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DIRECTORY AND CAPABILITIES

LA Wildfires Push California Insurance Market to Its Limit

January 14, 2025 — Leslie Kaufman, Lauren Rosenthal, Michelle Ma & Alexandre Rajbhandari - Bloomberg
If you live in California, you’re always bracing for the Big One. This week it arrived in the form of uncontrollable flames. Liability experts equipped with climate models had been uneasily eyeing such a scenario, realizing in recent years that wildfire now had similar system-crashing potential as a major earthquake to upend lives and destabilize California’s $10 trillion residential property market. A group convened to examine worst-case scenarios determined that three specific areas in the state were particularly vulnerable and capable of causing far-reaching fallout. One was Pacific Palisades, the Los Angeles neighborhood reduced to ashes this week by one of at least five fires burning across the city. Reprinted courtesy of Leslie Kaufman, Bloomberg, Lauren Rosenthal, Bloomberg, Michelle Ma, Bloomberg and Alexandre Rajbhandari, Bloomberg Read the full story...

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A Good Read on Fraud versus Contract

April 15, 2025 — Christopher G. Hill - Construction Law Musings
Here at Construction Law Musings, I have discussed the interwoven issues of fraud, contract, and the Virginia Consumer Protection Act (VCPA) on several occasions. In most cases, the three simply don’t mix, acting more like oil and water than parallel causes of action. There are exceptions however so these three are always worth exploring in most (particularly residential) construction matters. A recent case out of the 4th Circuit Court of Appeals lays out a good roadmap for a properly pled, and properly tried in this case, VCPA, fraud, and contract matter. That case is Harrell v. Deluca and I recommend it to your reading. In Harrell, the Court considered a case where the Harrells entered into a residential sales contract to purchase property from DeLuca. After that sales contract, the parties entered into an addendum for a list of improvements that DeLuca was to make to the property as part of the sale. After that, the parties entered into a construction contract for the completion of certain uncompleted improvements by August 15, 2019. Needless to say (or this wouldn’t be a blog post at a construction law blog) things did not go well and the Harrells sued Deluca for fraud, constructive fraud, breach of contract, and violation of the VCPA. Unsurprisingly, and after a 9-day bench trial, the district court found in DeLuca’s favor on the fraud claims (actual and constructive) and the VCPA claim. It found for the Harrells on the breach of contract claim and awarded $181,762.87. Read the full story...
Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Deterioration of Bridge Infrastructure Is Increasing Insurance Needs

December 03, 2024 — Grace Calengor - Construction Executive
As the world is taken by storm—literally, with increasing hurricanes, tornadoes, wildfires and more—insuring construction projects and infrastructure is becoming more complicated yet more necessary. Sean Pender, senior vice president of construction and development at CAC Specialty, is a leading specialty insurance broker and advisor. As major-storm season for the Northern hemisphere rounds out, he speaks with Construction Executive about the potential risk and insurance implications to the process of ensuring proper repairs, replacements and other forms of maintenance to one of the country’s most pivotal pieces of infrastructure: bridges. What does insurance coverage look like for building bridges in various environments throughout the country? Insurance is essential to protect the entity that owns the bridge during construction. Bridges under construction are at the highest risk of collapse because they are not yet fully stabilized and are exposed to severe weather and natural disasters, which could cause significant damage to the structure or injury to workers and civilians. Therefore, comprehensive liability insurance programs—typically with coverage limits of $50 to $100 million or higher—are crucial, especially with activities on or over waterways. Reprinted courtesy of Grace Calengor, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the full story...

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Deferred Maintenance?

December 17, 2024 — Daniel Lund III - Lexology
A Tennessee-based “outsourced maintenance vendor” to an engine company filed suit in Louisiana state court seeking to recover nearly $150,000 on “open account,” for work previously performed. The engine company removed the case to the Federal District Court in New Orleans and asserted as a defense that the vendor lacked a proper Louisiana construction contractor’s license. The engine company filed a motion for summary judgment based on the defense. Under Louisiana law, a contract between parties is “absolutely null”--considered to have never existed--where one of the parties performed services without a required Louisiana contractor’s license, and the combined work reaches a $50,000 threshold. The engine company asserted that the vendor performed typical construction contractor work, including plywood flooring, applied epoxy to concrete flooring, erected part of a commercial carport, undertook certain heavy demolition, and installed fences, guardrails, and wire racks. Read the full story...
Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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Smoke and Soot Constitute Direct Physical Loss

April 08, 2025 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court found that smoke and soot contamination rendered the property unfit for normal use, meeting the standard for "direct physical loss" under the policy language for recovery of business income. Bottega, LLC, et al. v. National Surety Corporation-Chicago, Il, 2025 U.S. Dist. LEXIS 5666 (N.D. Cal. Jan. 10, 2025). Bottega, a restaurant in Northern California, held a policy issued by National Surety which provided for loss of Business Income due to the necessary suspension of operation. The policy provided, "The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations." On October 8, 2017, a series of fires began in the area. The following day, the governor proclaimed a state of emergency closing various roads from approximately October 9 to 18, 2017, restricting access to the insured property. The fires did not reach the insured's property, but came very close. Bottega closed on October 9, 2017. The restaurant partially reopened the following day so that food could be provided and served to first responders. Bottega remained in operation throughout the fires except for the closure on October 16, 2017. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Mind Those Deadlines! Party Loses Appeal of Arbitration Decision by Failing to Timely File a Petition to Vacate

April 01, 2025 — Garret Murai - California Construction Law Blog
Arbitration provisions are increasingly common in construction contracts. Indeed, the boilerplate AIA contract documents include a standard arbitration provision providing for arbitration before the American Arbitration Association (“AAA”) (Note: AAA isn’t the only arbitration provider, and I’ve often wondered why the AIA includes the AAA only. Some sort of deal perhaps?). Whether you love arbitration or not – although “love” may be a bit of a strong word, and perhaps “prefer over litigation,” is more appropriate – there are strict deadlines under California law when it comes to confirming an arbitration award (if you win), challenging an arbitration award (if you lost), or seeking to vacate an arbitration award. In Valencia v. Mendoza, 103 Cal.App.5th 427 (2024), the Second District Court of Appeals discussed those deadlines in a case involving a “flip” gone wrong. Read the full story...
Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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The 2023 Term of the Supreme Court: Administrative and Regulatory Law Rulings

December 03, 2024 — Anthony B. Cavender - Gravel2Gavel Construction & Real Estate Law Blog
It is instructive to review the Supreme Court’s record in its most recent term, concentrating on regulatory and administrative law cases, which are usually back-burner issues. But not this term. The Supreme Court began the current term on October 7, 2024. The Court has already chosen many cases to review in the new term, and it promises to be as interesting as the 2023 term, which produced several significant rulings affecting regulatory and administrative law, chiefly the Loper Bright Enterprises ruling. Loper Bright overturned the Court’s landmark administrative law ruling of Chevron, USA v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Background to Loper Bright In 1984, the Supreme Court decided Chevron USA, Inc. v. National Resource Defense Council. (See 467 U.S. 839 (1984).) The unanimous decision, written by Justice Stevens, reversed then-D.C. Circuit Judge Ruth Bader Ginsburg’s ruling that set aside EPA’s Clean Air Act “bubble policy,” which was intended to provide regulatory relief from certain EPA permitting requirements. Read the full story...
Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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Updates to AIA Contract Applications

January 07, 2025 — Anand Gupta - Construction Law Zone Blog
The construction industry often relies on contract forms drafted by the American Institute of Architects (AIA). These AIA forms include agreements between owners, designers, consultants, contractors, subcontractors, and construction managers. Some prefer to use the forms in the stock form, but others prefer to modify the language to their benefit. These modifications can be made in Microsoft Word and uploaded into AIA’s current web-based system, ACD5, to create redlines against the standard AIA forms (Checked-Drafts) and final clean versions without the “DRAFT” watermarks. Law firms and clients keep repositories of these modified templates for future projects. A common issue with modifying documents offline in Microsoft Word and passing the documents back-and-forth between different email and document management systems is that the metadata of the forms becomes corrupted. AIA technical support then must reset the metadata, which takes hours or days. This delay can pose challenges to clients when they are up against a deadline. Read the full story...
Reprinted courtesy of Anand Gupta, Robinson+Cole
Mr. Gupta may be contacted at agupta@rc.com

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