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Welcome to our fifth issue of The Site Report for 2025! In this edition, we address North Carolina's insurers' duties, the increases and decreases in construction for renewable energies, construction and tariffs, and the increase in construction for certain states. We also introduce you to our 2025 Summer Associates class.
ANNOUNCEMENTS
Please join us in welcoming William S. Thompson, the immediate past United States Attorney for the Southern District of West Virginia, who has joined the law firm as Counsel. Will brings decades of experience across the legal, judicial, and business arenas. At Spilman, his practice will focus on litigation, with particular emphasis on alternative dispute resolution and white collar criminal defense.
Congratulations to 18 Spilman attorneys located in West Virginia and two of our Virginia attorneys for being recognized by Super Lawyers for 2025. The objective of the Super Lawyers selection process is to create a credible, comprehensive and diverse listing of outstanding attorneys from more than 70 practice areas. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. Many of these attorneys practice in our Construction Practice Group and ancillary departments.
Another congratulations goes to Anthony J.G. Hassey, who was recently appointed to a three-year term as a Hearing Committee Member serving the Disciplinary Board of the Supreme Court of Pennsylvania. The Disciplinary Board was created by the Supreme Court of Pennsylvania to review conduct and assure compliance by all attorneys to the Pennsylvania Rules of Professional Conduct.
Thank you for reading.
Stephanie U. Eaton - Co-Chair, Construction Group; Vice Chair of Southern Offices, Litigation Department; Editor, The Site Report
and
Julian E. Neiser - Co-Chair, Construction Group; Vice Chair of Northern Offices, Litigation Department
| | NC Court of Appeals Clarifies How Insurers’ Duties to Defend and Indemnity Are Triggered in Atypical Employment Relationships | | |
By Stephanie U. Eaton and Cole C. Younger, Summer Associate
The Court of Appeals’ opinion in N.C. Farm Bureau Mut. Ins. Co. v. Young, (No. COA24-594) addresses how a court is likely to assess the duty to defend and the duty to indemnify under an insurance contract, and the interplay of whether an individual is or is not an employee of the insured contractor.
Click here to read the entire article.
| | South Carolina Court of Appeals Demonstrates Collateral Estoppel's Power in Recent Construction Indemnity Cases | | |
By Hikmat N. Al-Chami
Recent activity in the South Carolina Court of Appeals highlights the importance of regularly reviewing and updating standard indemnity provisions in construction contracts. On February 12, 2025, the South Carolina Court of Appeals issued an opinion rejecting general contractor Builders FirstSource-Southeast Group's (BFS) indemnity agreements with its subcontractors in The Retreat at Charleston National Country Club Home Owners Ass'n, Inc. v. Winston Carlyle Charleston National, LLC (the "Palmetto Trim" case). In two recent opinions, the Court again rejected BFS's indemnity provisions, highlighting the critical importance of contractors reviewing their indemnity agreements to ensure compliance with South Carolina law.
Within weeks of the Palmetto Trim decision, on March 12, 2025, the South Carolina Court of Appeals issued two additional rulings—Six Fifty Six Owners Association, Inc. v. Winsor South, LLC (Case No. 2020-001328), and Dag Pavic v. Carolina Cottage Homes, LLC (Case No. 2021-000290)—both involving BFS and virtually identical indemnity disputes. Despite these recent cases involving different construction projects and different parties, the Court of Appeals swiftly applied the legal doctrine of collateral estoppel and held that BFS had not only litigated these exact indemnity provisions in the Palmetto Trim case and lost, but had also raised the same arguments for enforcement and been rejected on those grounds as well.
These recent rulings demonstrate the multi-layered legal framework governing construction indemnification, where provisions must satisfy contract interpretation standards, statutory requirements, and fundamental fairness principles to remain enforceable and the wide-reaching impacts one unsuccessful claim can have across multiple projects. Consequently, contractors, particularly those who use master agreements, should immediately review their agreements to ensure continued enforceability under South Carolina's evolving legal standards.
For an in-depth analysis of the underlying case and the specific contract provisions at issue in the Palmetto Trim case, please refer to our previous article titled “Subcontracting Lessons on Indemnity Provisions, Consistency of Contract Terms and Estoppel From the SC Court of Appeals.”
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“A new study from the Boston University Institute for Global Sustainability finds that construction costs run over budget for more than 60% of energy infrastructure projects worldwide.”
Why this is important: Over the next few decades, trillions of dollars in investments will be poured into the clean energy sector both at home and abroad. Many, if not most, of these projects will involve exorbitant budgets paired with large-scale construction and logistics. Despite this wealth of resources, most of these major energy projects will run behind schedule and far over budget. In fact, according to a study published in the journal Energy Research & Social Sciences, the average energy project comes in 40 percent more expensive than the initial projected construction cost and takes around two years longer than planned to build.
According to the study, the most egregious offenders are typically nuclear power plants. The plants usually cost more than double what was initially anticipated and are well behind schedule on construction. Nuclear power projects are not the only problematic form of energy construction projects, and even newer forms of clean energy, such as hydrogen and natural gas, run outsized risks of coming in far over budget and behind schedule.
Despite these dire statistics, it’s not all bad news. While their energy counterparts tend not to meet projected budgets or timetables, solar energy and electricity transmission projects have been a recent marker of efficiency and often come to completion under budget and ahead of schedule. These projects, also including wind farms, stand out among their energy project peers as relatively cheap, quick, and small-scale, making them attractive to public and private actors alike.
As the world transitions away from fossil fuels and looks to clean energy alternatives to meet its energy needs, the cost and speed at which new energy infrastructure can be completed will be of the utmost importance. While these findings do put a damper on the massive clean energy projects that have been popular in the past, the alternative may actually be better for energy generation and the environment. These smaller-scale projects, which allow for relatively quick and easy energy infrastructure construction, will be attractive for parties looking to transition from their fossil fuel-based energy infrastructure to one based on clean energy, and allow for these transitions to occur on a smaller and more local scale. --- Jonathan E. Gharib, Summer Associate
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“This fleet-scale methodology lowers costs and minimizes delays using advanced construction and manufacturing systems, including AI-driven site selection, real-time construction updates, and integrated supply chain logistics.”
Why this is important: Few people involved in the energy sector in South Carolina have forgotten the 2017 abandonment of the decade-long, $9 billion construction of the Virgil C. Summer Nuclear Power Station just 20 miles northwest of Columbia, South Carolina. Thus, it may be surprising to hear that a new nuclear construction company—The Nuclear Company—has now located in Richland County, South Carolina. With a new disciplined and scalable approach to the construction of nuclear reactors, The Nuclear Company has plans to use AI to facilitate site selection for fleets of reactors, provide real-time updates on construction progress, and integrate supply chain logistics, all of which could have mitigated against some of the construction and project management issues that led to the demise of the V.C. Summer facility.
One other significant approach that The Nuclear Company is taking involves the shift in who bears the burden of the infrastructure construction costs. Previous U.S. facility construction projects involved a coalition of industry partners for the planning and construction of the facilities, whereas The Nuclear Company puts that burden on a single entity or traditional utility company. The CEO of The Nuclear Company, Jonathan Webb, is hopeful that this new approach will help the United States become more competitive in the global nuclear arena, where China is taking a leading role. Webb explained that during the last decade, only two reactors were built in America as compared to China, where 37 reactors were built, 30 more are under construction, and 80 more are in the construction pipeline for the next decade. Nuclear energy, however, remains a key component of many utilities’ integrated resource planning because it provides clean, stable power supply to America’s growing energy demands. For those interested in working for The Nuclear Company, go to the company's Careers page. --- Stephanie U. Eaton
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“Inputs declined overall in April due to falling energy prices, but steel and copper rose significantly while nonresidential costs continued their upward march.”
Why this is important: Construction material prices may seem stable at first glance – up just 0.5 percent year over year – but that’s not the entire story. When you factor in broader inflation, real construction input costs have actually gone down. That’s a positive sign for many developers and project planners. But there's a catch: certain key materials like steel and copper are getting more expensive, thanks in large part to tariffs. These specific price increases are inflating costs for manufacturing facilities, infrastructure projects, and large-scale commercial builds – all sectors heavily reliant on those materials.
This mix of falling overall costs and rising prices for key materials introduces uncertainty and distortions into construction planning – which happens years in advance of actual construction or even breaking ground. Projects that rely heavily on steel, copper, or other tariff-impacted inputs may still face cost overruns even as broader prices trend downward. Flexible contract structures – such as price escalation clauses or material substitution options – can help manage these risks. Clear planning and well-drafted agreements are essential to keeping timelines and budgets on track in a volatile pricing environment. --- D. Addison Gills, Summer Associate
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“Despite the Trump administration’s reprieve on some tariffs, construction companies should act now to prepare for what’s to come.”
Why this is important: The tariffs imposed by the Trump administration (and responsive tariffs imposed by other countries) present a key cost factor that companies at every level of the construction industry need to consider, both in terms of increased raw material cost as well as potential related delays. Although price increases/delays connected to tariffs may be covered by the force majeure clauses that are now standard in most construction contracts, companies should not assume that that will be the case, and should proactively examine existing/future contracts to ensure that tariffs are being addressed appropriately. If there is any ambiguity within a construction contract as to how tariff-related issues will be handled, a prudent company will correct any such ambiguity by inserting specific, explicit tariff language to avoid any conflicts or misunderstandings in the future, along with any appropriate notice provisions. Lastly, because the nature of tariffs normally results in one of the parties to the transaction bearing the risk of higher expenses (often significantly so), it may be wise to handle these considerations at the outset of contract negotiations, rather than addressing such issues summarily at the end. --- James E. Simon
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“As developers, suppliers, and contractors prepare for changes that are likely on the horizon, flexibility will be critical.”
Why this is important: Since 2018, the construction industry has undergone massive shifts. Commercial construction was hit hard during the COVID-19 pandemic, but has since recovered. Commercial spending has surged post-pandemic, reaching $740 billion by early 2025 – the highest it has been in more than 20 years. However, with the Trump administration now in office, the outlook for 2025’s commercial construction will be shaped by a different set of pressures and priorities.
- Federal investment will continue to play a critical role. The Biden administration projects are just entering the construction phases, meaning the sectors these projects affect (clean energy, semiconductors, and advanced manufacturing) will continue to expand.
- Supply chain resilience remains a top concern. With the new tariffs and escalating geopolitical tensions, there will be sustained, if not increased, demand for warehouse construction, freight terminals, and distribution centers - all of which rely on foundational materials.
- The potential expansion of tariffs could indirectly affect the pace of construction. Many critical materials (wood, steel, aluminum) are heavily imported. If tariffs increase the cost of these materials, developers may delay or downsize projects, leading to a dampened demand for U.S.-produced materials.
- Sectors of commercial construction that have already been slow may face further problems. Sectors such as office, lodging, education, retail, and recreation may suffer from increased lack of demand with a potential economic slowdown looming. If these sectors remain soft, developers will likely focus on projects that are more resilient to market variability.
These market factors will not only affect West Virginia commercial construction but will also create issues for the broader U.S. economy’s commercial construction projects. As we move forward, a rebalancing of commercial construction activity seems imminent. In order to be prepared for these changes, market participants’ flexibility will be critical. They will need to pay attention to these factors in order to stay on top of the shifts in the market and adjust to prevent falling behind. Whether the market will boom or slow down, developers, suppliers, and contractors will need to be ready for it all. --- Cole C. Younger, Summer Associate
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“But emissions from the power sector still ticked up last year amid rising demand and more fossil-fuel use.”
Why this is important: For those contractors working on renewable energy projects, 2024 was a banner year. According to the International Renewable Energy Agency, more than 90 percent of projects worldwide consisted of wind, solar, and other renewable energy generation. These new projects – attributed to lower costs and strong support for global decarbonization – accounted for nearly 600 gigawatts (GW) of new generation as compared to only 47 GW of new fossil generation constructed last year. Renewable plus nuclear generation accounted for 40 percent of the world’s electricity in 2024. Construction of new clean energy generation resources will remain a significant part of the power generation equation now and for years to come, so education and training of a workforce who can site, plan, design, build, and manage solar, nuclear, wind, hydro, and geothermal facilities will also be critical.
At the same time, global demand for energy as a result of increased electrification, EVs, data center facilities, and cryptocurrency mining has required existing fossil-fuel power plants to continue operating, while newer facilities are being planned. In fact, emissions caused by power generation increased 1.7 percent in 2024 over 2023 levels. Focusing on making these new fossil generators more energy efficient, less polluting, and complementary to clean energy generation sources will be crucial to meeting these global energy demands without further expanding global carbon dioxide emissions. --- Stephanie U. Eaton
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During the summer months, our firm is pleased to host a talented group of law students, who get the opportunity to research and write, shadow our attorneys, and learn about the practice of law in a firm setting. As young professionals still deeply involved in higher education, our Summer Associates will be contributing to our summer publications and sharing their perspectives as both students and future legal practitioners. Please join us in welcoming them this summer and to our summer editions of The Site Report.
- Riley Devon Breen, University of North Carolina School of Law
- Carter Capehart, University of Dayton School of Law
- Jonathan Gharib, William & Mary Law School
- D. Addison Gills, Washington and Lee University School of Law
- Gabe Papadopoulos, American University, Washington College of Law
- Alan Parsons, West Virginia University, College of Law
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Addelyn Slyh, The University of Kentucky J. David Rosenberg College of Law
- Cole Younger, William & Mary Law School
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Responsible Attorney: Michael J. Basile, 800-967-8251
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