Seattle Washington Building Expert Directory

No Coverage for Construction Defect Claim Only Impacting Insured's Work

January 08, 2024 — Tred R. Eyerly - Insurance Law Hawaii
In a coverage dispute between two insurers over a claim for damages caused by faulty workmanship, the court found there was no right to equitable contribution or indemnity. Travelers Prop. Cas. Co. of Am. v. Mallcraft, Inc., 2023 Cal. Super. LEXIS 67568 (Cal. Super. Ct. Sept. 15, 2023). Mallcraft was the general contractor for a building project and was sued for construction defects. Travelers was an additional insured under a policy issued to a subcontractor, KitCor. Travelers defended Mallcraft in an arbitration. Travelers sought equitable contribution and equitable indemnity from Hartford, Mallcraft's insurer. Mallcraft and Travelers stiulated to a judgment agianst Mallcraft for all costs Travelers incurred in the arbitration. Travelers' insured, KitCor, was not implicated in the construction defect claims against Mallcraft. The judgment set forth findings, including the fact that the underlying plaintiff never made any claim that KitCor perfomred work on the project or casued property damage. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

“Bound by the Bond”

September 02, 2024 — Daniel Lund III - Lexology
A New York trial court granted judgment in favor of a performance bond surety on a construction project, based upon the failure of the claiming party to abide by the terms of the bond. The “AIA Document A312” bond form – described by the court (quoting surety law authority) to be “one of the clearest, most definitive, and widely used type of traditional common law ‘performance bonds’ in private construction” – contains various procedures which must be honored as a “condition precedent to an action to recover” on the bond/against the surety. One of those prerequisites is a “declaration of default” concerning the contractor principal (here, a subcontractor). The case involved the construction of an 85-story skyscraper in midtown Manhattan, and the performance of the subcontract for the building’s superstructure. The bonded contract was at a value of approximately $25,000,000 and obligated the sub to provide a performance bond “in a form similar to the [A312 bond],” and which was otherwise satisfactory to the obligee/construction manager. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Construction Industry on the Comeback, But It Won’t Be the Same

November 20, 2013 — CDJ STAFF
“The majority of contractors have readjusted and there’s cautious optimism, but there’s a new normal in construction,” Cam Dickinson, senior vice president of the construction group of Woodruff-Sawyer. But he cautioned that “it’s not going to come back like it was in the good old days.” Some places, like the Miami or New York City areas are doing well, although New York City has the perhaps unique advantage of its market. Brian Schofeld, Crystal & Co.’s senior managing director and construction practice leader noted that for one New York City project, “the penthouse went for the full value of the gut renovation and that left the other 17 floors as a profit.” Further signs of life are that “the residential private side is going gangbusters in the Bay Area and downtown San Francisco,” according to Bret Lawrence, vice president of construction for Woodruff-Sawyer, but he notes that “it’s nothing like it was.” Read the court decision
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Renters Who Bought Cannot Sue for Construction Defects

October 08, 2013 — CDJ STAFF
A Wisconsin couple that leased then bought a home cannot sue the couple that built the home for construction defects. The court rejected the claims made by Niksa and Kelly Ivancevic that the sellers, Ronald and Debra Reagan, had breached contract or that the contract represented a mutual mistake. The Ivancevics initially leased the home, with an agreement that said the house would be “delivered in clean condition and good repair, free of mold and toxic substances, suitable for habitation in compliance with all laws.” Before the purchase, no defects were found. After the purchase, the Ivancevics had problems with the air conditioning, leading to water leaks on the second floor. The court found that the actual sales contract did not guarantee a defect-free residence. Therefore the Ivancevic’s claim of a mutual mistake, in which “both parties of a contact are unaware of the existence of a past or present fact material to their agreement” did not apply, since the presence of construction defects was not “material to their agreement.” Read the court decision
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Washington Supreme Court Upholds King County Ordinance Requiring Utility Providers to Pay for Access to County’s Right-of-Way and Signals Approval for Other Counties to Follow Suit

March 02, 2020 — Kristina Southwell - Ahlers Cressman & Sleight PLLC
On December 5, 2019, the Washington State Supreme Court released its opinion in King County v. King County Water Districts, et al.,[1] upholding King County’s Ordinance 18403, which requires utility companies who are franchise grantees to pay “franchise compensation” for their use of the County rights-of-way. Generally, utility companies must apply for and obtain from the County a franchise permitting it to do necessary work in the County rights-of-way. [2] Previously, King County only charged an administrative fee associated with issuing such a franchise. But with the new franchise compensation charges, King County estimates that it will raise approximately $10 million dollars per year for its general fund. Ordinance 18403 passed in November 2016 and was the first of its kind in the state. The ordinance created a rule, set forth in RCW 6.27.080, requiring electric, gas, water, and sewer utilities who are granted a franchise by King County to pay “franchise compensation” in exchange for the right to use the County’s rights-of-way. The rule provides that franchise compensation is in the nature of an annual rent payment to the County for using the County roads. King County decides an initial estimate of the charge by considering various factors such as the value of the land used, the size of the area that will be used, and the density of the households served. But utility companies can negotiate with the County over the final amount of franchise compensation. Read the court decision
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Reprinted courtesy of Kristina Southwell, Ahlers Cressman & Sleight PLLC
Ms. Southwell may be contacted at kristina.southwell@acslawyers.com

No Coverage Where Cracks in Basement Walls Do Not Amount to Sudden Collapse

January 10, 2018 — Tred Eyerly - Insurance Law Hawaii

In another of a series of collapse cases arising out of Connecticut, the federal district court found there was no coverage for the homeowner's cracked basement wall caused by defective concrete. Liston-Smith v. CSAA Fire & Cas. Ins. Co., 2017 U.S. Dist. LEXIS 206211 (D. Conn. Dec. 15, 2017).

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

Update: Amazon Can (Still) Be Liable in Louisiana

December 31, 2024 — Michael Ciamaichelo - The Subrogation Strategist
On November 25, 2024, in Pickard v. Amazon.com, Inc., No. 5:20-cv-01448, 2024 U.S. Dist. LEXIS 215377, the United States District Court for the Western District of Louisiana (District Court) ruled that Amazon.com, Inc. (Amazon) could be liable for manufacturer-seller liability under the Louisiana Products Liability Act (LPLA) for a defective product sold by a third-party seller through the “Fulfillment by Amazon” program (FBA). The court also dismissed two tort claims against Amazon as follows: (i) Amazon does not qualify as a “seller” for purposes of non-manufacturer seller liability (because passing title is required for that claim); and (ii) there is insufficient evidence to prove the decedent, Archie Pickard (Pickard), relied on Amazon’s safety practices when purchasing the defective product, precluding a claim for negligent undertaking. Background Pickard died from injuries sustained in a house fire allegedly caused by a defective battery charger he purchased on Amazon. Jisell, a Chinese company and a third-party seller, manufactured and sold the charger. Amazon never took title to the charger but stored it in its warehouse and delivered it to Pickard through the FBA. Pickard’s children filed a wrongful death lawsuit against Amazon alleging three claims: (i) manufacturer-seller liability under the LPLA; and tort-based claims of (ii) non-manufacturer seller liability and (iii) negligent undertaking. After Amazon moved for summary judgment on all claims, the District Court certified questions to the Supreme Court of Louisiana (Supreme Court) seeking guidance as there was minimal guidance regarding the application of products claims to online marketplaces. Read the court decision
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Reprinted courtesy of Michael Ciamaichelo, White and Williams LLP
Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com

In Oregon Construction Defect Claims, “Contract Is (Still) King”

April 25, 2012 — CDJ STAFF

Writing in Oregon’s Daily Journal of Commerce, David Anderson looks at the aftermath of the case Abraham v. T. Henry Construction, Inc. In that case, Anderson notes that “the homeowners hired a contractor to build their house, and subsequently discovered extensive water damage” “after expiration of the time to sue for breach of contract.” The homeowners claimed negligence. Oregon’s Supreme Court concluded that “homeowners only had to prove that the contractor negligently caused reasonably foreseeable harm to the homeowner’s property.”

Anderson views this decision as leading to two risks for contractors. “First, contractors can be held liable in tort for breaching building code standards; second, they can be held liable for violating the often-difficult-to-define ‘reasonable care’ standard.” But here, “contract can be king.” The Oregon Supreme Court noted that the contractor “could have avoided exposure to the general ‘reasonable care’ standard by more carefully defining its obligations in the original construction contract.”

He notes that contractors who fail to define their obligations or use generic definitions “may be exposing themselves to a more vague scope of liability.”

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