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    Construction Expert Witness Builders Information
    Perry County, Indiana

    Indiana Builders Right To Repair Current Law Summary:

    Current Law Summary: According to SB45160, §IC 32-27-3-1&2 a claimant must provide written notice 60 days before filing an action. Within 21 days after service of the notice, the construction professional must serve a written response. Claimant must file list of known construction defects, description, and the construction professional responsible for each alleged defect (to the extent known).


    Construction Expert Witness Contractors Licensing
    Guidelines Perry County Indiana

    License required for plumbing. All other licensing is done at the local county level.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Home Builders Association of Southern Indiana
    Local # 1566
    1601 Greentree Court
    Clarksville, IN 47129
    http://www.hbasi.net

    Southwestern Indiana Builders
    Local # 1524
    2175 N Cullen Avenue
    Evansville, IN 47715
    http://www.sibaonline.org

    Gibson Co Chapter
    Local # 1530
    PO Box 386
    Princeton, IN 47670


    Builders Association of Dubois County
    Local # 1511
    1813 S A St
    Jasper, IN 47546
    http://www.dcbuilder.org

    Vincennes Area Chapter
    Local # 1563
    PO Box 531
    Vincennes, IN 47591


    River Valley Chapter of National Associated Home Builders
    Local # 1576
    PO Box 365
    Hanover, IN 47243


    Lawrence County Chapter
    Local # 1535
    201 Main Street c/o Hoosier Door
    Oolitic, IN 47451



    Construction Expert Witness News and Information
    For Perry County Indiana

    El Paso Increases Surety Bond Requirement on Contractors

    United States District Court Confirms That Insurers Can Be Held Liable Under The CCPA.

    Yellow Brass Fittings Play a Crucial Role in Baker v Castle & Cooke Homes

    California Posts Nation’s Largest Gain in Construction Jobs

    Montrose Language Interpreted: How Many Policies Are Implicated By A Construction Defect That Later Causes a Flood?

    Nevada Court Adopts Efficient Proximate Cause Doctrine

    After Katrina Came Homes that Could Withstand Isaac

    Statutes of Limitations May be the Colorado Contractors’ Friend

    Supreme Court of New York Denies Motion in all but One Cause of Action in Kikirov v. 355 Realty Assoc., et al.

    Contractor Burns Down Home, Insurer Refuses Coverage

    Condominium Communities Must Complete Construction Defect Repairs, Says FHA

    Court Orders House to be Demolished or Relocated

    Construction Law Alert: A Specialty License May Not Be Required If Work Covered By Another License

    New Households Moving to Apartments

    Appropriation Bill Cuts Military Construction Spending

    Product Exclusion: The Big Reason Behind The Delay of LEED 2012

    No Coverage for Property Damage That is Limited to Work Completed by Subcontractor

    Construction Defects in Home a Breach of Contract

    Courts Are Conflicted As To Whether "Good Faith" Settlement Determinations Can Be Reviewed Via Writ Petition Or Appeal

    No-Show Contractor Can’t Hide from Construction Defect Claim

    Follow Up on Continental Western v. Shay Construction

    Contractor Convicted of Additional Fraud

    Construction Workers Face Dangers on the Job

    Builder Waits too Long to Dispute Contract in Construction Defect Claim

    Coverage Rejected Under Owned Property and Alienated Property Exclusions

    Florida: No Implied Warranties for Neighborhood Improvements

    California Bill Would Notify Homeowners on Construction Defect Options

    Court Sends Construction Defect Case from Kansas to Missouri

    School Sues over Botched Pool

    Negligent Construction an Occurrence Says Ninth Circuit

    Federal Court Denies Summary Judgment in Leaky Condo Conversion

    Former New York Governor to Head Construction Monitoring Firm

    South Carolina Contractors Regain General Liability Coverage

    Cogently Written Opinion Finds Coverage for Loss Caused By Defective Concrete

    Town Files Construction Lawsuit over Dust

    Colorado Court of Appeals holds that insurance companies owe duty of prompt and effective communication to claimants and repair subcontractors

    Water Drainage Case Lacks Standing

    Ambitious Building Plans in Boston

    Statute of Limitations Upheld in Construction Defect Case

    Lockton Expands Construction and Design Team

    Hawaii Building Codes to Stay in State Control

    Legislatures Shouldn’t Try to Do the Courts’ Job

    Contractor Manslaughter? Safety Shortcuts Are Not Worth It

    Is Construction Heading Off the Fiscal Cliff?

    The Flood Insurance Reform Act May be Extended to 2016

    Construction Firm Sues City and Engineers over Reservoir Project

    Limiting Plaintiffs’ Claims to a Cause of Action for Violation of SB-800

    In Colorado, Repair Vendors Can Bring First-Party Bad Faith Actions For Amounts Owed From an Insurer

    Exact Dates Not Needed for Construction Defect Insurance Claim

    Construction Delayed by Discovery of Bones

    There Is No Non-Delegable Duty on the Part of Residential Builders in Colorado

    Save A Legal Fee? Sometimes You Better Talk With Your Construction Attorney

    The Colorado Court of Appeals Rules that a Statutory Notice of Claim Triggers an Insurer’s Duty to Defend.

    Florida Construction Defect Case Settled for $3 Million

    Manhattan Developer Breaks Ground on $520 Million Project

    Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment

    Builder Cannot Receive Setoff in Construction Defect Case

    Appeals Court Reverses Summary Judgment over Defective Archway Construction

    Don MacGregor To Speak at 2011 West Coast Casualty Construction Defect Seminar

    David McLain to Speak at the CDLA 2012 Annual Conference

    Know the Minnesota Statute of Limitations for Construction Defect Claims

    Destruction of Construction Defect Evidence Leads to Sanctions against Plaintiff

    No “Special Relationship” in Oregon Construction Defect Claim

    Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

    Certificate of Merit to Sue Architects or Engineers Bill Proposed

    Harmon Tower Construction Defects Update: Who’s To Blame?

    Association May Not Make Claim Against Builder in Vermont Construction Defect Case

    Construction Workers Unearth Bones

    New Jersey Court Rules on Statue of Repose Case

    Surveyors Statute Trumps Construction Defect Claim in Tennessee

    Harsh New Time Limits on Construction Defect Claims

    Court finds subcontractor responsible for defending claim

    Ensuing Loss Provision Does Not Salvage Coverage

    Cabinetmaker Exceeds Expectations as Conditions Improve

    Construction Defects and Contractor-Owners

    Washington Court of Appeals Upholds Standard of Repose in Fruit Warehouse Case

    Supreme Court of Oregon Affirms Decision in Abraham v. T. Henry Construction, et al.

    Hawaii State Senate Requires CGL Carriers to Submit Premium Information To State Legislature

    Ninety-Day Extension Denied to KB Home in Construction Defect Insurance Claim

    Architect Not Responsible for Injuries to Guests

    Contractor Underpaid Workers, Pocketed the Difference

    Nevada Senate Rejects Construction Defect Bill

    South Carolina Legislature Redefining Occurrences to Include Construction Defects in CGL Policies

    Insurer Settles on Construction Defect Claim

    Businesspeople to Nevada: Revoke the Construction Defect Laws

    Former Zurich Executive to Head Willis North America Construction Insurance Group

    Eleventh Circuit Asks Georgia Supreme Court if Construction Defects Are Caused by an "Occurrence"

    Bar to Raise on Green Standard

    Important Information Regarding Colorado Mechanic’s Lien Rights.

    Discovery Ordered in Nevada Construction Defect Lawsuit
    Corporate Profile

    PERRY COUNTY INDIANA CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    The Perry County, Indiana Construction Expert Witness Group is comprised from a number of credentialed construction professionals possessing extensive trial support experience relevant to construction defect and claims matters. Leveraging from this considerable body of experience, BHA provides construction related trial support and expert services to the nation's most recognized construction litigation practitioners, Fortune 500 builders, commercial general liability carriers, owners, construction practice groups, and a variety of state and local government agencies.

    Construction Expert Witness News & Info
    Perry County, Indiana

    Statutes of Limitations May be the Colorado Contractors’ Friend

    April 18, 2011 — April 18, 2011 Beverley BevenFlorez - Construction Defect Journal

    Albert Wolf, a principal in Wolf Slatkin & Madison P. C., has written an interesting article on statutes of limitations in construction defect claims in Colorado. While Wolf states that in most cases, “construction defect claims against construction industry participants (contractors, subcontractors, architects, engineers, etc.) requires that suits be started within two years after construction defects have been or should have been—in the exercise of reasonable diligence (care)—discovered,” if a project used the AIA General Conditions (AIA Document A2010) before the 2007 edition, the “statutes of limitations begin to run (accrue) at either substantial completion or breach by the contractor (installation of defective work), depending on the circumstances.”

    “That’s a huge difference,” Wolf writes in his article. “For example, if the structural defect caused by faulty foundation work is not discovered or discoverable until walls begin to exhibit cracking more than two years after the building is completed, the owner’s claim against the contractor may be barred if the AIA provision is applied.”

    Read the full story...


    After Breaching its Duty to Defend, Insurer Must Indemnify

    August 11, 2011 — Tred Eyerly, Insurance Law Hawaii

    In a brief decision analyzing Oregon law, the Ninth Circuit determined that once an insurer breaches its duty to defend, it must indemnify. See Desrosiers v. Hudson Speciality Ins. Co., 2011 U.S. App. LEXIS 12591 (9th CIr. June 21, 2011).

    The victim secured a judgment against the insured after he was beaten by another patron outside the insured's bar. Hudson Speciality Insurance refused to defend the insured, claiming the injury arose from an assault and battery, which excluded coverage.

    Read the full story…

    Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com


    History of Defects Leads to Punitive Damages for Bankrupt Developer

    March 1, 2012 — CDJ Staff

    The South Carolina Court of Appeals has ruled that evidence of construction defects at a developer’s other projects were admissible in a construction defect lawsuit. They issued their ruling on Magnolia North Property Owners’ Association v. Heritage Communities, Inc. on February 15, 2012.

    Magnolia North is a condominium complex in South Carolina. The initial builder, Heritage Communities, had not completed construction when they filed for bankruptcy protection under Chapter 11. The remaining four buildings were completed by another contractor. The Property Owners’ Association subsequently sued Heritage Communities, Inc. (HCI) alleging defects. The POA also sued Heritage Magnolia North, and the general contractor, BuildStar.

    The trial court ruled that all three entities were in fact one. On appeal, the defendants claimed that the trial court improperly amalgamated the defendants. The appeals court noted, however, that “all these corporations share officers, directors, office space, and a phone number with HCI.” Until Heritage Communities turned over control of the POA to the actual homeowners, all of the POA’s officers were officers of HCI. The appeals court concluded that “the trial court’s ruling that Appellants’ entities were amalgamated is supported by the law and the evidence.”

    Heritage also claimed that the trial court should not have allowed the plaintiffs to produce evidence of construction defects at other Heritage properties. Heritage argued that the evidence was a violation of the South Carolina Rules of Evidence. The court cited a South Carolina Supreme Court case which made an exception for “facts showing the other acts were substantially similar to the event at issue.” The court noted that the defects introduced by the plaintiffs were “virtually identical across all developments.” This included identical use of the same products from project to project. Further, these were used to demonstrate that “HCI was aware of water issues in the other projects as early as 1998, before construction on Magnolia North had begun.”

    The trial case ended with a directed verdict. Heritage charged that the jury should have determined whether the alleged defects existed. The appeals court noted that there was “overwhelming evidence” that Heritage failed “to meet the industry standard of care.” Heritage did not dispute the existence of the damages during the trial, they “merely contested the extent.”

    Further, Heritage claimed in its appeal that the case should have been rejected due to the three-year statute of limitations. They note that the first meeting of the POA was on March 8, 2000, yet the suit was not filed until May 28, 2003, just over three years. The court noted that here the statute of limitation must be tolled, as Heritage controlled the POA until September 9, 2002. The owner-controlled POA filed suit “approximately eight months after assuming control.”

    The court also applied equitable estoppel to the statute of limitations. During the time in which Heritage controlled the board, Heritage “assured the unit owners the construction defects would be repaired, and, as a result, the owners were justified in relying on those assurances.” Since “a reasonable owner could have believed that it would be counter-productive to file suit,” the court found that also prevented Heritage from invoking the statute of limitations. In the end, the appeals court concluded that the even apart from equitable tolling and equitable estoppel, the statute of limitations could not have started until the unit owners took control of the board in September, 2002.

    Heritage also contested the jury’s awarding of damages, asserting that “the POA failed to establish its damages as to any of its claims.” Noting that damages are determined “with reasonable certainty or accuracy,” and that “proof with mathematical certainty of the amount of loss or damage is not required,” the appeals court found a “sufficiently reasonable basis of computation of damages to support the trial court’s submission of damages to the jury.” Heritage also claimed that the POA did not show that the damage existed at the time of the transfer of control. The court rejected this claim as well.

    Finally, Heritage argued that punitive damages were improperly applied for two reasons: that “the award of punitive damages has no deterrent effect because Appellants went out of business prior to the commencement of the litigation” and that Heritages has “no ability to pay punitive damages.” The punitive damages were upheld, as the relevant earlier decision includes “defendant’s degree of culpability,” “defendants awareness or concealment,” “existence of similar past conduct,” and “likelihood of deterring the defendant or others from similar conduct.”

    The appeals court rejected all of the claims made by Heritage, fully upholding the decision of the trial court.

    Read the court’s decision…


    Arizona Homeowners Must Give Notice of Construction Defect Claims

    August 2, 2012 — CDJ Staff

    Chris Combs of the Combs Law Group notes that “the new home construction industry is recovering” and that some of the buyers of these homes “will have claims for construction defects.” But not so quick on filing that claim.

    Under Arizona law, as Mr. Combs notes the law “requires that, at least 90 days before filing any lawsuit, the buyer furnish notice by certified mail to the homebuilder specifying in detail the construction defect.” Only if there is no agreement over proposed repair can the homeowner file a lawsuit.

    Read the full story…


    Toxic Drywall Not Covered Under Homeowner’s Policy

    March 28, 2012 — CDJ Staff

    The Duphuys of Baton Rouge Louisiana found themselves needing to argue both sides of an issue, according to the judge in Duphuy v. USAA Casualty Insurance Company. The Duphuys alleged that the drywall in their home “emits odorous gases that cause damage to air-condition and refrigerator coils, copper tubing, electrical wiring, computer wiring, and other household items.” Additionally, they reported damage to “their home’s insulation, trimwork, floors, cabinets, carpets, and other items” which they maintained were “covered under the ‘ensuing loss’ portion of their policy.”

    Their insurer declined coverage, stating that the damages were not a “direct, physical loss,” and even if they were “four different exclusions independently exclude coverage, even if such loss occurred.” The policy excludes defective building materials, latent defects, pollutants, and corrosion damage. The court noted that “ambiguities in policy exclusions are construed to afford coverage to the insured.”

    The court did determine that the Duphuys were not in “a situation where the plaintiffs caused the risk for which they now seek coverage.” The judge cited an earlier case, In re Chinese Drywall, “a case with substantially similar facts and construing the same policy” and in that case, “property damage” was determined to “include the loss of use of tangible property.” The court’s conclusion was that the Duphuys “suffered a direct, physical loss triggering coverage under their policy.”

    Unfortunately for the Duphuys, at this point the judge noted that while they had a “direct, physical loss,” the exclusions put them “in the tough predicament of claiming the drywall is neither defective nor its off-gassing corrosive or a pollutant, but nonetheless damage-causing.”

    In the earlier Chinese Drywall case, the judge found that “faulty and defective materials” “constitutes a physical thing tainted by imperfection or impairment.” The case “found the drywall served its intended purpose as a room divider and insulator but nonetheless qualified under the exclusion, analogizing the drywall to building components containing asbestos that courts have previously determined fit under the same exclusion.” In the current case, the judge concluded that the drywall was “outside the realm of coverage under the policy.”

    The court also found that it had to apply the corrosion exclusion, noting that the plaintiffs tried to evade this by stating, “simplistically and somewhat disingenuously, that the damage is not caused by corrosion but by the drywall itself.” The plaintiffs are, however, parties to another Chinese drywall case, Payton v. Knauf Gips KG, in which “they directly alleged that ‘sulfides and other noxious gases, such as those emitted from [Chinese] drywall, cause corrosion and damage to personal property.’” As the court pointed out, the Duphuys could not claim in one case that the corrosion was caused by gases emitted by the drywall and in another claim it was the drywall itself. “They hope their more ambiguous allegations will be resolved in their favor and unlock the doors to discovery.”

    The court quickly noted that “the remaining damage allegations are too vague and conclusory to construe” and permitted “exploration of the latent defect and pollution exclusions.”

    The judge concluded that the plaintiffs did not provide sufficient facts to establish coverage under the ensuing loss provision, stating that the “plaintiffs must allege, at the very least, how the drywall causes damage to the trimwork, carpet, etc., not simply that it does so.” Given the court’s determinations in the case, the plaintiffs’ motion was dismissed.

    Read the court’s decision…


    Another Guilty Plea in Las Vegas HOA Scandal

    December 20, 2012 — CDJ Staff

    A twenty-eighth person has plead guilty in the ongoing Las Vegas HOA scandal. Dax Louderman, who had been a construction company manager had acknowledged that he stole more than $495,000 from his former employers, Alpha 1 Construction and the Stone Canyon Homeowners Association, and further that he did not report this improper income on his tax returns. He has agreed to work with prosecutors and to pay $134,860 to the IRS. His actual sentencing will happen on June 24.

    Read the full story…


    Hawaii Building Codes to Stay in State Control

    March 1, 2012 — CDJ Staff

    The Hawaii State Senate voted down Senate Bill 2692. Had it been passed, the State Building Code Council would have been abolished and building codes would have become the responsibility of county governments. The bill was opposed by the Insurance Institute for Business and Home Safety. Their director of code development, Wanda Edwards said that the bill “would have undermined key components that are essential to an effective state building code regime.”

    Read the full story…


    Public Relations Battle over Harmon Tower

    October 23, 2012 — CDJ Staff

    Tutor Pernini claims that CityCenter is portraying the construction firm as “the scum of the earth” in an attempt to influence eventual jurors, according to an article at Vegas Inc. The contractor’s attorneys have requested information regarding the public relations efforts of MGM Resorts and CityCenter, characterizing CityCenter’s PR as a “litigation spin doctor.”

    CityCenter has requested that at least one subpoena be canceled. Judge Elizabeth Gonzales has already allowed one to go through, although she has noted that Perini cannot request documents from CityCenter’s lawyers to the litigation consultants under attorney/client privilege. Tutor Perini claims that in 2010, Patricia Glaser, who has represented CityCenter, said her goal was to portray Perini as “the scum of the earth,” and make that certain that judges and juries would not “adopt the world view espoused by the opposing party.”

    Read the full story…


    New Construction Laws, New Forms in California

    July 10, 2012 — CDJ Staff

    New construction laws came into effect in California on July 1. Writing for the Martindale-Hubble Legal Library, Glenn Mau, J. Michael McGuire, and John Tonsing, all of Archer Norris, discuss these changes. They note that the most important part of the changes to California construction law is that “all mechanics liens, stop notices and bond claims recorded after July 1, 2012 must use the new standardized forms and follow the new definitions, notice prerequisites and statutory release form language.”

    Read the full story…


    Texas “your work” exclusion

    January 6, 2012 — CDCoverage.com

    In American Home Assurance Co. v. Cat Tech, L.L.C., No. 10-20499 (5th Cir. Oct. 5, 2011), claimant Ergon hired insured Cat Tech to perform service on a reactor at Ergon’s refinery. During a start-up of the reactor after Cat Tech had completed its work, the reactor suffered damage. Cat Tech performed additional service and repairs. However, again upon start-up of the reactor, it suffered additional damage. Ergon hired another contractor to repair the reactor. Ergon initiated arbitration proceedings against Cat Tech. Cat Tech’s CGL insurer American Home defended Cat Tech against the Ergon arbitration under a reservation of rights.

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    Remodels Replace Construction in Redding

    September 9, 2011 — CDJ Staff

    The Record Searchlight reports that while new construction is down in Redding, California, residential and commercial remodel permits are up 17 percent. By August 2010, there had been 63 housing and commercial business starts in Redding, while this year has seen only 15.

    One such remodel, that of Parkview Market, will cost about $201,000. Safeway is planning on two $80,000 remodels of its grocery stores in Redding. In all, the 150 building permits for remodels are worth a total of $2.8 million.

    Read the full story…


    Subcontractor Not Liable for Defending Contractor in Construction Defect Case

    February 10, 2012 — CDJ Staff

    The California Court of Appeals has ruled on January 9, 2012 in Hensel Phelps Construction Company v. Urata & Sons Cement, upholding the judgment of the lower court.

    Hensel Phelps was the general contractor for a high-rise in Sacramento. They were sued by the owners of the building after problems were discovered in the concrete slabs of the building’s parking garage. Instead of welded steel wire mesh, the slabs had been constructed with fiber mesh. Hensel Phelps filed a cross-complaint against Urata Cement, the subcontractor that had performed the cement work. Urata refused to defend Hensel Phelps. The owners’ case was subsequently dismissed due to the statute of limitations.

    Although the original case was over, Hensel Phelps continued in their claims against Urata. “Urata argued that a handwritten interlineation required Hensel Phelps to prove Urata was at fault for the injury alleged in the building owners’ complaint before Urata was obliged to defend Hensel Phelps in that action.”

    The lower court concluded that Urata would have been obligated to defend Hensel Phelps if the owners’ lawsuit had alleged that the damage was due to the subcontractor’s work or if evidence at trial established this. The lower court found neither of these true. Instead, the use of the fiber mesh was a design issue and “that decision was outside the scope of the subcontractor’s work.”

    During the trial, Hensel Phelps conceded that Urata was not at fault. The appeals court could find no reading of the contract that would cause Urata to be obligated to defend Hensel Phelps, calling Hensel Phelps’s reading of the contact as “grammatically infeasible.”

    Judges Nicholson, Raye, and Butz upheld the decision of the lower court and awarded costs on appeal to Urata.

    Read the court’s decision…


    Connecticut Gets Medieval All Over Construction Defects

    February 10, 2012 — CDJ Staff

    The Hartford Courant reports that Connecticut is trying a very old tactic in a construction defect suit. The law library building at the University of Connecticut suffered from leaks which have now been repaired. The state waited twelve years after was complete to file lawsuit, despite that Connecticut has a six-year statute of limitations on construction defect claims. Connecticut claims that the statute of limitations does apply to the state.

    The state is arguing that a legal principle from the thirteenth century allows it to go along with its suit. As befits a medieval part of common law, the principle is called “nullum tempus occurrit regi,” or “time does not run against the king.” In 1874, the American Law Register said that nullum tempus occurrit reipublicae “has been adopted in every one of the United States” and “is now firmly established law.”

    In the case of Connecticut, Connecticut Solicitor General Gregory D’Auria said that “the statute of limitations does not apply to the state.” He also noted that “the state did not ‘wait’ to file the lawsuit. The lawsuit was filed only after all other options and remedies were exhausted.”

    Connecticut also argued that “nullus tempus occurrit regi” applied in another construction defect case at the York Correctional Institution. The judge in that case ruled in December 2008 to let the case proceed. But in the library case, Judge William T. Cremins ruled in February 2009 that the statute of limitations should apply to the state as well. Both cases have been appealed, with the library case moving more quickly toward the Connecticut Supreme Court.

    Read the full story…


    In Re Golba: The Knaubs v. Golba and Rollison, Debtors

    June 19, 2012 — Brady Iandiorio

    Now comes another cautionary tale for builders and developers, especially those using single purpose business entities to handle individual construction projects. The United States Bankruptcy Court in Denver, Colorado, through the Honorable Michael Romero, provided an order regarding plaintiffs’ problems with a home they purchased from an entity controlled or represented by defendants. Plaintiffs, Kelvin and Holly Knaub (the “Knaubs”) filed adversary proceedings against debtor Robert Golba in his bankruptcy proceeding and against debtor Greg Rollison in his separate bankruptcy proceeding. The adversary proceedings were partially consolidated to proceed in parallel but not substantively.

    The Knaubs purchased a home from Gemm Homes (“Gemm”) in May 2003. Problems stemming from the foundation caused the Knaubs to seek an explanation and ultimately a solution from Gemm and then from Avalon Homes (“Avalon”), which the Knaubs claim is just a continuation of Gemm. Through their complaint, the Knaubs seek relief for 1) damages caused by fraudulent representations and false pretenses under 11 U.S.C. § 523(a)(2)(A), based on Golba’s misrepresentation that Gemm and Rollison were not involved in Avalon; 2) damages caused by actual fraud under § 523(a)(2)(A), based on Golba’s and Rollison’s alleged conspiracy fraudulently to convey the assets of Gemm to the Avalon entities; and 3) damages caused by breach of fiduciary duty under § 523(a)(4), alleging Gemm was an insolvent company which owed a fiduciary duty to its creditors, and alleging Golba participated in transferring Gemm’s assets to Avalon for no consideration. In the Golba action, the third claim for relief was dismissed.

    The facts of the case are important and somewhat convoluted. In an effort to make the cases clear, the evidence, allegations, and facts will be laid out in detail below. The Knaubs’ house was purchased from Gemm and soon after both Gemm and Rollison had an engineering company perform an analysis which discovered the foundation was not laid on stable ground.

    Read the full story…

    Reprinted courtesy of Brady Iandiorio, Higgins, Hopkins, McLain & Roswell, LLC. Mr. Iandiorio can be contacted at iandiorio@hhmrlaw.com


    Court Orders House to be Demolished or Relocated

    April 26, 2011 — April 26, 2011 Beverley BevenFlorez - Construction Defect Journal

    Decision Affirmed in Central Arkansas Foundation Homes, LLC v. Rebecca Choate

    The Arkansas Court of Appeals affirmed the decision by the trial court in Central Arkansas Foundation Homes, LLC v. Rebecca Choate. In the trial case, Central Arkansas Foundation Homes (CAFH) sought payment for a home built for Choate, while Choate alleged that the builders committed multiple construction defects including using the wrong foundation materials and positioning the house in the wrong direction.

    After the house was built, CAFH contacted Choate regarding payment, however, Choate alleged that the finished product did not match the contract. “ After CAFH completed construction, it obtained permanent home financing for Choate and tried to contact her to close the transaction. Choate did not respond until October 2005, when she sent CAFH a list of alleged construction defects, including that the house was facing in the wrong direction; that it was not built on a slab; and that the fireplace, garbage disposal, driveway, and storage area were missing. CAFH replied to Choate in writing, telling her that she had until January 6, 2006, to close on the house or CAFH would sell it. The correspondence enclosed worksheets showing that the amount Choate would owe at closing exceeded $94,000, which included interest that had accrued on the as-yet unpaid construction loan.”

    Initially, the court found in favor of CAFH. “On April 18, 2007, Choate’s attorney withdrew from representing her. Soon thereafter, CAFH’s attorney asked the court to set a final hearing on the case. The attorney purportedly sent Choate a letter by regular mail on May 15, 2007, advising her that the case was set for trial on July 9, 2007. Choate, however, did not appear. CAFH did appear, and its general manager, John Oldner, testified to events leading up to the case and the amount of damages claimed. According to Oldner, the interest on the construction loan had accrued to the point that CAFH now sought $104,965.88 from Choate. The court found in favor of CAFH and entered judgment for that amount, plus attorney fees, on July 18, 2007. The court ruled that CAFH could sell the house and either remit any excess to Choate or look to Choate for the deficiency if the sales price did not cover the judgment.”

    However, Choate successfully argued that she did not receive notice of the trial. A new trial was ordered, and the outcome was quite different. “On June 6, 2008, the circuit court entered judgment for Choate, ruling that the house was not in substantial compliance with the parties’ contract and that the contract should be rescinded. The court found that the house suffered from numerous construction defects, that the contract contemplated a slab rather than a concrete-pier foundation, and that CAFH ignored Choate’s complaints that the house was facing the wrong way. The judgment directed CAFH to hold Choate harmless on the construction loan, to deed Choate’s two acres back to her, and to remove the house from Choate’s property.”

    The Court of Appeals “found that Choate would be unjustly enriched by retaining the benefit of the septic systems and utility lines that CAFH installed on her land. The court therefore awarded $5340 to CAFH as a quantum-meruit recovery for the value of that work. CAFH contends that the award is not sufficient, but we see no clear error.” In the end, the Court of Appeals provided this reason for declining to reverse the trial court’s decision: “The court in this case apparently concluded that the house constructed by CAFH was so fundamentally at odds with Choate’s contractual expectations that she was not unjustly enriched and should simply be, as nearly as possible, returned to the status quo ante. Accordingly, the court ordered the house removed from her property and permitted CAFH to either relocate the house or salvage the house’s materials and unused appliances. We decline to reverse the court’s weighing of the equities in this manner.”

    Read the court’s decision…


    Mandatory Arbitration Provision Upheld in Construction Defect Case

    May 18, 2011 — May 18, 2011 Beverley BevenFlorez - Construction Defect Journal

    The Superior Court of New Jersey reversed the decision in Frumer v. National Home Insurance Company (NHIC) and the Home Buyers Warranty Corporation (HBW), stating that the mandatory arbitration provision within the Frumer’s home warranty policy was binding.

    The Frumers alleged that the construction defects were discovered immediately after moving into their million dollar home. After failing to achieve any results from dealing with the builder, they turned to their home warranty. There was some dispute over claims, and a settlement offer was rejected by the Frumers. The Frumers elected to commence litigation rather than utilize the binding arbitration.

    The NHIC and the HBW filed a motion to compel arbitration, however, the motion judge denied the motion: “…the Warranty leaves open the option for [plaintiffs] to commence litigation, which [plaintiffs have] done in this case. The clause also states that ‘the filing of a claim against this limited Warranty shall constitute the election of remedy and shall bar the Homeowner from all other remedies.’ However, the provision does not state that the filing of a claim elects arbitration as the exclusive remedy, and any ambiguity in the language must be inferred against the drafter.”

    The NHIC and the HBW appealed the decision. The Superior Court reversed the decision: “Where, such as here, the homeowner files a claim against the warranty for workmanship/systems defects, the warranty clearly and unequivocally establishes binding arbitration as the exclusive remedy. There is, however, no election of remedies for a dispute involving a major structural defect claim. The warranty clearly and unequivocally establishes binding arbitration as the exclusive remedy.”

    Charles Curley of Halberstadt Curley in Conshohocken, Pa., the local counsel for National Home and Home Buyers, told the New Jersey Law Journal that “the ruling reaffirms New Jersey’s commitment to enforcing arbitration agreements and requiring people to go to mandatory arbitration when the contracts call for it.”

    “At this point, their hope is that the warranty company will do what it's supposed to do — repair covered defects,” Eric McCullough, the Frumer’s lawyer said to the New Jersey Law Journal.

    Read the full story…


    Was Jury Right in Negligent Construction Case?

    September 30, 2011 — CDJ Staff

    Yes, said the South Carolina Court of Appeals in Pope v. Heritage Communities, Inc. Heritage Communities developed Riverwalk, a community in South Carolina. During the earlier trial, HCI “conceded that construction defects existed at Riverwalk, and repairs needed to be made.” The trial court found that the construction was negligent, awarding the property owners association $4.25 million in actual damages and $250,000 in punitive damages, with the class of owners awarded $250,000 in actual damages and $750,000 in punitive damages. HCI appealed on nine issues. All were rejected by the appeals court.

    The court rejected HCI’s claim that the judge’s instruction to the jury suggested to the jury that “the court had already determined that Appellants were willful, wanton, and reckless.” But here, the appeals court found “no reversible error.”

    The general contractor for Riverwalk was BuildStar. Off-site management and sale were managed by Heritage Riverwalk, Inc., which also owned title to the property. Both these companies were owned by Heritage Communities, Inc. During the trial, an HCI employee testified that “the three corporations shared the same officers, directors, office, and telephone number.” The trial court found that the three entities were amalgamated. This was upheld by the appeals court.

    Nor did the appeals agree with the HCI that the trial court had improperly certified a class. The owners were seen as properly constituting a class. Further, the court held that the property owners’ losses were properly included by the trial court. HCI objected at trial to the inclusion of evidence of subsequent remedial measures, however, as they did not object that it was inadmissible, the issue could not be addressed at appeal.

    HCI argued on appeal that the trial court should not have allowed evidence of defects at other HCI developments. The appeals court noted that “the construction defects at the other HCI developments were substantially similar to those experienced by Riverwalk.”

    The court additionally found that the negligence claims, the estimated damages (since full damage could not be determined until all defective wood was removed), and the award of punitive damages were all properly applied.

    Read the court’s decision…


    School District Marks End of Construction Project by Hiring Lawyers

    June 19, 2012 — CDJ Staff

    A school district in northeastern Pennsylvania has retained legal services as they approach the end of a construction project. The Mid Valley School Board cited concerns about the project’s budget, but Randy Parry, Superintendent of Mid Valley schools referenced “possible litigation at the end of the project.” Mr. Parry told the Scranton Times Tribune that construction delays could be a reason for litigation.

    In addition to approving an additional $20,000 for legal representation, the board also approved $21,579 for additional project costs.

    Read the full story…