1970 Broadway, Suite 670 Oakland, CA 94612 Tel: Fax: 510.930.3300 510.930.3400 Garret D. Murai [email protected] August 11, 2022 VIA REGISTERED MAIL RETURN RECEIPT REQUESED AND ELECTRONIC MAIL/ [email protected] Attn: Joe Leach CITY OF RICHMOND 450 Civic Center Plaza Richmond, CA 94804
Re: Richmond BTA Community Center Fire Damage Reconstruction Project Dear Mr. Leach: As I believe you are aware, our office represents Angotti & Reilly, Inc. (“A&R”), the City of Richmond’s (“City”) contractor on the Booker T. Anderson (BTA) Community Center Fire Damage Reconstruction Project located at 960 S. 47th Street, Richmond, California (“Project”). I, along with Jim Reilly of A&R, participated in a Zoom call with yourself, Yader Bermudez, Laura Marquez and James Atencio of the City on July 11, 2022 regarding builder’s risk insurance on the Project. This letter is being sent pursuant to Section 3.8 of that certain Construction Agreement between A&R and the City for the Project. A. Prior Vandalism at the Project Site As you may recall, the Zoom call on July 11, 2022 was prompted by vandalism that occurred at the Project this past Spring whereby vandals had stolen a considerable amount of copper piping and had damaged switch gear located at the Project. During the Zoom call the parties discussed the need to have builder’s risk policy in place to protect the City as well as A&R. B. Coverage Provided Through the California Joint Powers Risk Management Authority (CJPRMA) On July 12, 2022, following the Zoom call, Ms. Bermudez, the City’s project manager on the Project, sent an email to Mr. Reilly stating that “Laura [Marquez] will follow up with copy of the City’s Builder’s Risk Insurance.” A true and correct copy of Ms. Bermudez’ email is enclosed as Exhibit A.
Attn: Joe Leach CITY OF RICHMOND August 11, 2022 Nomos LLP Page 2 On July 14, 2022, Ms. Bermudez sent A&R a Memorandum of Coverage effective from July 1, 2021 through June 30, 2022 issued by the California Joint Powers Risk Management Authority (“CJPRMA”) (“CJPRMA Policy”). The CJPRMA Policy appears to be the same policy referred to in Ms. Bermudez’ response to A&R’s RFI No. 1, in which she included an email from Ms. Marquez, in which Ms. Marquez stated “[c]onfirmed that the CJPRMA property insurance program does include course of construction for projects for projects not exceeding $100M, which is the case here.” A true and correct copy of A&R’s RFI No. 1 and Ms. Bermudez’s response are enclosed as Exhibit B. Upon review it was determined that the CJPRMA Policy, in addition to being expired, does not in fact provide builder’s risk coverage. Specifically, Section 1 – Coverages, states that the CJPRMA Policy only provides coverage for third party claims against the City for bodily injury, property damage, personal injury, public officials errors and omissions or employment practices liability: The Authority will pay up to the limit of coverage those sums for ultimate net loss in excess of the retained limit that the covered parties become legally obligated to pay as damages because of bodily injury, property damage, personal injury, public officials errors and omissions or employment practices liability as those terms are herein defined and to which this agreement applies, caused by an occurrence during the coverage period, except as otherwise excluded. See CJPRMA Policy, Section 1 – Coverages. Further, Section VI – Exclusions, makes clear that the CJPRMA Policy does not provide builder’s risk coverage and does not cover damages other than money or property owned by the City: This agreement does not apply to: ***** 6) Damages Other Than Money Ultimate net loss arising out of relief, or redress, in any form other than money damages. ***** 29) Property of a Covered Property Property damage to:
Attn: Joe Leach CITY OF RICHMOND August 11, 2022 Nomos LLP Page 3 (a) property owned by the covered party; See CJPRMA Policy, Section VI – Exclusions. On July 19, 2022, A&R sent an email to Ms. Bermudez, Mr. Marquez and others at the City in which it stated that A&R’s insurance broker, Woodruff Sawyer, had reviewed the CJPRMA Policy, that the policy does not provide “any form of Property Coverage, let alone Builders Risk coverage,” and requesting that “the City provide us with evidence of Property Coverage and a copy of the Policy.” A true and correct copy of A&R’s email is enclosed as Exhibit C. On July 26, 2022, A&R sent a follow up email explaining that the CJPRMA Policy “was for Liability Coverage. It did not include any Property coverage. It specifically excluded property damage on Page 24, Par. 29” and further stating that “we are requesting that our broker approach Underwriters to see if it is possible for us to obtain a Builder’s Risk policy to move the project forward. If we can obtain a policy we will submit the cost as a change order request.” A true and correct copy of A&R’s email is enclosed as Exhibit D. On August 3, 2022, not having received a response from the City, A&R sent a proposed change order to the City which included a builder’s risk policy quote. A true and correct copy of the change order is enclosed as Exhibit E. To date, A&R has received no response from the City despite several calls and emails to the City and the Project architect, Mark Albertson. C. Conclusion This Project has already been vandalized on at least two occasions, and while the City has indicated that it has property insurance covering builder’s risk, it has not produced a policy providing such coverage to date. This obviously creates a risk for the City as well as A&R should further vandalism or property damage occur on the Project including damage caused by fire, which, notably, was the reason the City originally bid this Project, damage caused by pollutants, and damage to materials in transit and on-site. In the meantime, A&R is unable to begin work, which will impact the project schedule, project costs including extended overhead, and leaves the Project site further exposed to risk. As such, A&R asks that the City either provide evidence of a builder’s risk policy in which A&R and all subcontractor are named as additional insureds and which includes a waiver of subrogation including damages due to earthquake, earth movement, flood and delayed opening. Alternative, A&R asks that the City sign its change order so that it can move forward with securing builder’s risk insurance on its own. [INTENTIONALLY LEFT BLANK] Attn: Joe Leach CITY OF RICHMOND August 11, 2022 Nomos LLP Page 4 Sincerely, NOMOS LLP By: Garret D. Murai GDM:gdm cc Angotti & Reilly (via email) James Atencio, Esq. (via email and registered mail) ([email protected]) Mark Albertson (via email) ([email protected]) Yader Bermudez (via email) ([email protected]) Laura Marquez (via email) ([email protected])
Exhibit A
Thursday, August 11, 2022 at 10:27:10 Pacific Daylight Time
Subject:Re: Richmond Community Center, Workmans Comp Cert.
Date:Tuesday, July 12, 2022 at 2:05:55 PM Pacific Daylight Time From:Yader Bermudez
To: Jim Reilly
CC: Joe Leach, Laura Marquez, Garret Murai, James Atencio, Mark Albertson (via email, Kevin Reilly, Domenic
Appreciated. Laura will follow up with copy of the City’s Builder’s Risk Insurance Yader A Bermúdez
Re@red Annuitant
Public Works Director
City of Richmond
iPhone at 510 774-6300
On Jul 12, 2022, at 12:12 PM, Jim Reilly <[email protected]> wrote:
This email originated from outside of the City's email system. Do not open links or a[achments from untrusted sources.
All,
As discussed at our mee@ng yesterday a\ernoon we are sending an updated Workmans Compensa@on Insurance Cer@ficate for your records.
Jim Reilly
AngoW & Reilly, inc
2200 Jerrold Avenue, Suite E
San Francisco, CA 94124
415 575-3700
fax 575-1470
license 473263
<AngoW & Reilly Workmans Comp insurance cert 22-23.pdf>
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Exhibit B
RFI NO:
DWG REF:
SPEC REF:
REQUEST FOR INFORMATION Number of Pages:
PROJECT TITLE: Richmond Community Center ATTN:
JOB #: 6055
cc:
CONTRACTOR:
REQUESTED BY:
SUBJECT:
None Add Deduct To Be Determined
Cost Impact
CIRCLE ONE: ROUTINE / URGENT Schedule Impact
RESPONSE REQUESTED BY: (DATE) 01-Jun-22
INFORMATION NEEDED
SIGNATUREJim Reilly
DATE
COMPANY
REPLY
SIGNATURE
DATE
COMPANY
Builders Risk Insurance
1 Please confirm that the existing Fire Insurance Policy on the Community Center is cover Builders Risk for this project.
Mark Albertson
Jim Reilly
06/29/2022
Angotti & Reilly Inc
Angottti & Reilly
Thursday, August 11, 2022 at 10:30:01 Pacific Daylight Time
Subject:Fw: BTA Request for Informa5on
Date:Thursday, June 2, 2022 at 2:36:42 PM Pacific Daylight Time From:Yader Bermudez
To: Jim Reilly
CC: Mark Albertson
the response from our Risk Management is below. Is this good enough? YADER A BERMUDEZ, Retired Annuitant
City of Richmond, CA
Wastewater Program Manager
(510) 774-6300
From: Laura Marquez <[email protected]>
Sent: Thursday, June 2, 2022 2:15 PM
To: Yader Bermudez <[email protected]>
Cc: Anil Comelo <[email protected]>
Subject: RE: BTA Request for InformaQon
Confirmed that the CJPRMA property insurance program does include course of construcQon for projects not exceeding $100M, which is the case here.
Thank you.
Laura Marquez
Risk Manager
City of Richmond
O| 510.620.6974
F | 510.620.6811
[email protected]
From: Yader Bermudez <[email protected]> Sent: Wednesday, June 1, 2022 12:14 PM
To: Laura Marquez <[email protected]>
Cc: Anil Comelo <[email protected]>
Subject: Re: BTA Request for InformaQon
As requested
YADER A BERMUDEZ, Retired Annuitant
City of Richmond, CA
Wastewater Program Manager
(510) 774-6300
From: Laura Marquez <[email protected]>
Sent: Wednesday, June 1, 2022 9:51 AM
To: Yader Bermudez <[email protected]>
Cc: Anil Comelo <[email protected]>
Subject: RE: BTA Request for InformaQon
Hi Yader,
Can you send the email that was sent on 5/25/22, that had the aWachment. I’m not able to find that one, not even in my archives.
Thanks.
From: Yader Bermudez <[email protected]>
Date: May 25, 2022 at 7:53:17 PM PDT
To: Laura Marquez <[email protected]>
Cc: [email protected]
Subject: BTA RFI #1
Please confirm insurance coverage as requested on RFI#1. Thanks <RFI 1 Richmond Community Center Builders Risk.xlsx>
Laura Marquez
Risk Manager
City of Richmond
O| 510.620.6974
F | 510.620.6811
[email protected]
From: Yader Bermudez
Sent: Wednesday, June 1, 2022 9:12 AM
To: Laura Marquez <[email protected]>
Cc: Anil Comelo <[email protected]>
Subject: Re: BTA Request for InformaQon
Laura, please provide a response to this Contractor RFI#1 YADER A BERMUDEZ, Retired Annuitant
City of Richmond, CA
Wastewater Program Manager
(510) 774-6300
From: Yader Bermudez
Sent: Thursday, May 26, 2022 6:35 AM
To: Laura Marquez <[email protected]>
Subject: Fwd: BTA Request for InformaQon
Please confirm the City Fire Insurance cover the Contractor working on the BTA fire RestauraQon Yader A Bermúdez
ReQred Annuitant
Public Works Director
City of Richmond
iPhone at 510 774-6300
Begin forwarded message:
From: Yader Bermudez <[email protected]>
Date: May 25, 2022 at 7:53:17 PM PDT
To: Laura Marquez <[email protected]>
Cc: [email protected]
Subject: BTA RFI #1
Please confirm insurance coverage as requested on RFI#1. Thanks <RFI 1 Richmond Community Center Builders Risk.xlsx>
Yader A. Bermudez, ReQred Annuitant
Public Works Director
City of Richmond,
450 Civic Center Plaza
Richmond, CA 94804
(510) 774-6300
Exhibit C
Thursday, August 11, 2022 at 10:57:01 Pacific Daylight Time
Subject:Richmond Community Center, Builders Risk
Date:Tuesday, July 19, 2022 at 10:56:48 AM Pacific Daylight Time From:Jim Reilly
To: Yader Bermudez (via email, Mark Albertson (via email, [email protected], James Atencio, Joe Leach
CC: Kevin Reilly, Domenic, MaRy, Garret Murai
All,
We, and our insurance broker, Woodruff Sawyer, have reviewed the Memorandum of Coverage which Yader Bermudez transmiAed on July 14th.
This Memorandum refers to Liability Coverage provided by the Joint Powers.
There is no menJon of any form of Property Coverage, let alone Builders Risk coverage.
We request that the City provide us with evidence of Property Coverage and a copy of the Policy.
If the Policy exists, we request to be named as an insured including all our subcontractors in all Jers.
We would require a Waiver of SubrogaJon in our favor, a definiJon that we are not responsible for any deducJbles and that we are not responsible for earthquake, earth movement and flood and delayed opening expenses.
Please let us know as soon as possible if the City can provide the required coverage. We can’t proceed with the work without Builders Risk coverage.
Jim Reilly
AngoR & Reilly, inc
2200 Jerrold Avenue, Suite E
San Francisco, CA 94124
415 575-3700
fax 575-1470
license 473263
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Exhibit D
Thursday, August 11, 2022 at 11:00:10 Pacific Daylight Time
Subject:Richmond Community Project, Your le5er of 7-20-22 Date:Tuesday, July 26, 2022 at 4:19:43 PM Pacific Daylight Time From:Jim Reilly
To: [email protected]
CC: Joe Leach, Yader Bermudez (via email, Mark Albertson (via email, James Atencio, Kevin Reilly, Domenic, Ma5y, Garret Murai
Ms. Marquez,
We’ve reviewed your letter of July 20, 2022 and it doesn’t correspond to your answer to RFI 1 or our subsequent discussion and agreement.
We seem to be talking past each other. The Memorandum that we received was for Liability Coverage. It did not include any Property coverage. It specifically excluded property damage on
Builders Risk policies cover both the interests of the Owner, Contractor and Subcontractors for the value of the new work being incorporated into the project before final completion. Many existing property policies have provisions for adding Builders Risk coverage. The standard AIA A201 General Conditions require the Owner to provide Builders Risk insurance in Section 11.
Item 1 in your letter is incorrect. The City is already named as additional insured on our Accord form dated 3/24/22. This document is attached to the executed Construction Contract. Also, we started this project in May. We’ve been on the site multiple times. We have provided multiple RFIs and Submittals. We are in contract with multiple subcontractors. The City has already issued two ASIs which we are pricing. We have clearly started but have been delayed by damage to the building prior to our start and due to the City’s failure to provide Builder’s Risk insurance as agreed. We are ready to start the Abatement/Demo Phase once we have approval of the Abatement Plan which is Submittal #10, dated July 12, 2022
Item 2 is, also, incorrect. The City won’t or can’t provide a copy of a policy showing that the City has Builders Risk coverage for this project. Based on this failure by the City we are requesting that our broker approach Underwriters to see if it is possible for us to obtain a Builders Risk policy to move the project forward. If we can obtain a policy we will submit the cost as a change order request.
We hope all this can be resolved so that we can continue and finish the Project for the Community to use.
Jim Reilly
Ango0 & Reilly, inc
2200 Jerrold Avenue, Suite E
San Francisco, CA 94124
415 575-3700
fax 575-1470
license 473263
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Exhibit E