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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
    44404 16th St W Suite 107
    Lancaster, CA 93535



    Construction Expert Witness News and Information
    For Anaheim California

    Court Rejects Anti-SLAPP Motion in Construction Defect Suit

    Safety Officials Investigating Death From Fall

    Analysis of the “owned property exclusion” under Panico v. State Farm

    Record-Setting Construction in Fargo

    Texas Windstorm Insurance Agency Under Scrutiny

    New Safety Standards Issued by ASSE and ANSI

    All Risk Policy Only Covers Repair to Portion of Dock That Sustains Damage

    Colorado “occurrence”

    Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment

    After Breaching its Duty to Defend, Insurer Must Indemnify

    Construction Jobs Expected to Rise in Post-Hurricane Rebuilding

    Wisconsin “property damage” caused by an “occurrence.”

    Construction Defects Are Occurrences, Says Georgia Supreme Court

    Was Jury Right in Negligent Construction Case?

    Repair of Part May Necessitate Replacement of Whole

    New Jersey Court Rules on Statue of Repose Case

    General Contractors Must Plan to Limit Liability for Subcontractor Injury

    Faulty Workmanship may be an Occurrence in Indiana CGL Policies

    Can We Compel Insurers To Cover Construction Defect in General Liability Policies?

    Excess Carrier Successfully Appeals Primary Insurer’s Summary Judgment Award

    Ghost Employees Steal Jobs from Legit Construction Firms

    Insurer Must Defend Claims for Diminution in Value of Damaged Property

    Water Drainage Case Lacks Standing

    Insurer Not Liable for Construction Defect Revealed by Woodpecker

    Fifth Circuit Asks Texas Supreme Court to Clarify Construction Defect Decision

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

    Bound by Group Builders, Federal District Court Finds No Occurrence

    Anti-Assignment Provision Unenforceable in Kentucky

    Cogently Written Opinion Finds Coverage for Loss Caused By Defective Concrete

    Plaintiffs In Construction Defect Cases to Recover For Emotional Damages?

    Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

    Judge Rejects Extrapolation, Harmon Tower to Remain Standing

    Ensuing Loss Provision Does Not Salvage Coverage

    Insurer Unable to Declare its Coverage Excess In Construction Defect Case

    Consulting Firm Indicted and Charged with Falsifying Concrete Reports

    State Farm Too Quick To Deny Coverage, Court Rules

    Remodels Replace Construction in Redding

    Vegas Hi-Rise Not Earthquake Safe

    Loose Bolts Led to Sagging Roof in Construction Defect Claim

    Pier Fire Started by Welders

    The Colorado Court of Appeals Rules that a Statutory Notice of Claim Triggers an Insurer’s Duty to Defend.

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

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

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

    Differing Rulings On Construction Defect Claims Leave Unanswered Questions For Builders, and Construction Practice Groups. Impact to CGL Carriers, General Contractors, Builders Remains Unclear

    Orange County Home Builder Dead at 93

    Webinar on Insurance Disputes in Construction Defects

    Insurance for Defective Construction Now in Third Edition

    The King of Construction Defect Scams

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

    School District Marks End of Construction Project by Hiring Lawyers

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

    Equipment Costs? It’s a Steal!

    Cleveland Condo Board Says Construction Defects Caused Leaks

    Construction Worker Dies after Building Collapse

    Court Rules on a Long List of Motions in Illinois National Insurance Co v Nordic PCL

    Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.

    Southern California Lost $8 Billion in Construction Wages

    Water Is the Enemy

    Construction Workers Face Dangers on the Job

    Insurers Reacting to Massachusetts Tornadoes

    Texas covered versus uncovered allocation and “legally obligated to pay.”

    Coverage Rejected Under Owned Property and Alienated Property Exclusions

    Largest Per Unit Settlement Ever in California Construction Defect Case?

    Contractors Admit Involvement in Kickbacks

    More Charges in Las Vegas HOA Construction Defect Scam

    Florida County Suspends Impact Fees to Spur Development

    Dust Infiltration Due to Construction Defect Excluded from Policy

    Reference to "Man Made" Movement of Earth Corrects Ambiguity

    Nebraska Man Sentenced for Insurance Fraud in Construction Projects

    Construction Defect Claim Did Not Harm Homeowner, Court Rules

    No Duty to Indemnify When Discovery Shows Faulty Workmanship Damages Insured’s Own Work

    School Sues over Botched Pool

    San Diego Construction Defect Claim Settled for $2.3 Million

    State Audit Questions College Construction Spending in LA

    Does the New Jersey Right-To-Repair Law Omit Too Many Construction Defects?

    California Appeals Court Remands Fine in Late Completion Case

    Recent Case Brings Clarity and Questions to Statute of Repose Application

    Oregon agreement to procure insurance, anti-indemnity statute, and self-insured retention

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

    Florida Contractor on Trial for Bribing School Official

    Changes to Arkansas Construction and Home Repair Laws

    Firm Sued For Construction Defects in Parking Garage

    High School Gym Closed by Construction Defects

    Who Is To Blame For Defective — And Still LEED Certified — Courthouse Square?

    Nevada Assembly Sends Construction Defect Bill to Senate

    Insurer Settles on Construction Defect Claim

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

    No Coverage for Construction Defects Under Alabama Law

    Hilton Grand Vacations Defect Trial Delayed
    Corporate Profile

    ANAHEIM CALIFORNIA CONSTRUCTION EXPERT WITNESS
    DIRECTORY AND CAPABILITIES

    Leveraging from more than 5500 construction defect and claims related expert witness designations, the Anaheim, California Construction Expert Witness Group provides a wide range of trial support and consulting services to Anaheim's most acknowledged construction practice groups, CGL carriers, builders, owners, and public agencies. Drawing from a diverse pool of construction and design professionals, BHA is able to simultaneously analyze complex claims from the perspective of design, engineering, cost, or standard of care.

    Construction Expert Witness News & Info
    Anaheim, California

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

    May 10, 2012 — CDJ Staff

    Baker v Castle & Cooke Homes Hawaii, et al. is a “class action filed by homeowners who allege that their homes have a construction defect. They allege that their plumbing systems include brass fittings susceptible to corrosion and likely to cause leaks. They bring this action against the developer of their homes and the manufacturers of the brass fittings.”

    Zurn, the manufacturer of the allegedly defective brass fittings, sought a dismissal, or if that could not be achieved, then “a more definite statement, of five of the six claims.” Zurn moved for summary judgment on the sixth claim, or alternately sought “summary judgment on one of the five claims it” sought to dismiss.” The court granted in part the motion, and denied the motion for summary judgment.

    The developer, Castle & Cooke, sought dismissal of the First Amended Complaint stating “that Plaintiffs have not complied with Hawaii’s Contractor Repair Act, chapter 672E of Hawaii Revised Statutes, which requires, among other things, a plaintiff to give a contractor the results of any testing done before filing an action against that contractor.” The court couldn’t determine “certain facts essential to ruling” on Castle & Cooke’s motion, and therefore denied the motion, but ordered Plaintiffs to submit requested material by the stated deadline.

    The Baker v Castle & Cooke case began with the Plaintiffs claim that the use of yellow brass fittings can lead to construction defects. They allege that “yellow brass is particularly susceptible to dezincification, a corrosion process in which zinc leaches into potable water that comes into contact with the brass. According to Plaintiffs, as the brass corrodes, it becomes porous and mechanically weak. Plaintiffs further allege that the PEX systems in the putative class members’ homes have begun to, or are about to, leak water into the walls, ceilings, and floors of their homes. Plaintiffs allege that the leakage will cause water damage and mold growth, exposing the occupants to toxins.”

    In response to the plaintiffs’ claims, Zurn argued “because their yellow brass fittings have not failed to date, Plaintiffs fail to allege, and have no evidence showing, that they have suffered any actual injury.” Plaintiffs replied, “even if the fittings have not failed as of today, failure in the future is inevitable.”

    However, the court stated, “whether Plaintiffs have suffered any injury, or whether Plaintiffs are attempting to proceed based solely on future injury, implicates Plaintiffs’ standing to bring this action, as well as whether this case is ripe for adjudication.” The court has requested the parties to submit “supplemental briefing on whether this case should be dismissed pursuant to Rule 12(b)(1). In supplemental briefs, Zurn argues that dismissal is appropriate because Plaintiffs lack standing, and Castle & Cooke argues that dismissal is appropriate because Plaintiffs’ claims are not ripe.”

    The court continues to discuss the problem of standing: “To establish standing, a plaintiff must demonstrate three things. First, the plaintiff must suffer an "injury-in-fact," which means that there must be a concrete and particularized "invasion of a legally protected interest" and the invasion is actual or imminent. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Second, the injury must be fairly traceable to the challenged action. Third, a favorable decision must be likely to redress the injury. Id. It is the first element (injury-in-fact) that is in issue here.”

    The court found that the plaintiffs do have standing: “Even if the court could not rely on the allegations that the pipes will soon leak, the court would conclude that, for standing purposes, Plaintiffs have a sufficient injury-in-fact in the form of their alleged economic loss.” In a hearing, Plaintiffs argued that their homes had decreased in value.

    The court also denied Castle & Cooke’s motion to dismiss based on a lack of ripeness, stating “the same reasons Plaintiffs satisfy the injury-in-fact requirement for standing purposes, they satisfy the constitutional ripeness requirement.”

    Plaintiffs asserted six counts against Zurn. Zurn, in response, made a motion to dismiss counts VIII, IX, X, XII, and XIII. The court granted Zurn’s motion for Counts VIII, IX, and X only: “Counts VIII (product liability), IX (negligence), and X (strict liability) sound in tort. Zurn argues that, because Plaintiffs allege no injury other than to the PEX systems and the yellow brass fittings themselves, the economic loss rule bars their tort claims. The court agrees.”

    The court disagreed with Zurn’s motion regarding Count XII: “Count XII asserts that Zurn has breached the implied warranty of merchantability. Zurn argues that Count XII is barred by the applicable statute of limitations and that Plaintiffs do not sufficiently allege an injury. The court disagrees.”

    Zurn’s motion regarding Count XIII was also denied: “Count XIII asserts that Zurn violated section 480-2 of Hawaii Revised Statutes.” Furthermore, “Plaintiffs allege that Zurn ‘engaged in unfair and deceptive acts or practices when [it] designed, manufactured and sold Yellow Brass Fittings.’ Zurn argues that Plaintiffs fail to state a claim under section 480-2(a) because their claims are barred by the statute of limitations and they do not adequately allege reliance or a cognizable injury. The court disagrees.”

    The court denied the motion for summary judgment with respect to Counts XI and XII.

    Castle & Cooke sought to dismiss “Plaintiffs’ claims against it under section 672E-2 of Hawaii Revised Statutes, which provides for dismissal when claimants fail to comply with chapter 672E.” There was some discussion regarding the test results. Apparently, the plaintiffs had failed to provide a written notice of claim at least 90 days before filing the action. However, it is unclear if the Plaintiffs have since complied with the requirements of the chapter. “The court has received no supplemental information from either party about whether any test results from another case have been turned over or whether those materials are subject to a confidentiality agreement. The record at this point does not establish noncompliance with the requirement in chapter 672E to provide such information. The court therefore denies the motion to dismiss.”

    In summary, “Zurn’s motion to dismiss is granted as to Count VIII, Count IX, and Count X. Zurn’s motion to dismiss is denied with respect to Plaintiffs’ other claims. Zurn’s request for a more definite statement and its summary judgment motion are denied. Plaintiffs are given leave to file an amended Complaint no later than May 21, 2012.” Furthermore, “the court denies Castle & Cooke’s motion, but directs Plaintiffs to file, within two weeks, either a certificate of compliance with section 672E-3(c), or an explanation as to why they have not complied. Castle & Cooke may submit a response within two weeks of Plaintiffs’ submission. Each party’s submission is limited to 1000 words.”

    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…


    Homeowners May Not Need to Pay Lien on Defective Log Cabin

    July 1, 2011 — CDJ Staff

    The Idaho Supreme Court has ruled in the case of Perception Construction Management v. Bell. The Bells hired PCM to build a log home, agreeing to play monthly invoices in full within ten days. The Bells paid the first four invoices in full, part of the fifth, and ceased payment after that. Beofre seventh invoice, the Bells terminated the contract and hired a new contractor. PCM filed a claim of lien and ceased work.

    The Bells responded that PCM was in breach of contract and had failed to fulfill the contract in a workmanlike manner. They claimed construction defects and in the lien suit, sought to include testimony from an architect and a plumber reviewing PCM’s work. The court only allowed the architect to testify as to whether the amount of the lien was reasonable. No testimony was permitted from the plumber.

    The Idaho Supreme Court concluded that the claims of construction defects were important to case and remanded it to the lower court for a new trial taking into evidence that Bell’s contention that PCM’s work was defective.

    Read the court’s decision


    Exact Dates Not Needed for Construction Defect Insurance Claim

    March 1, 2012 — CDJ Staff

    The Texas Court of Appeals reversed the decision of the trial court in Vines-Herrin Custom Homes v Great American Lloyds Insurance Company on December 21, 2011. Vines-Herrin Custom Homes built a single-family home in Plano, Texas in 1999. They obtained a commercial general liability policy from Great American, later purchasing coverage from Mid-Continent, which the decision describes as “a sister company of Great American.”

    While the home was under construction, Emil G. Cerullo sought to purchase it. At the time, it was under contract to another buyer. Two months later, Vines-Herrin told Cerullo that the deal had “fell through.” Cerullo bought the house with modifications from the original plan. Upon moving in, Cerullo began having water intrusion and other problems. “Cerullo noticed water gathering on window sills and damage to the sheetrock and baseboard.” Additional problems followed, including cracks, leaks, “and in early 2002, the ceiling and roof began to sag.”

    Cerullo sued Vines-Herrin, claiming negligent construction. Vines-Herrin filed a claim seeking defense and indemnification under the insurance policies. Coverage was denied and Vines-Herrin filed suit to require coverage and also bringing claims for “breach of the duty of good faith and fair dealing, breach of contract, and DTPA and insurance code violations.”

    In May, 2006 Vines-Herrin stated that it had no more defense funds and went into arbitration with Cerullo. The underlying construction defect action was settled for about $2.5 million. As part of the settlement, “Cerullo became the rightful owner of all remaining claims, rights, and causes of action against” Vines-Herrin’s insurers. He then joined the coverage lawsuit.

    The non-jury trial was held under the controlling law of the time which “imposed a duty to defend only if the property damage manifested or became apparent during the policy period.” The court concluded in Cerullo’s favor. During the post-judgment motions, the Texas Supreme Court rejected the manifestation rule. Under this ruling, the trial court set aside its judgment and found in favor of the insurance companies. The trial court noted that although “the Residence was covered by an uninterrupted period of insurance (which began before the Residence was constructed) and that the damages to the Residence manifested during the uninterrupted period of insurance coverage,” “Mr. Cerullo failed to allege the date when actual physical damage to the property occurred.”

    The first claim by Cerullo and Vines-Herrin was that the “Final Judgment” occurred in October 2004, and that all proceedings thereafter were void. The court rejected this as the “final judgment” is not “final for the purposes of an appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” Despite the use of the word “final,” the trial court’s decision did not do this.

    The second issue was the application of the Texas Supreme Court case Don’s Building Supply Inc. v. OneBeacon Insurance. In this case, framing rot due to defective stucco was not discovered until after the end of the policy period. The Supreme Court noted that “the key date is when injury happens, not when someone happens on it.”

    The appeals court found that the trial court misapplied the Don’s Building Supply decision. Rather than an exact date, “so long as that damage occurred within the policy period, coverage was provided.” The appeals court noted that “Cerullo alleged the house was constructed in 1999 and he purchased it in May 2000.” “By April of 2001, Cerullo noticed that the windowsills in the study were showing signs of leakage and water damage.” As the court put it, “the petitions then alleged a litany of defects.”

    The court noted that coverage by Great American was in effect from November 9, 1999 to November 9, 2000. In May of 2000, the house suffered “substantial flooding from a rainstorm that caused damage.” This was during the policy period. “As a matter of law, actual damages must occur no later than when they manifest.”

    The court concluded that as damage manifested during the period of coverage, so must have the damage. The court ruled that “contrary to the trial court’s determination otherwise, the evidence showed Great American’s duty to indemnify was triggered, and expert testimony establishing the exact date of injury was not required to trigger the duty.”

    Read the court’s decision…


    California Posts Nation’s Largest Gain in Construction Jobs

    March 28, 2012 — CDJ Staff

    California added about 8,900 construction jobs in January, 2012, as compared to December, 2011, leading the nation in the number of added construction jobs. Thirty-four other states also saw added construction jobs. A year prior, only twenty-eight states added construction jobs. The Associated General Contractors of America analyzed the monthly report from the Labor Department. Ken Simonson, the chief economist for the Associated General Contractors of America noted that “the gains this January partly reflect very mild weather this winter and exceptionally cold and snowy conditions a year before.”

    Read the full story…


    Renovation Contractors: Be Careful How You Disclose Your Projects

    December 9, 2011 — Derek J. Lindenschmidt, Colorado Construction Litigation

    In Palu and Beyer v. Toney, 2011 WL 2560249 (Bankr. D. Colo.), the United States Bankruptcy Court for the District of Colorado determined that a Colorado District Court order granting summary judgment in favor of plaintiff home buyers was binding on the Bankruptcy Court in the defendant contractor’s bankruptcy proceeding based on issue preclusion.

    Pertinent to this column is the subject matter of the summary judgment motion: Colorado’s Seller’s Property Disclosure (Form LC-18-5-04). In the underlying state court action, the plaintiff home buyers filed a motion for summary judgment contending that the defendant contractor represented to them, through the Seller’s Property Disclosure, that there were no present or past conditions involving moisture or water problems, roof problems or leaks, skylight problems, or gutter downspout problems.

    In granting plaintiffs’ motion, the state court determined that the defendant contractor made these representations on her Seller’s Property Disclosure despite witnessing water leaking from the skylight onto the floor and being aware of repairs to the roof, skylight, and interior drywall prior to the sale of the property.

    Read the full story…

    Reprinted courtesy of Derek J. Lindenschmidt of Higgins, Hopkins, McClain & Roswell, LLP. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com


    No Coverage For Damage Caused by Chinese Drywall

    October 28, 2011 — Tred Eyerley, Insurance Law Hawaii

    The pollution exclusion barred coverage for alleged property damage and bodily injury in Evanston Ins. Co. v. Harbor Walk Dev., LLC, No. 2:10cv312 (E.D. Va. Sept. 9, 2011).

    Homeowners sued the insured, Harbor Walk, in three lawsuits, alleging the Chinese drywall installed in their homes emitted sulfides and other noxious gases. This caused corrosion and damage to the air-conditioning and ventilation units, refrigeration coils, copper tubing, faucets, metal surfaces, electrical appliances and other personal items. The homeowners also alleged the compounds emitted by the drywall caused bodily injury, such as allergic reactions, headaches, etc.

    Harbor Walk’s insurer, Evanston, filed for a declaratory judgment that the pollution exclusion precluded coverage.

    Read the full story...

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


    Window Manufacturer Weathers Recession by Diversifying

    October 28, 2011 — CDJ Staff

    American Openings, a Tuscon-based window manufacturer, has responded to the loss of its sales of windows for new home construction by moving into new markets. The Arizona Daily Star reports that American Openings used to see providing windows for new homes as half their business. Now, Tom Regina, the founder and president says “single family is just dead.”

    Their products are insulated windows, designed to comply with Energy Star standards. Without new homes being built, now the company is focusing on homeowners and building owners looking for more energy efficient windows. As the windows have two or three panes and special coatings, homeowners using them are eligible for tax credits.

    One of their newer products combines their energy-saving coatings with “break resistant” glass. The article notes that the windows repel “all but the most determined burglars.” However, the company is still awaiting special equipment to cut the glass.

    Read the full story...


    California Supreme Court Binds Homeowner Associations To Arbitration Provisions In CC&Rs

    September 13, 2012 — Stephen A. Sunseri and Aarti Kewalramani, Gatzke Dillon & Ballance LLP (http://www.gdandb.com).

    The California Supreme Court ruled in Pinnacle Museum Tower Assn. v. Pinnacle Market Development (August 16, 2012, S186149) __ Cal.4th __ [2012 WL 3516134], that arbitration provisions within the covenants, conditions, and restrictions (“CC&Rs”) for condominium projects are enforceable against their homeowner associations. The ruling — two years in the making — was based on legislative history of laws governing common interest developments, and decades of decisional authority involving contracts and arbitration provisions.

    In Pinnacle, a homeowners association sued a condominium builder for construction defects and resultant property damage to the common areas, and to the separate property interests held by the individual members. The builder moved to compel arbitration, based on a provision contained in the CC&Rs which required resolution of all construction disputes through binding arbitration. The association argued it could not be compelled to arbitrate these claims because it was not a party to the agreement to arbitrate, asserting “the Association did not bargain with [the builder] over the terms of the Project CC&R's or participate in their drafting.”

    The Supreme Court rejected the association's argument on the grounds that the builder-authored CC&Rs complied with the Davis-Stirling Act (“the Act”) (Civil Code §1350, et seq.) ? the law that governs all common interest developments in California. Under the Act, builders and sellers of common interest residential units are required to provide a copy of the CC&Rs to all purchasers, as well as copies of the Department of Real Estate's public report, which informs purchasers of their rights and remedies as members of the association, and encourages each prospective purchaser to review the terms carefully before entering into any agreement. Further, the Act states all CC&Rs are enforceable, unless unreasonable, and inure to the benefit of and bind all owners in the development. (Civ. Code, §1354, subd. (a).) The Court found each owner who purchased a condominium in the project either expressly consented to the terms and provisions of the CC&Rs or was deemed to have consented to the terms at the time of purchase.

    The Court also did not find the arbitration provision to be unconscionable. The Court indicated the provision was drafted and recorded in accordance with the Act, which allowed each prospective purchaser to make an informed decision prior buying a condominium unit. The provision also limited arbitration to construction defect disputes. The Court did not find any evidence the provision “shocked the conscience” or was “oppressive” in any way.

    Pinnacle settles a decades-long conflict over whether arbitration provisions in CC&Rs for condominium projects are enforceable against homeowner associations and their members. It remains unclear, however, whether Pinnacle’s rationale will be applied to cases involving homeowner associations for single-family residences (as opposed to condominiums), assuming those CC&Rs have similar arbitration requirements. Regardless, the result of Pinnacle is clear, if arbitration provisions contained in condominium CC&Rs meet the fairness and unconscionability tests set out by the Court, more condominium construction defect cases brought by homeowner associations will be resolved through the arbitration process.

    Read the court’s decision…

    Printed courtesy of Stephen A. Sunseri and Aarti Kewalramani, Gatzke Dillon & Ballance LLP. Mr. Sunseri can be contacted at ssunseri@gdandb.com and Ms. Kewalramani can be contacted at akewalramani@gdandb.com.


    Former Zurich Executive to Head Willis North America Construction Insurance Group

    March 1, 2012 — CDJ Staff

    Insurance Journal reports that Sean McGroarty will be directing surety operations for their construction practice in North America. Previously, Mr. McGroarty was the senior vice president and head of international surety with Zurich Financial Services. He has also worked for Liberty Mutual Group and the St. Paul Companies.

    Mr. McGroarty will be leading a team of professionals offering brokerage services for contract and commercial surety.

    Read the full story…


    New Construction Laws, New Forms in California

    July 10, 2012 — CDJ Staff

    New construction laws came into effect in California on July 1. Writing for the Martindale-Hubble Legal Library, Glenn Mau, J. Michael McGuire, and John Tonsing, all of Archer Norris, discuss these changes. They note that the most important part of the changes to California construction law is that “all mechanics liens, stop notices and bond claims recorded after July 1, 2012 must use the new standardized forms and follow the new definitions, notice prerequisites and statutory release form language.”

    Read the full story…


    Save a Legal Fee: Prevent Costly Lawsuits With Claim Limitation Clauses

    April 25, 2012 — Douglas Reiser, Builders Cousel

    Ever had that lingering problem with a contracting partner that went away for awhile and then came back to bite you ? years later? In Washington, construction contract claims can be raised for up to six years after substantial completion. Six years!? Why would I want to wait that long to find out if I have a problem? You don’t have to.

    Over the past few years, I have discussed the notion of “contractual claim periods” on The Builders Counsel. For today’s Save a Legal Fee column, I cannot think of a better topic. These provisions are specifically intended to save you from unnecessary legal fees that might arise if a problem goes unnoticed for too long.

    Contractual claim periods are simply a way to reduce the amount of time that a contracting party has to raise a claim against its contracting partner. For example, a subcontractor might require that a general contractor raise any claim that it might have ? for defective or incomplete work, injury, damages, etc ? within a particular amount of time or forever lose the ability to raise the claim in a legal proceeding.

    Read the full story…

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


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

    October 23, 2012 — Heidi J. Gassman, Higgins, Hopkins, McLain & Roswell

    The Colorado Homeowner Protection Act of 2007 (“HPA”), codified at C.R.S. § 13-20-806(7), specifically voids express waivers of, or limitations on, a residential property owner’s ability to enforce any rights, remedies, and damages provided by law in a construction defect case. Practically speaking, this means that limitation of liability provisions in contracts between construction professionals and residential homeowners are void and will not be enforced in Colorado. The HPA can extend even further, however, to subcontractors on residential projects, as seen in a recent District Court ruling.

    The HPA was tested in Thacker v. Gallery Homes, et al., v. Terracon Consultants, Inc., et al., Larimer County District Court Case No. 2007CV1195. Gallery Homes hired Terracon to provide geotechnical and structural engineering services at the Colony Ridge subdivision in Loveland, Colorado. Terracon performed work for Gallery Homes under three separate contracts, each of which included a provision limiting Terracon’s total liability to Gallery Homes.

    After the project was completed, two homeowners filed suit against Gallery Homes for alleged construction defects involving movement of their basement floor systems and foundations and damage to porches, patios, garages, and driveways. Gallery Homes sued Terracon as a third-party defendant, and Terracon sought to enforce its limitation of liability provisions via a partial summary judgment motion.

    Read the full story…

    Reprinted courtesy of Heidi J. Gassman, Higgins, Hopkins, McLain & Roswell, LLC. Ms. Gassman can be contacted at gassman@hhmrlaw.com


    More Charges in Las Vegas HOA Scandal

    September 13, 2012 — CDJ Staff

    The indictments continue in the Las Vegas HOA scandal. A lawyer for the Justice Department told the judge in the case that “we expect several indictments before the end of the year.” According to the Las Vegas Review Journal, “a dozen or more” additional people will be charged in the conspiracy.

    The judge in the case, Senior U.S. District Judge Lloyd George, told prosecutors that he wanted to address the issue of compensation for homeowners. Currently, defendants have agreed to pay $1.5 million to compensate homeowners associations and banks. Vistana homeowners have claimed that the conspirators got the bulk of a $19 million construction defect settlement.

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    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."

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


    Contractor Burns Down Home, Insurer Refuses Coverage

    May 10, 2012 — CDJ Staff

    InsuranceStep reports that a Connecticut insurance company has rejected a claim over a fire in a remodeling project that killed five people. Utica First Insurance states that the coverage was invalid as the insured, Tiberias Construction, had misrepresented information about the company and the work performed in applying for insurance. During a remodel, the contractor allegedly placed fireplace ashes near trash. The trash ignited, leading to the house fire.

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    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. 

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


    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.

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