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    Alix, Arkansas

    Arkansas Builders Right To Repair Current Law Summary:

    Current Law Summary: SB975: Requires that residential contractors be given notice and an opportunity to repair. Homeowners must provide 20 days notice in writing to builder prior to legal action to address defect and/or repair


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    Commercial and Residential Contractors License Required.


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    Greater Fort Smith Associated Home Builders
    Local # 0436
    5111 Rogers Ave Ste 531
    Fort Smith, AR 72903
    http://www.greaterfortsmithhomebuilders.com

    Cleburne County Home Builders Association
    Local # 0405
    PO Box 1325
    Heber Springs, AR 72543


    White County Home Builders Association
    Local # 0472
    PO Box 1501
    Searcy, AR 72143


    Crittenden County Home Builders Association
    Local # 0415
    PO Box 2204
    West Memphis, AR 72303


    Home Builders Association of Faulkner County
    Local # 0439
    PO Box 1228
    Conway, AR 72033
    http://www.faulknercountyhomebuilders.com

    NE Arkansas Home Builders Association
    Local # 0432
    PO Box 17237
    Jonesboro, AR 72403
    http://www.neahba.org

    Cabot Area Home Builders Association
    Local # 0420
    PO Box 1291
    Cabot, AR 72023
    http://www.cabotareahba.com


    Construction Expert Witness News and Information
    For Alix Arkansas

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

    Continuous Trigger of Coverage Adopted for Loss Under First Party Policy

    The Year 2010 In Review: Design And Construction Defects Litigation

    State Farm Too Quick To Deny Coverage, Court Rules

    Arbitration Clause Not Binding on Association in Construction Defect Claim

    Architectural Firm Disputes Claim of Fault

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

    Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment

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

    Court Will Not Compel Judge to Dismiss Construction Defect Case

    BUILD Act Inching Closer To Reality

    Nevada Bill Aims to Reduce Legal Fees For Construction Defect Practitioners

    Consumer Protection Act Whacks Seattle Roofing Contractor

    Construction Suit Ends with Just an Apology

    Surveyors Statute Trumps Construction Defect Claim in Tennessee

    South Carolina Legislature Defines "Occurrence" To Include Property Damage Arising From Faulty Workmanship

    Cabinetmaker Exceeds Expectations as Conditions Improve

    Court Orders House to be Demolished or Relocated

    After Katrina Came Homes that Could Withstand Isaac

    Arizona Court of Appeals Decision in $8.475 Million Construction Defect Class Action Suit

    Windows and Lawsuits Fly at W Hotel

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

    Homebuilding on the Rise in Nation’s Capitol

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

    Georgia Law: “An Occurrence Can Arise Where Faulty Workmanship Causes Unforeseen or Unexpected Damage to Other Property”

    Condo Owners Allege Construction Defects

    Godfather Charged with Insurance Fraud

    Nevada Construction Defect Lawyers Dead in Possible Suicides

    Arizona Homeowners Must Give Notice of Construction Defect Claims

    Court Clarifies Sequence in California’s SB800

    Wisconsin “property damage” caused by an “occurrence.”

    Mortar Insufficient to Insure Summary Judgment in Construction Defect Case

    Ohio Casualty’s and Beazer’s Motions were Granted in Part, and Denied in Part

    Firm Sued For Construction Defects in Parking Garage

    Houses Can Still Make Cents: Illinois’ Implied Warranty of Habitability

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

    California Assembly Bill Proposes an End to Ten Year Statute of Repose

    Construction Job Opening Rise in October

    Home Repair Firms Sued for Fraud

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

    Des Moines Home Builders Building for Habitat for Humanity

    Sometimes It’s Okay to Destroy Evidence

    The Flood Insurance Reform Act May be Extended to 2016

    Illinois Court Determines Insurer Must Defend Negligent Misrepresentation Claim

    Ohio Court Finds No Coverage for Construction Defect Claims

    A Loud Boom, But No Serious Injuries in World Trade Center Accident

    Condominium Communities Must Complete Construction Defect Repairs, Says FHA

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

    Guilty Pleas Draw Renewed Interest In Nevada’s Construction Defect Laws

    Construction Defect Lawsuit Stayed by SB800

    Orange County Home Builder Dead at 93

    Court Rejects Anti-SLAPP Motion in Construction Defect Suit

    Construction Workers Unearth Bones

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

    Official Tried to Influence Judge against Shortchanged Subcontractor

    More Charges in Las Vegas HOA Scandal

    Appropriation Bill Cuts Military Construction Spending

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

    Homeowner may pursue negligence claim for construction defect, Oregon Supreme Court holds

    Reference to "Man Made" Movement of Earth Corrects Ambiguity

    Going Green for Lower Permit Fees

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

    Insurer Not Liable for Construction Defect Revealed by Woodpecker

    Construction Defects as Occurrences, Better Decided in Law than in Courts

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

    Contractor’s Coverage For Additional Insured Established by Unilateral Contract

    Consulting Firm Indicted and Charged with Falsifying Concrete Reports

    Workers Hurt in Casino Floor Collapse

    Judge Concludes Drywall Manufacturer Sold in Florida

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

    Drug Company Provides Cure for Development Woes

    Mobile Home Owners Not a Class in Drainage Lawsuit

    Policing Those Subcontractors: It Might Take Extra Effort To Be An Additional Insured

    Good and Bad News on Construction Employment

    Building Inspector Jailed for Taking Bribes

    Statutes of Limitations May be the Colorado Contractors’ Friend

    Gut Feeling Does Not Disqualify Expert Opinion

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

    Construction on the Rise in Washington Town

    Texas covered versus uncovered allocation and “legally obligated to pay.”

    Florida Contractor on Trial for Bribing School Official

    Unit Owners Have No Standing to Sue under Condominium Association’s Policy

    District Court’s Ruling Affirmed in TCD v American Family Mutual Insurance Co.

    Cogently Written Opinion Finds Coverage for Loss Caused By Defective Concrete

    Instant Hotel Tower, But Is It Safe?

    When Does a Claim Against an Insurance Carrier for Failing to Defend Accrue?

    Who Is To Blame For Defective — And Still LEED Certified — Courthouse Square?

    SB800 Cases Approach the Courts

    School District Settles Construction Lawsuit

    Construction Firm Charged for Creating “Hail” Damage
    Corporate Profile

    ALIX ARKANSAS CONSTRUCTION EXPERT WITNESS
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    The Alix, Arkansas 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 Alix'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
    Alix, Arkansas

    No Choice between Homeowner Protection and Bankrupt Developers?

    February 10, 2012 — CDJ Staff

    Donna DiMaggio Berger, writing in the Sun Sentinel argues those may be the only current choices in Florida. A recent court case, Lakeview Reserve HOA v. Maronda Homes has caused a swift response from the legislators. Ms. Berger notes that the construction defect bill, HB 1013, “would take away a homeowner’s rights to pursue a developer for defects to the driveways, roads, sidewalks, utilities, drainage areas and other so-called ‘off-site’ improvements.” The alternative? She notes that applying the Maronda decision would “bankrupt developers who don’t build defect-free roads and sidewalks.”

    Read the full story…


    Court Strikes Down Reasonable Construction Defect Settlement

    December 20, 2012 — CDJ Staff

    The Court of Appeals of Washington has struck down a construction defect settlement between a building owner and the companies she hired to repair the siding, among other repairs to bring the building up to code. Yuan Zhang hired Hawk Construction LLC to do repair work. Hawk, in turn, hired Ready Construction LLC for some aspects of the project. Hawk and Ready were both insured by Capital Specialty Insurance Corporation.

    There were several problems with Ready’s work. After removing old siding, they did not protect the building, nor did they remove all of the damaged layers. Ready covered, but did not fix, a mildew problem under the old siding. When new siding was reattached, the nails used were too short to adequately attach it.

    After paying for an inspection of the work, Zhang had Hawk and Ready begin the repairs again, but the work was abandoned without being completed. Zhang sued Hawk for breach of contract. Hawk then sued Ready, claiming that “Ready was liable to Hawk to the extent that Hawk was liable to Zhang.” Capitol retained defense for both contractors.

    Zhang settled with Hawk, in an agreement that gave her “the right to collect and/or pursue all costs and attorney fees paid by Hawk or its insurance company defending against the Zhang’s claims and pursuing claims against Ready.” Subsequently, she also settled with Ready. Both companies ceased operations.

    Zhang had the settlements reviewed by a court, which concluded that the settlements were reasonable. Capital was allowed to appeal, claiming that the settlement included costs that were Zhang’s responsibility. The appeals court did not examine the question of the reasonableness of the settlement, concluding that Capitol’s interests were relevant only to “questions of bad faith, collusion, and fraud.”

    In the case of Zhang, the court concluded that the relationship between Zhang and her former contractors was collusive. The court noted that “bad faith or collusion may exist when the evidence indicates a joint effort to create, in a non-adversarial atmosphere, a resolution beneficial to both parties, yet highly prejudicial to the insurer as intervener.” The court noted that both companies had minimal assets which were, in any case, exempted from the agreement. Further, the court found that the agreements failed to determine “what amount of the repairs related to preexisting water damage.” Zhang’s calculation of costs also included her expenses for architectural and engineering services, which the court points out, “where always Zhang’s costs to bear.”

    The court concluded that “the overall structure of the settlements is highly probative of collusion, fraud, or bad faith.” Zhang’s agreements with Hawk and Ready allowed her to collect compensation from Hawk and then collect Ready’s compensation to Hawk for their portion of the settlement, allowing Zhang to collect the monies twice. Further, she was allowed to pursue Capitol for Hawk’s attorney expenses, even though Hawk had none. “The right to recover Hawk’s fees merely set up a windfall recovery for Zhang.” The court described the agreements among Zhang, Hawk, and Ready as “precisely the type of manipulation [the law] is intended to preclude.”

    Read the court’s decision…


    Fifth Circuit Reverses Insurers’ Summary Judgment Award Based on "Your Work" Exclusion

    November 18, 2011 — Tred Eyerley, Insurance Law Hawaii

    Application of the facts to the "your work" exclusion was the key to resolving coverage issued in Am. Home Assurance Co. v. Cat Tech L.L.C., 2011 U.S. App. LEXIS 21076 (5th Cir. Oct. 5, 2011).

    Ergon Refining, Inc. hired Cat Tech L.L.C. to service a hydrotreating reactor. In January 2005, Cat Tech replaced certain parts in the reactor. After Cat Tech finished the job and left, Ergon noticed a high pressure drop in the reactor, forcing it to be shut down. Cat Tech returned in February 2005, removed, repaired and replaced the damaged parts, and loaded new parts. After completion, a second large pressure drop occurred during the reactor’s start-up process. The reactor was shut down until October 2005, when Ergon hired a different contractor to perform the repair work. Additional damage to the reactor was found.

    Read the full story…

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


    AFL-CIO Joins in $10 Billion Infrastructure Plan

    June 30, 2011 — CDJ Staff

    The AFL-CIO has announced plans to generate up to $10 billion in funding for infrastructure development, training construction workers, and making buildings more energy efficient, pledging $20 million to retrofit buildings. Bloomberg News reports that union officials made the announcement in Chicago at the Clinton Global Initiative, releasing a statement from Richard Trumka, president of the union, “we, at the AFL-CIO, believe that together, with our partners in business and government, we can profitably invest significant resources to make America more competitive and energy efficient.” A foot injury prevented Mr. Trumka from attending the event.

    The statement also quoted Mark Ayers, president of the Building and Construction Trades Department of the AFL-CIO, “the time is now to become intensely focused on the creation of jobs.”

    Read the full story…


    SB800 Cases Approach the Courts

    July 10, 2012 — CDJ Staff

    California’s Right to Repair Law turns ten this year and cases under the statute are finally coming to trial, as John V. O’Meara of Bremer Whyte Brown & O’Meara writes for the Martindale-Hubble Legal Library. Mr. O’Meara notes that SB800 eliminated “the traditional definitions of construction defect,” replacing them with “functionality standards.” He argues that these standards are not uniform: “some standards require damage and others do not.” He also wonders what terms like “significant cracks,” “intended water” and “materially comply” mean in a court.

    Mr. O’Meara states that “defendants in construction defect cases have a right to know the standards that apply to a case, the definitions that will be presented to the jury, and the burden of proof that attaches.”

    Read the full story…


    Lawsuit over Construction Defects Not a Federal Case

    August 16, 2012 — CDJ Staff

    The United State District Court in California has dismissed the claims of a contractor against the United States government, on the grounds that it was not within the subject matter jurisdiction of the court. The origins of the case are in a related construction defect claim. The current plaintiff, Performance Contracting, Inc., did the lath and plaster work for a building for the Department of Veterans Affairs. After the building was completed, the Veterans Affairs complained to the general contractor, Wynema, Inc., of water intrusion problems.

    Wyema and Performance conducted testing and the water intrusion was found to be due to “a variety of design defects and omissions, including: 1) omission of proper window flashing; 2) inadequate waterproof membrane around the windows; 3) inadequate T-molding around the windows; 4) lack of a window sill pan for the windows; 5) lack of any backing in the window framing; 6) lack of any backing for the stucco expansion joints and seams; and 7) failure to require that a performance mock-up of the window assembly and adjacent areas be built and water tested.” Wyema filed a construction defect action against Performance and other subcontractors.

    In the current case, Performance claims that Veteran Affairs was negligent, that it “breached its duty to Plaintiff when it provided deficient plants and specifications” and “failed to properly oversee construction and inspect Project work.” The court determined that it could not hear this case, noting that “Federal Courts are presumptively without jurisdiction over civil actions.”

    Performance raised its claims under the Federal Tort Claims Act. The judge was not persuaded by this claim, noting that the FTCA does not apply to purported breach of the General Contract. The FTCA waives the government’s sovereign immunity in cases of “injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of an employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.”

    Performance was unable to pursue its claims in the Court of Federal Claims as there was no contract between Performance and the government. However, the court noted that Performance’s inability to file suit in the Court of Federal Claims does not open up a path to the District Court. “Litigants are not guaranteed a forum in which to sue the United States.” The court further noted that “if this Court were to accept Plaintiff’s logic, non-parties to contracts, but not parties, would be free to pursue contract claims in the fora of their choosing.”

    Read the court’s decision…


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

    June 19, 2012 — CDJ Staff

    The failure of R. J. Haas to produce documents or make himself available for deposition has worn out the patience of the US District Court in San Jose. Judge Howard Lloyd issued a ruling inProbuilders Specialty Ins. Co. v. Valley Corp. (N.D. Cal., 2012).

    Probuilders issued an insurance policy covering Haas for their work on the construction of a single-family home for Ty and Karen Levine. The Levines sued Haas for “shoddy and incomplete work.” Probuilders contends that Haas “made material misrepresentations with respect to verifying that the subcontractors had insurance.” Since November 2011, Haas has been without legal counsel in this matter.

    Despite Probuilder’s attempts, the court noted that “Hass any not provided any documents in response to the plaintiff’s three sets of requests for production of documents.” Haas also “has refused to make himself available for deposition.” Haas was first scheduled for deposition in September, 2011. Subsequently, Haas has rescheduled his deposition repeatedly, postponing it to January 4, then February 13, and then agreed to be deposed “before the then-scheduled March 15 mediation,” after which he said he would “be unavailable to be deposed before April.

    The court noted that although Haas “hay have had legitimate reasons for wishing to continue his deposition, such as illness and his attempt to retain new counsel,” however, the court concluded that “Haas has had ample time to retain new counsel and prepare for deposition.

    The court also found fault with Haas’s objections to certain terms in the Request for Admissions, among them “named,” “independent contractor,” and “work,” noting that Haas called these “vague and ambiguous.” The court called it “quibbling,” and noted that the federal courts disfavor this. Later in the decision, the court made it clear that Haas “is obligated under the Federal Rules of Civil Procedure to respond to discovery requests.” And concludes, “that he has apparently been seeking to retain new counsel for over five months does not give him license to ignore plaintiff’s discovery requests entirely.

    The court granted Probuilders the option of filing a motion for sanctions. Mr. Haas did not attend or participate.

    Read the court’s decision…


    Defect Claims as Occurrences? Check Your State Laws

    July 10, 2012 — CDJ Staff

    Although four states have defined construction defect claims as occurrences, contractors are still dealing with “coverage gaps for faulty work construction,” says Mike Tsikoudakis in a piece at Business Insurance. He quotes Julian Ehrlich, the senior VP of claims for Aon Risk Services that “one of the interesting and compelling aspects of the issue of coverage for defective construction is that jurisdictions differ, so policyholders don’t know what they’re going to get.” He further notes that “in context of construction defect, the term ‘occurrence’ is ambiguous.”

    One problem, as noted by Jeffrey J. Vita, a partner at Saxe Doernberger & Vita, is that construction firms end up needing to simultaneously defend against defect claims and to also file suit to be certain their insurance firms will cover claims. Insurance for construction defect claims is described as “expensive and somewhat limited.” Mr. Vita expects more states to help this situation with new laws, clarifying what is an occurrence.

    Read the full story…


    Construction Defect Not a RICO Case, Says Court

    August 4, 2011 — CDJ Staff

    The US District Court of North Carolina has rejected an attempt by a homeowner to restart her construction defect claim by turning it into a RICO lawsuit. Linda Sharp, the plaintiff in the case of Sharp v. Town of Kitty Hawk, attempted to amend a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO) and argued that her case belonged in the federal courts.

    Ms. Sharp sued in November, 2010 claiming construction defects. She sued in federal court, although the court noted that as she and most of the defendants are citizens of North Carolina, the state court would have been the appropriate jurisdiction. Further, the court noted that one federal claim Sharp made was dismissed with prejudice, leaving only the state law claims. These the court dismissed without prejudice, declining to exercise jurisdiction over North Carolina law.

    After the dismissal, Ms. Sharp attempted to amend her complaint after the deadline. To do so, according to the court, she would be required to obtain consent from defendants or leave of the court. She did neither.

    In his opinion, Judge W. Earl Britt rejected her motion for leave to amend. He also granted the defendants’ motion to dismiss. The clerk was directed to close the case.

    Read the court’s decision…


    Alaska Supreme Court Dismisses Claims of Uncooperative Pro Se Litigant in Defect Case

    August 11, 2011 — CDJ Staff

    The Alaska Supreme Court found that in the case of Khalsa v. Chose, Ms. Khalsa? failure to cooperate with the courts has obligated them to dismiss her claims against Mr. Chose. Ms. Khalsa bought a home kit from Mandala Custom Homes of Nelson, British Columbia, Canada. Mr. Chose, one of the owners of Mandala was paid by Ms. Khalsa to supervise assembly in Fairbanks. After construction, the roof developed leaks. Ms. Khalsa stated that when climbing a ladder to inspect a skylight leak, she fell and injured herself.

    During the subsequent suit, Khalsa proved uncooperative. She skipped a pretrial conference. She attended a hearing that set discovery deadlines but then did not comply with discovery, including her failure to provide medical records documenting her injuries. She eventually said that she would only be able to travel from Arizona to Alaska if the defendants paid for her and her caretaker?s expenses.

    When finally deposed, Khalsa terminated the deposition after five minutes, alleging the deposition was “intentionally designed to cause [her] to endure further emotional distress, due to the psychological trauma . . . that was caused or contributed to by the defendants.”

    Eventually, the lower court sanctioned her twice. In July, 2008, the court concluded that her failure to provide medical records required dismissal of her injury lawsuit. In October of that year, the court dismissed all remaining claims due to her “pattern of excuses and long delays in providing information for discovery culminating in her refusal to participate in her deposition by the defendants.” Further, Khalsa has argued that the trial court displayed “prejudice and bias toward the pro se plaintiff.”

    The Alaska Supreme Court rejected all of Ms. Khalsa?s claims, dismissing her case. They did, however, note that she has thirty days to file an appeal.

    Read the court’s decision…


    Local Government Waives Construction Fees to Spur Jobs

    June 19, 2012 — CDJ Staff

    Warren Township in New Jersey has waived building and electrical permit fees, up to $5,000, for businesses that create at least five new jobs. The fee reductions are available for construction in areas zones under various designations. Buildings that have received a zoning variance are not eligible. The Echoes-Sentinel notes that other towns in Somerset County, New Jersey have adopted similar ordinances.

    Read the full story…


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

    August 4, 2011 — CDJ Staff

    On July 28, the Washington Court of Appeals ruled in Clasen Fruit & Cold Storage v. Frederick & Michael Construction Co., Inc. that more than six years had passed since a contractor had concluded work and so granted a summary dismissal of the suit.

    Frederick & Michael Construction Co., Inc. (F&M) was contracted to construct several buildings for Clasen Fruit and Cold Storage. These were completed in March, 1999. The buildings suffered wind damage to the roofs in 2001, 2003, 2005, and 2006. In the first two incidents, F&M repaired the roofs with Clasen paying for repairs.

    In 2005, Clasen hired Continuous Gutter to make repairs. The final incident was the collapse of the roof of one building. This was attributed to “excessive moisture in the roof’s vapor barriers.” At this point, Clasen demanded that F&M pay for repair and replacement costs. In 2008, Clasen sued F&M for damages for breach of contract and negligent design and construction of the roof.

    The decision then covered the meanings, in Washington law, of “termination of services” and “substantial completion.” The panel concluded that construction was “substantially completed in 1997” and “relevant services” by 2001. “But Clasen did not sue until 2008, some seven years after termination of any roof related services.”

    Read the court’s decision…


    Timing of Insured’s SIR Payment Has No Effect on Non-Participating Insurer’s Equitable Contribution to Co-Insurer

    April 25, 2012 — Aarti Kewalramani, Gatzke Dillon & Balance LLP

    In a case of first impression, the California Court of Appeal, Fourth District, Division One, examined whether a non-participating insurer can evade its defense and indemnity obligations because the insured only paid the policy’s self-insured retention ("SIR") as part of a settlement. In Axis Surplus Lines Insurance Company v. Glencoe Insurance LTD. (April 11, 2012, D058963) __ Cal.App.4th __ [2012 WL 11903203], the critical issue for the Court was whether an insurer, with full notice and continued investigation of a claim, can "hide behind the SIR requirement in its policy." The Court declined to "sanction such gamesmanship."

    The dispute involved an equitable contribution claim between two insurers. Axis Surplus Insurance Company provided commercial general liability insurance to Pacifica Pointe L.P. During the same time period, Glencoe Insurance Ltd. provided an owner-controlled insurance policy (i.e., wrap policy) to Pacifica Pointe L.P. Both policies included provisions requiring co-carriers to split the defense and indemnity on equal shares. Pacifica was sued in a construction defect lawsuit, involving alleged resultant damages to condominiums it converted and sold. Pacifica tendered the claim to both Axis and Glencoe. While Axis agreed to defend Pacifica, subject to a reservation of rights, Glencoe declined to participate until Pacifica satisfied the $250,000 SIR on the policy. Glencoe continued to monitor the litigation from the sidelines.

    Axis and Pacifica settled the underlying construction defect lawsuit for $1 million. Pacifica advised Glencoe of the settlement, and received Glencoe’s approval to contribute its $250,000 SIR towards the settlement. Axis contributed $750,000 towards the settlement. After the settlement, Axis sued Glencoe for declaratory relief and equitable contribution, to recover a portion of the defense and indemnity it paid. The trial court found in favor of Axis and allocated Glencoe 60% of the settlement payment. Glencoe appealed.

    On appeal, the Court scrutinized whether Glencoe, as the non-participating insurer, had a legal obligation to provide a defense and indemnity to the insured, despite the timing of the SIR’s satisfaction. The Court determined that in an equitable contribution action, the participating insurer has the burden of proving merely the potential for coverage under the non-participating insurer’s policy. On this showing, the burden of proof shifts to the non-participating insurer to prove the absence of actual coverage under its policy. The Court emphasized that the timing of the SIR’s payment was inconsequential to either insurer’s burden. Because Glencoe admitted coverage existed under its policy, the Court affirmed the trial court’s decision.

    As a result, the result ultimately turned on whether the non-participating carrier had full notice of the claim and cannot use the timing of the satisfaction of the SIR to shield itself from an equitable contribution claim from the participating co-carrier.

    Published courtesy of Aarti Kewalramani of Gatzke Dillon & Balance LLP. Ms. Kewalramani can be contacted at akewalramani@gdandb.com.


    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…


    California Appeals Court Remands Fine in Late Completion Case

    November 18, 2011 — CDJ Staff

    The California Court of Appeals in Stanislaus County has reversed the decision of the lower court in Greg Opinski Construction Inc. v. City of Oakdale. The earlier court had awarded the city of judgment of $54,000 for late completion, $3,266 for repair of construction defects and interest, and $97,775 in attorneys’ fees. The late completion of the project was due to actions by the City of Oakdale, however, the court rejected Opinski’s argument that the California Supreme Court decision in Kiewit did not allow this, as his contract with the city established a procedure for claiming extensions.

    The appeals court noted that the Kiewit decision has been “criticized as an unwarranted interference in the power of contracting parties to shift the risk of delays caused by one party onto the other party by forcing the second party to give the first notice of any intention to claim an extension of time based on delays caused by first.” They cited Sweet, a professor at Boalt Hall, UC Berkeley’s law school, that Kiewit “gutted” the “provision that conditions the contractor’s right to claim an extension of time for delays beyond his control.”

    Further changes in California law in response to the Kiewit decision lead to the current situation which the court characterized as “if the contractor wished to claim it needed an extension of time because of delays caused by the city, the contractor was required to obtain a written change order by mutual consent or submit a claim in writing requesting a formal decision by the engineer.”

    Opinski also argued that the lower court misinterpreted the contract. The Appeals court replied that “Opinski is mistaken.” He cited parts of the contract regarding the increase of time, but the court rejected these, noting that “an inability to agree is not the same as an express rejection.”

    The court also rejects Opinski’s appeal that “the evidence the project was complete earlier than September 30, 2005, is weightier than the evidence to the contrary,” which they describe as “not a winning appellate argument.” The court points out that the role of an appeals court is not to reweigh the evidence, but to determine “whether the record contains substantial evidence in support of the judgment.”

    The court did side with Opinski on one question of the escrow account. They rejected most of his arguments, repeating the line “Opinski is mistaken” several times. They decided that he was mistaken on the timing of the setoff decision and on whether the city was the prevailing party. However, the appeals court did find that Opinski was not liable for interest on the judgment.

    The appeals court rejected the awarding of prejudgment interest to the city as the funds from which the judgment was drawn was held in an escrow account. The court noted that the city had access to the funds and could “access the funds when it determined that Opinski had breached the contract.” The appeals court noted that the judgment exhausted the escrow balance and remanded the case to the lower court to determine the amount own to Opinski.

    Read the court’s decision…


    $5 Million Construction Defect Lawsuit over Oregon Townhomes

    January 6, 2012 — CDJ Staff

    A homeowners’ association in Lake Oswego, Oregon has filed a $5 million lawsuit against the developers of the luxury townhomes. The homeowners of Sunset Crossing are suing Centurion Homes and Aspen Townhomes over claims that construction defects have lead to water intrusion and structural damages. The townhomes were built in 2005.

    Andy Burns, the lawyer for Phillip and Patricia Gentelmann, the owners of both Centurion Homes and Aspen Townhomes, said the Gentelmanns were “taking these allegations very seriously.” The suit says that the construction violated state and local building codes and that the firms did not repair damage caused by water intrusion.

    Read the full story…


    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

    April 6, 2011 — April 6, 2011 - By Mark VonderHaar and Yvette Davis in the Haight Brown & Bonesteel Blog

    On February 24, 2011, the California Court of Appeal held in Jeffrey Tverberg, et al v. Fillner Construction, Inc. that the imposition of direct liability on a hirer turns on whether the hirer exercised retained control of worksite safety in such a manner that affirmatively contributed to the independent contractor’s injury. Twice, Tverberg, an independent contractor hired by a general contractor's subcontractor, asked the general contractor to make the job site safe by covering up open holes created by another unrelated subcontractor while Tverberg was working at the site. After Tverberg was injured at the site by falling in a hole, he sued both the general contractor and the subcontractor which had hired him.

    The Court of Appeal reasoned that when the general contractor instructed another subcontractor to create a condition that was potentially dangerous (i.e., creating open and uncovered bollard holes), and simultaneously required Tverberg to perform unrelated work near the open holes, the general contractor s conduct may have constituted a negligent exercise of its retained control which affirmatively contributed to Tverberg’s injury. The Court also reasoned that the general contractor affirmatively assumed responsibility for the safety of the workers near the holes by only requiring stakes and safety ribbon, and negligently discharged that responsibility which resulted in injury.

    Read the full story...

    Reprinted courtesy of Mark VonderHaar and Yvette Davis of Haight Brown & Bonesteel. Mr. VonderHaar can be contacted at mvonderhaar@hbblaw.com and Ms. Davis at ydavis@hbblaw.com.


    New Buildings in California Soon Must Be Greener

    June 19, 2012 — CDJ Staff

    The California Energy Commission has approved new energy efficiency standards for new homes and commercial buildings. The 2013 Building Energy Efficiency Standards are set to go into effect on January 1, 2014, and will require 30% more energy efficiency for non-residential construction and 25% more for homes. The standards do not affect hospitals, nursing homes, or prisons.

    Buildings covered under the standard will have to have roofs that ready for the installation of solar panels. Additionally, non-residential buildings will require high-performance windows, advanced lighting controls, and cool-roof technologies. Residential requirements include insulated hot-water pipes, whole house fans, and more efficient windows.

    The new standards are expected to add 3,500 new building industry jobs. One thing these construction workers won’t be building are power plants, since over the next thirty years, the standards are expected to save as much as six power plants.

    Read the full story…