“Rip and Tear” Damage Remains Covered Under CGL Policy as “Accident”—for Now.
September 01, 2016 —
Michael Lindsay & Luke Mecklenburg – Snell & Wilmer Real Estate Litigation BlogThe Colorado Supreme Court has approved a settlement between the parties to an appeal of the 2012 Colorado Pool Systems v. Scottsdale Insurance Company Court of Appeals case, leaving that ruling intact. The ruling parses a fine line between uncovered costs of repairing defective work and covered costs of damage caused to nondefective work while repairing defective work. This nuanced opinion, which is now established Colorado law, is worth a second look.
In Colorado Pool Systems, Inc. v. Scottsdale Insurance Company, the Colorado Court of Appeals determined that so-called “rip and tear” damage caused by a construction professional to nondefective work while correcting defective work is covered as an “accident” under standard Commercial General Liability insurance language. 317 P.3d 1262 (Colo. App. 2012). A pool company excavated and built a rebar frame in order to construct a pool, but it hired a subcontractor to pour the concrete. An inspector later noticed that some of the rebar was too close to the surface, and the pool company agreed to demolish and replace the pool after an agent of its insurer represented that this loss would be covered. But the agent was wrong, the insurer denied coverage, and litigation ensued.
Reprinted courtesy of
Michael Lindsay, Snell & Wilmer and
Luke Mecklenburg, Snell & Wilmer
Mr. Lindsay may be contacted at mlindsay@swlaw.com
Mr. Mecklenburg may be contacted at lmecklenburg@swlaw.com
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The “Builder’s Remedy” Looms Over Bay Area Cities
February 20, 2023 —
Allan C. Van Vliet, Cara M. MacDonald, Robert G. Howard & Robert C. Herr - Gravel2Gavel Construction & Real Estate Law BlogCities in the San Francisco Bay Area are frantically working to finalize their state-mandated “housing elements” in their General Plans by the January 31, 2023, deadline imposed by the California Department of Housing and Community Development (HCD). For Bay Area cities like San Francisco, Oakland, San Jose and Berkeley, the plans must be approved by HCD
on or before January 31, 2023. California municipalities have extra incentive to get their housing elements approved this year, because the failure to meet the deadline may subject them to a remedy known as
the “builder’s remedy.”
The failure of cities in California to adopt and implement adequate housing elements as part of their General Plans has contributed to the state’s serious housing affordability crisis. The “builder’s remedy” incentivizes cities to meet housing element deadlines, because failure to do so could cause cities to lose control over certain land use entitlement decisions for projects that include housing under the state’s Housing Accountability Act (HAA).
Reprinted courtesy of
Allan C. Van Vliet, Pillsbury,
Cara M. MacDonald, Pillsbury,
Robert G. Howard, Pillsbury and
Robert C. Herr, Pillsbury
Mr. Van Vliet may be contacted at allan.vanvliet@pillsburylaw.com
Ms. MacDonald may be contacted at cara.macdonald@pillsburylaw.com
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Mr. Herr may be contacted at robert.herr@pillsburylaw.com
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Nevada’s Home Building Industry can Breathe Easier: No Action on SB250 Leaves Current Attorney’s Fees Provision Intact
June 21, 2017 —
Aaron Lovaas – Newmeyer & Dillion LLPConstruction and design professionals in Nevada’s home building industry breathed a collective sigh of relief on June 5, 2017 when the 79th Session of the Nevada Legislature adjourned without entertaining Senate Bill 250, which sought to reinstate homeowner plaintiffs’ nearly automatic right to recover attorneys’ fees, expert costs, and costs of investigation when bringing suit for alleged constructional defects.
Until 2015, homeowners’ recovery of such damages was the reality of the construction defect landscape in Nevada. While Chapter 40 of the Nevada Revised Statutes specifically allowed for recovery of “reasonable” attorneys’ fees, expert costs, and costs of investigation, the trend in Nevada was that plaintiffs were all but guaranteed awards of all such sums. Of course, this environment incentivized plaintiffs’ lawyers to bring claims of questionable or little repair value in cases where the attorney’s fees and expert costs often far exceeded the costs of repair.
HOW AB125 CHANGED THE LANDSCAPE
Such was the reality in Nevada until 2015 and the passage of Assembly Bill 125, which eliminated the nearly automatic award of attorneys’ fees and expert costs and overhauled Chapter 40 in many other respects. AB125 made over portions of Chapter 40 by:
- Placing awards of attorneys’ fees into the framework of offers of judgment, utilized extensively in other fields of civil litigation and available equally to homeowner plaintiffs as well as construction industry defendants; and
- Reworking expert costs and costs of investigation to allow for the award of those items only in the case of proven defects and only as to those costs directly related to the investigation and proof of those defects.
INTRODUCING SB250
The 2017 Legislative Session saw efforts to return Chapter 40 to its pre-2015 version through the introduction of SB250. Fortunately for construction and design professionals in the home building industry in Nevada, the State Senate Judiciary Committee did not act upon the bill and the effort died having never made it to a floor vote. Considering that Nevada’s Legislature meets biannually, the current framework of Chapter 40 is intact until at least 2019. The 2017 Legislative Session, however, is an illustration to how quickly those of the construction defect plaintiffs’ bar can move to initiate efforts to turn back the clock to a much riskier time for construction and design professionals.
Those in the industry should remain vigilant and monitor future legislative efforts to reinstate such awards or other clearly anti-builder measures. Such measures simply drive-up the overall cost and expense of home construction and, in turn, home ownership, which it is often said, is one of the cornerstones of the American dream.
Aaron Lovaas is a partner in the Las Vegas office of Newmeyer & Dillion. As a transactional attorney and business litigator, Aaron has the ability to evaluate legal issues from both points of view and help his clients understand their best option. He can be reached at aaron.lovaas@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
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Arizona Supreme Court Holds a Credit Bid at a Trustee’s Sale Should Not be Credited to a Title Insurer Under a Standard Lender’s Title Policy To the Extent the Bid Exceeds the Collateral’s Fair Market Value
March 01, 2017 —
Richard H. Herold - Snell & Wilmer Real Estate Litigation BlogThe Arizona Supreme Court recently addressed what impact, if any, a lender’s credit bid at an Arizona trustee’s sale has on an insurer’s liability under Sections 2, 7 and 9 of the standard’s lender’s title policy (“Policy”), holding in Equity Income Partners, LP v. Chicago Title Insurance Company, 241 Ariz. 334, 387 P.3d 1263 (February 7, 2017) as follows:
1. Section 2 of the Policy, entitled “Continuation of Insurance,” not Section 9, entitled “Reduction of Insurance; Reduction or Termination of Liability,” applies when a lender acquires property at a trustee sale by “either a full- or partial-credit bid” since Section 2 directly addresses the existence and amount of coverage in such circumstances. Id. at 1267.
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Richard H. Herold, Snell & WilmerMr. Herold may be contacted at
rherold@swlaw.com
Protect Your Right To Payment By Following Nedd
August 03, 2022 —
Denise Motta - Gordon & Rees Construction Law BlogIn order to preserve your right to payment, you must satisfy the contractual requirements supporting a change order for the increased costs or time due to the delay. The key to the successful presentation of change order claims is educating your team on the following:
1. NOTICE
- Review the change order and notice provisions of your contracts. Make your contract searchable and insert the term “Noti” and look for the items listed below.
- Who: Check the designated representative for notice.
- It may not be the project manager.
- Confirm who can authorize the change order.
- Is owner approval required?
- Ensure that the party approving the change order has authority to do so.
- What: Check for specific information required by the contract.
- Provide ALL information available.
- If certain information is not yet available, state that the information will be provided when available.
- Reserve all rights to amend and submit additional information.
- Request both an increase to the Contract Sum and Contract Time.
- Make the request even if you do not believe the delay or time necessary will cause a significant impact.
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Denise Motta, Gordon Rees Scully Mansukhani, LLPMs. Motta may be contacted at
dmotta@grsm.com
Appraisal Can Go Forward Prior to Resolution of Coverage Dispute
April 08, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Florida Supreme Court found that a trial court could compel an appraisal of the insured's loss prior to resolving coverage issues. Am. Coastal Ins. Co. v. San Marco Villas Condo. Ass'n, Inc., 2024 Fla. LEXIS 185 (Fla. Feb. 1, 2024).
Hurricane Irma damaged San Marco Condominium Association's buildings. American Coastal paid $192,629.75 for the loss. San Marco estimated the damage to be in excess of eight million dollars. San Marco demanded an appraisal under the policy. American Coastal refused to submit to appraisal because it was premature as its investigation was still ongoing.
San Marco sued American Coastal and asked the court to compel appraisal. American Coastal argued that San Marco had committed fraud or had made material misrepresentations regarding its claim. The trial court heard San Marco's appraisal motion and entered an order compelling appraisal. American Coastal appealed, bu the Second District Court affirmed.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Expect the Unexpected (Your Design Contracts in a Post-COVID World)
April 18, 2023 —
Melissa Dewey Brumback - Construction Law in North CarolinaHave you adapted your post-COVID practice to better plan for the “unexpected” ? In particular, have you looked at–and revised– your professional services contracts to give yourself a little more breathing room for unaccounted issues that may arise? If not, no time like the present.
Don’t like that saying? How about ” a stitch in time saves nine?” No? Still nothing? What about a picture of something so completely unexpected it shocks you– say, a fireman commuting home, in fire-fighting regalia, on a tricycle? Okay, here you go…
Now that I have your attention– you should make it a practice to regularly review and update your professional services agreements, and you should consider issues such as:
- Does your agreement provide for extra compensation if you have to spend more time or a longer period providing construction administration services for material delays or labor shortages? If not, it should.
- Does your agreement have a well-written “act of God” provision– one that includes pandemic/epidemics as part of the “act of God” conditions in which a term may become void? If not, add it now!
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Melissa Dewey Brumback, Ragsdale LiggettMs. Brumback may be contacted at
mbrumback@rl-law.com
Autovol’s Affordable Housing Project with Robotic Automation
February 15, 2021 —
Aarni Heiskanen - AEC BusinessJust over two years since breaking ground, Autovol is now using automation in new ways as it nears completion of its first major affordable housing project. The project, Virginia Street Studios, will make high-quality apartment homes more affordable to seniors in San Jose, one of America’s 10 most expensive cities.
The 400,000 square foot Autovol factory has now successfully deployed its unique combination of construction trades and robotic automation. Autovol has hired more than 100 employees, which the company calls Solutioneers. Led by CEO Rick Murdock and co-developed by The Pacific Companies, Autovol is pioneering a new kind of modular construction.
Robotics lead into the future of housing
“Automation and robotics will lead the world into the future of housing,” Murdock said. “What we’re doing hasn’t been attempted before. Our investors and Solutioneers leaned in with lots of confidence, and now we’re seeing great results that prove they were right.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
