Florida District Court Finds That “Unrelated” Design Errors Sufficient to Trigger “Related Claims” Provision in Architects & Engineers Policy
March 02, 2020 —
Jason Taylor - Traub LiebermanMost professional liability polices include some form of a “related claims” provision that generally provides where two or more claims or wrongful acts are causally or logically related, they will be deemed to constitute a single claim. Importantly, these provisions typically provide that those “claims” are then deemed to have been “first made” at the time the first claim or act was committed for purposes of the policy’s claims-made and reporting requirements. Understandably, these provisions provide insurers and insureds with some clarity over the number and timing of claims that could involve multiple errors or omissions, and potentially aggregate all related claims or acts into a single policy period. While reasonable in principle, application of such provisions, especially involving large scale design and construction projects, is not always so easy.
Nova Southeastern University, Inc. v. Continental Cas. Co., 18-cv-61842 (S.D. Fla. Dec. 27, 2019), involved such an insurance coverage dispute with a design project gone wrong. DeRose Design Consultants, Inc. (“DeRose”) was hired as a structural engineer to design “ice tanks” to store and chill water for an energy efficient air conditioning facility constructed on the campus of Nova Southeastern University (“NSU”). An early water test on one of the tanks determined the walls of the ice tank deflected, leaked, and cracked when the tank was filled with water. DeRose later discovered that the problems with the ice tank were caused by a structural design error.
The first errors were discovered in early 2009, and reported under DeRose’s professional liability policy with Evanston. DeRose then created a remedial design to repair the tanks, which involved strengthening repairs. Additional leaking and an early indication of corrosion involving the Remedial Design arose as early as October 25, 2009. Several field investigation reports were prepared in 2011 and 2012 confirming these issues with the Remedial Design. A third report in February 2012, however, identified a new error involving the concrete slab under the ice tanks also designed by DeRose. The third report concluded that the concreate slab was overstressed and could not handle the loads of the ice tanks. The report also concluded, however, that the design defects in the concrete slab were “unrelated” to the original design defect of the ice tank walls or Remedial Design.
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
U.S. Homeowners Are Lingering Longer, and the Wait Is Paying Off
July 28, 2018 —
Jeremy Hill - BloombergHomeowners in the U.S. are holding on to their houses longer than they have in at least 18 years, and when they do sell, they’re reaping gains that haven’t been seen since before the housing crisis.
Those who sold in the second quarter did so after owning their homes for an average of 8.09 years, the longest stretch since Attom Data Solutions started tracking the statistic in 2000. The wait appears to be paying off: Second-quarter sellers recorded gains averaging $58,000 -- the most since the third quarter of 2007.
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Jeremy Hill, Bloomberg
Naples, Florida, Is Getting So Expensive That City Workers Can’t Afford It
April 10, 2023 —
Amanda Albright - BloombergThe city of Naples on Florida’s Gulf Coast is paradise on Earth, if you believe those slick websites that rank the best US cities to live in or retire in. But if you talk with the people who work in its hospitals, restaurants and city government, you’ll get another story. They’d like to live in Naples, too, but most of them can’t afford to.
The city of 19,000 is home to the second-richest ZIP code in the US, after Miami Beach. Median household income stood at about $125,000 in 2021, compared with about $62,000 in Florida overall, according to the Census Bureau. Naples landed on a 2022 list of least affordable places for renters compiled by the National Apartment Association.
Amid a dearth of reasonably priced housing, at least 90% of city employees live outside Naples. Job vacancies are going unfilled, leading to chronic staffing shortages. The shortfall among firefighters, police officers and other essential workers in Collier County, which includes Naples, verges on unsafe, according to one local advocate. Private-sector employers have converted a hotel into apartments for workers as a temporary fix.
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Amanda Albright, Bloomberg
Construction Defect Lawsuit May Affect Home Financing
February 14, 2013 —
CDJ STAFFHomeowners in the Burlingame Ranch I Condominium Association already say they have problems with the siding on their units. The Aspen Business Journal says that their next problem might be with lenders. According to the homeowners’ attorney, Chris Brody, the association attempted to work things out, but this was not successful.
Mr. Brody was unaware of any issues with sales or refinancing, but the article notes that “at least one homeowner was told he could not refinance with a Fannie Mae backed loan if there’s pending litigation.” Last year, Fannie Mae did adopt a guideline that made homes involved in construction defect lawsuits ineligible for home loans.
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Congratulations to Partner John O’Meara for Being Named as One of America’s Top 100 Civil Defense Litigators for Three Consecutive Years!
September 20, 2021 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPPlease join Bremer Whyte Brown & O’Meara, LLP in congratulating Woodland Hills Partner John O’Meara for being selected as one of America’s Top 100 Civil Defense Litigators for the third year in a row!
Membership among America’s Top 100 Civil Defense Litigators highlights the accomplishments of the nation’s most esteemed and skilled Civil Defense attorneys. Only 100 attorneys in each state receive this honor and candidates for membership are identified through third-party research or peer nominations by America’s Top 100 or elite attorneys in the community. Candidates are judged by the attorney’s lifetime legal achievements, professional experience, significant case results, peer reputation, client satisfaction, other notable honors, media notoriety, and community impact.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
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Colorado Supreme Court Weighs in on Timeliness of Claims Against Subcontractors in Construction Defect Actions
March 16, 2017 —
Jean Meyer - Colorado Construction LitigationOn February 27, 2017, the Colorado Supreme Court announced its decision in the Goodman v. Heritage Builders, No. 16SA193, 2017 CO 13 (Colo. February 27, 2017) case. In ten short pages, the Colorado Supreme Court completely reshuffled Colorado construction law with respect to application of the statutes of limitation and repose on third-party claims in construction defect cases. Specifically, the Colorado Supreme Court overruled a series of earlier Court of Appeals' decisions that found C.R.S. § 13-80-104(1)(b)(II) (“104(1)(b)(II)”) had no effect on the six-year statute of repose. For context, 104(1)(b)(II) permitted third-party actions for indemnity and contribution to toll until ninety days after the claims in the underlying action were resolved by settlement or judgment. In the construction context, 104(1)(b)(II) was intended to allow a general contractor’s claims against liable subcontractors to toll for the statutorily defined period. This allowed the general contractor to first focus its attention on defending the claims against and thereafter to pursue its claims against the subcontractors.
However, beginning in 2008, in the Thermo Dev., Inc. v. Cent. Masonry Corp., 195 P.3d 1166 (Colo. App. 2008) case, the Colorado Court of Appeals began chipping away at the force of 104(1)(b)(II). This trend continued in the Shaw Constr., LLC v. United Builder Servs., Inc., 2012 COA 24, 296 P.3d 145 decision, the Sierra Pac. Indus., v. Bradbury, 2016 COA 132, _ P.3d_ decision, and culminating in the Sopris Lodging, LLC v. Schofield Excavation, Inc., 2016 COA 158, reh'g denied (Nov. 23, 2016) decision. Effectively, in these decisions, the Colorado Court of Appeals determined that third-party claims could not be brought beyond Colorado’s six-year statute of repose, regardless if they were brought within the ninety day tolling provision set forth in 104(1)(b)(II).
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
Colorado Senate Committee Approves Construction Defect Bill
March 19, 2015 —
Jesse Howard Witt – Acerbic WittLate last night, the Colorado Senate Business, Labor, and Technology Committee voted to refer
SB 15-177 to the committee of the whole. The vote followed nearly seven hours of testimony from those in favor of construction defect legislation and those opposed.
As I have
previously discussed, the bill sponsors have argued that their measure will encourage the construction of more affordable housing by giving builders de facto immunity for claims of defective workmanship and property damage in common interest communities. The bill achieves this by establishing difficult voting and disclosure requirements for homeowner associations and requiring costly, private arbitration of any disputes that can overcome the procedural hurdles. During the recent hearing, proponents echoed these statements and testified that insulating homebuilders from claims would lower home prices and rents by increasing the supply of cheaply-built condominiums.
Opponents questioned whether the bill contained any provisions that would actually help the affordable housing market. They also argued that it was improper for the legislature to shift the cost of fixing construction defects onto those homeowners who can least afford to pay for necessary repairs.
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Jesse Howard Witt, The Witt Law FirmMr. Witt welcomes comments at www.acerbicwitt.com
Where Breach of Contract and Tortious Interference Collide
July 18, 2022 —
Christopher G. Hill - Construction Law MusingsClaims for breach of contract are numerous in the construction law world. Without these claims we construction attorneys would have a hard time keeping the doors open. A 2021 case examined a different sort of claim that could arise (though, “spoiler alert” did not in this case) during the course of a construction project. That type of claim is one for tortious interference with business expectancy.
In Clark Nexsen, Inc. et. al v. Rebkee, the U. S. District Court for the Eastern District of Virginia gave a great explanation of the law of this type of claim in analyzing the following basic facts:
In 2018, Clark Nexsen, Inc. (“Clark”) and MEB General Contractors, Inc. (“MEB”) responded to Henrico County’s (“Henrico”) Request for Proposals (“RFP”) for the design and construction of a sport and convocation center (the “Project”). Henrico initially shortlisted Clark and MEB as a “design-build” team for the Project, but later restarted the search, issuing a second RFP. Clark and MEB submitted a second “design-build” proposal, but Henrico selected Rebkee Co. (“Rebkee”) for certain development aspects of the Project. MEB also submitted proposals to Rebkee, and Rebkee selected MEB as the design-builder for the Project. MEB, at Rebkee’s request, solicited proposals from three design firms and ultimately selected Clark as its design partner. From December 2019 to May 2020, Clark and MEB served as the design-build team to assist Rebkee in developing the Project. In connection therewith, Clark developed proprietary designs, technical drawings, and, with MEB, several cost estimates. In February 2020, MEB submitted a $294,334.50 Pay Application to Rebkee for engineering, design, and Project development work. Rebkee never paid MEB. Henrico paid MEB $50,000.00 as partial payment for MEB’s and Clark’s work. MEB then learned that Rebkee was using Clark’s drawings to solicit design and construction proposals from other companies. On July 23, 2020, Rebkee told MEB that Henrico directed it to cancel the design-build arrangement with MEB and Clark and pursue a different planning method. MEB and Clark sued and Rebkee for, among other claims, tortious interference with a business expectancy. Rebkee moved to dismiss the tortious interference claim.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
