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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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    Building Industry Association Southern California - Desert Chapter
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    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
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    Irvine, CA 92614
    http://www.biasc.org

    Building Industry Association Southern California - Orange County Chapter
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    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
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    Santa Clarita, CA 91355


    Building Industry Association Southern California - Building Industry Association of S Ca Antelope Valley
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    Construction Expert Witness News and Information
    For Anaheim California

    Alabama “occurrence” and subcontractor work exception to the “your completed work” exclusion

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

    Retaining Wall Contractor Not Responsible for Building Damage

    Contractual Liability Exclusion Bars Coverage

    Ohio Court Finds No Coverage for Construction Defect Claims

    Death of Construction Defect Lawyer Ruled a Suicide

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

    Illinois Court Determines Insurer Must Defend Negligent Misrepresentation Claim

    Insurer Not Entitled to Summary Judgment on Construction Defect Claims

    When Does a Claim Against an Insurance Carrier for Failing to Defend Accrue?

    Largest Per Unit Settlement Ever in California Construction Defect Case?

    Florida Property Bill Passes Economic Affairs Committee with Amendments

    Recent Case Brings Clarity and Questions to Statute of Repose Application

    No Coverage For Damage Caused by Chinese Drywall

    Water Drainage Case Lacks Standing

    Colorado Court of Appeals Finds Damages to Non-Defective Property Arising From Defective Construction Covered Under Commercial General Liability Policy

    Residential Construction Down in San Diego

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

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

    Businesspeople to Nevada: Revoke the Construction Defect Laws

    Godfather Charged with Insurance Fraud

    Insurer Has Duty to Defend in Water Intrusion Case

    Texas “Loser Pays” Law May Benefit Construction Insurers

    Construction Firm Charged for Creating “Hail” Damage

    Utah Construction Defect Claims Dependant on Contracts

    No Coverage for Property Damage That is Limited to Work Completed by Subcontractor

    District Court Awards Summary Judgment to Insurance Firm in Framing Case

    Construction Defects Are Occurrences, Says Georgia Supreme Court

    Builder Waits too Long to Dispute Contract in Construction Defect Claim

    Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii

    Texas Court of Appeals Conditionally Grant Petition for Writ of Mandamus to Anderson

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

    When is a Construction Project truly “Complete”? That depends. (law note)

    Subcontractor Not Liable for Defending Contractor in Construction Defect Case

    The King of Construction Defect Scams

    Preparing For the Worst with Smart Books & Records

    $5 Million Construction Defect Lawsuit over Oregon Townhomes

    Mortar Insufficient to Insure Summary Judgment in Construction Defect Case

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

    Delays in Filing Lead to Dismissal in Moisture Intrusion Lawsuit

    Construction Defects Leave Animal Shelter Unusable

    Preventing Costly Litigation Through Your Construction Contract

    After $15 Million Settlement, Association Gets $7.7 Million From Additional Subcontractor

    Ohio Casualty’s and Beazer’s Motions were Granted in Part, and Denied in Part

    Construction Demand Unsteady, Gains in Some Regions

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

    California Posts Nation’s Largest Gain in Construction Jobs

    Contract Not So Clear in South Carolina Construction Defect Case

    Southern California Lost $8 Billion in Construction Wages

    Insurers Reacting to Massachusetts Tornadoes

    Florida Construction Defect Case Settled for $3 Million

    OSHA Cites Construction Firm for Safety Violations

    Homebuilding Still on the Rise

    Tennessee Court: Window Openings Too Small, Judgment Too Large

    Pennsylvania Court Extends Construction Defect Protections to Subsequent Buyers

    Florida “get to” costs do not constitute damages because of “property damage”

    Construction Defect Lawsuit Stayed by SB800

    Celebrities Lose Case in Construction Defect Arbitration

    Exact Dates Not Needed for Construction Defect Insurance Claim

    New Buildings in California Soon Must Be Greener

    Local Government Waives Construction Fees to Spur Jobs

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

    The Flood Insurance Reform Act May be Extended to 2016

    Contractor Burns Down Home, Insurer Refuses Coverage

    Faulty Workmanship Exclusion Does Not Bar Coverage

    Nevada Senate Rejects Construction Defect Bill

    Washington Supreme Court Sides with Lien Claimants in Williams v. Athletic Field

    South Carolina “occurrence” and allocation

    School District Settles Construction Lawsuit

    Arizona Supreme Court Confirms Eight-Year Limit on Construction Defect Lawsuits

    Florida Contractor on Trial for Bribing School Official

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

    Construction Defect Notice in the Mailbox? Respond Appropriately

    Construction Defects Lead to Demolition

    Gut Feeling Does Not Disqualify Expert Opinion

    CC&Rs Not the Place for Arbitration Agreement, Court Rules

    Discovery Ordered in Nevada Construction Defect Lawsuit

    Contractor Removed from Site for Lack of Insurance

    Florida Chinese drywall, pollution exclusion, “your work” exclusion, and “sistership” exclusion.

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

    Damage During Roof Repairs Account for Three Occurrences

    Boston’s Tunnel Project Plagued by Water

    General Contractor/Developer May Not Rely on the Homeowner Protection Act to Avoid a Waiver of Consequential Damages in an AIA Contract

    Construction Delayed by Discovery of Bones

    2011 West Coast Casualty Construction Defect Seminar – Recap

    Pier Fire Started by Welders

    MGM Seeks to Demolish Harmon Towers

    Harmon Towers Case to Last into 2014

    There Is No Non-Delegable Duty on the Part of Residential Builders in Colorado

    Construction Workers Unearth Bones
    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. Drawing from this considerable body of experience, BHA provides construction related trial support and expert services to Anaheim's most recognized construction litigation practitioners, commercial general liability carriers, owners, construction practice groups, as well as a variety of state and local government agencies.









    Construction Expert Witness News & Info
    Anaheim, California

    Court Voids Settlement Agreement in Construction Defect Case

    September 1, 2011 — CDJ Staff

    A U.S. District Court Judge in Florida has ruled in favor of a company that sought to void a settlement agreement. The case, Water v. HDR Engineering, involved claims of construction defects at Florida’s C.W. Bill Young Regional Reservoir. The Tampa Bay Water Authority attributed these to both HDR Engineering’s design and Bernard Construction Company which had built the embankment. Bernard Construction filed a complaint against their subcontractor, McDonald.

    Tampa Bay Water settled with Bernard Construction and McDonald, in an agreement that set a minimum and maximum settlement, but also would “prohibit Barnard and McDonald from presenting any evidence on several claims and positions of TBW, to require Barnard to call certain witnesses at trial, to preclude Barnard and McDonald from calling other witnesses, and to restrict the filing of trial and post-trial motions.” HDR Engineering moved to void the agreement as collusive.

    The judge that the agreement¬? contained “133 paragraphs of ‘Agreed Facts’ that the parties stipulated would survive any order declaring the Settlement Agreement void or unenforceable.” He characterized these as stipulating “that Barnard neither caused nor contributed to TBW’s damages.” HDR motioned that a summary judgment be given to Barnard Engineering.

    The court found that “the evidence identified by TBW is patently insufficient to survive summary judgment.” Further, TBW’s expert initially held Barnard responsible for “lenses, pockets, streaks and layers within the embankment,” but then later withdrew this assigning the responsibility to HDR. Further, the court notes that, “TBW’s arguments that lenses, pockets, streaks, and layers in the soil wedge caused or contributed to its damages and that Barnard is liable for those damages have been foreclosed by the Agreed Facts.”

    As TBW failed to provide sufficient evidence to withstand summary judgment, the court granted summary judgment, mooted the claim against McDonald, and terminated the agreement between TBW and the other parties.

    Read the court’s decision…


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

    June 19, 2012 — Chad Johnson

    In D.R. Horton, Inc.-Denver v. The Travelers Indem. Co. of Am., 10-CV-02826-WJM-KMT, 2012 WL 527204 (D. Colo. Feb. 16, 2012), the court was asked to rule on Travelers’[1] motion to dismiss D.R. Horton, Inc. ?Äì Denver’s (“DRH”) claim that Travelers violated the Colorado Consumer Protection Act (“CCPA”).

    In the underlying construction defect case (“CD case”), DRH, as the developer and general contractor of a construction project, tendered the defense of the CD case to certain subcontractors and to Travelers as an insurer to those subcontractors. Travelers accepted the duty to defend DRH. DRH hired counsel to defend it, and the attorney fees and costs of suit were billed to Travelers. However, for a period of over five years, Travelers failed to actually pay any portion of the defense of DRH. Finally, on October 31, 2008, Travelers offered checks for payment of only 4% of the costs and fees incurred. DRH then returned the checks to Travelers and provided Travelers with authority to support its position that the amounts in Travelers’ checks were inadequate. Thereafter, Travelers dug its heels in, and resubmitted the same checks.

    DRH was then forced to file a coverage action against Travelers for declaratory judgment, breach of contract, bad faith breach of insurance contract, and deceptive trade practices under the CCPA. In its motion to dismiss DRH’s CCPA claim, Travelers’ argued that DRH failed to plead specific facts that Travelers engaged in a deceptive trade practice under C.R.S. § 6-1-105, and DRH failed to plead sufficient facts showing that Travelers’ actions significantly affect the public ?Äì a necessary element of a CCPA claim.

    Read the full story…

    Reprinted courtesy of Chad Johnson, Higgins, Hopkins, McLain & Roswell, LLC. Mr. Johnson can be contacted at johnson@hhmrlaw.com


    Recent Case Brings Clarity and Questions to Statute of Repose Application

    August 16, 2012 — Douglas Reiser, Builders Counsel

    I have often chatted about the Washington Statute of Repose on this blog. The Statute of Repose prevents construction claims, for the most part, from being raised 6 years from the date of substantial completion or termination. Well, a recent Court of Appeals case dove deep into the specific determinative factors that tell us when to start the clock. It certainly raises questions about how long we really have to file suit.

    The Statute of Repose has been a frequent topic here, so I will simply direct you to my prior post for further information on how this law works. A recent post was published about a lawsuit that might raise some questions about when and how the clock begins to roll, and claim periods begin to diminish.

    Read the full story…

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


    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.


    Court Will Not Compel Judge to Dismiss Construction Defect Case

    August 2, 2012 — CDJ Staff

    The Fourteenth Court of Appeals of Texas has denied a petition for a writ of mandamus. The parties involved, Bonner Ball, Thomas Zenner, and Rallin Welch, are lmited partners of Black Diamond Builders, LLP. Black Diamond is the recipient of a lawsuit from Grier and Camille Patton, for whom Black Diamond built a home. The Pattons are alleging construction defects.

    The Black Diamond partners argue that Judge Jeff Shadwick, presiding judge of the 55th District Court of Harris County, Texas should have granted their motion to dismiss. They sought to have the Fourteenth Court of Appeals compel that action.

    The Black Diamond Partners claims that “the homowners failed to satisfy statutory prerequisites before filing suit, and dismissal of the suit was automatic under the applicable statues in effect at the time the Pattons noticed alleged defects in their home.”

    The court noted that “a trial court will be held to have abused its discretion only if the party requesting mandamus relief establishes that the trial court could have reached but one decision.” The court did not concur with this and denied the petition for a writ of mandamus.

    Read the court's decision…


    A Call to Washington: Online Permitting Saves Money and the Environment

    October 28, 2011 — Douglas Reiser, Builders Counsel

    Here’s some good news for Oregon contractors:  Electronic Permitting is here. That’s right, no more standing in line with folders full of printed submittals and waiting all day for your permit. The click of a few buttons and you are in business. Great news, right? Unfortunately, Oregon isn’t sharing that celebration with Washington. So I say - why not?

    Last week, the State of Oregon released its new ePermitting online interface. The website allows contractors, owners and even local building departments to create an account, submit building plans and procure permits. With your account, you can track the progress of submissions, print documents and get posting information.

    The state ran a limited test version in the City of Florence since 2009, working out the kinks. Perhaps the most impressive result of the new system is that Oregon tackled the task of coagulating a local process into one central location.

    Read the full story...

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


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

    May 10, 2012 — CDJ Staff

    The case Illinois National Insurance Co. v Nordic PCL, et al. “involves a dispute about whether insurance benefits are available to a general contractor who built structures that allegedly have construction defects. Plaintiffs Illinois National Insurance Company (‘Illinois National’) and National Union Fire Insurance Company of Pittsburgh, PA (‘National Union’) (collectively, the ‘Insurers’), commenced this action for declaratory relief against Defendant Nordic PCL Construction, Inc., f/k/a Nordic Construction, Ltd. ("Nordic"), on August 23, 2011.”

    The court was asked to rule on a long list of motions: “Counterclaim Defendants’ Request for Judicial Notice in Support of Their (1) Motion to Dismiss the Counterclaim and (2) Motion to Strike Portions of the Counterclaim, ECF No. 16 (‘Request for Judicial Notice’); Counterclaim Defendants’ Motion to Dismiss Counterclaim Filed October 24, 2011, ECF No. 14 (‘Motion to Dismiss Counterclaim’); Counterclaim Defendants’ Motion to Strike Portions of the Counterclaim Filed October 24, 2011, ECF No. 15 (‘Motion to Strike’); Third-Party Defendant Marsh USA, Inc.’s Motion to Dismiss or, in the Alternative, Stay Proceedings in Favor of Pending State Action, ECF No. 33 (‘Marsh’s Motion To Dismiss Or Stay’); Defendant and Third-Party Plaintiff Nordic PCL Construction, Inc., f/k/a Nordic Construction Ltd.’s Substantive Joinder to Third-Party Defendant Marsh USA Inc.’s Motion to Dismiss or, in the Alternative, Stay Proceedings in Favor of Pending State Action, ECF No. 36 (‘Nordic’s Joinder’); and Third-Party Defendant Marsh USA, Inc.’s Motion for Judgment on the Pleadings on Counts V and VI of Defendant/Third-Party Plaintiff Nordic PCL Construction, Inc.’s Third-Party Complaint, ECF No. 29 (‘Marsh’s Motion for Judgment on the Pleadings’).”

    In result, the court reached the following decisions: “The court GRANTS IN RELEVANT PART the Insurers’ Request for Judicial Notice to the extent it covers matters relevant to these motions; GRANTS IN PART the Insurers’ Motion to Dismiss Counterclaim, but gives Nordic leave to amend the Counterclaim in certain respects; DENIES the Insurers’ Motion to Strike; DENIES Marsh’s Motion To Dismiss Or Stay and Nordic’s Joinder; and GRANTS Marsh’s Motion for Judgment on the Pleadings.”

    The court provides a bit of background on the case: “This action arises out of alleged construction defects involving two projects on which Nordic acted as the general contractor. Nordic is a defendant in a pending state court action with respect to one of the projects and says it spent more than $400,000 on repairs with respect to the other project. Nordic tendered the defense of the pending state court action to the Insurers and sought reimbursement of the cost of repairs already performed. The Insurers responded by filing this action to determine their rights under the insurance policies issued to Nordic.”

    Furthermore, the court presented a brief procedural history: “The Insurers commenced this declaratory action in this court on August 23, 2011. The Complaint asserts two claims, one seeking a declaration that the Insurers have no duty to provide a defense or indemnification regarding the Safeway Action, the other seeking such a declaration regarding the Moanalua Claims. Along with its Answer, Nordic filed a Counterclaim against the Insurers. The Counterclaim asserts breach of contract, breach of the covenant of good faith and fair dealing, misrepresentations and omissions of material fact, and bad faith, and seeks declaratory relief against the Insurers.”

    The procedural history continues: “Nordic also filed a Third-Party Complaint against Marsh, the broker that had procured the Policies from the Insurers for Nordic. Nordic alleges that it reasonably believed that the Policies would provide completed operations insurance coverage for the types of construction defects alleged in the Safeway Action and Moanalua Claims. The Third-Party Complaint asserts breach of contract, negligence, promissory estoppel, breach of fiduciary duties, implied indemnity, and contribution and equitable subrogation.”

    In conclusion, “The court GRANTS IN RELEVANT PART the Insurers’ Request for Judicial Notice. With regard to the Insurers’ Motion to Dismiss Counterclaim, the court GRANTS the motion as to Count I (breach of contract), Count II (duty of good faith and fair dealing), Count III (fraudulent and negligent misrepresentation), the portion of Count IV (bad faith) premised on fraud, and Count IV (declaratory relief). The court DENIES the motion as to Count IV (bad faith) that is not premised on fraud. Except with respect to the "occurrence" issue, which the court disposes of here on the merits, and Count V, which concerns only a form of relief, Nordic is given leave to amend its Counterclaim within three weeks of the date of this order. The court DENIES the Insurers’ Motion to Strike, DENIES Marsh’s Motion to Dismiss or Stay and Nordic’s Joinder, and GRANTS Marsh’s Motion for Judgment on the Pleadings with respect to Counts V and VI of the Third-Party Complaint.”

    Read the court’s decision…


    New Web Site Tracks Settled Construction Defect Claims

    June 19, 2012 — CDJ Staff

    Peter Lissner, a former Nevada homebuilder, has created a new site to help track homes that have been involved in construction defect litigation. His site, housefaxreview.com, collections documentation about homes where claims of construction defects have been made. He told The Builders Magazine concerns about “the number of homes that have been served notices, received compensation, yet the homes weren’t repaired.” On the site, the creator is identified as “a family owned builder.” According to the site, “the builder had no claims until the neighborhood reached the statutory claims limit 10 years.”

    Lissner also claims that in many cases, after settling construction defect lawsuits, the homeowners sell to subsequent buyers without disclosing the lawsuit or their failure to repair. “Who is going to let the new homeowner know about the issue?” he asks.

    Documents on the site are priced according to their relevance. Lissner notes that those who provide documents to the site will receive free access.

    Read the full story…


    Preparing For the Worst with Smart Books & Records

    November 7, 2012 — Douglas Reiser, Builders Counsel

    Contractors are often too caught up in keeping the wheel of business churning to recognize deficiencies in how their records are managed. Working hard and working often tend to leave little time for consideration of your documents. But all too often I see the unthinkable, a contractor gets into trouble and has to call on its surety for help. At that point, you might finally get your first dose of reality about your records ?Äì and it can cost you.

    Read the full story…

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


    Damage During Roof Repairs Account for Three Occurrences

    August 2, 2012 — Tred Eyerly, Insurance Law Hawaii

    Southgate Gardens Condominium had buildings damaged by Hurricane Wilma in 2005. See Mid-Continent Cas. Co. v. Basedeo, 2012 U.S. App. LEXIS 11864 (11th Cir. June 12, 2012). First State Development Corporation was hired by Southgate to do repairs.

    On November 1, 2005, First State completed tarping on the buildings. Thereafter, on November 11, 2005, First State contracted with Southgate to remove and replace the roofs of the Southgate Buildings.

    The tarps placed by First State were inadequate and allowed water to enter the unit of Wayne Basdeo and cause damage. Further, when it attached the tarps, First State caused holes to be made in the roofs of buildings, leading to additional damage. First State also left open the mansards (a type of roof which has two slopes on all all sides, but with the lower slope steeper that the upper one). Finally, the peeled-back condition of the roofing allowed rain to enter.

    Basdeo filed a claim with Mid-Continent.

    Read the full story…

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


    Construction Delayed by Discovery of Bones

    June 28, 2011 — CDJ Staff

    Work stopped on a $7 million construction project in Oak Harbor, Washington, after three sets of Native American remains were found. The Washington State Department of Archaeology and Historic Preservation had suggested that the project employ an archaeologist. City, state, and tribal officials are determining what will happen next. The Seattle Times reports that Jim Slowik, Oak Harbor’s mayor, has asked for a review of why no archaeologist was part of the project.

    Read the full story…


    Former New York Governor to Head Construction Monitoring Firm

    September 13, 2012 — CDJ Staff

    David Paterson, who succeeded Eliot Spitzer as Governor of New York, has started a new venture after leaving the Governor’s office in construction integrity monitoring. WNYC reports that Paterson will be the majority owner of Icon Compliance Services, LLC, which will both conduct investigations and work with law enforcement officials. Paterson says that in government projects “often concessions are made for political reasons in the public sector and then you never really get a product that you paid for.”

    Paterson will be working with a former vice president of Bovis Construction, Brian Aryai, who is also a former U.S. Treasury Agent. Aryai said that “it is astounding that some of the fraud that has come to the surface in the recent past,” and describes it as “almost laughable they were not detected.” Aryai tipped federal prosecutors that Bovis had been over billing on projects for at least a decade.

    Read the full story…


    The Year 2010 In Review: Design And Construction Defects Litigation

    February 25, 2011 — Candace Matson, Harold Hamersmith, and Helen Lauderdale - Construction & Infrastructure Law Blog - February 25, 2011

    This article is the first in a series summarizing construction law developments for 2010

    1. Centex Homes v. Financial Pacific Life Insurance Co., 2010 U.S. Dist. LEXIS 1995 (E.D. Cal. 2010)

    After settling numerous homeowners’ construction defect claims — and more than ten years after the homes were substantially completed — a home developer brought suit against one of the concrete fabrication subcontractors for the development seeking indemnity for amounts paid to the homeowners, as well as for damages for breach of the subcontractor’s duties to procure specific insurance and to defend the developer against the homeowners’ claims. The subcontractor brought a motion for summary adjudication on the ground the developer’s claims were barred by the ten year statute of repose contained in Code of Civil Procedure Section 337.15.

    The District Court agreed the developer’s claim for indemnity was barred by Section 337.15. And it held that because the damages recoverable for breach of the subcontractor’s duty to purchase insurance are identical to the damages recoverable through the developer’s indemnity claim, the breach of duty to procure insurance claim also was time-barred. The District Court, however, allowed the claim for breach of the duty to defend to proceed. The categories of losses associated with such a claim (attorneys’ fees and other defense costs) are distinct from the damages recoverable through claims governed by Section 337.15 (latent deficiency in the design and construction of the homes and injury to property arising out of the latent deficiencies).

    2. UDC — Universal Development v. CH2M Hill, 181 Cal. App. 4th 10 (6th Dist. Jan. 2010)

    Indemnification clauses in construction agreements often state that one party to the agreement — the “indemnitor” — will defend and indemnify the other party from particular types of claims. Of course, having a contract right to a defense is not the same as actually receiving a defense. Any indemnitor attempting to avoid paying for defense costs can simply deny the tender of defense with the hope that when the underlying claim is resolved the defense obligations will be forgotten. In the past, when parties entitled to a defense — the “indemnitees” — had long memories and pressed to recover defense costs, indemnitors attempted to justify denying the tender by claiming their defense obligations coincided with their indemnity obligations and neither arose until a final determination was made that the underlying claim was one for which indemnity was owed.

    Read the full story...

    Reprinted courtesy of Candace Matson, Harold Hamersmith, and Helen Lauderdale, Sheppard Mullin Richter & Hampton LLP. Ms. Matson can be contacted at cmatson@sheppardmullin.com, Mr. Hamersmith can be contacted at hhamersmith@sheppardmullin.com, and Ms. Lauderdale can be contacted at hlauderdale@sheppardmullin.com.


    Florida: No Implied Warranties for Neighborhood Improvements

    July 10, 2012 — CDJ Staff

    A new law in Florida ends suits from homeowners associations from suing over damages from off-site improvements on the basis of implied warranties. Rob Samouch, writing for the Naples Daily News quotes House Biill 1013: “There is no cause of action in law or equity available to a purchaser of a home or to a homeowners’ association based upon the doctrine or theory of implied warranty of fitness and merchantability or habitability for damages to off-site improvements." The off-site improvements are defined as: "The street, road, driveway, sidewalk, drainage, utilities, or any other improvement or structure that is not located on or under the lot on which a new home is constructed.”

    Mr. Samouch notes that “there are no statutory warrant rights in homeowner associations of fitness and merchantability or habitability like there is for condominium associations.” He predicts that the Florida legislature will have to address this issue “once new homeowners start screaming and yelling to them about their shoddy infrastructure for which they have no legal remedy.”

    The bill took effect on July 1, 2012 and applies to “all cases accruing before, pending on, or filed after July 1, 2012.”

    Read the full story…


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

    August 4, 2011 — CDCoverage.com

    In Dragas Management Corp. v. Hanover Insurance Co., No. 2:10cv547 (E.D. Va. July 21, 2011), claimant residential home general contractor and developer DMC filed for arbitration against insured drywall supply and install subcontractor Porter-Blaine seeking damages for (1) the replacement of defective Chinese drywall, and (2) the repair of resulting property to other components of the DMC homes and homeowners’ personal property in seventy-four homes. Porter-Blaine’s CGL insurer Citizens and excess insurer Hanover defended Porter-Blaine in the DMC arbitration.

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    Reprinted courtesy of CDCoverage.com


    Texas Construction Firm Files for Bankruptcy

    December 20, 2012 — CDJ Staff

    A Texas construction firm, founded in 1937, filed for bankruptcy, bringing twenty-two projects to a sudden halt, and resulting in the loss of jobs for hundreds of employees. Ballenger Construction told its employees to go home, as it could not complete the jobs. In some cases, work will need to be done to ensure that the work sites do not cause public safety hazards.

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

    December 9, 2011 — CDJ Staff

    The Arizona Court of Appeals has ruled in the case of Peters v. Marque Homes. In this case, Walter Peters provided the land and funding for Marque Homes to build a luxury residence in Glendale, Arizona. By the terms of the “Joint Venture Agreement,” Peters provided the land and funding, while Marque would not charge Peters for overhead, profits, or supervision fees. The agreement specified that profits would be divided equally.

    Two years later, Marque sued Peters claiming he had breached his obligations by refusing several offers for the home. Peters replied that Marque had “failed to complete the home so it is habitable to prospective purchasers.” Peters stated he had “retained an expert inspector who had identified numerous defects.” The court appointed a Special Commissioner to list the home for sale. Peters purchased the home with two stipulations ordered by the court. At this point, the earlier case was dismissed with prejudice.

    Peters then sued Marque “asserting express and implied warranty claims arising out of alleged construction defects in the home.” Marque claimed that Peters’s claims were “precluded by the prior joint venture dispute.” The court granted Marque’s motion.

    The appeals court reversed the lower court’s decision, determining that Peters’s claims were not precluded by the agreement. Although there had been a prior case between the two parties, warranty issues did not form a part of that case. “Peters never raised these allegations nor presented this evidence in support of any warranty claim.”

    The court also noted that the “parties never agreed to preclude future warranty claims.” Marque and Peters “agreed in the stipulated sale order that ‘the sale of the property to a third party shall be “as is” with a 10-year structural warranty.’” The court noted that the agreement said nothing about one of the parties buying the house.

    The appeals court left open a claim by Marque that there are no implied or express warranties available to Peters. They asked the Superior Court to address this.

    Read the court’s decision…


    Going Green for Lower Permit Fees

    October 23, 2012 — CDJ Staff

    Clay County, Kansas is offering rebates on building permits for green homes. According to the Kansas City Star, building permits in the county are typically $2,500. The county will rebate anything from half to all of the permit fee, depending on how well the builder meets green standards. The county will monitor and inspect the process to make certain that builders adhere to their promises for green construction. The county hopes this will encourage green building by offsetting the cost.

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