Contract Void Ab Initio: Key Insights into the KBR vs. Corps of Engineers Affirmative Defense
February 12, 2024 —
Matthew DeVries - Best Practices Construction LawIn a recent Board decision dated December 13, 2023, the United States Army Corps of Engineers sought to amend its answer in the case of APPEALS OF – KELLOGG BROWN & ROOT SERVICES, INC., under Contract No. W912GB-13-C-0011. The proposed amendment introduces an affirmative defense, contending that Kellogg Brown & Root Services, Inc. (KBR) made material misrepresentations in its proposal, rendering the fully-performed contract void ab initio.
Background: The contract in question, executed on July 9, 2013, was for the construction of an Aegis Ashore Missile Defense System site in Deveselu, Romania, with a firm, fixed-price amount of $134,211,592. The Corps moved to amend its answer to allege that KBR’s material misrepresentations induced the Corps to enter the contract, justifying the voiding of the contract. The alleged misrepresentations include issues related to subcontractor quotes, firm fixed prices, subcontracting plans, and more.
Motion to Amend and Legal Defense: The Corps, despite delays in formally amending its answer, argued that KBR was aware of the potential affirmative defense before the conclusion of fact discovery. The proposed affirmative defense asserts that KBR made eight material misrepresentations in its proposal, upon which the Corps relied in awarding the contract and defending against a GAO protest.
Read the full story...Reprinted courtesy of
Matthew DeVries, Burr & Forman LLPMr. DeVries may be contacted at
mdevries@burr.com
Contract Should Have Clear and Definite Terms to Avoid a Patent Ambiguity
December 11, 2023 —
David Adelstein - Florida Construction Legal UpdatesIf you need more of a reason to have contracts with clear and definite terms, this case is it. This case exemplifies what can happen if the contract, not only does not have clear and definite terms, but contains a patent ambiguity. The contract will be deemed unenforceable which will make one of the contracting parties very unhappy!
In Bowein v. Sherman, 48 Fla.L.Weekly D2208a (Fla. 6th DCA 2023), the buyer and seller entered into a real estate transaction. The transaction was for $2 Million. The purchase-and-sale agreement included the address and legal description of a parcel to be sold. However, there was a section in the agreement called “Other Terms and Conditions” which identified that the offer was actually for four properties that were being sold by the seller. When it came to closing time, the seller refused to close because the seller disputed that the $2 Million purchase price was for all four of his properties. The buyer sued the seller for specific performance to force the sale which the trial court agreed in favor of the buyer. However, the appellate court did not.
First, the appellate court held that “[t]he equitable remedy of specific performance may be granted only where the parties have actually entered into a definite and certain agreement.” Bowein, supra (quotation and citation omitted).
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Industry Groups Challenge DOL’s New DBRA Regulations
December 16, 2023 —
Bret Marfut - The Construction SeytLess than a month after taking effect, the Department of Labor’s (“DOL”) broad changes to the regulations implementing Davis-Bacon and Related Acts (“DBRA”) are facing legal challenges in two federal courts. These newly-filed lawsuits could change things for those trying to navigate the new regulatory landscape. Contractors on DBRA-covered contracts should keep an eye out for developments.
On October 23, 2023, DOL’s final rule updating the regulations implementing DBRA became effective. The first major overhaul of its kind in forty years, the final rule made sweeping changes to the regulations governing payment of prevailing wages on most federally-funded construction contracts.
Read the full story...Reprinted courtesy of
Bret Marfut, SeyfarthMr. Marfut may be contacted at
bmarfut@seyfarth.com
Navigating the Construction Burrito: OCIP Policies in California’s Construction Defect Cases
November 16, 2023 —
Alexa Stephenson & Ivette Kincaid - Kahana FeldIn the early 2000’s, Owner-Controlled Insurance Programs (OCIP) or WRAPS, were traditionally used in large commercial projects of over $50 million in construction costs. As construction defect lawsuits became more prevalent, subcontractors found themselves unable to meet the insurance requirements of their contracts with developers and general contractors because they could not find insurance companies that were willing to insure the risk. This presented a problem for developers and general contractors and left them with no option but to look into new insurance products that would insure them and all subcontractors who worked on the project. OCIPs became in some instances the only insurance option for developers, general contractors, and subcontractors to build single-family or multi-family projects in California and other western states.
OCIPS or WRAPS, often likened to the layers of a savory burrito, offer both enticing benefits and potential pitfalls. Just as a burrito’s ingredients can harmonize or clash, OCIP policies can shape the outcome of legal battles, impacting contractors, developers, and insurers alike.
Pros – Savoring the OCIP Burrito:
1. Wrapped Protection: Much like a well-folded burrito envelops its contents, OCIP policies offer comprehensive coverage for construction projects. Developers, general contractors, and subcontractors find comfort in knowing that their liability risks are bundled into a single policy, ensuring all enrolled parties have coverage in the event of a claim.
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...
Top 10 OSHA Violations For The Construction Industry In 2023
February 26, 2024 —
Dominic Donato & Jeff Miragliotta - Kahana FeldEvery year, the Occupational Safety and Health Administration (OSHA) publishes their top violations in the construction industry. And typically, the most common violations are consistent year after year. What separates 2023 is the number of citations involving Fall Protection, Scaffolding, Ladders, and the failure to use personal protective equipment (PPE) or other life safety equipment (LSE). The following is the list of the Top Ten OSHA violations for 2023:
(10) Toxic and Hazardous Substances. There were 382 citations issued for “hazardous communication” and improper warnings issued to construction employees.
(9) Excavations. There were 395 citations issued for failure to provide proper and specific excavation requirements and instructions.
(8) Scaffolding – Aerial Lifts. There were 481 citations issued for improper lifting equipment and supports for building scaffolding.
Reprinted courtesy of
Dominic Donato, Kahana Feld and
Jeff Miragliotta, Kahana Feld
Mr. Donato may be contacted at ddonato@kahanafeld.com
Mr. Miragliotta may be contacted at jmiragliotta@kahanafeld.com
Read the full story...
The (Jurisdictional) Rebranding of The CDA’s Sum Certain Requirement
April 15, 2024 —
Jordan A. Hutcheson and Stephanie Rolfsness - Watt TiederThe Contract Disputes Act (the “CDA”), 41 U.S.C.A. §§ 7101 et seq., which has provided the statutory framework for resolution of most contract disputes between the federal government and its contractors since 1978, has recently been the subject of changes in judicial interpretation, despite no corresponding statutory changes. The CDA’s implementing provisions in the Federal Acquisition Regulations (FAR), require that contractors submit a claim to the government in the form of written demand to a contracting officer requesting a final decision and seeking the payment of money in a sum certain prior to pursuing resolution via board or court. However, with respect to the sum certain requirement, the United States Court of Appeals for the Federal Circuit issued an opinion in late 2023 determining that this requirement “should not be given the jurisdictional brand” as it has categorically received in the past. Rather, the court concluded that the sum certain requirement is merely an element of a claim for relief under the CDA that a contractor must satisfy to recover. This rebranding does not debase the sum certain requirement, but it does indicate a renewed focus on what constitutes “jurisdictional” in government contracts litigation.
Reprinted courtesy of
Jordan A. Hutcheson, Watt Tieder and
Stephanie Rolfsness, Watt Tieder
Ms. Hutcheson may be contacted at jhutcheson@watttieder.com
Ms. Rolfsness may be contacted at srolfsness@watttieder.com
Read the full story...
Allegations Versus “True Facts”: Which Govern the Duty to Defend? Bonus! A Georgia Court Clears Up What the Meaning of “Is” Is
December 11, 2023 —
Rachel E. Hudgins & Syed S. Ahmad - Hunton Insurance Recovery BlogCourts scrutinize a complaint’s factual allegations to decide whether the allegations trigger a duty to defend.
[1] If the facts unambiguously exclude coverage, there is no duty to defend.
[2] But what if the factual allegations fall within a policy exclusion, but the allegations are untrue or questionable? What if the true facts would mean the exclusion doesn’t apply? In that case, many courts have found that the insurer should base its decision on the policyholder’s version of the “true facts.”
[3] An insurer can’t rely on the complaint’s allegations to deny coverage when the facts that the insurer knows or can ascertain show that the claim is covered.
[4]
A recent case,
United Minerals & Properties Inc. v. Phoenix Insurance Co., No. 4:23-cv-00050 (N.D. Ga.), illustrates these policy interpretation principles.
Reprinted courtesy of
Rachel E. Hudgins, Hunton Andrews Kurth and
Syed S. Ahmad, Hunton Andrews Kurth
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com
Mr. Ahmad may be contacted at sahmad@HuntonAK.com
Read the full story...
The Black Woman Architect Who Hopes to Change the Face of Design in America
January 16, 2024 —
Kriston Capps - BloombergIn the US, only 2% of licensed architects are Black. Less than a single percent are Black women. Architects tend to be older, White and men, as reflected by the leadership of both firms and professional groups. So when the American Institute of Architects inaugurated its 100th president, Kimberly Dowdell — the first Black woman to lead the association, and at 40 the youngest archit
2024 Construction Law UpdateLos Angeles Warehousing Mecca Halts Expansion Just as Needs SoarPennsylvania Federal Court Addresses Recurring Asbestos Coverage IssuesShaken? Stirred? A Primer on License Bond Claims in CaliforniaBig Policyholder Win in MichiganU.S. Homeownership Rate Falls to Lowest Since Early 1995San Francisco House that Collapsed Not Built to PlanCertain Private Projects Now Fall Under Prevailing Wage Laws. Is Yours One of Them?Insurer Defends Denial in Property Coverage Dispute Involving Marijuana Growing OperationsClient Alert: Release of Liability Agreement Extinguishes Duty of Ordinary CareReport: Construction Firms Could Better Protect Workers From Noise HazardsOne World Trade Center Due to Be America’s Tallest and World’s PriciestCorps Releases Final Report on $29B Texas Gulf Coast Hurricane Defense PlanUniwest Rides Again (or, Are Architects Subject to Va. Code Section 11-4.1?)CalOSHA Updates its FAQ on its COVID-19 Emergency Temporary RegulationsEndorsement to Insurance Policy ControlsChambers USA 2022 Ranks White and Williams as a Leading Law FirmSchool District Gets Expensive Lesson on Prompt Payment Law. But Did the Court Get it Right?San Francisco Bucks U.S. Trend With Homeownership GainsClient Alert: Design Immunity Affirmative Defense Not Available to Public Entities Absent Evidence of Pre-Accident Discretionary Approval of the Plan or DesignVermont Supreme Court Finds COVID-19 May Damage PropertyOutcry Over Peru’s Vast Graft Probe Prompts Top Lawyer to QuitMotion for Reconsideration Challenging Appraisal Determining Cause of Loss DeniedWage Theft Investigations and Citations in the Construction Industry Partners Patti Santelle and Gale White honored by as "Top Women in Law" The Legal IntelligencerNew California Standards Go into Effect July 1stWhen Is a Project Delay Material and Actionable?BHA has a Nice Swing Donates to CDCCFInvestigators Explain Focus on Pre-Collapse Cracking in Florida BridgeInsurers Subrogating in Arkansas Must Expend Energy to Prove That Their Insureds Have Been Made WholeNo Hiring Surge by Homebuilders Says Industry GroupAppeals Court Rules that CGL Policy Doesn’t Cover Subcontractors’ Faulty WorkLitigation Counsel of America Honors Partner Victor Anderson with Peter Perlman AwardWeslaco, Texas Investigating Possible Fraudulent Contractor InvoicesPennsylvania Mechanics’ Lien “Waivers” and “Releases”: What’s the Difference?Idaho Business Review Names VF Law Attorney Brittaney Bones Women of the Year Honoree Value in Recording Lien within Effective Notice of CommencementMontana Court Finds Duty to Defend over Construction Defect AllegationConstruction on the Rise in Washington TownWhite and Williams Recognizes Women’s History Month: Remembering Virginia Barton WallaceWharf Holdings to Sell Entire Sino-Ocean Stake for $284 MillionMortgage Bonds Stare Down End of Fed Easing as Gains PersistOSHA Reinforces COVID Guidelines for the WorkplaceGot Licensing Questions? CSLB Licensing Workshop November 17th and December 15th99-Year-Old Transmission Tower Seen as Possible Cause of Devastating Calif. WildfireFederal Subcontractor Who Failed to Follow FAR Regulations Finds That “Fair” and “Just” are Not Synonymous Insurance Policies Broadly Defining “Suits” May Prompt an Insurer’s Duty to Defend and Indemnify During the Chapter 558 Pre-Suit Notice ProcessNegligence of Property AppraiserFrench Laundry Spices Up COVID-19 Business Interruption DebateHow Contractors Can Prevent Fraud in Their Workforce Co-Insured Questions
Sometimes you Need to Consider the Coblentz AgreementInsurer's Denial of Coverage to Additional Insured Constitutes Bad FaithDrafting a Contractual Arbitration ProvisionThe Law Clinic Paves Way to the Digitalization of Built Environment ProcessesNTSB Outlines Pittsburgh Bridge Structure Specifics, Finding Collapse Cause Will Take MonthsBroker for Homeowners Policy Has No Duty to Advise Insureds on Excess Flood CoverageGovernor Signs Permit Extension Bill Extending Permit Deadlines to One YearHomebuilding Still on the Rise 
