The Supreme Court of Texas delivered a reminder that when drafting contracts, you should say what you mean and mean what you say, and reliance on oral representations directly contrary to the terms of a written agreement between sophisticated parties is not justifiable, reports Carrington Coleman Sloman & Blumenthal’s Sua Sponte blog.

Derrick Ward explains that the case considered a farmout contract between Barrow-Shaver Resources Company and Carrizo Oil & Gas for Barrow-Shaver to build a well on a lease held by Carrizo in exchange for an interest in the mineral rights. When Barrow-Shaver raised  concerns about the consent-to-assign provision and sought to add language that would prohibit Carrizo from withholding consent unreasonably, Carrizo’s representative allegedly offered assurances that Carrizo would work cooperatively if the assignment became an issue.

When it became an issue, litigation resulted. The court ultimately concluded the consent-to-assign provision “unambiguously allowed Carrizo to refuse its consent for any reason,” Carrizo’s refusal to consent to the assignment could not constitute a breach of contract as a matter of law.

Read the article.

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A Brouse McDowell Insurance Blog post discusses the drafting of insurance requirements in a contract to ensure that, in the event of a loss arising out of the work performed, parties will have assets available for that loss.

“If you are the general contractor, or you are hiring subcontractors or vendors, there are several things you need to know,” writes Stacy RC Berliner.

Topics discussed include: specify the right policies and limits to be procured, get endorsed as an additional insured, make sure the other’s policy is primary and non-contributory, specify maximum deductibles and self-insured retentions, and verification.

Read the article.

Reprinted from Saxe Doernberger & Vita, P.C.

On April 4, 2019, the Appellate Division of the New Jersey Superior Court confirmed that the waiver of subrogation provision in a commonly used form construction contract, American Institute of Architects (AIA) form A201 — 2007 General Conditions of the Contract for Construction, precluded an insurer’s claims against a subcontractor.

In Ace American Ins. Co. v. American Medical Plumbing, Inc., the court considered Ace American Insurance Company’s (Ace) subrogation claim against a plumbing subcontractor who was allegedly responsible for a water main leak that caused approximately $1.2 million in damages to Ace’s insured, Equinox Development Corporation (Equinox).

In March 2012, Equinox entered into a contract with Grace Construction Management Company, LLC (Grace) to build the “core and shell” of a new health club. Equinox and Grace used AIA form A201 for their contract. Grace then hired American Medical Plumbing, Inc. (American) as a plumbing subcontractor for the project. In April 2013, the water main failed, flooding the health club.

Ace, Equinox’s first-party property insurer, paid Equinox for the damages and sued American to recover these damages. American sought summary judgment, arguing that the waiver of subrogation provision in the contract between Grace and Equinox precluded Ace’s claim.

The relevant contract provision states that:

“The Owner and Contractor waive all rights against … each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other … for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Section 11.3 or other property insurance applicable to the Work, except such rights as they have to proceeds of such insurance held by the Owner as fiduciary.”

The trial court granted summary judgment in favor of American, finding that the waiver of subrogation in the contract applied to Ace’s claim. Ace appealed.

On appeal, Ace argued that the waiver only applied to claims for damage to the construction work itself and did not apply after the competition of construction. In this case, the damage was to not to the construction work itself – i.e., the “core and shell” of the health club. Instead, the majority of the damage was to the health club’s internal construction and furnishings.Additionally, the water main failed after the completion of construction.

The appellate court affirmed the trial court’s ruling, finding that “Ace misconstrue[d] the basic structure of the contract’s waiver provision.” The court found that the waiver applied to all damages covered by the property insurance regardless of whether the damage occurred after the completion of construction or included damage to work besides the contractor’s work.

The court also rejected Ace’s argument that this broad application of the waiver was inconsistent with AIA form A201’s requirement that the contractor carry liability insurance. The court found that “the subrogation waiver takes precedence over the contractor’s insurance obligation.” The court found that the contractor’s liability insurance served other important functions such as providing an extra layer of coverage beyond the owner’s property insurance and providing protection against injured third parties.

The New Jersey appellate court’s ruling follows the majority position on the scope of the waiver of subrogation in the standard AIA contract. However, a minority of jurisdictions do not recognize a waiver.

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1. No. A-5395-16T4 (N.J. App. Div. April 4, 2019)

Tara Lynch, writing for Gordon & Rees LLP’s Construction Law Blog, offers three clauses to consider when writing construction contracts, with an eye to limiting liability and maximizing profits.

One of the clauses covers waiver of consequential damages. “Prudent design professionals and contractors will strike this exception so as not to render the clause meaningless. A well-drafted waiver clause will be mutual, will define which damages are consequential versus direct, and will not contain exceptions,” she writes.

She also discusses clauses covering limitations of liability, and a percentage clause involving change orders.

Read the article.

By Andres Avila
Saxe Doernberger & Vita, P.C.

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Tennessee’s Supreme Court recently held that an insurer may not withhold repair labor costs as depreciation when the policy definition of actual cash value is found to be ambiguous. Tennessee joins other states like California and Vermont that prohibit the depreciation of repair labor costs in property policies.

In Lammert v. Auto-Owners (Mut.) Ins. Co., No. M201702546SCR23CV, 2019 WL 1592687, the Lammerts and other insureds sought property damage coverage from Auto Owners Insurance for hail damage to a home and other structures they owned in Tennessee.

Auto-Owners Insurance agreed to settle the claims on an actual cash value basis (ACV), which is a method of establishing the value of insured property that must be replaced to determine the indemnity by the insurer. There are multiple methods to calculate ACV. Auto-Owners decided to use the ACV calculation method of deducting depreciation from the cost to repair or replace the damaged property. Depreciation is the decline in value of a property since it was new because of use, age or wear. The rationale behind this method is that an insured should not make a profit by recovering the cost of, for example, a new roof for a damaged roof that was ten years old, and thus depreciation is deducted from the indemnity.

Auto-Owners, however, decided to deduct both the materials and the repair and replace labor costs, as depreciation, when calculating the ACV. Neither of both policies under dispute specifically mentioned that repair labor costs could be depreciated in their ACV definitions. The parties thus disagreed on whether depreciation applies only to the materials or to both materials and repair labor.

One of the policies defined ACV as “the cost to replace damaged property with new property of similar quality and features reduced by the amount of depreciation applicable to the damaged property immediately prior to the loss;” while the other did not define ACV but stated that ACV included a deduction for depreciation.

The insureds argued that depreciation should be limited only to the cost of the replacement materials. In their view, the language “depreciation applicable to the damaged property” eliminates labor costs, which are intangible and cannot be depreciated because they do not age or wear out. The insureds also argued that the “prior to the loss” policy language eliminated labor costs because the costs at issue were post-loss repair costs. Auto-Owners contended that neither policy was ambiguous because depreciation of a property is calculated based on the total replacement cost, which includes both labor and materials.

Allowing Auto-Owners to depreciate the cost of labor would leave the insureds with an out of pocket loss inconsistent with the principle of indemnity of insurance to make insureds whole. However, allowing the deduction may in turn cause a windfall to the insureds, also defeating the purpose of indemnity. The Tennessee Supreme Court sided with the policyholders and solved the dilemma by citing to case law from, among others, Oklahoma, Arkansas, Nebraska and Minnesota, as well as regulations in Vermont, California and Mississippi.

The Court noted that Oklahoma uses the “broad evidence” rule to determine ACV. This method, also followed in New York, allows insurers to consider any and every fact and circumstance that logically tends to a correct estimate of the loss.

Accordingly, in Redcorn v. State Farm Fire & Cas. Co., 55 P.3d 1017, 1020 (Okla. 2002), the Oklahoma Supreme Court ruled that repair labor must be depreciated under the “broad evidence” method.

A decade later, the Arkansas Supreme Court was more persuaded by the dissenters than the majority in Redcorn and concluded that labor was not depreciable because labor does not lose value due to wear and tear over time in Adams v. Cameron Mutual Insurance Co., 2013 Ark. 475, 430 S.W.3d 675 (2013). However, in 2017 the Arkansas legislature abrogated Adams and enacted Arkansas Statute section 23-88-106, which specifically included the cost of labor in its definition of an expense depreciation.

The Tennessee Supreme Court further noted that Nebraska, which also uses the “broad evidence” rule, sided with the Oklahoma Supreme Court majority. It held that property is a combination of materials and labor and thus repair labor costs must also be depreciated from the replacement cost to determine ACV. Henn v. American Family Mutual Insurance Co., 295 Neb. 859, 894 N.W.2d 179 (2017). The court also considered a third approach from Minnesota, which also follows the “broad evidence” rule. In Wilcox v. State Farm Fire & Cas. Co., 874 N.W.2d 780, 785 (Minn. 2016), the Minnesota Supreme Court held that certain labor costs may be depreciable making it an issue of fact rather than law.

The Court then turned for guidance to case law from the federal circuit courts of appeals involving the law of Missouri, Kansas and Kentucky. The Tennessee Court found that Missouri and Kentucky lean towards allowing insurers to deduct repair labor costs as depreciation; while Kentucky, on the other hand, leans towards seeing depreciation as an ambiguous term and thus interpreted against insurers, preventing carriers from subtracting repair labor costs as depreciation.

The Tennessee Court then turned to insurance departments’ regulations of the point in California, Vermont and Mississippi. California (Cal. Code Regs. tit. 10, § 2695.9(f)(1) (2019)) and Vermont (Insurance Bulletin No. 184) prohibit the depreciation of repair and replacement labor. On the other hand, the Mississippi Insurance Department Bulletin 2017-8 declared the absence of a statutory prohibition to labor costs depreciation in that state but that insurers should clearly provide for it in the insurance policy if they intended to do so.

Tennessee acknowledges both the “broad evidence” rule and the replacement-cost-less-depreciation method to determine ACV. The Tennessee Supreme Court was persuaded that, since neither of the policies explicitly stated whether labor costs are depreciable when calculating ACV, there was an ambiguity that had to be interpreted against insurers and in favor of insureds.

This decision in Tennessee serves as a warning that, absent policy language stating otherwise, property insurers cannot depreciate repair labor costs when calculating the ACV of a property using the replacement cost less depreciation method in Tennessee.

Two separate decisions in the United States Court of Federal Claims contain lessons that are generally helpful in all projects involving notice of contract changes, reports G. Scott Walters for Smith, Currie & Hancock.

“Prudent construction professionals, particularly those doing business with the government, should understand and comply with all notice provisions in their contract. Even if strict notice may not be required, it should be given early and often. Moreover, when notice is received, the prudent contractor must endeavor to understand what it means,” Walters writes.

“The court’s decisions on the notice issues may, at first, appear to contradict each other or to favor one party over the other,” he explains. “A closer look at these two decisions reveals that notice requirements, in the context of federal government construction contracts, can come in multiple forms and notice is not a ‘one size fits all’ proposition.”

Read the article.

West Mermis, PLLC, a Houston-based law firm, secured a take-nothing defense verdict for its client, a national highway construction contractor, in South Texas. Plaintiffs’ counsel asked the jury to award $40 million to the decedent’s family. Following a two-week trial, the jury rendered a complete defense verdict.

According to the firm, the lawsuit arose out of a two-vehicle accident that occurred within a road construction project in Duval County, Texas. Vincent Vargas’ vehicle rear-ended an 18-wheeler tractor-trailer within the construction contractor’s highway construction zone. Vargas suffered fatal injuries as a result of the accident, and his parents filed a lawsuit against the construction contractor.

At trial, West Mermis highlighted the safety measures the construction contractor utilized during the road construction and the professionalism with which it performed its work, the firm said on its website. The defense team, led by Lawrence J. West and assisted by Francis D. McWilliams, emphasized to the jury that the evidence did not support the plaintiffs’ allegations.

Read details of the case.

Stephen Cooney of Gray Reed, in a post on the firm’s website, provides some analysis of the state of groundwater law in Texas and discusses some of the effects of a Texas Supreme Court case that should now be a concern to land purchasers in every transaction.

In Coyote Lake Ranch, LLC v. City of Lubbock, the court found  that a severed groundwater right would be worthless if the groundwater owner could not enter upon the land in order to extract the groundwater

Under the law now, a petroleum development company can set up a pad, build roads, lay pipeline and start drilling for water, even though the holder of the mineral rights waived the right to come on the property to drill for oil and gas.

Read the article.

By Kerianne E. Kane
Saxe Doernberger & Vita, P.C.

What do you do when your house falls out from underneath you? Over the last few years, homeowners in northeastern Connecticut have been suing their insurers for denying coverage for claims based on deteriorating foundations in their homes. The lawsuits, which have come to be known as the “crumbling concrete cases,” stem from the use of faulty concrete to pour foundations of approximately 35,000 homes built during the 1980s and 1990s. In order to save their homes, thousands of homeowners have been left with no other choice but to lift their homes off the crumbling foundations, tear out the defective concrete and replace it. The process typically costs between $150,000 to $350,000 per home, and homeowner’s insurers are refusing to cover the costs. As a result, dozens of lawsuits have been filed by Connecticut homeowners in both state and federal court.

Of those cases, three related lawsuits against Allstate Insurance Company were the first to make it to the federal appellate level.[1] The Second Circuit Court of Appeals was tasked with deciding one common issue: whether the “collapse” provision in the Allstate homeowner’s policy affords coverage for gradually deteriorating basement walls that remain standing.

The Allstate policies at issue were “all-risk” policies, meaning they covered “sudden and accidental direct physical losses” to residential properties. While “collapse” losses were generally excluded, the policies did provide coverage for a limited class of “sudden and accidental” collapses, including those caused by “hidden decay,” and/or “defective methods or materials used in construction, repair or renovations.” Covered collapses did not include instances of “settling, cracking, shrinking, bulging or expansion.”

Under Connecticut law, if an insurance policy’s terms are “clear and unambiguous,” then courts will give the terms their ordinary meaning. If the terms are ambiguous, however, courts will construe the language in favor of the insured. The homeowners argued that under Connecticut Supreme Court precedent, the term “collapse” is ambiguous, because it includes not only sudden catastrophe, but also the type of gradual deterioration occurring in the foundations of their homes.

The homeowners principally relied on the Connecticut Supreme Court’s decision in Beach v. Middlesex Mutual Assurance Co.[2] In Beach, the plaintiffs sought coverage from their homeowner’s insurer for a crack in the foundation of their home, caused by a “collapse” within the terms of the policy. The insurer denied that a collapse had occurred and argued that the crack was caused by “settlement of earth movement,” a type of loss excluded under the policy. The homeowners argued that because “collapse” was not defined in the policy, it was ambiguous because it could include both a catastrophic breakdown, as well as a gradual breakdown based on loss of structural strength. The Connecticut Supreme Court agreed, finding that the term “collapse,” left undefined, encompasses “substantial impairment of the structural integrity of a building.” As a result, the court construed the term in favor of the homeowners, noting that if the insurer intended for the definition of “collapse” to be limited to a sudden and complete catastrophe, it had the opportunity to expressly include such a limited definition in the policy.

The Second Circuit Court of Appeals was not persuaded, however, that Beach was controlling, and found that the policy at issue in Beach was easily distinguishable from the Allstate policies, which included qualifying terms to define covered collapses as “entire,” “sudden” and “accidental.” The Court of Appeals explained that by including these terms, it was expressly clear that Allstate intended for covered collapses to be limited to abrupt, unexpected collapses. As a result, the Court concluded that the damages sustained by the homeowners were not covered under the policies, because not only was the gradual erosion and cracking of the foundations not “sudden” or “accidental,” but “cracking” was expressly excluded from the definition of collapse.

These decisions are a perfect example of the significance of policy terms and definitions, which can vary greatly from one insurance carrier to the next, and the impact that they can have on potential claims. The likelihood of success for the countless crumbling concrete cases still pending in Connecticut courts will largely depend on the specific terms of each policy, and the manner in which terms like “collapse” are defined or otherwise qualified.

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1 The three cases are Valls v. Allstate Insurance Co., 919 F.3d 739 (2d Cir. 2019); Carlson v. Allstate Insurance Co., Case No. 17-3501, 2019 WL 1466935 (2d Cir. April 2, 2019); and Lees v. Allstate Insurance Co., Case No. 18-007, 2019 WL 1466939 (2nd Cir. April 2, 2019).
2 Beach v. Middlesex Mutual Assurance Co., 205 Conn. 246, 532 A.2d 1297 (1987).
3 Valls, supra, at 744 (quoting Beach v. Middlesex, 205 Conn. at 253).

A web post by Glen A. Murphy for Spilman Thomas & Battle addresses potential issues and concerns that may arise between general contractors, subcontractors and their insurers when claims by outside parties (also known as third-parties) may arise.

Murphy explains:

When a General engages a Sub to perform work on projects, the parties should always reduce their expectations and agreements to a written document in which both sides agree and acknowledge the terms. These documents may go by many names, but they are contracts that bind the parties to the terms. It is a common component of these agreements for the businesses or organizations to take on the liability of another entity, which they might normally not otherwise have. This form of agreement, where one party takes on or assumes the liability of another party by contract, is commonly called a “hold harmless” or an “indemnity” agreement.

Read the article.

A recent ruling provides an unfortunate example of what can happen when a contractor does not consider commercial general liability when making strategic decisions throughout the process of investigating and repairing construction defects, writes William Bennett in a web post for Saxe Doernberger & Vita.

The post continues:

The Southern District of California recently held that a series of demands for a general contractor to investigate and repair several construction defects at a U.S. Army facility did not constitute a “suit” within the meaning of the general contractor’s commercial general liability (“CGL”) policy.

In Harper Construction Co., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., the U.S. Government hired Harper Construction Company (“Harper”) to construct a U.S. Army training facility for the Patriot Missile System in Fort Sill, Oklahoma. No. 18-cv-00471-BAS-NLS (S.D. Cal. Mar. 28, 2019). During the project, Harper hired Harper Mechanical Contractors (“Harper Mechanical”), an independent company, as a subcontractor “to perform demolition, grading, and other work at the Project.”

After Harper completed the project, the government informed Harper of property damage at the project, “including, but not limited to, gypsum wallboard cracks and binding doors.” Harper attempted to repair the issues, but the problems continued. The issues were apparently the result of Harper Mechanical’s grading work. Subsequently, the government sent two letters requesting an investigation and asking Harper to “propose a plan to correct the issues.” As Harper undertook an investigation spanning multiple years, the government became increasingly frustrated with the delays. The government threatened to initiate “formal administrative recourse” and to demolish the project, forcing Harper to re-build from the ground up. It also sent Harper another letter requesting Harper submit a formal proposal to correct the issues.

Harper’s general liability carrier was National Union Fire Insurance Company of Pittsburgh, PA (“National Union”). Harper Mechanical was listed as an additional insured on Harper’s policy. Four years after the government’s first notification to Harper of the issues with the project, Harper’s broker submitted a claim to National Union. The broker noted that Harper was seeking additional insured coverage for Harper Mechanical under Harper’s own policy for investigation and repair costs resulting from Harper Mechanical’s work.

National Union issued a reservation of rights letter and sought more information from Harper. The parties corresponded for the next year and half, until National Union issued a denial letter indicating that there was not a “suit” against Harper seeking damages because of “property damage,” based on the policy’s definition of “suit.”

The policy contained the standard ISO CGL definition of “suit,” which is defined, in pertinent part, as “a civil proceeding in which damages because of … ‘property damage’ to which this insurance applies are alleged. ‘Suit’ includes: … b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.”

Harper sued National Union. National Union moved for summary judgment. In opposition, Harper argued that the government’s demand constituted a “suit” because the demand falls within the Contract Disputes Act (“CDA”), which includes administrative and court proceedings and qualifies as “any other alternative dispute resolution proceeding” under the policy definition. The CDA applies to “contracts made by an executive agency for, among other things, the procurement of construction … of real property.”

The court acknowledged that the CDA applied to the contract, given the Army’s status as an executive agency. However, the CDA does not automatically consider all disputes to constitute a “claim.” A dispute does not become a “claim” unless one of the contracting parties issues a “[w]ritten demand or written assertion … seeking … the payment of money in a sum certain,” at which point “each claim by the Federal Government against a contractor relating to a contract shall be the subject of a written decision by the contracting officer.” Without the claim being “submitted for a written decision by the contracting officer, which is the first step in the dispute resolution process under the CDA,” the court determined that there was “no evidence that Harper was faced with a “civil proceeding in which damages … are alleged” or “any other alternative dispute resolution proceeding,” as required by the policy’s definition of “suit.” The court also noted that there was no evidence that National Union had consented to any of the processes involved in the dispute, which is a further requirement of the definition of “suit.”

The court granted summary judgment for National Union based on the conclusion that the CDA demands did not constitute a “suit.” This case is an unfortunate example of what can happen when a contractor does not consider coverage when making strategic decisions throughout the process of investigating and repairing construction defects. The result could potentially have been favorable for Harper had it notified National Union early (and often) of the issues, involved coverage counsel to work with its defense and/or general counsel to strategize about how to cast the proceedings as a “suit” under the CDA, and followed the proper channels under the CDA to solidify its position that the parties were involved in ADR proceedings under existing California law.

Amanda Garza of Porter Hedges, writing in the firm’s Texas Construction Law blog, explains the use of a “call-back warranty.”

“A call-back warranty establishes a period of time after the substantial completion of a project within which an owner can call upon a contractor to correct nonconforming work. The length of the ‘call-back period’ is typically one year but is ultimately determined by the language in the call-back warranty.”

She explains that the rights and obligations expire at the end of the call-back period, which can lead to some confusion about the effect on other warranties in the contract.

Read the article.

U.S. contractors should proceed with caution when seeking to expand their footprint to an international stage, especially in developing countries where the local infrastructure may not promote a sustainable, stable environment, or a sustainable business model for the contractor, warns Rachael E. Stack in a website post for Faegre Baker Daniels.

But by considering three factors, contractors can mitigate exposure to the various risks involved in an international project.

Stack discusses the elements of contract form and language, governing law, and impact on the local community.

Read the article.

Mark A. Cobb of Cobb Law Group writes that whenever he’s negotiating construction contracts on behalf of a client or discussing a construction collection matter with a potential client, the conversation inevitably includes a discussion of the construction contract’s dispute resolution clause.

In an article in the Georgia Construction, Bond & Lien Law Blog, he discusses several of the questions that can arise; e.g., What is a dispute resolution clause and why is it important? What types of construction contracts should include the clause? What are construction arbitration and mediation?

He also offers an example of a mandatory mediation provision.

Read the article.

Parties to a construction project can have a better agreement by addressing six topics described in a post in The Lien Zone blog.

Alex Barthet, author of the post, advises contract drafters to define the scope of the work that will be provided, list all the exclusions, explain the change order process, verify the schedule, refine the dispute resolution procedure, and make sure the winner gets legal fees.

Read the article.

The Ninth Circuit has ruled in a contract arbitration case that incorporated multiple Federal Acquisition Regulation clauses that govern the recovery of expenses in the event a contractor is terminated for convenience, i.e. required documentation and procedures.

Pepper Hamilton’s Constructlaw blog discusses Aspic Eng’g & Constr. Co. v. ECC Centcom Constructors LLC, in which an arbitrator had awarded Aspic more than $1 million. The arbitrator concluded that Aspic was not required to strictly comply with the FAR requirements based on several factors.

“The crux of the decision turns on whether the arbitrator’s decision draws its essence from the contract. The Ninth Circuit also explained that whether the award directly conflicted with the subcontracts was insufficient—on its own—to vacate the award,” the blog post explains.

Read the article.

A post in the Seyfarth Shaw Workplace Safety and Environmental Law Alert Blog discusses the case of a construction contractor facing a perjury charge after he allegedly testified that he did not twice order employees to work on a roof. They fell through the roof both times.

During the investigation, OSHA discovered text messages indicating that the contractor had indeed issued the orders.

The case provides two important lessons, according to the authors of the post: Don’t lie under oath, especially when there exists discoverable evidence to the contrary, and be properly prepared and familiar with all relevant facts before providing testimony or statements during an investigation.

The contractor faces a potential penalty of five years in a prison and a $250,000 fine, if convicted.

Read the article.

A client alert from Neal, Gerber & Eisenberg offers some advice on negotiating a demolition contract. Such contracts can arise when a big box retailer or a shopping center needs to be demolished to make room for a building more suited to a new use.

The article’s advice covers 12 topics, including the selection of the demolition contractor, dates of commencement and completion of the work, contract documents, the contract sum, payments, dispute resolution, insurance and bonds, indemnification, termination rights, the contractor’s warranty, safety compliance, and disposal of debris.

Read the article.

The 4th U.S. Circuit Court of Appeals has upheld the “take first, pay later” approach to building the Mountain Valley Pipeline, in which the company condemned private property in the project’s path before paying opposing landowners for their losses, reports The Roanoke Times.

Reporter Laurence Hammack writes that the ruling was a blow to pipeline foes, who have long decried the use of eminent domain to take parts of family farms and rural homeplaces to make way for a 303-mile natural gas pipeline through West Virginia and Virginia.

Landowners did not contest the laws that allowed the pipeline company to obtain forced easements through nearly 300 parcels in Southwest Virginia, but they objected to a lower-court ruling granting immediate possession of the disputed land before deciding how much each property owner should be compensated, Hammack explains.

Read the article.

An Ohio appellate court has addressed an issue that arose when an arbitrator specified in a contract is no longer available.

Pepper Hamilton’s Constructlaw blog covers the case in which a homeowner sued a contractor, alleging unjust enrichment and fraud. The contractor moved to compel arbitration under the agreement arbitration provision. But the specified arbitrator, the Ohio Arbitration and Mediation Center, appeared to be defunct.

“Because it was still possible to arbitrate the issues, the Court determined the agreement was not unenforceable due to impossibility,” writes Ryan R. Deroo. “The Court explained that this conclusion was consistent with the intent of the parties as they agreed to arbitrate disputes, and a change in forum should not override the fundamental purpose of the arbitration provision.”

The appellate court directed the trial court to appoint another arbitrator.

Read the article.