Equities Favor Subrogating Insurer Over Subcontractor That Performed Defective Work
August 04, 2015 —
Christopher Kendrick and Valerie A. Moore – Haight Brown & Bonesteel LLPIn Valley Crest Landscape v. Mission Pools (No. G049060, filed 6/26/15, ord. pub. 7/2/15), a California appeals court held that equities favor an insurer seeking equitable subrogation over a subcontractor that agreed to defend and indemnify claims arising out of its performance of work under the subcontract.
Valley Crest contracted to build a pool at the St. Regis Hotel in Dana Point. Valley Crest subcontracted with Mission Pools to perform the work. The master contract contained an indemnity clause in favor of St. Regis, and the subcontract contained an indemnity clause in favor of Valley Crest. An intoxicated guest who was rendered quadriplegic after diving in the shallow end of the pool sued the hotel, Valley Crest, Mission and others involved in the design, construction and operation of the pool. The suit included allegations that the pool depth was improperly marked; there was inadequate warning signage; and the pool finish caused the pool to appear deeper than it was. Valley Crest tendered its defense to Mission Pools under the subcontract’s indemnity agreement. When Mission did not respond, Valley crest filed a cross-complaint for indemnity. All parties ultimately reached a settlement with the injured plaintiff, leaving Valley Crest’s cross-complaint against Mission Pools.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com; Ms. Moore may be contacted at vmoore@hbblaw.com
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The “Right to Repair” Construction Defects in the Rocky Mountain and Plains Region
October 16, 2018 —
Jean Meyer & Sheri Roswell - Colorado Construction Litigation BlogIn excess of 30 states have enacted tort reform legislation requiring property owners to notify construction professionals of the presence of alleged construction defects prior to the commencement of a lawsuit. These statutes also often permit construction professionals to make an offer of repair within a statutorily defined period of time after receipt of a notice of claim letter. Undoubtedly, the notice-of-claim process has played a meaningful part in bringing construction professionals and claimants to timely resolutions of construction defect concerns in isolated instances.
However, while these statutes are commonly referred to as “right of repair” legislation, their practical effect is often reduced to little more than procedural empty gestures serving as a prelude to litigation. This article will briefly survey the “right to repair” statutes in Colorado, Montana, North Dakota and South Dakota. In Nebraska, New Mexico, Utah and Wyoming there is no right to repair or notice-of claim statue.
Reprinted courtesy of
Jean Meyer, Higgins, Hopkins, McLain & Roswell LLC and
Sheri Roswell, Higgins, Hopkins, McLain & Roswell LLC
Mr. Bracken, may be contacted at meyer@hhmrlaw.com
Ms. Russo may be contacted at roswell@hhmrlaw.com
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Colorado Finally Corrects Thirty-Year Old Flaw in Construction Defect Statute of Repose
March 29, 2017 —
Jesse Howard Witt - The Witt Law FirmThe Colorado Supreme Court has finally settled a decades-old conundrum surrounding the state’s construction defect statute of repose.
A statute of repose is similar to a statute of limitations insofar as both restrict the time a party can bring a claim. A statute of repose period begins on a fixed date (such as the day someone finishes work on a project), while a statute of limitations period begins when someone discovers an injury (such as a defectively installed window).
In 1986, at the height of the so-called “tort reform” movement, the Colorado General Assembly voted to shorten both the statute of repose and the statute of limitations for construction defect claims. Historically, Colorado’s statute of repose had given a homeowner ten years following construction to file an action, and its statute of limitations had required that any such action be filed within three years of the date that the claimant discovered a defect. After 1986, however, these time periods changed; the new statute of repose required suits to be filed within six years of the end of construction, and the new statute of limitations gave claimants only two years following discovery of the physical manifestation of a defect to seek legal relief.[1]
Reprinted courtesy of
Jesse Howard Witt, Acerbic Witt
Mr. Witt may be contacted at www.witt.law
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Instant Hotel Tower, But Is It Safe?
March 28, 2012 —
CDJ STAFFBroad Sustainable Building has leapfrogged in China’s construction boom by building a thirty-story hotel in just fifteen days in the city of Changsha. According to an article in the Los Angeles Times, most of the building was prefabricated, but most prefabricated buildings require a longer time for assembly. Broad claimed that it cut no corners on safety. However, Zhang Li, a Beijing architect, told the Times that “incredible speed also means incredible risk.”
At the completion date, the interior was still partially finished. Some rooms were furnished, while others weren’t quite so ready. The hotel will be used to house clients who are visiting Broad and some of its employees.
Broad called their process “the most profound innovation in human history” and predicted that soon a third of new buildings worldwide would be constructed this way. The company anticipates using the same process to build taller buildings, with hopes of eventually constructing a 150-story building.
China is currently undergoing a building boom which Zhang attributed to a desire to catch up to the developed world. As a result of this boom, he noted that building inspections are often skipped in China to speed up building.
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Foundation Differences Across the U.S.
October 15, 2014 —
Beverley BevenFlorez-CDJ STAFFThe National Association of Home Builders’ Eye on Housing analyzed data from the Survey of Construction (SOC) to demonstrate the differences in foundations built across the nation. For instance, “about 30 percent of new single-family homes started in 2013 have a full or partial basement, 54 percent are built on slabs, and 15 percent have a crawl space. The remaining share, including homes built on stilts or pilings, accounted for about 1 percent of homes started in 2013.”
Climate is the deciding factor in what type of foundations are used, Eye on Housing reported. “In colder regions where codes require foundations to be deep the marginal cost of providing a full or partial basement is not that great. So basements are the most common type of foundation in the colder climate divisions.” The warm climate area of the West South Central division are primarily built on slabs. However, “the other two divisions that make up the South region – the East South Central and South Atlantic –are still largely built on slabs but crawl spaces are also common.”
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Court Concludes That COVID-19 Losses Can Qualify as “Direct Physical Loss”
September 28, 2020 —
Lorelie S. Masters & Jorge R. Aviles - Hunton Andrews KurthIn a victory for policyholders, a federal district court found that COVID-19 can cause physical loss under business-interruption policies. In Studio 417, Inc., et al. v. The Cincinnati Insurance Co., No. 20-cv-03127-SRB (W.D. Mo. Aug. 12, 2020), the court rejected the argument often advanced by insurers that “all-risks” property insurance policies require a physical, structural alteration to trigger coverage. This decision shows that, with correct application of policy-interpretation principles and strategic use of pleading and evidence, policyholders can defeat the insurance industry’s “party line” arguments that business-interruption insurance somehow cannot apply to pay for the unprecedented losses businesses are experiencing from COVID-19, public-safety orders, loss of use of business assets, and other governmental edicts.
The policyholders in Studio 417 operate hair salons and restaurants asserting claims for business interruption. In suing to enforce their coverage, the policyholders allege that, over the last several months, it is likely that customers, employees, and/or other visitors to the insured properties were infected with COVID-19 and thereby infected the insured properties with the virus. Their complaint asserts that the presence of COVID-19 “renders physical property in their vicinity unsafe and unusable.” Unlike some other complaints seeking to enforce such coverage, it also alleges that the presence of COVID-19 and government “Closure Orders” “caused a direct physical loss or direct physical damage” to their premises “by denying use of and damaging the covered property, and by causing a necessary suspension of operations during a period of restoration.”
Reprinted courtesy of
Lorelie S. Masters, Hunton Andrews Kurth and
Jorge R. Aviles, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. Aviles may be contacted at javiles@HuntonAK.com
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Filing Lien Foreclosure Lawsuit After Serving Contractor’s Final Payment Affidavit
June 06, 2022 —
David Adelstein - Florida Construction Legal UpdatesIf you are an unpaid contractor in direct contract with the owner of real property, you should be serving a Contractor’s Final Payment Affidavit prior to foreclosing on your construction lien. This should extend to any trade contractor hired directly by the owner. As a matter of course, I recommend any lienor hired directly by the owner that wants to foreclose its lien to serve a Contractor’s Final Payment Affidavit. For example, if you are a plumbing contractor hired by the owner and want to foreclose your lien, serve the Affidavit. If you are a swimming pool contractor hired by the owner and want to foreclose your lien, serve the Affidavit. You get the point. (If you are not in direct contract with the owner, you do not need to serve the Affidavit, but you need to make sure you timely served your Notice to Owner; when you are in direct contract with the owner, you do not need to serve the Notice to Owner because the owner already knows you exist.)
The Contractor’s Final Payment Affidavit is a statutory form. I suggest working with counsel to help execute to avoid any doubts with the information to include. The unpaid amount listed should correspond with the amount in your lien and you want to identify all unpaid lienors (your subcontractors and suppliers) and amounts you believe they are owed.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
When Brad Pitt Tried to Save the Lower Ninth Ward
February 18, 2019 —
Rob Walker - BloombergIn the months that followed Hurricane Katrina in 2005, there was much discussion about how to rebuild the New Orleans neighborhoods devastated by flooding. Some even questioned whether certain areas should be rebuilt at all: The city’s population would likely be smaller; perhaps its footprint should be revised? The Lower Ninth Ward, for instance—a working-class black neighborhood ravaged when a floodwall failed—might be a lost cause, some said, because it was so severely damaged.
Neighborhood residents and activists pushed back, insisting the Lower Nine deserved rebuilding. One of the most high-profile efforts to do so came from an unlikely figure: Brad Pitt. In 2007 the actor founded the Make It Right Foundation, a nonprofit whose mission was to build affordable housing to help Lower Nine residents come home. Attracting designs from prize-winning architects and committing to the highest energy-efficiency standards, Make It Right pledged to build 150 residences. As Pitt later wrote, the organization aimed to make “a human success story of how we can build in the future, how we can build with equality, how we can build for families."
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Rob Walker, Bloomberg