SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Timely Legal Trends and Developments for Construction

February 18, 2019 — Matt Viator - Construction Executive
The construction industry is broad and the legal concerns of industry members can be far-reaching. What seems like tomorrow’s problem often jumps to the forefront and becomes a high priority today. 2018 was full of moments like these – and it’s important to keep track of legal developments for a glimpse at what may be waiting around the corner. With that in mind, here are some of the most important legal developments for the construction industry from the second half of 2018. Sureties and Litigation – a Broad Topic Sureties play a vital role on construction projects. On federal jobs and state, county or municipal jobs, surety bonds are typically required. That means it’s important to stay on top of how the courts are treating surety agreements. Reprinted courtesy of Matt Viator, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Miller Act CLAIMS: Finding Protections and Preserving Your Rights

November 29, 2021 — Diana Lyn Curtis McGraw - ConsensusDocs
The Miller Act (the “Act”), which requires the prime contractor to furnish a performance bond and a payment bond to the government, protects “all persons supplying labor and materials carrying out the work provided for in the contract.”[1] Despite its broad language, courts have limited the parties who may actually assert a claim under the Act. This article introduces general background of the Act, identifies subcontractors who may qualify for protections under the Act, and suggests ways to preserve the rights as prime contractors. Brief Background of the Miller Act Under the Miller Act, there are two types of bonds the prime contractor furnishes to the government in a federal construction contract of more than $100,000[2] 1. Performance Bond A performance bond protects the United States and guarantees the completion of the project in accordance with the contract’s terms and conditions.[3] This bond must be with a surety that is satisfactory to the officer awarding the contract and in the amount the officer considers adequate for government protection.[4] If a contractor abandons a project or fails to perform, the bond itself will cover the government’s cost of substitute performance. Thus, the performance bond disincentivizes contractors from abandoning projects and provides the government with reassurance that an abandonment will not create delays or additional expenses. Read the court decision
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Reprinted courtesy of Diana Lyn Curtis McGraw, Fox Rothschild LLP
Ms. McGraw may be contacted at dmcgraw@foxrothschild.com

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Does the New Jersey Right-To-Repair Law Omit Too Many Construction Defects?

January 06, 2012 — CDJ STAFF

A post on the blog of Liberty Building Forensics Group find fault with the New Jersey Home Warranty and Builders’ Registration Act for not being stringent enough. The poster notes the coverage given under the bill. In the first year, builders are responsible to remedy faulty workmanship and materials and major structural defects. While other protections expire in the first or second year, there is a ten year coverage of major construction defects.

The blogger finds fault with the exclusion New Jersey law places on these claims, arguing that “due to the stringent definition of ‘major construction defects,” the warranty affords no coverage unless the house is practically collapsing.” The bill excludes leaks, cracks, and mold, and further limits claims if the homeowner has failed to inform the builder or insurer of defects, failure to maintain the home, and alterations made by the homeowner.

The intent of the New Jersey law is given as “requiring that newly constructed homes conform to certain construction and quality standards as well as to provide buyers of new homes with insurance-backed warranty protection in the event such standards are not met.” It’s argued in the piece that it instead serves to “strip homeowners of any meaningful means of recovery for discovered construction defects.”

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Court Rules that Collapse Coverage for Damage Caused “Only By” Specified Perils Violates Efficient Proximate Cause Rule and is Unenforceable

January 26, 2016 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Vardanyan v. Amco Ins. Co. (No. F069953, filed 12/11/15) a California appeals court held that policy wording that the collapse coverage for damage “caused only by” certain specified perils did not mean “solely” by those specified perils, but that coverage may nonetheless apply even if excluded causes contributed to the loss, under the Insurance Code section 530 and the efficient proximate cause rule. In Vardanyan, the insured made a claim for water damage from unknown origin to a rental house. An engineer concluded that the various sources of moisture—roof leaks, gutters and downspouts that did not channel the water away from the house, a faucet spraying water on the exterior of the house, leaking toilet and bathtub, and humidity—contributed to the damage to the house, along with poor construction, termite damage and decay. The insurer denied coverage citing multiple policy exclusions, including damage caused by seepage or leakage of water from a plumbing system; deterioration; mold, wet or dry rot; settling of foundations, walls or floors; earth movement; water damage; neglect; weather conditions; acts or decisions of any person; and faulty or defective design, workmanship, repair, construction, or maintenance. The insured retained a public adjuster who disagreed, in particular citing the policy’s “Other Coverage 9” coverage for collapse of a building or part of a building “caused only by one or more” of a list of perils, including hidden decay, hidden insect damage, and weight of contents, equipment, or people. Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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PulteGroup Fires Exec Accused of Defamation By Founder’s Heir

January 17, 2023 — Patrick Clark - Bloomberg
PulteGroup Inc. fired a senior executive for violating the company’s code of conduct two days after the grandson of the homebuilder’s founder sued the executive for alleged defamation. The company, which is the third-largest US homebuilder, said in a statement Friday that it had terminated Brandon Jones after the results of an independent investigation. Jones had been slated to assume the role of chief operating officer in January. Bill Pulte, 34, filed a lawsuit on Wednesday in Palm Beach County, Florida, alleging that Jones had used anonymous Twitter accounts to smear members of the Pulte family. The lawsuit accused the executive of impersonating a business journalist and making a false claim that Pulte manipulated his grandfather. Read the court decision
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Reprinted courtesy of Patrick Clark, Bloomberg

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Defeating the Ten-Year Statute of Repose For Latent Construction Defects

January 28, 2015 — The Porter Law Group
It is an all-too-common scenario in California construction: Nine and a half years after completion of a major California construction project, immediately before the 10-year “statute of repose” for suing on “latent” construction defects expires, a lawsuit claiming damages for “recently discovered” latent construction defects is filed. The property owner sues the contractor for the alleged defects. The direct contractor sues all its subcontractors for indemnity and defense. The attorneys spontaneously generate. Experts proliferate. Claimed defects are extrapolated. Four or five years later, after a few dozen attorneys earn a small fortune in fees, the insurance companies make payments. Attorneys collect more fees. The owners take what remains. They repair nothing... and buy vacation homes. Perhaps a cynical view, but there are many in the construction defect world who would reach a similar conclusion. The question is: How can you defeat this seemingly inevitable chain of events? Under a case known as Brisbane Lodging L.P. v. Webcor Builders, Inc. 216 Cal.App 4th 1249 (2013) there may be hope. California Code of Civil Procedure sections 337.1 and 337.15 grant a 10-year “statute of repose” for bringing claims for “latent” construction defects. These statutes allow a lawsuit for such claimed defects to be filed in court up until ten years after the project has been completed. Latent defects are generally defined as those which are “not apparent by reasonable inspection” (CCP §337.15(b)). It is extremely common for such claims to be filed immediately before this 10-year deadline expires. When the lawsuit is brought, the cash register begins to ring. Read the court decision
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Reprinted courtesy of The Porter Law Group

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New Insurance Case: Owners'​ Insurance Barred in Reimbursement Action against Tenant

April 17, 2019 — Jason Adams - Gibbs Giden
The Western Heritage Ins. Co. v. Frances Todd, Inc. (2019 Cal.App. LEXIS 299 / 2019 WL 1450731) case has potential implications for insurance carriers, policyholders, condominium associations, unit owners, landlords and tenants. The case involves a fire at a commercial condominium complex (the “Association”). The Association’s CC&Rs required the Association to purchase a master fire insurance policy for the benefit of the Association and owners, with a waiver of subrogation endorsement that stated the insurance company could not seek reimbursement from the Association, its officers, owners or occupants of the units in the event of a covered fire. The CC&Rs also prohibited individual owners from obtaining their own fire insurance. The Association purchased the required fire insurance policy from Western Heritage Insurance Company (“Western Heritage”). One of the owner’s tenants, Frances Todd, Inc. (“Frances Todd”), allegedly caused a fire that damaged several units. Although the unit owner was covered as an additional named insured under the Western Heritage fire policy, the tenant, Frances Todd, was not. Western Heritage paid for the common area fire damage caused by Francis Todd, and then sued Frances Todd in a subrogation action to recover the amounts paid. Read the court decision
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Reprinted courtesy of Jason M. Adams, Gibbs Giden
Mr. Adams may be contacted at jadams@gibbsgiden.com

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From the Ground Up

March 06, 2022 — Maggie Murphy - Construction Executive
As a veteran of the U.S. Marine Corps, Mari Borrero knows a thing or two about stepping up to a challenge. She describes her time in the military as “one of those milestones that changes your life,” and credits the experience with turning her from a self-described “entitled teenager” into the woman she is today: fearless, bold and relentless in pursuit of her dreams. A career in the construction industry was never on the table for Borrero, who, after being honorably discharged from the Marine Corps, worked as a hospice-care coordinator and then a teacher in support of her then-third-grade son. The common thread in all these occupations? A genuine desire to put the needs of others before her own. Today, Borrero says she can’t imagine doing anything other than what she now calls work—owning and operating a construction business, Auburn, Washington–based American Abatement & Demo. Easing Transitions Born in Bayamón, Puerto Rico, Borrero was five when her mother moved the family to Dallas to seek life-saving treatment at Children’s Medical Center Dallas for her brother, who had a rare kidney disease. A local church supported the family, providing housing, food and clothing until they were able to transition into their own space. Reprinted courtesy of Maggie Murphy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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