Written by: Pamela L. Coleman, Esq. An often litigated, and often overlooked or non-negotiable, provision of construction contracts is the indemnification clause.  Such provision requires a party to protect another from claims and damages.  It seeks to impute liability to the indemnitor for the torts, or negligence, of the indemnitee.  The general rule in Georgia is that indemnity clauses are enforceable as written, including those that expressly, clearly, and unequivocally indemnify against a party’s own negligence.  Batson-Cook v. Georgia Marble Setting Co., 112 Ga. App. 226 (1965).  However, Georgia has enacted the anti-indemnification statute, O.C.G.A. § 13-8-2(b), providing an exception to the general rule.  The statute provides: A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair, or maintenance of a building structure, appurtenances, and appliances, including moving, demolition, and excavating connected therewith, purporting to require…       Read More

Written by: Tiffany R. Winks, Esq. The general rule in Georgia is that a road contractor cannot be held responsible for completed work over which he no longer exercises control. While there are exceptions to this general rule, such as work that is so negligently defective as to be considered imminently dangerous, if the work performed by the contractor is not shown to come within one of the exceptions to the general rule he cannot be held liable. When the work is finished by him and accepted by his employer, the liability of the former generally ceases and the employer becomes answerable for damages, which may thereafter accrue from defective conditions of the work. Recently, in Brown v. Seabord Constr. Co., 330 Ga. App. 778 (2015), the Court of Appeals of Georgia entered an Order affirming the grant of summary judgment in favor of a contractor in a negligence claim…       Read More

By: Don Benson and Crighton Allen OSHA is proposing a new construction standard to protect workers from exposure to respirable crystalline silica. The proposed Regulation has been forwarded by OSHA to the Office of Management and Budget for final review. OSHA’s proposal, generally, is to lower the existing permissible exposure limits (adopted in 1971) by about 50%. Among their many changes, the new OSHA rules will now require construction employers to: • Measure the amount of silica that workers are exposed to if it may be at or above an action level of 25 μg/m3 (micrograms of silica per cubic meter of air), averaged over an 8-hour day; • Protect workers from respirable crystalline silica exposures above the PEL of 50 μg/m3, averaged over an 8-hour day; • Limit workers’ access to areas where they could be exposed above the PEL; • Use dust controls to protect workers from silica…       Read More

Written by: Elizabeth Wieters, Esq. In August, the South Carolina Court of Appeals issued two opinions in Stoneledge at Lake Keowee Owners’ Ass’n v. Clear View Constr., LLC, 776 S.E.2d 426 (S.C. Ct. App. 2015) and Stoneledge at Lake Keowee Owners’ Ass’n v. Builders FirstSource-Southeast Grp., 776 S.E.2d 434 (S.C. Ct. App. 2015). Our firm represented the initial general contractor in the underlying lawsuit. We do not represent the appellants in these specific opinions, but the issues on appeal are seminal nonetheless. The Stoneledge opinions visit an area of law which needed to be touched upon in South Carolina and impact pleadings practice in construction defect lawsuits as they address claims of a general contractor against its subcontractors. The first Stoneledge opinion we examine concerns Marick Homebuilders’, the general contractor’s, negligence and equitable indemnity claims against its subcontractor, Clear View Construction. As to the negligence cause of action, the appellate…       Read More

Risk is the name of the game in the worlds of construction and insurance, but the risk is amplified when these two worlds join together. Obtaining “additional insured” (“AI”) coverage can play a significant role in managing the risk for the multiple contributors of a construction project. Generally, AI insurance coverage helps guarantee that the “upstream” construction contributors, such as the General Contractor, is sufficiently protected under a “downstream” contributor’s insurance policy. AI coverage is most commonly obtained by subcontractors to the benefit of the general contractor and developer/owner, and by a general contractor to the benefit of the developer/owner. Once AI status has been conferred, it is important to know how to verify and prove the coverage and what your rights and duties are under the coverage, as the threat of legal liability is constantly looming. See 3-30A New Appleman Insurance Law Practice Guide 30A.35-30A.37. Knowing how to prove…       Read More

Which Statute Applies? The Georgia Workers’ Compensation statute was designed to provide relief to injured workers without requiring the injured employee to seek recourse against the employer for negligence or other torts. In fact, within the Workers’ Compensation statute, O.C.G.A. § 34-9-11 provides immunity to employers who abide by Georgia Workers’ Compensation laws. Who is an Employer? The definition of a statutory employer is addressed in O.C.G.A. § 34-9-8(a): (a) A principal, intermediate, or subcontractor shall be liable for compensation to any employee injured while in the employ of any of his subcontractors engaged upon the subject matter of the contract to the same extent as the immediate employer. The Georgia Supreme Court explained the implications of this statute in Wright Assocs., Inc. v. Rieder, 247 Ga. 496, 499 (1981). In Wright, the court held that when an employee receives Workers’ Compensation benefits from his immediate employer, his or her…       Read More

Section 9-3-51 of the Georgia Annotated Code provides an eight (8) year statute of ultimate repose for construction defect claims. This does not alter the applicable statute of limitations (O.C.G.A. §§ 9-3-30 – 4 years for damage to realty), but establishes the outermost time in which any action for construction defects can be asserted. Moreover, no action to recover damages for injury to a person arising out of any deficiency in the construction of an improvement to real property shall be brought against any person performing construction of such an improvement more than eight years after substantial completion of such an improvement. O.C.G.A. § 9-3-51(a)(1), (3) In Wilhelm v. Houston County, 310 Ga. App. 506 (2011), the Court of Appeals held that the purchaser’s house and septic system were completed before she moved in, but she did not file suit for damages allegedly resulting from construction defects in the septic…       Read More

On January 28, 2015, the South Carolina Court of Appeals issued an order in Crossmann Cmtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., affirming the trial court’s findings on remand from the South Carolina Supreme Court in a pivotal construction defect case. 2015 S.C. App. LEXIS 5 (S.C. Ct. App. Jan. 28, 2015). This is a brief summary of the January 2015 Crossmann holding (for convenience, termed “Crossmann III” herein), as well as a summary of the findings from Crossmann II. The Crossmann findings have defined South Carolina’s treatment of the allocation of progressive property damage among commercial general liability (“CGL”) carriers. I. Crossmann II: Crossmann Cmtys. of N.C. v. Harleysville Mut. Ins. Co., 395 S.C. 40 (S.C. 2011). The Supreme Court’s Crossmann Cmtys. of N.C. v. Harleysville Mut. Ins. Co. (“Crossmann II“) from 2011 was a landmark case as it solidified South Carolina’s treatment of progressive property damage…       Read More

Defending a surety in a construction defect suit can seem like uncharted territory for some. We will be posting several topic overviews on defending a surety in the following months to help answer any surety-related questions you may have. What is the purpose of a performance bond? What distinguishes it from a standard CGL policy? A performance bond guarantees the work. Specifically, the bond guarantees the work “will be performed according to the specifications of the contract by providing a surety to stand in the place of the contractor should the contractor be unable to perform as required under the contract.” L-J, Inc. v. Bituminous Fire & Marine Ins. Co., 366 S.C. 117, 124 (S.C. 2005). Owners and developers may purchase a performance bond in order to minimize their exposure to catastrophic financial outcomes if their general contractor fails to perform. By obtaining a performance bond, the surety promises to…       Read More

Note: This summary is not intended to be an all-inclusive discussion of Georgia’s construction lien laws, but does include the most recent basic provisions. WHO: After all pre-lien notices have been filed, whether or not a Notice of Commencement has been properly filed at the beginning of a construction project, all contractors, subcontractors and all material men furnishings material to subcontractors, and all laborers furnishing labor to subcontractors, material men, and persons furnishing material for the improvement of real estate shall have a special lien on real estate for which they furnish labor, services or materials. O.C.G.A. § 44-14-361 (a)(2). This type of lien is only applicable to private projects, and cannot be used against government property or public projects. O.C.G.A. § 44-14-361. WHAT: In drafting a Claim of Lien, various requirements must be met in order for the claim to be valid. To be effective and enforceable there must…       Read More