Construction Law Blog

Tag: Contractor Liability

Punitive Damages Claims in New York Construction Contract Disputes

One topic that came up in my practice recently was a contractor’s potential exposure to liability for punitive damages under New York law. As the name suggests, punitive damages are awarded above and beyond their contract or property damages, ‘where the wrong done was aggravated by circumstances of violence, oppression, malice, fraud, … on the part of the defendant, and are intended to address the plaintiff’s mental anguish or other aggravation, to punish the defendant for its behavior.’ Black’s Law Dictionary 390 (6th Ed. 1991).

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Recent New York Litigation Highlights Increasing Risks to Contractors

Construction contracts require contractors and subcontractors to carry commercial general liability, or CGL, insurance and to name not only the contracting parties but additional third parties, such as project owners, as additional insured. Recent commercial general liability litigation, however, suggests that contractors and subcontractors should review the language of their CGL policies carefully because third parties to the contract, even if they are contractually required to be additionally insured, may actually be excluded by the insurance policies.

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Blending of Public and Private Construction – Proceed With Caution

Traditionally, New York Construction Law sets separate rules of engagement for public projects (where the owner is a public entity) and those that are private construction projects (where the owner is a private individual or corporation). Given these two distinct camps, it has been easy to classify a project as either a public project or a private one. For contractors, subcontractors and suppliers, knowing which rules of engagement pertain to them is essential to avoid making costly mistakes.

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Homeowners Unable To Recover For Emotional Distress In Construction Disputes

Many homeowners who consult with me regarding construction disputes are not only financially damaged but emotionally distressed, and understandably so. Our homes are not only our biggest financial investments but our sanctuaries, and misconduct by unscrupulous contractors that damages those sanctuaries makes us feel that we have no place of safety and, in some instances, makes us worry that we may be homeless altogether. Thus, the question is often posed to me whether homeowners can collect damages for emotional distress that results from construction contract disputes, in addition to their economic damages.

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