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Real Estate & Construction News Roundup (1/10/24) – New Type of Nuclear Reactor, Big Money Surrounding Sports Stadiums, and Positivity from Fannie Mae’s Monthly Consumer Survey

February 05, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, the commercial real estate market poses a risk to financial stability, New York City moves towards net-zero building emissions, workers at several Los Angeles area hotels tentatively agree to a new contract, and more!

• For the first time since Fannie Mae’s monthly consumer survey was launched in 2010, more homeowners overall believe rates will go down rather than up. (Diana Olick, CNBC)
• According to U.S. regulators, the commercial real estate market is potentially a leading risk to financial stability in 2024, noting rising vacancy rates, declining values of office properties, high interest rates and the possibility of an economic slowdown. (Jim Tyson, CFO Dive)
• New York City will soon begin penalizing owners of buildings that emit too much greenhouse gas — a move toward requiring net-zero building emissions by 2050. (Jennifer Kingson, Axios)

Read the full story...
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Congratulations to BWB&O’s Newport Beach Team for Prevailing on a Highly Contested Motion to Quash!

January 08, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Congratulations to Newport Partners Tyler Offenhauser and Jonathan Cothran, and Associate Anisha Kohli, who recently prevailed on behalf of BWB&O’s client before the Orange County Superior Court on a highly contested Motion to Quash Service based on Plaintiff’s failure to timely file and serve a DOE Amendment, naming our client. BWB&O’s client was the owner of a building where Plaintiff, a licensed electrician, was electrocuted while performing an upgrade to the building’s electrical infrastructure. Plaintiff’s original lawsuit named only the building’s tenant, who was also represented by BWB&O. BWB&O was successful earlier this year on a Motion for Summary Judgment under the Privette Doctrine and won judgment on behalf of the client/tenant. While that MSJ was pending, Plaintiff surreptitiously added the building’s owner to the suit with a DOE Amendment, after several months earlier learning the owner and then tenant were entities operated by the same individual. However, Plaintiff never informed counsel or any other party of the filing. Moreover, after the MSJ was granted, Plaintiff then waited several more months to serve the building’s owner. Read the full story...
Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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Illinois Supreme Court Holds that Constructions Defects May Constitute “Property Damage” Caused By An “Occurrence” Under Standard CGL Policy, Overruling Prior Appellate Court Precedent

January 08, 2024 — Jason Taylor - Traub Lieberman Insurance Law Blog
On November 30, 2023, the Illinois Supreme Court issued an opinion that overturned precedent in Illinois regarding whether faulty workmanship that only caused damage to the insured’s own work constituted “property damage” caused by an “occurrence” under Illinois law. In Acuity v. M/I Homes of Chicago, LLC, 2023 IL 129087, the Illinois Supreme Court considered whether Acuity, a mutual insurance company, had a duty to defend its additional insured, M/I Homes of Chicago, LLC (M/I Homes), under a subcontractor’s commercial general liability (CGL) policy in connection with an underlying lawsuit brought by a townhome owners’ association for breach of contract and breach of an implied warranty of habitability. The Cook County Circuit Court granted summary judgment in favor of Acuity finding no duty to defend because the underlying complaint did not allege “property damage” caused by an “occurrence” under the initial grant of coverage of the insurance policy. The appellate court reversed and remanded, finding that Acuity owed M/I Homes a duty to defend. The Illinois Supreme Court affirmed, in part, holding construction defects to the general contractor’s own work may constitute “property damage” caused by an “occurrence” under the standard CGL Policy. This is significant as it overrules prior Illinois precedent finding that repair or replacement of the insured’s defective work does not satisfy the initial grant of coverage of a CGL Policy. By way of background, the underlying litigation stems from alleged construction defects in a residential townhome development in the village of Hanover Park, Illinois. The townhome owners’ association, through its board of directors (the Association) subsequently filed an action on behalf of the townhome owners for breach of contract and breach of the implied warranty of habitability against M/I Homes as the general contractor and successor developer/seller of the townhomes. The Association alleged that M/I Homes’ subcontractors caused construction defects by using defective materials, conducting faulty workmanship, and failing to comply with applicable building codes. As a result, “[t]he [d]efects caused physical injury to the [t]ownhomes (i.e. altered the exterior’s appearance, shape, color or other material dimension) after construction of the [t]ownhome[ ] was completed from repeated exposure to substantially the same general conditions.” The defects included “leakage and/or uncontrolled water and/or moisture in locations in the buildings where it was not intended or expected.” The Association alleged that the “[d]efects have caused substantial damage to the [t]ownhomes and damage to other property.” Read the full story...
Reprinted courtesy of Jason Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com

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Massive Danish Hospital Project Avoids Fire Protection Failures with Imerso Construction AI

December 23, 2023 — Aarni Heiskanen - AEC Business
Ensuring regulatory compliance of firewall constructions is getting a high-tech boost. Over the past 16 months, the construction team responsible for the iconic new Nyt Hospital Nordsjælland near Copenhagen used Imerso construction AI technology to achieve remarkable results. By using Imerso, the team enhanced work productivity while preventing costs and delays worth €5.2 million during the construction of the superstructure. Inspired by this success, the team led by Project Manager Anders Kaas has since been eager to explore the potential of the technology in other areas. The opportunity arose to address a topic that has traditionally posed significant challenges and expenses in numerous construction projects – ensuring regulatory compliance of fire barriers and firewall constructions. Read the full story...
Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Insurer's Bad Faith is Actionable Tort for Purposes of Choice of Law Analysis

January 08, 2024 — Janeen M. Thomas - Saxe Doernberger & Vita, P.C.
When an insurer handles a claim in violation of its duty to act in good faith, policyholders are often eager to sue the insurer for bad faith, seeking extra contractual damages. Before filing suit, however, it is critical that policyholders consider what state’s law applies to the bad faith claim. In the recent case of Scott Fetzer Co. v. Am. Home Assurance Co., Inc.1, the Ohio Supreme Court held that Restatement (Second), Conflict of Laws, § 145 (“Section 145"), governed the choice of law dispute, which meant that the insured would be able to obtain discovery of Travelers’ claims-handling procedures, guidelines, internal documents, and communications relating to the claim.2 The insured, Scott Fetzer, argued that the materials were discoverable because documents evidencing an insurer’s bad faith are not protected by attorney-client privilege in Ohio. In response, Travelers argued that the laws of either Indiana (the place where the parties entered into the insurance contract), or Michigan (the location of the insured risk) governed the discovery dispute because Restatement (Second) § 193 (“Section 193”) governs the choice of law analysis for claims that “arise out of insurance contracts.”3 The laws of either Indiana or Michigan were more favorable for Travelers because Indiana does not allow discovery of materials covered by attorney-client privilege, and Michigan does not even recognize a cause of action for bad faith. Read the full story...
Reprinted courtesy of Janeen M. Thomas, Saxe Doernberger & Vita, P.C.
Mr. Thomas may be contacted at JThomas@sdvlaw.com

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Vietnam Expands Arrests in Coffee Region Property Probe

February 19, 2024 — Mai Ngoc Chau - Bloomberg
Vietnam authorities detained the Communist Party chief of coffee-producing province Lam Dong as they expand an investigation into alleged bribery tied to a tourist and residential project, the public security ministry said in a website statement. Party chief Tran Duc Quan was arrested for allegedly abusing his power and position, according to the statement. Quan allegedly violated the law while giving instructions to the Dai Ninh property project in the province, causing severe consequences, it said. A Lam Dong Provincial Party Committee representative declined to provide a comment about the arrest. A representative for Quan was not available. Read the full story...
Reprinted courtesy of Mai Ngoc Chau, Bloomberg

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HB24-1014: A Warning Bell for Colorado Businesses Amid Potential Consumer Protection Changes

February 26, 2024 — Jennifer Brockel - Colorado Construction Litigation Blog
HB24-1014 stands to eliminate the longstanding public impact requirement found within C.R.S. § 6-1-105(2) of the Colorado Consumer Protection Act (“CCPA”). While this proposed change professes the noblest intentions of “public peace, health or safety,” its effect portends a large detriment to Colorado business and an astronomical payday for Colorado plaintiffs’ attorneys. Brief History For over 100 years, Colorado recognized the need to protect its citizens from deceptive trade practices through a mechanism akin to the Federal Trade Commission Act that preceded it. In 1915, Colorado passed legislation prohibiting “untrue, deceptive, or misleading” advertising. C.L. 1921 § 6942 evolved into the broader protections afforded in the more recent consumer protection law from 1969 that prohibited “deceptive trade practices, and included protections from unfair, unconscionable, and deceptive acts or practices.” Read the full story...
Reprinted courtesy of Jennifer Brockel, Higgins, Hopkins, McLain & Roswell, LLC
Ms. Brockel may be contacted at brockel@hhmrlaw.com

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Portions of Policyholder's Expert's Opinions Excluded

November 13, 2023 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court granted, in part, the insurer's motion to exclude portions of expert testimony. Tundra M. Holdings, LLC v. Markel Ins. Co., 2023 U.S. Dist. LEXIS 139952 (D. Alaska Aug. 10, 2023). Plaintiff alleged a building it owned suffered damages consisting of building roof failure due to snow load. Plaintiff submitted a claim to Markel for its loss. Plaintiff hired an engineering firm to conduct an inspection. The recommendation was to install snow guards and that 28 rafters be replaced with new beams. The evaluation did not state that the recommendation was required by law or ordinance. Nor did the evaluation make mention of replacing the metal roof on the building or anything about the water system or sprinkler system. Plaintiff then obtained an estimate of $687,500 for roof repair/replacement, store front repair, a sprinkler system installer and a water system upgrade. Read the full story...
Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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