Gibbons Law Alert

Gibbons Law Alert

Author: Damian V. Santomauro

New Jersey Department of Community Affairs Temporarily Relaxes Construction Code Provisions Relating to Minor Work, Inspections, and Certificate Requirements

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Posted in Construction

On April 2, 2020

In response to the COVID-19 pandemic, Governor Phil Murphy issued Executive Order No. 107 (“EO 107”) on March 21, 2020, mandating that all non-essential brick-and-mortar retail businesses close to the public as long as EO 107 remains in effect. EO 107 does not require closure of construction projects. Not only does EO 107 identify “construction workers” as an example of employees who need to be physically present at their work sites in order to perform their duties, but also, shortly after issuing EO 107, Governor Murphy sent a tweet confirming that work at construction sites may continue. On the same date that Governor Murphy issued EO 107, he issued Executive Order No. 108 (“EO 108”), which provides that local officials may not enact or enforce rules or regulations that conflict with EO 107. Although work at construction sites continues in New Jersey, there are myriad ways in which construction projects can be adversely impacted by the COVID-19 virus. One potential impact concerns ongoing inspections of construction work performed by local construction code officials pursuant to the Uniform Construction Code (UCC), N.J.A.C. 5:23. Construction code officials routinely inspect ongoing projects at various points during construction and issue Certificates of Occupancy for structures when requirements for same are satisfied. From a legal perspective, as a result of...

Preparing for and Addressing Potential Impacts of COVID-19 on the Construction Industry

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Posted in Construction

On March 25, 2020

As the number of COVID-19 cases increases exponentially in the United States, the impact on the construction industry will inevitably continue to rise. Although projects in many states continue to progress at this time, some jurisdictions have taken drastic measures. For example, the Pennsylvania Department of Transportation recently suspended all construction projects until further notice in response to COVID-19. Similarly, all construction projects in Boston were ordered to stop for at least 14 days. In addition to shutdowns that may possibly be imposed by potential government action in response to the virus, ancillary issues could adversely impact parties to a construction project and the labor, goods, services, and materials used on projects. Such issues may include disruptions to construction supply chains in the U.S. and abroad, employees becoming ill and under quarantine, a workforce adjusting to changes resulting from school closings and other evolving societal changes flowing from COVID-19, and a rapidly changing and uncertain economic situation. While the current situation is essentially unprecedented, there are some actions parties in the construction industry can take to help prepare for, and address, potential impacts to their business and ongoing projects. Review Construction Contracts: Whether it is a standard form construction contract such as those published by the American Institute of Architects, a contract that has been...

New Jersey Appellate Division Issues Two Opinions Clarifying Local Public Contracts Law

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Posted in Construction / Construction Litigation

On August 27, 2014

In recent months the New Jersey Appellate Division issued two opinions clarifying aspects of the New Jersey Local Public Contracts Law, which generally mandates that contracts above a specified amount be awarded by municipalities to the lowest responsible bidder after public advertising for bids and bidding, N.J.S.A. § 40A:11-4, and also sets forth specific, non-waiveable bid requirements, the absence of which will result in a per se disqualification of the bid. N.J.S.A. § 40A:11-23.2.

Agreements to Arbitrate Will Be Enforced Against Unit Owners Even Where the Claims of the Condominium Association Will Be Litigated

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Posted in Alternative Dispute Resolution

On October 3, 2013

Purchasers of units in planned real estate developments, such as condominium complexes, often enter into purchase agreements with the developer that contain arbitration provisions requiring the purchasers to arbitrate any claims they may have arising out of the construction and sale of the unit. In Hudson Tea Buildings Condo Assoc. v Block 268 LLC, the New Jersey Appellate Division recently considered questions over the enforceability of such provisions in a lawsuit involving some claims that were subject to the arbitration provision and some that were not.

The Limited “Refund” Remedy Under the New Jersey Consumer Fraud Act Does Not Apply to Violations of the Home Improvement Practices or Home Improvement Contractor Registration Regulations

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Posted in Construction Litigation / Contract Claims

On September 6, 2013

The New Jersey Consumer Fraud Act (“CFA”) provides powerful remedies that can be used by aggrieved parties to a construction contract. While the treble damages and attorneys’ fees remedies have traditionally received greater attention by parties and the courts, the CFA also references a refund remedy in N.J.S.A. §§ 56:8-2.11, -2.12 that aggrieved consumers have relied upon to seek refunds of amounts paid under construction contracts that violated the CFA, particularly where they had not been able to demonstrate an ascertainable loss entitling them to treble damages. However, the recent Appellate Division decision in Logatto v. Lipsky effectively eliminates the availability of the refund remedy in virtually all CFA cases, including cases arising out of construction contracts, as well as those involving alleged violations of the Home Improvement Practices and Home Improvement Contractor Registration regulations.

New Jersey’s Prompt Payment Act Does Not Apply to Contracts for the Upkeep and Maintenance of Land

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Posted in Construction / Construction Litigation

On May 24, 2013

New Jersey’s Prompt Payment Act (“PPA”) can be a valuable tool available to contractors, subcontractors, sub-subcontractors, and product suppliers that are owed money on New Jersey construction projects, as aggrieved parties can recover interest on unpaid amounts at prime plus one (1%) percent in the event payment is not made within the time period provided by the PPA and attorneys’ fees. N.J.S.A. § 2A:30A-2. In TBI Unlimited, LLC v. Clearcut Lawn Decisions, LLC, the United States District Court for the District of New Jersey considered the scope of the PPA, which is only the subject of a handful of written opinions.

Contracting Around the Discovery Rule: The Oregon Court of Appeals Enforces a Clause in a Construction Contract That Defined the Date of Accrual

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Posted in Construction / Construction Litigation

On April 17, 2013

Parties to construction contracts often include provisions that set forth time frames to file actions arising out of the contract that are different than the applicable statute of limitations. In the absence of any statutory prohibition, contract provisions limiting the time to file an action to less than the applicable statute of limitations are generally enforceable provided the time frame is reasonable. Although perhaps less common, some construction contracts include provisions that attempt to define when the applicable limitations period begins to run (i.e. when causes of action arising out of the contract accrue).

A Contractor’s Repair Estimate Provides Evidence of an Ascertainable Loss Under the New Jersey Consumer Fraud Act

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Posted in Construction / Construction Litigation

On April 10, 2013

The New Jersey Consumer Fraud Act (“CFA”) allows parties to recover damages if they have suffered an ascertainable loss. See N.J.S.A. 56:8-19. In the recent decision from the New Jersey Appellate Division, Pope v. Craftsman Builders, Inc., the court considered the type of evidence that can provide proof of an ascertainable loss in the context of a CFA claim involving a construction project.

Not All Wrongs are the Same: The Florida Supreme Court Holds That a Contractor That Knowingly Hires an Unlicensed Subcontractor Can Recover for Breach of Contract Against That Subcontractor

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Posted in Construction / Construction Litigation

On April 3, 2013

Like other states, Florida regulates parties in the construction industry and requires that contractors performing certain work be properly licensed. See Flor. Stat. Ch. 489. If an unlicensed contractor enters into a construction contract it cannot enforce that contract. See Flor. Stat. Ch. 489.128. In the recent decision in Earth Trades, Inc. v. T&G Corp., the Florida Supreme Court considered the impact of this law in a contract dispute between an unlicensed subcontractor and a general contractor, where the subcontractor claimed that the general contractor knew that it was unlicensed.

Consent to Class Arbitration: What is the Meaning of “Silence?”

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Posted in Class Action Defense

On April 24, 2012

In Stolt-Nielsen S.A. v. Animal Feeds International Corp., the United States Supreme Court held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” As the parties in Stolt-Nielsen stipulated that their arbitration “agreement was ‘silent’ in the sense that they had not reached any agreement on the issue of class arbitration,” the Court ruled that the arbitrator could not infer the parties’ consent to class arbitration solely from the fact of their agreement to arbitrate, or failure to preclude it.

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