Construction Litigation Roundup: “Stuck on You”
March 04, 2024 —
Daniel Lund III - LexologyA “contract of adhesion” is referred to as a standard form contract – usually preprinted – “prepared by a party of superior bargaining power for adherence or rejection of the weaker party.” Yet, it is not the nature of the contract alone which determines its enforceability, but, instead, “whether a party truly consented to all of the printed terms.”
A Louisiana plaintiff fighting a forum selection clause in a construction contract sought to have the clause nullified, urging that the clause was “buried” in the agreement and in small font, arguing also that the contractor had “superior bargaining position at the time of entering into the contract… because [plaintiff] needed to repair the hurricane damage” to his home as soon as possible.
In response, the contractor urged that the contract was not executed under rush conditions, and that, in any event, the contract was only two pages long – and the forum selection clause was not hidden and was in the same font as all of the other provisions in the contract.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Former Zurich Executive to Head Willis North America Construction Insurance Group
March 01, 2012 —
CDJ STAFFInsurance Journal reports that Sean McGroarty will be directing surety operations for their construction practice in North America. Previously, Mr. McGroarty was the senior vice president and head of international surety with Zurich Financial Services. He has also worked for Liberty Mutual Group and the St. Paul Companies.
Mr. McGroarty will be leading a team of professionals offering brokerage services for contract and commercial surety.
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Who Says You Can’t Choose between Liquidated Damages or Actual Damages?
October 11, 2017 —
Kevin Walton - Snell & Wilmer Real Estate Litigation BlogIn Colorado, courts enforce liquidated damages provisions if three elements are satisfied: (1) the parties intended to liquidate damages; (2) the amount of liquidated damages was a reasonable estimate of the presumed actual damages caused by a breach; and (3) at the time of contracting, it was difficult to ascertain the amount of actual damages that would result from a breach. But what happens when a contract gives a party a right to choose between liquidated damages or actual damages? This seems troublesome because it allows a party to set the floor for their damages without limitation if actual damages exceed the contractual amount. As a matter of first impression, the Colorado Supreme Court addressed this issue in Ravenstar, LLC v. One Ski Hill Place, LLC, 401 P.3d 552 (Colo. 2017).
In Ravenstar, plaintiffs contracted to buy condominiums from a developer. As part of their contracts, plaintiffs deposited earnest money and construction deposits equal to 15% of each unit’s purchase price. Plaintiffs breached their contract by failing to obtain financing and failing to close by the closing date. Each contract’s damages provision provided that if a purchaser defaulted, the developer had the option to retain all or some of the deposits as liquidated damages or, alternatively, to pursue actual damages and apply the deposits to that award. After plaintiffs defaulted, the developer chose to keep plaintiffs’ deposits as liquidated damages. Plaintiffs sued for return of their deposits.
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Kevin Walton, Snell & WilmerMr. Walton may be contacted at
kwalton@swlaw.com
Deck Police - The New Mandate for HOA's Takes Safety to the Next Level
November 18, 2019 —
Joseph Ferrentino – Newmeyer DillionA recent California law will hold homeowners’ associations accountable for the safety of their decks. SB326 now mandates all homeowners' associations to have decks inspected at least once every nine years by an architect or structural engineer to determine whether the decks are safe and waterproof. This law (Civil Code section 5551) follows SB721 which was passed in 2018 and requires a similar inspection every six years for other multifamily dwelling units. Failure to comply can result in paying the enforcement costs of local building agencies.
DETAILS ON THE MANDATE:
More specifically, the 2019 law requires inspections of wood “decks, balconies, stairways, and their railings” more than six feet off of the ground and designed for human use. Additionally, the engineer or architect must (1) certify that he or she has inspected for safety and waterproofing, and (2) certify the remaining useful life of the system. Further, the inspector must inspect a random sample of enough units to provide 95% confidence that “the results are reflective of the whole.” In other words, in addition to the inspector, the association will have to hire a statistician.
The nine-year timetable for inspection is no coincidence. After all, the statute of limitations for construction defects is ten years. In fact, associations are required to give notice to their members before filing a suit against a builder. However, under the new law, the association can delay giving notice to its members “if the association has reason to believe that the statute of limitations will expire.” Also, recent case law held that builders could add requirements to CC&R’s to limit a board’s authority to file lawsuits – i.e. adding a supermajority vote by members. Under SB326, any such provisions are now void. Hence, “supermajority” voting provisions are now invalid.
IMPACT ON CONSTRUCTION LITIGATION
These recent laws are clearly a reaction to the tragic collapse of an apartment balcony in Berkley in 2015 that resulted in the death of six college students. While it is imperative that decks be structurally safe, the requirements of SB326 will fuel more construction defect litigation.
Joseph Ferrentino is a Partner in Newmeyer Dillion's Newport Beach office. With 25 years of experience, Joe guides clients through construction law issues, among other areas. For more information on how Joe can help, contact him at joe.ferrentino@ndlf.com
ABOUT NEWMEYER DILLION
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that align with the business objectives of clients in diverse industries. With over 70 attorneys working as an integrated team to represent clients in all aspects of business, employment, real estate, privacy & data security and insurance law, Newmeyer Dillion delivers tailored legal services to propel clients’ business growth. 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 Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com
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Preservationists Want to Save Penn Station. Yes, That Penn Station.
December 20, 2021 —
Kriston Capps - BloombergIn November, as one of her first major acts since taking office, New York Governor Kathy Hochul pared back development plans for New York City’s Pennsylvania Station set in place by her predecessor, disgraced former governor Andrew Cuomo.
The Cuomo plan would have greatly expanded Penn Station and upscaled the neighborhood; Hochul’s vision narrows the scope of work, but it still stands to dramatically transform the subterranean transportation hub, which has been the focus of various unrealized redesign dreams for decades. On Dec. 8, critics and supporters sounded off on the Penn Station scheme in a public hearing. More than 200 people registered to weigh in on how the 10 new skyscrapers coming to the area (shrunk down a bit under Hochul) would affect the scale and character of the community, and the historic buildings that would need to be razed to make way for new development.
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Kriston Capps, Bloomberg
Has Hydrogen's Time Finally Come?
April 05, 2021 —
Mary B. Powers, Debra K. Rubin, Michael Dumiak, and Pam Radtke Russell - Engineering News-RecordGlobal conditions to harness the potential of hydrogen to fuel the developing clean energy transformation—particularly technology innovation, political investment and growing acceptance that climate change is a reality—finally appear to be lining up. While reports have noted hydrogen eyed as a fossil fuel replacement as far back as Jules Verne’s 1875 novel “The Mysterious Island,” with costs high and changemaking slow, it never captured the market many hoped for.
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Mary B. Powers, ENR,
Debra K. Rubin, ENR,
Michael Dumiak, ENR, and
Pam Radtke Russell, ENR
Ms. Rubin may be contacted at rubind@enr.com
Ms. Russell may be contacted at Russellp@bnpmedia.com
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Navigating the New Landscape: How AB 12 and SB 567 Impact Landlords and Tenants in California
March 11, 2024 —
Sharon Oh-Kubisch - Kahana FeldThere are various changes in the Landlord-Tenant laws in CA that became effective in 2024.
For the purposes of this article, I wanted to focus on Assembly Bill (AB) 12 and Senate Bill (SB) 567 only.
Governor Gavin Newsom recently signed AB 12 into law, a legislation that limits the amount landlords can charge for security deposits to just one month’s rent for unfurnished apartments. While the law aims to make housing more accessible, it raises several concerns for landlords and tenants alike. AB 12, was authored by Assemblyman Matt Haney, D-San Francisco; it passed both the Senate and the Assembly houses in September. The legislation introduces a notable shift from existing law, under which landlords can charge up to two months’ rent for an unfurnished unit and three months’ rent for a furnished one. This exception does not apply when the prospective tenant is a military service member, however.
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Sharon Oh-Kubisch, Kahana FeldMs. Oh-Kubisch may be contacted at
sokubisch@kahanafeld.com
Carbon Monoxide Injuries Caused by One Occurrence
April 01, 2014 —
Tred R. Eyerly – Insurance Law HawaiiInjuries from carbon monoxide poisoning to two families living in the insured's apartment complex arose from a single occurrence. Kosnoski v. Rogers, No. 13-0494, Memorandum and Decision (W. Va. Feb. 18, 2014).
The families lived in two apartments in the same complex owed by Marc Rogers. Members of the two families suffered serious injuries from carbon monoxide poisoning and one family member died. A gas boiler furnace in the basement of the apartment complex created the carbon monoxide.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com