Philadelphia Construction Law Blog

Pennsylvania Superior Court Decided

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Industry News on Oct 6, 2017.

On September 27, 2017, the Pennsylvania Superior Court decided that the Bilt-Rite case, which held that an architect could be liable to a contractor for negligent misrepresentation, applies to other professionals as well.  The Court therefore reversed a trial court decision in favor of an accountant, stating that: “We find the court applied a too narrow reading to Bilt-Rite in determining that the case only concerns disputes involving an architect/contractor scenario. Rather, we conclude Bilt-Rite can be applied to other factual scenarios where a party is providing professional information that is designed to be relied upon by a third party.”  The case may be found at this link: http://www.pacourts.us/assets/opinions/Superior/out/24161563.       

Scheduling Experts Have A Variety Of Methods Available

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Industry News on Sep 28, 2017.

Scheduling experts have a variety of methods available to them for analyzing delays, but all methods are not equally reliable or persuasive, a point well illustrated by the April, 2017 decision of the United States Court of Federal Claims in K-Con Building Systems, Inc. v. United States, 131 Fed.Cl. 275 (2017).  That decision provides a detailed analysis of the competing opinions of the parties’ scheduling experts, and the court found that the scheduling analysis method employed by the defendant was more persuasive.  The court stated: “The parties present diametrically opposed descriptions of the critical path of performance—plaintiff submits that the critical path of performance should be based on an as-planned, forward-looking schedule, and defendant contends that the critical path of performance should be based on an as-built, backward-looking schedule. The court agrees with defendant that the proper way to determine what activities were on the critical path of performance in this case is to examine what actually occurred during contract performance. There are two reasons for this conclusion. First, a critical path schedule that relies solely on the schedule set forth in the contract specifications does not account for any subsequent changes to the schedule authorized by the contracting agency…. Second, the use of a contractually based critical path schedule does not reflect that plaintiff did not actually perform in accordance with the schedule set forth in the contract specifications.”

Bad Faith

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Bonding and Surety on Sep 28, 2017.

On September 28, 2017, the Supreme Court of Pennsylvania, in Rancosky v. Washington National Insurance Company, held that in order to recover in a bad faith action against an insurer under 42 Pa.C.S. §8371, the plaintiff must “present clear and convincing evidence (1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis.” Further, the Court held that proof of an insurance company’s motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim under Section 8371, observing that evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.  

Launch of Enforcement of the Respirable Crystalline Silica in Construction Standard, 29 CFR § 1926.1153

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Industry News on Sep 25, 2017.

On September 23, 2017, OSHA will begin enforcement of the new respirable crystalline silica standard for construction (“new silica rule”). OSHA announced that during the first 30 days of enforcement of the new silica rule, it will consider good-faith efforts by employers in their attempt to comply with the new silica rule. OSHA will offer outreach and assistance to help ensure employers are fully and properly complying with the new requirements. The memorandum issued by OSHA on the subject can be found under the following link: https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=31292

Pittsburgh Airport Shrinkage Spurs Substantial Construction Project

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Industry News on Sep 20, 2017.

The Pittsburgh Post-Gazette reports that Pittsburgh International Airport will receive a $1.1 Billion facelift, ironically spurred by a downsizing of the airport facility. The consolidation of U.S. Airways, a major tenant at the airport, with American Airlines resulted in a substantial reduction in capacity at the airport over the last several years. A 600 person operation center at the airport was closed, as were other facilities. The plan recently unveiled is essentially a makeover for a terminal opened as a US Airways hub in 1992, but which now serves only ½ the traffic it once did. The project includes a new building for ticketing and security, a new parking garage and a streamlined boarding facility. Under the proposed modernization, the current landside building would be abandoned, the tram that hauls people from it to the X-shaped boarding facility, or airside, terminated, and the number of gates will be reduced to 51 from 75. Constructed in their place will be a $783.8 million landside building located between airside’s C and D concourses with new security and baggage facilities, a reconfigured international arrivals area, a 3,000-space parking garage, and other features designed focused on the needs of modern travelers. The Post-Gazette also reports that private developers have expressed interest in commercial development of vacant space at the airport for tenants interested in locating their businesses near the airport. The Federal Aviation Administration would likely have to approve any redevelopment of the vacant airport space. Andrew B. Cohn can be reached by email […]

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Uncategorized on Aug 15, 2017.

U.S. MODULAR CONSTRUCTION ON THE RISE

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Industry News on Aug 10, 2017.

The Chicago Tribune recently reported that two European developers are planning a mixed-use development that could include up to 20,000 modular homes on the former site of a U.S. Steel plant in Chicago. A division of Irish firm WElink Group and Spain-based Barcelona Housing Systems (BHS) has entered into an agreement to purchase the 440-acre site. WElink builds energy-efficient modular housing, and BHS uses solar power and recycled materials in its homes. Closing on the property is to occur within five months. It is anticipated that the development would likely include low- and mid-rise buildings, parks and a marina. Developers are increasingly using modular and offsite construction to speed up construction and overcome skilled-labor shortage. Modular factories offer efficiencies which produce either whole rooms or room segments concurrently with site work and other site operations. This efficiency can significantly streamline the project schedule. A number of commercial developers, including Marriott, have made public commitments to use modular construction to reduce costs and achieve overall efficiency. It recently announced that it planned to incorporate modular in approximately 13% of its total North American hotel deals this year. That would translate to approximately 50 hotels that will include some element of modular building. Although most of the growth in modular in the U.S. has come from the multifamily and hospitality sector, some single-family builders are also using the method. Entekra, An Irish developer, Entekra, plans to build volume modular housing in the U.S. It claims that its model can produce the components for […]

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NJ CONSTRUCTION LIEN BARRED BY BANKRUPTCY AUTOMATIC STAY

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Jul 26, 2017.

In a recent opinion, the Third Circuit Court of Appeals held that the automatic stay of claims against a bankrupt contractor barred the filing of an electrical supplier’s NJ construction lien against the project real estate. The decision points out how differences between state lien statutes can affect the rights of lien claimants where a bankruptcy has been filed. In In Re Linear Electric Company, Inc., a prime electrical contractor filed a bankruptcy petition.  After the petition had been filed, two electrical suppliers to the bankrupt contractor filed New Jersey Construction Liens against real estate which had been improved with the electrical material supplied by the two lien claimants.  The bankrupt contractor moved to dismiss the liens as having been filed in violation of the automatic stay of claims imposed when a bankruptcy is filed, even though the lien claims were asserted against real property owned by the project owner, not directly against the bankrupt contractor. The Court held that the liens violated the automatic stay. It reasoned that even though the liens were asserted against real estate owned by a non-bankrupt party, under the New Jersey Lien statute, the liens functioned as a claim against the accounts receivable of the bankrupt electrical contractor in that if the liens were paid, the project owner would not have to pay the bankrupt contractor.  This would be to because, under the New Jersey Lien statute, construction liens are assessable only up to the amount of a “Lien Fund”, consisting of all unpaid […]

Clearwater Construction v. Northampton County

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Contract Bidding on Jul 12, 2017.

On July 10, 2017, in Clearwater Construction v. Northampton County, the Pennsylvania Commonwealth Court, in a case of first impression, ruled that a disappointed bidder  lacked standing to challenge a contract awarded under the Public Private Transportation Partnership Act (P3 Act), 74 Pa. C.S. §§ 9101-9124, holding that “Absent a statutory provision to the contrary, generally disappointed bidders lack standing to challenge the award of a government contract. Section 9109(n) of the P3 Act does not provide that statutory basis as its application is limited to a “development entity,” which by statutory definition is a party to the contract.”  The case may be found at this link: http://www.pacourts.us/assets/opinions/Commonwealth/out/1658CD16_7-10-17.pdf?cb=1  

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