Category Archives for "Court Decisions"

Enforceability of pay-if-paid clauses under Nevada law. APCO Construction, Inc. v. Zitting Brothers Construction, Inc. Supreme Court of Nevada (2020). by Hugh Anderson

APCO Construction was the general contractor on a Las Vegas construction project that ground to a halt in late 2008. APCO subcontracted wood-framing, sheathing, and shimming work to Zitting Construction. The subcontract stated that payment to Zitting was conditioned on APCO’s receipt of payment from the project owner, Gemstone—as the Nevada Supreme Court described it, this was “known colloquially as a pay-if-paid clause.”

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Did a subcontractor’s commercial general liability insurer have a duty to defend the project owner and construction manager in an injury lawsuit by the subcontractor’s employee? Scottsdale Insurance Company v. Columbia Insurance Group, Inc. United States Court of Appeals for the Seventh Circuit (2020). by Hugh Anderson

DH Mechanical provided heating, ventilating, and air conditioning construction services for a building construction project in Chicago. A TDH employee plunged through an unguarded opening and fell 22 feet, sustaining serious injuries. The employee sued the construction manager, Prairie Management and Development, and the project owner, Rockwell Properties, alleging negligent supervision and monitoring of the work of the subcontractors and of the worksite; the lawsuit also included claims against other project participants. The lawsuit did not contain any direct or express claims or allegations against TDH Mechanical, which was not subject to injury litigation by an employee, by virtue of the workers’ compensation laws.

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Applicability of state building codes to a project undertaken by a bi-state commission created under the U.S. Constitution’s Compact Clause. Delaware River Joint Toll Bridge Commission v. Secretary, Pennsylvania Department of Labor and Industry. United States Court of Appeals for the Third Circuit (2021). by Hugh Anderson

In 1934 the State of New Jersey and the Commonwealth of Pennsylvania enacted laws forming the Delaware River Joint Toll Bridge Commission. As stated in the Constitution (Article I), all agreements and compacts between the states must be approved by Congress—such approval was given to the toll bridge agreement between Pennsylvania and New Jersey in 1935. The Commission was granted sweeping authority to own, construct, maintain, and operate bridges and related improvements and facilities, and to “exercise all other powers…reasonably necessary to [the Commission’s] authorized purposes…,” specifically including the
exercise of powers with respect to its property and affairs. These broad powers were stated to be subject to an exception: the Commission was expressly denied the power to levy taxes.

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Applicability of statute that prohibits the contractual elimination of tort liability, to a contract clause waiving the right to subrogation. Rural Mutual Insurance Co. v. Lester Buildings, LLC. Supreme Court of Wisconsin (2019), by Hugh Anderson

Applicability of statute that prohibits the contractual elimination of tort liability, to a contract clause waiving the right to subrogation. Rural Mutual Insurance Co. v. Lester Buildings, LLC. Supreme Court of Wisconsin (2019)

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Project owner’s liability for delays arising from design review comments that deviated from the contractually-established design process. Appeals of RBC Construction Corp. Armed Services Board of Contract Appeals (2020), by Hugh Anderson

Project owner’s liability for delays arising from design review comments that deviated from the contractually-established design process. Appeals of RBC Construction Corp. Armed Services Board of Contract Appeals (2020), by Hugh Anderson

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Timeliness of construction defect claims—commencement of California’s 10 year statutory repose period. Hensel Phelps Construction Co. v. Superior Court. Court of Appeals of California (2020).by Hugh Anderson

Timeliness of construction defect claims—commencement of California’s 10 year statutory repose period. Hensel Phelps Construction Co. v. Superior Court. Court of Appeals of California (2020).by Hugh Anderson

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General contractor’s responsibility for safety of subcontractor’s employee. Foley v. Builtech Construction, Inc. Appellate Court of Illinois (2019), by Hugh Anderson

Summary: John Foley was an employee of a subcontractor. He injured his back while pulling rebar from a tangled storage pile. Builtech was the general contractor. Foley sued Builtech, alleging negligence, failure to provide a safe workplace, and premises liability. Builtech moved for summary judgment, contending that it did not have actual or constructive notice […]

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Issue: Impact of a pay-when-paid clause in the context of subcontractor’s payment bond claim. Crosno Construction, Inc. v. Travelers Casualty and Surety Company of America. Court of Appeal, California (2020), by Hugh Anderson

Summary: Clark Bros., Inc., was the general contractor on an arsenic removal water treatment plant project for the North Edwards Water District in Kern County, California. Clark furnished a payment bond issued by Travelers. Clark entered into a subcontract with Crosno Construction under which Crosno was to fabricate, erect, and coat two 250,000-gallon welded steel […]

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Calculation of the deductible under a builder’s risk insurance policy. McDonnel Group, LLC v. Starr Surplus Lines Insurance Company, United States District Court for the Eastern District of Louisiana (2020), by Hugh Anderson

Summary: The McDonnel Group was the general contractor for the renovation of the historic Jung Hotel in New Orleans. McDonnel purchased a builder’s risk policy, expressly including flood insurance. Two years into the project, on August 5, 2017, a heavy rain caused $3.2 million in damage to the work in progress. McDonnel made a claim […]

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