Seattle Washington Building Consultant Directory

New York Revises Retainage Requirements for Private Construction Contracts: Overview of the “5% Retainage Law”

January 22, 2024 — Levi W. Barrett, Patrick T. Murray, Skyler L. Santomartino & Mark A. Snyder - Peckar & Abramson, P.C.
On November 17, 2023, the State of New York enacted the “5% Retainage Law.” This legislation effectively limits the amount of retainage that can be held from general contractors and subcontractors to no more than 5%. It applies to many but not all construction contracts. In addition, the new law revises late stage billing requirements, enabling contractors to invoice for retainage at substantial completion. Previously, the parties to a construction contract were free to negotiate any retainage amount, limited only by an unspecified “reasonable amount” that would be released as the parties contractually set forth. Summary The new law amends Sections 756-a and 756-c of the General Business Law (part of Article 35E of the GBL, known as the “Prompt Pay Act”), and applies to private construction contracts “where the aggregate cost of the construction project, including all labor, services, materials and equipment to be furnished, equals or exceeds one hundred fifty thousand dollars.” Reprinted courtesy of Levi W. Barrett, Peckar & Abramson, P.C., Patrick T. Murray, Peckar & Abramson, P.C., Skyler L. Santomartino, Peckar & Abramson, P.C. and Mark A. Snyder, Peckar & Abramson, P.C. Mr. Barrett may be contacted at lbarrett@pecklaw.com Mr. Murray may be contacted at pmurray@pecklaw.com Mr. Santomartino may be contacted at ssantomartino@pecklaw.com Mr. Snyder may be contacted at msnyder@pecklaw.com Read the full story...

Wyoming Supreme Court Picks a Side After Reviewing the Sutton Rule

January 16, 2024 — Ryan Bennett - The Subrogation Strategist
In a matter of first impression, the Supreme Court of Wyoming (Supreme Court), in West American Insurance Company v. Black Dog Consulting Inc., No. S-23-0052, 2023 WY 109, 2023 Wyo. LEXIS 111, examined whether a landlord’s insurer could pursue a subrogation claim against a tenant who caused a fire loss. The Supreme Court, applying a case-by-case approach, found that the insurer could not subrogate against the tenant. West American Insurance Company (West) insured Profile Properties (Profile), which owned commercial property in Cheyenne, Wyoming. Black Dog Consulting Inc., d/b/a C.H. Yarber (Yarber) leased commercial space from Profile where it operated a metal fabrication business. The lease agreement between Profile and Yarber required Yarber to pay the full expense of Profile’s blanket insurance policy, which included general commercial liability insurance and fire and extended coverage insurance on the building. Read the full story...
Reprinted courtesy of Ryan Bennett, White and Williams LLP
Mr. Bennett may be contacted at bennettr@whiteandwilliams.com

Is Modular Construction Destined to Fail?

March 11, 2024 — Aarni Heiskanen - AEC Business
The construction sector is a harsh environment for innovation. I’ve been following the story of one Finnish innovative contractor, Lehto Group, over the years with enthusiasm. I was saddened to hear that the group’s three significant subsidiaries joined the ranks of many Finnish contractors who have filed for bankruptcy over the last six months. Lehto developed industrialized building concepts and had its own production facilities. The company had a promising start but eventually ran into problems. Was the industrial approach a mistake, or were other factors contributing to the firm’s fall? Three Contributing Factors Lehto Group’s collapse was not a surprise to its competitors, who had observed warning signs years prior. The company’s order book plummeted in 2024 despite still employing around 500 workers. Rakennuslehti, the leading construction magazine in Finland, asked three experienced industry professionals to give their views on Lehto’s failure. The interviewees spoke anonymously due to the small size of the Finnish market and the sensitive nature of commenting on a competitor’s matters. Read the full story...
Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

If a Defect Occurs During Construction, Is It an "Occurrence?"

February 12, 2024 — Brendan J. Witry - The Dispute Resolver
Establishing insurance coverage for construction defects is almost as important as establishing liability in the underlying construction defect litigation itself. The risk to the defendant contractor of defending a construction claim can place significant burdens on a contractor’s operations and an uninsured judgment might even put the contractor out of business. For owners, suing a contractor for construction defects can become academic if there is no prospect of insurance coverage; obtaining a $1 million judgment against a contractor with limited assets would be a pyrrhic victory. Commercial General Liability (CGL) carriers are obligated to defend claims that potentially fall within the coverage granted by the policy.[1] When presented with a claim, CGL insurers typically have three options: (1) assume the defense without reservation; (2) assume the defense asserting defenses to coverage, and depending on the state, reserving the right to recover defense costs if it later determines there is no duty to defend; or (3) deny the claim outright and seek a declaratory judgment holding that the insurer has no duty to defend or indemnify. An insurer may deny the claim outright and not seek a declaratory judgment, but does so at its peril because it can expose the insurer to significant liability if the insured later shows the insurer in fact had a duty to defend. Read the full story...
Reprinted courtesy of Brendan J. Witry, Laurie & Brennan LLP
Mr. Witry may be contacted at bwitry@lauriebrennan.com

Congratulations to BWB&O’s Newport Beach Team for Prevailing on a Highly Contested Motion to Quash!

January 08, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Congratulations to Newport Partners Tyler Offenhauser and Jonathan Cothran, and Associate Anisha Kohli, who recently prevailed on behalf of BWB&O’s client before the Orange County Superior Court on a highly contested Motion to Quash Service based on Plaintiff’s failure to timely file and serve a DOE Amendment, naming our client. BWB&O’s client was the owner of a building where Plaintiff, a licensed electrician, was electrocuted while performing an upgrade to the building’s electrical infrastructure. Plaintiff’s original lawsuit named only the building’s tenant, who was also represented by BWB&O. BWB&O was successful earlier this year on a Motion for Summary Judgment under the Privette Doctrine and won judgment on behalf of the client/tenant. While that MSJ was pending, Plaintiff surreptitiously added the building’s owner to the suit with a DOE Amendment, after several months earlier learning the owner and then tenant were entities operated by the same individual. However, Plaintiff never informed counsel or any other party of the filing. Moreover, after the MSJ was granted, Plaintiff then waited several more months to serve the building’s owner. Read the full story...
Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

Federal Court Reiterates Broad Duty to Defend in Additional Insured Cases

April 22, 2024 — Craig Rokuson - Traub Lieberman
In the recent case of Travelers Indem. Co. of Am. v. Accredited Sur. & Cas. Co., No. 21-CV-7189 (FB) (JRC), 2024 U.S. Dist. LEXIS 44634 (E.D.N.Y. Mar. 13, 2024), the Federal District Court for the Eastern District of New York had occasion to consider an additional insured tender on behalf of a prime contractor, Archstone, to a subcontractor, Topline, who was named as a direct defendant in a New York labor law case. Even though Topline’s carrier put forth evidence that Topline was not negligent, the court held, under New York’s broad duty to defend, that Topline’s carrier owed a duty to defend the prime contractor. Initially, the court was satisfied that a purchase order, signed only by Topline and not Archstone, was binding on Topline. That purchase order specified that Topline agreed to name Archstone as an additional insured. With respect to the duty to defend, the court found that it was enough that the underlying plaintiff alleged that all defendants, including Topline, were negligent in permitting a ladder that plaintiff was on to remain in a defective condition and in failing to foresee the existence of a hazard from the condition of the subject ladder. Read the full story...
Reprinted courtesy of Craig Rokuson, Traub Lieberman
Mr. Rokuson may be contacted at crokuson@tlsslaw.com

Surety Trends to Keep an Eye on in the Construction Industry

March 25, 2024 — Oliver Craig - Construction Executive
Reflecting on the dynamics of the 2023 construction and surety industries, it is evident that opportunities and challenges have emerged for contractors that will shape the landscape for the year ahead. Contractors can not only capitalize on these trends but protect the successful companies they have already built. PROJECT OPPORTUNITIES There has been a notable increase in public works opportunities, driven by increased government spending and the aging infrastructure in the United States. This trend is expected to continue in 2024 and beyond, with a notable portion of work coming in transportation- and public-utility-related infrastructure. Due to increased spending, many contractors are reporting historically high backlogs—and that often includes the largest project their company has contracted in their history. While increased spending presents more opportunity, it’s critical contractors be even more diligent about new opportunities, giving additional consideration to the following: Job Selection: New geographies, scope, project owners and/or subcontractor relationships commonly come with a learning curve. With the current state of the market, it’s not the ideal time to be learning costly lessons. Contractors should focus on having a proactive go/no-go strategy when reviewing potential projects to identify risks early and plan accordingly. Reprinted courtesy of Oliver Craig, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the full story...

Veolia Agrees to $25M Settlement in Flint Water Crisis Case

February 19, 2024 — James Leggate - Engineering News-Record
Engineering firm Veolia North America agreed to a $25-million settlement to resolve a federal class action case related to its work for the city of Flint, Mich., during the city’s lead-in-water crisis, the company and attorneys for the plaintiffs announced Feb. 1. Veolia is the second engineering firm that worked for the city to settle with city residents, and the deal came ahead of a class-action trial scheduled to start later this month. Reprinted courtesy of James Leggate, Engineering News-Record Mr. Leggate may be contacted at leggatej@enr.com Read the full story...

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