Construction Law – Page 34 – Legal issues, news, and regulations concerning the construction industry

Economic Loss Doctrine may not Preclude Claims Against Building Contractors for Negligent Construction that Results in Foreseeable Damage to Property

Mar 30 2008

Harris v. Suniga, 344 Or. 301, 180 P.3d 12 (Or. 2008)

In this case, the defendant general contractors constructed an apartment building for a California investment company. The California investment company sold the completed apartment building to the plaintiffs, trustees for the Harris Family Trust. Following the sale, plaintiffs found the apartment building had problems with leaking water and dry rot and filed a claim for negligent construction against the defendant contractors. Prior to suit, the plaintiff and defendants were “strangers.” The plaintiffs did not purchase the apartment building from the defendants, did not contract with the defendants, and did not have any previous contact with the defendants. Plaintiffs alleged that defendants’ failure to install required flashings in the building caused the dry rot damage, and that the failure constituted negligence.

Relevant Factors in Grant of Freezing Injunction in Support of Foreign Arbitration

Mar 27 2008

Mobil Cerro Negro Ltd. v. Petroleos de Venezuela SA, 2008 WL 678144, [2008] EWHC 532 (Queen’s Bench Div., Commercial Ct.)

In this case, a freezing injunction was set aside, having been granted in support of claims which were the subject of ICC arbitration seated in New York. The parties were parties to a contract for the exploitation of oil rights, the Claimant being a US corporate and the Defendant the Venezuelan state oil company. Venezuelan legislation passed in 2007 mandated the “migration” of non-Venezuelan interests in Venezuelan oil to Venezuelan entities, and gave rise to claims under the parties’ contract. Mobil obtained a worldwide freezing injunction up to a value of $12 billion and Petroleos applied to have the injunction set aside. Read More

Suit Can Proceed Against General Contractor Based on Claims of Subcontractor’s Negligence and Public Nuisance

Mar 27 2008

New York v. Shaw Contract Flooring Servs., 853 N.Y.S.2d 694 (N.Y. App. Div. 2008)

State university brought claims against a general contractor and subcontractor for asbestos released as a result of tile work performed by the subcontractor. The trial court denied the general contractor’s motion to dismiss the negligence and public nuisance claims. The Appellate Division affirmed. Read More

The Risks and Rewards of Green Building

Mar 24 2008

New legal implications arise from building environmentally friendly

By K&L Gates attorneys Patrick J. Perrone and Loly Garcia Tor, and David Crump Jr., Director of Legal Research for the National Association of Homebuilders

Appearing in the March 24, 2008 issue of the New Jersey Law Journal, this article explores the potential risks builders may face when building and marketing “green” homes and buildings.

View the full article here.

Choice of Seat Dictates Procedural Law

Mar 20 2008

Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Bus. Servs. Ltd., 2008 WL 678195, [2008] EWHC 426 (Queen’s Bench Div., Tech. & Constr. Ct.)

In this case an agreement to arbitrate selected the Arbitration Act 1996 as the applicable procedural law but stated that the seat of any arbitration was "Glasgow, Scotland," where the Act does not apply. It was held that, construing the contract as a whole, the arbitration was seated juridically in England, with Glasgow serving as the location of the arbitral hearing. Read More

Factors Justifying Disclosure of Documents Filed in Arbitration

Mar 19 2008

John Forster Emmott v. Michael Wilson & Partners Ltd., 2008 WL 576947, [2008] EWCA Civ 184 (Ct. of App., Civil Div.)

In this case, the Court of Appeal upheld an order permitting the disclosure of documents filed in a London arbitration to the courts of certain overseas jurisdictions in related proceedings. In the London arbitration Wilson had originally made claims of fraud against the claimant Emmott but had subsequently withdrawn them. Wilson repeated those allegations in the overseas proceedings to which Emmott was not a party. Read More

General Contractor Waives Right to Challenge Settlement by Surety

Mar 19 2008

Kennerson v. LaBarbera, 536 F. Supp. 2d 305 (W.D.N.Y. 2008)

In this case, a subcontractor sued a general contractor and a surety for failure to make payments for work performed on a construction project for a county water authority. The surety filed cross-claims against the general contractor pursuant to an indemnification agreement. The water authority asserted indemnification claims against the surety. The surety subsequently settled the claims against the general contractor and moved for summary judgment as to all cross-claims. The district court granted the motion. Read More

K&L Gates’ Arbitration World, Spring 2008

Mar 01 2008

By K&L Gates attorneys Peter R. Morton, Ian Meredith, John L. Boos, Joanna A. Diakos.

Arbitration World is an update for clients and contacts on recent development in international arbitration law and practice.

Welcome to the Fifth Edition of Arbitration World, a publication from K&L Gates’ Arbitration Group which aims to highlight significant developments and issues in international arbitration for executives and in-house counsel with responsibility for dispute resolution.

In this edition, in terms of U.S. developments, we look at the growth of “class arbitration” in the U.S. and Canada, review the case law on challenging the scope of submission to an arbitrator in the U.S. and take an early look at an important Supreme Court case regarding the scope for Federal Courts to review arbitral awards as well as the proposed “Arbitration Fairness Act.”

We consider two aspects of the continuing development of the ethical framework for arbitrators: guidelines from the Chartered Institute of Arbitrators on the interviewing of prospective arbitrators and a U.S. Court of Appeal case on the duty to investigate potential conflicts of interest.

Bond Issuer Lacks Authority to Release Claims Related to Construction

Feb 26 2008

Eaton Elec., Inc. v. Dormitory Auth. of New York, 852 N.Y.S.2d 363 (N.Y. App. Div. 2008)

In this case, plaintiff contracted with Dormitory Authority of New York to perform electrical work in the renovation of a library. Plaintiff experienced delays and financial problems, eventually forcing it to assign its payment interest in the construction contract to AXA Global Risks U.S. Insurance Company in exchange for financial assistance. Later, in return for payment from Dormitory Authority, AXA executed a release to discharge Dormitory Authority from any claims of liability in relation to the underlying construction project. That release later became problematic when plaintiff sought an additional $12 million from Dormitory Authority as reimbursement for unanticipated and unforeseen additional costs incurred on the project. Dormitory Authority moved for summary judgment, arguing that AXA had released it from any such liability. The Supreme Court denied Dormitory Authority’s motion, reasoning that AXA lacked authority to release any such claims. Read More

Builder Liable for Intentional Infliction of Emotional Distress and Consumer Protection Act Violations Based on Verbal Abuse of New Home Purchasers

Feb 15 2008

Lepp v. V.M.S. Realty Trust, 2008 WL 375971 (Mass. App. Div. Feb. 8, 2008)

This is a per curiam decision by the Massachusetts Appellate Division that addresses the liability of homebuilders and vendors. In Lepp, the purchasers of a newly built home sued the vendor of the home for breach of contract for failure to install the agreed upon insulation. The purchasers also sued the builder, who was an employee of the vendor, for breach of contract, breach of the implied warranty of good workmanship, intentional infliction of emotional distress and violation of M.G.L. c. 93A — the Massachusetts Consumer Protection Act. The trial court found for the plaintiffs on all counts in a jury-waived trial and the defendants appealed.
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