Mendocino Hospital Nearing Completion
December 04, 2013 —
CDJ STAFFThe Frank R. Howard Memorial Hospital is well underway on its plans to move to a larger facility. The new building in Willits, California, will be more than twice the size of the old building at 74,000 square feet. Construction has reached the halfway point after just over three months of construction. Despite that, plans are to put the facility into use in January 2015.
The general contractor for the project is HBE Corporation. Rick Bockmann, HBE’s chief executive officer, said that the hospital was “on schedule and on budget.”
Read the court decisionRead the full story...Reprinted courtesy of
Should I Pull the Pin? Contractor and Subcontractor Termination for Cause
January 26, 2017 —
Patrick McNamara - Porter Law GroupAny owner or general contractor who has a few projects under his or her belt has likely had this thought: “My contractor (or subcontractor) is not performing the way I expected; should I replace him?” The other side of the termination coin is: “This project is not going the way I expected; should I get out?”
While there may be an emotional high that immediately comes from terminating a contractor or subcontractor (or leaving a project, in mid-stream), there are many factors to be weighed, before making that decision.
Project Delay. Replacing a contractor or subcontractor that has already begun performance always results in delays to the project. Assessing the work in place, interviewing replacement contractors, and negotiating the terms of the new relationship can easily consume weeks, if not months of project time.
Read the court decisionRead the full story...Reprinted courtesy of
Patrick McNamara, Porter Law GroupMr. McNamara may be contacted at
pmcnamara@porterlaw.com
Contractor Sentenced to Seven Years for Embezzling $3 Million
July 20, 2020 —
Garret Murai - California Construction Law BlogMichael Medeiros was not a good guy. Ok, on a scale of 1 to 10, maybe not a 9 or 10 (when you’re including guys like Charles Manson), but a solid 6 or 7 at least.
The next case, People v. Medeiros, Case No. A155648, 1st District Court of Appeals (March 26, 2020), is less important for its legal holding than as a reminder that while most legal disputes on construction projects end up with one party owing the other party money, sometimes, when a party’s conduct has been really bad, it can end in a loss of liberty (i.e., jail time) as well.
People v. Medeiros
Medeiros was a painting contractor operating under the name Professional Painting Company, Inc. In the early 1990s, Medeiros met Susan Lambert, who served as the property manager for a homeowners’ association, Woodlake Association, in Hayward, California.
Lambert was an alcoholic. Following a series of surgeries in 2005 and 2007 she became addicted to opiates as well. She also had a gambling problem. As a result, Lambert regularly found herself in financial difficulty.
And this is where Lambert and Medeiros found that they shared common ground. At some point, Medeiros confided to Lambert that he was having cash flow and tax problems.
Read the court decisionRead the full story...Reprinted courtesy of
Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Revisiting the CMO; Are We Overusing the Mediation Privilege?
November 19, 2021 —
Michael T. Kennedy Jr. - BERDING|WEILOne of the most common features in construction defect cases is the Case Management Order (“CMO”) or Pre-Trial Order (“PTO”) to govern pre-trial and mediation procedures. CMOs and PTOs arose in the days when the HOA would sue the developer, the developer would cross-complaint against the subcontractors, and each defendant and cross-defendant might have 2 or 3 insurance carriers defending, each of whom may retain their own panel counsel. In a large case there may have been 20 parties and 30 defense attorneys. In order to avoid the cost and chaos of all of those parties propounding their own discovery, and in order to prepare these cases for mediation well before trial and the associated costs, it became standard practice in California to include provisions in the CMO to stay all discovery until just before trial.
Plaintiff would provide a Defect List or Statement of Claims and the parties experts would meet and exchange information as part of the mediation process. All of the information exchanged would be subject to mediation privileges and inadmissible at trial. The benefit of this practice was that the parties (and carriers) would avoid the cost of formal discovery and allow the experts to discuss compromised scopes of repair to help settle the case while being able to take a more aggressive position at trial. The disadvantages are that each party uses its privileged initial expert reports to stake out negotiating positions more extreme than what they would put on at trial, with each side losing credibility with the other in assessing the value of the case, and for those cases that did not settle, the parties would be faced with having to do all of the depositions and discovery in the last 60 days, or delaying trial, or both.
Over the last 10 or 15 years with the advent of wrap-up insurance policies, these cases now usually involve 2 sides instead of 20; only the HOA and the developer remain in the case. However, old habits die hard, and the standard CMO/PTO hasn’t evolved with other aspects of these cases. The practice of staying all discovery and exchanging information only under mediation privileges remains, and as a result insurance carriers don’t receive the admissible evidence that they need to determine coverage and evaluate the real settlement value of the case until just before trial. On the plaintiff’s side, if most of the experts’ work is done under the guise of mediation privilege, those costs may not be recoverable. Outside the context of mediation, costs incurred in investigation of the defects and preparation of a scope and cost of repair are recoverable.
This reflexive claim of mediation privilege over all information exchanged during the case has outlived its usefulness. The CMO can and should remain to regulate formal discovery and to help the parties prepare for mediation, but regulated discovery should be opened early in the case. In California, the SB800 process already provides for the exchange of admissible information during the prelitigation right to repair process. Continuing that exchange during the early litigation allows the parties to continue to prepare for mediation, but waiving privileges had advantages for both sides.
A senior claims manager once commented that Plaintiff’s mediation-protected Statement of Claims “might as well be a stack of blank paper” for all of its usefulness to the carrier in assessing the value of the case. If the Plaintiff and it expects are free to inflate their claims early in the case without having to worry about every supporting those claims in front of a jury, they have little or no credibility. And if those claims are inflated or not “real,” not only can the carrier not properly assess the verdict range and settlement value of the case, but it may also be hampered in making a coverage determination. Simply put, if the exchange of real information through formal discovery is put off until just before trial, the defense cannot be ready to settle until then. Worse, the cost of defense goes through the roof in the last 60 days before trial as the lawyers’ scramble to take all of the depositions and to all of the other work that had been stayed for the previous year or two.
The Plaintiff is faced with the same question of credibility of defense experts where they are free to take a “low ball” negotiating position without having to support that position through cross-examination in front of the jury. Just as the carrier behind the defense attorney needs the Plaintiff’s “real” evidence to assess the claim, so does the HIOA Board of Directors behind the Plaintiff’s counsel. Additionally, in California as in most states, the cost of experts’ preparation for mediation may not be recoverable as costs or damages, but investigation of the defects and preparation of the scope and cost of repair is recoverable.
The biggest challenge is resolving construction defect claims for both sides is how to resolve these cases quickly while keeping costs under control. Practices that worked 20 years ago are no longer applicable with changes in insurance, and in light of some of the bad habits that arise when all of the information exchanged was confidential.
The CMO/PTO process can still be useful to regulate the discovery and mediation schedule given the volume of documents and other information to be exchanged but exchanging “real” information in a form that may come into evidence at trial should foster earlier resolution, resulting in cost savings for the parties. The CMO can provide for the parties to respond to controlled discovery, and the exchange of expert reports and potentially depositions can and should be done earlier in the case, well before the eve of trial. The parties can then assess the true value of each case and prepare for more substantive mediation without waiting until they are on the figurative courthouse steps.
Construction defect cases have a pattern, and it is tempting for busy lawyers to just put each case through the same algorithms that they have used for years. However, these cases have evolved and those of us handling these cases need to reevaluate our approach to these cases. Taking aggressive negotiating positions that no longer have any credibility with the other side has become counterproductive, and the exchange of real evidence earlier in the case would better serve our clients and carriers.
BERDING|WEIL is the largest and most experienced construction defect and common interest development law firm in California. For more information, please visit https://www.berding-weil.com
Read the court decisionRead the full story...Reprinted courtesy of
Michael T. Kennedy Jr., BERDING|WEILMr. Kennedy may be contacted at
mkennedy@berdingweil.com
Commerce City Enacts Reform to Increase For-Sale Multifamily Housing
August 19, 2015 —
David M. McLain – Colorado Construction LigitationMany cities in Denver’s metropolitan areas are experiencing tremendous growth. For more than a year, Colorado has been reported to be in a building boom. However even with the noticeable expansion, some areas still suffer from a lack of housing options specific to multifamily developments. Sean Ford, Mayor of Commerce City, stated that “[the city] has not approved a new condominium or multi-family project since 2008.”[1] Those of us in the construction industry attribute this shortage, at least in part, to construction defect litigation, which is often drawn-out, complicated, and very costly to builders.
Predicting that light rail service will intensify the need for owner-occupied units among Commerce City residents, the city council enacted legislation to address this scarcity. Ordinance No. 2060 which took effect August 1, 2015 provides “reasonable steps to encourage prompt and voluntary correction of construction defects … in order to enhance the health and safety of residents of Commerce City.”
The ordinance requires a homeowner who discovers a defect to provide written notice via certified mail or personal delivery to the responsible builder, contractor, engineer, or design professional. The notice may include requests for relevant construction documentation, maintenance recommendations, and warranty information. The builder must acknowledge receipt of notice and provide requested documents within 14 days.
Read the court decisionRead the full story...Reprinted courtesy of
David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Private Mediations Do Not Toll The Five-Year Prosecution Statute
April 28, 2016 —
Zachary P. Marks – Chapman Glucksman Dean Roeb & Barger In FocusIf you thought private mediation could toll the five-year period for case prosecution – think again. In a recent decision handed down by the Second District Court of Appeal, the court unequivocally held that voluntary, private mediations do not toll the five-year period before dismissal for failure to bring an action to trial.
California Code of Civil Procedure section 583.310 sets forth the applicable rule: “[a]n action shall be brought to trial within five years after the action is commenced against the defendant.” Section 1775.7(b) clarifies this rule, stating that the five-year period can be tolled if it is “submitted to mediation” within the final six months of the five-year period. However, the Code is silent with respect to the effect of tolling on public versus private mediations.
The Court of Appeal addressed this issue in its recent decision entitled Castillo v. DHL Express (USA) (2015) 243 Cal.App.4th 1186. Castillo was an employment class action brought by truck drivers against their employers. Plaintiffs argued that the case was “submitted to mediation” within the meaning of Section 1775.7(b) because the court’s Case Management Order reflected the fact that the parties agreed to pursue mediation. Conversely, defendants argued that the Case Management Statement clearly stated that the parties voluntarily agreed to a private mediation, not a court-ordered mediation.
Read the court decisionRead the full story...Reprinted courtesy of
Zachary P. Marks, Chapman Glucksman Dean Roeb & Barger In FocusMr. Marks may be contacted at
zmarks@cgdrblaw.com
An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy
June 12, 2014 —
Richard H. Glucksman, Esq., Jon A. Turigliatto, Esq. and Kacey R. Riccomini, Esq. – Chapman Glucksman Dean Roeb & BargerThe Second District Court of Appeal’s recent decision, Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216, immediately affects builders and contractors (collectively “builders”) who are often named as additional insureds (AIs) to contractors’ general liability policies. The decision is an important tool for builders’ counsel because the builder’s reasonable expectations can alter the interpretation of ambiguous terms in policies issued to subcontractors. Essentially, the builder’s intent is relevant to the interpretation of policy terms because the subcontractor’s intent in requesting additional coverage depends on the agreement it made with the builder. The salient aspects of the facts, the Appellate Court’s reasoning, and practical considerations are discussed below.
Transport Insurance Company (Transport) issued a commercial excess and umbrella liability policy (Policy) to Vulcan Materials Company (Vulcan), naming R.R. Street & Co., Inc. (Street) as an AI for its distribution of a solvent. The Policy provided that Transport would indemnify and defend the insured for loss caused by property damage if (1) it was not covered by “underlying insurance” but was within the terms of coverage of the Policy, or (2) if the limits of liability of the “underlying insurance” were exhausted during the Policy period due to property damage. The Policy included a Schedule of Underlying Insurance (Schedule) that listed policies issued to Vulcan. Thereafter, Vulcan and Street were named as defendants in several environmental contamination actions (Underlying Actions).
Transport brought a declaratory relief action against Vulcan regarding Transport’s duty to defend. (Legacy Vulcan Corp. v. Superior Court (Legacy Vulcan) (2010) 185 Cal.App.4th 677). The trial court found the term “underlying insurance” ambiguous as it was not expressly defined to include only the policies on the Schedule and could be interpreted to include all primary policies in effect. Vulcan challenged the trial court’s decision by petition for writ of mandate, contending “underlying insurance” only included policies listed on the Schedule. The Court of Appeal found “underlying insurance” ambiguous because it was an expressly qualified term under other Policy provisions but not in the umbrella coverage provision and, thus, it was a generic term that was not limited to policies listed in the Schedule or inclusive of all primary insurance.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
Kacey R. Riccomini
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com; Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com, and Ms. Riccomini may be contacted at kriccomini@cgdrblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Florida's New Pre-Suit Notification Requirement: Retroactive or Prospective Application?
February 05, 2024 —
Holly A. Rice - Saxe Doernberger & Vita, P.C.Florida’s newly formed Sixth District Court of Appeal (“Sixth DCA”) recently certified conflict with Florida’s Fourth District Court of Appeal on the issue of retroactive application of the pre-suit notice requirement contained in Florida Statute §627.70152.1 Earlier this year, the Fourth District Court of Appeal (“Fourth DCA”) held that the pre-suit notice provision applies retroactively, meaning, it applies to all suits filed after July 1, 2021, regardless when the insurance policy was issued.2 The Sixth DCA, in
Hughes v. Universal Property & Casualty Insurance Company,3 directly rejected the Fourth DCA’s interpretation and instead found a retroactive application of the pre-suit notice to be unconstitutional under Florida law. Prior to the Fourth DCA’s ruling, most trial courts had found no retroactive application for the pre-suit notice provision.4
In August 2021, shortly after Florida Statutes Section 627.70152 went into effect on July 1, 2021, Rebecca Hughes (“Hughes”) sued Universal Property & Casualty Insurance Company (“Universal Property”) for breach of contract after Universal Property denied her insurance claim. Hughes did not file a pre-suit notice under Section 627.70152. Universal Property moved to dismiss based on Hughes’ failure to file the pre-suit notice, arguing that the pre-suit notice requirement applies to all lawsuits filed after July 1, 2021, even if the claimant’s insurance policy was issued before the statute’s effective date. The trial court agreed with Universal Property and dismissed the lawsuit.
Read the court decisionRead the full story...Reprinted courtesy of
Holly A. Rice, Saxe Doernberger & Vita, P.C.Ms. Rice may be contacted at
HRice@sdvlaw.com
