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    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
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    Commercial and Residential Contractors License Required.


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    Building Industry Association Southern California - Desert Chapter
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    77570 Springfield Ln Ste E
    Palm Desert, CA 92211
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    Building Industry Association Southern California - Riverside County Chapter
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    Building Industry Association Southern California
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    Building Industry Association Southern California - Baldy View Chapter
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    Construction Expert Witness News and Information
    For Anaheim California

    South Carolina Contractors Regain General Liability Coverage

    Construction Defect Not an Occurrence in Ohio

    South Carolina “occurrence” and allocation

    No Coverage for Construction Defects Under Alabama Law

    Arbitration Clause Found Ambiguous in Construction Defect Case

    Windows and Lawsuits Fly at W Hotel

    More Charges in Las Vegas HOA Construction Defect Scam

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

    US Courts in Nevada Busy with Yellow Brass

    Arizona Contractor Designs Water-Repellant Cabinets

    Record-Setting Construction in Fargo

    Federal District Court Predicts Florida Will Adopt Injury In Fact Trigger

    Home Sales Still Low, But Enough to Spur Homebuilders

    Unfinished Building Projects Litter Miami

    Good and Bad News on Construction Employment

    Texas res judicata and co-insurer defense costs contribution

    Local Government Waives Construction Fees to Spur Jobs

    Judge Okays Harmon Tower Demolition, Also Calls for More Testing

    Nevada Senate Rejects Construction Defect Bill

    No Coverage Under Ensuing Loss Provision

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

    Florida County Suspends Impact Fees to Spur Development

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

    Wine without Cheese? (Why a construction contract needs an order of precedence clause)(Law Note)

    Preventing Costly Litigation Through Your Construction Contract

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

    Texas Law Bars Coverage under Homeowner’s Policy for Mold Damage

    New Construction Laws, New Forms in California

    Lockton Expands Construction and Design Team

    Contractor Liable for Soils Settlement in Construction Defect Suit

    Senate Committee Approves Military Construction Funds

    Vegas Hi-Rise Not Earthquake Safe

    Statute of Repose Dependant on When Subcontractors Finished

    Hilton Grand Vacations Defect Trial Delayed

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    Mississippi exclusions j(5) and j(6) “that particular part”

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    Homeowners Not Compelled to Arbitration in Construction Defect Lawsuit

    Construction Defects Are Occurrences, Says South Carolina High Court

    Insurance Company Must Show that Lead Came from Building Materials

    Contractors with Ties to Trustees Reaped Benefits from LA Community College Modernization Program

    Amerisure Case to be Heard by Texas Supreme Court

    Background Owner of Property Cannot Be Compelled to Arbitrate Construction Defects

    San Diego Construction Defect Claim Settled for $2.3 Million

    The Complete and Accepted Work Doctrine and Construction Defects

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    The Flood Insurance Reform Act May be Extended to 2016

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

    Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii

    Florida Contractor on Trial for Bribing School Official

    Appropriation Bill Cuts Military Construction Spending

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

    Ninety-Day Extension Denied to KB Home in Construction Defect Insurance Claim

    Important Information Regarding Colorado Mechanic’s Lien Rights.

    The Year 2010 In Review: Design And Construction Defects Litigation

    OSHA Extends Temporary Fall Protection Rules

    Washington Court Limits Lien Rights of Construction Managers

    Kentucky Court Upholds Arbitration Award, Denies Appeal

    Construction Defect Lawsuit Stayed by SB800

    Federal Court Denies Summary Judgment in Leaky Condo Conversion

    Tucson Officials to Discuss Construction Defect Claim

    Condominium Exclusion Bars Coverage for Construction Defect

    Ceiling Collapse Attributed to Construction Defect

    Construction Firm Sues City and Engineers over Reservoir Project

    Construction Defects Not Occurrences under Ohio Law

    Recent Case Brings Clarity and Questions to Statute of Repose Application

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

    David McLain to Speak at the CDLA 2012 Annual Conference

    Joinder vs. Misjoinder in Colorado Construction Claims: Roche Constructors v. One Beacon

    An Upward Trend in Commercial Construction?

    Businesspeople to Nevada: Revoke the Construction Defect Laws

    2011 West Coast Casualty Construction Defect Seminar – Recap

    Contractual Liability Exclusion Bars Coverage

    Gut Feeling Does Not Disqualify Expert Opinion

    Federal Judge Dismisses Insurance Coverage Lawsuit In Construction Defect Case

    No Third-Quarter Gain for Construction

    Coverage Rejected Under Owned Property and Alienated Property Exclusions

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

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

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

    Read Her Lips: “No New Buildings”

    General Contractors Must Plan to Limit Liability for Subcontractor Injury

    Underpowered AC Not a Construction Defect

    Don MacGregor To Speak at 2011 West Coast Casualty Construction Defect Seminar

    Ensuing Loss Provision Does Not Salvage Coverage

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

    Nevada Assembly Bill Proposes Changes to Construction Defect Litigation

    Harsh New Time Limits on Construction Defect Claims
    Corporate Profile

    ANAHEIM CALIFORNIA CONSTRUCTION EXPERT WITNESS
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    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. Leveraging 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.

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    Construction Expert Witness News & Info
    Anaheim, California

    Vegas Hi-Rise Not Earthquake Safe

    July 12, 2011 — CDJ Staff

    If an earthquake hit Las Vegas, the Harmon Tower would not withstand it. A report from Weidlinger Associates told MGM Resorts that “in a code-level earthquake, using either the permitted or current code specified loads, it is likely that critical structural members in the tower will fail and become incapable of supporting gravity loads, leading to a partial or complete collapse of the tower.” The inspection came at the request of county officials, according to the article in Forbes.

    According to Ronald Lynn, directory of the building division in the county’s development services division, “these deficiencies, in their current state, make the building uninhabitable.” The county is concerned about risks to adjacent buildings.

    MGM Resorts is currently in litigation, separate from the stability issues, with Perini Corp., the builders of Harmon Tower.

    Read the full story…


    Joinder vs. Misjoinder in Colorado Construction Claims: Roche Constructors v. One Beacon

    July 10, 2012 — David McLain, Higgins, Hopkins, McLain & Roswell, LLC

    Often, those practicing in the construction defect field have faced questions concerning the joinder of a party. Recently, the U.S. District Court for the District of Colorado weighed in on the requirements for joinder under the Colorado Rules of Civil Procedure. See Roche Constructors, Inc. v. One Beacon America Ins. Co., 2012 WL 1060000 (D. Colo. 2012). Roche secured a construction contract to build a detention facility for the Lincoln County Sheriff’s Office in Lincoln County, Nebraska. In turn, Roche entered into a subcontract with Dobberstein Roofing Company, Inc. in October 2009 to install the roofing system and other related work at the detention facility. The subcontract agreement required Dobberstein to maintain adequate commercial general liability insurance and to add Roche as an additional insured under the policy. Roche maintained a builder’s risk policy issued by OneBeacon America Insurance Company and Dobberstein secured a certificate of liability insurance underwritten by Transportation Insurance Company (“TIC”). Id. at *1.

    Roche alleged that Dobberstein constructed the roofing system in a negligent manner in violation of the subcontract. Roche claims it incurred additional costs to repair structural damage to the roofing system as a result of Dobberstein’s negligent work. In order to cover said damage, Roche tendered insurance claims to OneBeacon and TIC.

    Read the full story…

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


    Record-Setting Construction in Fargo

    November 7, 2012 — CDJ Staff

    Prairie Business reports that Fargo is experiencing the most new construction it has ever seen, totaling $434 million in value, which exceeds the previous high in 2006 of $428 million. Many of the construction starts are for single family homes, although there is also an increase in construction of apartments and townhomes.

    The Home Builders Association of Fargo-Moorhead also noted that there was also a large of remodeling projects. Terry Becker, the president of the HBA, said that “remodeling is just huge right now.”

    Read the full story…


    A Lien Might Just Save Your Small Construction Business

    April 4, 2011 — Douglas Reiser in the Builders Counsel Blog

    Many owners incorrectly believe that payment to the general contractor gets the owner off the hook for payment to subcontractors and suppliers. This assumption sometimes fosters the irresponsible owner, who fails to ensure that everyone is getting paid. Fortunately for those contractors further down the contracting chain, this assumption is incorrect.

    Suppliers and subcontractors can file a lien to secure payment for their labor and materials. A filing party must offer proper notice (if applicable) and file an adequate and timely lien in the County where the work is performed. You can read our earlier posts on these topics by following this link.

    A lien notice and a lien put an owner on notice that your business has provided labor and/or materials for the improvement of the owner’s property (See RCW 60.04.031 for more info). If the owner fails to take care to ensure that your business is paid the law mandates that the owner may have to pay twice.

    Read the full story...

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


    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.)  

    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.


    Kansas Man Caught for Construction Scam in Virginia

    December 20, 2012 — CDJ Staff

    A Virginia court sent charges of construction fraud against a Kansas man to a grand jury. Larry Foster visited homes in Bedford County, Virginia, tested the water, and told homeowners that they needed new water filtration systems. The homeowners paid, but Mr. Foster never delivered. One homeowner who testified paid him $1,690. Another paid even more, giving $3,090 to Mr. Foster. In order to dupe his victims, Foster used the address of a chiropractor as a business address, unbeknownst to the actual business there.. He is wanted for charges in other states as well.

    Read the full story…


    Construction Defect Litigation at San Diego’s Alicante Condominiums?

    March 25, 2011 — Alicante HOA Website

    According to recent posts in the Alicante HOA website, construction experts and legal counsel have been retained. The HOA board has been informed that testing of a variety of the building’s components are underway or will begin in the near future.

    Read More...


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

    April 27, 2011 — April 27, 2011, by CDCoverage.com

    In Markel American Ins. Co. v. Lennar Corp., No. 14-10-00008-CV (Tex. Ct. App. April 19, 2011), insured homebuilder Lennar filed suit against its insurer Markel seeking recovery of costs incurred by Lennar to repair water damage to homes resulting from defective EIFS siding. Following a jury trial, judgment was entered in favor of Lennar and against Markel. On appeal, the intermediate appellate court reversed. Applying Texas law, the court first held that Lennar failed to satisfy its burden of allocating damages between covered and uncovered. In a prior decision, the court had held that, while the costs incurred by Lennar for the repair of the resulting water damage

    Read the full story…

    Reprinted courtesy of CDCoverage.com


    Georgia Supreme Court Rules Construction Defects Can Constitute an Occurrence in CGL Policies

    April 5, 2011 — April 5, 2011 Beverley BevenFlorez - Construction Defect Journal

    Recently, the Supreme Court of Georgia reversed the decision in American Empire Surplus Lines Insurance Company v Hathaway Development Company, Inc. stating that because Whisnant’s faulty workmanship caused damage to the surrounding properties, the construction defects constituted “occurrences” under the Commercial General Liability (CGL) policy. Unlike the South Carolina Supreme court ruling in the case of Crossman Communities v Harleysville Mutual, the Georgia Supreme Court stated that an accident can happen intentionally if the effect is not the intended result.

    Interestingly, the only dissenting judge, J. Melton, disagreed with his colleagues on the basis that “although the term ‘accident’ is not specifically defined in the policy, it is axiomatic that an ‘accident’ cannot result from ‘intentional’ behavior.” It is clear that what constitutes an occurrence in CGL policies is still being hotly debated.

    Read the full story...


    Are Construction Defects Covered by Your General Liability Policy?

    July 10, 2012 — CDJ Staff

    Construction firms are finding that their insurers are denying construction defect claims and the courts are siding with the insurers, according to Kelly M. Gindele, writing in the Martindale-Hubble Legal Library. Ms. Gindele notes that when construction defect claims are not covered, firms can end up with “multi-million dollar claims” that it has to pay “out of its own pocket.” She notes that in Kentucky and Ohio, if “the insured’s work causes an unforeseen and unintended event to occur?Ķthere is not occurrence under the policy.” Further, if there is an occurrence, the court will “look for an exception to coverage.”

    She also notes that contractors may not hold sufficient coverage, either by limiting the amounts or the time. She notes that while “insurers generally try to limit coverage for defect claims to one year,” that “construction defects may not be found in a year’s time.”

    Ms. Ginele recommends that contractors “hire an insurance company with extensive experience in this field” and “independent legal counsel with insurance knowledge,” to avoid finding themselves “with limited or even no coverage when it needs it most.”

    Read the full story…


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

    May 26, 2011 — Tred R. Eyerly, Insurance Law Hawaii

    On May 17, 2011, South Carolina passed legislation to combat the restrictive interpretation of what constitutes an "occurrence" under CGL policies. S.C. Code Ann. sec. 38-61-70.

    The legislation reversed a decision by the state's Supreme Court issued earlier this year. See Crossman Communities of North Carolina, Inc. v. Harleysville Mut. Ins. Co., 2011 W.L. 93716 (S.C. Jan. 7, 2011). Crossman had overruled an earlier decision by the South Carolina Supreme Court that holding that defective construction was an “occurrence.” Crossman, however, reversed course, holding that damages resulting from faulty workmanship were the “natural and probable cause” of the faulty work and, as such, did not qualify as an “occurrence.”

    Read the full story…

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


    Plaintiffs In Construction Defect Cases to Recover For Emotional Damages?

    March 16, 2011 — March 16, 2011 - Construction Defect Journal Staff

    A recent post to the Markusson, Green, Jarvis Blog reports on an important appeals decision which promises to impact construction defect litigation in Colorado.

    The post provides analysis on the recovery of inconvenience damages. The focus of the piece is centered on Hildebrand v. New Vista Homes II, LLC, 08CA2645, 2010 WL 4492356 (Colo. Ct. App. Nov. 10, 2010), wherein it was held that " the plain language of Construction Defect Action Reform Act permits recovery of damages for inconvenience, and that the trial court did not err by allowing inconvenience damages to go to the jury".

    According to the MGJ Blog "The Hildebrand decision is important because it provides Construction Defect Plaintiffs with a foothold for collecting emotional damages. While several questions of law remain as to who or under exactly what circumstances a Plaintiff may recover these types of damages, the Hildebrand case has clearly set forth that emotional damages may be considered as part of actual damages pursuant to CDARA."

    Read Full Story...


    BUILD Act Inching Closer To Reality

    July 8, 2011 — Douglas Reiser, Builders Counsel

    A select group of Senators have launched a marketing campaign for the BUILD Act. If this is the first you are hearing about the BUILD Act, do not fret. The Act still has a long way to go, but if successful it would bring a national infrastructure bank.

    I have been fascinated with the concept of a national infrastructure bank for quite some time. The idea has been around since the Clinton years ? and perhaps beyond. The Act’s purpose is to create a national bank (American Infrastructure Financing Authority) to provide loans and loan guarantees to encourage private investment in upgrading America’s infrastructure. For a number of years, we have seen similar legislation float around Congress. But, none of those initiatives have gained as much traction as BUILD.

    Read the full story…

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


    Amerisure Case to be Heard by Texas Supreme Court

    August 16, 2012 — CDJ Staff

    The Fifth Circuit Court of Appeals has withdrawn its decision in Ewing Construction Company Inc. v. Amerisure Insurance Company, according to Insurance Developments. The Fifth Circuit had concluded that “a contractor’s obligation to perform its contact in a workmanlike manner constituted an ‘assumption of liability.’” Two questions have now been certified to the Texas Supreme Court. The dissent in the case argued the majority had misread Texas Supreme Court precedent. The court will now have the opportunity to clarify this matter.

    Read the full story…


    Insurer Rejects Claim on Dolphin Towers

    July 22, 2011 — CDJ Staff

    A year after residents were forced to leave Dolphin Towers in Sarasota, Florida because of concrete problems, some residents are defaulting on their obligations, abandoning their units. In June, the building’s insurer, Great American, rejected a claim, arguing that the building’s problems were due to latent defects, not covered under the policy. Repair estimates, previously put at $8.2 million, have now risen to $11.5 million. If homeowners cover this cost, it would require an assessment of about $100,000 for each unit.

    About thirty owners are in arrears on dues and fees. Charlotte Ryan, the president of the Dolphin Tower board, wrote to owners, that “the board will have no choice but to lien your property and pursue foreclosure if you do nothing to bring your delinquencies up to date.” However, as homeowners default, the funding for repairs is imperiled. The board has already spent more than $500,000 on shoring up the building and hiring consultants. Their lawyers, on the other hand, are working on a contingency basis.

    Read the full story…


    Construction Law Client Alert: California Is One Step Closer to Prohibiting Type I Indemnity Agreements In Private Commercial Projects

    June 15, 2011 — Haight Brown & Bonesteel, LLP

    On June 1, 2011 by majority vote, the California Senate passed Senate Bill 474, which would amend Civil Code section 2782, and add Civil Code section 2782.05. The passage of this new law is a critical development for real estate developers, general contractors and subcontractors because it will affect how these projects are insured and how disputes are resolved.

    Civil Code section 2782 was amended in 2007 to prohibit Type I indemnity agreements for residential projects only. Since 2007, various trade associations and labor unions have lobbied to expand those very same restrictions to other projects. These new provisions apply to contracts, entered into after January 1, 2013, that are not for residential projects, and that are not executed by a public entity. The revisions provide that any provision in a contract purporting to indemnify, hold harmless, and defend another for their negligence or other fault is against public policy and void. These provisions cannot be waived.

    A provision in a contract requiring additional insured coverage is also void and unenforceable to the extent it would be prohibited under the new law. Moreover, the new law does not apply to wrap-up insurance policies or programs, or a cause of action for breach of contract or warranty that exists independently of the indemnity obligation.

    The practical impact of this new law is that greater participation in wrap-up insurance programs will likely result. While many wrap-up programs suffer from problems such as insufficient limits, and disputes about funding the self-insured retention, the incentive for the developer or general contractor to utilize wrap-up insurance will be greater than ever before because they will no longer be able to spread the risk of the litigation to the trades and the trade carriers.

    Read the full story…

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


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

    May 24, 2011 — CDJ Staff

    Judge Patricia J. Cottrell, ruling on the case Roger Wilkes, et al. v. Shaw Enterprises, LLC, in the Tennessee Court of Appeals, upheld the trial court’s conclusion that “the builder constructed the house in accordance with good building practices even though it was not in strict conformance with the building code.” However, Judge Cottrell directed the lower court to “award to Appellants reasonable attorneys' fees and costs incurred in their first appeal, as determined by the trial court.”

    Judge Cottrell cited in her opinion the contract which specified that the house would be constructed “in accordance with good building practices.” However, after the Wilkes discovered water leakage, the inspections revealed that “that Shaw had not installed through-wall flashing and weep holes when the house was built.” The trial court concluded that:

    “Separate and apart from the flashing and weep holes, the trial court concluded the Wilkeses were entitled to recover damages for the other defects they proved based on the cost of repair estimates introduced during the first and second trials, which the court adjusted for credibility reasons. Thus, the trial court recalculated the amount the Wilkeses were entitled to recover and concluded they were entitled to $17,721 for the value of repairs for defects in violation of good business practices, and an additional 15%, or $2,658.15, for management, overhead, and profit of a licensed contractor. This resulted in a judgment in the amount of $20,370.15. The trial court awarded the Wilkeses attorneys” fees through the Page 9 first trial in the amount of $5,094.78 and discretionary costs in the amount of $1,500. The total judgment following the second trial totaled $26,973.93.”

    In this second appeal, Judge Cottrell concluded, that “the trial court thus did not have the authority to decide the Wilkeses were not entitled to their attorneys” fees and costs incurred in the first appeal.”

    Read the court’s decision


    Public Relations Battle over Harmon Tower

    October 23, 2012 — CDJ Staff

    Tutor Pernini claims that CityCenter is portraying the construction firm as “the scum of the earth” in an attempt to influence eventual jurors, according to an article at Vegas Inc. The contractor’s attorneys have requested information regarding the public relations efforts of MGM Resorts and CityCenter, characterizing CityCenter’s PR as a “litigation spin doctor.”

    CityCenter has requested that at least one subpoena be canceled. Judge Elizabeth Gonzales has already allowed one to go through, although she has noted that Perini cannot request documents from CityCenter’s lawyers to the litigation consultants under attorney/client privilege. Tutor Perini claims that in 2010, Patricia Glaser, who has represented CityCenter, said her goal was to portray Perini as “the scum of the earth,” and make that certain that judges and juries would not “adopt the world view espoused by the opposing party.”

    Read the full story…