When embarking on a new design or construction contract, all parties hope the road will be smooth and that any bumps can be handled by agreement. However, real disputes do occur. When they do, a well-crafted contract can provide rules for resolution. It is best to formulate those rules before disputes arise. In my recent
Think all Oregon construction defect claims are governed by the same 10-year statute of repose? Think again.
In Shell v. Schollander Companies, Inc., the Oregon Supreme Court affirmed a line of appellate decisions distinguishing between defect claims arising out of construction performed for an owner and defect claims arising out of an owner’s purchase of an existing structure. In Schollander, the homeowner sought recovery for defects in the construction of
Yes, Contractor Licensing May Be Required Under California Law Even if the Contractor Does Not Physically Build Anything Itself
It seems that almost weekly, and certainly monthly, I receive a call or inquiry from colleagues and/or prospective clients as to whether a license is really required if the prospective “contractor” is not actually building anything but is merely facilitating a “deal” or is hiring otherwise qualified and licensed contractors and trades. Virtually every time
Hate Negotiating? Think It is a Waste of Time? Think Again. Seven Habits of Successful Negotiators
If you dislike negotiating, you are not alone. But successful negotiators understand and embrace the opportunities that a negotiation presents. In my recent article for the Daily Journal of Commerce, I discuss seven habits of successful negotiators that can help you successfully conclude your construction-related negotiations. Read the full article here.
“Hate Negotiating?
NYC Crane Collapse Likely to Fuel Crane Objections and Easements
On Friday, February 5, one man died and three were injured when a 565-foot crane toppled in gusty winds in lower Manhattan, not far from the World Trade Center. The investigation will likely take weeks to months as experts try to reconstruct whether the engineering, erection, operation or manufacture of the crane, or some combination
Contractors Are Running into Unexpected Trouble as Local Air Quality Management Districts Stretch the Limits of Their Authority
It has long been the case that the California Air Resources Board (“ARB”) and each of California’s local Air Quality Management Districts (“AQMDs”) may regulate sources of portable emissions. However, about two decades ago, the legislature recognized that it was often impractical and too costly for businesses traveling throughout the state to acquire permits for
Contractor Beware When Working With Developers to Assure Mechanic’s Lien Rights
Interpreting Utah’s former mechanic’s lien statute, the Utah Court of Appeals has held that a contractor that contracted with and provided construction services for a developer could not maintain a valid mechanic’s lien on property owned by a third-party landowner. In Reeve & Associates, Inc. v. Tanner, 2015 UT App 166 (2015), the owners of
Court of Appeals affirms Brightwater judgment, reviews law regarding differing site conditions and surety obligations
On November 9, 2015, Division One of the Court of Appeals affirmed a 2012 King County trial court judgment that joint-venture tunneling contractor Vinci Construction Grands Projets/Parsons RCI/Frontier-Kemper (VPFK) was liable to King County for $144 million in damages and attorney fees.
The case arose from the Brightwater project, a wastewater treatment plant north of Woodinville with a tunnel system that conveys wastewater to the plant and treated water to a marine outfall in Puget Sound. VPFK was awarded a $212 million contract to build two segments of the 13-mile tunnel system. Unfortunately, VPFK’s two tunnel-boring machines broke down several hundred feet beneath Lake Forest Park and Bothell. The machines required extensive repairs that threatened to delay the completion of the overall project.
VPFK repaired one machine and completed one tunnel segment, but King County did not accept the lengthy delay and additional cost proposed for the repair of the second machine. King County hired Jay Dee Coluccio to complete the remaining tunnel segment between Shoreline and Lake Forest Park. The Brightwater project began full operation in late 2012.
King County sued VPFK and its sureties for approximately $156 million, based on its costs arising from project delays and design modifications. VPFK counterclaimed for approximately $70 million, arguing that its delays were excused by differing site conditions and defective project design. King County acknowledged some of VPFK’s claims totaling about $4.7 million.
After a nearly three-month trial, the jury awarded $156 million in damages to King County, offset by $26 million to VPFK for its counterclaims. The court awarded King County its attorney/expert fees in the approximate amount of $14 million, for a net judgment of $144 million.
The trial and appeal involved a number of interesting issues, two of which are summarized here.
Key Aspects of Joint Check Agreements
Joint checks are a useful tool in the construction industry to give owners and prime contractors peace of mind that lower-tier subcontractors or suppliers are being paid and potential lien claims are avoided. But joint check agreements and the subsequent actions can result in unintended consequences and liability. In my recent article for the Daily
Take Care in Reaching for Deep Pockets: Don’t Let Insurance Companies Off the Hook When Drafting Settlement Agreements in Construction Defect Cases
It will happen to almost every contractor at some point — an owner or project developer will try to sue you. Hopefully your insurer agrees you are covered, and you’ve dodged a bullet. But if your insurer tells you that you are not covered, things get sticky. One common strategy is for the parties to