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    Vernon, Utah

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    Utah Valley Home Builders Association
    Local # 4670
    1443 W 800 N Ste 103
    Orem, UT 84057
    http://www.uvhba.com

    Home Builders Association of Utah (state)
    Local # 4600
    9069 South 1300 West
    West Jordan, UT 84088
    http://www.utahhba.com

    Salt Lake Home Builders Association
    Local # 4655
    9069 S 1300 W
    West Jordan, UT 84088
    http://www.slhba.com

    Park City Area Home Builders Association
    Local # 4690
    PO Box 980850
    Park City, UT 84098
    http://www.pcahba.com

    Central Utah Home Builders Association
    Local # 4674
    PO Box 27
    Ephraim, UT 84627
    http://www.cuhba.com

    Northern Wasatch Home Builders Association
    Local # 4640
    5728 S 1475 E Suite 100
    South Ogden, UT 84403
    http://www.nwhba.org

    Cache Valley Home Builders Association
    Local # 4620
    120 East 200 North
    Logan, UT 84321
    http://www.cvhba.com


    Construction Expert Witness News and Information
    For Vernon Utah

    DA’s Office Checking Workers Comp Compliance

    California Lawyer Gives How-To on Pursuing a Construction Defect Claim

    Florida: No Implied Warranties for Neighborhood Improvements

    Park District Sues over Leaky Roof

    Harmon Hotel Construction Defect Update

    David McLain to Speak at the CDLA 2012 Annual Conference

    One Colorado Court Allows Negligence Claim by General Contractor Against Subcontractor

    Brown Paint Doesn’t Cover Up Construction Defects

    Construction Law Client Alert: Hirer Beware - When Exercising Control Over a Job Site’s Safety Conditions, You May be Held Directly Liable for an Independent Contractor’s Injury

    Homeowner Has No Grounds to Avoid Mechanics Lien

    Death of Construction Defect Lawyer Ruled a Suicide

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

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

    Boston Tower Project to Create 450 Jobs

    Boyfriend Pleads Guilty in Las Vegas Construction Defect Scam Suicide

    Mobile Home Owners Not a Class in Drainage Lawsuit

    The Ever-Growing Thicket Of California Civil Code Section 2782

    Discovery Ordered in Nevada Construction Defect Lawsuit

    Bill Seeks to Protect Legitimate Contractors

    Construction Law: Unexpected, Fascinating, Bizarre

    Harmon Towers Duty to Defend Question Must Wait, Says Court

    General Contractor/Developer May Not Rely on the Homeowner Protection Act to Avoid a Waiver of Consequential Damages in an AIA Contract

    A Call to Washington: Online Permitting Saves Money and the Environment

    Building Inspector Jailed for Taking Bribes

    Instant Hotel Tower, But Is It Safe?

    Court Rules on a Long List of Motions in Illinois National Insurance Co v Nordic PCL

    No Resulting Loss From Deck Collapsing Due to Rot

    Condo Buyers Seek to Void Sale over Construction Defect Lawsuit

    Washington Supreme Court Sides with Lien Claimants in Williams v. Athletic Field

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

    Boston’s Tunnel Project Plagued by Water

    Florida Law: Defects in Infrastructure Improvements Not Covered in Home Construction Warranties

    California Construction Bill Dies in Committee

    Hawaii Building Codes to Stay in State Control

    More Charges in Las Vegas HOA Construction Defect Scam

    Arbitration Clause Not Binding on Association in Construction Defect Claim

    Flooded Courtroom May be Due to Construction Defect

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

    Hospital Construction Firm Settles Defect Claim for $1.1 Million

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

    BHA Expands Construction Experts Group

    $5 Million Construction Defect Lawsuit over Oregon Townhomes

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

    Unlicensed Contractors Nabbed in Sting Operation

    Condominium Exclusion Bars Coverage for Construction Defect

    In Colorado, Primary Insurers are Necessary Parties in Declaratory Judgment Actions

    Southern California Lost $8 Billion in Construction Wages

    Construction Defects Leave Animal Shelter Unusable

    Construction Case Alert: Appellate Court Confirms Engineer’s Duty to Defend Developer Arises Upon Tender of Indemnity Claim

    Nebraska Man Sentenced for Insurance Fraud in Construction Projects

    In Oregon Construction Defect Claims, “Contract Is (Still) King”

    Construction Employment Rises in Half of the States

    CC&Rs Not the Place for Arbitration Agreement, Court Rules

    Exclusion Bars Coverage for Mold, Fungus

    Construction Defect Not Occurrences, Says Hawaii Court

    Workers Hurt in Casino Floor Collapse

    Local Government Waives Construction Fees to Spur Jobs

    Bound by Group Builders, Federal District Court Finds No Occurrence

    Harsh New Time Limits on Construction Defect Claims

    Retaining Wall Contractor Not Responsible for Building Damage

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

    Reference to "Man Made" Movement of Earth Corrects Ambiguity

    Construction Upturn in Silicon Valley

    A Performance-Based Energy Code in Seattle: Will It Save Existing Buildings?

    Irene May Benefit Construction Industry

    Federal Judge Dismisses Insurance Coverage Lawsuit In Construction Defect Case

    Nevada Assembly Bill Proposes Changes to Construction Defect Litigation

    Lien Claimant’s Right to Execute against Bond Upheld in Court of Appeals

    Mark Van Wonterghem To Serve as Senior Forensic Consultant in the Sacramento Offices of Bert L. Howe & Associates, Inc.

    Insurance Firm Defends against $22 Million Claim

    Is There a Conflict of Interest When a CD Defense Attorney Becomes Coverage Counsel Post-Litigation?

    Construction Defect Journal Marks First Anniversary

    No Coverage for Counterclaim Alleging Construction Defects Pled as Breach of Contract

    Window Manufacturer Weathers Recession by Diversifying

    Amerisure Case to be Heard by Texas Supreme Court

    Contractor Burns Down Home, Insurer Refuses Coverage

    Construction Defect Litigation at San Diego’s Alicante Condominiums?

    Court finds subcontractor responsible for defending claim

    Seven Former North San Diego County Landfills are Leaking Contaminants

    North Carolina Exclusion j(6) “That Particular Part”

    OSHA Cites Construction Firm for Safety Violations

    Loss Caused by Seepage of Water Not Covered

    Ensuing Losses From Faulty Workmanship Must be Covered

    Connecticut Gets Medieval All Over Construction Defects

    Federal District Court Continues to Find Construction Defects do Not Arise From An Occurrence

    No Coverage For Construction Defects When Complaint Alleges Contractual Damages

    Architectural Firm Disputes Claim of Fault

    Manhattan Developer Breaks Ground on $520 Million Project

    Will They Blow It Up?

    Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage
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    VERNON UTAH CONSTRUCTION EXPERT WITNESS
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    The Vernon, Utah Construction Expert Witness Group at BHA, leverages from the experience gained through more than 5,500 construction related expert witness designations encompassing a wide spectrum of construction related disputes. Leveraging from this considerable body of experience, BHA provides construction related trial support and expert services to Vernon's most recognized construction litigation practitioners, commercial general liability carriers, owners, construction practice groups, as well as a variety of state and local government agencies.

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    Construction Expert Witness News & Info
    Vernon, Utah

    Preparing For the Worst with Smart Books & Records

    November 7, 2012 — Douglas Reiser, Builders Counsel

    Contractors are often too caught up in keeping the wheel of business churning to recognize deficiencies in how their records are managed. Working hard and working often tend to leave little time for consideration of your documents. But all too often I see the unthinkable, a contractor gets into trouble and has to call on its surety for help. At that point, you might finally get your first dose of reality about your records ?Äì and it can cost you.

    Read the full story…

    Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com


    No Coverage for Counterclaim Alleging Construction Defects Pled as Breach of Contract

    September 13, 2012 — Tred Eyerley, Insurance Law Hawaii

    The Colorado Court of Appeals considered whether counterclaims against the insured for alleged faulty construction work were based in contract or constituted allegations of an "accident" under the policy. TCD, Inc. v. Am. Family Mutual Ins. Co., 2012 WL 1231964 (Colo. Ct. App. April 12, 2012).

    The developer, Frisco Gateway Center, LLC, contracted with TCD, the general contractor, to construct a building. TCD, in turn, subcontracted with Petra Roofing to install the roof. The subcontract required Petra to "indemnify, hold harmless, and defend" TCD against claims arising out of resulting from the performance of Petra's work on the project. Petra was also required to name TCD as an additional insured on its CGL policy.

    After a dispute arose between TCD and Gateway regarding payment and performance on the project, TCD sued Gateway and other parties seeking payment. Gateway counterclaimed against TCD for breach of contract and negligence. TCD demanded coverage from Petra's insurer, but coverage was denied.

    Read the full story…

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


    Badly Constructed Masonry Walls Not an Occurrence in Arkansas Law

    May 10, 2012 — CDJ Staff

    The US District Court for Maryland has granted a summary judgment in the case Konover Construction Corp. v. ATC Associates to Massachusetts Bay Insurance Company and denied a request for dismissal from ACT. Konover (KBE) was contracted by Wal-Mart to build a Wal-Mart store and a Sam’s Club in Port Covington, Maryland. Superus, Inc. was hired by KBE to build the masonry walls. Superus purchased a policy from Massachusetts Bay Insurance which named KBE as an additional insured. Wal-Mart hired ATC Associates to independently test and inspect the concrete structural steel, and masonry.

    After the building was in use, a large crack appeared which was attributed a latent construction defect. Other cracks were discovered. Upon investigation, it was discovered that there were “voids or foam in the concrete block surrounding the reinforcing steel that should have been filled with grout,” and in some cases, “reinforcing steel was missing or not installed in accordance with the specifications.” KBE paid for the repair and remediation and Wal-Mart assigned all rights and interests against ATC to KBE.

    KBE filed suit against ATC. ATC called for dismissal on the grounds that Wal-Mart had no claims as the problems had been remediated. Wal-Mart then provided KBE with additional agreements to give them enforceable rights against ATC and Superus. KBE filed a fourteen claims against ATC, Superus, and Massachusetts Bay. In the current case, Massachusetts Bay sought summary judgment and ATC sought dismissal of all claims against it.

    Massachusetts Bay claims that they need not indemnify Superus, as “there is no evidence adequate to establish that Superus’ defective work caused any collateral and/or resulting damage that was not subject to an Impaired Property exclusion, and that, in any event, no damage occurred during the policy period.”

    As Wal-Mart is headquarted in Arkansas, certain contracts were under Arkansas law. Under the Arkansas courts, “defective workmanship, standing alone and resulting in damages only to the work product itself, is not an ‘occurrence.’” The court determined that collateral or resultant damage would be covered. The court found that “it is clear under Arkansas law, and the parties appear to agree, that Massachusetts Bay is not obligated to indemnify KBE for any repairs to the masonry walls themselves, including any cracks or gaps in the walls.” The court also found that “there is no evidence adequate to prove that any allegedly resultant property damage was caused by Superus’ faulty construction of the walls.” The court also noted that “if the building code violation and structural integrity problem were ‘property damage,’ insurance coverage would be barred by the Impaired Property Exclusion.” Based on these findings, the court concluded that Massachusetts Bay is entitled to summary judgment.

    While the court dismissed the case against Massachusetts Bay, the court declined ATC’s motion to dismiss. The court noted that ACT’s alleged negligence in conducting inspections “created only a risk of economic loss for KBE.” Although hired by Wal-Mart, ATC “transmitted its daily testing and inspection reports of the Wal-Mart and Sam’s Club projects directly to KBE.” The court found that “KBE has made a plausible claim.”

    ATC also claimed that KBE contributed to the negligence due to the negligence of its subcontractor. The court concluded that it was plausible that “ATC will not be able to carry its burden of proving KBE was contributorily negligent.” The court was less sanguine about KBE’s fraud claim, but though it “may not now appear likely to have merit, it is above the ‘plausibility’ line.”

    In conclusion, KBE may not continue its case against Massachusetts Bay. However, the judge allowed the other proceedings to continue.

    Read the court’s decision…


    Housing Prices Up through Most of Country

    December 20, 2012 — CDJ Staff

    Home prices in October were up more than six percent compared with prices in October 2011. The LA Times noted that some of the strongest gains were in California and Arizona. The Phoenix metropolitan area saw a 24.5% rise in home prices. In California, Riverside and Los Angeles were just above the national average, at 7.3% and 6.4%, contributing to the state’s overall nine percent increase.

    The news wasn’t good throughout the entire country, as five states did not see any price increases. Mark Fleming, the chief economist at CoreLogic, a research firm in Irvine, California said that “the housing recovery that started earlier in 2012 continues to gain momentum.

    Read the full story…


    Condo Owners Allege Construction Defects

    July 6, 2011 — CDJ Staff

    Last November, mold problems were discovered at the Siena Condominiums in Montclair, New Jersey, which had been described by their developers as “an enclave of luxury in an urban village setting.” The owners have filed a lawsuit against Pinnacle Companies, Kohl Parnters, and Herod Development, seeking “compensatory damages, interest, reasonable attorney’s fee and costs, and for such other, further, and different relief as the Court may deem just and proper.”

    According to the article on Baristanet.com, an engineering report commissioned by the condominium association revealed many problems, including improperly installed windows and siding. The developers commissioned two engineering reports themselves and found evidence of water pounding on the roof. Despite these reports and repeated promises, no repairs have been made.

    Read the full story…


    Discovery Ordered in Nevada Construction Defect Lawsuit

    August 16, 2012 — CDJ Staff

    Gemstone LVS was sued by the Manhattan Homeowners Association in Las Vegas, after which Chartis Specialty Insurance informed Gemstone that they “had no duty to defend or indemnify Gemstone under the Commercial Umbrella Liability Policy.” Gemstone “asserts that at the time the Policy was purchased, it was understood that Chartis would provide insurance coverage for a construction defect lawsuit” and now seeks discovery “to prove Chartis’ bad faith purpose in drafting an illusory Policy.”

    The opinion notes that “the Court conducted a preliminary peek at the pending motion for partial summary judgment and finds that Chartis has not made the strong showing necessary to support the requested stay.” Further, the court notes that “when ambiguity in the language of a policy exists, the court may consider not only the language of the policy but also the ‘intent of the parties, the subject matter of the policy, and the circumstances surrounding its issuance.’” The court concludes that “this type of discovery is relevant to understanding the intent of the parties, more specifically, whether it was understood that Chartis would provide insurance coverage given the construction defect lawsuit.”

    Accordingly, the court denied Chartis’ motion for stay of discovery and established a schedule for discovery, expert designations, rebuttal expert designations, and other matters related to the trial.

    Read the court’s decision…


    Appeals Court Upholds Decision by Referee in Trial Court for Antagan v Shea Homes

    May 10, 2012 — CDJ Staff

    In the case Antangan v. Shea Homes Ltd. Partnership (Cal. App., 2012), Plaintiffs appealed “an order vacating a judgment and entering a modified judgment in their construction defect action against defendants Shea Homes, Inc. and Shea Homes Limited Partnership,” while the Defendant, Shea Homes Limited Partnership (Shea Homes) appealed “an order of the judicial referee denying its motion to strike and tax costs.”

    On the Antagon issue, the appeals court concluded that “the trial court did not err by vacating and modifying its judgment so that the cost of referee’s fees would be equally divided by the parties and consistent with a prior stipulation they filed in court.”

    On the Shea Homes issue, the appeals court concluded: “1) the judicial referee did not err by ruling that plaintiffs’ offers to compromise (§ 998) were validly served on Shea Homes’ counsel, 2) the offers substantially complied with statutory requirements, 3) the offers were not required to be apportioned, and 4) the referee’s award of $5,000 as costs for a person assisting plaintiffs’ counsel was not an abuse of discretion.” The appeals court affirmed the judgment.

    Here is a brief history of the trial case: “Plaintiffs Chito Antangan, Jimmy Alcova and other homeowners brought an action against defendants Shea Homes, Inc. and Shea Homes Limited Partnership for damages alleging that the properties they purchased from these ‘developer defendants’ were defective. Plaintiffs claimed numerous construction defects required them ‘to incur expenses’ for ‘restoration and repairs’ and the value of their homes had been diminished.”

    In response, Shea Homes filed a motion for an order to appoint a judicial referee. The motion was granted and it was ruled that “a referee would ‘try all issues’ and ‘report a statement of decision to this court.’”

    On May 10, 2010 the judicial referee (Thompson) “awarded plaintiffs damages and various costs, and ruled that ‘Shea Homes shall bear all of the Referee’s fees.’” The latter ruling would become a matter for contention later on.

    In July of 2010, the plaintiffs “sought, among other things, $54,409.90 for expert fees, and $14,812.50 for the services of Melissa Fox for ‘exhibit preparation & trial presentation.’ Shea Homes filed a motion to strike and/or tax costs claiming: 1) Fox was a paralegal, 2) plaintiffs were not entitled to attorney’s fees, and 3) the fees for Fox’s services were an indirect and improper method to obtain attorney’s fees. The referee disagreed and awarded $5,000 for Fox’s services. The referee also ruled that plaintiffs had properly served valid offers to compromise (§ 998) on Shea Homes’ counsel in 2009. He said those offers to defendants in the case at that time did not have to be apportioned.”

    “Antangan contends the trial court erred when it vacated and modified its original judgment, which ordered Shea Homes to pay all the referee’s fees. We disagree.”

    Antagon contended that the trial court erred when it vacated and modified its original judgment regarding Shea Homes paying the referee’s fees. The appeals court disagreed: “A trial court has inherent authority to vacate or correct a judgment that is void on its face, incorrect, or entered by mistake. (§ 473; Rochin v. Pat Johnson Manufacturing Co. (1998),67 Cal.App.4th 1228; Olivera

    Read the court’s decision…


    Des Moines Home Builders Building for Habitat for Humanity

    September 13, 2012 — CDJ Staff

    A group of Des Moines home builders is building two homes for low-income families. The homes are being constructed to meet the National Association of Home Builders’ emerald standard for green construction. According to the article in the Des Moines Register, the homes will be finished by the end of August.

    Read the full story…


    Home Builder Doesn’t See Long Impact from Hurricane

    November 7, 2012 — CDJ Staff

    No one needs to tell Toll Brothers about the impact of Hurricane Sandy. The Wall Street Journal reports that the home building company lost power as a result of the storm. Martin Connor, the company’s CFO, told the Journal that he did not expect the hurricane to have a big effect on sales. Luckily for the company, many of its large projects are either sufficiently completed to provide shelter or too early in the process to be affected by the storm. “This type of weather event has limited impact on the market. It may move settlements later, and may defer people a weekend or two until they go out shopping. But it doesn’t have a long impact.”

    Read the full story…


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

    May 10, 2012 — CDJ Staff

    Baker v Castle & Cooke Homes Hawaii, et al. is a “class action filed by homeowners who allege that their homes have a construction defect. They allege that their plumbing systems include brass fittings susceptible to corrosion and likely to cause leaks. They bring this action against the developer of their homes and the manufacturers of the brass fittings.”

    Zurn, the manufacturer of the allegedly defective brass fittings, sought a dismissal, or if that could not be achieved, then “a more definite statement, of five of the six claims.” Zurn moved for summary judgment on the sixth claim, or alternately sought “summary judgment on one of the five claims it” sought to dismiss.” The court granted in part the motion, and denied the motion for summary judgment.

    The developer, Castle & Cooke, sought dismissal of the First Amended Complaint stating “that Plaintiffs have not complied with Hawaii’s Contractor Repair Act, chapter 672E of Hawaii Revised Statutes, which requires, among other things, a plaintiff to give a contractor the results of any testing done before filing an action against that contractor.” The court couldn’t determine “certain facts essential to ruling” on Castle & Cooke’s motion, and therefore denied the motion, but ordered Plaintiffs to submit requested material by the stated deadline.

    The Baker v Castle & Cooke case began with the Plaintiffs claim that the use of yellow brass fittings can lead to construction defects. They allege that “yellow brass is particularly susceptible to dezincification, a corrosion process in which zinc leaches into potable water that comes into contact with the brass. According to Plaintiffs, as the brass corrodes, it becomes porous and mechanically weak. Plaintiffs further allege that the PEX systems in the putative class members’ homes have begun to, or are about to, leak water into the walls, ceilings, and floors of their homes. Plaintiffs allege that the leakage will cause water damage and mold growth, exposing the occupants to toxins.”

    In response to the plaintiffs’ claims, Zurn argued “because their yellow brass fittings have not failed to date, Plaintiffs fail to allege, and have no evidence showing, that they have suffered any actual injury.” Plaintiffs replied, “even if the fittings have not failed as of today, failure in the future is inevitable.”

    However, the court stated, “whether Plaintiffs have suffered any injury, or whether Plaintiffs are attempting to proceed based solely on future injury, implicates Plaintiffs’ standing to bring this action, as well as whether this case is ripe for adjudication.” The court has requested the parties to submit “supplemental briefing on whether this case should be dismissed pursuant to Rule 12(b)(1). In supplemental briefs, Zurn argues that dismissal is appropriate because Plaintiffs lack standing, and Castle & Cooke argues that dismissal is appropriate because Plaintiffs’ claims are not ripe.”

    The court continues to discuss the problem of standing: “To establish standing, a plaintiff must demonstrate three things. First, the plaintiff must suffer an "injury-in-fact," which means that there must be a concrete and particularized "invasion of a legally protected interest" and the invasion is actual or imminent. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Second, the injury must be fairly traceable to the challenged action. Third, a favorable decision must be likely to redress the injury. Id. It is the first element (injury-in-fact) that is in issue here.”

    The court found that the plaintiffs do have standing: “Even if the court could not rely on the allegations that the pipes will soon leak, the court would conclude that, for standing purposes, Plaintiffs have a sufficient injury-in-fact in the form of their alleged economic loss.” In a hearing, Plaintiffs argued that their homes had decreased in value.

    The court also denied Castle & Cooke’s motion to dismiss based on a lack of ripeness, stating “the same reasons Plaintiffs satisfy the injury-in-fact requirement for standing purposes, they satisfy the constitutional ripeness requirement.”

    Plaintiffs asserted six counts against Zurn. Zurn, in response, made a motion to dismiss counts VIII, IX, X, XII, and XIII. The court granted Zurn’s motion for Counts VIII, IX, and X only: “Counts VIII (product liability), IX (negligence), and X (strict liability) sound in tort. Zurn argues that, because Plaintiffs allege no injury other than to the PEX systems and the yellow brass fittings themselves, the economic loss rule bars their tort claims. The court agrees.”

    The court disagreed with Zurn’s motion regarding Count XII: “Count XII asserts that Zurn has breached the implied warranty of merchantability. Zurn argues that Count XII is barred by the applicable statute of limitations and that Plaintiffs do not sufficiently allege an injury. The court disagrees.”

    Zurn’s motion regarding Count XIII was also denied: “Count XIII asserts that Zurn violated section 480-2 of Hawaii Revised Statutes.” Furthermore, “Plaintiffs allege that Zurn ‘engaged in unfair and deceptive acts or practices when [it] designed, manufactured and sold Yellow Brass Fittings.’ Zurn argues that Plaintiffs fail to state a claim under section 480-2(a) because their claims are barred by the statute of limitations and they do not adequately allege reliance or a cognizable injury. The court disagrees.”

    The court denied the motion for summary judgment with respect to Counts XI and XII.

    Castle & Cooke sought to dismiss “Plaintiffs’ claims against it under section 672E-2 of Hawaii Revised Statutes, which provides for dismissal when claimants fail to comply with chapter 672E.” There was some discussion regarding the test results. Apparently, the plaintiffs had failed to provide a written notice of claim at least 90 days before filing the action. However, it is unclear if the Plaintiffs have since complied with the requirements of the chapter. “The court has received no supplemental information from either party about whether any test results from another case have been turned over or whether those materials are subject to a confidentiality agreement. The record at this point does not establish noncompliance with the requirement in chapter 672E to provide such information. The court therefore denies the motion to dismiss.”

    In summary, “Zurn’s motion to dismiss is granted as to Count VIII, Count IX, and Count X. Zurn’s motion to dismiss is denied with respect to Plaintiffs’ other claims. Zurn’s request for a more definite statement and its summary judgment motion are denied. Plaintiffs are given leave to file an amended Complaint no later than May 21, 2012.” Furthermore, “the court denies Castle & Cooke’s motion, but directs Plaintiffs to file, within two weeks, either a certificate of compliance with section 672E-3(c), or an explanation as to why they have not complied. Castle & Cooke may submit a response within two weeks of Plaintiffs’ submission. Each party’s submission is limited to 1000 words.”

    Read the court’s decision…


    Florida trigger

    August 4, 2011 — CDCoverage.com

    In Mid-Continent Casualty Co. v. Siena Home Corp., No. 5:08-CV-385-Oc-10GJK (M.D. Fla. July 8, 2011), insured residential real estate developer Siena was sued by homeowners seeking damages for moisture penetration property damage resulting from exterior wall construction defects. Siena’s CGL insurer Mid-Continent filed suit seeking a declaratory judgment of no duty to defend or indemnify in part on the basis that the alleged “property damage” did not manifest during the Mid-Continent policy period.

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    Condominium Communities Must Complete Construction Defect Repairs, Says FHA

    July 10, 2012 — CDJ Staff

    Laura K. Sanchez of HindmanSanchez writes that the FHA “will not approve or recertify” any condominium community “where there are any pending or incomplete repairs within the community which are a result of a construction defect claim, regardless of whether the litigation has been resolved and regardless of whether there are funds in the bank paid by the developer to pay for the repairs.” The FHA notes that failure to complete or fund repairs could “put FHA insured loans at risk.” Communities must disclose all maintenance and repair issues to the FHA. Sanchez notes that the FHA has stated that incomplete repairs could put FHA-insured loans at risk.

    Read the full story…


    Analysis of the “owned property exclusion” under Panico v. State Farm

    March 8, 2011 — March 8, 2011, Colorado Construction Litigation

    The U.S. Court of Appeals for the Tenth Circuit recently concluded that the “owned property exclusion” applied to bar coverage for claims of property damage. See Panico v. State Farm Fire and Cas. Co., 2011 WL 322830 (10th Cir. 2011). In Panico, the plaintiffs sold property in Aspen, Colorado to the Taylors, who sued the Panicos upon discovering the property was not as represented. After refusing to defend, the Panicos sued State Farm for breach of contract. The district court concluded that the Taylors’ claims were not covered under the Panicos insurance policies and granted summary judgment in State Farm’s favor. The U.S. Court of Appeals for the Tenth Circuit affirmed.

    Mr. Panico built the house on the property as well as several additions to the house. As the Taylors lived in Florida, they primarily relied on their real estate agent and an inspector to ensure the property was acceptable. According to their complaint, the Taylors discovered that the house was “virtually uninhabitable due to serious design and construction defects, mold, rodents, and drainage problems.” Id. at *1. In their complaint, the Taylors asserted three claims for relief against the Panicos based upon misrepresentation and fraudulent concealment about the condition of the property.

    Read the full story...

    Reprinted courtesy of Heather M. Anderson of Higgins, Hopkins, McClain & Roswell, LLP. Ms Anderson can be contacted at anderson@hhmrlaw.com


    Pipes May Be Defective, But Owners Lack Standing

    September 13, 2012 — CDJ Staff

    The United States District Court in Minnesota has determined that Steven and Cecilia Thundander cannot make a class-action claim against Uponor, Inc. over the plumbing in their home, as they do not have Article III standing. In this situation, the alleged defect is that Uponor made fraudulent claims that the pipes met National Sanitation Foundation (NSF) standards for use in potable water systems. Uponor submitted samples of other pipes, and their substitution was discovered when the NSF made an inspection of the manufacturing facility. The court noted that “the Thunanders contend that Uponor failed to inform homeowners, plumbers and consumers that it had been selling pipe that failed to meet NSF toxicity requirements at the time of sale and installation.”

    The Court noted that the Thunanders have not tested their piping to determine if they “demonstrate toxicity or lack of compliance with the NSF 61 standards,” noting also that the Complaint seeks to require Uponor to instruct the plaintiffs on “how to test the piping and water to determine the level of risk.” Lacking testing, the Court could not find that the Thundanders have defective pipes. The Court found that the “Plaintiffs have failed to adequately plead an injury in fact sufficient to confer standing as to their product liability claims.”

    The Court also concluded that it could not determine if the Plaintiff’s warranty actions could not be applied, as they “have failed to allege a plausible defect.” Even in the presence of a defect, the Court noted that more than eight years had passed before the filing of the suit, when the warranties under both Indiana and Minnesota law have a four-year statute of limitations. The Court also rejected the Thunanders tort claims, once again because “Plaintiffs have not tested their pipes,” noting that “a tort requires the existence of an injury.”

    In conclusion, Judge Nelson rejected the entirety of the complaint, granting the motions to dismiss by the defendants. However, despite the problems with the Thunanders’ claims, she found that they were not “patently frivolous or groundless.” Therefore, she denied attorney fees requested by one of the defendants.

    Read the court’s decision…


    Construction Defect Exception Does Not Lift Bar in Payment Dispute

    September 13, 2012 — CDJ Staff

    The Court of appeals of Oregon has affirmed the ruling of a lower court, agreeing that ORS 701.131(1) bars John Pincetich from pursuing a payment dispute against his clients, Thomas and Frances Nolan. The Nolans hired Mr. Pincetich to build a home, during which time Mr. Pinchtich lost his license due to a lapse in liability insurance. Mr. Pincetich was reinstated after reestablishing insurance.

    After the house was concluded, a dispute over payment arose. The Nolans claimed that Mr. Pincetich was unable to bring an action against them as ORS 701.131(1)(b) specifies that the contractor must hold a license “continuously while performing the work for which compensation is sought.” As there were fourteen days in which Mr. Pincetich did not hold a license, the trial court concluded that this law did not apply.

    Mr. Pincetich claimed that in hiring him, the defendants became residential developers. Mr. Pincetich argued that developers are exempted under ORS 701.121(2)(C), but this was rejected by the trial court. This formed the basis of his appeal. The appeals court concluded that the exception he cited was motivated to “further benefit consumers by providing authority for unlicensed contractors to pursue third-party claims in construction-defect cases.” The court concluded that Mr. Pincetich’s reasoning would “allow unlicensed contractors to do the very thing that the claims bar is intended to prevent them from doing.”

    Read the court’s decision…


    Texas “Loser Pays” Law May Benefit Construction Insurers

    June 7, 2011 — CDJ Staff

    Under a new law, Texas HB 274, the Texas Supreme Court will be making rules for motions to dismiss and to expedite suits of less than $100,000. The law also contains two “loser pays” provisions. If a lawsuit is found dismissed for having “no basis in fact or law,” the losing side must pay attorney costs. The other provision caps award of attorney fees if plaintiffs reject settlement offers. Texas Lawyer quotes Houston attorney Mike Gallagher as saying this will affect “the practice of everyone who handles significant lawsuits.”

    Gregory Marcum, whose practice includes construction defect litigation, plans to contact insurance companies, as the new law may save them money. “It will definitely be a factor in the defense strategy for handling a case.” He notes that “any insurance carrier would want that done.”

    Marcum notes that the offer-of-settlement rules only apply when cases go to trial. “Almost all cases settle.”

    Read HB 274

    Read the full story…


    Partial Settlement in DeKalb Construction Management Case

    July 10, 2012 — CDJ Staff

    The DeKalb County School District has made a partial settlement in a lawsuit over their claims of mismanagement of construction projects. The Atlanta Journal-Constitution reports that the school board settled with E. R. Mitchell & Co., the smaller of two firms that they have sued. As part of the settlement, Mitchell will be testifying against their former partner. Claims from the other side of the lawsuit are that the school board improperly fired the Heery/Mitchell partnership. The superintendant who fired the company, Crawford Lewis, and his chief operations office, Pat Reid, have since been charged with criminal conspiracy to defraud the construction program. A lawyer for Heery said that “we believe that when presented to a jury, Heery will be vindicated.”

    Read the full story…


    A Call to Washington: Online Permitting Saves Money and the Environment

    October 28, 2011 — Douglas Reiser, Builders Counsel

    Here’s some good news for Oregon contractors:  Electronic Permitting is here. That’s right, no more standing in line with folders full of printed submittals and waiting all day for your permit. The click of a few buttons and you are in business. Great news, right? Unfortunately, Oregon isn’t sharing that celebration with Washington. So I say - why not?

    Last week, the State of Oregon released its new ePermitting online interface. The website allows contractors, owners and even local building departments to create an account, submit building plans and procure permits. With your account, you can track the progress of submissions, print documents and get posting information.

    The state ran a limited test version in the City of Florence since 2009, working out the kinks. Perhaps the most impressive result of the new system is that Oregon tackled the task of coagulating a local process into one central location.

    Read the full story...

    Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com