FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

There Was No Housing Bubble in 2008 and There Isn’t One Now

January 17, 2022 — Ramesh Ponnuru - Bloomberg
Housing markets are red hot, with prices up more than 18% from November 2020 to November 2021. That’s an acceleration over the previous two years, which saw increases of 4% and 8% each. It’s also a faster rate than the U.S. experienced during the housing boom of the 2000s that preceded the Great Recession. That comparison is causing some heartburn. “Are we in another housing bubble?” asked Mark Zandi, chief economist at Moody’s. The consensus, shared by Zandi, is that the answer is no — or, at least, that today’s bubble is different and less dangerous than the last one. Lending standards are more strict than they were 15 years ago, for example, which ought to mean that fewer homeowners are at risk of defaulting if prices fall. Read the court decision
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Reprinted courtesy of Ramesh Ponnuru, Bloomberg

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Indemnification Against Release/“Disposal” of Hazardous Materials

May 18, 2020 — Brian S. Wood & Miranda R. Millerick - ConsensusDocs
It is very common, if not nearly an industry standard, for construction contracts and subcontracts to contain provisions addressing the discovery of unanticipated hazardous materials. Many of these provisions require a contractor or subcontractor to discontinue work where hazardous materials are discovered. An example of such a clause can be found in the American Institute of Architects (AIA) Document A201 (2017), Section 10.3.1, which states in part:

If the Contractor encounters a hazardous material or substance not addressed in the Contract Documents and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and notify the Owner and Architect of the condition.

A similar clause in ConsensusDocs does not require the contractor to stop work, but provides that the “Contractor shall not be obligated to commence or continue work until any Hazardous Material discovered at the Work site has been removed, rendered or determined to be harmless by the Owner as certified by an independent testing laboratory and approved by the appropriate government agency.” Reprinted courtesy of Brian S. Wood, Smith, Currie & Hancock LLP and Miranda R. Millerick, Smith, Currie & Hancock LLP Mr. Wood may be contacted at bswood@smithcurrie.com Ms. Millerick may be contacted at mrmillerick@smithcurrie.com Read the court decision
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In Hong Kong, You Can Find a Home Where the Buffalo Roam

September 17, 2014 — Shai Oster – Bloomberg
To city dwellers worried about mice and rats, spare a thought for Hong Kongers confronting half-ton feral beasts. A few miles from some of the most densely populated neighborhoods in the world, more than 1,000 cows and buffalo from abandoned farms roam the countryside. Development now is pushing them into harm’s way and onto roads. Hong Kong represents an extreme example of the task many communities face of balancing conservation and growth. Wolves sniff near the suburbs of Paris, bears roam Lake Tahoe and moose stumble across the roads of Halifax. There’s a new word to describe how undomesticated animals adapt to man-made environments: synurbanization. Read the court decision
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Reprinted courtesy of Shai Oster, Bloomberg
Shai Oster may be contacted at soster@bloomberg.net

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Excess Carrier Successfully Appeals Primary Insurer’s Summary Judgment Award

December 09, 2011 — Tred R. Eyerly - Insurance Law Hawaii

Although the excess carrier was given inadequate notice of the underlying arbitration, the trial court determined it shared responsibility with the primary carrier for the arbitration award. Finding disputed issues of fact, the Washington Court of Appeals reversed in Am. States Ins. Co. v. Century Surety Co., 2011 Wash. App. LEXIS 2488 (Wash. Ct. App. Oct. 31, 2011).

The primary insurer, American States, issued two liability policies to Professional Home Builders (PHB), a siding contractor. The policies were for successive years, 1998-1999 and 1999-2000. Each policy had annual limits of $1 million per occurrence. PHB also had a commercial excess liability policy for 1999-2000 with Century Surety Company.

PHB was sued by Residential Investment Partners (RIP) for construction defects after moisture entered the building envelope, causing decay and damage. Century’s expert determined the decay started before the 1999-2000 policy period.

RIP and PHB went to arbitration.

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

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Court Strikes Down Reasonable Construction Defect Settlement

December 20, 2012 — CDJ STAFF
The Court of Appeals of Washington has struck down a construction defect settlement between a building owner and the companies she hired to repair the siding, among other repairs to bring the building up to code. Yuan Zhang hired Hawk Construction LLC to do repair work. Hawk, in turn, hired Ready Construction LLC for some aspects of the project. Hawk and Ready were both insured by Capital Specialty Insurance Corporation. There were several problems with Ready’s work. After removing old siding, they did not protect the building, nor did they remove all of the damaged layers. Ready covered, but did not fix, a mildew problem under the old siding. When new siding was reattached, the nails used were too short to adequately attach it. After paying for an inspection of the work, Zhang had Hawk and Ready begin the repairs again, but the work was abandoned without being completed. Zhang sued Hawk for breach of contract. Hawk then sued Ready, claiming that “Ready was liable to Hawk to the extent that Hawk was liable to Zhang.” Capitol retained defense for both contractors. Zhang settled with Hawk, in an agreement that gave her “the right to collect and/or pursue all costs and attorney fees paid by Hawk or its insurance company defending against the Zhang’s claims and pursuing claims against Ready.” Subsequently, she also settled with Ready. Both companies ceased operations. Zhang had the settlements reviewed by a court, which concluded that the settlements were reasonable. Capital was allowed to appeal, claiming that the settlement included costs that were Zhang’s responsibility. The appeals court did not examine the question of the reasonableness of the settlement, concluding that Capitol’s interests were relevant only to “questions of bad faith, collusion, and fraud.” In the case of Zhang, the court concluded that the relationship between Zhang and her former contractors was collusive. The court noted that “bad faith or collusion may exist when the evidence indicates a joint effort to create, in a non-adversarial atmosphere, a resolution beneficial to both parties, yet highly prejudicial to the insurer as intervener.” The court noted that both companies had minimal assets which were, in any case, exempted from the agreement. Further, the court found that the agreements failed to determine “what amount of the repairs related to preexisting water damage.” Zhang’s calculation of costs also included her expenses for architectural and engineering services, which the court points out, “where always Zhang’s costs to bear.” The court concluded that “the overall structure of the settlements is highly probative of collusion, fraud, or bad faith.” Zhang’s agreements with Hawk and Ready allowed her to collect compensation from Hawk and then collect Ready’s compensation to Hawk for their portion of the settlement, allowing Zhang to collect the monies twice. Further, she was allowed to pursue Capitol for Hawk’s attorney expenses, even though Hawk had none. “The right to recover Hawk’s fees merely set up a windfall recovery for Zhang.” The court described the agreements among Zhang, Hawk, and Ready as “precisely the type of manipulation [the law] is intended to preclude.” Read the court decision
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Oregon Bridge Closed to Inspect for Defects

February 25, 2014 — Beverley BevenFlorez-CDJ STAFF
According to The Oregonian, the Morrison Bridge in Multnomah county, Oregon will be closed Sunday, February 23rd “so county crews can inspect the decking that has caused problems since it was installed” in 2012. The “southernmost eastbound lane has been closed for weeks while crews conducted inspections.” The defects appeared “almost immediately after the project” was completed, reported The Oregonian. Drivers have “dealt with a bumpy, noisy ride as the loose decking panels flopped beneath them.” Multnomah county has sued “Conway Construction, the company the installed the decking, as well as Strongwell Corp., the company that supplied Conway with the decking materials, and Zellcomp, the company that made the decking materials, to determine who should foot the bill for extensive repairs or outright replacement of the decking.” Read the court decision
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Hawaii Federal District Court Again Rejects Coverage for Faulty Workmanship

January 13, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court for the District of Hawaii continued its longstanding pattern of finding no coverage for claims based upon construction defects. Am. Auto. Ins. Co. v. Haw. Nut & Bolt, 2016 U.S. Dist. LEXIS 174243 (D. Haw. Dec. 16, 2016). Safeway filed a complaint against Hawaii Nut & Bolt (HNB). The complaint involved issues pertaining to the construction of the roof deck at a Safeway store. HNB was a subcontractor hired to supply a coating system on the roof of the store to make it waterproof. The product was manufactured by VersaFlex. After the store opened, there were water leaks from the roof. This disrupted business operations and caused damage to Safeway's business and reputation. HNB tendered the claims to its CGL carrier, Fireman's Fund Insurance Corporation (FFIC). FFIC defended the underlying lawsuit for six years under a reservation of rights. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Hybrid Contracts for The Sale of Goods and Services and the Predominant Factor Test

February 15, 2021 — David Adelstein - Florida Construction Legal Updates
Florida’s Uniform Commercial Code (also known as the UCC) applies to transactions for goods. “Goods” is defined by Article II of the UCC as “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (chapter 678) and things in action.” Fla. Stat. s. 672.105(1). The UCC does NOT apply to transactions for services. Transactions for services are governed by common law. Oftentimes, transactions or contracts include BOTH goods and services. In this scenario, referred to as a hybrid contract, does the UCC or common law apply? In this scenario, courts apply the predominant factor test to determine whether the UCC or common law governs the transaction:

Whether the UCC or the common law applies to a particular hybrid contract depends on “whether the[ ] predominant factor, the [ ] thrust, the[ ] purpose [of the contract], reasonably stated, is the rendition of service, with goods incidentally involved (e.g., contract with artist for painting) or is a transaction of sale, with labor incidentally involved (e.g., installation of a water heater in a bathroom).” In such instances, the determination whether the “predominant factor” in the contract is for goods or for services is a factual inquiry unless the court can determine that the contract is exclusively for goods or services as a matter of law. Allied Shelving & Equipment, Inc. v. National Deli, LLC, 154 So.3d 482, 484 (Fla. 3d DCA 2015) (citations omitted).

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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