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September 2016

Construction Law Update

Third Quarter 2016

Gordon & Rees's Construction Group is pleased to publish the latest issue of our Construction Law Update, a quarterly take on trends of interest to design professionals, contractors, and developers throughout the country.

  1. White-Collar Exemptions and the Impact on Construction

  2. New Jersey Supreme Court Decides Developer/General Contractor’s CGL Policy Covers Damages Arising from Subcontractors’ Faulty Workmanship

  3. Gordon & Rees Construction Attorneys Making Headlines

  4. Gordon & Rees Construction Law Blog

  5. About Gordon & Rees's Construction Group

I. White-Collar Exemptions and the Impact on Construction
  By Chad A. Shultz

The new overtime regulations that were recently enacted not only mandate that employees earning less than $913 per week or $47,476 per year are due overtime, but it can also spell trouble for contractors and subcontractors paying those wages. While employees can be classified as exempt for any amounts over this threshold, unfortunately, the new overtime regulations failed to clarify the old “white-collar” exemption tests, leaving many questions unanswered for employers.

To read a full, expanded version of this article, click here.

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II. New Jersey Supreme Court Decides Developer/General Contractor’s CGL Policy Covers Damages Arising from Subcontractors’ Faulty Workmanship
  By Lee Henig-Elona

Cypress Point Condo Assoc. v. Adria Towers, et al., involved claims arising from water infiltration and mold growth, damage to steel supports, exterior and interior sheathing and sheetrock, and insulation to common areas, interior structures and residential units of a 53-unit luxury residential condominium in Hoboken called Cypress Point. The Association sued the developer/general contractor, its Comprehensive General Liability (“CGL”) insurance carriers, and various subcontractors whose work was allegedly defective. At the trial court level, the developer’s carriers convinced the court that they were not liable and entitled to summary judgment because the subcontractors’ faulty workmanship did not constitute an “occurrence” that caused “property damage” as defined by the 1986 ISO form CGL policy. The carriers effectively argued that because the damage arose entirely from faulty work performed by or on behalf of the developer/GC, such risk was not covered.

To read a full, expanded version of this article, click here.

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III. Gordon & Rees Construction Attorneys Making Headlines

Sacramento partner Matthew Randle and associate James Ling recently obtained a dismissal on behalf of their developer client from a $30 million claim involving the purchase of a high end golf course in Malibu, California.

On July 21, 2016, Gordon & Rees hosted a full-day Continuing Education Conference in the Willis Tower in Chicago, Illinois on various legal topics, including Effective Risk Transfer Techniques in Construction and Design. Chicago partner Tom Cronin moderated a panel that included Dallas partner Keith Cramer along with insurance claims representatives from Zurich North America and The Hanover Insurance Group.

On June 23, 2016, Tom Cronin presented on Engineering Law and Risk Management: Understanding How Contracts Can Reduce or Increase Risk. The seminar, which was in Lisle, Illinois, was attended by more than 50 people, which included design professional claims professionals, practicing architects and engineers, and attorneys.

On June 18, 2016, Boston partner Jay Gregory presented on Continuing Education Risk Management for graduates of the Boston Architectural College.

Matthew Randle presented on the Fundamentals of Construction Contracting in California to the Sacramento Municipal Utility District in June.

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IV. Gordon & Rees Construction Law Blog

The Gordon & Rees Construction Law Blog continues to post new content addressing topical issues affecting the construction industry throughout the country. From analysis of new court decisions, discussions of timely legislation, and commentary on real-world, project-specific issues, Gordon & Rees’s Construction Law Blog provides insight on the issues that affect the construction industry now.

We invite you to visit the blog at and see for yourself what we are up to. If you like what you see, do not hesitate to subscribe under the “Stay Connected” tab on the right side of the blog. There you can choose how you would like to be informed of new content (Twitter, LinkedIn, email, etc.). If you have any questions about the blog or would like to discuss further any of its content, please do not hesitate to contact us.

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V. About Gordon & Rees's Construction Group

Gordon & Rees's Construction Group consists of more than 90 lawyers in 38 offices throughout the nation. The firm continues to expand, opening five new offices in the 2015 and 2016 which include Harrisburg, Pennsylvania, Boston, Massachusetts, Wheeling, West Virginia, and Columbus, Ohio, and most recently Westchester, New York.

Gordon & Rees’s construction attorneys focus their practice on the comprehensive range of legal service required by all participants in the construction industry – architects, engineers, design professionals, design joint ventures, owners, developers, property managers, general contractors, subcontractors, material suppliers, product manufacturers, lenders, investors, state agencies, municipalities, and other affiliated consultants and service providers.

We serve clients who design, develop, or build all types of structures, including commercial buildings, single and multifamily residential projects, industrial facilities, universities, hospitals, museums, observatories, amusement parks, hotels, shopping centers, high-rise urban complexes, jails, airports, bridges, dams, and power plants. We also have been involved in projects for tunnels, freeways, light rail, railway stations, marinas, telecom systems, and earth-retention systems. Our experience includes private, public, and P3 construction projects.

If you have questions about this issue of the Construction Law Update or our nationwide construction practice, click here to visit our practice group page or contact partner Tom Cronin.

Thomas G. Cronin
Gordon & Rees, LLP
1 North Franklin
Suite 800
Chicago, IL 60606
(312) 980-6770

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