South Carolina Contractors Regain General Liability Coverage
May 20, 2011 — CDJ Staff
PR Newswire reports that the Carolinas Associated General Contractors (CAGC) have successfully persuaded the South Carolina legislature to pass a bill restoring commercial general liability (CGL) coverage. Governor Nikki Hartley signed the legislation on May 17.
A South Carolina Supreme Court decision given on January 7, 2011, had ended commercial general liability coverage in the state. Senate Bill 431 addressed this decision, restoring the ability of home builders to obtain CGL coverage.
PR Newswire quotes South Carolina homebuilder, Allen Amsler: “We have seen a lot of legislation with substantial impact to our business over the years. However, I would place this in the same level of importance with the original tort reform legislation. The effects of the Supreme Court’s ruling could have been catastrophic to our industry in South Carolina had it not been for this bill. Thanks to all those in the House, Senate and the Governor’s office who assisted us.”
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Nevada Bill Aims to Reduce Legal Fees For Construction Defect Practitioners
March 21, 2011 — March 21, 2011 Construction Defect Journal Staff
Assemblyman Ira Hansen and twelve additional members of Nevada’s Assembly are sponsoring Assembly Bill 285. AB 285 Revises provisions governing an award of attorney’s fees in causes of action for constructional defects. Existing law generally provides that a claimant may recover reasonable attorney’s fees as part of the claimant’s damages in a cause of action for constructional defects. (NRS 40.655)
This bill removes this provision and instead authorizes a court to award reasonable attorney’s fees to a prevailing party involved in such a cause of action if an independent basis for the award exists pursuant to existing law which authorizes a court to award attorney’s fees in certain circumstances, or Rule 68 of the Nevada Rules of Civil Procedure, which provides for the payment of reasonable attorney’s fees by an offeree who rejects an offer and subsequently fails to obtain a more favorable judgment.
In an AP report published in Business Week it is suggested that the target objective of legislators centers on what it refers to as Nevada’s "Rampant construction defect lawsuits".
According to Business Week "The suits bring in hundreds of millions of dollars for lawyers and have put construction companies out of business. Hansen says fewer construction firms mean higher prices for Nevada consumers."
Click Here To Read Full Text and Revisions of Assembly Bill 285
Construction Job Opening Rise in October
December 20, 2012 — CDJ Staff
There was a significant increase in the number of open construction jobs during October, according to a report for the National Association of Home Builders. Working from preliminary data provided by the Bureau of Labor Statistics, the NAHB said that the number of open positions reached “levels and rates last seen in 2007.” As the data is still preliminary, the NAHB noted that the conclusions should be taken with caution.
While there was a spike in job openings, the hiring of people to fill these positions hasn’t caught up with it, and there was a small decline in hires. But to return to the good news, there was also a drop in layoffs in that same period.
Through October, about 8,000 people have been hired in the construction sector. The NAHB notes that this does not correspond with the recent increases with home construction. They suggest that “it may be the case that startups in the home building and remodeling sectors are being missed by the establishment survey.” Another possibility they raise is that already-employed construction workers are simply working more hours.
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Anti-Concurrent Causation Clause Bars Coverage for Landslide and Water Leak
June 19, 2012 — Tred Eyerly, Insurance Law Hawaii
The insured unsuccessfully attempted to get around the policy’s anti-concurrent causation clause by arguing a covered cause of loss was a contributing factor. See Stor/Gard, Inc. v. Strathmore Ins. Co., 2012 U.S. Dist. LEXIS 63217 (D. Mass. May 4, 2012).
A building at the insured’s storage facility was damaged when heavy rain caused a mass of soil to slide down a slope, causing soil and a retaining wall to fall on the building. The accident caused a partial collapse of the building. The insurer hired two soil engineers, each of whom concluded that a landslide caused the accident. The reports also noted, however, that a leak from the property’s drainage system resulted in a very small percentage of water infiltrating the ground.
The insurer denied coverage based upon an exclusion for landslides.
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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BHA Expands Construction Experts Group
October 28, 2011 — Bert L. Howe & Associates, Inc. - Corporate Offices
Bert L. Howe & Associates, Inc., one of the nation’s leading construction forensics firms is pleased to announce the expansion of the company’s civil and structural engineering capabilities.
JERRY M. MILES, PE - Mr. Miles has been a licensed civil engineer in California since 1987 and has served as the lead civil engineer on many projects in several states. His experience includes contract administration services as the owner’s representative on a variety of projects including mastered planned communities, residential subdivisions, shopping centers and multi-family residential projects. He has also been involved in providing water quality management plans and storm water pollution prevention plans. Mr. Miles has also served on the Town of Apple Valley’s Building Department Dispute Resolution Board.
His more than 26 years of engineering experience includes geotechnical evaluations, structural design of wood-framed, masonry, and concrete tilt-up buildings, small and large subdivision engineering construction/improvements plans, hydrology/hydraulic reports and design, forensic investigation and expert witness testimony. Mr. Miles has qualified as an expert in numerous jurisdictions and Federal court. He has been called upon to provide deposition testimony on more than twenty-five occasions and has successfully testified at arbitration and trial. Click here to view Mr. Miles’ Current CV.
MATTHEW J. STIEFEL, PE - With a background that spans a multitude of design and new construction projects to catastrophic claims analysis, Mr. Stiefel brings a unique set of credentials and experience to the construction experts group at Bert L. Howe & Associates. Mr. Stiefel has more than 13 years’ experience in civil, structural, and geotechnical engineering; providing design and construction consulting services on a variety of projects that include multi-family and single family dwellings, commercial buildings, transportation facilities, industrial facilities, storm drain channels, water and wastewater pipelines. His engineering experience encompasses multiple disciplines of civil engineering including geotechnical design and evaluation, foundation design, structural design of wood-framed buildings, preparation of grading plans and site drainage analysis. He has provided cause and origin analysis for insurance adjusters on many residential and commercial sites related to issues involving moisture intrusion and mold, foundation movement, site drainage, soil movement, wind damage, and other various losses. Click here to view Mr. Stiefel’s Current CV.
Damage During Roof Repairs Account for Three Occurrences
August 2, 2012 — Tred Eyerly, Insurance Law Hawaii
Southgate Gardens Condominium had buildings damaged by Hurricane Wilma in 2005. See Mid-Continent Cas. Co. v. Basedeo, 2012 U.S. App. LEXIS 11864 (11th Cir. June 12, 2012). First State Development Corporation was hired by Southgate to do repairs.
On November 1, 2005, First State completed tarping on the buildings. Thereafter, on November 11, 2005, First State contracted with Southgate to remove and replace the roofs of the Southgate Buildings.
The tarps placed by First State were inadequate and allowed water to enter the unit of Wayne Basdeo and cause damage. Further, when it attached the tarps, First State caused holes to be made in the roofs of buildings, leading to additional damage. First State also left open the mansards (a type of roof which has two slopes on all all sides, but with the lower slope steeper that the upper one). Finally, the peeled-back condition of the roofing allowed rain to enter.
Basdeo filed a claim with Mid-Continent.
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
Connecticut Gets Medieval All Over Construction Defects
February 10, 2012 — CDJ Staff
The Hartford Courant reports that Connecticut is trying a very old tactic in a construction defect suit. The law library building at the University of Connecticut suffered from leaks which have now been repaired. The state waited twelve years after was complete to file lawsuit, despite that Connecticut has a six-year statute of limitations on construction defect claims. Connecticut claims that the statute of limitations does apply to the state.
The state is arguing that a legal principle from the thirteenth century allows it to go along with its suit. As befits a medieval part of common law, the principle is called “nullum tempus occurrit regi,” or “time does not run against the king.” In 1874, the American Law Register said that nullum tempus occurrit reipublicae “has been adopted in every one of the United States” and “is now firmly established law.”
In the case of Connecticut, Connecticut Solicitor General Gregory D’Auria said that “the statute of limitations does not apply to the state.” He also noted that “the state did not ‘wait’ to file the lawsuit. The lawsuit was filed only after all other options and remedies were exhausted.”
Connecticut also argued that “nullus tempus occurrit regi” applied in another construction defect case at the York Correctional Institution. The judge in that case ruled in December 2008 to let the case proceed. But in the library case, Judge William T. Cremins ruled in February 2009 that the statute of limitations should apply to the state as well. Both cases have been appealed, with the library case moving more quickly toward the Connecticut Supreme Court.
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Coverage for Construction Defects Barred by Business Risk Exclusions
September 1, 2011 — Tred Eyerley, Insurance Law Hawaii
Although the court determined there was an occurrence, coverage was excluded by the business risk exclusions. See Cont’l W. Ins. Co. v. Shay Constr. Co., 2011 U.S. Dist. LEXIS 82839 (D. Colo. July 28, 2011).
White was the general contractor on the project. White had three subcontracts with Shay to provide framing, siding, and related work on the project. Shay was insured under a CGL policy issued by Continental Western.
Two of Shay’s subcontractors furnished materials, labor and equipment to Shay. These subcontractors filed suit in state court alleging they had not been compensated for the work and materials. White and Shay were named as defendants. White cross claimed against Shay, alleging Shay had breached its obligations under the subcontracts. Several allegations sounded in contract. Other allegations, however, contended Shay had performed defective work and had damaged the work of other trades in correcting deficiencies in its own performance.
Shay sought coverage under Continental Western’s policy. Continental Western filed suit for a declaratory judgment and moved for summary judgment.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
2011 Worst Year Ever for Home Sales
September 9, 2011 — CDJ Staff
So few new single-family homes have sold in 2011 that expectations are that this will be the worst year for new homes sales since the Commerce Department started tracking this in 1963. The Harford Courant notes that previously builders created a new supply to which was added homes under foreclosure.
Ed Leamer, economist and director of UCLA’s Anderson Forecast, says that recovery would be driven by two sectors, manufacturing and construction. “It doesn’t look like there is going to be a big recovery in manufacturing,” he says. “It is going to have to come in housing.”
The soft housing market, however, is leading to a loss of construction jobs, as reported by the Associated General Contractors of America. As a result, stock prices for the twelve largest publicly-traded home builders have declined 22.7 percent in a market that has declined 4.2 percent overall.
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Construction Suit Ends with Just an Apology
February 10, 2012 — CDJ Staff
After suing a contractor for failing to complete the remodeling of their home, an Orange County couple has settled for an apology. Douglas J. Pettibone represented the contractor, who had lost his business after a broken neck, multiple surgeries, and an addiction to pain medicine. Mr. Pettibone represented his client pro bone. The case was settled in arbitration by JAMS.
Mr. Pettibone noted that his client gave “a heartfelt and very moving apology.” The remodeling was completed by another contractor, two years after Thorp Construction stopped work on the project. After the apology, the case was dismissed.
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Court Voids Settlement Agreement in Construction Defect Case
September 1, 2011 — CDJ Staff
A U.S. District Court Judge in Florida has ruled in favor of a company that sought to void a settlement agreement. The case, Water v. HDR Engineering, involved claims of construction defects at Florida’s C.W. Bill Young Regional Reservoir. The Tampa Bay Water Authority attributed these to both HDR Engineering’s design and Bernard Construction Company which had built the embankment. Bernard Construction filed a complaint against their subcontractor, McDonald.
Tampa Bay Water settled with Bernard Construction and McDonald, in an agreement that set a minimum and maximum settlement, but also would “prohibit Barnard and McDonald from presenting any evidence on several claims and positions of TBW, to require Barnard to call certain witnesses at trial, to preclude Barnard and McDonald from calling other witnesses, and to restrict the filing of trial and post-trial motions.” HDR Engineering moved to void the agreement as collusive.
The judge that the agreement¬? contained “133 paragraphs of ‘Agreed Facts’ that the parties stipulated would survive any order declaring the Settlement Agreement void or unenforceable.” He characterized these as stipulating “that Barnard neither caused nor contributed to TBW’s damages.” HDR motioned that a summary judgment be given to Barnard Engineering.
The court found that “the evidence identified by TBW is patently insufficient to survive summary judgment.” Further, TBW’s expert initially held Barnard responsible for “lenses, pockets, streaks and layers within the embankment,” but then later withdrew this assigning the responsibility to HDR. Further, the court notes that, “TBW’s arguments that lenses, pockets, streaks, and layers in the soil wedge caused or contributed to its damages and that Barnard is liable for those damages have been foreclosed by the Agreed Facts.”
As TBW failed to provide sufficient evidence to withstand summary judgment, the court granted summary judgment, mooted the claim against McDonald, and terminated the agreement between TBW and the other parties.
Read the court’s decision…
Recent Case Brings Clarity and Questions to Statute of Repose Application
August 16, 2012 — Douglas Reiser, Builders Counsel
I have often chatted about the Washington Statute of Repose on this blog. The Statute of Repose prevents construction claims, for the most part, from being raised 6 years from the date of substantial completion or termination. Well, a recent Court of Appeals case dove deep into the specific determinative factors that tell us when to start the clock. It certainly raises questions about how long we really have to file suit.
The Statute of Repose has been a frequent topic here, so I will simply direct you to my prior post for further information on how this law works. A recent post was published about a lawsuit that might raise some questions about when and how the clock begins to roll, and claim periods begin to diminish.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
Florida Property Bill Passes Economic Affairs Committee with Amendments
April 14, 2011 — April 14, 2011 Beverley BevenFlorez - Construction Defect Journal
The Florida Property Bill (HBB 803) was passed by the Economic Affairs Committee by a vote of 11-7, according to Property Casualty 360, after adopting nine new amendments. The additions to the bill included limiting notice of claims to a set number of years, extending the statute of limitation on property claims from five years to six years, among others.
HB 803 and SB 408, the Senate companion bill, focus primarily on residential property insurance. They make changes to the Florida Hurricane Catastrophe Fund, while also promoting increased notification of policy changes to policyholders. Sections of the bills provide minor fixes such as renaming Citizens Property Insurance Corporation to Taxpayer-Funded Property Insurance Corporation. However, other sections of the bills contain more significant policy changes such as sinkhole coverage and hurricane claims.
The bills’ intent, according to the SunSentinel.com, is to reduce fraudulent claims and to bring new insurers into the insurance market. However, SunSentinel.com also reports that the bills may drastically increase property insurance premiums.
Read the full Property Casualty 360 article...
Read the full Sun Sentinel article...
New Buildings in California Soon Must Be Greener
June 19, 2012 — CDJ Staff
The California Energy Commission has approved new energy efficiency standards for new homes and commercial buildings. The 2013 Building Energy Efficiency Standards are set to go into effect on January 1, 2014, and will require 30% more energy efficiency for non-residential construction and 25% more for homes. The standards do not affect hospitals, nursing homes, or prisons.
Buildings covered under the standard will have to have roofs that ready for the installation of solar panels. Additionally, non-residential buildings will require high-performance windows, advanced lighting controls, and cool-roof technologies. Residential requirements include insulated hot-water pipes, whole house fans, and more efficient windows.
The new standards are expected to add 3,500 new building industry jobs. One thing these construction workers won’t be building are power plants, since over the next thirty years, the standards are expected to save as much as six power plants.
Read the full story…
Good Signs for Housing Market in 2013
December 20, 2012 — CDJ Staff
Dan Green, a loan officer at Waterstone Mortgage, is optimistic about the construction market in 2013. He notes that the rise in building permit, housing starts, and housing completions are all good signs. Mortgage rates are still low, making these new homes attractive to buyers.
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Colorado Statutes of Limitations and Repose, A First Step in Construction Defect Litigation
December 20, 2012 — CDJ Staff
Grund Dagner, a law firm operating in Denver and Boulder, Colorado notes on their blog that when defending a construction defect claim, one of their first steps is to determine if the claims are affected by the statutes of limitations or repose, and that they “have had much success raising these defenses with the court before trial.”
Colorado has a two-year statute of limitations, starting from when the homeowner discovers the defect. Further, Colorado’s statute of repose precludes lawsuits beginning “more than six years after the substantial completion of the improvement to the real property.”
Grund Dagner notes that they “recently obtained dismissal of claims related to eight of 22 buildings in a condominium project, where the homeowners in those building observed the defects more than two years before the HOA initiated its claims against our client.”
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Construction Defect Lawsuits? There’s an App for That
July 10, 2012 — CDJ Staff
The website ebeeky.com reviews Picture It Settled, an app designed to help people engaged in lawsuits figure out where settlement strategies would be most successful. First available for Android and then iOS, the app is now available for Blackberry. One user of the application wrote that “anyone who has set through a construction defect mediation can immediately grasp the value of this app.
The app tracks the negotiation process, allowing users to see a history of bids and counteroffers. It also models the negotiation process in order to predict the ultimate cost of settlement. These numbers are based on past similar negotiations that the user has entered.
Read the full story…
Seller Cannot Compel Arbitration for Its Role in Construction Defect Case<
March 1, 2012 — CDJ Staff
The buyer of a leaky home in Venice, California cannot be compelled to arbitration with the seller in a construction defect lawsuit, according to a decision in Lindemann v. Hume, which was heard in the California Court of Appeals. Lindemann was the trustee of the Schlei Trust which bought the home and then sued the seller and the builder for construction defects.
The initial owner was the Hancock Park Trust, a real estate trust for Nicholas Cage. Richard Hume was the trustee. In 2002, Cage agreed to buy the home which was being built by the Lee Group. Cage transferred the agreement to the Hancock Park Trust. Hancock had Richard Nazarin, a general contractor, conduct a pre-closing walk through. They also engaged an inspector. Before escrow closed, the Lee Group agreed to provide a ten-year warranty “to remedy and repair any and all damage resulting from water infiltration, intrusion, or flooding due to the fact that the door on the second and third floors of the residence at the Property were not originally installed at least one-half inch (1/2”) to one inch (1”) above the adjacent outside patio tile/floor on each of the second and third floors.”
Cage moved in and experienced water intrusion and flooding. The Lee Group was unable to fix the problems. Hume listed the home for sale. The Kamienowiczs went as far as escrow before backing out of the purchase over concerns about water, after the seller’s agent disclosed “a problem with the drainage system that is currently being addressed by the Lee Group.”
The house was subsequently bought by the Schlei Trust. The purchase agreement included an arbitration clause which included an agreement that “any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration.” The warranty the Lee Group had given to Hancock was transferred to the Schlei trust and Mr. Schlei moved into the home in May 2003.
Lindemann enquired as to whether the work done would prevent future flooding. Nazarin sent Schlei a letter that said that measures had been taken “to prevent that situation from recurring.” In February, 2004, there was flooding and water intrusion. Lindemann filed a lawsuit against the Lee Group and then added the Hancock Park defendants.
The Hancock Park defendants invoked the arbitration clause, arguing that Lindemann’s claims “were only tangentially related to her construction defect causes of action against the Lee Group.” On June 9, 2010, the trial court rejected this claim, ruling that there was a possibility of conflicting rulings on common issues of law. “With respect to both the developer defendants and the seller defendants, the threshold issue is whether there was a problem with the construction of the property in the first instance. If there was no problem with the construction of the property, then there was nothing to fail to disclose.” Later in the ruling, the trial court noted that “the jury could find there was no construction defect on the property, while the arbitration finds there was a construction defect, the sellers knew about it, and the sellers failed to disclose it.” The appeals court noted that while Hancock Park had disclosed the drainage problems to the Kamienowiczs, no such disclosure was made to Sclei.
The appeals court described Hancock Park’s argument that there is no risk of inconsistent rulings as “without merit.” The appeals court said that the issue “is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered.” Further, the court noted that “the Hancock Park defendants and the Lee Group have filed cross-complaints for indemnification against each other, further increasing the risk of inconsistent rulings.”
The court found for Lindemann, awarding her costs.
Read the court’s decision…
