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    California Builders Right To Repair Current Law Summary:

    Current Law Summary: SB800 (codified as Civil Code §§895, et seq) is the most far-reaching, complex law regulating construction defect litigation, right to repair, warranty obligations and maintenance requirements transference in the country. In essence, to afford protection against frivolous lawsuits, builders shall do all the following:A homeowner is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the homeowner by the builder and product manufacturers, as well as commonly accepted maintenance practices. A failure by a homeowner to follow these obligations, schedules, and practices may subject the homeowner to the affirmative defenses.A builder, under the principles of comparative fault pertaining to affirmative defenses, may be excused, in whole or in part, from any obligation, damage, loss, or liability if the builder can demonstrate any of the following affirmative defenses in response to a claimed violation:

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    With over 4500 construction defect and claims related expert designations, the Anaheim, California Construction Expert Directory provides a wide range of trial support and construction consulting services to legal professionals and construction practice groups seeking effective resolution of construction defect and claims litigation. BHA provides construction claims investigation, testimony, and support services to the nation's most recognized construction practice groups, Fortune 500 builders, CGL carriers, owners, as well as a variety of public entities. Utilizing captive assets which comprise licensed general and specialty contractors, consulting civil engineers, NCARB certified architects, roofing, and building envelope experts, the construction experts group brings national experience and local capabilities to Anaheim and the surrounding areas.

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    Insurer Settles on Construction Defect Claim

    July 10, 2012 — CDJ Staff

    Law360 reports that Arch Specialty Insurance Company has settled over claims that it wrongly denied coverage in a construction defect claim. The court dismissed Arch with prejudice. Terms of the settlement were not disclosed and the attorneys made not comment to Law360.

    Read the full story…

    Architectural Firm Disputes Claim of Fault

    May 27, 2011 — CDJ Staff

    Lake-Flato Architects has disputed the arbitration panel’s conclusion that problems with the home of Tom Hanks and Rita Wilson were due to design flaws. The firm settled with the couple for $900,000, however the Idaho Mountain Express reports that David Lake said, “the settlement in the case in no way represents that Lake Flato was responsible for faulty design.” The Express reported that “the arbitrators found that problems at the home were attributable to design errors that did not take into account the cold winter climate of the Sun Valley area.”

    Read the full story…

    The Year 2010 In Review: Design And Construction Defects Litigation

    February 25, 2011 — Candace Matson, Harold Hamersmith, and Helen Lauderdale - Construction & Infrastructure Law Blog - February 25, 2011

    This article is the first in a series summarizing construction law developments for 2010

    1. Centex Homes v. Financial Pacific Life Insurance Co., 2010 U.S. Dist. LEXIS 1995 (E.D. Cal. 2010)

    After settling numerous homeowners’ construction defect claims — and more than ten years after the homes were substantially completed — a home developer brought suit against one of the concrete fabrication subcontractors for the development seeking indemnity for amounts paid to the homeowners, as well as for damages for breach of the subcontractor’s duties to procure specific insurance and to defend the developer against the homeowners’ claims. The subcontractor brought a motion for summary adjudication on the ground the developer’s claims were barred by the ten year statute of repose contained in Code of Civil Procedure Section 337.15.

    The District Court agreed the developer’s claim for indemnity was barred by Section 337.15. And it held that because the damages recoverable for breach of the subcontractor’s duty to purchase insurance are identical to the damages recoverable through the developer’s indemnity claim, the breach of duty to procure insurance claim also was time-barred. The District Court, however, allowed the claim for breach of the duty to defend to proceed. The categories of losses associated with such a claim (attorneys’ fees and other defense costs) are distinct from the damages recoverable through claims governed by Section 337.15 (latent deficiency in the design and construction of the homes and injury to property arising out of the latent deficiencies).

    2. UDC — Universal Development v. CH2M Hill, 181 Cal. App. 4th 10 (6th Dist. Jan. 2010)

    Indemnification clauses in construction agreements often state that one party to the agreement — the “indemnitor” — will defend and indemnify the other party from particular types of claims. Of course, having a contract right to a defense is not the same as actually receiving a defense. Any indemnitor attempting to avoid paying for defense costs can simply deny the tender of defense with the hope that when the underlying claim is resolved the defense obligations will be forgotten. In the past, when parties entitled to a defense — the “indemnitees” — had long memories and pressed to recover defense costs, indemnitors attempted to justify denying the tender by claiming their defense obligations coincided with their indemnity obligations and neither arose until a final determination was made that the underlying claim was one for which indemnity was owed.

    Read the full story...

    Reprinted courtesy of Candace Matson, Harold Hamersmith, and Helen Lauderdale, Sheppard Mullin Richter & Hampton LLP. Ms. Matson can be contacted at, Mr. Hamersmith can be contacted at, and Ms. Lauderdale can be contacted at

    Summary Judgment in Construction Defect Case Cannot Be Overturned While Facts Are Still in Contention in Related Cases

    September 9, 2011 — CDJ Staff

    The Alabama Court of Civil Appeals has dismissed an appeal of a summary judgment in the case Bella Investments, Inc. v. Multi Family Services, Inc. MFS was hired by Bella to be the general contractor for a hotel in Gardendale, Alabama. MFS hired various subcontractors, including the architect for the project. After completion of the hotel in April, 2006, Bella made requests for MFS to repair cracked floor tiles.

    In August, 2008, Bella sued MFS, the architect, and various fictitiously named defendants. Subsequently, Bella amended its complaint, naming some of the fictitiously named defendants.

    MFS in turn claimed that Bella’s claims were void under the statute of limitations and that Bella was in beach of contact by failing to pay MFS the full amount owed. MFS moved for summary judgment under the statute of limitations, which was granted by the court.

    Bella requested that the court “alter, amend, or vacate its summary judgment order.” When this was denied, Bella appealed to the Alabama Supreme Court, which transferred the appeal to the Court of Civil Appeals. The Court of Appeals refused to vacate the summary judgment as claims that form part of the case against MFS are also part of Bella’s claims against the other defendants. For this reason, the court upheld the summary judgment.

    Read the court’s decision…

    Construction Defects Not Occurrences under Ohio Law

    November 7, 2012 — CDJ Staff

    Concluding the “claims of defective construction or workmanship brought by a property owners are not claims for ‘property damage’ caused by an ‘occurrence’ under a commercial general liability policy,” the Supreme Court of Ohio has ruled in Westfield Insurance Co. v. Custom Agri Systems, Inc. In the underlying case, Custom Agri Systems, Inc. built a grain bin as a subcontractor to Younglove Construction, LLC. Younglove had been contracted by PSD Development, which withheld payment, claiming it had suffered damages due to defects in Custom Agri System’s work. Younglove filed a complaint against Custom Agri, which filed complaints against its subcontractors. Custom Agri also requested that its insurer, Westfield Insurance Company, defend and indemnify it. Westfield claimed that it had no such duty. The Ohio Supreme Court concurred.

    The decision notes that “Custom was being sued under two general theories: defective construction and consequential damages resulting from the defective construction.” Westfield argued that none of the claims were “for ‘property damage’ caused by an ‘occurrence” and therefore none of the claims were covered under the CGL policy.” Further, Westfield argued that “even if the claims were for property damage caused by an occurrence, they were removed from coverage by an exclusion in the policy.”

    The case was filed in the US District Court which issued a summary judgment for Westfield. The plaintiff appealed and Sixth Circuit Court of Appeals certified the questions to the Supreme Court of Ohio.

    The court noted that “all of the claims against which Westfield is being asked to defect and indemnify Custom relate to Custom’s work itself.” And so, the court concluded that they “must decide whether Custom’s alleged defective construction of and workmanship on the steel grain bin constitute property damage caused by an ‘occurrence.’” However, the court noted that under the terms of the insurance contract, an occurrence is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and the court noted that the “natural and commonly accepted meaning” of “accident” is something “unexpected, as well as unintended.”

    The Ohio Supreme Court also looked at court decisions in other places, and found that in many similar cases, courts have concluded that construction defects are not occurrences.

    In a dissenting opinion, Justice Pfeifer argues that “if the defective construction is accidental, it constitutes an ‘occurrence’ under a CGL policy.” Justice Pfeifer characterized the majority’s definition of “accidental” as “broad, covering unexpected, unintentional happenings.”

    Read the court’s decision…

    Bar to Raise on Green Standard

    November 7, 2012 — CDJ Staff

    Next June, members of the U.S. Green Building Council will be voting on changes to the LEED green building standard. “The bar is getting raised,” said Navad Malin of BuildingGreen, a consulting and publishing firm, in an article in USA Today. Under the proposed guidelines, builders would have to project energy and water use for five years as part of the certification process. However, if the occupants aren’t as green as the builders anticipated, the buildings will not lose their certification.

    The new rules will include higher energy standards, award points for avoiding potentially hazardous materials, and even determine what kind of plumbing items can be used.

    Read the full story…

    Insurers Reacting to Massachusetts Tornadoes

    August 11, 2011 — CDJ Staff

    The Patriot-Ledger reports that insurers could pay out as much as $200 million to cover homes damaged or destroyed in the tornadoes that hit central and southern Massachusetts in June, 2011. Joseph Murphy, Commissioner of the State Division of Insurance didn?t foresee problems with insurers covering these claims. “At this point, there doesn’t seem to be any one company overexposed in that area,” he told the Patriot-Ledger.

    Insurance executives did not think the tornadoes would cause them to raise rates. Steve Chevalier, CEO of NLC Companies, said, “it’s a major event for those impacted by it, but it’s not close to a financial hit to us.”

    One insurer noted that the winter weather generated more claims; however the cumulative value of those claims was $15 million.

    Read the full story…

    Instant Hotel Tower, But Is It Safe?

    March 28, 2012 — CDJ Staff

    Broad Sustainable Building has leapfrogged in China’s construction boom by building a thirty-story hotel in just fifteen days in the city of Changsha. According to an article in the Los Angeles Times, most of the building was prefabricated, but most prefabricated buildings require a longer time for assembly. Broad claimed that it cut no corners on safety. However, Zhang Li, a Beijing architect, told the Times that “incredible speed also means incredible risk.”

    At the completion date, the interior was still partially finished. Some rooms were furnished, while others weren’t quite so ready. The hotel will be used to house clients who are visiting Broad and some of its employees.

    Broad called their process “the most profound innovation in human history” and predicted that soon a third of new buildings worldwide would be constructed this way. The company anticipates using the same process to build taller buildings, with hopes of eventually constructing a 150-story building.

    China is currently undergoing a building boom which Zhang attributed to a desire to catch up to the developed world. As a result of this boom, he noted that building inspections are often skipped in China to speed up building.

    Read the full story…