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    Seminary, Mississippi

    Mississippi Builders Right To Repair Current Law Summary:

    Current Law Summary: (HB1166/SB1081, HB722/SB2368) The New Home Warranty Act stipulates warranties for one-year and six-year periods limits types of defects; defines specific defects and exclusions such as outbuildings, detached garages, detached carports, swimming pools, recreational facilities, driveways, walkways, patios, boundary walls, retaining walls, bulkheads, fences, landscaping, off-site improvements, drainage, utilities, etc.; additional exclusions are negligence, improper maintenance, or improper operation, failure to comply with warranty requirements of manufacturer, inadequate ventilation, lack of mitigation, normal wear and tear, insect damage or "rotting of any kind", mold or mold damage, consequential damages, and defects in electrical, plumbing, heating, air conditioning, or similar fixture not manufactured by builder


    Construction Expert Witness Contractors Licensing
    Guidelines Seminary Mississippi

    State license required for commercial jobs over $100,000, city or county jobs over $50,000.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Home Builders Association of Natchez
    Local # 2563
    PO Box 1351
    Natchez, MS 39120


    Home Builders Association of East Central Mississippi
    Local # 2516
    PO Box 1551
    Laurel, MS 39441


    Greater Hattiesburg Home Builders Association
    Local # 2527
    629 North Main St
    Hattiesburg, MS 39401
    http://www.hattiesburgbuilders.org

    SW Mississippi Home Builders Association
    Local # 2573
    P O Box 1426
    McComb, MS 39649


    Stone County Chapter
    Local # 2585
    PO Box 1417
    Wiggins, MS 39577


    Home Builders Association of Mississippi
    Local # 2500
    PO Box 3556
    Jackson, MS 39207
    http://www.hbam.com

    Home Builders Association of Vicksburg
    Local # 2581
    PO Box 821035
    Vicksburg, MS 39182



    Construction Expert Witness News and Information
    For Seminary Mississippi

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

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

    Construction Defect Not an Occurrence in Ohio

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    Construction Defects in Home a Breach of Contract

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

    Destruction of Construction Defect Evidence Leads to Sanctions against Plaintiff

    Nevada Budget Remains at Impasse over Construction Defect Law

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

    Product Exclusion: The Big Reason Behind The Delay of LEED 2012

    Avoid Gaps in Construction Defect Coverage

    Construction Defect Claim Did Not Harm Homeowner, Court Rules

    Homeowner Has No Grounds to Avoid Mechanics Lien

    Insurer Must Cover Construction Defects Claims under Actual Injury Rule

    Preventing Costly Litigation Through Your Construction Contract

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    Architectural Firm Disputes Claim of Fault

    Five Years of Great Legal Blogging at Insurance Law Hawaii

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    Nevada Bill Aims to Reduce Legal Fees For Construction Defect Practitioners

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    Ensuing Losses From Faulty Workmanship Must be Covered

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    Statute of Limitations Upheld in Construction Defect Case

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    Contractor Sues Supplier over Defective Products

    District Court Awards Summary Judgment to Insurance Firm in Framing Case

    New Households Moving to Apartments

    Boston’s Tunnel Project Plagued by Water

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

    California Construction Bill Dies in Committee

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    Consumer Protection Act Whacks Seattle Roofing Contractor

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    FHA Lists Bridges and Overpasses that May Have Defective Grout

    Faulty Workmanship may be an Occurrence in Indiana CGL Policies

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

    Condo Owners Worried Despite Settlement

    Insurance for Defective Construction Now in Third Edition

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    Construction Company Head Pleads Guilty to Insurance and Tax Fraud

    Defective Drains Covered Despite Water Intrusion Exclusion

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

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    Residential Construction: Shrinking Now, Growing Later?

    Colorado Senate Bill 12-181: 2012’s Version of a Prompt Pay Bill

    California Supreme Court Finds Associations Bound by Member Arbitration Clauses

    Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship

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    Foundation Arbitration Doesn’t Preclude Suing Over Cracks

    MGM Seeks to Demolish Harmon Towers

    Battle of “Other Insurance” Clauses

    Georgia Supreme Court Rules Construction Defects Can Constitute an Occurrence in CGL Policies

    Preparing for Trial on a Cause of Action for Violation of Civil Code section 895, et seq.

    Nevada Construction Defect Lawyers Dead in Possible Suicides

    General Contractor/Developer May Not Rely on the Homeowner Protection Act to Avoid a Waiver of Consequential Damages in an AIA Contract

    Fourteen More Guilty Pleas in Las Vegas Construction Defect Scam

    Renovation Contractors: Be Careful How You Disclose Your Projects

    Construction Defects Leave Animal Shelter Unusable

    Hawaii Building Codes to Stay in State Control

    School Sues over Botched Pool

    History of Defects Leads to Punitive Damages for Bankrupt Developer

    Injured Construction Worker Settles for Five Hundred Thousand

    Texas Construction Firm Files for Bankruptcy

    Harmon Towers Case to Last into 2014

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

    Policyholder Fails to Build Adequate Record to Support Bad Faith Claim
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    The Seminary, Mississippi 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. Drawing from this considerable body of experience, BHA provides construction related trial support and expert services to Seminary'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
    Seminary, Mississippi

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

    February 10, 2012 — Tred Eyerly, Insurance Law Hawaii

    Jeff City Industries was the general contractor for a sewer system improvement project in Branson, Missouri. Bituminous Cas. Corp. v. United HRB Gen. Contractors, Inc., 2011 U.S. Dist. LEXIS 145666 (W.D. Mo. Dec. 19, 2011). Branson sued Jeff City, alleging breach of the construction contract for the project. The claims included improperly bedded sewer piping, improper aligning portions of trenching for the sewer piping, improper service line connections to the sewer piping, etc.

    Read the full story…

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


    The Year 2010 In Review: Design And Construction Defects Litigation

    February 25, 2011 — Candace Matson, Harold Hamersmith, and Helen Lauderdale - Construction & Infrastructure Law Blog - February 25, 2011

    This article is the first in a series summarizing construction law developments for 2010

    1. Centex Homes v. Financial Pacific Life Insurance Co., 2010 U.S. Dist. LEXIS 1995 (E.D. Cal. 2010)

    After settling numerous homeowners’ construction defect claims — and more than ten years after the homes were substantially completed — a home developer brought suit against one of the concrete fabrication subcontractors for the development seeking indemnity for amounts paid to the homeowners, as well as for damages for breach of the subcontractor’s duties to procure specific insurance and to defend the developer against the homeowners’ claims. The subcontractor brought a motion for summary adjudication on the ground the developer’s claims were barred by the ten year statute of repose contained in Code of Civil Procedure Section 337.15.

    The District Court agreed the developer’s claim for indemnity was barred by Section 337.15. And it held that because the damages recoverable for breach of the subcontractor’s duty to purchase insurance are identical to the damages recoverable through the developer’s indemnity claim, the breach of duty to procure insurance claim also was time-barred. The District Court, however, allowed the claim for breach of the duty to defend to proceed. The categories of losses associated with such a claim (attorneys’ fees and other defense costs) are distinct from the damages recoverable through claims governed by Section 337.15 (latent deficiency in the design and construction of the homes and injury to property arising out of the latent deficiencies).

    2. UDC — Universal Development v. CH2M Hill, 181 Cal. App. 4th 10 (6th Dist. Jan. 2010)

    Indemnification clauses in construction agreements often state that one party to the agreement — the “indemnitor” — will defend and indemnify the other party from particular types of claims. Of course, having a contract right to a defense is not the same as actually receiving a defense. Any indemnitor attempting to avoid paying for defense costs can simply deny the tender of defense with the hope that when the underlying claim is resolved the defense obligations will be forgotten. In the past, when parties entitled to a defense — the “indemnitees” — had long memories and pressed to recover defense costs, indemnitors attempted to justify denying the tender by claiming their defense obligations coincided with their indemnity obligations and neither arose until a final determination was made that the underlying claim was one for which indemnity was owed.

    Read the full story...

    Reprinted courtesy of Candace Matson, Harold Hamersmith, and Helen Lauderdale, Sheppard Mullin Richter & Hampton LLP. Ms. Matson can be contacted at cmatson@sheppardmullin.com, Mr. Hamersmith can be contacted at hhamersmith@sheppardmullin.com, and Ms. Lauderdale can be contacted at hlauderdale@sheppardmullin.com.


    Lien Law Unlikely To Change — Yet

    May 26, 2011 — Melissa Brumback, Construction Law in North Carolina

    For those of you following the proposed revisions to the NC lien law that is currently at the NC House Judiciary Subcommittee B, a quick update: the proposed bill (HB 489) is unlikely to be voted on this legislative session due to its unpopularity with several constituency groups, including both the AIA-North Carolinaand the NC Home Builders Association.

    Read the full story…

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


    Colorado “occurrence”

    January 6, 2012 — CDCoverage.com

    In Greystone Construction, Inc. v. National Fire & Marine Insurance Co., No. 09-1412 (10th Cir. November 1, 2011), general contractors Greystone and Branan were each sued by purchases of homes built by each alleging defective construction performed by subcontractors. CGL insurer American Family Mutual Insurance Company defended both Greystone and Brannon while co-insurer National Fire & Marine Insurance Company denied a defense. Greystone, Branan, and American Family sued National Fire for contribution towards defense costs. The federal district trial court entered summary judgment for National Fire.

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    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


    Australian Developer Denies Building Problems Due to Construction Defects

    June 15, 2011 — CDJ Staff

    The Sunland Group, the developer, is objecting to claims that it is responsible for corrosion damage in a residential building in Gold Coast, Australia, as reported in the Courier & Mail. Residents of Q1, the world’s tallest residential tower, are suing the developer, claiming that defects and corrosion “compromise the long-term durability and appearance of” the six-year-old building.

    The developer has not only denied that there are defects in the building, but has also stated that the construction contract “did not warrant that the construction would be defects-free.” Sunland claimed that corrosion was due to the homeowners association having “failed to carry out the maintenance requirements.”

    Repair of the building is expected to cost millions of dollars. Sunland denies that it should pay any of that.

    Read the full story…


    Insurer Unable to Declare its Coverage Excess In Construction Defect Case

    January 6, 2012 — CDJ Staff

    The Ninth Circuit Court of Appeals has upheld a summary judgment in the case of American Family Mutual Insurance Co. v. National Fire & Marine Insurance Co. Several other insurance companies were party to this case. In the earlier case, the US District Court of Appeals for Arizona had granted a summary judgment to Ohio Casualty Group and National Fire & Marine Insurance Company. At the heart of it, is a dispute over construction defect coverage.

    The general contractor for Astragal Luxury Villas, GFTDC, contracted with American Family to provide it with a commercial liability policy. Coverage was issued to various subcontractors by Ohio Casualty and National Fire. These policies included blanket additional insured endorsements that provided coverage to GFTDC. The subcontractor policies had provisions making their coverage excess over other policies available to GFTDC.

    The need for insurance was triggered when the Astragal Condominium Unit Owners Association filed a construction defect claim in the Arizona Superior Court. CFTDC filed a third-party claim against several subcontractors. The case was settled with American Family paying the settlement, after which it filed seeking reimbursement from the subcontractor’s insurers. The court instead granted summary judgment in favor of Ohio Casualty and National Fire.

    American Family appealed to the Ninth Circuit for a review of the summary judgment, arguing that the “other insurance” clauses were “mutually repugnant and unenforceable.” The Ninth Circuit cited a case from the Arizona Court of Appeals that held that “where two policies cover the same occurrence and both contain ‘other insurance’ clauses, the excess insurance provisions are mutually repugnant and must be disregarded. Each insurer is then liable for a pro rate share of the settlement or judgment.”

    The court noted that unlike other “other insurance” cases, the American Family policy “states that it provides primary CGL coverage for CFTDC and is rendered excess only if there is ‘any other primary insurance’ available to GFTDC as an additional insured.” They note that “the American Family policy purports to convert from primary to excess coverage only if CFTDC has access to other primary insurance as an additional insured.”

    In comparison, the court noted that “the ‘other insurance’ language in Ohio Casualty’s additional insured endorsement cannot reasonably be read to contradict, or otherwise be inconsistent with, the ‘other primary insurance’ provision in the American Family policy.” They find other reasons why National Fire’s coverage did not supersede American Family’s. In this case, the policy is “written explicitly to apply in excess.”

    Finally, the Astragal settlement did not exhaust American Family’s coverage, so they were obligated to pay out the full amount. The court upheld the summary dismissal of American Family’s claims.

    Read the court’s decision…


    Construction Defect Litigation at San Diego’s Alicante Condominiums?

    March 25, 2011 — Alicante HOA Website

    According to recent posts in the Alicante HOA website, construction experts and legal counsel have been retained. The HOA board has been informed that testing of a variety of the building’s components are underway or will begin in the near future.

    Read More...


    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…


    LEED Certified Courthouse Square Negotiating With Insurers, Mulling Over Demolition

    June 6, 2011 — Douglas Reiser in the Builders Counsel Blog

    Apparently, Courthouse Square is still unresolved. The County hasnow hired an attorney to handle its insurance claim against Affiliated FM. Is there a lawsuit coming?

    Right now, no lawsuit is expected. According to officials, the insurer has been acting in good faith. But, its been quite a while since Salem officials learned that the Courthouse Square building had significant concrete issues that would result in probable demolition of the LEED certified building.

    If you have yet to hear about Courthouse Square, let me fill you in briefly. The Salem building was substantially completed in 2000 and LEED certified by the US Green Building Council in 2002. The project cost more than $30 Million to complete and the building was revered for its innovation as a crowning achievement for city leaders.

    But, structural problems in the building’s core were discovered as early as 2002, writes Chris Cheatham of Green Building Law Update. Final tests earlier in the year, determined that the building had to be vacated. The building has been clear since July 2010.

    Read the full story…

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


    Architect Not Liable for Balcony’s Collapse

    September 13, 2012 — CDJ Staff

    The Texas Supreme Court declined to hear an appeal from a woman who was partially paralyzed due to the collapse of a balcony. She had sued the architect of her friends’ home, but the Texas Third Circuit Court of Appeals had reversed a jury ruling against the architect, Sinclair Black. Black’s firm, Black + Vernooy, had designed the home and had supervised “administration of the construction contract.” Despite a contractual obligation to “endeavor to guard the owner against defects and deficiencies,” the balcony builder had not followed the architect’s specifications, including in the construction of the balcony.

    While the jury found Black liable for ten percent of the blame, Black argued that he could not be held liable for the contractor’s negligence, nor did he have any duty to third parties.

    Read the full story…


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

    September 1, 2011 — Chad Johnson of Higgins, Hopkins, McLain & Roswell, LLC

    In Weitz Co., LLC v. Ohio Cas. Ins. Co., the U.S. District Court for the District of Colorado was asked to rule on a motion to disqualify counsel in an insurance coverage action. 11-CV-00694-REB-BNB, 2011 WL 2535040 (D. Colo. June 27, 2011). Motions to disqualify counsel are viewed with suspicion, as courts “must guard against the possibility that disqualification is sought to ‘secure a tactical advantage in the proceedings.’” Id. at *2 (citing Religious Technology Center v. F.A.C.T. Net, Inc., 945 F. Supp. 1470, 1473 (D. Colo. 1996).

    Weitz Company, LLC (“Weitz”) is a general contractor and defendant in an underlying construction defect suit which had concluded before the action bringing rise to this order. In the underlying action, Weitz made third-party claims against subcontractors, including NPW Contracting (“NPW”). Weitz was listed as an additional insured under NPW’s policies with both Ohio Casualty Insurance Company and Mountain States Mutual Casualty Company (collectively “the Carriers”). The Carriers accepted Weitz’s tender of defense under a reservation of rights. However, neither insurance carrier actually contributed to Weitz’s defense costs in the underlying action. At the conclusion of the construction defect action, the parties unsuccessfully attempted to apportion the attorney’s fees and costs. Eventually, Weitz brought suit against the recalcitrant carriers. The Lottner firm, which had previously represented Weitz in the underlying construction defect action, continued to represent Weitz in this coverage action. 

    Read the full story…

    Reprinted courtesy of Higgins, Hopkins, McLain & Roswell, LLC. Mr. Johnson can be contacted at johnson@hhmrlaw.com


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

    May 9, 2011 — May 9, 2011 Beverley BevenFlorez - Construction Defect Journal

    In the case of Leflet v. Fire (Ariz. App., 2011), which involved an $8.475 million settlement in a construction defect class action suit, the question put forth to the Appeals court was “whether an insured and an insurer can join in a Morris agreement that avoids the primary insurer’s obligation to pay policy limits and passes liability in excess of those limits on to other insurers.” The Appeals court provided several reasons for their decision to affirm the validity of the settlement agreement as to the Non-Participatory Insurers (NPIs) and to vacate and remand the attorney fee awards.

    First, the Appeals court stated, “The settlement agreement is not a compliant Morris agreement and provides no basis for claims against the NPIs.” They conclude, “Appellants attempt to avoid the doctrinal underpinnings of Morris by arguing that ‘the cooperation clause did not prohibit Hancock from assigning its rights to anyone, including Appellants.’ This narrow reading of the cooperation clause ignores the fact that Hancock did not merely assign its rights — it assigned its rights after stipulating to an $8.475 million judgment that neither it nor its Direct Insurers could ever be liable to pay. Neither Morris nor any other case defines such conduct as actual ‘cooperation’—rather, Morris simply defines limited circumstances in which an insured is relieved of its duty to cooperate. Because Morris agreements are fraught with risk of abuse, a settlement that mimics Morris in form but does not find support in the legal and economic realities that gave rise to that decision is both unenforceable and offensive to the policy’s cooperation clause.”

    The Appeals court further concluded that “even if the agreement had qualified under Morris, plaintiffs did not provide the required notice to the NPIs.” The court continued, “Because an insurer who defends under a reservation of rights is always aware of the possibility of a Morris agreement, the mere threat of Morris in the course of settlement negotiations does not constitute sufficient notice. Instead, the insurer must be made aware that it may waive its reservation of rights and provide an unqualified defense, or defend solely on coverage and reasonableness grounds against the judgment resulting from the Morris agreement. The NPIs were not given the protections of this choice before the agreement was entered, and therefore can face no liability for the resulting stipulated judgment.”

    Next, the Appeals court declared that “the trial court abused its discretion in awarding attorney’s fees under A.R.S § 12-341.” The Appeals court reasoned, “In this case, the NPIs prevailed in their attack on the settlement. But the litigation did not test the merits of their coverage defenses or the reasonableness of the settlement amount. And Plaintiffs never sued the NPIs, either in their own right or as the assignees of Hancock. Rather, the NPIs intervened to test the conceptual validity of the settlement agreement (to which they were not parties) before such an action could commence. In these circumstances, though it might be appropriate to offset a fee award against some future recovery by the Plaintiff Leflet v. Fire (Ariz. App., 2011) class, the purposes of A.R.S. § 12-341.01 would not be served by an award of fees against them jointly and severally. We therefore conclude that the trial court abused its discretion in awarding fees against Plaintiffs ‘jointly and severally.’”

    The Appeals court made the following conclusion: “we affirm the judgment of the trial court concerning the validity of the settlement agreement as to the NPIs. We vacate and remand the award of attorney’s fees. In our discretion, we decline to award the NPIs the attorney’s fees they have requested on appeal pursuant to A.R.S. § 12-341.01(A).”

    Read the court’s decision…


    The U.S. Tenth Circuit Court of Appeals Rules on Greystone

    November 18, 2011 — Derek J. Lindenschmidt, Higgins, Hopkins, McLain & Roswell, LLC

    On November 1, 2011, the Tenth Circuit Court of Appeals ruled on the certified question of whether property damage caused by a subcontractor’s faulty workmanship is an “occurrence” for purposes of a commercial general liability (CGL) insurance policy. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., No. 09-1412 (10th Cir. Nov. 1, 2011), the Tenth Circuit determined that because damage to property caused by poor workmanship is generally neither expected nor intended, it may qualify under Colorado law as an occurrence and liability coverage should apply. Id. at 2.

    The short history of the Greystone case is as follows. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., 649 F. Supp. 2d 1213 (D. Colo. 2009), two contractors and one of their insurers brought an action against a second insurer after the second insurer refused to fund the contractors’ defense in construction defect actions brought by separate homeowners. Id. at 1215. The U.S. District Court for the District of Colorado, relying on General Sec. Indem. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), granted summary judgment in favor of the second insurer on the basis that the homeowners’ complaints did not allege accidents that would trigger covered occurrences under the second insurer’s policies. Id. at 1220. Notably, the Greystone, General Security, and other similar decisions prompted the Colorado General Assembly to enact C.R.S. § 13-20-808, which was designed to provide guidance for courts interpreting perceived coverage conflicts between insurance policy provisions and exclusions. The statute requires courts to construe insurance policies to favor coverage if reasonably and objectively possible. C.R.S. § 13-20-808(5).

    The Tenth Circuit began its analysis by determining whether C.R.S. § 13-20-808, which defines the term “accident” for purposes of Colorado insurance law, would have a retroactive effect, and thereby settle the question before the court. The Tenth Circuit gave consideration to several Colorado district court orders issued since the enactment of C.R.S. § 13-20-808 which have suggested that the statute does not apply retroactively, including Martinez v. Mike Wells Constr., No. 09cv227 (Colo. Dist. Ct., Mar. 1, 2011), and Colo. Pool. Sys., Inv. V. Scottsdale Ins. Co., No. 09cv836 (Colo. Dist. Ct., Oct. 4, 2010). The Tenth Circuit also attempted to ascertain the General Assembly’s intent behind the term “all insurance policies currently in existence...” Greystone, No. 09-1412, at 12. The Tenth Circuit determined that the General Assembly would have more clearly stated its intentions for the term if it was supposed to apply retroactively to expired policies, rather than those still running. Id. at 12-13. Ultimately, the Tenth Circuit decided that C.R.S. § 13-20-808 did not apply retroactively, but noted that “the retrospective application of the statute is not necessarily unconstitutional.” Id. at 9, 11-14. As such, the Tenth Circuit advised that it was required to decide the question presented in the appeal under the principles of Colorado insurance law. Id. at 15.

    Read the full story…

    Reprinted courtesy of Higgins, Hopkins, McLain & Roswell, LLC. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com


    Boston’s Tunnel Project Plagued by Water

    August 11, 2011 — CDJ Staff

    Boston’s Tip O’Neil Tunnel, part of the “Big Dig” project, is suffering from water leaks which has lead to millions of dollars of damage, according to an article in the Boston Globe. The report quotes Frank DePaola, the highway administrator, as likening the water leaks to “three garden hoses.” The project’s chief engineer notes that those “three garden hoses” add up to 17 million gallons a year.

    Further, the chief engineer reports notes that the leaks could compromise both safety and structural integrity. Problems have included a 110-pound light fixture that fell in February, ventilation ducts clogged with ice during the winter, and mold in utility rooms and ventilation buildings.

    Read the full story…


    Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment

    June 16, 2011 — CDJ Staff

    Louisiana politicians are still working on a compromise in the state’s construction budget, as reported in the Times-Picayune. Rob Marrianneax, the chair of the Senate Revenue and Fiscal Affairs Committee, removed a $45 million request from Governor Bobby Jindal and added $4 million for projects that Jindal vetoed last year.

    Two senators have formed competing plans to fund redevelopment construction for New Orleans’s Methodist Hospital. Mitch Landrieu, the mayor of New Orleans, hoped for $30 million dollars in state bonds. Senator Cynthia Willard-Lewis proposed an amendment that would supply $1.6 million, while Senator J.P. Morrell has an amendment that would supply $4 million.

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

    May 26, 2011 — Tred R. Eyerly, Insurance Law Hawaii

    On May 17, 2011, South Carolina passed legislation to combat the restrictive interpretation of what constitutes an "occurrence" under CGL policies. S.C. Code Ann. sec. 38-61-70.

    The legislation reversed a decision by the state's Supreme Court issued earlier this year. See Crossman Communities of North Carolina, Inc. v. Harleysville Mut. Ins. Co., 2011 W.L. 93716 (S.C. Jan. 7, 2011). Crossman had overruled an earlier decision by the South Carolina Supreme Court that holding that defective construction was an “occurrence.” Crossman, however, reversed course, holding that damages resulting from faulty workmanship were the “natural and probable cause” of the faulty work and, as such, did not qualify as an “occurrence.”

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


    Discovery Ordered in Nevada Construction Defect Lawsuit

    August 16, 2012 — CDJ Staff

    Gemstone LVS was sued by the Manhattan Homeowners Association in Las Vegas, after which Chartis Specialty Insurance informed Gemstone that they “had no duty to defend or indemnify Gemstone under the Commercial Umbrella Liability Policy.” Gemstone “asserts that at the time the Policy was purchased, it was understood that Chartis would provide insurance coverage for a construction defect lawsuit” and now seeks discovery “to prove Chartis’ bad faith purpose in drafting an illusory Policy.”

    The opinion notes that “the Court conducted a preliminary peek at the pending motion for partial summary judgment and finds that Chartis has not made the strong showing necessary to support the requested stay.” Further, the court notes that “when ambiguity in the language of a policy exists, the court may consider not only the language of the policy but also the ‘intent of the parties, the subject matter of the policy, and the circumstances surrounding its issuance.’” The court concludes that “this type of discovery is relevant to understanding the intent of the parties, more specifically, whether it was understood that Chartis would provide insurance coverage given the construction defect lawsuit.”

    Accordingly, the court denied Chartis’ motion for stay of discovery and established a schedule for discovery, expert designations, rebuttal expert designations, and other matters related to the trial.

    Read the court’s decision…