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Consequential Damages in Green Construction Lawsuits

By Mark J. Stempler

A primary concern in any lawsuit involving green construction is damages.  One party will claim it has been harmed and will typically demand money or specific performance.   There are different types of damages that can be sought including actual damages, future damages, punitive damages, and consequential damages.  That last category raises some unique issues in a green building lawsuit.
 
Consequential damages are typically defined in Florida as those that do not necessarily, but may directly or indirectly, result from the injury for which compensation is sought.  Consequential damages can include items like loss of use, lost profits, loss of rental income, etc.  These are all issues in the green building context too, but determining the value of these damages may be more difficult to define.  For example, suppose an owner is seeking green building certification for an apartment complex.  If the contractor or other professional responsible for attaining such certification does not get the certification, the owner may be entitled to consequential damages for lost rent for the units.  But, the owner could encounter difficulties in proving the amount of damages.  The owner likely believes that green buildings command higher rents than non-green buildings, but that is not guaranteed.  The burden will be on the owner to prove what that added value would have been.  Or, if the failure to achieve the green certification cause the owner to miss related tax credits or grants, the owner may have a claim for those values.  It will, of course, depend on what representations were made in the contract.  In fact, the loss of tax credits was the issue in one of the first reported green construction lawsuits.  In that case, which eventually settled, the contract contained a waiver of consequential damages.  Another potential scenario is when the project does not deliver the energy cost savings promised to the owner, or promised by an owner to a tenant for example.  Those lost savings may also provide a basis for a consequential damages claim.  These examples illustrate the need for clear and specific language in a construction contract regarding each parties’ representations, expectations and responsibilities.

The Pitfalls of Professional Liability Insurance Coverage

Insurance coverage can generally be an invaluable resource when things go wrong on a construction project. However, in the case of professional liability policies, there are several issues that deserve special attention when negotiating with a design professional, to make sure the desired coverage is available when you need it....

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Based upon weekly bid reports, the trend in Florida continues to emphasize design-build requests for proposals ("RFP") for public works projects. Public agencies view the design-build model as a means to streamline the procurement process as well as an opportunity to contract with one firm which has the responsibility for both the design and construction of a project....

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When is a mandatory contractual venue clause in a construction contract not mandatory?

As a subcontractor, you enter into a contract with a general contractor to perform construction work on a project located in a certain county in Florida. The contract, however, has a carefully worded mandatory venue clause stating that the venue for any lawsuit brought for breach of the contract shall be in a different county in Florida. Unfortunately, things take a turn for the worse on the project. The general contractor does not pay you. Accordingly, you file a Claim of Lien. In turn, the general contractor transfers your lien to a bond pursuant to Florida Statute § 713.24; with the bond being posted in the clerk’s office of the county of the project’s location. Now you need to file suit. You elect to sue for both a breach of the contract and for an action on your lien that was transferred to a bond (also known as a lien transfer bond)....

Becker & Poliakoff COO George Burgess Named to Florida P3 Task Force

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Florida adopts the Daubert standard for admissibility of expert testimony

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LEED v4 Passes

by Mark J. Stempler The newest version of the popular LEED Green Rating System is affirmed.  The U.S. Green Building Council (USGBC) announcced that its membership voted to adopt LEED v4 by an overwhelming 86%.  This version of LEED has been in the works for a few years.  Ultimatly, it withstood controversy and was refined through several public comment periods. Changes in LEED v4 from the current version (adopted in 2009) include: *  A new credit category - Location and Transportation; *  A new credit in the Sustainable Sites category - Rainwater Management; and *  New prerequisites in the Water Efficiency category; and *  New requirements for the use of LEED AP's for specific credits. There are several other additions and changes in LEED v4 which will affect numerous types of buildings. For the complete list, check out http://new.usgbc.org/v4. The full LEED v4 program, along with reference guides, will be unveiled at this year's Greenbuild conference in Philadelphia...