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    Huntingdon, Tennessee

    Tennessee Builders Right To Repair Current Law Summary:

    Current Law Summary: (HB 2787/SB2931 & HB 2771/SB 2201; Title 66, Chptr 36) Homeowners must serve written notice of a defect 15 days after its discovery; Contractors, upon receipt of the notice, have 10 business days to inspect the residence and inform any subcontractors it believes are reasonably responsible on the defect. Within 10 business days after notice of the claim, the subcontractor must serve a written response to contractor. Within 30 days after receipt of notice of a defect, the contractor must provide written notice of intention (repair, replace, monetarily compensate or reject) to the homeowner.


    Construction Expert Witness Contractors Licensing
    Guidelines Huntingdon Tennessee

    Commercial and Residential Contractors License Required.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Home Builders Association of Greater Knoxville
    Local # 4455
    221 Clark St
    Knoxville, TN 37921
    http://www.hbaknoxville.com

    Home Builders Association of Middle Tennessee
    Local # 4477
    9007 Overlook Blvd Suite 201
    Brentwood, TN 37027
    http://www.hbamt.net/

    Home Builders Association of Cumberland Co
    Local # 4410
    PO Box 507
    Crossville, TN 38557
    http://www.cumberlandcountyhomebuilders.com

    Home Builders Association of Dyer Co
    Local # 4425
    1075 Cooper Dr
    Dyersburg, TN 38024


    Home Builders Association of Rutherford Cty
    Local # 4490
    730-A Middle Tennessee Blvd Suite 5
    Murfreesboro, TN 37129
    http://www.rchba.info/

    Home Builders Association of Sevier Co
    Local # 4486
    PO Box 4653
    Sevierville, TN 37864
    http://www.seviercountyhba.com

    Home Builders Association of Upper Cumberland
    Local # 4491
    PO Box 243
    Cookeville, TN 38503
    http://www.uchba.com


    Construction Expert Witness News and Information
    For Huntingdon Tennessee

    Nevada Assembly Sends Construction Defect Bill to Senate

    Damage During Roof Repairs Account for Three Occurrences

    Allowing the Use of a General Verdict Form in a Construction Defect Case Could Subject Your Client to Prejudgment Interest

    Kentucky Court Upholds Arbitration Award, Denies Appeal

    Builder Waits too Long to Dispute Contract in Construction Defect Claim

    Nevada District Court Dismisses Case in Construction Defect Coverage Suit

    Badly Constructed Masonry Walls Not an Occurrence in Arkansas Law

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

    Reference to "Man Made" Movement of Earth Corrects Ambiguity

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

    Insurance Company Prevails in “Chinese Drywall” Case

    Construction Defect Destroys Home, Forty Years Later

    “Details Matter” is the Foundation in a Texas Construction Defect Suit

    Conspirators Bilked Homeowners in Nevada Construction Defect Claims

    Construction Defects: 2010 in Review

    Drug Company Provides Cure for Development Woes

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

    Five Years of Great Legal Blogging at Insurance Law Hawaii

    No Coverage For Damage Caused by Chinese Drywall

    School Sues over Botched Pool

    Consulting Firm Indicted and Charged with Falsifying Concrete Reports

    Lower Court “Eminently Reasonable” but Wrong in Construction Defect Case

    Judge Rejects Extrapolation, Harmon Tower to Remain Standing

    Anti-Assignment Provision Unenforceable in Kentucky

    Florida trigger

    Coverage Exists Under Ensuing Loss Provision

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

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

    Exact Dates Not Needed for Construction Defect Insurance Claim

    Mandatory Arbitration Provision Upheld in Construction Defect Case

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

    Official Tried to Influence Judge against Shortchanged Subcontractor

    San Diego Construction Defect Claim Settled for $2.3 Million

    Celebrities Lose Case in Construction Defect Arbitration

    Williams v. Athletic Field: Hugely Important Lien Case Argued Before Supreme Court

    Contractor Manslaughter? Safety Shortcuts Are Not Worth It

    DA’s Office Checking Workers Comp Compliance

    School District Marks End of Construction Project by Hiring Lawyers

    Defect Claims as Occurrences? Check Your State Laws

    BHA Expands Construction Experts Group

    Restitution Unlikely in Las Vegas Construction Defect Scam

    Homebuilding Still on the Rise

    Wine without Cheese? (Why a construction contract needs an order of precedence clause)(Law Note)

    Insurer Has Duty to Defend in Water Intrusion Case

    Builder to Appeal Razing of Harmon Tower

    Pipes May Be Defective, But Owners Lack Standing

    Preparing For the Worst with Smart Books & Records

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

    Appeals Court Reverses Summary Judgment over Defective Archway Construction

    New Apartment Tower on the Rise in Seattle

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

    Court Consolidates Cases and Fees in Soil Construction Defect Case

    Home Builder Doesn’t See Long Impact from Hurricane

    Environment Decision May Expand Construction Defect Claims

    One World Trade Center Due to Be America’s Tallest and World’s Priciest

    California Appeals Court Remands Fine in Late Completion Case

    Remodels Replace Construction in Redding

    Insurer Rejects Claim on Dolphin Towers

    Australian Group Seeks Stronger Codes to Combat Dangerous Defects

    Water District Denied New Trial in Construction Defect Claim

    Bad Faith and a Partial Summary Judgment in Seattle Construction Defect Case

    Safety Officials Investigating Death From Fall

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

    Record-Setting Construction in Fargo

    Steps to Defending against Construction Defect Lawsuits

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

    $5 Million Construction Defect Lawsuit over Oregon Townhomes

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

    Tennessee Court: Window Openings Too Small, Judgment Too Large

    Safe Harbors- not just for Sailors anymore (or, why advance planning can prevent claims of defective plans & specs) (law note)

    Town Files Construction Lawsuit over Dust

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

    Faulty Workmanship may be an Occurrence in Indiana CGL Policies

    Fire Reveals Defects, Appeals Court Affirms Judgment against Builder

    Ensuing Loss Provision Does Not Salvage Coverage

    Construction Job Opening Rise in October

    Judge Okays Harmon Tower Demolition, Also Calls for More Testing

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

    Unlicensed Contractors Nabbed in Sting Operation

    Texas contractual liability exclusion

    Construction on the Rise in Denver

    Time to Repair Nevada’s Construction Defect Laws?

    Another Guilty Plea in Las Vegas HOA Scandal

    Parking Garage Collapse May Be Due to Construction Defect

    Judge Kobayashi Determines No Coverage for Construction Defect Claim

    Insurer Able to Refuse Coverage for Failed Retaining Wall

    Condominium Exclusion Bars Coverage for Construction Defect

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    No Coverage Under Ensuing Loss Provision

    Exclusions Bar Coverage for Damage Caused by Chinese Drywall
    Corporate Profile

    HUNTINGDON TENNESSEE CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    The Huntingdon, Tennessee 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 Huntingdon'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.









    Construction Expert Witness News & Info
    Huntingdon, Tennessee

    Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship

    December 9, 2011 — Tred R. Eyerly, Insurance Law Hawaii

    Applying Colorado law, the Tenth Circuit found a duty to defend construction defect claims where the faulty workmanship was unintentional. Greystone Const. Inc. v. National Fire & Marine Ins. Co., 2011 U.S. App. LEXIS 22053 (10th Cir. Nov. 1, 2011). A prior post [here] discussed the Tenth Circuit’s certified question to the Colorado Supreme Court in this matter, a request that was rejected by the Colorado court.

    In two underlying cases, Greystone was sued by the homeowner for damage caused to the foundation by soil expansion. In both cases, the actual construction was performed by subcontractors. Further, in neither case was the damage intended or anticipated. Nevertheless, National Union refused to defend, contending property damage resulting from faulty construction was not an occurrence.

    Relying on a Colorado Court of Appeals case, General Security Indemn. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), the district court granted summary judgment to National Union.

    On appeal, the Tenth Circuit first considered whether Colorado legislation enacted to overturn General Security could be applied retroactively. The statute, section 13-20-808, provided courts "shall presume that the work of a construction professional that results in property damage, including damage to the work itself or other work, is an accident unless the property damage is intended and expected by the insured."

    Read the full story…

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


    The Complete and Accepted Work Doctrine and Construction Defects

    August 16, 2012 — CDJ Staff

    Matthew C. Bouchard of Lewis & Roberts PLLC, writes how North Carolina is “bucking the trend” on the “complete and accepted work doctrine.” As he notes, in most states “a contractor can be found liable for personal injuries suffered by third parties from accidents occurring after the contractor’s work is completed and accepted.” But one exception is North Carolina.

    He gives the example of a case, Lamb v. D.S. Duggins Welding, Inc., in which a site superintendent was “injured by the alleged negligence of the project’s steel deck installer, a sub-subcontractor in the contractual chain” “after the sub-sub’s work had been completed and accepted.” The trial court held that the “completed and accepted work doctrine” ended the subcontractor’s liability. The case noted that “employees of the general contractor had modified the installation of the perimeter safety cable in question after the sub-sub had demobilized from the site.”

    Mr. Bouchard notes that “once a project is accepted and turned over, the contractor typically loses control over maintenance of the new facility.” However, he notes that “where the contractor’s work constitutes negligence ?Ķ the doctrine may not apply.” Nor does it end breach of contract claims. It only covers third parties.

    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…


    Repair of Part May Necessitate Replacement of Whole

    February 10, 2012 — CDJ Staff

    Judge Gleuda E. Edmonds, a magistrate judge in the United States District Court of Arizona issued a ruling in Guadiana v. State Farm on January 25, 2012. Judge Edmonds recommended a partial summary judgment in favor of the plaintiff.

    Ms. Guandiana’s home had water damage due to pluming leaks in September 2004. She was informed that polybutylene pluming in her house could not be repaired in parts “it must be completely replaced.” She had had the plumbing replaced. State Farm denied her claim, arguing that “the tear-out provision did not cover the cost of accessing and replacing those pipes that were not leaking.”

    In September 2007, State Farm filed a motion to dismiss. The court rejected this motion, stating that “If Guadiana can establish as a matter of fact that the system that caused the covered loss included all the pipes in her house and it was necessary to replace all the pipes to repair that system, State Farm is obligated to pay the tear-out costs necessary to replace all the pipes, even those not leaking.”

    In March 2009, State Farm filed for summary judgment, which the court granted. State Farm argued that “the tear-out provision only applied to ‘repair’ and not ‘replace’ the system that caused the covered leak.” As for the rest of the piping, State Farm argued that “the policy does not cover defective materials.”

    In December 2011, Ms. Guadiana filed for summary judgment, asking the court to determine that “the policy ‘covers tear-out costs necessary to adequately repair the plumbing system, even if an adequate repair requires replacing all or part of the system.”

    In her ruling, Judge Edmonds noted that Ms. Guadiana’s claim is that “the water damage is a covered loss and she is entitled to tear-out costs necessary to repair the pluming system that caused that covered loss.” She rejected State Farm’s claim that it was not obligated to replace presumably defective pipes. Further, she rejected State Farm’s argument that they were only responsible for the leaking portion, noting “Guadiana intends to prove at trial that this is an unusual case where repair of her plumbing system requires replacement of all the PB plumbing.”

    Judge Edmonds concluded by directing the District Court to interpret the tear out issue as “the tear-out provision in State Farm’s policy requires State Farm to pay all tear-out costs necessary to repair the plumbing system (that caused the covered loss) even if repair of the system requires accessing more than the leaking portion of the system.”

    Read the court’s decision…


    Courts Are Conflicted As To Whether "Good Faith" Settlement Determinations Can Be Reviewed Via Writ Petition Or Appeal

    July 10, 2012 — Stephen A. Sunseri and Aarti Kewalramani, Gatzke Dillon & Ballance LLP

    The Court of Appeal, Second District, Division Three, ruled in Oak Springs Villas Homeowners Association v. Advanced Truss Systems, Inc., et al., (June 14, 2012, B234568) __ Cal.App.4th __ [2012 WL 2149923], that a non-settling defendant cannot appeal a trial court's good faith settlement determination. Instead, a non-settling defendant may only file a petition for writ of mandate pursuant to Code of Civil Procedure section 877.6 to challenge a good faith determination. This decision comes on the heels of a 2011 ruling in Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, which found that a writ petition is not the sole means of challenging a trial court's good faith settlement determination.

    In Oak Springs Villas, supra, the condominium homeowners' association sued a developer, general contractor, and various subcontractors for alleged construction deficiencies and resultant property damage. The association eventually settled with the developer, but not with a truss manufacturer. The trial court approved the developer's motion for good faith settlement determination, and the truss manufacturer immediately appealed, instead of filing a writ petition. On appeal, the developer argued the good faith determination was not an appealable order. The truss manufacturer argued Cahill applied, as well as an older case, Justus v. Atchison (1977) 19 Cal.3d 564, which allowed for appeals when no remaining issues exist as to the appealing party.

    The Court of Appeal ruled in the developer's favor and declined to follow Cahill, stating the truss manufacturer should have filed a writ petition, as expressly required under Section 877.6, subdivision (e). The Court also believed Justus was inapplicable because a non-settling party should not be allowed to have two review opportunities ?Äì one after an adverse good faith ruling, and then another after the ultimate conclusion of the case.

    However, the greater effect is that Cahill and Oak Springs Villas simultaneously stand in conflict and appear to be valid law. One case allows for an appeal of a good faith settlement determination, while the other requires strict adherence to the statute. The Supreme Court is likely to review the issue. In the meantime, parties challenging good faith rulings are advised to consult the statutory requirements under Section 877.6, subdivision (e).

    Printed courtesy of Stephen A. Sunseri and Aarti Kewalramani, Gatzke Dillon & Ballance LLP. Mr. Sunseri can be contacted at ssunseri@gdandb.com and Ms. Kewalramani can be contacted at akewalramani@gdandb.com.


    “Details Matter” is the Foundation in a Texas Construction Defect Suit

    March 1, 2012 — CDJ Staff

    The Court of Appeals of Texas has ruled in the case of Barzoukas v. Foundation Design. Mr. Barzoukas contracted with Heights Development to build a house. He subsequently sued Heights Developments and “numerous other defendants who participated in the construction of his house.” Barzoukas eventually settled with all but two defendants, one who went bankrupt and Foundation Design, the defendant in this case. In the earlier phase, Barzoukas made claims of “negligence, negligent misrepresentation, fraud, fraudulent inducement, conspiracy, and exemplary damages in connection with the foundation.”

    Foundation Design had been hired to install 15-foot piers to support the foundation. The engineer of record, Larry Smith, sent a letter to Heights Development noting that they had encountered hard clay stone when drilling. Smith changed the specifications to 12-foot piers. Initially, the City of Houston called a halt to work on the home when an inspector concluded that the piers were too shallow. Heights Development later convinced the city to allow work to continue. Subsequently, experts concluded that the piers were too shallow.

    Foundation Design filed a motion for summary judgment. The trial court granted this, “without specifying the basis for its ruling.” Barzoukas contends the court was in error. Foundation Design contends that “Barzoukas failed to proffer competent evidence establishing that their conduct proximately caused damages.” Further, they did not feel that Smith’s letter gave “rise to viable claims for fraud and fraudulent inducement.”

    One problem the court had was a lack of evidence. The court noted that “the purported subcontract is entirely missing” in the pleadings. The court has no contract between Bazourkas and Heights Development, nor one between Heights Development and either Foundation Design or Smith. The court underscored the importance of this, writing, “details matter.” They found that “the details are largely missing here.” Without the contract, the court found it impossible to determine if “Smith or an entity related to him agreed to indemnify Heights Development for damages arising from Smith’s negligent performance.”

    As the material facts are in dispute, the appeals court found that there were no grounds for a summary judgment in the case. “Pointing to the existence of a contract between Heights Development and Barzoukas, or to the existence of a subcontract, is the beginning of the analysis ? not the end.”

    Foundation Design and Smith also claimed that Barzoukas’s expert did not proffer competent evidence and that the expert’s opinions were conclusory. The trial court did not rule on these claims and the appeals court has rejected them.

    Finally, Barzoukas made a claim that the trial court should not have rejected his argument of fraud and fraudulent inducement. Here, however, the appeals court upheld the decision of the lower court. “Barzoukas did not present evidence supporting an inference that Smith or Foundation Design made a purposeful misrepresentation.

    The court remanded the case to the trial court for reconsideration. One member of the panel, Judge Charles Seymore, upheld the entire decision of the trial court. He dissented with the majority, finding that the economic loss rule foreclosed the claim of negligence.

    Read the court’s decision…


    Des Moines Home Builders Building for Habitat for Humanity

    September 13, 2012 — CDJ Staff

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

    Read the full story…


    Judge Okays Harmon Tower Demolition, Also Calls for More Testing

    August 2, 2012 — CDJ Staff

    Vegas.Inc reports that Clark County District Court Judge Elizabeth Gonzalez has permitted the demolition the tower, which MGM Resorts has claimed is a safety hazard. Perini Building Co. claims that the building does not need to be demolished. CityCenter claims that repairing the building would take nearly a year longer than a demolition and cost about $200 million. Further, CityCenter assumes that the building’s reputation would cost it another $30 million.

    Subsequently, Judge Gonzalez ruled that the pattern of destructive testing would not support a claim that there were an estimated 1,400 defective items in the building. An attorney for CityCenter, Steve Morris, has suggested that they may seek more testing, impossible to do once the building is demolished. CityCenter issued a statement that “nearly every time CityCenter has chipped away concrete to review structural work at the Harmon, we have found defects.” They describe the building as “unusable.”

    Tutor Perini contends that it “remains confident that it will prevail when the issues of safety, reparability and responsibility for the issues facing the Harmon tower are considered.

    Read the full story…


    Insurer Not Entitled to Summary Judgment on Construction Defect Claims

    February 10, 2012 — Tred Eyerly, Insurance Law Hawaii

    The insurer unsuccessfully moved for summary judgment, contending it had no obligation to defend two related underlying construction defect cases. Amerisure Ins. Co. v. R.L.Lantana Boatyard, Ltd., 2012 U.S. Dist. LEXIS 2466 (S.D. Fla. Jan. 9, 2012).

    An engineering report noted design construction defects and deficiencies in visible, physical improvements at The Moorings at Lantana Condominium. In two lawsuits, The Moorings sued the developer, R.L. Lantana Boatyard ("RLLB"), and the contractor, Current Builders of Florida.

    Current Builders was insured by Amerisure. RLLB was named as an additional insured under the Amerisure policy.

    Read the full story…

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


    Condominium Exclusion Bars Coverage for Construction Defect

    August 17, 2011 — Tred Eyerley, Insurance Law Hawaii

    Coverage was denied under the policy’s condominium exclusion in California Traditions, Inc. v. Claremont Liability Ins. Co.,2011 Cal. App.LEXIS912 (Cal. Ct. App., ordered published July 11, 2011).

    California Traditions was the developer and general contractor for a housing development. California Traditions subcontracted with Ja-Con to perform the rough framing work for 30 residential units. The project had 146 separate residences that were freestanding with no shared walls, roof, halls, or plumbing or electrical lines. To allow a higher density development, the project was developed, marketed and sold as condominiums.

    The purchaser of one of the units filed a complaint against California Traditions alleging property damage from the defective construction. California Traditions cross-complained against Ja-Con.

    Read the full story…

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


    One World Trade Center Due to Be America’s Tallest and World’s Priciest

    February 10, 2012 — CDJ Staff

    As One World Trade Center rises, so does the price tag. After construction delays and cost overruns, the cost of the building at the site of the September 11 attacks has risen to $3.8 billion. Part of the expense of the skyscraper is the heavily reinforced base of the building. The elevator shafts are also heavily reinforced, all part of guarding against future terrorist attacks.

    In comparison, the world’s tallest tower, the Burj Khalifa in Dubai, cost only $1.5 billion, less than half the cost of One World Trade Center. As a result, the Port Authority does not see the building as being profitable in near future. In order to fund it, the agency is raising tolls on bridge and tunnel traffic.

    Currently, about the half the unfinished building is leased. Construction is expected to conclude in 2013.

    Read the full story…


    Florida Chinese drywall, pollution exclusion, “your work” exclusion, and “sistership” exclusion.

    May 26, 2011 — CDCoverage.com

    In Auto-Owners Ins. Co. v. American Building Materials, Inc., No. 8:10-CV-313-T-24-AEP (M.D. Fla. May 17, 2011), insured drywall supplier ABM was sued by general contractor KB Homes seeking damages because property damage to houses built by KB Homes using defective Chinese drywall supplied by ABM. ABM’s CGL insurer Auto-Owners defended ABM under a reservation of rights and filed suit against ABM and KB Homes seeking a judicial declaration of no to duty to defend or indemnify ABM against the KB Homes lawsuit. On cross motions for summary, the federal district trial court directed entry of judgment in favor of ABM and KB Homes and against Auto-Owners, holding that Auto-Owners had a duty to defend and indemnify ABM against the KB Homes lawsuit.

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    Construction Company Head Pleads Guilty to Insurance and Tax Fraud

    December 20, 2012 — CDJ Staff

    The former head of Orients Construction Company and of Melrose Construciton Company, Herlindo Garcia-Merlos, has entered a guilty plea to charges that the gave false informoation to his insurer, New Jersey Manufacturers Insurance Group, for more than three years in order to lower his workers compensation payments. Mr. Garcia-Merlos was able to underpay by more than $315,000 as a result of this deception.

    Mr. Garcia-Merlos additionally failed to file tax returns for his companies and underreported his wages on his own tax returns. The State of New Jersey is seeking an eight-year prison term and restitution of more than $400,000.

    Read the full story…


    Judge Rejects Extrapolation, Harmon Tower to Remain Standing

    November 7, 2012 — CDJ Staff

    CityCenter has filed an emergency motion asking the Nevada Supreme Court to intervene in Judge Elizabeth Gonzalez’ order that the building’s defects cannot be extrapolated from those tested. CityCenter’s structural engineering expert “evaluated 397 of the Harmon’s critical structural elements and found all but one defective,” according to the article on Vegas.Inc. Judge Gonzalez would not permit this to be extrapolated to the untested 1,072, as the locations tested were not random.

    Judge Gonzalez also ruled that if CityCenter does additional testing, they may not appeal her order that ruled the extrapolation inadmissible. CityCenter argued to the Nevada Supreme Court that “the notion that CityCenter should be forced to incur additional millions of dollars in testing costs and sanctions ?Äì on the condition that it waive its right to appeal this ruling ?Äì just to be permitted to present its own damages evidence, shocks the conscience.”

    Gonzalez gave the okay to CityCenter to demolish the building, but its demolition would make any further testing impossible. Under Gonzalez’ ruling, the untested structural elements cannot b assumed to be defective.

    Read the full story…


    Bad Faith and a Partial Summary Judgment in Seattle Construction Defect Case

    February 10, 2012 — CDJ Staff

    The US District Court of Washington has issued a ruling in the case of Ledcor Industries v. Virginia Surety Company, Inc. Ledcor was the builder of a mixed-use real estate project in Seattle called the Adelaide Project. Ledcor purchased an insurance policy from Virginia Surety covering the project. After the completion of the project, Ledcor received complaints of construction defects from the homeowners, which they forwarded to Virginia Surety.

    Virginia Surety denied coverage on several grounds. Absent any lawsuit, Virginia claimed that there was “not yet any duty to defend or indemnify.” Further, as the policy commenced ten days after work on the project was substantially completed, Virginia cited a provision in the policy that excluded coverage for damage that occurred before the policy began. As problems included water intrusion, Virginia noted an exclusion for fungal damage. Finally, Virginia noted that it was not clear whether damage was due to Ledcor’s own actions.

    The homeowners sued over the construction defects. Ledcor settled these suits before trial. In this, they were defended by, and settlements were paid by American Home, another of Ledcor’s insurers. Ledcor claims that Virginia Surety acted in bad faith by denying coverage and by its failure to investigate the ongoing nature of the work at the project.

    The judge determined that Virginia Surety acted in bad faith when it invoked the fungus exclusion. Virginia noted that fungal damage “‘would have been’ referenced in the list of construction defects,” however, the HOAs claimed only “water stains” and “water damage,” and made no mention of mold or fungus. The court found that Virginia Surety “was not entitled to deny coverage simply because it may have suspected that mold or fungus damage existed.” The court noted that further proceedings would be needed to determine what portion of the settlement Virginia is obligated to pay.

    The court found that there were matters of fact to be determined on the further issues in the case. The judge wrote that although Virginia acted in bad faith in invoking the fungus exclusion, it still had to be determined if they were in breach of contract by failing to defend Ledcor. Ledcor still needs to show that the damages claimed by the HOA were due to work actually covered by Virginia Surety.

    Ledcor made an additional claim that Virginia Surety violated Washington’s laws concerning the insurance industry. Here, the court noted that the improper exclusion for fungus issues “constitutes a per se unfair trade practice.” Six other claims were made under this law. The court found that Virginia Surety did not misrepresent “pertinent facts or insurance policy provisions.” It also issued its denial letter promptly, satisfying the fifth provision. However, Virginia Surety did violate the second provision, in that it failed “to acknowledge and act reasonably promptly upon communications with respect to claims.” Two other issues could not be determined.

    Judge Martinez’s decision granted a summary judgment to Ledcor on the issue of bad faith. An additional summary judgment was granted that Virginia Surety violated Washington’s Insurance Fair Conduct Act. Judge Martinez did not grant summary judgment on any of the other issues Ledcor raised.

    Read the court’s decision…


    No Coverage for Property Damage That is Limited to Work Completed by Subcontractor

    April 25, 2012 — Tred Eyerly, Construction Law Hawaii

    The issue before the 11th Circuit was whether, under Florida law, a general contractor had coverage for a property damage claim limited to the defective work performed by a subcontractor, and not affecting any other portion of the project. The court found no coverage in Amerisure Mut. Ins. Co. v. Auchter Co., 2012 U.S. App. LEXIS 5412 (11th Cir. March 15, 2012).

    Amelia Island Company contracted with Auchter Company, a general contractor, for construction of an inn and conference room. Auchter subcontracted with Register Contracting Company to install the Inn’s roof. Pursuant to the Florida Building Code, installation of the roof required that it be able to withstand 110 m.p.h. winds.

    Register completed installing the roof tiles in January 1998. Beginning in 2002, the tiles began dislodging from the roof. During the 2004 hurricane season, three hurricanes caused more tiles to come off the roof. Some of these tiles hit other tiles, cracking them.

    In 2006, the parties went to arbitration over the costs of repairs for the roof.

    Read the full story…

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


    Insurance Policy Provides No Coverage For Slab Collapse in Vision One

    August 17, 2011 — Douglas Reiser, Builders Counsel

    This post will examine whether Division Two of the Washington Court of Appeals properly reversed and remanded several lower court decisions in the case of Vision One LLC v. Philadelphia Indemnity Insurance. In short, and from the perspective of an appellate attorney, the court of appeals got the decision right. Given the rules of contract interpretation and causation in tort claims, there was really no other way the court could have ruled. I understand that from a contractor’s perspective and insurance perspective, the decision seems odd. But from a purely legal standpoint, the decision is well-reasoned and well-supported. Let me explain.

    Background

    First, here are the facts in a nutshell. Vision One is a construction company that undertook to construct a condo complex in Tacoma. Vision then contracted with D&D Concrete to pour a concrete slab for a section of the foundation. To shore the concrete slab, D&D further contracted Berg Equipment to provide necessary equipment to stabilize the structure. Well, something down the line went wrong. The shoring failed and the slab collapsed, causing a great deal of damage.

    Read the full story…

    Read the court’s decision…

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


    Boyfriend Pleads Guilty in Las Vegas Construction Defect Scam Suicide

    November 7, 2012 — CDJ Staff

    One of the odder twists of the Las Vegas construction defect scandal was the charge that Nancy Quon’s boyfriend helped her in an initial suicide attempt. Quon, implicated by not charged in the case of taking control of homeowner boards in order to profit from construction defect settlements. William Webb was alleged to have bought the drug GBH in order to allow Quon, his girlfriend, to commit suicide. Ms. Quon later overdosed on a combination of alcohol and prescription drugs.

    In addition to pleading guilty to the drug charges, Webb also made a plea bargain with prosecutors in which he did not admit guilt in an insurance fraud charge, but acknowledged that prosecutors would likely be successful at obtaining a conviction. Webb will be sentenced February 7 and is expected to receive a sentence of six years imprisonment.

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