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    Santa Claus, Indiana

    Indiana Builders Right To Repair Current Law Summary:

    Current Law Summary: According to SB45160, §IC 32-27-3-1&2 a claimant must provide written notice 60 days before filing an action. Within 21 days after service of the notice, the construction professional must serve a written response. Claimant must file list of known construction defects, description, and the construction professional responsible for each alleged defect (to the extent known).


    Construction Expert Witness Contractors Licensing
    Guidelines Santa Claus Indiana

    License required for plumbing. All other licensing is done at the local county level.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Southwestern Indiana Builders
    Local # 1524
    2175 N Cullen Avenue
    Evansville, IN 47715
    http://www.sibaonline.org

    Home Builders Association of Southern Indiana
    Local # 1566
    1601 Greentree Court
    Clarksville, IN 47129
    http://www.hbasi.net

    Gibson Co Chapter
    Local # 1530
    PO Box 386
    Princeton, IN 47670


    Builders Association of Dubois County
    Local # 1511
    1813 S A St
    Jasper, IN 47546
    http://www.dcbuilder.org

    Vincennes Area Chapter
    Local # 1563
    PO Box 531
    Vincennes, IN 47591


    River Valley Chapter of National Associated Home Builders
    Local # 1576
    PO Box 365
    Hanover, IN 47243


    Lawrence County Chapter
    Local # 1535
    201 Main Street c/o Hoosier Door
    Oolitic, IN 47451



    Construction Expert Witness News and Information
    For Santa Claus Indiana

    No “Special Relationship” in Oregon Construction Defect Claim

    Firm Sued For Construction Defects in Parking Garage

    Construction Defect Not a RICO Case, Says Court

    New Buildings in California Soon Must Be Greener

    Arbitrator May Use Own Discretion in Consolidating Construction Defect Cases

    Former New York Governor to Head Construction Monitoring Firm

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

    Insurer Unable to Declare its Coverage Excess In Construction Defect Case

    Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii

    Harsh New Time Limits on Construction Defect Claims

    Insurer Not Entitled to Summary Judgment on Construction Defect Claims

    School District Marks End of Construction Project by Hiring Lawyers

    The Complete and Accepted Work Doctrine and Construction Defects

    Coverage for Construction Defects Barred by Business Risk Exclusions

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

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

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

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

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

    Windows and Lawsuits Fly at W Hotel

    Colorado “property damage” caused by an “occurrence” and exclusions j(5) and j(6) “that particular part”

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

    Badly Constructed Masonry Walls Not an Occurrence in Arkansas Law

    Homeowner Has No Grounds to Avoid Mechanics Lien

    Retaining Wall Contractor Not Responsible for Building Damage

    Condominium Communities Must Complete Construction Defect Repairs, Says FHA

    One Colorado Court Allows Negligence Claim by General Contractor Against Subcontractor

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

    Insurer Settles on Construction Defect Claim

    Steps to Defending against Construction Defect Lawsuits

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    Cleveland Condo Board Says Construction Defects Caused Leaks

    Homeowners May Not Need to Pay Lien on Defective Log Cabin

    Construction Demand Unsteady, Gains in Some Regions

    Florida “get to” costs do not constitute damages because of “property damage”

    Geometrically Defined Drainage Cavities in EIFS as a Guard Against Defects

    Mark Van Wonterghem To Serve as Senior Forensic Consultant in the Sacramento Offices of Bert L. Howe & Associates, Inc.

    Homeowners Not Compelled to Arbitration in Construction Defect Lawsuit

    Insurers Reacting to Massachusetts Tornadoes

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    Irene May Benefit Construction Industry

    Gilroy Homeowners Sue over Leaky Homes

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    Landmark San Diego Hotel Settles Defects Suit for $6.4 Million

    Construction Defect Lawsuits? There’s an App for That

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    Harmon Towers Case to Last into 2014

    Amerisure Case to be Heard by Texas Supreme Court

    Underpowered AC Not a Construction Defect

    Arizona Contractor Designs Water-Repellant Cabinets

    Hovnanian Sees Second-Quarter Profit, Points to Recovery

    California Supreme Court to Examine Arbitration Provisions in Several Upcoming Cases

    SB800 Cases Approach the Courts

    Ensuing Loss Provision Found Ambiguous

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

    BHA Expands Construction Experts Group

    Unfinished Building Projects Litter Miami

    West Hollywood Building: Historic Building May Be Defective

    Hawaii Building Codes to Stay in State Control

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

    Equipment Costs? It’s a Steal!

    Construction Suit Ends with Just an Apology

    Coverage Rejected Under Owned Property and Alienated Property Exclusions

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

    South Carolina Contractors Regain General Liability Coverage

    Ohio subcontractor work exception to the “your work” exclusion

    District Court Awards Summary Judgment to Insurance Firm in Framing Case

    No Resulting Loss From Deck Collapsing Due to Rot

    Texas “Loser Pays” Law May Benefit Construction Insurers

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

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

    Nevada Assembly Sends Construction Defect Bill to Senate

    Minnesota Starts Wide-Ranging Registration of Contractors

    Mandatory Arbitration Provision Upheld in Construction Defect Case

    Injured Construction Worker Settles for Five Hundred Thousand

    A Downside of Associational Standing - HOA's Claims Against Subcontractors Barred by Statute of Limitations

    Loss Caused by Seepage of Water Not Covered

    Construction Workers Unearth Bones

    Contractor’s Home Not Covered for Construction Defects

    Colorado Court of Appeals Rejects Retroactive Application of C.R.S. § 13-20-808.

    Fourteen More Guilty Pleas in Las Vegas Construction Defect Scam

    Pipes May Be Defective, But Owners Lack Standing

    Harmon Towers Duty to Defend Question Must Wait, Says Court

    Pictorial Construction Terminology Dictionary — A Quick and Helpful Reference

    Florida: No Implied Warranties for Neighborhood Improvements
    Corporate Profile

    SANTA CLAUS INDIANA CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    Leveraging from more than 5500 construction defect and claims related expert witness designations, the Santa Claus, Indiana Construction Expert Witness Group provides a wide range of trial support and consulting services to Santa Claus' 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.









    Construction Expert Witness News & Info
    Santa Claus, Indiana

    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.


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

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

    California Assemblyman Furutani has introduced a bill that if passed would eliminate the ten year statute of repose in certain construction defect cases. The statute of repose would not apply when “an action in tort to recover damages for damage to real or personal property, or for personal injury or wrongful death from exposure to hazardous or toxic materials, pollution, hazardous waste, or associates environmental remediation activities,” according to the latest amended version of AB 1207.

    When Furutani first introduced the bill, it was aimed at small businesses only. However, the description of the bill, which read, “An act to amend Section 14010 of the Corporations Code, relating to small businesses” has been stricken from the bill, and it has been amended to read, “An act to amend Section 337.15 of the Code of Civil Procedure, relating to civil actions.”

    The change in the bill’s intent has caused some outcry among attorneys in the blogosphere. For instance, Sean Sherlock of Snell & Wilmer stated that “the proposed amendment is unnecessary, and would upset nearly 50 years of deliberative legislation and judicial precedent on construction defects liability and the 10–year statute — all apparently motivated by a decision in a single, isolated Superior Court lawsuit that has not yet been reviewed by the court of appeal.” Sherlock is referring to Acosta v. Shell Oil Company, in which the Superior Court agreed to dismiss the plaintiffs’ claims against the developer based in part on the ten year statute of repose. AB 1207 was amended five days after the ruling in Acosta v. Shell Oil Company.

    California AB 1207 has been re-referred to the Judiciary Committee.

    Read the full story…


    Insurer Not Liable for Construction Defect Revealed by Woodpecker

    September 13, 2012 — CDJ Staff

    The Eighth Circuit Court of Appeals has ruled that an insurance provision that excluded construction defects must stand in Friedberg v. Chubb, granting a summary judgment to the insurance firm.

    The Friedbergs discovered extensive water damage to their home after a woodpecker drilled a hole in a vertical support. They sought insurance coverage under their Chubb “Masterpiece” policy. The decision quotes the policy as covering “all risk of physical loss” “unless stated otherwise or an exclusion applies.” These exclusions included “gradual or sudden loss,” “structural movement,” and “faulty planning, construction or maintenance,” but the policy covered “ensuing covered loss unless another exclusion applies.”

    Chubb’s expert determined that the Friedbergs’ home had defective construction, and “attributed the damage to the beams and walls below the beam to a failure to install control joints.” After Chubb denied coverage, the Friedbergs sued, although the court ruled that “even under the Friedbergs’ theory, the water damage was a loss caused by faulty construction and therefore excluded under the policy.”

    On appeal, the Friedbergs argued that “the loss resulted from the combination of both faulty construction and the presence of water” and that Minnesota’s “concurrent causation” doctrine must apply, which according to the decision, “when a loss results from both a covered peril and an excluded peril, coverage exists unless the excluded peril is the ‘overriding cause’ of the loss.” The court rejected this reasoning, noting that “once the house was plagued with faulty construction, it was a foreseeable and natural consequence that water would enter.”

    The Friedbergs also contended that “the damage caused by the intrusion of water into their home is an ‘ensuing covered loss’ for which they are due coverage.” The court also rejected this claim, noting that Minnesota law excludes defective construction from the ensuing loss provision. The court said that “the Friedbergs’ reading of their ensuing-loss clause, by contrast, would dramatically limit their policy’s faulty-construction exclusion, because almost ‘any loss cause by’ faulty construction could also be characterized as an ensuing loss under an all-risk policy.”

    Read the court’ decision…


    Foundation Arbitration Doesn’t Preclude Suing Over Cracks

    March 28, 2012 — CDJ Staff

    The Louisiana Court of Appeals has reversed the decision of a lower court, allowing a construction defect case to go through. In Greer v. Town Construction Company, the Greers hired Town Construction to build a home in Baton Rouge. The business relationship went sour, with disputes over “costs, change orders, workmanship, and timeliness issues.”

    Town Construction filed an arbitration claim for the unpaid contract balance. In the counterclaim, the Greers made claims of mold and mildew problems, and wall cracks that they attributed to a “structural defect in the foundation.” In arbitration, Town Construction was awarded the full contract balance plus extra costs and interest, while the Greers were awarded for their structural claims.

    Three years later, the Greers found additional cracks and filed a suit against Town Construction. Town Construction argued that the Greer’s lawsuit should be dismissed, as the claims had already been through the arbitration process. The district court agreed with Town Construction and dismissed the suit.

    The appeals court noted that the Greers would have no ground for a suit if the arbitration was a “valid and final judgment,” and went on to note that there was no evidence in the trial record that the arbitration met this qualification. The court noted that although it was clear that both parties had agreed to the decisions of the arbiter, under Louisiana law, arbitration is not final until it has been “rendered by a court with jurisdiction over subject mater and over parties.”

    The court remanded the case to the lower court, noting that “the district court is obligated to first determine whether a valid arbitration award is in existence and had been confirmed before considering the merits of the exception. The court noted that their decision “should not be read to express any opinion as to the merits of the claims or as to the propriety of damages sought in the Greer’s lawsuit.”

    Read the court’s decision…


    San Diego Construction Defect Claim Settled for $2.3 Million

    July 10, 2012 — CDJ Staff

    The Nauman Law firm has settled the lawsuit by the Latitude Owners Association against CS-Crossroads and others, as reported in the Sacramento Bee from a press release by the firm. The owners at Latitude, a condominium community in San Diego, found that hillside crawl spaces were not property waterproofed, leading to rotting plywood, water intrusion, and pipe leaks. There were additional problems with retrofitted windows and repairs of outside decks. The case was filed in San Diego Superior Court, but settled after multiple mediations.

    Read the full story…


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

    August 2, 2012 — Heather Anderson, Higgins, Hopkins, McLain & Roswell, LLC

    A recent opinion from the Colorado Court of Appeals is a cautionary tale concerning the calculation of pre-judgment interest. See Hendricks v. Allied Waste Transportation, Inc., 2012 WL 1881004 (Colo. App. 2012). The Hendricks sued Allied after one of its drivers backed into the corner of their home with an Allied garbage truck. At trial, a jury awarded the Hendricks $160,100 in damages. Although the jury was instructed on the cost of repairs, diminution in value, and non-economic damages, the parties agreed to a general verdict form that did not ask the jury to specify the types of damages awarded. The Hendricks sought to amend the judgment to include prejudgment interest and costs, which the trial court granted.

    Allied appealed, arguing that the trial court erred by awarding the Hendricks prejudgment interest from the date their property was damaged. Id. at *7. The Colorado Court of Appeals found no error, and affirmed.

    Read the full story…

    Reprinted courtesy of Heather Anderson, Higgins, Hopkins, McLain & Roswell, LLC. Ms. Anderson can be contacted at anderson@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…


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

    March 5, 2011 — By CDCoverage.com, March 5, 2011

    In American Empire Surplus Lines Ins. Co. v. Hathaway Development Co., Inc., No. S10G0521 (Ga. March 7, 2011), insured plumbing subcontractor Whisnant was sued by general contractor Hathaway seeking damages for costs incurred by Hathaway in repairing damage to property other than Whisnant’s plumbing work resulting from Whisnant’s negligently performed plumbing work on three separate projects. On one project, Whisnant installed a pipe smaller

    Read the full story...

    Reprinted courtesy of CDCoverage.com


    Driver’s Death May Be Due to Construction Defect

    August 16, 2012 — CDJ Staff

    A man driving a rental truck collided with a parking ramp at the Mall of America in Bloomington, Minnesota, leading to his death when the ramp broke and crushed the cab of the truck. One expert said that the ramp should have been built to withstand the impact. Tim Galarnyk told Fox News that the building feature didn’t’ even bear weight, describing it as “a cosmetic facial panel.” Nevertheless, in a contest with a truck he said the ramp portion should “peel it like a tin can before it takes the concrete element down.”

    The Mall of American is not commenting on the accident.

    Read the full story…



    After Construction Defect Case, Repairs to Austin Building

    August 2, 2012 — CDJ Staff

    The Austin Business Journal reports that remediation is about to begin on Met Center 10, a building that was “at the center of a complex structural defect case.” Claims were made that Grubb & Ellis failed to disclose known structural defects to a group of investors who purchased the building. The brokerage was ordered to pay $6.75 million. Repairs will take an estimated six months at a cost of $3.7 million.

    Read the full story…


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

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

    After reviewing the decision in Abraham v. T. Henry Construction, et al., the Oregon Supreme Court affirmed that a tort claim for property damage arising from construction defects may exist even when the homeowner and the builder are in a contractual relationship.

    When the case was initially filed, the plaintiffs alleged breach of contract and negligence. The defendants moved for summary judgment arguing that one, the claim was barred by the six-year statute of limitations and two, no special relationship (such as one between a doctor and patient) existed. The court agreed with the defendants. However, the Court of Appeals while affirming the trial court’s decision on breach of contract reversed the decision on negligence. The Court of Appeals stated that an administrative or statute rule could establish a standard of care independent from the contract.

    The Oregon Supreme Court gave an example of cases where a tort claim could exist when a contract is present: “If an individual and a contractor enter into a contract to build a house, which provides that the contractor will install only copper pipe, but the contractor installs PVC pipe instead (assuming both kinds of pipe comply with the building code and the use of either would be consistent with the standard of care expected of contractors), that failure would be a breach of contract only. […] If the failure to install the copper pipe caused a reduction in the value of the house, the plaintiff would be able to recover that amount in an action for breach of contract. […] On the other hand, if the contractor installed the PVC pipe in a defective manner and those pipes therefore leaked, causing property damage to the house, the homeowner would have claims in both contract and tort. […] In those circumstances, the obligation to install copper instead of PVC pipe is purely contractual; the manner of installing the pipe, however, implicates both contract and tort because of the foreseeable risk of property damage that can result from improperly installed pipes.”

    Read the court’s decision…


    Condominium Communities Must Complete Construction Defect Repairs, Says FHA

    July 10, 2012 — CDJ Staff

    Laura K. Sanchez of HindmanSanchez writes that the FHA “will not approve or recertify” any condominium community “where there are any pending or incomplete repairs within the community which are a result of a construction defect claim, regardless of whether the litigation has been resolved and regardless of whether there are funds in the bank paid by the developer to pay for the repairs.” The FHA notes that failure to complete or fund repairs could “put FHA insured loans at risk.” Communities must disclose all maintenance and repair issues to the FHA. Sanchez notes that the FHA has stated that incomplete repairs could put FHA-insured loans at risk.

    Read the full story…


    Arizona Court of Appeals Rules Issues Were Not Covered in Construction Defect Suit

    December 9, 2011 — CDJ Staff

    The Arizona Court of Appeals has ruled in the case of Peters v. Marque Homes. In this case, Walter Peters provided the land and funding for Marque Homes to build a luxury residence in Glendale, Arizona. By the terms of the “Joint Venture Agreement,” Peters provided the land and funding, while Marque would not charge Peters for overhead, profits, or supervision fees. The agreement specified that profits would be divided equally.

    Two years later, Marque sued Peters claiming he had breached his obligations by refusing several offers for the home. Peters replied that Marque had “failed to complete the home so it is habitable to prospective purchasers.” Peters stated he had “retained an expert inspector who had identified numerous defects.” The court appointed a Special Commissioner to list the home for sale. Peters purchased the home with two stipulations ordered by the court. At this point, the earlier case was dismissed with prejudice.

    Peters then sued Marque “asserting express and implied warranty claims arising out of alleged construction defects in the home.” Marque claimed that Peters’s claims were “precluded by the prior joint venture dispute.” The court granted Marque’s motion.

    The appeals court reversed the lower court’s decision, determining that Peters’s claims were not precluded by the agreement. Although there had been a prior case between the two parties, warranty issues did not form a part of that case. “Peters never raised these allegations nor presented this evidence in support of any warranty claim.”

    The court also noted that the “parties never agreed to preclude future warranty claims.” Marque and Peters “agreed in the stipulated sale order that ‘the sale of the property to a third party shall be “as is” with a 10-year structural warranty.’” The court noted that the agreement said nothing about one of the parties buying the house.

    The appeals court left open a claim by Marque that there are no implied or express warranties available to Peters. They asked the Superior Court to address this.

    Read the court’s decision…


    Was Jury Right in Negligent Construction Case?

    September 30, 2011 — CDJ Staff

    Yes, said the South Carolina Court of Appeals in Pope v. Heritage Communities, Inc. Heritage Communities developed Riverwalk, a community in South Carolina. During the earlier trial, HCI “conceded that construction defects existed at Riverwalk, and repairs needed to be made.” The trial court found that the construction was negligent, awarding the property owners association $4.25 million in actual damages and $250,000 in punitive damages, with the class of owners awarded $250,000 in actual damages and $750,000 in punitive damages. HCI appealed on nine issues. All were rejected by the appeals court.

    The court rejected HCI’s claim that the judge’s instruction to the jury suggested to the jury that “the court had already determined that Appellants were willful, wanton, and reckless.” But here, the appeals court found “no reversible error.”

    The general contractor for Riverwalk was BuildStar. Off-site management and sale were managed by Heritage Riverwalk, Inc., which also owned title to the property. Both these companies were owned by Heritage Communities, Inc. During the trial, an HCI employee testified that “the three corporations shared the same officers, directors, office, and telephone number.” The trial court found that the three entities were amalgamated. This was upheld by the appeals court.

    Nor did the appeals agree with the HCI that the trial court had improperly certified a class. The owners were seen as properly constituting a class. Further, the court held that the property owners’ losses were properly included by the trial court. HCI objected at trial to the inclusion of evidence of subsequent remedial measures, however, as they did not object that it was inadmissible, the issue could not be addressed at appeal.

    HCI argued on appeal that the trial court should not have allowed evidence of defects at other HCI developments. The appeals court noted that “the construction defects at the other HCI developments were substantially similar to those experienced by Riverwalk.”

    The court additionally found that the negligence claims, the estimated damages (since full damage could not be determined until all defective wood was removed), and the award of punitive damages were all properly applied.

    Read the court’s decision…


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

    August 4, 2011 — Higgins, Hopkins, McLain & Roswell, LLC

    Recently, in Caribou Ridge Homes, LLC v. Zero Energy, LLC, et al., Case No. 10CV1094, Boulder County District Court Judge Ingrid S. Bakke entered a ruling and order on the Plaintiff’s Motion for Determination of Question of Law Pursuant to C.R.C.P. 56(h) on Issue of Damages. The Order found that the Plaintiff was not a homeowner intended to be protected by the Homeowner Protection Act (the “HPA”) and thus could not pursue its claims for consequential damages against Defendant.

    By way of background, on June 18, 2008, Plaintiff Caribou Ridge Homes, LLC (“Caribou”) entered into a Standard Form Agreement Between Owner and Contractor AIA Document A114-2001 (the “Contract”) with Defendant Zero Energy, LLC (“Zero Energy”). Plaintiff hired Zero Energy to serve as a general contractor for the construction of a single-family home in the Caribou Ridge subdivision in Nederland, Colorado. A provision in the contract contained a mutual waiver of consequential damages (“Waiver”).

    Read the full story…

    Reprinted courtesy Higgins, Hopkins, McLain & Roswell, LLC


    Nevada District Court Dismisses Case in Construction Defect Coverage Suit

    August 16, 2012 — CDJ Staff

    The United States District Court of Nevada has dismissed a case filed by Maryland Casualty Company against National Fire & Marine Insurance Company. This case follows a case in which National was sued over “200 causes of action arising out of 193 separate insurance coverage disputes related to 75 different insureds and 163 unrelated construction defect or Chapter 40 proceedings across seven states.” The judge in this initial case severed the plaintiffs, as he found that allowing joinder “would make this case impossible to manage.” In this particular instance, National seeks to have the claims made by Maryland Casualty dismissed.

    Maryland Casualty alleged that for insurance policies issued to 38 companies, National was obligated to defend the insured. National was, according to the plaintiff, named as defendants in 72 unrelated lawsuits to which National disclaimed coverage. However, the court found that Maryland Casualty failed “to provide enough detail regarding the relevant property damage, policies, claims, and time periods.” The court found that Maryland failed to “state a claim upoin which relief can be granted.

    The court also found that “the Complaint lacks any well-pled allegations from which the Court could conclude the Plaintiff has standing since the Complaint is devoid of information about the specific policies at issue.

    The court did allow Maryland Casualty up to September 3, 2012 in which to file an amended complaint.

    Read the court’s decision…


    Liability policy covers negligent construction: GA high court

    October 31, 2010 — Original article by Michael Bradford in Business Insurance

    ATLANTA—Negligent construction that results in damage to surrounding property constitutes an occurrence under a commercial general liability policy, the Georgia Supreme Court has ruled.

    In a 6-1 opinion Monday in American Empire Surplus Lines Insurance Co. Inc. vs. Hathaway Development Co. Inc., the Georgia high court upheld a lower court ruling that the general contractor’s claim for damage caused by a subcontractor’s faulty plumbing work was covered.

    The ruling on construction defects is the latest in number of such cases across the United States

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    Reprinted courtesy of Michael Bradford of Business Insurance.


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

    March 7, 2011 — By Steve Cvitanovic of Haight Brown & Bonesteel, LLP.

    Contractors should always be sure that they understand the licensing in any Subcontract or Prime Contract before entering into any agreement. However, on March 3, 2011, in the case of Pacific Casson & Shoring, Inc. v. Bernards Bros., Inc. 2011 Cal.App.Lexis 236, the Court of Appeal determined that if a specialty license is subsumed within another license, the specialty license may not be required.

    Bernards entered into a subcontract with Pacific to excavate, backfill, grade and provide geotechnical design parameters for a hospital. The Prime Contract required the bidder to maintain a Class C-12 specialty earthwork license. However, Pacific only held a Class A general engineering license which it turns out was suspended during the performance of the work. Pacific sued Bernards for nonpayment of $544,567, but the lawsuit was dismissed because the trial court found that Pacific (1) lacked a C-12 license, and (2) Pacific’s Class A license was suspended for failure to pay an unrelated judgment. Pacific was also ordered to disgorge $206,437 in prior payments.

    The Court of Appeal reversed and remanded. The Court of Appeal agreed with Pacific and held that a C-12 specialty license was not required despite the Prime Contract. The Court of Appeal found that the C-12 specialty license would have been “superfluous” since it was fully encompassed within the Class A requirements. However, the Court of Appeal also remanded the case for further

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    Reprinted courtesy of Steve Cvitanovic of Haight Brown & Bonesteel, LLP.