May 2011 Construction Law Newsletter

May 2011, vol. 1, no. 1

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Now every article is the start of a discussion. If you're a member of the Construction Law Section, you can comment on any of the articles that appear below.

In This Issue…

Upcoming CLE

Understanding a Construction Contract
April 7 - Chicago

Full CLE Calendar…

Related Court Cases

Implied Warranty of Habitability
Sienna Court Condominium Ass'n v. Champion Aluminum Corp.

Three consolidated appeals, all arising from condominium association's suit alleging defects in design and construction of a condo development in Evanston. Court properly dismissed claims for breach of implied warranty of habitability, as such claims may not be asserted against design professionals and materials suppliers who did not actually perform construction work. A property owner is not barred from asserting claim of breach of implied warranty of habitability against subcontractor of insolvent developer or general contractor. Court properly dismissed counterclaims of condo development's general contractor (which is insolvent and has been dissolved), as counterclaims were not asserted within a reasonable time after its dissolution. (HOFFMAN and DELORT, concurring.)

Subrogation
Empress Casino Joliet Corporation v. W.E. O'Neil Construction Co.

(Court opinion corrected 12/6/16.) Fire occurred during extensive renovation project at casino, resulting in extensive damage to casino. Casino received $81.15 million in insurance payments from 3 separate insurers under 3 separate insurance policies. Waiver of subrogation provision is not limited to negligence actions, but can apply with equal force to contract claims. As parties agreed that loss and damage from fire would be borne solely by casino's property insurance, casino thus waived all claims against contractors arising from such loss. Plaintiffs failed to present facts showing that "time is of the essence" provision was material to contract such that Defendants' failure to complete project within contemplated time frame would negate waiver of subrogation provision. Contract provisions requiring contractor to obtain liability insurance and to indemnify casino for claims arising out of performance of work did not conflict with waiver of subrogation clause, so as to render those provisions an exception to the waiver. (LAVIN and COBBS, concurring.)

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