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    Construction Expert Witness Builders Information
    Anaheim, California

    California Builders Right To Repair Current Law Summary:

    Current Law Summary: SB800 (codified as Civil Code §§895, et seq) is the most far-reaching, complex law regulating construction defect litigation, right to repair, warranty obligations and maintenance requirements transference in the country. In essence, to afford protection against frivolous lawsuits, builders shall do all the following:A homeowner is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the homeowner by the builder and product manufacturers, as well as commonly accepted maintenance practices. A failure by a homeowner to follow these obligations, schedules, and practices may subject the homeowner to the affirmative defenses.A builder, under the principles of comparative fault pertaining to affirmative defenses, may be excused, in whole or in part, from any obligation, damage, loss, or liability if the builder can demonstrate any of the following affirmative defenses in response to a claimed violation:


    Construction Expert Witness Contractors Licensing
    Guidelines Anaheim California

    Commercial and Residential Contractors License Required.


    Construction Expert Witness Contractors Building Industry
    Association Directory
    Building Industry Association Southern California - Desert Chapter
    Local # 0532
    77570 Springfield Ln Ste E
    Palm Desert, CA 92211
    http://www.desertchapter.com

    Building Industry Association Southern California - Riverside County Chapter
    Local # 0532
    3891 11th St Ste 312
    Riverside, CA 92501


    Building Industry Association Southern California
    Local # 0532
    17744 Sky Park Circle Suite 170
    Irvine, CA 92614
    http://www.biasc.org

    Building Industry Association Southern California - Orange County Chapter
    Local # 0532
    17744 Skypark Cir Ste 170
    Irvine, CA 92614
    http://www.biaoc.com

    Building Industry Association Southern California - Baldy View Chapter
    Local # 0532
    8711 Monroe Ct Ste B
    Rancho Cucamonga, CA 91730
    http://www.biabuild.com

    Building Industry Association Southern California - LA/Ventura Chapter
    Local # 0532
    28460 Ave Stanford Ste 240
    Santa Clarita, CA 91355


    Building Industry Association Southern California - Building Industry Association of S Ca Antelope Valley
    Local # 0532
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    Lancaster, CA 93535



    Construction Expert Witness News and Information
    For Anaheim California

    Save A Legal Fee? Sometimes You Better Talk With Your Construction Attorney

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

    Homeowner’s Policy Excludes Coverage for Loss Caused by Chinese Drywall

    Bound by Group Builders, Federal District Court Finds No Occurrence

    South Carolina Law Clarifies Statue of Repose

    2011 West Coast Casualty Construction Defect Seminar – Recap

    “Other Insurance” and Indemnity Provisions Determine Which Insurer Must Cover

    Builder Waits too Long to Dispute Contract in Construction Defect Claim

    Harsh New Time Limits on Construction Defect Claims

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

    New Apartment Tower on the Rise in Seattle

    Insurer Rejects Claim on Dolphin Towers

    Judge Kobayashi Determines No Coverage for Construction Defect Claim

    Arbitrator May Use Own Discretion in Consolidating Construction Defect Cases

    Construction Defects Lead to Demolition of Seattle’s 25-story McGuire Apartments Building

    Workers Hurt in Casino Floor Collapse

    Partial Settlement in DeKalb Construction Management Case

    Was Jury Right in Negligent Construction Case?

    Insurer Beware: Failure to Defend Ends with Hefty Verdict

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    Contractor Removed from Site for Lack of Insurance

    Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship

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

    United States District Court Confirms That Insurers Can Be Held Liable Under The CCPA.

    Changes To Indemnification Statute Are Here! Say Hello To Defense Duties

    Plans Go High Tech

    Safety Officials Investigating Death From Fall

    New Washington Law Nixes Unfair Indemnification in Construction Contracts

    School District Marks End of Construction Project by Hiring Lawyers

    Delaware “occurrence” and exclusions j(5) and j(6)

    Loose Bolts Led to Sagging Roof in Construction Defect Claim

    Virginia Chinese Drywall “property damage” caused by an “occurrence” and number of “occurrences”

    Failure to Meet Code Case Remanded to Lower Court for Attorney Fees

    No Third-Quarter Gain for Construction

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

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

    Texas “your work” exclusion

    One to Watch: Case Takes on Economic Loss Rule and Professional Duties

    Defect Claims as Occurrences? Check Your State Laws

    Is Construction Heading Off the Fiscal Cliff?

    Mobile Home Owners Not a Class in Drainage Lawsuit

    Contract Not So Clear in South Carolina Construction Defect Case

    Insurance Policy Provides No Coverage For Slab Collapse in Vision One

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

    Construction Defects as Occurrences, Better Decided in Law than in Courts

    Florida County Suspends Impact Fees to Spur Development

    Ceiling Collapse Attributed to Construction Defect

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

    Construction Defect Exception Does Not Lift Bar in Payment Dispute

    Claims Under Colorado Defect Action Reform Act Count as Suits

    Construction Defects Are Occurrences, Says Georgia Supreme Court

    Coverage for Construction Defects Barred by Business Risk Exclusions

    No Coverage For Construction Defects When Complaint Alleges Contractual Damages

    Godfather Charged with Insurance Fraud

    Construction Defect Case Not Over, Despite Summary Judgment

    Going Green for Lower Permit Fees

    Preventing Costly Litigation Through Your Construction Contract

    Certificate of Merit to Sue Architects or Engineers Bill Proposed

    AFL-CIO Joins in $10 Billion Infrastructure Plan

    Contractor’s Coverage For Additional Insured Established by Unilateral Contract

    Court Strikes Down Reasonable Construction Defect Settlement

    Hawaii State Senate Requires CGL Carriers to Submit Premium Information To State Legislature

    Mandatory Arbitration Provision Upheld in Construction Defect Case

    Construction Defect Notice in the Mailbox? Respond Appropriately

    HOA Has No Claim to Extend Statute of Limitations in Construction Defect Case

    Cogently Written Opinion Finds Coverage for Loss Caused By Defective Concrete

    Firm Sued For Construction Defects in Parking Garage

    District Court Awards Summary Judgment to Insurance Firm in Framing Case

    Changes to Arkansas Construction and Home Repair Laws

    Connecticut Gets Medieval All Over Construction Defects

    School Sues over Botched Pool

    State Audit Questions College Construction Spending in LA

    Negligent Misrepresentation in Sale of Building Altered without Permits

    California Supreme Court Finds Associations Bound by Member Arbitration Clauses

    High School Gym Closed by Construction Defects

    Yellow Brass Fittings Play a Crucial Role in Baker v Castle & Cooke Homes

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

    Judge Rejects Extrapolation, Harmon Tower to Remain Standing

    California Appeals Court Remands Fine in Late Completion Case

    Nevada Bill Aims to Reduce Legal Fees For Construction Defect Practitioners

    US Courts in Nevada Busy with Yellow Brass

    Insurance Company Prevails in “Chinese Drywall” Case

    Background Owner of Property Cannot Be Compelled to Arbitrate Construction Defects

    Michigan Supreme Court Concludes No Statute of Repose on Breach of Contract

    Statute of Limitations Upheld in Construction Defect Case

    Another Guilty Plea in Las Vegas HOA Scandal

    Building Inspector Jailed for Taking Bribes

    The Year 2010 In Review: Design And Construction Defects Litigation

    Texas Construction Firm Files for Bankruptcy

    Insurer Settles on Construction Defect Claim
    Corporate Profile

    ANAHEIM CALIFORNIA CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    The Anaheim, California Construction Expert Witness Group at BHA, leverages from the experience gained through more than 5,500 construction related expert witness designations encompassing a wide spectrum of construction related disputes. Drawing from this considerable body of experience, BHA provides construction related trial support and expert services to Anaheim's most recognized construction litigation practitioners, commercial general liability carriers, owners, construction practice groups, as well as a variety of state and local government agencies.

    Construction Expert Witness News & Info
    Anaheim, California

    Ohio subcontractor work exception to the “your work” exclusion

    August 11, 2011 — CDCoverage.com

    In Mosser Construction, Inc. v. Travelers Indem. Co., No. 09-4449 (6th Cir. July 14, 2011)(unpublished), claimant project owner Port Clinton contracted with insured general contractor Mosser for the construction of a building.  Following completion, Port Clinton sued Mosser for breach of contract seeking damages because of physical injury to the project occurring after completion resulting from defective backfill material that settled improperly.

    Mosser’s CGL insurer Travelers denied a defense and Mosser filed suit against Travelers seeking a declaratory judgment. Mosser and Travelers filed cross-motions for summary judgment on the issue of whether the supplier of the backfill material?Gerken?qualified as a subcontractor for purposes of the subcontractor work exception to the “your work” exclusion—exclusion l.—for property damage to or arising out of Mosser’s completed work.   Mosser had purchased the backfill material from Gerken pursuant to a purchase order specifying that Gerken was to supply Mosser with an industry standard grade of backfill for use in the Port Clinton project.

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    Florida Contractor on Trial for Bribing School Official

    October 28, 2011 — CDJ Staff

    Lloyd Whann, an executive in M. M. Parrish Construction, a Gainesville, Florida firm, is going to trial over claims that he bribed a school district official with more than $50,000 in gifts. The trial has been pushed to March of 2012, in order for his defense to review documents.

    Bob Williams, the former school official, plead guilty to conspiracy to commit bribery. He agreed to testify against Whann and M.M. Parrish Construction.

    Read the full story...


    One Colorado Court Allows Negligence Claim by General Contractor Against Subcontractor

    December 20, 2012 — Heather Anderson , Higgins, Hopkins, McLain & Roswell

    Judge Paul King of the Douglas County District Court recently confirmed that subcontractors in residential construction owe an independent duty, separate and apart from any contractual duties, to act without negligence in the construction of a home in Colorado.  See Order, dated September 7, 2010, Sunoo v. Hickory Homes, Inc. et al., Case No. 2007CV1866; see alsoCosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983); A.C. Excavating v. Yacht Club II Homeowners Ass’n, Inc., 114 P.3d 862 (Colo. 2005).  He also verified that the holding in the B.R.W. Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004)[1]  case does not prohibit general contractors, such as Hickory Homes, from enforcing a subcontractor’s independent duty to act without negligence in the construction of a home. 

    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…


    Policyholder Fails to Build Adequate Record to Support Bad Faith Claim

    May 19, 2011 — May 19, 2011 - Tred R. Eyerly, Insurance Law Hawaii

    The importance of careful preparation and documentation was the take away lesson in a Texas bad faith case, C.K. Lee v. Catlin Specialty Ins. Co., 2011 U.S. Dist. LEXIS 19145 (S.D. Tex. Feb. 28, 2011).

    C.K. Lee owned a commercial shopping center in Houston. Catlin issued a commercial property policy to Lee. On September 12, 2008, Hurricane Ike hit and caused substantial property damage throughout the Texas Gulf Coast area. On September 24, 2008, Lee submitted a claim for damage to the roof of his shopping center to Catlin.

    Catlin hired Engle Martin to represent its interests in adjusting the claim. Engle Martin eventually adjusted over 200 Ike-related claims for Catlin.

    In November 2008, Engle Martin and Emergency Services Inc., retained by Lee, inspected Lee’s property. Engle Martin observed evidence of roof repairs that had apparently been made both before and after Hurricane Ike. Engle Martin decided it was necessary to use an infrared scan of the roof to help identify which damages, if any, were attributable to wind and which, if any, were attributable to sub par, prior repairs or natural deterioration.

    Engle Martin retained Project, Time & Cost (PT&C) to conduct the infrared inspection. PT&C’s inspection determined there was no wind-related damage to the roof and no breaches or openings created by wind. Instead, the roof had exceeded its life expectancy and was in need of replacement due to normal wear and weathering. Consequently, Catlin decided that the damage to Lee’s roof was not caused by winds from Hurricane Ike.

    Meanwhile, Lee’s contractor, Emergency Services, prepared a report estimating that the total cost of repairing the roof would be $871,187. Engle Martin’s estimate for repair of the roof was $22,864.

    Lee filed suit for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code. Catlin moved for summary judgment on all claims but breach of contract, arguing that because there was a bona fide dispute concerning the cause of the damages and whether they were covered under the policy, there was no evidence of bad faith or violations of the Texas Insurance Code.

    Read the full story…

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


    Subcontractor Not Liable for Defending Contractor in Construction Defect Case

    February 10, 2012 — CDJ Staff

    The California Court of Appeals has ruled on January 9, 2012 in Hensel Phelps Construction Company v. Urata & Sons Cement, upholding the judgment of the lower court.

    Hensel Phelps was the general contractor for a high-rise in Sacramento. They were sued by the owners of the building after problems were discovered in the concrete slabs of the building’s parking garage. Instead of welded steel wire mesh, the slabs had been constructed with fiber mesh. Hensel Phelps filed a cross-complaint against Urata Cement, the subcontractor that had performed the cement work. Urata refused to defend Hensel Phelps. The owners’ case was subsequently dismissed due to the statute of limitations.

    Although the original case was over, Hensel Phelps continued in their claims against Urata. “Urata argued that a handwritten interlineation required Hensel Phelps to prove Urata was at fault for the injury alleged in the building owners’ complaint before Urata was obliged to defend Hensel Phelps in that action.”

    The lower court concluded that Urata would have been obligated to defend Hensel Phelps if the owners’ lawsuit had alleged that the damage was due to the subcontractor’s work or if evidence at trial established this. The lower court found neither of these true. Instead, the use of the fiber mesh was a design issue and “that decision was outside the scope of the subcontractor’s work.”

    During the trial, Hensel Phelps conceded that Urata was not at fault. The appeals court could find no reading of the contract that would cause Urata to be obligated to defend Hensel Phelps, calling Hensel Phelps’s reading of the contact as “grammatically infeasible.”

    Judges Nicholson, Raye, and Butz upheld the decision of the lower court and awarded costs on appeal to Urata.

    Read the court’s decision…


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

    March 17, 2011 — By Shaun McParland Baldwin, March 17, 2011

    The Court of Appeals of Indiana recently addressed the “Montrose” language added to the CGL ISO form in 2001 in the context of a construction defect claim where a fractured storm drain caused significant flooding a year after the drain was damaged. The insuring agreement requires that “bodily injury” or “property damage” be caused by an “occurrence” and that the “bodily injury” or “property damage” occur during the policy period. The Montrose language adds that the insurance applies only if, prior to the policy period, no insured knew that the “bodily injury” or “property damage” had occurred in whole or in part. Significantly, it also states that any “bodily injury“ or “property damage” which occurs during the policy period and was not, prior to the policy period known to have occurred, includes a continuation, change or resumption of that “bodily injury” or “property damage” after the end of the policy period.

    In Grange Mutual Cas. Co. v. West Bend Mut. Ins. Co., No. 29D04-0706-PL-1112 (Ct. App. IN March 15, 2011), http://www.ai.org/judiciary/opinions/pdf/03151109ehf.pdf, Sullivan was the General Contractor for a school construction project. Its subcontractor, McCurdy, installed the storm drain pipes. One of the storm pipes was fractured in 2005 while McCurdy was doing its installation work. More than a year later, the school experienced significant water damage due to flooding. It was later discovered that the flooding was due to the fractured storm drain. Sullivan’s insurer paid $146,403 for the water damage. That insurer brought a subrogation claim against McCurdy and its two insurers: West Bend and Grange. West Bend had issued CGL coverage to McCurdy while the construction was ongoing , including the date in which the storm pipe was fractured. Grange issued CGL coverage to McCurdy at the time of the flooding. Those two carriers jointly settled the subrogation claim and then litigated which insurer actually owed coverage for the loss. Significantly, the loss that was paid included only damages from the flooding, not any damages for the cost of repairing the pipe.

    Read the full story...

    Reprinted courtesy of Shaun McParland Baldwin of Tressler LLP. Ms Baldwin can be contacted at sbaldwin@tresslerllp.com


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

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

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

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

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

    Read the full story…

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


    Safer Schools Rendered Unsafe Due to Construction Defects

    February 10, 2012 — CJD Staff

    Built on a program for safer school buildings, schools in Neenan County, Colorado have been shown to have mild-to-moderate structural problems, rendering some of them unsafe. The Denver Post reports that a third-party review of schools built by the Neenan Company has shown structural issues in all fifteen school buildings.

    One school, Meeker Elementary, has been closed as it could collapse under high winds or during an earthquake. Sargent Junior-Senior High School is in use, but there are plans to evacuate the buildings if winds exceed 25 mile per hour. Two schools have roofs that are unable to bear expected loads of snow during the winter.

    The Neenan Company says that the school buildings are not up to their standards and is working with the school districts to repair the buildings. Repairs are expected to be complete by August.

    Read the full story…


    Timing of Insured’s SIR Payment Has No Effect on Non-Participating Insurer’s Equitable Contribution to Co-Insurer

    April 25, 2012 — Aarti Kewalramani, Gatzke Dillon & Balance LLP

    In a case of first impression, the California Court of Appeal, Fourth District, Division One, examined whether a non-participating insurer can evade its defense and indemnity obligations because the insured only paid the policy’s self-insured retention ("SIR") as part of a settlement. In Axis Surplus Lines Insurance Company v. Glencoe Insurance LTD. (April 11, 2012, D058963) __ Cal.App.4th __ [2012 WL 11903203], the critical issue for the Court was whether an insurer, with full notice and continued investigation of a claim, can "hide behind the SIR requirement in its policy." The Court declined to "sanction such gamesmanship."

    The dispute involved an equitable contribution claim between two insurers. Axis Surplus Insurance Company provided commercial general liability insurance to Pacifica Pointe L.P. During the same time period, Glencoe Insurance Ltd. provided an owner-controlled insurance policy (i.e., wrap policy) to Pacifica Pointe L.P. Both policies included provisions requiring co-carriers to split the defense and indemnity on equal shares. Pacifica was sued in a construction defect lawsuit, involving alleged resultant damages to condominiums it converted and sold. Pacifica tendered the claim to both Axis and Glencoe. While Axis agreed to defend Pacifica, subject to a reservation of rights, Glencoe declined to participate until Pacifica satisfied the $250,000 SIR on the policy. Glencoe continued to monitor the litigation from the sidelines.

    Axis and Pacifica settled the underlying construction defect lawsuit for $1 million. Pacifica advised Glencoe of the settlement, and received Glencoe’s approval to contribute its $250,000 SIR towards the settlement. Axis contributed $750,000 towards the settlement. After the settlement, Axis sued Glencoe for declaratory relief and equitable contribution, to recover a portion of the defense and indemnity it paid. The trial court found in favor of Axis and allocated Glencoe 60% of the settlement payment. Glencoe appealed.

    On appeal, the Court scrutinized whether Glencoe, as the non-participating insurer, had a legal obligation to provide a defense and indemnity to the insured, despite the timing of the SIR’s satisfaction. The Court determined that in an equitable contribution action, the participating insurer has the burden of proving merely the potential for coverage under the non-participating insurer’s policy. On this showing, the burden of proof shifts to the non-participating insurer to prove the absence of actual coverage under its policy. The Court emphasized that the timing of the SIR’s payment was inconsequential to either insurer’s burden. Because Glencoe admitted coverage existed under its policy, the Court affirmed the trial court’s decision.

    As a result, the result ultimately turned on whether the non-participating carrier had full notice of the claim and cannot use the timing of the satisfaction of the SIR to shield itself from an equitable contribution claim from the participating co-carrier.

    Published courtesy of Aarti Kewalramani of Gatzke Dillon & Balance LLP. Ms. Kewalramani can be contacted at akewalramani@gdandb.com.


    The Hidden Dangers of Construction Defect Litigation

    March 28, 2012 — David M. McLain, Colorado Construction Litigation

    David M. McLain, writing at Colorado Construction Litigation, has an interesting blog post republishing his article in Common Interests magazine, the monthly periodical of the Rocky Mountain Chapter of the Community Associations Institute. In his article, he touches on a number of pitfalls in construction defect litigation, including the potential conflicts of interests facing HOAs. He also considers the problems homeowners can face, including both “strong-arm tactics” taken by attorneys to compel homeowners to join the lawsuit, or situations in which the interests of the HOA do not match those of the homeowners. He writes:

    There is also a conflict of interest with individual owners who attempt to opt out of the case. This can lead to shocking strong-arm tactics on the part of plaintiffs’ attorneys. In one instance, a plaintiffs’ attorney sent a letter to an individual homeowner that stated that as a 1/58th owner of the common elements, if he refused to go along with the suit, and there was ultimately a finding in favor of the HOA which was in any way limited by his refusal to participate, he would be personally liable for 1/58th of the HOA’s total damages. In another instance, a different plaintiffs’ attorney sent a letter to a homeowner who wanted the builder to perform warranty repairs, informing the owner that if he let the builder perform any repairs, the attorney would bill the HOA according to the fee agreement entered by the HOA board (without knowledge or consent of non-board members) and that the HOA would assess the homeowner for that expense. These are just two examples of conflicts which may arise between the HOA board and individual homeowners when the HOA pursues CD cases.

    Another example of a conflict which will arise as a result of CD litigation occurs post-settlement. When an HOA settles for less than 100% of the amount necessary to fund all repairs outlined by its experts, plus attorneys’ fees and litigation costs, there will obviously be a shortfall in the amount necessary to fix the development. The HOA board must then choose to impose a special assessment to cover the shortfall or to make some, but not all, of the repairs outlined by its experts. In choosing the latter, the conflict arises with respect to which homes get fixed and which do not. In this situation, the HOA board has acted as the attorney-in-fact for the individual owners by bringing claims on their behalf, and has compromised those claims without their knowledge or consent.

    Read the full story…

    Reprinted courtesy of David M. McLain of Higgins, Hopkins, McClain & Roswell, LLC. Mr. McClain can be contacted at mclain@hhmrlaw.com.


    Contract Not So Clear in South Carolina Construction Defect Case

    November 7, 2012 — CDJ Staff

    The South Carolina Court of Appeals has reversed a partial summary judgment issued by one of the lower courts in the case of The Retreat at Edisto Co-Owners Association v. The Retreat at Edisto. The underlying issues of the case deal with a construction defect complaint.

    The lower court had concluded “Developer’s ‘First Amendment’ to the Master Deed required the Developer to satisfy the provision in the paragraph labeled ‘Master Deed Amendment or Phase II’ as a condition precedent to its election to proceed with the development of Phase II.”

    The appeals court found that “the language of the First Amendment to the Master Deed is susceptible to more than one interpretation.” The court additionally concluded that the “Developer presented the requisite scintilla of evidence on the question of its intent in order to establish a genuine issue of material fact. As the material facts were in dispute, the appeals court reversed the summary judgment and remanded the case to the circuit court for further proceedings.

    Read the court’s decision…


    Construction Employment Rises in Half of the States

    December 9, 2011 — CDJ Staff

    The Labor Department has noted that half the states and the District of Columbia saw increases in construction employment during the month of October. During the same month, twenty-three states lost construction jobs.

    The biggest gains were in North Dakota, Oklahoma, DC, Texas, and California. The biggest losses were in Georgia, New Mexico, Wisconsin, and Florida. There was no change for Alabama.

    The chief executive officer of the Association of General Contractors of America, Stephen E. Sandherr, called for more infrastructure development. “Allowing water, transportation and energy networks to deteriorate will hurt construction employment and force taxpayers to spend more later, to fix broken infrastructure.”

    Read the full story…


    AFL-CIO Joins in $10 Billion Infrastructure Plan

    June 30, 2011 — CDJ Staff

    The AFL-CIO has announced plans to generate up to $10 billion in funding for infrastructure development, training construction workers, and making buildings more energy efficient, pledging $20 million to retrofit buildings. Bloomberg News reports that union officials made the announcement in Chicago at the Clinton Global Initiative, releasing a statement from Richard Trumka, president of the union, “we, at the AFL-CIO, believe that together, with our partners in business and government, we can profitably invest significant resources to make America more competitive and energy efficient.” A foot injury prevented Mr. Trumka from attending the event.

    The statement also quoted Mark Ayers, president of the Building and Construction Trades Department of the AFL-CIO, “the time is now to become intensely focused on the creation of jobs.”

    Read the full story…


    Increased Expenditure on Injuries for New York City School Construction

    August 16, 2012 — CDJ Staff

    You can buy a lot of bandages for $270 million, but even though the expenses are related to the New York City schools, the money is being budgeted by the School Construction Agency as what they expect to pay for injuries and liability expenses related to school construction. The New York Post notes that this is nearly ten times what the city spent in 2000 on workers' compensation and liability claims. Michael Elmdendorf of the General Contractors Association likened injury compensation to a broken slot machine, telling the Post, "when you pull that lever, you win." A spokesperson from the Department of Education, Margie Feinberg, attributed the rise to higher medical care costs.

    Read the full story…


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

    August 11, 2011 — CDJ Staff

    The Alaska Supreme Court found that in the case of Khalsa v. Chose, Ms. Khalsa? failure to cooperate with the courts has obligated them to dismiss her claims against Mr. Chose. Ms. Khalsa bought a home kit from Mandala Custom Homes of Nelson, British Columbia, Canada. Mr. Chose, one of the owners of Mandala was paid by Ms. Khalsa to supervise assembly in Fairbanks. After construction, the roof developed leaks. Ms. Khalsa stated that when climbing a ladder to inspect a skylight leak, she fell and injured herself.

    During the subsequent suit, Khalsa proved uncooperative. She skipped a pretrial conference. She attended a hearing that set discovery deadlines but then did not comply with discovery, including her failure to provide medical records documenting her injuries. She eventually said that she would only be able to travel from Arizona to Alaska if the defendants paid for her and her caretaker?s expenses.

    When finally deposed, Khalsa terminated the deposition after five minutes, alleging the deposition was “intentionally designed to cause [her] to endure further emotional distress, due to the psychological trauma . . . that was caused or contributed to by the defendants.”

    Eventually, the lower court sanctioned her twice. In July, 2008, the court concluded that her failure to provide medical records required dismissal of her injury lawsuit. In October of that year, the court dismissed all remaining claims due to her “pattern of excuses and long delays in providing information for discovery culminating in her refusal to participate in her deposition by the defendants.” Further, Khalsa has argued that the trial court displayed “prejudice and bias toward the pro se plaintiff.”

    The Alaska Supreme Court rejected all of Ms. Khalsa?s claims, dismissing her case. They did, however, note that she has thirty days to file an appeal.

    Read the court’s decision…


    Ambitious Building Plans in Boston

    November 18, 2011 — CDJ Staff

    Although most are unlikely to change the Boston skyline, there are several large projects on the drawing boards. The site BostInnovation covered ten of them in a recent post. Downtown Boston will be the site of several of these large projects, including three towers to be added to the Christian Science Plaza, a 404-unit residential tower in the Theater District, and perhaps the largest of these projects, a 47-story tower to be built over Copley Plaza, which will tower over the adjacent buildings. None of the planned buildings will challenge the Hancock Tower’s 60 stories.

    Read the full story…


    West Hollywood Building: Historic Building May Be Defective

    August 16, 2012 — CDJ Staff

    The Sunset Lanai apartment building in West Hollywood, California has its fans, it also has its detractors. Designed by Edward H. Flickett and built in 1952 by George Alexander, the building isn’t wearing its years lightly. Its owner has opposed a move by the West Hollywood Preservation Commission that the building is a “local cultural resource.” Instead, Edwin Silver, the building’s owner says the group has overstated the building’s significance. His lawyer points to “design and construction flaws,” and says the building is prone to flooding and leaks. Repairs to the building have an estimated cost of $2.3 million, according to the L.A. Times.

    The West Hollywood City Council decided to table the question of a historical designation as that might impede repairs. However, they did decide that if Silver seeks to demolish the building, they will grant the protection.

    Read the full story…