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    Construction Expert Witness Builders Information
    Steinauer, Nebraska

    Nebraska Builders Right To Repair Current Law Summary:

    Current Law Summary: Actions alleging a breach of warranty and construction defect are governed by a four-year statute of limitations (which may be extended by two years if the cause of action is not or could not reasonably have been discovered within the four-year period) and a ten-year statute of repose for latent defects.


    Construction Expert Witness Contractors Licensing
    Guidelines Steinauer Nebraska

    Businesses must register with the Secretary of State. No state license is required for general contracting, however, local licensure is needed in counties with populations over 100,000. Licensure is required for the electrical trade.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Home Builders Association of Lincoln
    Local # 2836
    6100 S 58th St Ste C
    Lincoln, NE 68516
    http://www.hbal.org

    West Central Nebraska Home Builders Association
    Local # 2897
    5817 Ave O Place
    Kearney, NE 68847


    Nebraska State Home Builders Association
    Local # 2800
    PO Box 22375
    Lincoln, NE 68542
    http://www.nshba.org

    Central Nebraska Home Builders Association
    Local # 2818
    131 North Grace
    Grand Island, NE 68803


    North Platte Chapter
    Local # 2854
    PO Box 146
    North Platte, NE 69103


    Metro Omaha Builders Assn
    Local # 2872
    4141 N 156th Street Ste 100
    Omaha, NE 68116
    http://www.moba.com

    Columbus Home Builders Association
    Local # 2805
    3121 39th St
    Columbus, NE 68601



    Construction Expert Witness News and Information
    For Steinauer Nebraska

    Insurer Able to Refuse Coverage for Failed Retaining Wall

    Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment

    Good Signs for Housing Market in 2013

    Texas “Loser Pays” Law May Benefit Construction Insurers

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

    Injured Construction Worker Settles for Five Hundred Thousand

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

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

    SB800 Cases Approach the Courts

    Ensuing Loss Provision Does Not Salvage Coverage

    School District Settles Construction Lawsuit

    Construction Jobs Expected to Rise in Post-Hurricane Rebuilding

    Construction Defect Lawsuits? There’s an App for That

    Insurer Not Entitled to Summary Judgment on Construction Defect Claims

    JDi Data Introduces Mobile App for Litigation Cost Allocation

    South Carolina Contractors Regain General Liability Coverage

    General Contractors Must Plan to Limit Liability for Subcontractor Injury

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

    Conspirators Bilked Homeowners in Nevada Construction Defect Claims

    Construction Employment Rises in Half of the States

    Homeowners Sue Over Sinkholes, Use Cash for Other Things

    Workers Hurt in Casino Floor Collapse

    Construction on the Rise in Washington Town

    Ohio subcontractor work exception to the “your work” exclusion

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

    Another Las Vegas Tower at the Center of Construction Defect Claims

    Limitations of Liability in Subcontractors’ Contracts May Not Be Enforceable in Colorado to Limit Claims by Construction Professionals.

    Discovery Ordered in Nevada Construction Defect Lawsuit

    Federal Judge Dismisses Insurance Coverage Lawsuit In Construction Defect Case

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

    Exact Dates Not Needed for Construction Defect Insurance Claim

    Rihanna Finds Construction Defects Hit a Sour Note

    Residential Construction: Shrinking Now, Growing Later?

    Anti-Concurrent Causation Clause Bars Coverage for Landslide and Water Leak

    Drug Company Provides Cure for Development Woes

    No Third-Quarter Gain for Construction

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

    Lawsuit over Construction Defects Not a Federal Case

    Ensuing Loss Provision Does Not Salvage Coverage

    Las Vegas Home Builder Still in Bankruptcy

    Condo Owners Allege Construction Defects

    Delaware “occurrence” and exclusions j(5) and j(6)

    El Paso Increases Surety Bond Requirement on Contractors

    Ensuing Losses From Faulty Workmanship Must be Covered

    Developer’s Fraudulent Statements Are His Responsibility Alone in Construction Defect Case

    Federal Court Denies Summary Judgment in Leaky Condo Conversion

    New Safety Standards Issued by ASSE and ANSI

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

    Construction Defect Exception Does Not Lift Bar in Payment Dispute

    Appeals Court Reverses Summary Judgment over Defective Archway Construction

    Sometimes It’s Okay to Destroy Evidence

    Contractor’s Home Not Covered for Construction Defects

    Orange County Home Builder Dead at 93

    Geometrically Defined Drainage Cavities in EIFS as a Guard Against Defects

    Judge Kobayashi Determines No Coverage for Construction Defect Claim

    More Charges in Las Vegas HOA Construction Defect Scam

    Loose Bolts Led to Sagging Roof in Construction Defect Claim

    Subcontractor Not Liable for Defending Contractor in Construction Defect Case

    OSHA Extends Delay of Residential Construction Fall Protection Requirements

    Construction Defects Lead to Demolition

    Bound by Group Builders, Federal District Court Finds No Occurrence

    Safer Schools Rendered Unsafe Due to Construction Defects

    New OSHA Fall Rules to Start Early in Minnesota

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

    DA’s Office Checking Workers Comp Compliance

    Homebuilders Go Green in Response to Homebuyer Demand

    Boyfriend Pleads Guilty in Las Vegas Construction Defect Scam Suicide

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

    California Supreme Court Finds Associations Bound by Member Arbitration Clauses

    Hawaii Building Codes to Stay in State Control

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

    Harsh New Time Limits on Construction Defect Claims

    Colorado Court of Appeals Finds Damages to Non-Defective Property Arising From Defective Construction Covered Under Commercial General Liability Policy

    Florida trigger

    Eighth Circuit Remands to Determine Applicability of Collapse Exclusion

    After Construction Defect Case, Repairs to Austin Building

    Five Years of Great Legal Blogging at Insurance Law Hawaii

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

    After $15 Million Settlement, Association Gets $7.7 Million From Additional Subcontractor

    Defective Drains Covered Despite Water Intrusion Exclusion

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    Negligent Construction an Occurrence Says Ninth Circuit

    Construction Defects Are Occurrences, Says South Carolina High Court

    Surveyors Statute Trumps Construction Defect Claim in Tennessee

    US Courts in Nevada Busy with Yellow Brass

    Texas Windstorm Insurance Agency Under Scrutiny

    Death of Construction Defect Lawyer Ruled a Suicide

    High School Gym Closed by Construction Defects

    When is a Construction Project truly “Complete”? That depends. (law note)

    Toxic Drywall Not Covered Under Homeowner’s Policy
    Corporate Profile

    STEINAUER NEBRASKA CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    Leveraging from more than 5500 construction defect and claims related expert witness designations, the Steinauer, Nebraska Construction Expert Witness Group provides a wide range of trial support and consulting services to Steinauer's most acknowledged construction practice groups, CGL carriers, builders, owners, and public agencies. Drawing from a diverse pool of construction and design professionals, BHA is able to simultaneously analyze complex claims from the perspective of design, engineering, cost, or standard of care.

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    Construction Expert Witness News & Info
    Steinauer, Nebraska

    Crane Dangles and So Do Insurance Questions

    November 7, 2012 — CDJ Staff

    Hurricane Sandy sent a construction crane dangling from the top of One57, a condo construction project in New York City. In response to the risk, the nearby Parker Meridian and other nearby buildings were evacuated until the crane could be stabilized. Businessweek reports that One57 involves “a tangle of companies,” including the developer, Extell Development and the contractor, Lend Lease Construction. Pinnacle Industries was responsible for providing and operating the crane.

    The insurance claims are yet to be made, but they will likely include the costs of evacuating nearby buildings and to cover any damage to the building itself. David DeLaRue, a vice president in construction practice at Willis Group Holdings said there would be two questions: “Did our insured do anything to cause that loss? Does this policy cover it?”

    Read the full story…


    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…


    Home Repair Firms Sued for Fraud

    September 30, 2011 — CDJ Staff

    The Illinois Attorney General has filed a lawsuit in Cook County Circuit Court alleging that two connected firms took money from homeowners and then failed to perform the contracted work. One of the three defendants, Chris Bidigare, was an owner of agent of both Fairway Construction and Maintenance Services, LLC, and Rock Construction Management, LLC.

    In once case, according to the article on the OakPark Patch, one homeowner provided a $111,000 down payment, only to have the company cancel the job and refuse to return the money. One homeowner was told by Fairway that she should contact their insurance provider. The insurance provider told her that Fairway’s insurance had been cancelled due to non-payment.

    The suit seeks to bar the three defendants from working in home repair in Illinois.

    Read the full story…


    New Construction Laws, New Forms in California

    July 10, 2012 — CDJ Staff

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

    Read the full story…


    Ohio Court of Appeals Affirms Judgment in Landis v. Fannin Builders

    April 20, 2011 — April 20, 2011 Beverley BevenFlorez - Construction Defect Journal

    The Ohio Court of Appeals affirmed the judgment in Landis v. William Fannin Builders. Landis contracted Fannin Builders to build their home. The case involved staining problems on the T1-11 siding chosen by the plaintiffs.

    After a year and a half of discussion on how to resolve the problem of uneven staining on the siding, Landis filed suit “against Fannin Builders, alleging claims for breach of contract, breach of the express limited warranty, and violation of the Ohio Consumer Sales Practices Act (“OCSPA”). Fannin Builders, in turn, filed a third-party complaint against 84 Lumber, alleging claims for breach of contract and indemnification. With the trial court’s leave, Fannin Builders also later amended its answer to add a counterclaim against appellees for breach of contract and unjust enrichment. In the counterclaim, Fannin Builders alleged that appellees still owed it $3,908.98 for the construction of appellees’ home.”

    “In its decision, the trial court found in appellees’ favor on their breach of contract claim and against appellees on their claims for breach of the express limited warranty and violation of the OCSPA. Additionally, the trial court found in Fannin Builders’ favor on its counterclaim for breach of contract and against Fannin Builders on its third-party claims for breach of contract and indemnity. The trial court determined that appellees’ damages amounted to $66,906.24, and after setting off the $3,908.98 that appellees owed Fannin Builders under the construction contract, the trial court awarded appellees $62,997.26. The trial court reduced its decision to judgment on May 18, 2010.”

    Fannin Builders appealed this judgment and assigned the following errors:

    [1.] The Trial Court Erred as a Matter of Law by Concluding that Appellant Breached its Contract with Appellees when it provided a Semi-Transparent Oil-Based Stain that Simply did not Meet their Approval.

    [a.] The Contract does not Contain a Satisfaction Clause.

    [b.] Even if the Court Implies a Satisfaction Clause, the Court Should Apply an Objective Standard.

    [2.] The Trial Court Erred as a Matter of Law by Failing to Consider Appellant’s Right to Cure.

    [3.] The Trial Court committed Reversible Error by not Assessing Damages Using “Diminished Value Standard,” and by Creating a Remedy that Constitutes Economic Waste.

    [4.] The Trial Court Erred as a Matter of Law by Concluding that Appellant is Barred from Seeking Indemnification When 84 [Lumber] Never Fulfilled its Obligations Pursuant to the Settlement Agreement Entered on August 2, 2005.

    In response to the first assigned error, the Court of Appeals stated: “Because the failure to provide siding of a uniform color, not appellees’ displeasure, breached the contract, we reject Fannin Builders’ contention that the trial court implied a satisfaction clause into the contract and found a breach of that clause. Accordingly, we overrule Fannin Builders’ first assignment of error.”

    The Court of Appeals overruled the second assignment of error and provided the following reasoning: “Although Fannin Builders depends upon a term of the limited warranty for its right to cure, the trial court concluded that no breach of the limited warranty occurred. Fannin Builders breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIA’s Quality Standards. Consequently, the limited warranty does not apply to this case, and thus, it does not prevent appellees’ recovery of damages.”

    The Appeals Court found “the trial court’s award of damages” was “both reasonable and supported by competent, credible evidence,” and therefore concluded “that the trial court did not err in setting appellees’ damages at $62,997.26.” The Fannin Builders third assignment of error was overruled.

    The fourth and final assignment of error was also overruled by the Court of Appeals. “While Fannin Builders correctly asserts that 84 Lumber never installed the replacement siding, it ignores the fact that it ordered 84 Lumber to remove the replacement siding from appellees’ property. Thus, Fannin Builders precluded 84 Lumber from completely performing under the August 2, 2005 letter agreement. […] Consequently, Fannin Builders cannot now claim that the letter agreement is unenforceable or that it is entitled to indemnification from 84 Lumber. Because Fannin Builders assumed all liability for the defective siding in the letter agreement, it is responsible for appellees’ damages.”

    James A. Zitesman, Columbus, Ohio Business Attorney, compared the case to Jones v. Centex (Ohio App. 2010), which had a different verdict:

    “The common thread is the implied warranty of good workmanship. In the Jones case, the Court found that the buyers had in fact waived all implied warranties, including the implied warranty of good workmanship. In the contract between Jones and Centex, the builder stated that it “…would not sell the property to Purchasers without this waiver.” Probably should have been a sign to the buyers.

    In the Landis case, the Court stated, “Contracts for the future construction of a residence include a duty, implied by law, that the builder must perform its work in a workmanlike manner.” The Court gave significant weight to the concept of the implied warranty of good workmanship. The builder relied upon the BIA Warranty which limits builders’ liability and exposure to legal issues. The trial court concluded there was no breach of the limited warranty, rather the builder “breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIAs Quality Standards.”

    The Supreme Court of Ohio has accepted the Jones v. Centex Homes case for review.

    Read the full story...


    California Posts Nation’s Largest Gain in Construction Jobs

    March 28, 2012 — CDJ Staff

    California added about 8,900 construction jobs in January, 2012, as compared to December, 2011, leading the nation in the number of added construction jobs. Thirty-four other states also saw added construction jobs. A year prior, only twenty-eight states added construction jobs. The Associated General Contractors of America analyzed the monthly report from the Labor Department. Ken Simonson, the chief economist for the Associated General Contractors of America noted that “the gains this January partly reflect very mild weather this winter and exceptionally cold and snowy conditions a year before.”

    Read the full story…


    Nevada Bill Aims to Reduce Legal Fees For Construction Defect Practitioners

    March 21, 2011 — March 21, 2011 Construction Defect Journal Staff

    Assemblyman Ira Hansen and twelve additional members of Nevada’s Assembly are sponsoring Assembly Bill 285. AB 285 Revises provisions governing an award of attorney’s fees in causes of action for constructional defects. Existing law generally provides that a claimant may recover reasonable attorney’s fees as part of the claimant’s damages in a cause of action for constructional defects. (NRS 40.655)

    This bill removes this provision and instead authorizes a court to award reasonable attorney’s fees to a prevailing party involved in such a cause of action if an independent basis for the award exists pursuant to existing law which authorizes a court to award attorney’s fees in certain circumstances, or Rule 68 of the Nevada Rules of Civil Procedure, which provides for the payment of reasonable attorney’s fees by an offeree who rejects an offer and subsequently fails to obtain a more favorable judgment.

    In an AP report published in Business Week it is suggested that the target objective of legislators centers on what it refers to as Nevada’s "Rampant construction defect lawsuits".

    According to Business Week "The suits bring in hundreds of millions of dollars for lawyers and have put construction companies out of business. Hansen says fewer construction firms mean higher prices for Nevada consumers."

    Click Here To Read Full Text and Revisions of Assembly Bill 285


    Five Years of Great Legal Blogging at Insurance Law Hawaii

    December 9, 2011 — CDJ Staff

    Our congratulations to Tred Eyerly who has been blogging at Insurance Law Hawaii for five years now. Over the years, he has posted more than five hundred posts and has provided us all with fascinating insights into the laws on insurance coverage. He describes his blog as “a commentary on insurance coverage issues in Hawaii and beyond.” We are grateful that the “beyond” has just in the last few weeks included Colorado, Illinois, Washington, Minnesota, and Rhode Island (about as far from the island of Hawaii as you can get).

    You can read his blog at Insurance Law Hawaii.


    Contractor Manslaughter? Safety Shortcuts Are Not Worth It

    August 11, 2011 — Douglas Reiser, Builders Counsel

    It’s been a while since I discussed the importance of safety. But, a recent article on ENR.com compelled this brief article. Don’t shortcut safety — you could be facing serious criminal repercussions.

    A New York crane company owner and one of his employees are each facing a second-degree manslaughter charge for the death of two construction workers.  The charges stem from the collapse of a crane in New York City. The district attorney determined that the crane owner cut a few corners to reduce its operation costs, significantly sacrificing safety.

    Another example was the 2010 trial of another New York crane operator who was charged with manslaughter. In that case, the criminal charges failed to stick, but an administrative judge found that the contractor used a damaged sling to support the steel collar binding the tower-crane mast to the 18th floor of a high-rise building being constructed. The company also used four slings instead of the eight, as specified by the crane manufacturer; improperly attached the slings and failed to pad or soften them.

    Read the full story…

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


    DA’s Office Checking Workers Comp Compliance

    February 10, 2012 — CDJ Staff

    The San Bernardino office of the California District Attorney is partnering with the California Contractor’s State License Board to check if subcontractors are holding the required workers compensation insurance. The High Desert Daily Press reports that the process of checking at sites has been going on for several months.

    Investigators visit sites and ask supervisors to provide a list of subcontractors which the state then checks for compliance. One worker was quoted that insurance inspections were so rare that he had never seen one before, despite 20 years in construction.

    On one day, investigators in two teams visited fourteen construction sites and reviewed the insurance status of twenty-two firms. Three were found out of compliance and stop work orders were issued.

    Read the full story…


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

    July 11, 2011 — Tred R. Eyerly, Insurance Law Hawaii

    The Illinois Court of Appeals determined the insurer must defend allegations of property damage arising from faulty workmanship. Milwaukee Mut. Ins. Co. v. J.P. Larsen, Inc., 2011 Ill. App. Unpub. LEXIS 1443 (Ill. Ct. App. June, 20, 2011).

    Larsen was a subcontractor for Weather-Tite in a condominium building. Weather-Tite installed windows on the project and hired Larsen to apply sealant to the windows. The windows subsequently leaked and caused water damage within the complex.

    The homeowner’s association sued Weather-Tite for breach of express and implied warranties. Weather-Tite filed a third-party complaint against Larsen, seeking contribution and alleging that Larsen was in breach of contract by failing to add Weather-Tite as an additional insured under Larsen’s CGL policy.

    Both Weather-Tite and Larsen tendered to Larsen’s insurer. Both tenders were denied because the insurer contended the complaints alleged only construction defects, and not “property damage” or an “occurrence” within the terms of the policy.

    The insurer filed suit for a declaratory judgment. The trial court granted the insurer’s motion as to Weather-Tite, but granted Larsen’s cross-motion for summary judgment.

    Read the full story…

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


    Godfather Charged with Insurance Fraud

    July 1, 2011 — CDJ Staff

    Texas-based Godfather Construction is a recipient of a fraud suit from the Cook County state attorney’s office. The firm incorporated in Illinois in April 2010, moving there to do business after storms damaged homes in the Chicago suburbs, according to a report in the Chicago Tribune. The state attorney alleges that Godfather brought unlicensed out-of-state workers and the work they performed was “incomplete or shoddy.” Godfather is claimed to have received about $60,000 from Illinois homeowners. The prosecutors are seeking restitution for Godfather’s clients and seek to forbid the firm from doing business in Illinois.

    Read the full story…


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

    October 23, 2012 — CDJ Staff

    The Vermont Supreme Court issued a ruling on September 28 on Long Trail House Condominium Association. The case was heard by a panel of two Supreme Court justices, Marilyn Skoglund and Brian Burgess, and three justices specially assigned for the case, Kupersmith, Davenport, and Johnson. The decision came down with a 3-2 split; Judges Kupersmith and Johnson joining in a dissent.

    In the underlying case, Stratton Corporation entered into an agreement with Engelberth Construction in which Engelberth would supply “recommendations on construction feasibility, consultation as to the selection of materials and equipment, assistance with zoning requirements and permits, and cooperation with the ‘design team’ to provide valuable engineering services.” Engelberth was not responsible to determine that the drawings and specifications were in accordance with the law and building codes, nor were they responsible “for the design team’s designs, errors, or omissions.”

    Subsequent to the agreement was a construction project which culminated in the incorporation of the Long Trail House Condominium Association. The condominium owners initiated a lawsuit over alleged defects. Stratton, Intrawest, and the association settled claims for $7,025,00 with Stratton and Intrawest both pursuing claims against Engelberth. This case is still unsettled.

    The association progressed on remediation, which cost about $1,500,00 more than was provided by the settlement, and so the association also sued Engelberth. In this case, the court granted a summary judgment to Engelberth, concluding that negligence claim was barred both “by the economic loss rule and that the absence of contractual privity was fatal to the warranty claims.”

    The court upheld both determinations of the lower court. The court noted that “the economic loss rule ‘prohibits recovery in tort for purely economic losses’” and that “in tort law, duties are imposed by law to protect the public from harm.” A negligence claim could only be supported with evidence of “some accompanying physical harm, which does not include economic loss.”

    The association made the claim that the economic loss rule applies only when there is a contractual relationship between the two parties. The court rejected this argument, citing a reference that “economic interests are protected, if at all, by contract principles, rather than tort principles.”

    Nor did the court find it persuasive that a “professional services” exception to the economic loss doctrine applied, noting that the court has rejected this notion in two prior cases. The noted that the association’s losses were purely economic, and their inability to settle those claims with Engelberth did not mean that they had not means of settling them, as they were able to settle these very claims with Stratton and Intrawest.

    The association also raised claims of an implied warranty, resting on the construction contract between Engelberth and Stratton. This was also rejected by the court, noting that Vermont “case law plainly contemplates the existence of contractual privity before a breach of implied warranty claim can be raised.” The court noted that there was neither a contract nor a sale between Engelberth and the association, and thus there were no grounds for an implied warranty. The court concluded that “the Association’s warranty remedy lies against the entity that sold it the condominium units and implicitly warranted through the sale that the units were built in a good and workmanlike manner and that they were suitable for habitation.”

    Read the court’s decision …


    Mandatory Arbitration Provision Upheld in Construction Defect Case

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

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

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

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

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

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

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

    Read the full story…


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

    August 2, 2012 — Brady Iandiorio, Higgins, Hopkins, McLain & Roswell, LLC

    Recently, in the Arapahoe District Court, the Honorable Michael Spear, issued an order holding that builders do not owe a non-delegable duty to homeowners. In Marx and Corken v. Alpert Custom Homes, Inc., et al., Judge Spear’s order came in response to plaintiffs’ motion for determination of question of law seeking a finding that the defendants owed a non-delegable duty to the plaintiffs and thus, to strike defendants’ designation of nonparties at fault. After being fully briefed, Judge Spear, found that such a non-delegable duty does not exist.

    The case arises from the construction of a single-family residence in Aurora, Colorado. Through the construction and interaction with Alpert Custom Homes, Inc. and Scott and Sally Alpert, the defendants, Paul Marx and Kay Corken, the plaintiffs claimed they suffered various damages and losses, and brought claims for breach of contract-warranty, breach of contract, violation of the Colorado Consumer Protection Act, breaches of the implied covenant of good faith, promissory estoppel, willful breach of contract, and quantum meruit. During litigation, the defendants filed a designation of nonparties at fault, which named several parties which were at fault for the alleged construction defects at issue in the case. The pertinent nonparties named were subcontractors of defendant Alpert Custom Homes, Inc. during the construction of the residence.

    Read the full story…

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


    History of Defects Leads to Punitive Damages for Bankrupt Developer

    March 1, 2012 — CDJ Staff

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

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

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

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

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

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

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

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

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

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

    Read the court’s decision…


    Construction Defect Lawsuits? There’s an App for That

    July 10, 2012 — CDJ Staff

    The website ebeeky.com reviews Picture It Settled, an app designed to help people engaged in lawsuits figure out where settlement strategies would be most successful. First available for Android and then iOS, the app is now available for Blackberry. One user of the application wrote that “anyone who has set through a construction defect mediation can immediately grasp the value of this app.

    The app tracks the negotiation process, allowing users to see a history of bids and counteroffers. It also models the negotiation process in order to predict the ultimate cost of settlement. These numbers are based on past similar negotiations that the user has entered.

    Read the full story…


    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…