After the insurer denied coverage in a homeowner’s policy for construction defects under various exclusions, the court found the ensuing loss provision was ambiguous.Kesling v. Am. Family Mut. Ins. Co., 2012 U.S. Dist. LEXIS 38857 (D. Colo. March 22, 2012).
After purchasing a home from the sellers, the insureds noticed problems with the deck of the home. Massive cracking appeared, causing lifting and leaking on the deck and water running through the exterior foundation wall into the home. There was also damage to the roof and crawlspace.
The insureds had a homeowner’s policy with American Family, which covered accidental direct physical loss to property described in the policy unless the loss was excluded. They requested coverage for "conditions, defects and damages." American Family denied coverage because wear and tear, as well as damage to foundations, floors and roofs were excluded. The policy did provide coverage, however, for "any resulting loss to property described . . . above, not excluded or excepted in this policy.
When coverage was denied, the insureds sued American Family.
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.
The Seattle Times reports that a transit construction project has uncovered about twenty-five gravestones. The area was historically sensitive, as it is in territory once occupied by the Puyallup Tribe. At current report, no human remains have been found and the article cites the project?s archeological consultant as describing the gravestones as “not historically significant.”
Coverage of the ongoing litigation concerning the Harmon Hotel continues to proliferate. Architectural Record and a number of other news outlets continue to provide additional details and coverage of the matter. Chief among the conditions alleged are improperly installed reinforcing steel inside link beams on 15 floors. MGM Claims that the conditions amount to hundreds of millions of dollars in damages, while Perini (the builder) indicated in a July 12th statement that the buildings problems are related to the design, and the they are “fixable.”
There is significant speculation that MGM Resorts International isn’t interested in repairing the hotel due to a glut of hotel rooms attendant to the troubled economy. In a statement Tuesday Perini reportedly stated that “Repairing and opening the Harmon would only create a greater glut of unused hotel rooms for MGM,” “If market conditions were better and MGM found that demand existed for the Harmon hotel rooms, MGM would not be claiming that the Harmon is unstable.”
MGM asserts that Perini failed to ”properly construct” the project. Clark County’s Department of Development Services has reportedly asked MGM to provide a plan to fix the project by August 15th.
The Harmon is part of the $8.5 billion CityCenter project that opened in the fourth quarter of 2009 and is jointly owned by MGM Resorts and Dubai World.
Prior reports indicated that the owner (MGM) had considered razing the entire project. The future of the project remains uncertain.
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
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…
Contractor Sues Supplier over Defective Products
June 28, 2011 — CDJ Staff
Fast Track Specialties has sued RJF International after needing to remove wall protection units at Methodist West Houston Hospital, according to an article in the Houston Chronicle. Fast Track claims that contractors had to disconnect gas, water, and electric from the area to facilitate removal of corner guards, handrails, and crash guards from the hospital. This cost the contractor more than $135,000.
Fast Track is claiming that RJD International has committed breach of contract, breach of warranty, and negligent representation.
Read the full story…
Congress Addresses Homebuilding Credit Crunch
May 20, 2011 — CDJ Staff
The National Association of Home Builders (NAHB) reports that Representatives Gary Miller (CA), Brad Miller (NC) and twenty-nine cosponsors have put forth a bill with bipartisan support to “address the severe credit crunch for acquisition, development, and construction (AD&C) financing.” They report in addition to more than 1.4 million construction workers who have been “idled since 2006,” the housing slump has cost 3 million jobs and $145 million in wages.
NAHB reports that they worked closely with lawmakers on the bill. The association had members meet with legislators both in D.C. and in their home districts. They state that HR 1755 would help homebuilders “find the credit they need to move forward with new or existing projects.”
The bill would allow lenders to use the value upon completion when assessing loan collateral and ban the use of foreclosed or distressed sale properties in assessing values of projects. The would bill would also lessen restrictions by banking regulators, which the lead sponsors said “have hindered federal and state chartered banks and thrifts’ ability to make and maintain loans to qualified small home builders that have viable projects.”
The NAHB is urging members of Congress to cosponsor the bill and is urging the Senate to introduce a companion bill.
Read the full story…
Read HR 1755
Know the Minnesota Statute of Limitations for Construction Defect Claims
July 10, 2012 — CDJ Staff
Writing on the Benson Kerrane Storz Nelson web site, Alex Nelson gives an overview of the Minnesota laws covering statutes of limitation and repose. He notes that frequently when his firm declines to take a construction defect case its’ over a missed statute of limitation. He describes the time periods as both “short” and “ambigious.” The briefest limit is that a homeowner “has only 6 months within which to give written notice of the defect to the builder once the defect has manifested itself.” Any legal action must commence within two years of the same point.
The Minnesota statutes also have a six-year limitation, which starts for a single home at transfer of title to the first purchaser or when the purchaser takes possession, whichever happens first. For a condo, it is the last of “completion of the common element,” first unit sale or “Termination of Declarant control.” Fraud or misrepresentation also has a six-year limit, while negligence claims are limited to within the first two years “after the manifestation of the defect.”
The statues of repose also provide limits to filing construction defect lawsuits. Mr. Nelson points out that the longest are for negligence, fraud, and “major construction defects,” all of which have a ten-year limit. On the other hand, claims against general workmanship and materials must be made in the first year.
Read the full story…
Product Exclusion: The Big Reason Behind The Delay of LEED 2012
July 10, 2012 — Douglas Reiser, Builders Counsel
By now, you have probably heard that the USGBC has decided to delay implementation of its previously named “LEED 2012” rating system. What you might not know is exactly why this is happening. Rest assured that the decision was not made willy nilly ?Äì LEED 2012 had many industrial groups running for the hills.
I have spent the past few weeks reading a number of articles on the backlash. LEED 2012 was intended to create a seismic shift; it was not a mere update. A strict focus on reduction of chemicals, created mass panic that a large number of material providers’ products would essentially be banned from green projects ?Äì meaning most local, state and federal projects.
Read the full story…
Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
Orange County Home Builder Dead at 93
April 25, 2012 — CDJ Staff
Randall E. Presley was a homebuilder in Southern California for more than thirty years, acting as head of Presley Development Company from 1956 until selling the firm to Lyon Homes in 1987. The two companies merged in 1991 as the Presley Cos. Mr. Presley saw the need in the 1950s to provide people in Southern California with low- to medium-priced quality homes.
His firm built more than 160 communities and was among the ten largest homebuilding firms in the country, expanding beyond California. Mr. Presley was 93 when he succumbed to pneumonia. He is survived by a wife, three children, seven grandchildren, and 11 great-grandchildren.
Read the full story…
Federal District Court Continues to Find Construction Defects do Not Arise From An Occurrence
May 10, 2012 — CDJ Staff
Coverage for construction defects continues to be hotly contested in Hawaii state and federal courts. In a recent decision, Judge Mollway felt bound to follow the Ninth Circuit’s decision in Burlington Ins. Co. v. Oceanic Design & Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004), where the court found construction defect claims arise from breach of contract, not from an occurrence. Judge Mollway’s most recent decision on the issue is Illinois Nat. Ins. Co. v. Nordic PCL Constr., Inc., 2012 U.S. Dist. LEXIS 58464 (D. Haw. April 26, 2012).
Nordic constructed a grocery store for Safeway. In addition to the grocery store, Nordic built a 165-space rooftop parking deck, retail shops and related improvements. After opening for business in 2007, Safeway experienced significant leaks. Safeway demanded that Nordic repair the parking deck. Nordic sent the demand letter to the insurer, who agreed to appoint counsel subject to a reservation of rights.
Safeway filed suit against Nordic in state court alleging, among other things, breach of contract and negligence. The insurer provided Nordic with a defense, but Nordic hired independent counsel.
The insurer filed for declaratory relief in federal district court.
Read the full story…
Bound by Group Builders, Federal District Court Finds No Occurrence
August 11, 2011 — Tred Eyerly, Insurance Law Hawaii
The homeowners sued their contractor, alleging the contractor had defectively constructed and failed to complete their home.  State Farm Fire and Casualty Co. v. Vogelgesang, 2011 U.S. Dist. LEXIS 72618 (D. Haw. July 6, 2011). The homeowners' complaint pled, among other things, damage caused by breach of contract and negligence. State Farm agreed to defend under a reservation of rights.
State Farm filed suit in federal court for declaratory relief. Judge Mollway granted State Farm's motion for summary judgment. Relying on the Hawaii Intermediate Court of Appeal's decision in Group Builders, Inc. v. Admiral Ins. Co., 123 Haw. 142, 231 P.3d 67 (Haw. Ct. App. 2010), Judge Mollway determined that the claims asserted in the underlying litigation arose from the contractor's alleged breach of contract.  Group Builders held that breach of contract claims based on allegations of shoddy performance were not covered under CGL policies.
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
Homeowners Must Comply with Arbitration over Construction Defects
January 6, 2012 — CDJ Staff
The California Court of Appeals has upheld a decision by the Superior Court of Kern County that homeowners must comply with arbitration procedures in their construction defect claim. The California Court of Appeals ruled on December 14 in the case of Baeza v. Superior Court of Kern County, denying the plaintiff’s petition that the trial court vacate its order.
The plaintiffs in the case are homeowners in various developments built by Castle & Cook. The homes were sold with a contract that provided for “nonadversarial prelitigation procedures, including mediation, and judicial reference.” The homeowners made defect claims and argued that Castle & Cooke failed to comply with statutory disclosure requirements and that some of the contracts violate related statutes.
The appeals court found that there was no ground for appeal of the lower court’s order to continue with prelitigation procedures. The court noted that the plaintiffs could not seek a review of the mediation until a judgment was issued, but that then the issue would be moot. The court felt that there were issues presented that needed clarification, and so they reviewed this case. This was cleared for publication.
The court considered the intent of the legislature in passing the Right to Repair Act, noting that “under the statutory scheme, the builder has the option of contracting for an alternative nonadversarial prelitigation procedure,” as established in Chapter 4. The court noted that Chapter 4 “contains no specifics regarding what provisions the alternative nonadversarial contractual provisions may or must include.”
The plaintiffs contended that the builder was in violation of the standards set out in Section 912, however the court responded that these sections set out one set of procedures, but they concluded that “if the Legislature had intended the section 912 disclosure provisions…it could have made the requirements applicable to all builders by locating them in a section outside Chapter 4.”
Read the court’s decision…
Preparing for Trial on a Cause of Action for Violation of Civil Code section 895, et seq.
May 10, 2012 — Samir R. Patel, Esq., Lorber, Greenfield, & Polito, LLP
In 2002, the California Legislature enacted the Right to Repair Act (hereinafter “SB-800”), as codified in Title VII of the Civil Code. As set forth in Civil Code section 895, et seq., SB-800 established a set of standards for residential construction, and provides a statutory protocol to address alleged violations of those standards. SB-800 applies to all new single family homes sold after January 1, 2003, and it created its own cause of action governed completely by its own terms, in that in order to state a cause of action under SB-800, a plaintiff may only allege a violation of the Act. (Civ. Code, § 938.) Under Civil Code sections 896, 897, 943, and 944, the Legislature made it clear that it intended to create a single cause of action for construction defects in homes that fall under the purview of SB-800. By passing SB-800, the Legislature eliminated multiple and often redundant or conflicting causes of action, burdens of proof, statutes of limitations, and types of damages that were common in construction defect actions prior to the enactment of the same.
Civil Code section 895, et seq. has significantly changed the landscape of construction defect lawsuits. Yet, for years, the only attention given to the statutes focused solely on the codified pre-litigation process that requires plaintiffs and builders to meet and confer regarding defects and attempt a process to repair the alleged defects before litigation is pursued. A major impediment to the implementation of the pre-litigation procedures has often been that the statutes specifically state that the information obtained during the pre-litigation process is admissible at trial. Hence, through use of the pre-litigation process, plaintiffs’ counsel can engage in a builder funded fishing expedition and later use the information obtained to advance their litigation goals. As such, many builders have chosen to opt out of codified pre-litigation process altogether, an option which the builder can elect within their Purchase and Sale Agreements.
Recently, counsel for builders throughout California have turned their attention to the “exclusive remedy” aspect of SB-800 by seeking, often successfully, to limit plaintiffs to a single cause of action for violation of SB-800. Civil Code section 943 makes clear that a cause of action for violation of SB-800 performance standards is a plaintiff’s sole remedy for a residential construction defect action. Civil Code section 943 states:
Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under 944 is allowed. (Civ. Code, § 943.) Â
The question remains: what is the benefit of requiring plaintiffs to trim down their complaint and eliminate their tried and true common law causes of action, and requiring them to pursue only a single cause of action for violation of SB800?
The construction standards enumerated within SB-800 include fifty-plus functionality standards. On their face, any benefit to pursuing a construction defect action under a single cause of action for violation of SB-800 initially appears trivial at best, in light of the fact that a jury may be very confused with the complexity of the functionality standards set forth within the Civil Code. Nevertheless, Title VII of the Civil Code actually contains numerous provisions that builders can utilize to their benefit throughout the process of construction defect litigation, including during preparation for trial.
First and foremost, counsel for builders can assert numerous affirmative defenses that will be beneficial if the matter proceeds to trial. These affirmative defenses, as codified in Civil Code section 945.5, include mitigation, in whole or in part, for damages caused by: an unforeseen act of nature; a homeowner’s failure to allow reasonable and timely access for inspections and repair under the pre-litigation procedures; the homeowner’s failure to follow the builder’s recommendations and commonly accepted homeowner maintenance obligations; ordinary wear and tear; misuse; abuse; or neglect. Builders should include these affirmative defenses within their responsive pleadings and as trial approaches, prepare appropriate motions in limine and request special jury instructions regarding the same. As frustrated builders and their attorneys are well aware, many construction defect suits result from a homeowner’s failure to properly maintain their property in a manner that is consistent with normal maintenance procedures and guidelines. Furthermore, within the ten year statute of limitations for most defects, ordinary wear and tear is often attributable to numerous deficiencies alleged by plaintiffs. The affirmative defense for a homeowner’s failure to allow inspections and repairs is also vital, as plaintiffs’ counsel may encourage a homeowner to forego the repair and seek monetary damages, allowing plaintiffs’ counsel to ultimately obtain their share of attorney’s fees. Therefore, the SB-800 statutes provide the builder with recourse and distinctive mitigation defenses that were previously and confusingly mixed into tort and contract related defenses. These affirmative defenses can also be utilized by counsel during the cross-examination of plaintiff homeowners and expert witnesses. Defense counsel should fully grasp these defenses and utilize them as defense themes throughout litigation.
As a plaintiff is limited to a single cause of action for violation of SB-800, if defense counsel has failed to properly eliminate excessive tort and contract causes of action prior to trial, a motion for summary adjudication, or at the very least, a motion for judgment on the pleadings should be brought to limit the introduction of evidence outside of a single cause of action for violation of SB-800. Practical judges are always looking for ways to streamline and expedite trials, and they are currently ruling that SB-800 is the exclusive remedy available to plaintiffs. In fact, plaintiffs’ firms in SB-800 matters are now voluntarily limiting their complaints to this one cause of action.
Special jury instructions can also be crafted to limit a jury’s computation of damages pursuant to Civil Codesection 944, which provides the method for computing damages within a construction defect action, as follows:
If a claim for damages is made under this title, the homeowner is only entitled to damages for the reasonable value of repairing any violation of the standards set forth in this title, the reasonable cost of repairing any damages caused by the repair efforts, the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards, the reasonable cost of removing and replacing any improper repair by the builder, reasonable relocation and storage expenses, lost business income if the home was used as a principal place of a business licensed to be operated from the home, reasonable investigative costs for each established violation, and all other costs or fees recoverable by contract or statute. (Civ. Code, § 944.) [Emphasis added.]
Civil Code section 944 specifically prohibits recovery for damages outside the scope of its explicit language as it states “the homeowner is only entitled to ... damages for the reasonable value of repairing any violation of the standards set forth in this title....” [Emphasis added.] The statute ultimately provides a “reasonableness” standard for the computation of damages that did not exist when computing damages on traditional common law tort and contract claims. Therefore, defense counsel should prepare special jury instructions to limit evidence of damages introduced at trial to the reasonable value of repairing any violation of the standards, and to exclude any evidence of damages beyond the reasonableness standard. Defense counsel should seize the opportunity to utilize the theme of “reasonableness” when attacking plaintiffs’ allegations and plaintiffs’ proposed repair methodology throughout the discovery process and at trial.
Defense counsel may also prepare a motion in limine or special jury instruction regarding the limitation of evidence regarding defects that did not cause resultant damage. Civil Code section 897 states:
Intent of Standards
The standards set forth in this chapter are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it shall be actionable if it causes damage. (Civ. Code, § 897.) [Emphasis added.]
Defense counsel can argue that the introduction of any evidence supporting a claim for construction-related deficiencies that are not enumerated within Civil Code section 896, or for deficiencies where no damage has occurred is prohibited and must be excluded at trial. This requirement of resultant damages is familiar as the general rule was previously established in Aas v. Superior Court (2000) 24 Cal.4th 627, in which the California Supreme Court held that there is no tort recovery for construction defects that have not actually caused property damage. The legislature effectively codified this rule within Civil Code section 897.
A motion in limine can also be crafted to limit expert testimony to the standards enumerated in Civil Code section 896, and to deficiencies that caused damage pursuant to Civil Code 897. The motion in limine can be based upon Civil Code section 943 and the fact that claims for defects in homes which were sold after January 1, 2003 may only be pursued under a single cause of action for violation of SB-800. As such, expert testimony should be controlled by the standards set forth in Civil Code section 896. Furthermore, throughout a construction defect matter, defense counsel should ensure that their experts are well versed with the standards and that they can provide testimony that utilizes the same. Defense counsel’s knowledge of the standards will also be helpful during the cross-examination of plaintiffs’ expert witnesses.
If, despite the efforts of defense counsel, the complaint still has numerous causes of action, or if only some homes fall under the purview of SB-800 while others do not, defense counsel can utilize a motion to bifurcate trial. The motion’s basis is that a cause of action for violation of SB-800 will require the introduction of evidence regarding the violations of the fifty-plus standards, and the tort and contract-based claims would also require the introduction of a wide range of evidence to prove each cause of action. For example, in order to prove the tort causes of action, plaintiffs must prove elements such as: duty, breach, proximate and actual causation, and that the builder placed the homes into the stream of commerce. (See Richards v. Stanley (1954) 43 Cal.2d 60, 63; Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 227.) On the contract causes of action, plaintiffs must prove the existence of a valid written contract for the sale of the home, including proof regarding the existence of basic contractual elements such as offer, acceptance, and consideration. (Civ. Code, § 1624 subd. (a); Roth v. Malson (1997) 67 Cal.App.4th 552, 557.) Defense counsel can argue that exposing the jury to elements that may or may not be applicable to all of the homes in the action will complicate and confuse the jury. Thus, concurrently exposing the jury to the SB-800 claims and the non-SB-800 claims will necessitate undue consumption of time, and create the substantial danger of undue prejudice of confusing the issues or misleading the jury.
One of the most important and relevant features of the SB-800 statutes is that they include shortened statutes of limitation as to certain enumerated defects. The codified statutes of limitations apply from the date of “close of escrow,” and are much more definitive than statutes of limitations regarding tort and contract claims. Therefore, they can be utilized within a motion for summary adjudication in cases where only one or a few defects are alleged. For example, under Civil Code section 896, et seq., there is a five year limitation on paint (Civ. Code, § 896, subd. (g)(1)); a four year limitation on plumbing fixtures (Civ. Code, § 896, subd. (e)); a three year limitation on landscaping (Civ. Code § 896, subd. (g)(12)); and a one year limitation on irrigation systems and drainage (Civ. Code, § 896, subd. (g)(7)). The non-SB-800 claims are subject to a four year statute of limitation for patent defects and a ten year statute of limitation for latent defects. (See Code of Civ. Proc., §§ 337.1, 337.15.) The contrast between the statute of limitations for the SB-800 claims and non-SB-800 claims can complicate a matter at trial, further establishing the necessity to limit plaintiffs to a single cause of action for violation of SB-800. Hence, defense counsel should also utilize a motion to bifurcate the statute of limitations issues from the issue of liability if a question of fact exists. If successful on the motion to bifurcate, plaintiff’s counsel will be barred from the introducing evidence at trial regarding a defect where the statute of limitations has run.
Defense counsel should also seek to simplify the construction standards for the jury. Ultimately, by drafting jury instructions and a special verdict form that is easy to navigate, counsel can promote an easy interpretation of the standards enumerated within the Civil Code. The best route for drafting a special verdict form is to draft it as a check-list, similar to a traditional real estate walk-through check-list. By incorporating the shortened statutes of limitations into the special verdict form, defense counsel can effectively frame the case for the jury. The special verdict form should also allow the jury to easily eliminate any claim for damages that is mitigated, in whole or in part, through the codified affirmative defenses. Defense counsel should also consider drafting a trial brief that effectively and simplistically provides the trial court judge with an understanding of the specific defects before the court, and simultaneously notes which Civil Code standards are implicated and the scope of the same. If the trial judge is not well versed in construction defect litigation, defense counsel should be all the more careful in breaking down the parameters and limitations codified within SB-800 for the court.
The strategies outlined within this article are only a few tactics that can be utilized to defend a construction defect suit. Depending on the defect allegations within any particular case, defense counsel should become intimately familiar with Title VII of the Civil Code and use all aspects of the same to their advantage. If not, plaintiffs’ counsel will have the advantage during “court-house step” settlement discussions and at trial.
Printed courtesy of Samir R. Patel, Esq. of Lorber, Greenfield, & Polito, LLP. Mr. Patel can be contacted at spatel@lorberlaw.com.
Reference to "Man Made" Movement of Earth Corrects Ambiguity
December 20, 2012 — Tred Eyerly, Insurance Law Hawaii
In Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 NY3d 302 (2009), the New York Court of Appeals found an "earth movement" exclusion was ambiguous when applied to an excavation. The court now considered whether a similar exclusion, expressly made applicable to "man made" movement of earth, eliminated the ambiguity when loss was created by excavation. Bentoria Holdings, Inc. v. Travelers Indem. Co., 2012 N.Y. LEXIS 3087 (N.Y. Oct. 25, 2012).
Plaintiff's building suffered cracks due to an excavation being conducted on the lot next door. A claim was submitted to Travelers, plaintiff's insurer. Travelers rejected the claim, relying on the earth movement exclusion.
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
No Duty to Indemnify When Discovery Shows Faulty Workmanship Damages Insured’s Own Work
November 7, 2012 — Tred Eyerly, Insurance Law Hawaii
Our post last week addressed the duty to defend when alleged faulty workmanship caused loss to property adjacent to where the insured was working. See Pamerin Rentals II, LLC v. R.G. Hendricks & Sons Constr., Inc., 2012 Wis. App. LEXIS 698 (Wis. Ct. App. Sept. 5, 2012) [post here]. Today, we report on recent developments in the same case where the court determined, despite earlier finding the insurer owed a defense, it had no duty to indemnify. Pamperin Rentals II, LLC v. R.G. Hendricks & Sons Constr., Inc., 2012 Wisc. App. LEXIS 793 (Wis. Ct. App. Oct. 10, 2012).
Hendricks contracted to “prepare the site and supply and install concrete, tamped concrete, and colored concrete” at several service stations. The owner sued Hendricks, alleging the concrete “was defective and/or the work performed was not done in a workman-like manner and resulted in damages, and will require replacement.”
Pekin Insurance Company agreed to defend Hendricks subject to a reservation of rights.
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
All Risk Policy Only Covers Repair to Portion of Dock That Sustains Damage
January 6, 2012 — Tred Eyerly, Insurance Law Hawaii
A portion of a dock on Lack Michigan operated by the Ports of Indiana suffered visible damage. See Ports of Indiana v. Lexington Ins. Co., 2011 U.S. Dist. LEXIS 130979 (S.D. Ind. Nov. 14, 2011). Lexington Insurance Company insured the port. Lexington agreed that a portion of the dock was damaged and paid $1.2 million for repairs. A dispute arose, however, over whether additional sections of the dock were damaged and whether the damage was the result of more than one "occurrence."
An expert report opined that a significant drop creating record lows in the water level of Lake Michigan in 2007 caused damage to the dock. Lexington maintained that only 128 feet of the dock was damaged; other portions of the dock did not sustain "direct physical loss or damage."
Read the full story…
Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
