Manhattan’s Property Boom Pushes Landlords to Sell Early
August 26, 2015 —
Sarah Mulholland – BloombergManhattan property owners are cashing out ahead of schedule.
With New York real estate values and rents surging, owners of commercial properties acquired as recently as a year ago are already seeking buyers. In the case of one Midtown site, the developer scrapped construction plans to sell an empty plot of land.
There’s so much buyer demand that in some situations it’s more opportune for landlords to sell rather than follow through on plans for redevelopment or filling buildings with new tenants. A record $29.4 billion of Manhattan property deals were completed in the first half of 2015, according to brokerage Jones Lang LaSalle Inc., part of a five-year real estate rally that’s pushed prices to new highs in big U.S. cities.
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Sarah Mulholland, Bloomberg
Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy
December 15, 2016 —
Richard H. Glucksman & Ravi R. Mehta – Chapman Glucksman Dean Roeb & Barger Bulletin I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016
The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”). In
Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (
Civil Code §896). The Court answered this question affirmatively.
The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects. Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act. The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act. Elliott appealed. The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.
To answer this question, the Court analyzed a recent case decided by the Court of Appeal for the Fourth Appellate District:
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98. In this subrogation case, a builder’s insurer asserted common law causes of action (but not statutory building standard violations) alleging construction defects against the builder to recover amounts paid to the homeowner after a sprinkler system failure caused extensive damage to the subject property. The trial court sustained the builder’s demurrer to the Complaint on the ground that it was time-barred under the Act. The Court of Appeal reversed the trial court’s order, holding that common law construction defect claims arising from actual damages are not covered by the Act because “the Act does not provide the exclusive remedy in cases where actual damage has occurred.” (
Liberty Mutual, 219 Cal.App.4th 98, 109).
The
Elliott Court declined to follow
Liberty Mutual, finding that that Court failed to properly analyze the language of the Act. The
Elliott Court analyzed both the statutory scheme and the legislative history of the Act to arrive at the conclusion that common law causes of action for construction defects do indeed fall within the purview of the Act.
According to the
Elliott Court, the Act “broadly applies to
any action seeking recovery of damages arising out of, or related to deficiencies in…residential construction and in such an action, a homeowner’s claims or causes of action shall be limited to violation of the standards set forth in the Act, except as specified.” Further, the Act expressly provides that “no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.”
Civil Code §943(a). In turn,
Civil Code §944 allows for a recovery for the cost of repairing a building standard violation, or for the cost of repairing any damage caused by such a violation, among other things.
The limited exceptions to the Act’s applicability concern the enforcement of a contract, or any action for fraud, personal injury, or violation of a statute. Civil Code §943(a). Additionally, the Act does not apply to condominium conversions. Civil Code §896.
The Elliott Court explains that apart from these exceptions, the Legislature intended the Act to apply to all construction defect claims (regardless of damage) relating to the construction of residential properties whose sales contracts are signed after January 1, 2003. There is no exception in the Act, express or implied, for common law causes of action.
Next, the Court turns to the Act’s legislative history to buttress this conclusion. This history makes clear that the Act is a legislative response to the California Supreme Court’s holding in
Aas v. Superior Court (2000) 24 Cal.4th 627, that construction defects in residential properties are only actionable in tort when actual property damage manifests. Senate Judiciary Committee hearings indicate that the Act was the product of protracted negotiations between varying interested parties, including construction industry trade groups and consumer protection groups. The Legislature intended (1) to promulgate building standards, violations of which would be actionable, even without damage, and (2) to allow homeowners to recover for actual damage caused by construction defects not covered by the building standards. In other words, the Act was intended to provide homeowners redress regardless of whether damage had manifested.
Therefore, the Court concluded that common law causes of action for construction defects, regardless of damage, are subject to the pre-litigation procedure set forth in the Act. The Court issued a writ of mandate directing the trial court to vacate its earlier order, and to enter a new order granting Elliott’s motion to stay the litigation until the homeowners (and Elliott) have satisfied the pre-litigation procedure of the Act.
II. McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132
Similar to the Third Appellate District Court’s ruling in
Elliott, the Fifth Appellate District Court also rejected the holding of
Liberty Mutual in a matter now pending before the California Supreme Court:
McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132 (review granted and opinion superseded sub nom.
Albany v. Superior Court 360 P.3d 1022). Also similar to
Elliott, in
McMillin a group of homeowners filed common law construction defect claims against the builder of their homes. The builder,
McMillin, moved to stay the litigation pending compliance with the Act’s pre-litigation procedure. The trial court denied the motion, holding that the Act does not apply because the homeowners have not asserted statutory building standard violations contained within the Act.
In reasoning substantially similar to that of
Elliott, the
McMillin Court rejected Liberty Mutual’s holding that the Act is not the exclusive remedy for pursuing construction defect claims, with or without damage. Thus, the
McMillin Court issued a writ of mandate to vacate the trial court’s earlier order and to enter a new order granting McMillin’s motion to stay.
On November 24, 2015, the California Supreme Court granted the homeowners’ petition for review. In August of 2016, briefing was completed and the matter is now awaiting the scheduling of arguments. CGDRB will continue to closely monitor the pending appeal of this matter to the California Supreme Court, as well as all related developments.
Reprinted courtesy of
Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and
Ravi R. Mehta, Chapman Glucksman Dean Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Mehta may be contacted at rmehta@cgdrblaw.com
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The Privette Doctrine and Its Exceptions: Court of Appeal Grapples With the Easy and Not So Easy
November 18, 2024 —
Garret Murai - California Construction Law BlogIn
CBRE v. Superior Court, 102 Cal.App.5th 639 (2024), the 4th District Court of Appeal grappled with a thorny and not-so-thorny issue involving injured parties under the Privette doctrine. The less thorny issue was whether application of the Privette doctrine depends on whether a written contract exists between the parties. Spoiler: It does not. The thorny issue was whether the Hooker exception to the Privette doctrine – which applies when a landowner exercises control over a project – should apply where a landowner directs a contractor to perform work that is at odds with legal requirements.
The CBRE Case
Property Reserve, Inc. owns an office building managed by CBRE in San Diego, California. On April 9, 2019, PRI entered into a lease agreement with a new tenant for a suite in the building. The lease required that PRI perform certain tenant improvements.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Steel-Fiber Concrete Link Beams Perform Well in Tests
December 21, 2016 —
Nadine M. Post – Engineering News-RecordA recent series of dynamic tests demonstrates that there are several types and doses of steel-fiber reinforcement that can be used in performance-based seismic design of coupling beams—headers that link openings in concrete shear walls—to reduce rebar congestion. The tests, performed at the University of Wisconsin, are called “a step in the right direction” by the structural engineer who pioneered the use of SFR concrete.
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Nadine M. Post, Engineering News-RecordMs. Post may be contacted at
postn@enr.com
Contractor Underpaid Workers, Pocketed the Difference
February 10, 2012 —
CDJ STAFFProperty Casualty 360 reports that the owner of a construction company in California’s Bay Area has been arraigned in San Francisco Superior Court. The fifty-seven felony counts include charges of payroll theft and insurance fraud.
San Francisco District Attorney, George Gascon is quoted as saying that Doherty’s actions “hurts the honest businesses that were unable to successfully compete for these projects which the defendant was able to underbid and win as a result of this scheme.”
Frances Ann Doherty, owner of Doherty Painting & Construction has been charged with submitting false documentation as to what wages she paid her workers. It is alleged that over three years she pocketed $600,000. Additionally, she is charged with underpaying her insurer by more than $100,000 by submitting to them the fake payroll information.
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Indiana Appellate Court Allows Third-Party Spoliation Claim to Proceed
August 01, 2023 —
Ryan Bennett - The Subrogation StrategistIn Safeco Insurance Company of Indiana as Subrogee of Ramona Smith v. Blue Sky Innovation Group, Inc., et al, No. 22A-CT-1924, 2023 Ind. App. LEXIS 157, the Court of Appeals of Indiana (Appellate Court) reversed a trial court ruling that granted the motion to dismiss filed by Michaelis Corporation (Michaelis), a restoration company. The Appellate Court ruled that the trial court erred in dismissing the plaintiff’s spoliation and negligence claims against Michaelis, who discarded evidence relating to the cause of the fire at issue.
The plaintiff’s insured owned a home in Indianapolis, Indiana. On Halloween night in 2019, a fire occurred at the property. The plaintiff’s representatives preliminarily determined that the fire may have been caused by a digital dehydrator within the kitchen. Michaelis had a representative present at the site inspection and was allegedly told to preserve the kitchen area. That area was taped off with “caution” tape. Michaelis also placed a tarp over the kitchen to prevent weather damage. Despite the instructions and precautions, Michaelis demolished the kitchen and discarded the dehydrator along with other fire debris.
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Ryan Bennett, White and Williams LLPMr. Bennett may be contacted at
bennettr@whiteandwilliams.com
Berger: FIGG Is Slow To Hand Over All Bridge Collapse Data
November 12, 2019 —
Richard Korman - Engineering News-RecordThe Florida International University Tragedy
About half an hour before the almost-completed pedestrian bridge collapsed onto a busy Miami-area road last year, killing six people, Denney Pate, the bridge’s engineer-of-record, sent a text to Linda Figg, the chief executive of FIGG Bridge Engineers.
Richard Korman, Engineering News-Record
Mr. Korman may be contacted at kormanr@enr.com
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Pending Sales of U.S. Existing Homes Rise Most in Four Years
July 01, 2014 —
Jeanna Smialek – BloombergThe number of contracts to purchase previously owned U.S. homes jumped in May by the most in more than four years, a sign the residential-real estate market is rebounding after a slow start to the year.
The pending home sales index climbed 6.1 percent, the biggest advance since April 2010, after a revised 0.5 percent increase in April, the National Association of Realtors said today in Washington. The gain exceeded the most optimistic estimate in a Bloomberg survey of economists, whose median forecast called for a 1.5 percent gain.
Housing demand is benefiting from cheaper borrowing costs, a stronger employment outlook and easier access to credit for some households. At the same time, higher prices and limited income gains are keeping the improvement in the residential real estate from becoming more broad-based.
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Jeanna Smialek, BloombergMs. Smialek may be contacted at
jsmialek1@bloomberg.net
