Contractors learned many lessons from 2020-2022 on material/labor availability, price escalation, and contractual allocations of risk. Prudent contractors will consider this in contracts moving forward.
Long gone are the days of large projects that are simply private or public. Large projects are multi-layered when it comes to funding. Federal, state, and
On Friday, January 24, 2020, a Lake County Common Pleas Court returned a unanimous jury verdict in favor of Hahn Loeser’s client — TRAX Construction Co. — against the Village of Reminderville, Ohio, its design professional OHM Advisors, Inc., and Village Engineer, Eugene Esser, awarding our client the full $1.1 million it sought for compensatory damages. The jury also found OHM Advisors and Mr. Esser had committed fraud, and in addition to liability for compensatory damages, awarded TRAX $375,000 in punitive damages and its attorney’s fees.
Continue Reading Hahn Loeser Obtains Unanimous Jury Verdict for TRAX Construction Co.
On July 17, 2019, the Supreme Court of Ohio announced a major victory for the Ohio construction industry in the ongoing battle over whether Ohio’s construction statute of repose, R.C. 2305.131, bars claims for breach of contract as well as tort claims. In New Riegel Local School District v. Buehrer Group Architecture & Engineering, Inc., et al., the Ohio Supreme Court ruled the construction statute of repose does apply to breach-of-contract claims as well as tort claims.
Continue Reading Ohio Supreme Court Rules that Statute of Repose Applies to Contract Claims
Hahn Loeser’s Construction Team is a proud leader in a major victory for Ohio contractors and their sureties. The Fifth District Court of Appeals of Ohio issued a recent decision confirming that Ohio’s construction statute of repose, R.C. 2305.131, applies to breach of contract claims. It also confirmed that sureties are entitled to rely on the statute of repose as a defense to claims under the bond.
Continue Reading Ohio Court of Appeals Confirms Applicability of Statute of Repose to Contract Claims and Sureties
Steel and other construction material tariffs necessitate careful evaluation and allocation of project cost and schedule risks. For example, when steel costs increased suddenly based solely on presidential executive orders, the building trades and owners saw drastic increases in costs, shop drawing review times and delivery dates. In many instances, contract documents failed to account for such risks.
Another factor that can significantly increase the price of material, and even the market price for labor, include catastrophic weather events. When bad weather occurs, contractors may no longer be able to obtain the material at originally budgeted pricing, or secure necessary labor forces to perform the work. Labor and material shortages domino into project delays, potential liquidated damages and claims.Continue Reading Contract Risk for Escalation Costs
While electronic funds transfer is considered a convenient and quicker way to process payments and receive funds on construction projects, this practice presents significant risk to project participants. Contractual and processing controls are necessary to prevent fraud, which is on the rise locally and nationally.
Continue Reading Owners and Contractors Beware! Electronic Payments in Construction Are Subject to Increased Fraud
In Berkley Ins. Co. v. Kent State Univ., Ohio Ct. of Cl. No. 2018-00579JD (Jan. 14, 2019), the Ohio Court of Claims expanded its prior rulings strictly enforcing contract dispute resolution provisions in the public construction contract arena. The Court ruled, despite the circumstances that actually existed between the contracting parties, that a contractor’s surety who takes over and completes a project after the contractor’s default and termination is likewise bound by the contract’s dispute provisions. The ruling reinforces the significant risk of waiver of claims by contractors and their sureties when claims are not promptly submitted in accordance with contract provisions governing disputes, even though all parties are aware of the dispute and claim.Continue Reading Ohio Court of Claims Decision Puts Public Works Bond Sureties Directly Behind the Eight Ball
Beware! On October 9, 2018, the Ohio Supreme Court issued a final ruling that, not surprisingly, will effectively eliminate meaningful insurance coverage for contractors, subcontractors, and owners for defective construction work. The most recent ruling reaffirms what experienced construction counsel cautioned for years; project participants cannot rely on comprehensive general liability (“CGL”) insurance coverage to remediate defective or non-conforming work. According to the Ohio Supreme Court, although defective construction work causes “property damage,” that damage is neither “accidental” nor “fortuitous” and, therefore, represents an “ordinary business risk” that members of the construction industry must manage without recourse to insurance proceeds. It does not matter that the cause of loss was defective work of a contractor or its downstream subcontractor. This decision is a significant, if not insurmountable, bar to insureds forcing insurers to defend defective work claims, pay for expert evaluations, or to fund settlements under standard coverage forms that have permeated the Ohio construction industry for decades. The Court held that, under the terms of these form insurance agreements, no downstream insurance coverage exists for damages arising from defective work of a subcontractor. Ohio Northern University v. Charles Construction Company, et al. (Ohio Supreme Court, October 9, 2018)
It is critical that industry participants understand the far-reaching and long-term effects of the Ohio Northern University decision and take prompt action to evaluate and mitigate risk or loss. The decision reaffirms and expands the Supreme Court’s 2012 ruling in Westfield Ins. Co. v. Custom Agri Sys., Inc. to the detriment of Ohio’s construction industry participants since it involved a contractor’s policy, and it denied coverage under standard “products completed operations” (“PCOC”) endorsements. For years, insurance agents and insureds’ assumed PCOC endorsements and related policy provisions covered losses arising after substantial completion to the extent the cause of loss was a subcontractor or other lower tier’s defective work. The October 2018 Supreme Court ruling will also impact available insurance coverage for work performed out of state if a contractor’s or subcontractor’s CGL policies are governed by Ohio law.Continue Reading Protect Your Bottom Line on Ohio Construction Projects