The Economic Loss Rule and the Disclosure of Latent Defects: In re the Estate of Carol S. Gattis
January 15, 2014 —
Brady Iandiorio - Higgins, Hopkins, McLain & Roswell, LLCIn a recent case of first impression, the Colorado Court of Appeals determined that the economic loss rule does not bar a nondisclosure tort claim against a seller of a home, built on expansive soils which caused damage to the house after the sale. The case of In re the Estate of Carol S. Gattis represents a new decision regarding the economic loss rule. Because it is a case of first impression, we must wait to see whether the Colorado Supreme Court grants a petition for certiorari.
Until then, we will analyze the decision handed down on November 7, 2013. The sellers of the home sold it to an entity they controlled for the purpose of repairing and reselling the home. Before that purchase, Sellers obtained engineering reports including discussion of structural problems resulting from expansive soils. A structural repair entity, also controlled by Sellers, oversaw the needed repair work. After the repair work was completed, Sellers obtained title to the residence and listed it for sale.
Sellers had no direct contact with Gattis, who purchased the residence from Sellers. The purchase was executed through a standard-form real estate contract, approved by the Colorado Real Estate Commission: Contract to Buy and Sell Real Estate, to which no changes were made. Several years after taking title to the residence, Gattis commenced action, pleading several tort claims alleging only economic losses based on damage to the residence resulting from expansive soils.
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Brady Iandiorio, Higgins, Hopkins, McLain & Roswell, LLCMr. Iandiorio may be contacted at
iandiorio@hhmrlaw.com
Clearly Determining in Contract Who Determines Arbitrability of Dispute
April 26, 2021 —
David Adelstein - Florida Construction Legal UpdatesAs you know from prior postings: “Arbitration provisions are creatures of contract and must be construed ‘as a matter of contract interpretation.’ ” Fallang Family Limited Partnership v. Privcap Companies, LLC, 46 Fla.L.Weekly D639e (Fla. 4th DCA 2021) (citation omitted). Thus, if you prefer to arbitrate potential disputes, instead of litigating potential disputes, you want to include an arbitration provision in your contract. While there are positives and negatives to arbitration, no different than litigation, these positives and negatives should be considered during the contract negotiation process when dealing with the dispute resolution process in the contract.
Generally, under the law, the arbitrability of a dispute is determined by the court. However, this can be deferred to the arbitrator with clear and unmistakable language in the contract.
By way of example, the American Arbitration Association includes a rule that allows an arbitrator to rule on the arbitrability of the dispute, i.e., the claims asserted are subject to the governing arbitration provision in the contract. Recent law has suggested that if the objective is to authorize an American Arbitration Association arbitrator to make this determination, the contract clearly and unmistakably needs to state this intent and generally referring to the American Arbitration Association rules is not good enough. For this reason, I have included in arbitration provisions language that specifically states, “In the event of any dispute as to the arbitrability of any claim or dispute, the parties agree that an appointed arbitrator within the American Arbitration Association shall make this determination.” I have also included in arbitration provisions the converse so that if there is a dispute as to the arbitrability of a claim or dispute, the court, and not the arbitrator, will make this determination.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Law Client Advisory: What The Recent Beacon Decision Means For Developers And General Contractors
August 20, 2014 —
Steven M. Cvitanovic and Whitney L. Stefko - Haight Brown & Bonesteel LLPOn 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.
So, how will Beacon change the landscape for developers and general contractors? It is important to understand the factual background in Beacon to predict how the decision may alter the playing field. For a detailed analysis of the Amicus briefs in the Beacon matter from the AIA, the CBIA, and the Consumer Attorneys of California, please click here.
The Beacon case arose from a common development model in California: a developer conceives a multi-unit project, maps the project as a condo development but rents as apartments. Shortly after completion of the Beacon project, the developer sold the entire project and the new owner finalized the existing condominium map and placed the units on the market as condominiums. Although the architects always knew they had designed a residential structure, the project ultimately became a condominium development. The newly formed homeowners’ association filed a construction defect suit against the developers, general contractor, the subcontractors and the architects for design and construction defects.
Reprinted courtesy of
Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and
Whitney L. Stefko, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com
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Landmark Towers Association, Inc. v. UMB Bank, N.A. or: One Bad Apple Spoils the Whole Bunch
May 12, 2016 —
Jean Meyer - Colorado Construction LitigationOn April 21, 2016, the Colorado Court of Appeals issued an opinion that immediately drew the ire of the greater real estate development industry and those concerned about affordable housing in a state in the midst of unprecedented soaring rent and housing prices. The Landmark Towers Assn., Inc. v. UMB Bank, N.A., 2016 COA 61, decision is the result of protracted litigation arising out of construction and sale of the ill-fated European Village (“Village”) residential community. For a thorough summary of the origins of the development and the unfortunate story of the man behind the curtain, review the Denver Post’s article titled “Zachary Davidson, Denver Landmark developer, and his fall from grace.” (http://www.denverpost.com/ci_22656011/fall-from-grace-zach-davidson-landmark denver)
Despite the unique facts and circumstances relating to the questionable dealings by the developer, Mr. Zachary Davidson, the decision now stands to turn the Colorado real estate development business on its head. Specifically, a group of condominium owners, who did not live in the Village, learned that their properties had been included in a special district, the Marin Metropolitan District (“District”), to finance the Village. Prior to their purchase, Mr. Davidson failed to disclose to the condominium owners that they would be responsible for financing the Village’s development through previously issued bonds by the District to be paid for through their property taxes. Understandably frustrated by this discovery the condominium owners, through the Landmark Towers Association, Inc. (“Landmark HOA”), investigated the origin of these unforeseen property taxes.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
California Restricts Principles of “General” Personal Jurisdiction
April 01, 2015 —
Kristian B. Moriarty and R. Bryan Martin – Haight Brown & Bonesteel LLPIn BNSF Railway Company v. Superior Court (Kralovetz) (Filed 3/27/2015, No. B260798), the California Court of Appeal, Second District, held a Delaware railroad corporation, with its principal place of business in Texas, was not subject to “general” personal jurisdiction in California, despite California housing 8.1% of the corporation’s total workforce, accounting for 6% of the corporation’s revenue, and containing just under 5% of its total track mileage.
Plaintiff, Vicki Kralovetz, filed suit in California Superior Court against defendant, BNSF Railway Company (“BNSF”), and others, for wrongful death. Plaintiff contended her husband was exposed to asbestos products manufactured by BNSF in Kansas while working at a dismantling facility owned by BNSF’s predecessor in interest. Plaintiff claimed the exposure caused her husband to contract mesothelioma, which resulted in his death.
Reprinted courtesy of
Kristian B. Moriarty, Haight Brown & Bonesteel LLP and
R. Bryan Martin, Haight Brown & Bonesteel LLP
Mr. Moriarty may be contacted at mmoriarty@hbblaw.com
Mr. Martin may be contacted at bmartin@hbblaw.com
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Implementation of CA Building Energy Efficiency Standards Delayed
February 25, 2014 —
Beverley BevenFlorez-CDJ STAFFIn his California Construction Law blog, Garret Murai published the recent Industry Bulletin released by the California Contractors State License Board (CSLB) regarding the delayed implementation of the California Building Energy Standards. CSLB has delayed implementation from January 1st, 2014 to July 1, 2014 due to “unanticipated delays in developing complete performance compliance software for 2013 Public Domain Residential and Nonresidential California Building Energy Code Compliance guidelines, necessitating the CEC action to change the effective date of energy related provisions.”
The Industry Bulletin summarized changes regarding various codes including 2013 California Energy Code, Part 6; 2013 California Administrative Code, Chapter 10, Part 1; and, 2013 CALGreen, Part 11. According to the bulletin, as reported by the California Construction Law blog, “Contractors are encouraged to contact their local building enforcement agencies for assistance and/or clarification.”
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Claim for Consequential Damages Survives Motion to Dismiss
November 14, 2018 —
Tred R. Eyerly - Insurance Law HawaiiThe insured's claim for consequential damages survived the insurer's motion to dismiss. Tiffany Tower Condominium, LLC v. Ins. Co. of the Greater N.Y., 2018 N.Y. App. Div. LEXIS 5783 (N.Y. App. Div. Aug. 22, 2018).
Tiffany Tower submitted a claim in November 2012 with Insurance Company of the Great New York for damages sustained by its building during Superstorm Sandy. The insurer paid the original claim in December 2012. Then, in September 2014, Tiffany Tower submitted a supplemental claim for additional losses which it asserted were caused by the storm. The insurer denied the supplemental claim.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Toward Increased Citizen Engagement in Urban Planning
November 14, 2018 —
Aarni Heiskanen - AEC BusinessDigitalization creates new opportunities for citizen engagement in urban planning. I gave a short presentation on the topic at the Digitalization in Urban Planning event in Helsinki.
The event was organized by CHAOS Architects, a tech company. Its AI cloud platform allows citizens to share ideas about their city and co-create it with their community. The platform contains engagement-driven applications and third-party APIs that process business intelligence for better interaction and decision-making.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
