We reported last month that Maryland was on the verge of modernizing its statutory framework for P3s, legislation heavily backed by Governor O’Malley’s administration. The proposed legislation was projected to increase the State’s capital budget by as much as $315 million and create as many as 4,000 jobs.
A federal court in Louisiana denied a subcontractor’s coverage action against Ace Insurance because the subcontractor did not enroll in the Contractor Controlled Insurance Program. The case is Williams v. Traylor-Massman-Weeks, LLC, et al., EDLA No. 10-2309 and you can look at the pdf of the opinion here: Williams v. Traylor-Massman-Weeks.pdf
The Corps of Engineers entered into a contract with Shaw, which had a Contractor Controlled Insurance Program (known as a “CCIP” which is a type of “wrap up” because its “wraps up” various types of insurance into one place. Shaw entered into a contract with Eustis and at the time, Shaw planned to sponsor a CCIP, but had not created it yet. So, Shaw’s subcontract directed Eustis to enroll — presumably when the CCIP was created.
The trouble was, Eustis didn’t enroll. And wouldn’t you know it, of all the projects where they forgot to enroll in the CCIP, that was the one where they had a lawsuit? Eustis came up with several creative theories for coverage, but couldn’t escape its fundamental problem: It simply didn’t enroll in the CCIP.
Aside from the obvious lesson here — if you are a potential enrollee on a wrap up, make sure you have actually enrolled — there are other less obvious lessons. If you sponsor a CCIP, do two things: (a) try to make sure your subs get their paper work in; and (b) structure your contracts so that if they don’t, the risk to you is minimized.
On March 30, 2012, New Jersey’s Appellate Division issued a ruling in the case of New Jersey v Perini Corp. which explains how New Jersey’s 10 year statute of repose applies to projects using phased construction.
New Jersey’s statute of repose essentially provides that no action may be brought to recover damages for any deficiency in the “design, planning, surveying, supervision or construction” of a project “more than 10 years after the performance or furnishing of such services and construction.” Earlier cases have already established that the statute of repose runs from the date that one’s services for the project are substantially complete. So, the statute of repose will prohibit a claim against an early trade subcontractor once 10 years has elapsed after that subcontractor completed its work on the project even though the entire project may not yet be substantially complete for more than 10 years. However, the general contractor will remain on the hook until 10 years has elapsed from the date of substantial completion for the entire project.
The Perini case required the court to apply these concepts to phased construction. The state sued the general contractor, designer and pipe supplier for problems that developed with the underground hot water piping at a new state prison. The suit was filed on April 28, 2008. By contract, the prison was constructed in three separate phases – each with its own contractual substantial completion date. By April 27, 1998, 10 years before the state filed suit, the state had issued substantial completion certificates for the entirety of the first two phases of the project and for all but two buildings included in the third phase – a garage and a housing unit located outside the main perimeter. However, no certificate of substantial completion was issued specifically for the hot water system.
The court held that “multiple phases of a construction project that are clearly identified and documented can trigger separate periods of repose, even for the general contractor and other contractors that continue to work on the entire project.” However, the court rejected the notion that there can be “separate trigger dates of repose for components of a project, whether multi-phase or not, that are not clearly identified in the documentary record as distinguishable improvements.” In this case, the court found that the hot water system was not a clearly distinguishable component of the construction and was not substantially complete by April 27, 1998. As such, the state’s claim was not untimely under the statute of repose.
After three years of development, on March 28, 2012, the International Code Council (“ICC”) announced the release of its 2012 International Green Construction Code (“IgCC”). The IgCC, a milestone for bringing sustainability into the mainstream, will enable state and local governments to codify green building practice. The IgCC was developed by the ICC in cooperation with key industry partners – the AIA, ASTM International, ASHRAE, the U.S. Green Building Council (“USGBC”), and the Illuminating Engineering Society (“IES”).
The ICC touts the IgCC as the first model code to address sustainability issues throughout the entire life of a construction project – from design to certificate of occupancy. Richard P. Weiland, CEO of the ICC, described the IgCC to GlobeSt.com as “a baseline document or regulatory framework that different jurisdictions can use for sustainable construction practices.” Wieland further explained that the ICC incorporates the 2011 version of the ANSI/ASHRAE/IES/USGBC Standard 189.1 but allows state and local governments to be flexible in implementation.
More, after the jump.
A press release from the USGBC, maker of the LEED green building certification system, lauded the model code as an important policy option for localities. According to the USGBC, the IgCC is a complement to LEED that allows state and local governments “to share many of the benefits of green buildings with the millions of buildings that are designed, constructed and renovated to meet minimum code, whether or not they are engaged in the LEED program.”
As jurisdictions begin to consider adopting the IgCC, training and resources will be available from the ICC and its partners. The AIA’s announcement states that it has analyzed the IgCC’s impact on the architectural profession and will be releasing a guide in May 2012. The ICC’s Green Building guide, which it claims is the construction industry’s first support publication referencing the 2012 IgCC, is currently available here.
Could LEED certification of new buildings cause increased injury rates for construction workers? Matthew Hallowell, an assistant professor in the Civil, Environmental and Architectural Engineering Department at the University of Colorado at Boulder, thinks so. A recent set of articles authored by Hallowell and several co-authors published or in review by the Journal of Construction Engineering and Management analyzed LEED credits and conducted field research on the hazards related to constructing buildings that will be registered under the LEED system. The articles found that twelve LEED credits contribute to increased hazards for construction workers. According to the author’s research, these hazards for construction workers include:
– A 24% increase in injuries resulting from slips and falls while installing heavy solar panels on roofs painted white in order to reflect sunlight;
– A 36% increase in cuts and abrasions when entering recycling dumpsters to retrieve improperly discarded materials;
– An increase in falls when green roofs are installed by landscaping contractors not accustomed to working at height; and
– An increase in falls when workers spend increased time at height installing sky lights to provide day lighting or performing time-intensive wiring for lighting sensors.
The articles do note that worker safety under LEED is improved by the use of lower VOC adhesives and sealants. In all, Hallowell claims that a building cannot be considered sustainable without accounting for the health of construction workers.
But should we blame LEED for these hazards? Several of these risks and related mitigation strategies predate LEED and apply equally to any large construction project, including increased emphasis on fall protection procedures, reducing the time workers spend in hazardous situations, and increased protections against hazardous chemicals.
Further, several of the potential hazards Hallowell references could be addressed by additional safety features for construction practices that could be introduced by regulators or contractors. For example, the articles cite potential injuries caused by installing white solar roofing panels, which can be heavier and more slippery than traditional black roofing materials and can reflect light into workers’ eyes. The authors recommend rubber walk pads and safety eyewear to combat these problems, safety measures that are not noted by LEED.
The U.S. Green Building Council, which oversees LEED, has taken notice of potential safety hazards. Brendan Owens, a USGBC representative, said he was surprised by Hallowell’s findings and noted that USGBC is working with the National Institute for Occupational Safety and Health to evaluate these safety issues. While it may be too late for the USGBC to include safety-related changes for the forthcoming update to the LEED rating system, called LEED 2012, safety concerns will likely play a larger role in future updates to the rating system.
Colorado’s Regional Transportation District (RTD), the public transit provider for the Denver Metro area, is hopeful that public-private partnerships, including unsolicited P3 bids, will accelerate the completion of the FasTracks program. FasTracks, a voter-approved transit expansion program aimed at better connecting the Denver Metro area, includes 122 miles of commuter and light rail, 18 miles of bus rapid transit service, 21,000 new parking spaces, redevelopment of Denver’s Union Station and redirected bus services.
Maryland’s Lt. Governor Anthony Brown led a joint executive and legislative commission to make recommendations for modernizing Maryland’s statutory framework for P3s. The Commission’s work led to legislation, designated as SB358/HB576, that passed the House of Delegates this week and is expected to pass the Senate in the coming days. The primary goal of the legislation is to address Maryland’s critical infrastructure needs through expertly structured public-private partnerships. The various Maryland departments that oversee capital projects found that increased use of P3s could contribute as much as $315 million to the State’s capital budget and create perhaps as much a 4,000 jobs.
Jeffrey Gans, a partner in Pillsbury’s Construction practice and among those leading Pillsbury’s P3 practice, testified in support of the bill before both Houses in the Maryland General Assembly. “The availability of capital is the most often recognized benefit of a public-private partnership. But as important, is the fact that once the legislation takes effect, Maryland will have at its disposal the ingenuity and entrepenurial spirit that is the life blood of the free market.” Mr. Gans’ testimony was in specific reference to the language in the legislation that permits unsolicited P3 proposals to be made to any State agency authorized to enter a P3. “The expertise of the best best and the brightest the market has to offer will be motivated to find innovative and profitable solutions to Maryland’s infrastructure needs,” Gans said.
Can anyone claim that they read their homeowner’s insurance policy before they had a claim to submit? That’s what I thought. I don’t know whether Larry Ward read his before he had a claim, but he’s read it now, and so have several judges and numerous lawyers. Based on a recent decision from the U.S. Court of Appeals for the Fourth Circuit, the judges and clerks of the Virginia Supreme Court will be reading it too.
Ward submitted a claim to his property insurance carrier when he discovered that his new home was suffering damage from Chinese Drywall. The carrier denied his claim and filed a declaratory judgment action in federal court for the Eastern District of Virginia (the “Rocket Docket” for those not familiar with it). The district court granted summary judgment in favor of the carrier and Ward appealed. The Fourth Circuit did not affirm or reverse. Instead, the court concluded that the case involved unsettled questions of Virginia law, and certified the question to the Virginia Supreme Court.
More, after the jump.
The policy is an all risk policy on a standard form. It covers all risk of direct physical loss to the property covered by the policy. Sounds easy, right? If your property is damaged, you’ve got coverage.
Not so fast, says the carrier. After issuing a broad coverage grant, the policy chips away at the coverage by excluding damage caused by several specific “causes of loss.” The district court agreed that the damage by Chinese drywall triggered these exclusions. The Fourth Circuit, noting Ward’s argument that they are ambiguous, concluded that Virginia law is unsettled on the point. The court accordingly asked the Virginia Supreme Court to answer this question:
1. For purposes of interpreting an “all risk” homeowners insurance policy, is any damage resulting from this drywall unambiguously excluded from coverage under the policy because it is loss caused by:
(a) “mechanical breakdown, latent defect,
inherent vice, or any quality in property that causes it to damage itself”;
(b) “faulty, inadequate, or defective materials”;
(c) “rust or other corrosion”; or (d) “pollutants,” where pollutant is defined as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis,
chemicals and waste?
For what it’s worth, an intermediate appellate court in Louisiana found that the exclusions apply under Louisiana law. You can see that opinion here.
According to this article by Ben Nuckols, a team of surveyors is in town. They are here to figure out if the Washington Monument shifted or sunk during the 5.8-magnitude earthquake that hit our Nation’s capital in August of last year. Although the monument is structurally sound, it will remain closed until August 2013 for repairs. The surveyors’ preliminary results are expected in two weeks.
For people living in an area not prone to having earthquakes, it was quite a jarring experience. In fact, one of my colleagues went as far as to take cover under his desk while yelling warnings to our entire floor, but that is beside the point. One can only imagine the thoughts racing through the minds of the employees and tourists in the Washington Monument at the time. Some of the reactions of the people – as well as the damage from the interior – were captured by video camera installed inside the Monument. You can watch videos at the 500 foot level from three different views on the National Park Service website.
Let’s all hope the surveyors’ findings do not reveal the Washington Monument is tilted as a result of last year’s earthquake. Although, even if the obelisk remains in perfect position, I may just keep my feet planted on the ground after watching those videos!
Photo Credit: Samer Farha
When we posted yesterday about the RFP for the Tappan Zee Bridge replacement, we perhaps missed the most important aspect of the Instructions to Bidders: No Obligation to Award. (It’s on page 40, for those keeping track.) Usually this sort of provision is a safety valve. Here, it might be more. The owner apparently still doesn’t know where the money will come from. Bloomberg is reporting that a bill is working its way through the New York Legislature to allow Public Private Partnership funding for . . . the Tappan Zee Bridge Replacement.
