CDJ’s #5 Topic of the Year: Beacon Residential Community Association v. Skidmore, Owings & Merrill, et al.
December 31, 2014 —
Beverley BevenFlorez-CDJ STAFFSteven M. Cvitanovic and Whitney L. Stefko of Haight Brown & Bonesteel analyzed the Beacon decision, and discussed how it affects developers and general contractors: “On July 3, 2014, the California Supreme Court (the “Court”) came out with its decision in Beacon Residential Community Association v. Skidmore, Owings & Merrill, et al. The Beacon decision settled a long-standing dispute in California about whether design professionals such as architects and engineers owe a duty to non-client third parties. In finding that the plaintiffs in Beacon could state a claim against the architects of the Beacon project, the Court also sowed the seeds of change in the way contracts are structured between developers, architects, engineers, and even general contractors.”
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Bert L. Howe & Associates Returns as a Sponsor at the 30th Annual Construction Law Conference in San Antonio
January 13, 2017 —
Don MacGregor - Bert L. Howe & Associates, Inc.Bert L. Howe & Associates, Inc. is proud to join with the Texas Institute of CLE, and return for the third year as a sponsor and exhibitor at the 30th Annual Construction Law Conference to be held March 2nd & 3rd, 2017 at the La Cantera Resort and Spa in San Antonio.
With offices in San Antonio and Houston serving all of Texas, Bert L. Howe & Associates, Inc. (BHA) offers the experience of over 20 years of service to carriers, defense counsel, and insurance professionals as designated experts in nearly 6,500 cases. BHA’s staff encompasses a broad range of licensed and credentialed experts in the areas of general contracting and specialty trades, as well as architects, and both civil and structural engineers, and has provided services on behalf of developers, general contractors and sub-contractors.
BHA’s experience covers the full range of construction and construction defect litigation, including single and multi-family residential (including high-rise), institutional (schools, hospitals and government buildings), commercial, and industrial claims. BHA specializes in coverage, exposure, premises liability, and delay claim analysis as well.
As the litigation climate in Texas continues to change, and as the number of construction defect and other construction related cases continues to rise, it is becoming more important for contractors and builders to be aggressive in preparing for claims before they are made, and in defending against those claims once they are filed. Since 1993, Bert L. Howe & Associates has been an industry leader in providing construction consulting services, and has been a trusted partner with builders and insurance carriers, both large and small, across the Western and Southern United States. Here in Texas, we have been providing construction defect and construction-claims related forensic expert services for the past decade with a proven track record of successful results. To-date, we have participated in the successful defense of claims involving thousands homes here in Texas alone.
For those of you planning on attending the conference, or those who may know someone who will be, we encourage you to stop by the BHA booth and we welcome the opportunity to discuss further the broad range of services provided by BHA.
For your convenience, here is a link to the information page for the 30th Annual Construction Law Conference: https://www.clesolutions.com/store.aspx?categoryid=2
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Don MacGregor, Bert L. Howe & Associates, Inc.Mr. MacGregor may be contacted at
dmac@berthowe.com
A Community Constantly on the Brink of Disaster
February 06, 2023 —
Jason Daniel Feld - Kahana FeldIn the beautiful coastline region along the famous Pacific Coast Highway between Ventura and Santa Barbara rests the small cottage town of La Conchita. With unobstructed ocean views, this community is only 820 feet wide on a narrow strip of land abutting a 590 feet high cliffside bluff. The bluff has a slope of approximately 35 degrees and consists of poorly cemented marine sediments. This is the perfect recipe for constant disaster from a geological perspective and the site of several major landslides that have devastated this community. Geologic evidence indicates that landslides, which are part of the larger Rincon Mountain slides, have been occurring at and near La Conchita for many thousands of years up to the present with reported landslides beginning as early as 1865. In both 1889 and 1909, the
Southern Pacific Rail Line
running along the coast was inundated. In the 1909 slide, a train was buried. Since that time, other slides have occurred, covering at times cultivated land, roadways, and the community itself. The two most devastating landslides occurred in 1995 and 2005.
1995 Landslide
From October 1994-March 1995, there was double the amount of seasonal rainfall for the area – in excess of 30 inches. The slide occurred on March 3, 1995, when surface cracks in the upper part of the slope opened on the hillside, and
surface runoff was infiltrating into the subsurface. The heavy rains essentially saturated the slope causing a massive slide. On March 4, 1995, the hill behind La Conchita failed, moving tens of meters in minutes, and buried nine homes with no loss of life. The
County of Ventura immediately declared the whole community a
Geological Hazard Area, imposing building restrictions on the community to restrict new construction. On March 10, 1995, a subsequent debris flow from a canyon to the northwest damaged five additional houses in the northwestern part of La Conchita. In total, the slide measured approximately 390 feet wide, 1080 feet long and 98 feet deep. The deposit covered approximately 9.9 acres, and the volume was estimated to be approximately 1.7 million cubic yards of sediment. The devastation was immeasurable and the damage to homes, property and infrastructure was in the millions of dollars to repair. Litigation quickly arose following the 1995 slide with seventy-one homeowners suing the La Conchita Ranch Co. in Bateman v. La Conchita Ranch Co. The judge ruled that irrigation was not the major cause of the slide and that the ranch owners were not responsible.
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Jason Daniel Feld, Kahana FeldMr. Feld may be contacted at
jfeld@kahanafeld.com
Wait! Don’t Sign Yet: Reviewing Contract Protections During the COVID Pandemic
April 13, 2020 —
Danielle S. Ward - Balestreri Potocki & HolmesAs the circumstances of the COVID pandemic change day by day, and we all rush to keep business moving where and when we can, companies should consider hitting the “pause button” before renewing or executing any new contracts. Developing contracts often takes considerable time and expense, and companies are not in the habit of reworking them often. A change in law may prompt a company to revisit their contract terms, but otherwise business is often carried out with a standard form contract for a period of years. With the COVID pandemic affecting nearly every business and industry, life is not business as usual, and companies should make sure their contracts consider what previously seemed like an unforeseeable event.
Force Majeure clauses are included in many contracts to excuse contract performance when made impossible by some unforeseen circumstance. These clauses typically fall under two categories: general and specific. General force majeure clauses excuse performance if performance is prevented by circumstances outside the parties’ control. By contrast, specific force majeure clauses detail the exhaustive list of circumstances (acts of god, extreme weather, war, riot, terrorism, embargoes) which would excuse contract performance. Force majeure clauses are typically interpreted narrowly. If your contract has a specific clause and pandemic or virus is not one of the listed circumstances it may not apply. Whether a particular existing contract covers the ongoing COVID pandemic will vary depending on the language of the contract.
Force majeure clauses previously made headlines when the great economic recession hit in 2008. A number of courts held that simple economic hardship was not enough to invoke force majeure. The inability to pay or lack of desire to pay for the contracted goods or services did not qualify as force majeure. In California, impossibility turns on the nature of the contractual performance, and not in the inability of the obligor to do it. (Kennedy v. Reece (1964) 225 Cal. App. 2d 717, 725.) In other words, the task is objectively impossible not merely impossible or more burdensome to the specific contracting party.
California has codified “force majeure” protection where the parties haven’t included any language or the circumstances in the clause don’t apply to the situation at hand. Civil Code section 1511 excuses performance when “prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States, unless the parties have expressly agreed to the contrary.” (Civ. Code § 1511.) What qualifies as a “superhuman cause”? In California, the test is whether under the particular circumstances there was such an insuperable interference occurring without the party's intervention as could not have been prevented by the exercise of prudence, diligence and care. (Pacific Vegetable Oil Corp. v. C. S. T., Ltd. (1946) 29 Cal.2d 228, 238.)
If you find yourself in an existing contract without a force majeure clause, or the statute does not apply, you may consider the doctrine of frustration of purpose. This doctrine is applied narrowly where performance remains possible, but the fundamental reason the parties entered into the contract has been severely or substantially frustrated by an unanticipated supervening circumstance, thus destroying substantially the value of the contract. (Cutter Laboratories, Inc. v. Twining (1963) 221 Cal. App. 2d 302, 314-15.) In other words, performance is still possible but valueless. Note this defense is not likely to apply where the contract has simply become less profitable for one party.
Now that COVID is no longer an unforeseeable event, but rather a current and grave reality, a party executing a contract today without adequate protections may have a difficult time proving unforeseeability. Scientists are not sure whether warm weather will suppress the spread of the virus, as it does with the seasonal flu, but to the extent we get a reprieve during the summer we may see a resurgence of cases this Fall or Winter. Companies should take care in reviewing force majeure clauses, and other clauses tied to timely performance such as delay and liquidated damages before renewing or executing new contracts.
Your contract scenario may vary from the summary provided above. Please contact legal counsel before making any decisions. During this critical time, BPH’s attorneys can be reached via email to answer your questions.
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Danielle S. Ward, Balestreri Potocki & HolmesMs. Ward may be contacted at
dward@bph-law.com
Keeping Up With Fast-moving FAA Drone Regulations
February 28, 2018 —
Dick Zhang – Construction Executive Magazine One of the biggest changes in recent years relating to commercial drone regulations has been FAA rule Part 107. Prior to 107, drone pilots were required to hold a current, manned aircraft pilot certificate, and had to pass a written, practical and oral exam to earn that credential. After 107 came into effect, a drone pilot was only required to pass a written exam to earn this commercial drone license.
The majority of people working at construction companies who take the Part 107 exam don’t have any type of aviation background, so it’s recommended that they give themselves at least two hours of study a day over two weeks to prepare for the exam. This commitment allows enough time for the student to both master any prepared test materials as well as do any additional research when necessary. The Part 107 certification is good for 24 months. While the FAA hasn’t posted anything about a recertification process yet, it will need to do so soon because everyone who took the exam when it was available in September 2016 will need to be recertified by August 2018.
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Dick Zhang, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.Mr. Zhang may be contacted at
contact@identifiedtech.com
Housing Stocks Rally at End of November
December 04, 2013 —
CDJ STAFFThe homebuilding industry had something to be thankful for this year. In a report on stocks issued just before the Thanksgiving holiday, Standard Pacific Group and Toll Brothers where outperforming the S&P 500 (Gafisa S.A., a Brazilian firm that trades on the New York Stock Exchange also outperformed the index). Both of the U.S. firms traded about their 50-day moving averages. A third U.S. home builder, The Ryland Group, traded above its 50-day moving average, but did not outperform the S&P 500.
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Insurer's Appeal of Jury Verdict Rejected by Tenth Circuit
March 06, 2023 —
Tred R. Eyerly - Insurance Law HawaiiAfter a jury awarded damages related to the insurer's delayed payment under the claim and the insurer's post trial motions to set aside the verdict were denied, the Tenth Circuit affirmed. US General, LLC v. GuideOne Mut. Ins. Co., 2022 U.S. App. LEXIS 34066 (10th Cir. Dec. 12, 2022).
Crossroads American Baptist Church submitted a claim to GuideOne for hailstorm damage. Crossroads hired US General as the general contractor to perform the repairs and later assigned its interest in the insurance policy to US General.
Numerous disputes arose between Crossroads and GuideOne regarding the cost of the repairs. There were delayed payments and portions of the repairs were never paid for. The delayed payments meant GuideOne's ability to begin making the repairs was hindered because it was more expensive to start and stop a project.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Just When You Thought General Contractors Were Necessary Parties. . .
November 30, 2020 —
Christopher G. Hill - Construction Law MusingsDid you think that a subcontractor had to name a general contractor in a mechanic’s lien suit? I did. Did you think that nothing about this changed in the case where a Virginia mechanic’s lien was “bonded off” pursuant to Va. Code Section 43-71? I did.
Well, a recent Virginia Supreme Court case, Synchronized Construction Services Inc. v. Prav Lodging LLC, seems to at least create some doubt as to whether the a general contractor is a “necessary” party to a lawsuit by a subcontractor in the case where a bond is posted for release of a mechanic’s lien.
In Prav Lodging, the facts were a bit unusual. The day after the mechanic’s lien was recorded by Synchronized Construction Services, Inc. (“Synchronized”) the construction manager, Paris Development Group, the construction manager and de facto general contractor, went out of business. Despite this fact, and after the lien was bonded off, Synchronized sued to enforce the lien and for breach of contract against Paris. The wrinkle here is that Synchronized was unable to serve several defendants, among them Paris, within one year of filing suit as required by Virginia statute. In the Circuit Court, the financing bank moved to dismiss the suit for failure to serve necessary parties. The Circuit Court dismissed the breach of contract count but refused to dismiss the mechanic’s lien count on this basis.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
