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    Pinal County, Arizona

    Arizona Builders Right To Repair Current Law Summary:

    Current Law Summary: (HB 2620; ARS §12-1363, 1361, 1364) Current laws on the books require a purchaser of a home to provide written notice at least 90 days before commencing legal action. This gives the homebuilder time to inspect, repair or replace the defect if it falls within the specifications of the warranty. Homebuilder has 60 days to respond to written notice which may include offer to replace, repair or offer monetary compensationSB 1311 is a similar statute that covers multi-family dwellings. If no resolution is met through alternative dispute resolution procedures and a civil lawsuit is filed, the seller’s insurance company must treat a notice of a dwelling action as a notice of a claim subject to the insurance policy without affecting available coverage under the policy


    Construction Expert Witness Contractors Licensing
    Guidelines Pinal County Arizona

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    Construction Expert Witness Contractors Building Industry
    Association Directory
    Southern Arizona Home Builders Association
    Local # 0335
    2840 N Country Club Rd Ste 100
    Tucson, AZ 85716
    http://www.sahba.org

    Home Builders Association of Central Arizona
    Local # 0310
    16430 N Scottsdale Road Suite 150
    Scottsdale, AZ 85254
    http://www.hbaca.org

    Northern Arizona Builders Association
    Local # 0315
    1500 E Cedar Ave Suite 86
    Flagstaff, AZ 86004
    http://www.nazba.org


    Construction Expert Witness News and Information
    For Pinal County Arizona

    Court Clarifies Sequence in California’s SB800

    Construction on the Rise in Denver

    Construction Defect Not Occurrences, Says Hawaii Court

    Construction Workers Unearth Bones

    Contractor Underpaid Workers, Pocketed the Difference

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

    Contractor Manslaughter? Safety Shortcuts Are Not Worth It

    The Hidden Dangers of Construction Defect Litigation

    Texas “your work” exclusion

    Florida Contractor on Trial for Bribing School Official

    Irene May Benefit Construction Industry

    Toxic Drywall Not Covered Under Homeowner’s Policy

    Pier Fire Started by Welders

    Dust Infiltration Due to Construction Defect Excluded from Policy

    Defect Claims as Occurrences? Check Your State Laws

    Failure to Meet Code Case Remanded to Lower Court for Attorney Fees

    Record-Setting Construction in Fargo

    Nevada Budget Remains at Impasse over Construction Defect Law

    Ensuing Loss Found Ambiguous, Allowing Coverage

    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

    West Hollywood Building: Historic Building May Be Defective

    Construction Defects Leave Animal Shelter Unusable

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

    Hovnanian Sees Second-Quarter Profit, Points to Recovery

    Florida County Suspends Impact Fees to Spur Development

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

    Ghost Employees Steal Jobs from Legit Construction Firms

    Harmon Towers Duty to Defend Question Must Wait, Says Court

    New Jersey Court Rules on Statue of Repose Case

    Certificate of Merit to Sue Architects or Engineers Bill Proposed

    Construction Defect Lawsuit Stayed by SB800

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

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

    Defective Drains Covered Despite Water Intrusion Exclusion

    Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship

    Illinois Court Determines Insurer Must Defend Property Damage Caused by Faulty Workmanship

    Is Construction Heading Off the Fiscal Cliff?

    Windows and Lawsuits Fly at W Hotel

    Tacoma Construction Site Uncovers Gravestones

    “Other Insurance” and Indemnity Provisions Determine Which Insurer Must Cover

    An Upward Trend in Commercial Construction?

    Lockton Expands Construction and Design Team

    Lawsuit over Construction Defects Not a Federal Case

    Public Relations Battle over Harmon Tower

    Construction Defect Exception Does Not Lift Bar in Payment Dispute

    Homeowners May Not Need to Pay Lien on Defective Log Cabin

    California Supreme Court to Examine Arbitration Provisions in Several Upcoming Cases

    Construction Defects and Contractor-Owners

    Contractor Burns Down Home, Insurer Refuses Coverage

    Continuous Trigger of Coverage Adopted for Loss Under First Party Policy

    Florida trigger

    Legislatures Shouldn’t Try to Do the Courts’ Job

    Plans Go High Tech

    History of Defects Leads to Punitive Damages for Bankrupt Developer

    Contractor Liable for Soils Settlement in Construction Defect Suit

    Texas exclusions j(5) and j(6).

    Construction Spending Dropped in July

    High School Gym Closed by Construction Defects

    Bound by Group Builders, Federal District Court Finds No Occurrence

    Insurer Has Duty to Disclose Insured's Interest In Obtaining Written Explanation of Arbitration Award

    California Posts Nation’s Largest Gain in Construction Jobs

    Insurance Policy Provides No Coverage For Slab Collapse in Vision One

    Avoid Gaps in Construction Defect Coverage

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

    Green Buildings Could Lead to Liabilities

    Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.

    Colorado “occurrence”

    Fifth Circuit Asks Texas Supreme Court to Clarify Construction Defect Decision

    Unlicensed Contractors Nabbed in Sting Operation

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

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

    A Lien Might Just Save Your Small Construction Business

    Construction Defect Claim Did Not Harm Homeowner, Court Rules

    Ohio Court Finds No Coverage for Construction Defect Claims

    Changes To Indemnification Statute Are Here! Say Hello To Defense Duties

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

    California Supreme Court Binds Homeowner Associations To Arbitration Provisions In CC&Rs

    No Coverage for Negligent Misrepresentation without Allegations of “Bodily Injury” or “Property Damage”

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

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

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

    Housing Prices Up through Most of Country

    Insurer Must Defend Claims for Diminution in Value of Damaged Property

    Underpowered AC Not a Construction Defect

    Nebraska Man Sentenced for Insurance Fraud in Construction Projects

    No Third-Quarter Gain for Construction

    Construction Defect Not an Occurrence in Ohio

    JDi Data Introduces Mobile App for Litigation Cost Allocation

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

    Important Information Regarding Colorado Mechanic’s Lien Rights.
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    PINAL COUNTY ARIZONA CONSTRUCTION EXPERT WITNESS
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    The Pinal County, Arizona Construction Expert Witness Group is comprised from a number of credentialed construction professionals possessing extensive trial support experience relevant to construction defect and claims matters. Leveraging from this considerable body of experience, BHA provides construction related trial support and expert services to the nation's most recognized construction litigation practitioners, Fortune 500 builders, commercial general liability carriers, owners, construction practice groups, and a variety of state and local government agencies.

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    Construction Expert Witness News & Info
    Pinal County, Arizona

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

    February 10, 2012 — Douglas Rieser, Builders Counsel

    Stonewood v. Infinity Homes is a simple construction dispute over a matter of about $9,000.00. But sometimes these tiny little disputes turn into expensive legal battles over mere procedural quivering. In Stonewood, a small subcontractor won a big victory yesterday when the Divison 1 Court of Appeals upheld its judgment against a lien release bond posted by an owner.

    Infinity Homes contracted with Stonewood Design to lay tile in one of its customer’s homes. Stonewood did the work, but Infinity withheld roughly $9,000.00 of the contract sums for what it alleged were trade damages left on the tile. The two parties were unable to come to an agreement over payment and Stonewood proceeded with a lien under RCW 60.04. It then filed an action to enforce the lien against the homeowner, Infinity and its bonding company.

    Read the full story…

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


    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…


    Tacoma Construction Site Uncovers Gravestones

    August 11, 2011 — CDJ Staff

    The Seattle Times reports that a transit construction project has uncovered about twenty-five gravestones. The area was historically sensitive, as it is in territory once occupied by the Puyallup Tribe. At current report, no human remains have been found and the article cites the project?s archeological consultant as describing the gravestones as “not historically significant.”

    Read the full story…


    Late Filing Contractor Barred from Involving Subcontractors in Construction Defect Claim

    March 1, 2012 — CDJ Staff

    The Colorado Court of Appeals looked at that state’s Construction Defect Action Reform Act in determining if a general contractor could add subcontractors as third-party defendants to a construction defect lawsuit. Shaw Construction, LLC was the general contraction of the Roslyn Court condominium complex, and was sued by the homeowners’ association in a construction defect case. United Builder Services was the drywall subcontractor on the project. MB Roofing had installed roofs, gutters, and downspouts. The certificate of occupancy for the last building was issued on March 10, 2004. The project architect certified completion of all known remaining architectural items in June, 2004.

    The HOA filed a claim against the developers of the property on January, 21, 2009. A week later, the HOA amended its complaint to add Shaw, the general contractor. Shaw did not file its answer and third-party complaint until March 29, 2010, sending its notice of claim under the CDARA on March 30.

    The subcontractors claimed that the six-year statute of limitations had ended twenty days prior. Shaw claimed that the statute of limitations ran until six years after the architect’s certification, or that the HOA’s suit had tolled all claims.

    The trial court granted summary judgment to the subcontractors, determining that “substantial completion occurs ‘when an improvement to real property achieves a degree of completion at which the owner can conveniently utilize the improvement of the purpose it was intended.’”

    The appeals court noted that “Shaw correctly points out that the CDARA does not define ‘substantial completion.’” The court argued that Shaw’s interpretation went against the history and intent of the measure. “Historically, a construction professional who received a complaint responded by ‘cross-nam[ing] or add[ing] everybody and anybody who had a part to play in the construction chain.’” The court concluded that the intent of the act was to prevent unnamed subcontractors from being tolled.

    The court further rejected Shaw’s reliance on the date of the architect’s certification as the time of “substantial completion,” instead agreeing with the trial court that “the architect’s letter on which Shaw relies certified total completion.”

    The appeals court upheld the trial court’s determination that the statute of limitation began to run no later than March 10, 2004 and that Shaw’s complaint of March 29, 2010 was therefore barred. The summary judgment was upheld.

    Read the court’s decision…


    Housing Market on Way to Recovery

    October 23, 2012 — CDJ Staff

    Bloomberg News reports that new home purchases neared a two-year high, with July sales being the strongest since April 2010. Economists polled by Bloomberg expected an annual pace of 380,000 sales, the current levels are at 373,000. Strongest sales gains were in the Northeast, with a 20 percent jump. The Midwest and Western regions had small gains, and the South saw a drop of 4.9 percent. As the Northeast’s home prices are highest and the South’s the lowest, the pattern of sales lead to a sharp increase in median sales price.

    Meanwhile, existing stocks of homes continued to deplete, reaching a record low of 38,000 completed homes on the market. In response, builders are constructing new homes at a pace not seen since April 2010, accord to the Commerce Department.

    Read the full story…


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

    June 14, 2011 — Douglas Reiser, Builders Council Blog

    I just came across a case that I think truly paints the insurance dilemma for contractors. Thanks to this recent Illinois case, I don’t have to make up any factual scenarios—so kudos to Attorney Robert Boylan for posting it.

    In reading over my RSS feeds this weekend, I noticed a great writeup on long-time blogger Josh Glazov’s Construction Law Today. Attorney Robert Boylan’s post describes a recent Illinois case where a general contractor was denied its additional insured status on a second-tier subcontractor’s insurance. The reason for the denial: the general contractor failed to procure an agreement in writing with the second-tier subcontractor, requiring it to be listed as an additional insured.

    Read the full story…

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


    Water Drainage Case Lacks Standing

    March 28, 2012 — CDJ Staff

    The Texas Court of Appeals has ruled in the case La Tierra de Simmons Familia Ltd. V. Main Event Entertainment, LP. The trial court had found for Main Event. On appeal, the court threw out some of the grounds on which the trial court had reached its decision.

    The case involved two commercial lots in northwest Austin, Texas. The uphill tract (Phase III of the Anderson Arbor development) diverts its runoff onto the lower tract (the “Ballard tract”). The owners of the Ballard tract claim that “the drainage system was designed or constructed in a manner that has damaged and continues to damage the Ballard tract.”

    Both tracts have undergone changes of ownership since the construction of the drainage system in 2004. At the time the drainage system was constructed, the parcel was owned by Sears Roebuck and Co. Sears later sold the property. Main Event Entertainment is the current tenant. Likewise, the Ballard tract was previously owned by the Ballard Estate which sold the property to La Tierra on an “as is” basis in 2007.

    After La Tierra bought the Ballard tract, La Tierra’s engineer “witnessed and videotaped what he described as ‘flooding’ on the Ballard tract caused by storm water discharge from the Anderson Arbor drainage system during a rainfall event.” La Tierra determined that an adequate drainage system would cost about $204,000. Development plans were put on hold.

    La Tierra sued Main Event and various other parties associated with the uphill tract, seeking “actual damages for (1) decrease and loss in rental income due to delay in obtaining the development permit, (2) interest on carrying costs during that time period, (3) the cost to build a water conveyance system on the Ballard tract, (4) engineering fees incurred to redesign the water conveyance system, (5) unspecified out-of-pocket real estate expenses, and (6) property devaluation occasioned by the need to construct an expensive water conveyance system.” The trial court never reached these claims, ruling instead that La Tierra lacked standing, that its claims were barred under the statute of limitations, and that there was no evidence of damage.

    La Tierra appealed, arguing that “(1) the summary-judgment evidence does not conclusively establish that property damage claims accrued or were discovered prior to September 11, 2007, which is within the limitations period and was after La Tierra purchased the property; (2) even if the property was damaged before La Tierra acquired ownership of the Ballard tract, standing exists based on the assignments of interest from the Ballard Estate heirs, and the discovery rule tolls limitations until the injury was discovered on September 11, 2007; (3) limitations does not bar La Tierra's request for injunctive relief; (4) La Tierra's water code claim against Main Event and M.E.E.P. is viable based on their control over the drainage system, which makes them necessary and indispensable parties for injunctive relief; (5) La Tierra presented more than a scintilla of evidence to raise a fact issue on damages, causation, and other essential elements of its causes of action; and (6) the trial court abused its discretion when it sustained the defendants' objections to La Tierra's summary-judgment evidence.”

    The appeals court concluded that La Tierra’s second claim was irrelevant to standing, as La Tierra “obtained assignments from the Ballard Estate heirs ? nearly one year after the lawsuit was initially filed.” Nor did the court accept their first point. The water system had been operating unaltered since January, 2004, with monthly maintenance and inspection to maintain its designed operation. Further, a feasibility report La Tierra received stated that “over sixteen acres drain into those ponds, and thus onto this site.” The court noted that “the underlying facts giving rise to a cause of action were known before La Tierra acquired ownership of the Ballard tract.”

    The court concluded that the drainage issue is a permanent injury, but that it “accrued before La Tierra acquired an ownership interest in the property.” As La Tierra has standing, the appeals court ruled that it was improper for the trial court to rule on the issues. The appeals court dismissed the questions of whether the case was barred under the statute of limitation and also the question of whether or not La Tierra had damages.

    As the issue of standing would not allow La Tierra to bring the suit, the appeals court found for the defendants, dismissing the case for this single reason, and otherwise affirming the ruling of the lower court.

    Read the court’s decision…


    Contractor’s Home Not Covered for Construction Defects

    September 13, 2012 — CDJ Staff

    The US District Court in Seattle has rejected most of the claims made by a Des Moines man over insurance coverage for water damage to his home. Judge John C. Coughenour granted summary judgment to Liberty Northwest in Ayar v. Liberty Northwest Insurance Corporation.

    Sayad Ayar was the general contractor for the construction of his house. As a homeowner held a $1.5 million insurance policy from Liberty Northwest (LNW) that excluded “faulty, inadequate, or defective construction.”

    In 2008, less than three years after his house was constructed, Mr. Ayar filed a claim after water leaked through his living room ceiling. LNW hired an engineering firm to investigate the damage. The engineering firm, CASE Forensics, concluded that the water intrusion was due to “the failure to install an adequate and continuous waterproof membrane, flashing, and drainage system within the balcony at the time of construction.” Ayar’s expert attributed the leakage to “damage done to the weather deck waterproofing during a storm event with high winds,” which would be covered under the policy. CASE Forensics reviewed these conclusions and rejected them. LNW denied coverage.

    Further problems lead to further investigations, and in each case, LNW attributed the problems to construction defects. During this process, LNW “authorized Ayar to cut into the ceiling’s drywall in order to assist in determining the source of the water intrusion.” Mr. Ayar moved his family to a rental home. He requested that LNW cover the rental and other other costs.

    LNW’s adjuster concluded that no coverage was available, but recommended paying Mr. Ayar $19,648.68 to reinstall drywall and repair the hole in the ceiling. The insurance company paid $2,000 to cover the cost of cutting into the ceiling. The also claimed the amount of drywall he removed was “excessive” and would not cover his relocation as “his home had been livable and because the loss was not covered.”

    Ayar made four claims to the court in support of the argument that LNW misrepresented “pertinent facts or insurance policy provisions.” The court rejected three of these, noting that as all water damage was excluded, LNW’s citation of other sources of water intrusion was not a misrepresentation. “LNW did not rely on this provision as the reason for denying coverage.” Nor was LNW’s reference to “fungi, wet or dry rot” a misrepresentation. As for their reference to construction defects, it “was clearly appropriate given that the construction defect exclusion was the principal basis or denying the claim.” However, the court found that regarding the removal of drywall, “a triable issue of the facts exists.”

    Ayar also claimed that LNW did not conduct a reasonable investigation, but the court found no evidence to support this conclusion. “This is not a case where the insurer failed to investigate or did so only half-heartedly.” Although the thoroughness of the investigation could not questioned, the court concluded that its timing could. Ayar claimed that LNW engaged in unreasonable delays. LNW counters that the delays were due to “Ayar’s own obstructive behavior and failure to cooperate with LNW’s investigation.”

    The court dismissed all of Ayar’s claims, with the exception of whether LNW should have informed him that they would not pay for drywall repair unless there was damage, and whether LNW’s investigation failed to conclude its investigation within a thirty-day time line.

    Read the court’s decision…


    Boston Tower Project to Create 450 Jobs

    November 18, 2011 — CDJ Staff

    Continuing the development of Boston’s Theater District, Millennium Partners broke ground for the building of Hayward Place, a 15-story residential tower with street-level shops. The project is expected to take two years to complete and will employ about 450 construction workers.

    Thomas Menino, the mayor of Boston said that the “ground breaking of Hayward Place is another sign of economic growth and forward progress on the revitalization of this area.” The project will be built by Suffolk Construction. John Fish, their CEO, said they were “fortunate as a contractor to be the beneficiary of this.”

    The report in the Boston Herald notes that a few blocks away, the site of the former Filenes department store is still “an empty eyesore.” Menino joked, “anyone want to bid for it?” He promised that site would also be developed.

    Read the full story…


    Nebraska Man Sentenced for Insurance Fraud in Construction Projects

    July 10, 2012 — CDJ Staff

    Thomas Herink has been ordered to repay more than $5 million to his victims and will be serving three years of probation after 18 months in jail for defrauding banks and insurance companies, according to a report in the Insurance Journal. Herink falsified financial statements to lenders and insurers so that his company, Golf Services Group Inc. could participate in construction projects.

    Read the full story…


    Statute of Repose Dependant on When Subcontractors Finished

    July 10, 2012 — CDJ Staff

    Scott C. Sandberg of Snell and Wilmer writes a post on the JDSupra site about the Colorado Court of Appeals decision in Shaw Construction v. United Builder Services. Sanberg notes that when the general contractor was sued by an HOA, the contractor turned around and sued its subcontractors. The contractor made three claims. They claimed that “improvement” referred to the whole project, that “substantial completion” was reached when the architect certified completion, and that the statute of repose was tolled by the HOA’s service of a Construction Defect Action Reform Act notice.

    The subcontractors claimed that “improvement” only referred to their specific work, which reached “substantial completion” when they finished, despite work to be done by other later, and the HOA’s notice to the contractor did not affect the subcontractors. The Colorado court agreed with the subcontractors.

    Sandberg notes that some of the contractor’s were not addressed by the court, noting that “the court did not decide whether an improvement triggering the statute of repose can be determined on a trade-by-trade basis,” and that “the court did not decide whether substantial completion occurs when a certificate of occupancy is issued or when the architect certifies completion.”

    Read the full story…


    Insurer’s Discovery Requests Ruled to be Overbroad in Construction Defect Suit

    October 28, 2011 — CDJ Staff

    The US District Court has ruled in the case of D.R. Horton Los Angeles Holding Co. Inc. v. American Safety Indemnity, Co. D.R. Horton was involved in a real estate development project. Its subcontractor, Ebensteiner Co., was insured by ASIC and named D.R. Horton as an additional insured and third-party beneficiary. D.R. Horton, in response to legal complaints and cross-complaints, filed for coverage from ASIC under the Ebensteiner policy. This was refused by ASIC. ASIC claimed that “there is no potential coverage for Ebensteiner as a Named Insurer and/or D.R. Horton as an Additional Insured.” They stated that “the requirements for coverage are not satisfied.”

    The case same to trial with the deadline for discovery set at March 1, 2011. ASIC stated they were seeking the developer’s “job file” for the Canyon Gate project. D.R. Horton claimed that ASIC’s discovery request was overbroad and that it would be “unduly burdensome for it to produce all documents responsive to the overbroad requests.”

    D.R. Horton did agree to produce several categories of documents, which included:

    “(1) final building inspection sign-offs for the homes that are the subject of the underlying litigation;(2) an updated homeowner matrix for the underlying actions; (3) the concrete subcontractor files; (4) the daily field logs for D.R. Horton’s on-site employee during Ebensteiner’s work; (5) documents relating to concrete work, including documents for concrete suppliers; (6) documents relating to compacting testing; (7) documents relating to grading; and (8) D.R. Horton’s request for proposal for grading”

    The court found that the requests from ASIC were overbroad, noting that the language of the ASIC Request for Production of Documents (RFP) 3-5 would include “subcontractor files for plumbing, electric, flooring, etc. - none of these being at issue in the case.” The court denied the ASIC’s motion to compel further documents.

    The court also found fault with ASIC’s RFPs 6 and 7. Here, D.R. Horton claimed the language was written so broadly it would require the production of sales information and, again, subcontractors not relevant to the case.

    Further, the court found that RFPs 8, 10, 11, and 13 were also overbroad. RFP 8 covered all subcontractors. D.R. Horton replied that they had earlier complied with the documents covered in RFPs 10 and 11. The court concurred. RFP 13 was denied as it went beyond the scope of admissible evidence, even including attorney-client communication.

    The court denied all of ASIC’s attempts to compel further discovery.

    Read the court’s decision…


    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


    Arbitration Clause Not Binding on Association in Construction Defect Claim

    June 19, 2012 — CDJ Staff

    Determining that a community’s CC&Rs do not form an agreement to arbitrate, the California Court of Appeals has reversed the decision of the Superior Court inVerano Condo. Homeowners the Ass’n v. La Cima Dev., LLC (Cal. App., 2012). La Cima purchased an apartment complex in December 2004, which they converted into condominiums. In the process, La Cima created the CC&Rs, under which the Verano Condominium Homeowners Association came into being. One section of the CC&Rs included arbitration clauses. Additionally, the purchase agreements for individual condominium units also contained arbitration clauses. Subsequently, the owners became aware of construction defect both in units and in the common areas. The Association sued La Cima both in its own interest and on behalf of its members. La Cima moved to compel arbitration, which was denied by the trial court. La Cima appealed.

    The court concluded that “CC&Rs are insufficient to form an agreement to arbitrate between La Cima and the Association.” The court noted that “no evidence exists to show the Association consented to the terms of the CC&Rs, either explicitly or implicitly.”

    The court agreed with La Cima that the arbitration agreement applied to those owners who had purchased their units directly from La Cima. Moreover, as the conversion to condominiums involved interstate commerce, in part because a Delaware company was selling condominiums located in California, the court held that the Federal Arbitration Act (FAA) applied, and as such “even a state constitutional standard, such as the the jury waiver provision requirements of the California Constitution, cannot be used to circumvent the FAA in the face of an otherwise valid arbitration agreement.”

    However, the court also held that there was “no agreement in the CC&Rs between La Cima and owners who did not purchase units directly from La Cima,” adding that “no meeting of the minds between La Cima and these later purchasers and their successors occurred.” The court did not believe that “the Legislature intended that CC&Rs would be used to provide continuing and irrevocable contractual development or role as a representative of the owners of the development.”

    The purpose of the CC&Rs, according to the court are to “protect owners from one another and permit enforcement of its terms by the Association.” The court stated that “La Cima relinquished its interests in the land by selling its property and may not assert any rights under the CC&Rs following the transfer of its ownership interest.

    In its conclusion, the court determined that claims must be organized in three classes. The claims the association made against La Cima for defects in the common area “are not subject to any valid agreement to arbitrate.” The second category are those owners who did not purchase their units directly from La Cima. Here, also, the court found that the units “are similarly not subject to a valid arbitration agreement.”

    The third category, however, was “owners who purchased units directly from La Cima.” The court held that these arbitration agreements were valid, and if the claims were to be taken up by the association, the association could only submit these claims to arbitration. The lower court was instructed to separate these claims, as here La Cima’s motion could be granted.

    Read the court’s decision…


    Construction Delayed by Discovery of Bones

    June 28, 2011 — CDJ Staff

    Work stopped on a $7 million construction project in Oak Harbor, Washington, after three sets of Native American remains were found. The Washington State Department of Archaeology and Historic Preservation had suggested that the project employ an archaeologist. City, state, and tribal officials are determining what will happen next. The Seattle Times reports that Jim Slowik, Oak Harbor’s mayor, has asked for a review of why no archaeologist was part of the project.

    Read the full story…


    US Courts in Nevada Busy with Yellow Brass

    August 2, 2012 — CDJ Staff

    Judge Robert C. Jones, the chief judge of the United States District Court of Nevada, and Judge Peggy A. Leen, a magistrate judge with the same court, have issued orders in cases involving allegations of high-zinc yellow brass plumbing components. Judge Jones issued orders on Waterfall Homeowners Association v. Viega, Inc. and Greystone Nevada, LLC v. Anthem Highlands Community Association on July 9, 2012. Judge Leen issued orders on Southern Terrace Homeowners Association v. Viega, Inc. on July 10, and The Seasons Homeowners Association, Inc. v. Richmond American Homes of Nevada, Inc. on July 19.

    Chief Judge Jones held an omnibus hearing on Waterfall v. Viega on June 12. During that hearing “Chief Judge Jones had already agreed that the claims against the product manufacturers should be be severed from the majority of the other claims and that discovery should proceed on different tracks.” Judge Leen ordered that the Southern Terrace claims be referred to Chief Judge Jones to determine if it should be consolidated with other yellow brass cases.

    Chief Judge Jones’s decision in Greystone Nevada rests on issues of whether the affected homeowners had signed arbitration agreements. The judge found that the “Defendant’s claims that the seven homeowners they have identified are subsequent purchasers who need not arbitrate with Greystone is definitively refuted by the evidence.”

    Judge Leen cites the Greystone decision in her ruling on Seasons Homeowners Association v. Richmond American Homes of Nevada. Richmond seeks to compel individual arbitration, stating that “the arbitration clause used singular rather than plural terms, and therefore, class arbitration was foreclosed.” Judge Leen determined that “under Nevada law, a homeowners association has statutory authority to represent homeowners associations in these types of actions. She did, however, accept Richmond’s argument that they could compel arbitration.

    The Waterfall order involves an attempt by two homeowners associations to seek a class action against seventeen defendants, the first twelve of whom are described as “the Viega Defendants” and “the Uponor Defendants.” Chief Judge Jones notes that “many of these Defendants have been sued in identical class actions by the same law firms, but with different named defendants.” The homeowner association seek to “represent their own 998 members directly but also wish to represent up to 10,000 homeowner associations representing up to 250,000 similarly situated homeowner members throughout the Las Vega area via this class action.”

    The judge has denied the Viega Defendants’ attempt to deny class certification, noting that the plaintiffs “argue that they intend to argue for class certification under Rule 23(b)(3). He also denied the motions by the two groups of the Viega Defendants. The U.S. Viega Defendants sought to be dismissed from the case for a variety of reasons. The judge noted of the claim that the plaintiffs had no injury of fact and are not alleging actual damage is contradicted by the allegations of actual damage made by the plaintiffs. ”They have alleged that the parts are defective and have already begun to corrode in at least a few sample circumstances, even if they have not yet failed.” To the argument that there re not particular claims made against defendants, the judge notes, “it is clear from the Complaint which Defendants are alleged to have manufactured and sold which brands of allegedly defective products, and which Defendants are alleged to have installed them.”

    The German Viega firms also sought to be dismissed from the suit, noting that “they have no property, employees, accounts, advertisements, etc. in Nevada and have not sold any products in Nevada.” However, the judge notes that “at least Waterfall, and perhaps Red Bluff, was still under construction when Viega, Inc. became the sole shareholder of Vanguard Industries, Inc.”

    Finally, both of Chief Judge Jones’s rulings cite a related case in the U.S. District Court for the District of Minnesota involving a class action settlement for those with F1807 systems. He notes in both these cases that “Plaintiffs disclaimed any claims based upon F1807 components.”

    Read the courts' decisions…

    Waterfall Homeowners Association v. Viega, Inc.

    Greystone Nevada, LLC v. Anthem Highlands Community Association

    Southern Terrace Homeowners Association v. Viega, Inc.

    The Seasons Homeowners Association, Inc. v. Richmond American Homes of Nevada, Inc.


    New Safety Standards Issued by ASSE and ANSI

    March 28, 2012 — Melissa Dewey Brumback, Construction Law North Carolina

    The American National Standards Institute (ANSI) and the American Society of Safety Engineers (ASSE) have recently announced their approval of two new safety standards to enhance construction site safety.

    The two new standards, which are set to take effect during June 2012, are the ANSI/ASSE A10.1-2011 Pre-Project and Pre-Task Safety and Health Planning for Construction and Demolition Operations, and the ANSI/ASSE A10.26-2011 Emergency Procedures for Construction and Demolition Sites.

    The new A10.1-2011 standard was designed to assist construction owners, contractors, and designers by ensuring that safety and health planning were standard parts of their pre-construction planning. It is also intended to help owners of construction sites to establish a process for evaluating constructor candidates with regard to their safety and health performance planning.

    The A10.26 standard applies to emergency situations, including fires, collapses, and hazardous spills. The standard deals with emergency rescue, evacuation, and transportation of injured workers, and also plans for coordinating with emergency medical facilities ahead of potential disasters.

    Read the full story…

    Reprinted courtesy of Melissa Dewey Brumback of Ragsdale Liggett PLLC. Ms. Brumback can be contacted at mbrumback@rl-law.com.


    Homebuilders Go Green in Response to Homebuyer Demand

    May 10, 2012 — CDJ Staff

    McGrawHill Construction reports that 17 percent of new homes and remodels in 2011 were done with green building practices. Their report estimates that by 2016, this will rise to 29 to 38 percent of the market for home construction and remodeling.

    Consumers see the green buildings as more desirable, particularly where they are more energy efficient. Two thirds of builders noted their customers were interested in features that would lower the energy use of their homes. Consumers also feel that green building materials are more durable and see green homes as higher quality.

    Read the full story…