts, Minnesota, New Jersey, New York and Pennsylvania – jurisdictions in which Saul Ewing Arnstein & Lehr LLP…
Continue Reading COVID-19 Shutdown Orders Allow Construction Work to Proceed in Some States but Limit it in Others – May 13 Update

This update tracks COVID-19 shutdown orders as of March 26, 2020, 12:00 p.m. EDT that affect construction projects in Delaware, the District of Columbia, Florida, Massachusetts, Minnesota, New Jersey, New York and Pennsylvania – jurisdictions in which Saul Ewing Arnstein & Lehr LLP offices are located. We have updated the post in the last 24 hours to cover new orders in Massachusetts and Minnesota.

Jurisdictions Requiring Work Stoppage:

Massachusetts: On March 17, 2020, the City of Boston shut down all construction in the city for two weeks. A few other Massachusetts localities (such as Cambridge and Martha’s Vineyard towns of
Continue Reading COVID-19 Shutdown Orders Largely Allow Construction Work To Proceed

Update on State-Specific Coronavirus Shutdown Orders and Their Impact on Construction Work

Saul Ewing Arnstein & Lehr’s Construction Practice has outlined Coronavirus shutdown orders as of March 25, 2020 at 12:00 p.m. EDT and their impact on state-specific construction projects across ten jurisdictions. The areas covered include: Delaware; the District of Columbia; Florida; Illinois; Maryland; Massachusetts; Minnesota; New Jersey; New York; and Pennsylvania. These orders largely allow construction work to proceed. Read our full summary here.
Continue Reading Update on State-Specific Coronavirus Shutdown Orders and Their Impact on Construction Work

Builders Beware: Georgia Court Rejects Suit by Unlicensed Contractor for Unpaid Work
Unlicensed contractors in Georgia recently were dealt a blow by the state’s Court of Appeals when three judges held that a contractor’s failure to possess a valid state contractor’s license precluded the contractor from bringing a lawsuit for unpaid fees. In Fleetwood v. Lucas, __ S.E.2d __, 2020 WL 1149734 (Ga. Ct. App. March 10, 2020), a panel of judges ruled against a contractor, who completed extensive repair and renovation work on two properties, because the contractor was not properly licensed by the state government.  
Property owners
Continue Reading Builders Beware: Georgia Court Rejects Suit by Unlicensed Contractor for Unpaid Work

Language in Performance Bond Critical in Determining Surety’s Rights to Complete
If an owner terminates a contractor due to a contractor default on a bonded project, can the surety hire the same contractor to complete the work under the bond?  Depending on the language of the bond, it may be permissible in Florida.
Recently, in Seawatch at Marathon Condominium Association, Inc. v. The Guarantee Company of North America, No. 3D18-1337, 2019 WL 4850194 (Fla. 3d DCA Oct. 2, 2019), a Florida appellate court ruled that the unambiguous terms of an AIA A312 Performance Bond permitted a surety to propose a
Continue Reading Language in Performance Bond Critical in Determining Surety’s Rights to Complete

Effective August 20, 2019, Illinois law provides that a maximum of 10 percent retainage may be withheld from payments under private construction contracts and, after the contract is one-half complete, retainage must be reduced to 5 percent and kept at 5 percent for the remainder of the contract.  With this new law, Illinois joins the vast majority of states that have enacted laws pertaining to retainage on construction contracts.  Like almost every other state, Illinois’ retainage restrictions are unique to Illinois and, therefore, parties to Illinois construction contracts should understand how the new law will impact their projects.  This article
Continue Reading Illinois’ New Retainage Law

The U.S. Attorney’s Office for the Middle District Florida settled its allegations against a Central Florida contractor accused of violating the Small Business Administration’s regulations by allegedly creating a sham joint venture to be awarded a project. Click here for more information about the settlement.

NASA sought bids for a demolition project that was funded by the Small Business Administration (“SBA”).  A requirement of the project was that it be awarded to a business that was qualified as a small business enterprise (“SBE”).  In order to qualify, Sunrise Systems of Brevard, Inc. (“Sunrise”) formed a joint venture with V&R Enterprises
Continue Reading Small and Minority Business Enterprises- No Shams Allowed

Developer is Not Indemnified for its Own Conduct Without an Express Agreement in the Indemnification Clause
In a case where the jury found both the Architect and the Developer separately responsible for Plaintiff’s damages, an Appellate Division of the New Jersey Superior Court recently held that the Developer is not entitled to be indemnified by the Architect.  See Grandview at Riverwalk Port Imperial Condo. Ass’n, Inc. v. K. Hovnanian at Port Imperial Urban Renewal II, LLC, No. A-2308-17T2, 2019 WL 3798427 (N.J. Super. Ct. App. Div. Aug. 13, 2019)(unpublished decision). The appellate court agreed with the Developer’s argument that the
Continue Reading Developer is Not Indemnified for its Own Conduct Without an Express Agreement in the Indemnification Clause

Utah Appellate Court: Homeowners’ Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule
A recent Utah Appellate Court upheld the dismissal of a homeowners’ claims against a geotechnical engineer because the homeowners did not have a contract with the geotechnical engineer and therefore their claims were barred by the economic loss rule. See Hayes v. Intermountain Geoenvironmental Services, Inc., 2019 UT App 112, 2019 WL 2621931.  In Utah, the economic loss rule only allows lawsuits for defective design or construction to be based on a breach of contract.  Such a claim
Continue Reading Utah Appellate Court: Homeowners’ Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule

Each year, hurricane season presents a challenge to contractors and developers along the Gulf and Atlantic coasts as they face the risk of impacts from significant weather.  Hurricanes Michael, Irma, Harvey and Florence are only the most recent reminders of how devastating one of these storms can be.  With the construction industry being as active as it is, projects in storm-prone areas should be prepared to deal with and minimize the physical and financial risks that come along with these storms. 
I was recently able to share my insight about what project teams can do to deal with a storm
Continue Reading Are You Ready for Hurricane Season?