Another Reminder that Your Construction Contract Language Matters
June 06, 2018 —
Christopher G. Hill - Construction Law MusingsHere at Musings, I have often (some might say too often) discussed the fact that in Virginia (as well as other places), your construction contract language will be strictly enforced. I have also discussed the need for attorney fees provisions as well as other language in order to mitigate your risk as a contractor. A recent case from the City of Roanoke Circuit Court discussed both of these principals and their intersection.
In LAM Enterprises, LLC v. Roofing Solutions, Inc., the Roanoke Court looked at a contract between LAM and Roofing Solutions, Inc. that contained two provisions of the construction contract between the parties. The first provision limited the liability of Roofing Solutions to the contract price. The second provision is a relatively typical “prevailing party” attorney fees provision in which the winner of any lawsuit would be entitled to collect its attorney fees. For the specific language of these provisions, I commend the opinion linked above for your reading.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Homeowners Must Comply with Arbitration over Construction Defects
January 06, 2012 —
CDJ STAFFThe California Court of Appeals has upheld a decision by the Superior Court of Kern County that homeowners must comply with arbitration procedures in their construction defect claim. The California Court of Appeals ruled on December 14 in the case of Baeza v. Superior Court of Kern County, denying the plaintiff’s petition that the trial court vacate its order.
The plaintiffs in the case are homeowners in various developments built by Castle & Cook. The homes were sold with a contract that provided for “nonadversarial prelitigation procedures, including mediation, and judicial reference.” The homeowners made defect claims and argued that Castle & Cooke failed to comply with statutory disclosure requirements and that some of the contracts violate related statutes.
The appeals court found that there was no ground for appeal of the lower court’s order to continue with prelitigation procedures. The court noted that the plaintiffs could not seek a review of the mediation until a judgment was issued, but that then the issue would be moot. The court felt that there were issues presented that needed clarification, and so they reviewed this case. This was cleared for publication.
The court considered the intent of the legislature in passing the Right to Repair Act, noting that “under the statutory scheme, the builder has the option of contracting for an alternative nonadversarial prelitigation procedure,” as established in Chapter 4. The court noted that Chapter 4 “contains no specifics regarding what provisions the alternative nonadversarial contractual provisions may or must include.”
The plaintiffs contended that the builder was in violation of the standards set out in Section 912, however the court responded that these sections set out one set of procedures, but they concluded that “if the Legislature had intended the section 912 disclosure provisions…it could have made the requirements applicable to all builders by locating them in a section outside Chapter 4.”
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San Francisco Sues Over Sinking Millennium Tower
November 17, 2016 —
Beverley BevenFlorez-CDJ STAFFDennis Herrera, San Francisco’s city attorney, filed a lawsuit against the developer of the Millennium Tower, “for failing to inform buyers that it was sinking ‘much faster than expected,’” reported the New York Times. Mission Street Development sold more than 400 units in the skyscraper.
“They went ahead and sold condominiums for a handsome profit without telling the buyers about the situation,” Mr. Herrera told the New York Times. “This is every homeowner’s worst nightmare.”
The spokesman for the development, P.J. Johnson, stated that “the allegations by the city attorney had ‘no merit,’ and that the “building had sunk within ‘predicted, safe ranges’ during the entire sales process,” according to the New York Times. Furthermore, Johnson asserted that the problem derived from the nearby railroad station removing water from the ground, which “had caused the building to ‘settle beyond the 12 inches it was predicted to settle.’”
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Facing Manslaughter Charges In Worker's 2021 Trench Collapse Death, Colorado Contractor Who Willfully Ignored Federal Law Surrenders To Police
February 06, 2023 —
U.S. Department of LaborBRECKENRIDGE, CO – The owner of a Vail construction company facing felony manslaughter charges has surrendered to local law enforcement after the Summit County Sheriff's Office in Breckenridge, Colorado, issued an arrest warrant on Jan. 24, 2023, related to the findings of a federal safety investigation into a deadly trench collapse in November 2021.
In May 2022, the U.S. Department of Labor's Occupational Safety and Health Administration cited Peter Dillon, owner of the now-defunct A4S LLC, after a worker installing residential sewer pipes suffered fatal injuries when the trench around him caved in. The collapse resulted from deteriorating conditions at the project, which A4S LLC could have prevented by using legally required trench protection systems.
OSHA issued three willful citations to A4S LLC for not ensuring the excavation was inspected by a competent person, failing to instruct employees on the recognition and avoidance of unsafe conditions and not having a trench protective system in place. Investigators also issued an additional serious citation for not having a safe means of egress within 25 lateral feet of employees working in a trench.
The agency proposed penalties of $449,583 and placed the company in OSHA's Severe Violator Enforcement Program.
The department referred the case to the 5th Judicial District Attorney's office recommending criminal charges for A4S LLC's refusal to require safety protection, despite worsening trench conditions that included at least one trench collapse.
A4S LLC has since shuttered and Dillon agreed to forfeit any future ownership, leadership or management position that involves trenching or excavation, or the oversight of workplace safety and health.
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Release Of “Unknown” Claim Does Not Bar Release Of “Unaccrued” Claim: Fair Or Unfair?
July 15, 2019 —
David Adelstein - Florida Construction Legal UpdatesA general release of “unknown” claims through the effective date of the release does NOT bar “unaccrued” claims. This is especially important when it comes to fraud claims where the facts giving rise to the fraud may have occurred prior to the effective date in the release, but a party did not learn of the fraud until well after the effective date in the release. A recent opinion maintained that a general release that bars unknown claims does NOT mean a fraud claim will be barred since the last element to prove a fraud had not occurred, and thus, the fraud claim had not accrued until after the effective date in the release. See Falsetto v. Liss, Fla. L. Weekly D1340D (Fla. 3d DCA 2019) (“The 2014 [Settlement] Agreement’s plain language released the parties only from “known or unknown” claims, not future or unaccrued claims. Because there is a genuine issue of material fact as to whether the fraud claim had accrued — that is, whether Falsetto [party to Settlement Agreement] knew or through the exercise of due diligence should have known about the alleged fraud at the time the 2014 Agreement was executed — the trial court erred in granting summary judgment on those fraud claims.”).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Port Authority Approves Subsidies for 2 World Trade Project
December 10, 2015 —
David M. Levitt – BloombergThe Port Authority of New York and New Jersey approved subsidies to help expedite the construction of lower Manhattan’s 2 World Trade Center, where Rupert Murdoch’s 21st Century Fox Inc. and News Corp. companies have a tentative deal to move their headquarters from midtown.
Developer Silverstein Properties Inc., which leases the sites for 2 World Trade Center and two other towers from the Port Authority, would receive a rent break that amounts to $9 million over the life of the lease, Authority Director Patrick Foye said, just before the agency board unanimously approved the proposal.
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David M. Levitt, Bloomberg
“Details Matter” is the Foundation in a Texas Construction Defect Suit
March 01, 2012 —
CDJ STAFFThe Court of Appeals of Texas has ruled in the case of Barzoukas v. Foundation Design. Mr. Barzoukas contracted with Heights Development to build a house. He subsequently sued Heights Developments and “numerous other defendants who participated in the construction of his house.” Barzoukas eventually settled with all but two defendants, one who went bankrupt and Foundation Design, the defendant in this case. In the earlier phase, Barzoukas made claims of “negligence, negligent misrepresentation, fraud, fraudulent inducement, conspiracy, and exemplary damages in connection with the foundation.”
Foundation Design had been hired to install 15-foot piers to support the foundation. The engineer of record, Larry Smith, sent a letter to Heights Development noting that they had encountered hard clay stone when drilling. Smith changed the specifications to 12-foot piers. Initially, the City of Houston called a halt to work on the home when an inspector concluded that the piers were too shallow. Heights Development later convinced the city to allow work to continue. Subsequently, experts concluded that the piers were too shallow.
Foundation Design filed a motion for summary judgment. The trial court granted this, “without specifying the basis for its ruling.” Barzoukas contends the court was in error. Foundation Design contends that “Barzoukas failed to proffer competent evidence establishing that their conduct proximately caused damages.” Further, they did not feel that Smith’s letter gave “rise to viable claims for fraud and fraudulent inducement.”
One problem the court had was a lack of evidence. The court noted that “the purported subcontract is entirely missing” in the pleadings. The court has no contract between Bazourkas and Heights Development, nor one between Heights Development and either Foundation Design or Smith. The court underscored the importance of this, writing, “details matter.” They found that “the details are largely missing here.” Without the contract, the court found it impossible to determine if “Smith or an entity related to him agreed to indemnify Heights Development for damages arising from Smith’s negligent performance.”
As the material facts are in dispute, the appeals court found that there were no grounds for a summary judgment in the case. “Pointing to the existence of a contract between Heights Development and Barzoukas, or to the existence of a subcontract, is the beginning of the analysis ? not the end.”
Foundation Design and Smith also claimed that Barzoukas’s expert did not proffer competent evidence and that the expert’s opinions were conclusory. The trial court did not rule on these claims and the appeals court has rejected them.
Finally, Barzoukas made a claim that the trial court should not have rejected his argument of fraud and fraudulent inducement. Here, however, the appeals court upheld the decision of the lower court. “Barzoukas did not present evidence supporting an inference that Smith or Foundation Design made a purposeful misrepresentation.
The court remanded the case to the trial court for reconsideration. One member of the panel, Judge Charles Seymore, upheld the entire decision of the trial court. He dissented with the majority, finding that the economic loss rule foreclosed the claim of negligence.
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Hold on Just One Second: Texas Clarifies Starting Point for Negligence Statute of Limitations
July 11, 2022 —
Lian Skaf - The Subrogation StrategistIn construction or similar ongoing projects, problems often pop up. Sometimes they can pop up again and again. Making things even more complicated, one problem may affect another, seemingly new problem. When these construction problems result in property damage, timelines tend to overlap and determining when a statute of limitation begins to run for a particular claim can be difficult. Especially in states with short statute of limitations for tort claims like Texas, knowing when a statute begins to run is crucial for a subrogation professional.
In Hussion St. Bldgs., LLC v. TRW Eng’rs, Inc., No. 14-20-00641-CV, 2022 Tex. App. LEXIS 2193, 2022 WL 1010313, the Court of Appeals of Texas provided clarity on when the two-year statute of limitations for tort claims begins to run. Reversing the judgment from the lower court, the appellate court denied summary judgment to the defendant, holding that, despite there being existing issues with the ongoing construction project, the negligence cause of action for Hussion Street Buildings, LLC (Hussion) did not begin to run more than two years prior to filing suit.
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Lian Skaf, White and Williams LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
