When Does a Claim Against an Insurance Carrier for Failing to Defend Accrue?
November 7, 2012 — David McLain, Colorado Construction Litigation
The following is an update on our December 20, 2010 article regarding United States Fire Insurance Company v. Pinkard Construction Company, Civil Action No. 09-CV-01854-MSK-MJW, and its underlying dispute, Legacy Apartments v. Pinkard Construction Company, Case No. 2003 CV 703, Boulder County Dist. Ct. That article can be found here.
The present action, St. Paul Fire and Marine Insurance Co., et al. v. The North River Insurance Co., et al., Civil Action No. 10-CV-02936-MSK-CBS, encompasses the coverage battle that ensued between Pinkard’s insurers, Travelers Indemnity Company of America (“Travelers”) and United States Fire Insurance Company (“USFI”), following the settlement of Legacy’s construction defect claims against Pinkard. A short history of the underlying facts is as follows:
In 1995, Pinkard constructed the Legacy Apartments housing complex in Longmont, Colorado. Following construction, Legacy notified Pinkard of water leaks associated with various elements of construction. Legacy ultimately filed suit against Pinkard in 2003, and would go on to clarify and amend its defect claims in 2004, 2006, and again in 2008. Following Pinkard’s notification of Legacy’s claims, USFI provided a defense to Pinkard, but Travelers refused to do so, on the purported basis that Legacy’s allegations did not implicate property damage under the terms of Travelers’ policy.
Read the full story…
Reprinted courtesy of David M. McLain, Higgins, Hopkins, McLain & Roswell, LLC. Mr. McLain can be contacted at mclain@hhmrlaw.com
Georgia Law: “An Occurrence Can Arise Where Faulty Workmanship Causes Unforeseen or Unexpected Damage to Other Property”
March 5, 2011 — By
CDCoverage.com, March 5, 2011
In American Empire Surplus Lines Ins. Co. v. Hathaway Development Co., Inc., No. S10G0521 (Ga. March 7, 2011), insured plumbing subcontractor Whisnant was sued by general contractor Hathaway seeking damages for costs incurred by Hathaway in repairing damage to property other than Whisnant’s plumbing work resulting from Whisnant’s negligently performed plumbing work on three separate projects. On one project, Whisnant installed a pipe smaller
Read the full story... Reprinted courtesy of CDCoverage.com
The Flood Insurance Reform Act May be Extended to 2016
April 7, 2011 — April 7, 2011 Beverley BevenFlorez - Construction Defect Journal
The Flood Insurance Reform Act of 2011 (H. R. 1309) has been referred to the House Committee on Financial Services—the first step in the legislative process. The bill, if passed, would extend the program to September 30, 2016. It is currently slated to be terminated September 30 of this year. The bill also contains changes to premium rates, mapping protocols, and privatization initiatives.
H. R. 1309 has garnered the support of several Insurance organizations. Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), sent a letter of support to the Chair and Ranking member of the House Financial Services Subcommittee. “AIA has advocated for a long term reauthorization of the NFIP to protect consumers and help increase stability for real estate transactions and policyholders,” Pusey said. “AIA believes the five-year extension contained in HR 1309, will provide certainty in the flood program thereby increasing consumer and business confidence in the NFIP.”
Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies (NAMIC) spoke out in support of the bill. “For the NFIP to survive, the prices for flood insurance must reflect the actual costs of flood risk for a property,” Grande said. “HR 1309 will provide that transparency. In addition, the Technical Mapping Advisory Council will give communities a voice in the flood mapping process, fostering a better understanding of what flood maps represent and how they are made.”
Read H. R. 1309...
Read the American Insurance Association statement...
Read the NAMIC Press Release...
Texas exclusions j(5) and j(6).
April 27, 2011 — April 27, 2011, by CDCoverage.com
In Evanston Ins. Co. v. D&L Masonry of Lubbock, Inc., No. 07-10-00358-CV (Tex. Ct. App. April 18, 2011), insured masonry subcontractor D&L sued its CGL insurer Evanston to recover costs incurred by D&L for the replacement of window frames damaged by D&L while performing masonry work adjacent to the window frames. The trial court granted summary judgment for D&L.
Read the full story…
Reprinted courtesy of CDCoverage.com
Appropriation Bill Cuts Military Construction Spending
June 15, 2011 — CDJ Staff
The Hill reports that HR 2055, the Military Construction, Veterans Affairs (VA) and Related Agencies bill, has passed with only five votes in opposition. The bill cuts the budget for military construction spending by $2.6 billion due to anticipated base closures.
The bill includes $186 million for family housing construction by the Army, $100 million for family housing construction by the Navy and Marines, and $84 million for family construction by the Air Force, with an additional $50 million allocated for the DOD outside the military branches. By the act, these funds will remain available until September 30, 2016.
Read the full story…
Read HR 2055
Ensuing Loss Provision Does Not Salvage Coverage
August 2, 2012 — Tred Eyerly, Insurance Law Hawaii
The Minnesota Court of Appeals affirmed the trial court's decision finding no coverage due to exclusions from the all-risk policy for losses related to mold, rot and condensation. Koskovich v. Am Family Mut. Ins. Co., 2012 Minn. App. Unpub. LEXIS 581 (Minn. Ct. App. June 25, 2012).
In 1978, the insureds purchased a home that was built in 1904. From 1991 to 1995, they remodeled, which included rotating the house 45 degrees, removing a wing and adding a new section. Polypropylene vapor barriers were installed, with pinholes for ventilation.
In 2008, water was observed on an interior floor. An investigation revealed that the sheathing under the siding and the house's framing were wet and rotten, requiring removal and replacement of the siding and studs. Repairs were made and a claim was submitted to American Family Mutual Insurance Company.
American's structural engineer inspected and determined that moisture was likely caused by condensation of water vapor where the vapor barrier was held tight to the sheathing and by inward water migration from wet siding during rainy periods through the vapor-barrier perforations. The structural engineer opined that, although the home's framing was deteriorated and structurally compromised, it did not appear as though the home was in imminent danger of collapse.
American denied coverage.
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
Construction Defects Are Occurrences, Says Georgia Supreme Court
July 10, 2012 — CDJ Staff
Michael Bradford writes about the implications of a March decision of the Georgia Supreme Court in which the court found that “negligent construction resulting in damage to surrounding property constitutes an occurrence under a commercial general liability policy. The contractor in the case, American Empire Surplus Lines Insurance Co. Inc. vs. Hathaway Development Co. Inc, argued that a damage caused by a plumbing subcontractor’s work was covered. American Empire was the insurer for the plumbing subcontractor.
Bradford notes that this follows similar decisions in other courts. The George court ruled that “an occurrence can arise where faulty workmanship causes unforeseen or unexpected damage to other property.”
Read the full story…
Nevada Assembly Sends Construction Defect Bill to Senate
June 6, 2011 — CDJ Staff
In a 26 to 16 vote, the Nevada Assembly has passed Assembly Bill 401, which extends the time limit for legal action over home construction defects. According to the Las Vegas Sun, Assembly member Marcus Conklin, Democrat of Las Vegas, said the bill was about “keeping the consumer whole.” However, Ira Hansen, Republican of Sparks, told the sun that suits are happening before contractors can make repairs. The bill would allow attorney fees even if repairs are made.
Read the full story…
Construction Bright Spot in Indianapolis
March 1, 2012 — CDJ Staff
The downtown Indianapolis area is the site of about 85 major building projects that are from groundbreaking to just complete. The Indianapolis Star reports that the cumulative worth of the projects is about $3 billion, a level of construction that Indianapolis has seen only once before.
About thirty of the projects are residential. The main commercial project is a $754 million hospital building. The boom in downtown Indianapolis is not matched elsewhere, with the Indianapolis Star reporting that in the rest of Central Indiana, construction has slowed.
Read the full story…
Limiting Plaintiffs’ Claims to a Cause of Action for Violation of SB-800
November 18, 2011 — Samir R. Patel, Esq. and Todd E. Verbick, Esq., Lorber, Greenfield & Polito, LLP
There has been a fair share of publicity about the SB-800 amendments to the Civil Code (Civil Code section 896, et seq.) that codified construction defect litigation in 2002. Most of the publicity is geared toward the pre-litigation standards allowing a builder the right to repair before litigation is commenced by a homeowner. Less focus and attention has been given to the fact that violation of the SB-800 performance standards is being used by plaintiff’s counsel as an additional tool in the plaintiff’s pleading tool box against builders. Closer scrutiny to SB-800 reveals that those provisions should in fact act as a limitation to the pleading tools available to plaintiffs and an additional tool for builders in the defense of cases governed by SB-800.
The typical construction defect complaint contains the boiler plate versions of numerous causes of action. These causes of action include Strict Liability, Negligence, Negligence Per Se, Breach of Contract, Breach of Contract – Third-Party Beneficiary, Breach of Express Warranties, Breach of Implied Warranties, among others. The wide array of causes of action leave a defendant “pinned to the wall” because they require a complex defense on a multitude of contract and tort related causes of action. Furthermore, the statutes of limitations as to these claims widely differ depending upon if the particular defect is considered latent or patent. The truth of the matter remains, no matter what the circumstances, if a construction defect matter ultimately goes to trial, it is inevitable that plaintiffs will obtain a judgment on at least one of these causes of action.
On its own, the Strict Liability cause of action can be a thorn in a defendant’s side. A builder is obviously placing a product into the stream of commerce and strict liability is a tough standard to defend against, particularly when it concerns intricate homes comprised of multiple components that originally sold for hundreds of thousands of dollars. A Negligence cause of action can also be difficult to defend because the duty of care for a builder is what a “reasonable” builder would have done under the circumstances. An interpretation of this duty of care can easily sway a jury that will almost always consist of sympathetic homeowners. A Negligence Per Se cause of action can also leave a defendant vulnerable to accusations that a builder violated the Uniform Building Code or a multitude of other obscure municipal construction-related code provisions during the construction of the home. Lastly, the Breach of Contract cause of action leaves a builder relying on dense and intricate purchase and sale agreements with dozens of addenda which leave the skeptical jurors turned off by what they view as one-side, boilerplate provisions. Ultimately, when a matter is about to go to trial, the complexity of these complaints can benefit a plaintiff and increase a plaintiff’s bargaining power against a defendant who is attempting to avoid a potentially large judgment.
Enter the SB-800 statutes. The SB-800 statutes apply to all homes sold after January 1, 2003. Civil Code section 938 specifically states that “[t]his title applies only to new residential units where the purchase agreements with the buyer was signed by the seller on or after January 1, 2003.” (Civil Code §, 938.) As time progresses, more residential construction defect cases will exclusively fall under the purview of SB-800. Slowly but surely more SB-800 governed litigation is being filed, and its exclusive application is looming on the horizon.
On its surface, this “right to repair” regime has left builders with a lot to be desired despite the fact that it is supposed to allow the builder the opportunity to cure any deficiencies in their product before litigation can be filed by potential plaintiffs. However, the application of the time line for repair has shown to be impractical for anything but the most minor problems involving only small numbers of residential units. Moreover, the fact that the fruits of the builder’s investigation into the claimed defects in the pre-litigation context can freely be used as evidence against it in litigation makes builders proceed with trepidation in responding with a repair. For these reasons, more SB-800 litigation can be expected to result due to the shortcomings of the pre-litigation procedures, and savvy defense counsel should anticipate the issues to be dealt with in presenting the defense of such cases at trial.
This fact should not necessarily be met with fear or disdain. Within the SB-800 statutes, the legislature made it clear that they were creating a new cause of action for construction defect claims, but it further made it clear that this cause of action is a plaintiff’s exclusive remedy. The legislature giveth, but at the same time, the legislature taketh away. Throughout numerous provisions within the SB-800 statutes, the Civil Code states that claims for construction defects as to residential construction are exclusively governed by the Civil Code, and that the Civil Code governs any and all litigation arising under breaches of these provisions. Civil Code section 896 specifically states:
In any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction … the claimant’s claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in this title. (Civil Code §, 896.)
Civil Code section 896 then provides approximately fifty-plus standards by which a construction defect claim is assessed under that provision. Civil Code section 896 covers everything from plumbing to windows, and from foundations to decks, and in several instances expressly dictates statutes of limitations as to specific areas of construction that severely truncate the 10-year latent damage limitations period. As for any construction deficiencies that are not enumerated within Civil Code section 896, Civil Code section 897 explicitly defines the intent of the standards and provides a method to assess deficiencies that are not addressed in Civil Code section 896. Civil Code section 897 states:
Intent of Standards
The standards set forth in this chapter are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it shall be actionable if it causes damage. (Civil Code §, 897.)
Therefore, Civil Code section 897 acts as a catch-all by which defects that are not covered within Civil Code section 896 can be evaluated on a damage standard mirroring the Aas case (damages must be present and actual). The result of sections 896 and 897 being read in combination is a comprehensive, all-inclusive set of performance standards by which any defect raised by Plaintiffs can be evaluated and resolved under a single SB-800 based cause of action.
Civil Code section 943 makes clear that a cause of action for violation of SB-800 performance standards is a plaintiff’s sole remedy for a residential construction defect action. Specifically, Civil Code section 943 states:
Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under 944 is allowed. In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute. (Civil Code §, 943.)
Civil Code section 944 provides the method for computing damages within a construction defect action, as follows:
If a claim for damages is made under this title, the homeowner is only entitled to damages for the reasonable value of repairing any violation of the standards set forth in this title, [and] the reasonable cost of repairing any damages caused by the repair efforts… . (Civil Code §, 944.)
A cursory review of these statutes yields the conclusion that the legislature was attempting to create an exclusive cause of action that trumps all other causes of action where SB-800 applies. The remedy available to plaintiffs is limited to that allowed by the Civil Code. As noted above, “[n]o other cause of action for a claim covered by this title…is allowed.” (Civil Code §, 943.) Therefore, Civil Code sections 896, 897, 943, and 944 specifically prohibit the contract-based and tort-based causes of action typically pled by plaintiffs.
Plaintiff’s counsel has seized upon the language of section 943 to advance the argument that SB-800 still allows a plaintiff to advance typical contract and tort based causes of action. On the surface, this argument may seem compelling, but a minimum of scrutiny of the express language of section 943 dispels this notion. Section 943 says that it provides rights “[i]n addition” to those under the SB-800 Civil Code provisions. Clearly, the language in section 943 is intended to expressly underscore the fact that a plaintiff is not precluded from seeking relief in addition to that allowed under SB-800 for damages not arising from a breach of the SB-800 standards or for damages in addition to those recoverable under Section 944. This language does not provide an unfettered license to bring a Strict Liability, Negligence or other cause of action against a builder where SB-800 applies.
In fact, this language only keeps the door open for plaintiffs to pursue such causes of action not arising from a breach of the SB-800 standards should there be such supporting allegations. For example, if a plaintiff alleges that a builder breached an “express contractual provision” related to the timing of the completion of the home and close of escrow, and the contract specifies damages in this regard, a plaintiff may have a viable separate cause of action for Breach of Contract for recovery of those damages precisely because that is not an issue expressly dealt with in SB-800 in the performance standards under sections 896 and 897, or in the damage recovery terms under 944. As it stands, the vast majority of complaints are seeking redress for violation of the same primary right; that is, defects specifically outlined in Section 896 and 897 or which result in damages as stated in Section 944.
So, how does a builder defend against a complaint that contains multiple causes of action regarding construction defects for a home sold after January 1, 2003? There are numerous ways to approach this. First and foremost, these superfluous and improper causes of action can be attacked by demurrer seeking dismissal of all causes of action other than the cause of action alleging violation of SB-800. If the the time period within which to file a demurrer has passed already, a motion for judgment on the pleadings can be utilized to attack the improper causes of action in the same way as a demurrer can be used for this purpose.
The limitation to a demurrer or motion for judgment on the pleadings is that the judge is restricted to viewing only the four corners of the pleading when making a ruling. It is typical for plaintiffs’ counsel to cleverly (or one might even say, disingenuously) leave the complaint purposely vague to avoid a successful defense attack on the pleadings by not including the original date the residence was sold. In that instance, a motion for summary adjudication can be used to attack a plaintiff’s complaint. By simply providing evidence that the homes were originally sold after January 1, 2003, the improper causes of action should be subject to dismissal by summary adjudication. If the plaintiff is a subsequent purchaser, the builder still has recourse to enforce the pleading limitations under SB-800. Civil Code section 945 states that “[t]he provisions, standards, rights, and obligations set forth in this title are binding upon all original purchasers and their successors-in-interest.” (Civil Code §, 945.)
Attacking a plaintiff’s complaint to eliminate multiple causes of action can have numerous benefits. The practical result is that a plaintiff will only have one viable cause of action. The advantage is that the SB-800 performance standards include the defined performance standards and shortened statutes of limitations periods with regard to specific issues. Furthermore, as to defects which are not specifically provided for in Civil Code section 896, Civil Code section 897 requires a proof of actual damages. Therefore, a plaintiff must provide evidence of current damages and not simply conditions that may potentially cause damage in the future.
The Appellate Courts have yet to directly address and interpret these SB-800 provisions. The time for that is undoubtedly drawing near. For now, however, plaintiffs will have to find ways to accurately plead construction defect claims within the confines of one cause of action for breach of the performance standards enumerated within the Civil Code.
Printed courtesy of Lorber, Greenfield & Polito, LLP. Mr. Patel can be contacted at spatel@lorberlaw.com and Mr. Verbick at tverbick@lorberlaw.com.
Construction Defects Not Occurrences under Ohio Law
November 7, 2012 — CDJ Staff
Concluding the “claims of defective construction or workmanship brought by a property owners are not claims for ‘property damage’ caused by an ‘occurrence’ under a commercial general liability policy,” the Supreme Court of Ohio has ruled in Westfield Insurance Co. v. Custom Agri Systems, Inc. In the underlying case, Custom Agri Systems, Inc. built a grain bin as a subcontractor to Younglove Construction, LLC. Younglove had been contracted by PSD Development, which withheld payment, claiming it had suffered damages due to defects in Custom Agri System’s work. Younglove filed a complaint against Custom Agri, which filed complaints against its subcontractors. Custom Agri also requested that its insurer, Westfield Insurance Company, defend and indemnify it. Westfield claimed that it had no such duty. The Ohio Supreme Court concurred.
The decision notes that “Custom was being sued under two general theories: defective construction and consequential damages resulting from the defective construction.” Westfield argued that none of the claims were “for ‘property damage’ caused by an ‘occurrence” and therefore none of the claims were covered under the CGL policy.” Further, Westfield argued that “even if the claims were for property damage caused by an occurrence, they were removed from coverage by an exclusion in the policy.”
The case was filed in the US District Court which issued a summary judgment for Westfield. The plaintiff appealed and Sixth Circuit Court of Appeals certified the questions to the Supreme Court of Ohio.
The court noted that “all of the claims against which Westfield is being asked to defect and indemnify Custom relate to Custom’s work itself.” And so, the court concluded that they “must decide whether Custom’s alleged defective construction of and workmanship on the steel grain bin constitute property damage caused by an ‘occurrence.’” However, the court noted that under the terms of the insurance contract, an occurrence is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and the court noted that the “natural and commonly accepted meaning” of “accident” is something “unexpected, as well as unintended.”
The Ohio Supreme Court also looked at court decisions in other places, and found that in many similar cases, courts have concluded that construction defects are not occurrences.
In a dissenting opinion, Justice Pfeifer argues that “if the defective construction is accidental, it constitutes an ‘occurrence’ under a CGL policy.” Justice Pfeifer characterized the majority’s definition of “accidental” as “broad, covering unexpected, unintentional happenings.”
Read the court’s decision…
Former Zurich Executive to Head Willis North America Construction Insurance Group
March 1, 2012 — CDJ Staff
Insurance Journal reports that Sean McGroarty will be directing surety operations for their construction practice in North America. Previously, Mr. McGroarty was the senior vice president and head of international surety with Zurich Financial Services. He has also worked for Liberty Mutual Group and the St. Paul Companies.
Mr. McGroarty will be leading a team of professionals offering brokerage services for contract and commercial surety.
Read the full story…
West Coast Casualty Promises Exciting Line Up at the Nineteenth Annual Conference
March 28, 2012 — CDJ Staff
West Coast Casualty has announced the lineup for the annual WCC Construction Defect Seminar. This year’s seminar will be the nineteenth anniversary, and it will be held on May 17th and 18th, 2012 in Anaheim, California. They are the largest construction defect event in the world and this year’s seminar will again bring the top people in the field to address many of the current issues and where the construction defect community will be going in the future.
The event, anticipated to be even larger than prior years, will have numerous panels and presentations on the current state of construction defect litigation. Among the topics that will be presented are “Arbitrate? Let’s See You Make Me!” “Defending Construction Defect Failure Mechanisms?An Expert’s Perspective,” and “Current Trends in Effectively Handling SB800 Cases.”
Speakers at the event will include judges, lawyers, and representatives of the insurance industry. One event, “Meet Your Judges, A Candid Discussion on Construction Defect Claims and Litigation from the Bench?” will include judges from five states, including the Honorable Nancy M. Saitta, Chief Justice of the Nevada Supreme Court, the Honorable Clifton Newman of the South Carolina Circuit Court, and the Honorable Rex Heeseman of the Los Angeles County Superior Court.
Daniel A. Berman, Esq. and Stephen Henning, Esq. will be talking on the topic of “Social Networking Sites: Strategies, Ethical Pitfalls, and Practice Pointers for Litigating and Winning Your Construction Defect Case.” Mr. Berman is a Founding and Managing Partner of Wood, Smith, Henning & Berman LLP. He has been named a Southern California Super Lawyer for eight consecutive years. Mr. Henning is a Founding Partner of Wood, Smith, Henning & Berman, LLP and Fellow of the Litigation Counsel of America. Mr. Henning will also be one of the presenters on the panel “Important Court Decisions Impacting Construction Defect Claims.”
The panel “Why Do We Need to Know Certain Things and How Decisions Are Made” will be presented by important figures in the construction claims industry, including Phyllis Modlin, Todd Schweitzer, Teresa D. Wolcott, and Lee Wright. Ms. Modlin is a Construction Defect Claims Supervisor responsible for nationwide claims for Markel Corporation. Mr. Schweitzer is an Assistant Vice President of Major Case for Construction Defect and Professional Liability Claims Services at Zurich North America. Ms. Wolcott is the National Product Manager for Construction Defect Claims within the Construction Claims Organization at Travelers Insurance. Mr. Wright is an Assistant Vice President and Senior Claims Consultant for XL Specialty Insurance.
The event will also include a Science and Technology Fair in which exhibitors will be presenting technological problem solving and decision making as they relate to resolving ongoing construction and post construction-defect related issues while reducing costs for all those involved in claims and litigation. The fair is dedicated to these novel applications of science and technology that benefit the construction defect community but are not yet commonly available. This will be the third time the Construction Defect Seminar will include a Science and Technology Fair.
Sessions at the event are approved for MCLE credit in Arizona, California, Colorado, Illinois, Maine, Minnesota, New York, Ohio, and Pennsylvania. MCLE credits vary by state; attendees can obtain up to 10.25 hours of credit in Arizona, California, Maine, and New York. Applications for several other states are still pending. Additionally, the event is also worth continuing education credits with the Florida Department of Insurance and for Registered Professional Adjusters. West Coast Casualty has applications pending for adjuster continuing education in an additional thirty-six states.
West Coast Casualty recommends this event for anyone involved in construction or construction defect claims, whether they are a claims adjuster, a member of a homeowner board, a judge, a property manager, a construction claims attorney, a general contractor, or anyone else with an interest in this area. The event typically has more than 1,600 attendees. Those interested can register online.
Read the full story…
Another Las Vegas Tower at the Center of Construction Defect Claims
November 7, 2012 — CDJ Staff
Accusations are coming from both sides over construction defects at a Las Vegas tower, only this time, it’s not the Harmon Towers, it’s Hilton Grand Vacations, which is part of the Planet Hollywood Resort. The project was originally dubbed PH Towers Westgate, and it was developed by Westgate Resorts, which is suing the contractor, Tutor-Saliba for $10 million over late completion and construction defects.
Among the defects Westgate is claiming are cracked floor tiles in the valet lobby and cracks and delamination of the pool deck. Tutor-Saliba argues that the failure of the valet lobby floor is due to Westgate specifying only 1/16th inch-wide grouting, instead of the specified ¬º inch, and Westgate’s refusal to allow expansion joints on the pool deck has lead to problems there. Westgate’s attorney, Robert Schumacher, attributes the problems to “shoddy construction practices.”
According to the article in the Las Vegas Review Journal, plans were only 60 percent complete when construction began, leading to “thousands of change orders.” Despite not meeting an August completion deadline, Tutor-Saliba is claiming it is owed a $1.5 million bonus nevertheless.
Read the full story…
Consumer Protection Act Whacks Seattle Roofing Contractor
July 21, 2011 — Douglas Reiser, Builders Council
It’s been over 1 year since we last visited the CertainTeed Corp. v. Seattle Roof Brokers lawsuit. After my original post, the contractor, James Garcia, appeared at Builders Counsel in a comment to defend himself. It appears that 1 year later, the court decided to side with CertainTeed and award them significant attorneys’ fees. Ready for the whole story? Its a pricey one.
Back in July 2010, good friend Mike Atkins (Seattle Trademark Attorney) authored a post about a Seattle roofing contractor who had been sued for false advertising on his website. The lawsuit was raised by CertainTeed, a roofing material producer, whose products were the target of a Seattle contractor’s ire. Seattle Roof Brokers, owned by James Garcia, published content on its website, remarking that CertainTeed products have a history of “premature failure” and that they “will fail?.resale inspection after 15-20 years.”
CertainTeed filed its action to obtain an injunction and damages under the Consumer Protection Act.
Read the full story…
Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
Don MacGregor To Speak at 2011 West Coast Casualty Construction Defect Seminar
January 1, 2011 — February 08, 2011 CDJ Staff
“Challenges for Experts in Construction Defect Claims and Litigation” will be held Thursday May 13, 2011 between 1:30 and 3:00 PM at this year’s West Coast Casualty Construction Defect Seminar. Among the various topics covered will be of Right to Repair/Opportunity to Repair statutes, improper testing methodologies, new challenges where a case involves a Wrap Policy, OCIPS, CCIPS, and other owner controlled insurance programs, as well as the need for realistic testing protocols for the party the expert is retained to represent.
During the presentation Mr. MacGregor will be working in connection with a group of construction and design experts each of which have extensive experience with construction defect and claims related litigation. This particular session is expected to attract a standing-room only crowd, drawing in excess of 1700 attendees.
The West Coast Casualty Construction Defect Seminar is the largest seminar of its type. This year’s event is scheduled for will take place on May 12 and 13, 2011, at The Disneyland Hotel and Resort. For more information regarding the years event please visit http://www.westcoastcasualty.com/dyncat.cfm?catid=3322
http://www.westcoastcasualty.com/dyncat.cfm?catid=3322
Defective Drains Covered Despite Water Intrusion Exclusion
July 10, 2012 — CDJ Staff
The US District Court in Washington State has granted a summary judgment in Hiller v. Allstate Prop. & Cas. Ins. Co. The Hillers bought a new home in Wenatchee, Washington and insured it with an “all risk” policy from Allstate. Subsequently, Mr. Hiller discovered that the carpet in the basement was saturated with water. Hiller notified Allstate who requested that he determine the source of the water intrusion. Hiller poured water into a downspout drain and found this caused water to leak into the home’s basement.
Further investigation with the homes original excavation contractor revealed that “the end of the drain pipe was partially blocked by rocks and had been wrapped with fabric landscaping material.” Additionally, “a ‘T’ pipe installed at the foot of the drain was directing water toward the house’s concrete foundation.” Allstate denied the claim “under the policy’s surface water, subsurface water, inherent vice, and latent defect exlusions.” After the denial, Hiller “discovered that the foundation had not been treated with waterproof sealant and that several concrete form pins were still in place.”
The court noted that “there is no genuine dispute about the cause of the claimed loss.” This left the court concluding that “the only relevant question for the purposes of the instant cross-motions for summary judgment is whether a loss caused by defective construction is covered under the Hillers’ ‘all risk’ insurance policy.” Under Washington’s “efficient proximate cause” rule, “where an insured risk itself sets into operation a chain of causation in which the last step may have en an excepted risk, the excepted risk will not defeat recovery.” The court found that a loss caused by defective construction is in fact covered under the policy, noting that “the policy does not contain an exclusion for defective construction.”
The court concluded that the defective drain was not an inherent vice, as it “cannot properly be characterized as defects ‘inherent [in the] nature of the commodity which will cause it to deteriorate with a lapse of time.” Nor was it a latent defect, “one that could not have been discovered by inspection.” The court concluded that “both of the construction defects at issue could have been discovered by a reasonable inspection.”
With these facts determined, the court found for the Hillers.
Read the court»s decision…
LEED Certified Courthouse Square Negotiating With Insurers, Mulling Over Demolition
June 6, 2011 — Douglas Reiser in the Builders Counsel Blog
Apparently, Courthouse Square is still unresolved. The County hasnow hired an attorney to handle its insurance claim against Affiliated FM. Is there a lawsuit coming?
Right now, no lawsuit is expected. According to officials, the insurer has been acting in good faith. But, its been quite a while since Salem officials learned that the Courthouse Square building had significant concrete issues that would result in probable demolition of the LEED certified building.
If you have yet to hear about Courthouse Square, let me fill you in briefly. The Salem building was substantially completed in 2000 and LEED certified by the US Green Building Council in 2002. The project cost more than $30 Million to complete and the building was revered for its innovation as a crowning achievement for city leaders.
But, structural problems in the building’s core were discovered as early as 2002, writes Chris Cheatham of Green Building Law Update. Final tests earlier in the year, determined that the building had to be vacated. The building has been clear since July 2010.
Read the full story…
Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
