Construction Litigation Roundup: “Builder’s Risk Indeed”
October 24, 2023 —
Daniel Lund III - LexologyA contractor for a hotel in Seattle was tasked with constructing the hotel utilizing premanufactured modular hotel rooms. The modular unit portion of the project was the subject of a $15.8 million subcontract between the general contractor and the manufacturer. The manufacturer was also responsible to the GC for shipping and installing the modular units.
Shipping was to be “DDP,” or “Delivery Duty Paid” – which, according to a New York federal court, “is an international shipping term meaning that the seller assumes all responsibilities and costs for delivering property to the named place of destination, including export and import clearance, fees, duties, and taxes.” Additionally, per the subcontract, the manufacturer was responsible for “ensur[ing] all modular units [were] covered, secured[,] and protected from damage during the shipping process….” The modular units were shipped from Poland to Seattle. In the shipping process, the units spent some time in the Port of Everett in Washington state, where the units sustained water damage while sitting in port.
A related damage claim made by the subcontractor against the general contractor’s builder’s risk policy. On the face of the policy, the policy covered subcontractors as “additional insured” parties, covered all manner of materials and the like to be used on the project, and would provide that coverage in the process of transporting the materials insofar as “inland or coastal waters” were concerned. Yet, the builder’s risk insurer refused to cover the claim for the damages to the modular units which occurred while sitting in port in Everett.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
The Goldilocks Rule: Panel Rejects Proposed Insurer-Specific MDL Proceedings for Four Large Insurers, but Establishes MDL Proceeding for the Smallest
November 16, 2020 —
Eric B. Hermanson & Konrad R. Krebs - White and WilliamsIt is an outcome few people expected. Back in August, the Judicial Panel on Multidistrict Litigation (Panel) refused plaintiffs’ requests to set up a single industry-wide multi-district litigation, which would have consolidated — in a single massive proceeding — all federal lawsuits seeking COVID-related business interruption coverage from insurers. The Panel acknowledged common legal issues, and potential benefits of coordinated management, but it balanced those benefits against the numerous factual differences between policies, carriers, and insureds, and noted that “[t]hese differences will overwhelm any common factual questions.”
Then, after lengthy argument, the Panel ordered further briefing as to whether separate, company-specific MDL proceedings might be appropriate against five specific insurance carriers: specifically, the five carriers against whom the largest numbers of federal claims were pending.
By choosing these five carriers and not others for further argument, the Panel seemed to be suggesting a formula: the larger the carrier, and the greater the number of claims against it, the greater the potential benefit from coordinated management, and the stronger the plaintiffs’ case for pre-trial consolidation.
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Eric Hermanson, White and WilliamsMr. Hermanson may be contacted at
hermansone@whiteandwilliams.com
Construction Defect Bill Removed from Committee Calendar
February 12, 2013 —
CDJ STAFFColorado State Senator Mark Scheffel has removed Senate Bill 13-052 from the Senate Judiciary Committee’s calendar because he feels an upcoming study on construction near transit centers will be important for the consideration of the bill. SB 13-052 would affect construction defect claims in communities that were within a half mile of public transportation. Critics claim it would gut construction defect protections, as even a bus stop would count as a “mass transit center.”
Scheffel says he doesn’t know what the study will find, but says that whether he likes or hates it, it will be relevant.
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Bert L. Howe & Associates Brings Professional Development Series to Their Houston Office
May 19, 2014 —
Beverley BevenFlorez-CDJ STAFFBHA’s Professional Development Series provides seminar attendees with a heightened level of knowledge and understanding on a wide range of subjects covering construction and construction defect litigation, tailored to the unique needs of local counsel and insureds.
The next seminar in this series, THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION, will be presented on June 13th.
This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.0 credit hours, of which 0.0 credit hours will apply to legal ethics/professional responsibility credit.
The seminar will be presented by Don MacGregor, general contractor and project manager, at BHA’s Houston office during the noontime hour, and luncheon will be provided. As with all BHA Professional Development activities, there is no cost for participation.
Water intrusion through doors, windows and roofing systems, as well as soil and foundation-related movement, and the resultant damage associated therewith, are the triggering effects for the vast majority of homeowner complaints today and serve as the basis for most residential construction defect litigation.
The graphic and animation-supported workshop/lecture activity will focus on the residential construction process, an examination of associated damages most often encountered when investigating construction defect claims, and the inter-relationships between the developer, general contractor, sub trades and design professionals.
Typical plaintiff homeowner/HOA expert allegations will be examined in connection with those building components most frequently associated with construction defect and claims litigation.
The workshop will examine:
* Typical construction materials, and terminology associated with residential construction
* The installation process and sequencing of major construction elements, including interrelationship with other building assemblies
* The parties (subcontractors) typically associated with major construction assemblies and components
* The various ASTM standard testing protocols utilized to field test buildings
* An analysis of exposure/allocation to responsible parties
Attendance at THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION seminar will provide the attendee with:
* A greater understanding of the terms and conditions encountered when dealing with common construction defect issues
* A greater understanding of contractual scopes of work encountered when reviewing construction contract documents
* The ability to identify, both quickly and accurately, potentially responsible parties
* An understanding of damages most often associated with construction defects, as well as a greater ability to identify conditions triggering coverage
* Assistance in the satisfaction of important continuing education requirements.
Course #: 901290467
Sponsor #: 14152
BHA Houston Office
800 Town & Country Blvd.
Suite 300
Houston, TX 77024
To register for the event, please email Don MacGregor at dmac@berthowe.com.
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Compliance Doesn’t Pay: Compliance Evidence Inadmissible in Strict Liability Actions
February 05, 2024 —
Kyle Rice - The Subrogation StrategistIn Sullivan v. Werner Co., No. 18 EAP 2022, 2023 Pa. LEXIS 1715 (Dec. 22, 2023), the Supreme Court of Pennsylvania (Supreme Court) clarified that in light of its decision in Tincher v. Omega Flex, Inc., 628 Pa. 296 (2014), evidence that a product complied with industry standards is inadmissible in an action involving strict product liability.
In Tincher, the Supreme Court overruled prior case law and reaffirmed that Pennsylvania is a Second Restatement Jurisdiction. As stated in Sullivan, discussing Tincher, under the Restatement (Second) of Torts § 402A, a “seller of a product has a duty to provide a product that is free from ‘a defective condition unreasonably dangerous to the consumer or [the consumer’s] property.’ To prove breach of this duty, a ‘plaintiff must prove that a seller (manufacturer or distributor) placed on the market a product in a “defective condition.””
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Kyle Rice, White and WilliamsMr. Rice may be contacted at
ricek@whiteandwilliams.com
New York Court Permits Asbestos Claimants to Proceed Against Insurers with Buyout Agreements
December 06, 2021 —
Patricia B. Santelle & Frank J. Perch, III - White and Williams LLPA recent New York federal district court decision addresses a number of issues in the context of asbestos coverage involving an insolvent insured, holding that policy buyout agreements between the insured and its insurers did not bar actions by certain tort judgment creditors against some of the settling insurers, and further finding that such agreements can constitute fraudulent conveyances, especially where the proceeds of the settlement are not reserved for payment of insured claims.
In the litigation pending in the Western District of New York (Mineweaser v. One Beacon Insurance Company, et al., No. 14-CV-0585A), certain asbestos plaintiffs sought recovery from excess insurers for judgments obtained against an insolvent asbestos supplier (Hedman Resources, formerly known as Hedman Mines), which ceased operations in 2007 due to insolvency. Hedman had at one time been a subsidiary of Gulf & Western. As of 2009-2011, the excess insurers of Gulf & Western were advised of exhaustion of primary insurance as well as Hedman’s insolvency.
Reprinted courtesy of
Patricia B. Santelle, White and Williams LLP and
Frank J. Perch, III, White and Williams LLP
Ms. Santelle may be contacted at santellep@whiteandwilliams.com
Mr. Perch may be contacted at perchf@whiteandwilliams.com
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Construction Firm Sues Town over Claims of Building Code Violations
November 06, 2013 —
CDJ STAFFParadigm Development and Construction LLC has sued Bristol Township, Pennsylvania over the allegation that town building officials colluded with their clients to issue building code violations after Paradigm prepared to sue the clients. John and Patricia Conard hired Paradigm to construct an addition to their home. During the process, the work went through nine inspections before Paradigm stopped work over a payment dispute.
Some months later, Bristol Township issued a notice that Paradigm had 37 violations of the building code. Paradigm alleges that the source was a set of photographs provided by the Conards to the building officials. The lawsuit states that Paradigm “was not notified of any construction deficiencies at the Conard property, and was not provided with an opportunity to discuss, defend or refute the allegations of the Municipal Defendants that Plaintiff has violated the Bristol Building code.”
The violation notice was withdrawn a few months later.
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90 and 150: Two Numbers You Must Know
July 22, 2019 —
Christopher G. Hill - Construction Law MusingsMechanic’s liens are a big topic here at Construction Law Musings. I’ve discussed everything from the picky nature of this powerful payment tool to the changes that are upcoming on July 1, 2019. Given the strict way that the form and timing of a Virginia mechanic’s lien is so critical, I thought a quick reminder was in order.
Two numbers that are critical to the timing and content of any mechanic’s lien are 90 and 150, both found in Va. Code 43-4. 90 days is the time from the last date of work (not invoicing), or last date of the last month in which work was done given proper circumstances.
The 90 days prescibes the time during which a contractor can properly record a valid lien. This is a hard deadline and is 90 days, not three months. Miss this deadline and no matter what the type of payment that has not been made (something discussed below), the contractor will lose its lien rights. This is the easier of the two numbers to both understand and apply. Count 90 days from last non-corrective or warranty work and that is your hard out for filing.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
