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Philadelphia Construction Law Blog

Construction Trivia

Posted by:  Josh Quinter  (jquinter@kaplaw.com)

The Hoover Dam is still considered one of the most impressive engineering and construction accomplishments of all time. Relying on the largest known reservoir in the United States, it provides massive amounts of hydroelectric power to the power grid. But it was not always called the Hoover Dam.

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What was the name of the Hoover Dam before it was renamed as such in 1947? Tell us your answer in the comments section below.

Kaplin Stewart Construction Attorneys To Deliver Program to New Jersey Architects

On Thursday, August 28, 2014, two attorneys from Kaplin Stewart's construction law department will deliver a presentation on contract administration and handling construction disputes to New Jersey architects. Josh Quinter and Karin Corbett will speak as part of a continuing education program for design professionals in Princeton, New Jersey.

Pennsylvania Commonwealth Court holds that acceptance of a public contract bid does not form a contract

Posted by:  Robert Korn  (rkorn@kaplaw.com)

The Commonwealth Court recently considered a breach of contract claim by Allan A. Myers after the Montgomery County Commissioners reversed course and awarded paving work to another bidder.

construction paving.jpgAllan A. Myers, LP, was awarded a contract by the County Commissioners in Montgomery County to perform certain paving work. Upon being awarded the bid, Myers incurred the expense of procuring the bonds required for the project. Thereafter, the County, by formal resolution, rescinded the award to Myers and awarded the work to another bidder.

Pennsylvania Supreme Court Overturns Conway v. Cutler

Posted by:  Josh Quinter  (jquinter@kaplaw.com)

In a prior post on November 19, 2012, I reported that the Superior Court of Pennsylvania held that the implied warranty of habitability extended to subsequent purchasers of residential properties. The Superior Court based its opinion on the foundation of public policy considerations flowing from the unequal bargaining power between developers/builders and residential home buyers.In its August 18, 2014, ruling, the Pennsylvania Supreme Court reversed that decision on the primary ground that public policy decisions are best left to the legislature.

By way of brief recap, the Plaintiffs in the case (Conway) did not purchase their home from Cutler. Instead, they purchased their home from another couple that previously bought the residence from Cutler. Approximately 2 years after moving in, the Conways noted water infiltration into their home and hired an expert to look into the issue. Suit was eventually brought against Cutler for latent defects that they alleged caused the water problem. The suit asserted a single claim for breach of the implied warranty of habitability.

After the trial court dismissed the case, the Superior Court decided that the implied warranty of habitability is based on public policy considerations that exist regardless of the existence of a contract. The sales transaction that initiates the warranty can often be a trigger, but it is not a requirement. Subsequent homeowners can still rely on the superior knowledge and expertise of builder regardless of whether they purchase the home directly from the builder or not.

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CHANGE TO PENNSYLVANIA MECHANIC'S LIEN LAW AFFECTS LIEN PRIORITY

Posted by:  Andy Cohn  (acohn@kaplaw.com)

On July 9, the Pennsylvania Legislature amended the Mechanic's Lien Law to change lien priority rules flowing from the 2012 Kessler decision by the Pennsylvania Superior Court. The Kessler Court had established that mechanic's liens had priority over open-end mortgages where visible commencement of work at the site pre-dated the recording of the mortgage and advances on the mortgage were made for costs other than "hard construction costs".

Act 117 amends the Mechanic's Lien Law to provide that a construction loan will have lien priority ahead of any filed mechanics lien claims if it is secured by an open-end construction loan mortgage under which at least 60% of the proceeds are "intended to pay or used to pay" all or part of the "costs of construction". This is the case even if visible commencement of work precedes the recording of the construction loan's open-end mortgage. The Act was signed into law by Governor Corbett on July 9, 2014 and becomes effective on September 7, 2014.

mortgage.pngAct 117's definition of "cost of construction" is very broad. It includes all costs, expenses and reimbursements pertaining to erection, construction, alteration, repair, mandated off-site improvements, government impact fees and other construction-related costs, including, but not limited to, costs, expenses and reimbursements in the nature of taxes, insurance, bonding, inspections, surveys, testing, permits, legal fees, architect fees, engineering fees, consulting fees, accounting fees, management fees, utility fees, tenant improvements, leasing commissions, payment of prior filed or recorded liens or mortgages, including mechanics' liens, municipal claims, mortgage origination fees and commissions, finance costs, closing fees, recording fees, title insurance or escrow fees, or any similar or comparable costs, expenses or reimbursements related to an improvements, made or intended to be made, to the property. For purposes of this definition, "reimbursements" includes any such disbursements made to the borrower, any person acting for the benefit or on behalf of the borrower, or to an affiliate of the borrower.

OSHA ANNOUNCES INITIATIVE TO DECREASE WORKPLACE FATALITIES

Posted by:  Josh Quinter  (jquinter@kaplaw.com)

It should be the goal of every owner and construction company to return employees home for dinner safely every day. In addition to being the right thing to do, workers who are injured, or worse, don't show up for work the next day. Safety is and should be one of those symbiotic relationships that all parts of the construction community can work on together.

OSHA Inspector.jpgThe U.S. Department of Labor's Occupational Safety and Health Administration recently launched a "Construction Incident Prevention Initiative" campaign in an effort to curb fatalities on construction projects. Increased inspection and compliance efforts, particularly out of the Wilmington, Delaware office, will be part of the program. OSHA hopes that the increased compliance efforts will decrease fatalities in particular.

The primary focus of the initiative is to identify and eliminate safety and health hazards from the four leading causes of accidents: falls, crushing events, electrocutions, and caught-in-between events. In terms of health hazards, the compliance efforts will target silica, lead, and hexavalent chromium. Given the high heat conditions this summer, special efforts will be undertaken to address heat illness for those working outside too.

New OSHA Area Director for Region III

Posted by:  Josh Quinter  (jquinter@kaplaw.com)

Effective June 29, 2014, Nicholas DeJesse is the Area Director of the Philadelphia Are Office for OSHA. The new position is a promotion from Assistant Area Director in Area III, a position DeJesse has held since April 2012.

DeJesse started with OSHA in 1995 as an Industrial Hygienist intern. He later took a full time position with OSHA as a CSHO in the Philadelphia Area Office later that year. He went on to work as a Safety and Occupational Health Specialist in the Regional Office and a Safety and Health Manager with the Regional OASAM. He has also spent time working for the Department of Health and Human Services as a Public Health Analyst/Regional Emergency Coordinator and with the Federal Emergency Management Agency as the Chief of the Regional Preparedness Branch.

Be Careful With Lien Releases, They Can Do More Than Release Just Liens

Posted by:  Josh Quinter (jquinter@kaplaw.com)

Executing releases of mechanic's liens is an all too common part the application for payment process on construction projects. Often times, payment is not released by the party upstream until that release of liens is submitted. Contractors and subcontractors alike should be particularly careful, however, when signing these lien releases. They are powerful documents that can result in a complete dismissal of much more than just the right to file a mechanic's lien.

The recent holding in Conestoga Ceramic Tile Distributors, Inc. v. Travelers Casualty and Surety Company of America reinforces the aforementioned concept. The background of the case is not an unusual occurrence and can easily happen to the lackadaisical or unsuspecting contractor. After payment was slow in coming, a deal was reached in which the subcontractor was to, among other things, submit a lien release to have the disputed payment released. The payment never came; but the surety issuing the payment bond was also found to have been free of liability because of the language in the release of liens.

The case arose out of a project done by IMC Construction for the Pennsylvania College of Technology. IMC provided the college with a payment bond issued by Travelers, pursuant to which Travelers agreed to accept liability if IMC defaulted on any of its obligations to Pennsylvania College or its requirement to pay the subcontractors and suppliers. IMC then contracted with Profast Commercial Flooring for a portion of the work; and Profast entered into a sub-subcontract with Conestoga to provide the tile for the project.

Frustrated Contractor.jpgA payment dispute arose and was allegedly settled between the parties. As part of the agreement to resolve the issue, Conestoga agreed to and in fact signed a "Lower Tier Vendor Final Waiver and Release". The release contained language which stated that Conestoga "forever releases and discharges IMC, Profast, and Penn College from all claims, demands, and causes of action, arising from or relating to Conestoga's labor, materials, and/or services provided to the project." Two joint check agreements were also signed by which Conestoga was to be paid. Despite signing the release and the join check agreements, Conestoga was still not paid approximately $170,000.00 by Profast.

Metabo Corporation Announces Recall

Posted by: Josh Quinter  (jquinter@kaplaw.com)

The Metabo Corporation has announced a recall of the W14-150 Ergo Angle Grinder. The company indicated that it was brought to their attention that under certain circumstances the grinder can get stuck in the on position. Two incidents were verified, although there have been no injuries to date. Metabo cites its desire to promote safety and to ensure that no user is injured by its product as the basis for the recall.

Metabo Grinder.jpg

Distributors were asked to immediately stop selling the product and determine what tools fall into the recall group. Those who already have the Ergo grinders are instructed to contact the Metabo Corporation at 800-638-2264, ext. 253, to make arrangements for replacement or repair.

New Allentown Project Is Biggest Ever for Neighborhood Improvement Zones

Posted by: Josh Quinter  (jquinter@kaplaw.com)

The next project for the City Centered Investment Corporation of Allentown is likely to end up being its biggest ever. Five City Center, a proposed 7-story office building would be 250,000 square feet plus parking for more than 1,000 spaces to accommodate the building. The project would be headed by the Allentown Neighborhood Improvement Zone Development Authority.

The Five City Center project will be built at a cost of approximately $100 million on a property located in the parking lot of the current Wells Fargo building between Walnut and 7th and 8th Streets. The location is prime real estate in close proximity to the PPL Center, which is where the new hockey team will be playing. With the Development Authority's approval in place, the City can begin looking for tenants as zoning approval and construction are completed.

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