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September 2017

Construction Law Update

Third Quarter 2017

Gordon & Rees's Construction Group is pleased to publish the latest issue of our Construction Law Update, a quarterly take on trends of interest to design professionals, contractors, and developers throughout the country.

INSIDE THIS ISSUE
  1. New York Appellate Decision Provides Breathing Room in Defense of Labor Law Cases

  2. Revisiting Claims for Breach of Implied Warranty of Habitability: Illinois Appellate Court for the First District Limits Claims Against Design Professionals and Suppliers, Upholds Claims Against Subcontractors When Builder or Seller Is Insolvent

  3. Renewal Energy Projects: Illinois Power Agency Releases Standard Form Contract and Proposed Request for Proposal to Be Used for Wind and Solar Energy Projects Under the Future Energy Bill

  4. So, When are You “Off the Hook?” A Look at Statutes of Limitation and Repose in California Construction Claims

  5. Gordon & Rees Construction Attorneys Making Headlines

  6. Gordon & Rees Construction Law Blog

  7. About Gordon & Rees's Construction Group

I. New York Appellate Decision Provides Breathing Room in Defense of Labor Law Cases
     
  By Adam S. Furmansky
   

Owners, general contractors, and agents of owners at construction sites often face an uphill battle, if not an insurmountable battle, in defending Labor Law §240(1) cases. The statute provides, in part, “all contractors and owners and their agents, except owners of one and two-family dwellings who contract for but do not direct or control the work, in the erection, demolition, repairing, altering, painting, cleaning or pointing of a building or structure shall furnish or erect, or cause to be furnished or erected for the performance of such labor, scaffolding, hoists, stays, ladders, slings, hangers, blocks, pulleys, braces, irons, ropes, and other devices which shall be so constructed, placed and operated as to give proper protection to a person so employed.” Such statute and interpretive case law have led many to refer to Labor Law §240(1) as a strict liability statute for workers injured by falling objects or workers who themselves fell on the jobsite.

To read a full, expanded version of this article, click here.

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II. Revisiting Claims for Breach of Implied Warranty of Habitability: Illinois Appellate Court for the First District Limits Claims Against Design Professionals and Suppliers, Upholds Claims Against Subcontractors When Builder or Seller Is Insolvent
     
  By Tyler Duff
   

On February 17, 2017 the Illinois Appellate Court for the First District considered three consolidated appeals brought by a condominium association seeking damages for defects in the design and construction of a condominium building. Sienna Court Condominium Ass’n v. Champion Aluminum Corp., 2017 IL App (1st) 143364. Two of the Sienna Court appeals addressed the viability of claims for breach of the implied warranty of habitability against defendants that were not the builder or the seller. Id. at ¶ 48. The First District ruled that a property owner may not assert a claim of breach of implied warranty against design professionals and material suppliers who did not perform construction work. Id. at ¶¶ 66, 69. However, a property owner may assert a claim against a subcontractor of an insolvent developer or general contractor. Id. at ¶ 81.

To read a full, expanded version of this article, click here.

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III. Renewal Energy Projects: Illinois Power Agency Releases Standard Form Contract and Proposed Request for Proposal to Be Used for Wind and Solar Energy Projects Under the Future Energy Bill
     
  By Tyler Duff
   

Wind and solar energy have become increasingly desired sources of renewable energy. Illinois lawmakers have passed the Future Energy Jobs Act in reaction to this increase. Among other things, the Future Energy Jobs Act serves as a catalyst to investment in developing wind and solar energy projects in Illinois. Under the Act, developers may receive payments for renewable energy credits (“RECs”). To facilitate the process for exchanging RECs, the Illinois Power Agency has released a proposed standard form contract and request for proposal (“RFP”) that developers may use for wind and solar energy projects. The contracts include fairly standard provisions, and also more detailed provisions that are specific to requirements under the Act. The contracts and RFP serve as guidelines for the exchange of RECs for payment from the Illinois Power Agency.

To read a full, expanded version of this article, click here.

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IV. So, When are You “Off the Hook?” A Look at Statutes of Limitation and Repose in California Construction Claims
     
  By Christine D. Barker
   

Like everything in life, all good things must come to an end, even a plaintiff’s right to sue. Known as the Statute of Limitation or Statute of Repose1, these government-imposed laws set the time limit on a plaintiff’s the right to file a lawsuit on a particular cause of action. Which statute applies depends on the claim.

Breach of Contract

When two parties enter into a contract, be it written or oral, the legislature has imposed a time limit on when claims under that contract must be brought in a court of law. If it is an oral contract, the SOL is 2 years from the date the agreement was breached. If the agreement is written, then the SOL is 4 years from the date of the breach. What constitutes a breach, you might ask? When one party claims that another party did not perform as promised.2 Couple of caveats, generally only the parties to the agreement can bring a lawsuit. Of course, like hand-me-downs, parties can assign their rights to other or forfeit them by dirtying their own hands first.

To read a full, expanded version of this article, click here.

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V. Gordon & Rees Construction Attorneys Making Headlines

Denver partner Dan Evans recently secured a complete defense judgment for his client, a national corporation, in a bench trial in Douglas County District Court. The plaintiff had previously installed a sanitary sewer pipe below a 4-lane road. When soils above the pipe later settled, plaintiff hired Gordon & Rees’s client to compaction grout the soils in order to prevent further settling. The client’s compaction grouting work was successful in preventing further settlement, but the contractor sued, claiming our client damaged the sanitary sewer line in the process of its work.

Using video and other evidence showing the pipe damage before and after the client’s work, Gordon & Rees through fact and expert witnesses established that plaintiff had damaged the pipe when it first installed it, long before our client arrived on the project. The court agreed that the pipe damage occurred before the client’s compaction grouting work, giving it a complete defense victory. The court also awarded the client its substantial counterclaim for the amounts charged for the compaction grouting work, as well as it costs. Associate attorney Megan Rose-Garnett helped with briefing and paralegal Derek Kirchmeier was instrumental during trial.
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Los Angeles partner Brenda Radmacher will be presenting to various construction and design association groups throughout October and November on topics including effective risk management and negotiation tactics. Ms. Radmacher will be presenting at the Claims and Litigation Management Alliance in San Diego, CA; the Associated General Contractors of California Conference in Indian Wells, CA; the Women Construction Owners and Executives Leadership Summit in San Francisco, CA; and the 2017 BD+C Women in Design + Construction Conference in Scottsdale, AZ.

On August 30, 2017, Boston partner Jay Gregory presented a webinar for the Air Barrier Association of America entitled “Design Delegation through Submittals and Shop Drawings – The Devil is in the Details.”

Chicago partner Tom Cronin co-presented a webinar in conjunction with The Hanover Insurance Group on August 29, 2017, regarding the 2002 deadly scaffolding collapse at the John Hancock Building in Chicago, Illinois and risk management lessons for design professionals.

Miami partners Ari Shapiro and Daniel Garcia and associate Andrew Schindler recently published an article in Lexology addressing Florida’s forthcoming change to the SOL for construction defect cases. To read the full article, click here.

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VI. Gordon & Rees Construction Law Blog

The Gordon & Rees Construction Law Blog continues to post new content addressing topical issues affecting the construction industry throughout the country. From analysis of new court decisions, discussions of timely legislation, and commentary on real-world, project-specific issues, Gordon & Rees’s Construction Law Blog provides insight on the issues that affect the construction industry now.

We invite you to visit the blog at www.grconstructionlawblog.com and see for yourself what we are up to. If you like what you see, do not hesitate to subscribe under the “Stay Connected” tab on the right side of the blog. There you can choose how you would like to be informed of new content (Twitter, LinkedIn, email, etc.). If you have any questions about the blog or would like to discuss further any of its content, please do not hesitate to contact us.

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VII. About Gordon & Rees's Construction Group

Gordon & Rees's Construction Group consists of more than 100 lawyers in 46 offices throughout the nation. The firm continues to expand, opening eight new offices in 2017 which include Cincinnati, Cleveland, Lincoln, Milwaukee, Oklahoma City, Omaha, Providence, and Salt Lake City.

Gordon & Rees’s construction attorneys focus their practice on the comprehensive range of legal service required by all participants in the construction industry – architects, engineers, design professionals, design joint ventures, owners, developers, property managers, general contractors, subcontractors, material suppliers, product manufacturers, lenders, investors, state agencies, municipalities, and other affiliated consultants and service providers.

We serve clients who design, develop, or build all types of structures, including commercial buildings, single and multifamily residential projects, industrial facilities, universities, hospitals, museums, observatories, amusement parks, hotels, shopping centers, high-rise urban complexes, jails, airports, bridges, dams, and power plants. We also have been involved in projects for tunnels, freeways, light rail, railway stations, marinas, telecom systems, and earth-retention systems. Our experience includes private, public, and P3 construction projects.

If you have questions about this issue of the Construction Law Update or our nationwide construction practice, click here to visit our practice group page or contact partner Tom Cronin.

Thomas G. Cronin
Gordon & Rees, LLP
1 North Franklin
Suite 800
Chicago, IL 60606
(312) 980-6770
tcronin@gordonrees.com

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