ANAHEIM CALIFORNIA CONSTRUCTION EXPERT WITNESS
DIRECTORY AND CAPABILITIES

Federal Magistrate Judge Recommends Rescission of Policies

February 12, 2024 — Craig Rokuson - Traub Lieberman
In the recent case of Union Mut. Fire Ins. Co. v. 142 Driggs LLC, 2023 U.S. Dist. LEXIS 220393, Magistrate Judge Lois Bloom of the United States District Court for the Eastern District of New York recommended granting the insurer's default judgment and holding that of three policies issued to 142 Driggs LLC ("Driggs") be rescinded ab initio. Driggs had represented on its insurance applications that it did not provide parking to anyone other than itself, tenants, and its guests at the subject insured premises. However, Union Mutual learned that Driggs had been renting out three garages to non-tenants. Second, Driggs represented that the mercantile square footage was around 1,000 square feet, when in actuality, it was larger than allowed under the policies. Union Mutual provided underwriting guidelines in connection with its default motion, which state that "parking provided for anyone other than the insured, tenants and their guests," presents an "unacceptable risk." The guidelines also state that answering yes to any "preliminary application questions (which presumably included those regarding mercantile square footage and parking) is an "unacceptable risk." The court held that these guidelines supported a finding that Driggs made material misrepresentation and that Union Mutual relied on these misrepresentations in issuing the policies. The court, as such, recommended that the policies at issue be rescinded from inception. Read the full story...
Reprinted courtesy of Craig Rokuson, Traub Lieberman
Mr. Rokuson may be contacted at crokuson@tlsslaw.com

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Surplus Lines Carrier Can Force Arbitration in Louisiana Despite Statute Limiting Arbitration

February 12, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court granted the surplus lines insurer's motion to compel arbitration despite a Louisiana statute barring policies from depriving courts of jurisdiction in cases against insurers. Queens Beauty Supply, LLC v. Indep.Specialty Ins. Co., 2023 U.S. Dist. LEXIS 195372 (E.D. La. Oct. 31, 2023). Hurricane Ida damaged property leased by Queens. Queens filed suit against its insurer, Independent Specialty Insurance Company (ISIC) for breath of contract and bad faith for failing to pay the full amount Queens contends it was owed for the damage. ISIC moved to compel arbitration. Queens argued that ISIC waived its right to enforce the policy's arbitration clause by its actions before the court, including failing to opt-out of the settlement program adopted for Hurricane Ida cases. The court disagreed, ISIC had taken no overt act that evidenced a desire to resolve the instant dispute through litigation rather than arbitration. ISIC asserted as an affirmative defense that Queens's claims were barred by the arbitration clause in the policy. ISIC then participated in the settlement program for Hurricane Ida cases, which evidences a desire to settle the dispute, not to resolve it by litigation. Therefore, ISIC had not waived its right to arbitrate. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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2024 Construction Law Update

December 23, 2023 — Garret Murai - California Construction Law Blog
We would like to wish you and yours a happy holiday season as we approach 2024. The first half of the 2023-2024 legislative session saw the introduction of 3,028 bills, which, according to legislative observers, are the most bills introduced in a session in more than a decade, perhaps reflecting the fact that California has a record number of new legislators with over a quarter taking the oath of office for the first time. Of these bills, Governor Newsom signed nearly 400 into law including several impacting the construction industry related to climate change and housing affordability. Read the full story...
Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Real Estate & Construction News Roundup (11/8/23) – New Handling of Homelessness, Decline in Investments into ESG Funds, and Shrinking of a Homebuyer’s Dollar

December 11, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
Our latest roundup includes two large flood control projects in New Jersey, how residential REITs could benefit from higher interest rates, how the downfall of WeWork could cause expansive collateral damage, and more!

• The Federal Reserve said the possibility of large losses in the $24 trillion U.S. commercial real estate market poses a top risk to financial stability. (Jim Tyson, CFO Dive)
• According to proptech firm MRI Software, apartment leasing patterns are “reverting to pre-pandemic patterns and becoming more predictable.” (Leslie Shaver, Multifamily Dive)
• Los Angeles has developed a new way to handle homelessness—real estate agents for those without a home. (Jennifer Ludden, NPR)

Read the full story...
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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American Arbitration Association Revises Construction Industry Rules and Mediation Procedures

April 08, 2024 — Dennis Cavanaugh & Larry Grijalva - Construction Law Zone
The American Arbitration Association (AAA), one of the longest-standing and experienced alternative dispute resolution (ADR) administrators, has unveiled a significant update to its Construction Industry Rules and Mediation procedures. This update, last revised in 2015, became effective March 1, 2024. Changes to the AAA Construction Industry Rules are significant as these rules are incorporated by default in American Institute of Architects standard construction forms, which are widely used in the industry. Advancements in remote access technology drive a substantial number of new changes. Others are designed to streamline the arbitrator appointment process and certain prehearing procedures and to make arbitration more cost-efficient by enhancing the arbitrator’s case management authority. Some of the more notable changes are: Fast Track F-1: The limit for cases eligible for AAA’s Fast Track Procedures has been increased from $100,000 to $150,000 so long as no claim or counterclaim exceeds that amount. Reprinted courtesy of Dennis Cavanaugh, Robinson & Cole and Larry Grijalva, Robinson & Cole Mr. Cavanaugh may be contacted at dcavanaugh@rc.com Mr. Grijalva may be contacted at lgrijalva@rc.com Read the full story...

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Courthouse Reporter Series: Two Recent Cases Address Copyright Protection for Architectural Works

January 16, 2024 — Stu Richeson - The Dispute Resolver
Recent decisions by the Seventh Circuit and the Eight Circuit have addressed the scope of protection afforded to architectural works under copyright law. The Seventh Circuit case of Design Basics, LLC v. Signature Constr., Inc., 994 F.3d 879 (7th Cir. 2021), took a somewhat narrow view of the copyright protection afforded to the design of an “affordable, multipurpose, suburban, single-family home.” In Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc., 9 F.4th 803 (8th Cir. 2021), cert. denied, 142 S. Ct. 2888, 213 L. Ed. 2d 1103 (2022) the Eight Circuit held that the publication of floor plans of a house in a real estate listing was not protected from claims of copyright infringement. Design Basics, LLC v. Signature Constr., Inc., involved a plaintiff that the court described as holding registered copyrights in thousands of floor plans for suburban, single-family homes that are basic schematic designs, largely conceptual in nature, and depict layouts for one- and two-story single-family homes that include the typical rooms: a kitchen, a dining area, a great room, a few bedrooms, bathrooms, a laundry area, a garage, stairs, assorted closets, etc. The court described the plaintiff as a “copyright troll” and noted that litigation proceeds had become the principal revenue stream for the plaintiff. The plaintiff sued a contractor and related businesses contending hat the defendants had infringed plaintiff’s copyrighted floor plans. Read the full story...
Reprinted courtesy of Stu Richeson, Phelps
Mr. Richeson may be contacted at stuart.richeson@phelps.com

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Your Construction Contract

April 08, 2024 — David Adelstein - Florida Construction Legal Updates
Your construction contract is an important topic. What’s even more important is YOUR process for reviewing and negotiating construction contracts. Are you simply acting as a riverboat gambler willing to assume undue risk because you don’t value the investment in understanding what you are signing? If so, it becomes hard to complain about what you agreed to and signed when you chose NOT to invest in the process. Investing in the process means you are working with a construction attorney, you have an insurance broker that understands your industry, you have resources in place to ensure risk is negotiated and allocated, and you understand what risk you are assuming to make sure you are properly protecting and perfecting your rights, and transferring risk downstream. When it comes to construction contracts, there are really three approaches: 1. Riverboat Gambler. This is the “I’ll sign whatever you give me because I don’t want to lose the contract / revenue.” Under this approach, you are not worried about undue risk because you don’t value the investment in the next two approaches. Your thought process is that you’ll care about the risk when an issue pops up, i.e., the riverboat gambler. This is not an approach I’d recommend because it is contrary to the adage, “an ounce of prevention is worth a pound of cure.” This is simply a reactive approach to issues and risks. The other two approaches are more proactive and better suited to understand and manage risk. Read the full story...
Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Reasonable Expectations – Pennsylvania’s Case by Case Approach to the Sutton Rule

February 12, 2024 — Melissa Kenney - The Subrogation Strategist
In Mutual Benefit Ins. Co. a/s/o Michael Sacks v. Koser, No. 1340 MDA 2023, 2023 Pa. Super. LEXIS 574, 2023 PA Super 252 (Mutual Benefit), the Superior Court of Pennsylvania discussed whether a landlord’s property insurer could file a subrogation action against tenants that had negligently damaged the landlord’s property. Despite there being more than one clause in the lease holding the tenants liable for the damages, the court held that because there was a provision requiring the landlord, not the tenants, to insure the leased building, the insurer could not subrogate against the tenants. In Pennsylvania, a tenant’s liability for damage to a leased premises in a subrogation action brought by a landlord’s insurer is determined by the reasonable expectation of the parties to the lease agreement. Under this approach, to determine if subrogation is permitted, the court considers the circumstances of the case and examines the terms of the lease agreement. In Mutual Benefit, the tenants leased and resided in a residential home pursuant to a lease agreement. The lease specifically addressed insurance, stating that landlord was responsible for obtaining insurance on the dwelling and the landlord’s personal property, and tenants were encouraged to procure separate insurance for their personal property. The lease also addressed liability for damage to the leased property, stating generally that the tenants were responsible for damage caused by the tenants’ negligence. Read the full story...
Reprinted courtesy of Melissa Kenney, White and Williams
Ms. Kenney may be contacted at kenneyme@whiteandwilliams.com

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