Risk Transfer: The Souffle of Construction Litigation
December 13, 2022 —
Alexa Stephenson & Ivette Kincaid - Kahana FeldWho does not love a good souffle?! Enthusiasts will know that a great souffle is not something you can obtain quickly. Rather, it is common in restaurants to order the souffle as dessert at the beginning of the meal because it takes an hour to bake. Risk transfer – like a good souffle – also requires planning, preparation, and the right ingredients.
In construction litigation, attorneys are often not retained until after the project has been completed for several years as the dispute between the homeowner and the general contractor or developer took time to escalate to formal litigation. A significant part of defense counsel’s legal analysis involves assessing and evaluating risk transfer opportunities. For example, in the case of a general contractor or developer who did not self-perform the construction work but instead retained subcontractors to do so, counsel will assess if risk can be transferred from the general contractor or developer to the subcontractors who performed the work which the homeowners allege is defective. In other words, a developer or general contractor can reduce their risk (i.e. liability and money owed) by transferring said risk (i.e. pointing the finger at) to a third party.
Sounds easy, right? Unfortunately, just like the souffle making process, it is easier said than done. This task can be exceedingly difficult in the absence of contracts that contain strong indemnity and insurance provisions – the essential ingredients to effect risk transfer. Worry not! We have provided “baking” instructions for you below to help you get a great risk transfer souffle time and again.
Reprinted courtesy of
Alexa Stephenson, Kahana Feld and
Ivette Kincaid, Kahana Feld
Ms. Stephenson may be contacted at astephenson@kahanafeld.com
Ms. Kincaid may be contacted at ikincaid@kahanafeld.com
Read the full story...
Update: Supreme Court Issues Opinion in West Virginia v. EPA
August 03, 2022 —
Anne Idsal Austin, Shelby L. Dyl & Sheila McCafferty Harvey - PillsburyTakeaways
- The Supreme Court sided with a coalition of states and coal mining companies constraining EPA’s ability to regulate CO2 emissions from power plants.
- The Supreme Court’s deployment of the “major questions doctrine” could have far-reaching implications for agencies’ authority to take actions that are politically and economically significant.
- The Court also announced a broad interpretation of standing, finding that the challengers could bring their suit notwithstanding EPA’s announced nonenforcement of the Clean Power Plan and intent to engage in a rulemaking to replace it.
Introduction
On June 30, 2022, the Supreme Court issued its opinion in West Virginia v. EPA, invalidating the 2015 Obama-era Clean Power Plan (CPP). Chief Justice John Roberts delivered the opinion of the court, holding that Section 111(d) of the Clean Air Act does not authorize EPA to devise emissions caps based on “generation shifting”—the approach EPA took in the CPP wherein power plants would be required to transition from higher-emitting (e.g., coal) to lower-emitting (e.g., natural-gas) to then even lower-emitting (e.g., wind and solar) electricity production.
The Court’s holding that the case was justiciable despite the Biden administration’s stated intent to repeal the Clean Power Plan and engage in a new rulemaking, as well as its deployment of the “major questions doctrine,” is likely to have far-reaching implications for legal challenges to all administrative agency actions.
Reprinted courtesy of
Anne Idsal Austin, Pillsbury,
Shelby L. Dyl, Pillsbury and
Sheila McCafferty Harvey, Pillsbury
Ms. Austin may be contacted at anne.austin@pillsburylaw.com
Ms. Dyl may be contacted at shelby.dyl@pillsburylaw.com
Ms. Harvey may be contacted at sheila.harvey@pillsburylaw.com
Read the full story...
Kiewit Hired as EPC for Fire-Damaged Freeport Gas Terminal Fix
September 19, 2022 —
Mary B. Powers - Engineering News-RecordFreeport LNG’s $13.5-billion natural gas liquefaction plant and export terminal in Texas, closed since a June 8 fire and explosion that damaged the facility, said it will not partially reopen until possibly mid-November, and not fully operate until next March—the third delay it has announced.
Reprinted courtesy of
Mary B. Powers, Engineering News-Record
ENR may be contacted at enr@enr.com
Read the full story...
PSA: Pay If Paid Ban Goes into Effect on January 1, 2023
December 05, 2022 —
Christopher G. Hill - Construction Law MusingsI have
written a couple of times here at Musings regarding the new pay-if-paid legislation passed by the General Assembly last session. While the statute has some inconsistencies and a working group has made
some recommendations, the legislation as passed will go into effect on January 1, 2023, without any changes (at least until next session). As always, such action by our legislature here in Virginia will create work for construction attorneys assisting their clients to amend contracts to meet the new rules.
Essentially (and with minor inconsistencies between public and private contracts), the bill requires that any construction contract entered into after January 1, 2023 have the following provisions:
- On public projects: A payment clause that obligates a contractor on a construction contract to be liable for the entire amount owed to any subcontractor with which it contracts. Such contractor shall not be liable for amounts otherwise reducible due to the subcontractor’s noncompliance with the terms of the contract. However, in the event that the contractor withholds all or a part of the amount promised to the subcontractor under the contract, the contractor shall notify the subcontractor, in writing, of his intention to withhold all or a part of the subcontractor’s payment with the reason for nonpayment.
Read the full story...Reprinted courtesy of
The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Contract And IP Implications Of Design Professionals Monetizing Non-Fungible Tokens Comprising Digital Construction Designs
December 26, 2022 —
Colin C. Holley - ConsensusDocsThere is an emerging market that appears poised to increasingly provide opportunities to monetize architectural and other construction designs through the sale of non-fungible tokens (NFTs). Last year, artist Krista Kim reportedly made the first sale of a digital home design via an NFT marketplace, for over $500,000. With some NFTs selling for millions of dollars, monetizing digital designs is undoubtedly an enticing prospect for architects, engineers, and other design professionals. It is thus critical to understand the application of intellectual property rights to NFTs and to address those rights in contracts involving design professionals.
What is an NFT?
To understand the market for NFTs it is necessary to first understand blockchain technology. A blockchain is a decentralized system of recording information via a digital ledger of transactions duplicated and distributed across many computers. The manner in which each block of the ledger chain is created—using a cryptographic mathematical algorithm tied into the previous block, a timestamp, and transaction data—prevents it from being changed retroactively without a change to all subsequent blocks and consensus of the decentralized network.
An NFT is a ‘token’ secured to a blockchain. It can represent ownership of any item that is non-fungible, i.e., any item that has unique qualities that add value and make the item non-interchangeable. NFTs can take unlimited forms, including, for example, tokens representing unique artwork, music, fashion items, in-game items, essays, collectibles, memorabilia, furniture, and real estate.
Read the full story...Reprinted courtesy of
Colin C. Holley, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)Mr. Holley may be contacted at
cholley@watttieder.com
Pennsylvania Civil Engineers Give the State's Infrastructure a "C-" Grade
November 28, 2022 —
American Society of Civil EngineersPENNSYLVANIA. — The Pennsylvania Council of the American Society of Civil Engineers (ASCE) released the 2022 Report Card for Pennsylvania's Infrastructure today at three congruent news conferences across the state including Harrisburg, Lehigh Valley, and Pittsburgh, with 15 categories of infrastructure receiving an overall grade of a "C-". This is the same grade issued by the council in its 2018 report. A "C-" means Pennsylvania's infrastructure is in mediocre condition and requires attention. Pennsylvania's aviation and rail networks are helping to drive economic growth in the region and an improved roadway network is helping increase efficiency for the regional and national economies, but an aging infrastructure network and struggling water systems threaten the health, safety and welfare of the region. Civil engineers graded aviation (B-), bridges (D+), dams (C), drinking water (D), energy (C), hazardous waste (B-), levees (C), parks (C+), ports (C+), rail (C), roads (C-), solid waste (C+), stormwater (D), transit (D), and wastewater (D-).
"Considering Pennsylvania's aging infrastructure and its critical role in our state's economy, policy makers must continue to prioritize dedicated funding to update and improve all infrastructure assets," said Rep. Mike Carroll, D-118. "Failure to do so will seriously harm the quality of life for every citizen."
"This report shows that Pennsylvania's infrastructure has seen some noteworthy improvements and that our lawmakers are prioritizing the built environment, but out-of-sight, out-of-mind systems such as water and wastewater pipelines are lacking the necessary attention," said David DiGioia, chair, 2022 Report Card for Pennsylvania's Infrastructure. "With help from the Bipartisan Infrastructure Law, we could improve our communities for generations if we double down on investment and close our funding gaps across all sectors included in this report."
The Report Card was created as a public service to citizens and policymakers to inform them of the infrastructure needs in their state. Civil engineers used their expertise and school report card-style letter grades to condense complicated data into an easy-to-understand analysis of Pennsylvania's infrastructure network. ASCE State and Regional Infrastructure Report Cards are modeled after the national Infrastructure Report Card, which gave America's infrastructure an overall grade of 'C-' in 2021.
To view the report card and all five categories, visit https://infrastructurereportcard.org/state-item/Pennsylvania/.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
Why Ethiopia’s $5 Billion Dam Has Riled Its Neighbors
September 12, 2022 —
Samuel Gebre & Fasika Tadesse - BloombergEthiopia has been at loggerheads with downstream neighbors Egypt and Sudan for years over a $5 billion mega-dam it’s building on the Nile River. A third phase of filling a 74 billion cubic-meter (2.6 trillion cubic-foot) reservoir behind the Grand Ethiopian Renaissance Dam was completed in August, a process that’s reignited tensions. Egypt has described the unilateral action as a violation of international law and its foreign minister, Sameh Shoukry, wrote to the United Nations Security Council in July, reiterating its objections and accusing Ethiopia of derailing attempts to resolve the standoff.
1. Why is the dam so significant?
The Nile is the most important source of fresh water in a largely arid region that is very vulnerable to drought and climate change and is experiencing rapid population growth. Egypt relies on the 4,000-mile-long river for as much as 97% of its supply, and much of eastern Sudan’s population depends on it for survival. Ethiopia is counting on a 5,150-megawatt hydropower plant on its new dam to help supply electricity to the 60% of its population that don’t have access, and sustain its manufacturing industries. The plant began generating power in 2022, some of which will be sold to neighboring countries.
Reprinted courtesy of
Samuel Gebre, Bloomberg and
Fasika Tadesse, Bloomberg Read the full story...
Understanding Liability Insurer’s Two Duties: To Defend and to Indemnify
December 26, 2022 —
David Adelstein - Florida Construction Legal UpdatesA liability insurer has two duties that are the crux of a liability policy: the duty to defend the insured in legal actions and the duty to indemnify the insured from losses covered under the policy. Many times, policyholders (insureds) do not fully understand or appreciate these two important duties. They need to and this is why having private counsel assist with coverage-related considerations is an absolute must.
An insurers’ duty to defend is separate from its duty to indemnify. A recent opinion out of the Middle District of Florida in Progressive Express Ins. Co. v. Tate Transport Corp., 2022 WL 16963815 (M.D.Fla. 2022) clarifies the distinction between these duties with a focus on an insurer’s initial duty — the duty to defend. Please read below so you can have more of an appreciation of these duties. The court does a good job discussing Florida law with the emphasis on when an insurer’s initial duty to defend kicks-in:
Duty to Defend
Under Florida law, “an insurer’s duty to defend its insured against a legal action arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage.” The duty to defend is a broad one, broader than the duty to indemnify, and “[t]he merits of the underlying suit are irrelevant.” We determine whether an insurer has a duty to defend its insured based only on “the eight corners of the complaint and the policy,” and only as the complaint’s alleged facts are “fairly read[.]” The “facts” we consider in evaluating the duty to defend come solely from the complaint, regardless of the actual facts of the case and regardless of any later developed and contradictory factual record. “Any doubts regarding
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
