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DIRECTORY AND CAPABILITIES

California Attempts to Tackle Housing Affordability Crisis

December 22, 2019 — Garret Murai - California Construction Law Blog
It’s a bit too early yet for our 2020 Construction Law Update but here’s a preview of some of the new laws taking effect next year. Earlier this month, Governor Gavin Newsom signed a slate of 18 bills to boost housing production in an effort to tackle the state’s housing affordability crisis. First, a bit of background. California currently ranks 49th among the states in housing units per resident. Experts say that the state needs to double its current rate of housing production of 85,000 unit per year just to keep up with population growth and four times the current rate to reduce housing costs. Anecdotally, here in the San Francisco Bay Area, the median rent for a one-bedroom apartments in San Francisco is currently $3,690 per month or $44,280 per year. However, as of May 2018, according to the U.S. Bureau of Statistics, the annual mean wage of a teller is just $32,840, for farmworkers $34,700, and for teachers $48,250. And that’s before taxes. Let that sink in for a moment. The result is one in five Californians live in poverty, the highest rate in the nation, when factoring in the cost of living. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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These Pioneers Are Already Living the Green Recovery

June 01, 2020 — Laura Millan Lombrana & Akshat Rathi - Bloomberg
In the wake of the historic global economic shutdown in response to the Covid-19 pandemic, governments are unleashing trillions of dollars in a bid to create jobs and spur economic recovery. The scale of this stimulus is unprecedented, in some cases amounting to more than 10% of countries’ gross domestic product. At the same time, an overwhelming number of economists, finance ministers, and business leaders are saying that much of that money needs to help—and certainly not hinder—our ability to cut emissions. If that advice is heeded, these funds will go to emerging technologies that would have sounded like science fiction not so long ago. Now they have ambitions to help lower greenhouse gas emissions on an industrial scale. Leading the way is the European Union, which was planning a green transformation even before the outbreak began. It aims to make the 27-member bloc the first carbon neutral continent by 2050, and the pandemic hasn’t changed that. Read the court decision
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Reprinted courtesy of Laura Millan Lombrana & Akshat Rathi, Bloomberg

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Charlotte, NC Homebuilder Accused of Bilking Money from Buyers

April 01, 2015 — Beverley BevenFlorez-CDJ STAFF
The Charlotte Observer reported that a homebuilder couple “was arrested Tuesday on charges alleging that they kept more than $600,000 three families paid them to build Lake Wylie homes that were never completed.” Robert Scott Kuhlkin and wife, Sherry Lynn Kuhlkin “accepted $189,000 from one family, $239,000 from another family, and $233,000 from a third family to build houses, 16th Circuit assistant solicitor Matthew Hogge said in court, but instead they ‘took the money for themselves.’” The alleged victims told the court that the homes had defects or were left unfinished. Read the court decision
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Kansas City Airport Terminal Project Faces Delays, Rising Costs

February 06, 2019 — Kansas City Star - Engineering News-Record
Costs have long since blown past initial estimates, prompting an independent review of the price tag. Its opening is eight months behind schedule and mounting delays drew heated questions from local officials last year. Sounds like the continuing saga of Kansas City's planned airport terminal, overwhelmingly approved by voters in November 2017 . It's actually about the new international arrivals facility under construction at Seattle-Tacoma International Airport , or Sea-Tac. Read the court decision
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Reprinted courtesy of Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com

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Granting Stay, Federal Court Reviews Construction Defect Coverage in Hawaii

January 06, 2012 — Tred R. Eyerly - Insurance Law Hawaii

The federal district court ultimately stayed a construction defect case, but offered comments on the current status of coverage disputes for such defects in Hawaii. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. Simpson Mfg. Co., 2011 U.S. Dist. LEXIS 128481(D. Haw. Nov. 7, 2011).

National Union filed a complaint for declaratory relief to establish it had no duty to defend or to indemnify Simpson Manufacturing Company in four actions pending in the Hawaii state courts. The state court actions concerned allegedly defective hurricane strap tie hold downs that were manufactured and sold by Simpson. The hurricane ties allegedly began to prematurely corrode and rust, causing cracking, spalling and other damage to homes.

National Union contended the underlying allegations did not constitute "property damage" caused by an "occurrence," as defined in the policies.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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New Illinois Supreme Court Trigger Rule for CGL Personal Injury “Offenses” Could Have Costly Consequences for Policyholders

March 09, 2020 — Michael S. Levine & Kevin V. Small - Hunton Insurance Recovery Blog
The Illinois Supreme Court’s recent decision in Sanders v. Illinois Union Insurance Co., 2019 IL 124565 (2019), announced the standard for triggering general liability coverage for malicious prosecution claims under Illinois law. In its decision, the court construed what appears to be a policy ambiguity against the policyholder in spite of the longstanding rule of contra proferentem, limiting coverage to policies in place at the time of the wrongful prosecution, and not the policies in effect when the final element of the tort of malicious prosecution occurred (i.e. the exoneration of the plaintiff). The net result of the court’s ruling for policyholders susceptible to such claims is that coverage for jury verdicts for malicious prosecution – awarded in today’s dollars – is limited to the coverage procured at the time of the wrongful prosecution, which may (as in this case) be decades old. Such a scenario can have costly consequences for policyholders given that the limits procured decades ago are often inadequate due to the ever-increasing awards by juries as well as inflation. Moreover, it may be difficult to locate the legacy policies and the insurers that issued such policies may no longer be solvent or even exist. A copy of the decision can be found here. The Sanders case arose out of the wrongful conviction of Rodell Sanders in 1994 by the City of Chicago Heights (the “City”). Mr. Sanders sought recompense for, among other things, malicious prosecution through a federal civil rights action against the City. In September 2016, Mr. Sanders obtained a consent judgment for $15 Million; however, at the time of the wrongful conviction, seventeen years earlier, the City’s only applicable insurance policy provided just $3 million in coverage. The City contributed another $2 million towards the judgment and, in exchange for Mr. Sanders’s agreement not to seek the $10 million balance from the City, assigned its rights under the policies for the 2012 to 2014 period. Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Kevin V. Small, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Small may be contacted at ksmall@HuntonAK.com Read the court decision
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Illinois Court Determines Insurer Must Defend Property Damage Caused by Faulty Workmanship

July 11, 2011 — Tred R. Eyerly - Insurance Law Hawaii

The Illinois Court of Appeals determined the insurer must defend allegations of property damage arising from faulty workmanship. Milwaukee Mut. Ins. Co. v. J.P. Larsen, Inc., 2011 Ill. App. Unpub. LEXIS 1443 (Ill. Ct. App. June, 20, 2011).



Larsen was a subcontractor for Weather-Tite in a condominium building. Weather-Tite installed windows on the project and hired Larsen to apply sealant to the windows. The windows subsequently leaked and caused water damage within the complex.



The homeowner’s association sued Weather-Tite for breach of express and implied warranties. Weather-Tite filed a third-party complaint against Larsen, seeking contribution and alleging that Larsen was in breach of contract by failing to add Weather-Tite as an additional insured under Larsen’s CGL policy.



Both Weather-Tite and Larsen tendered to Larsen’s insurer. Both tenders were denied because the insurer contended the complaints alleged only construction defects, and not “property damage” or an “occurrence” within the terms of the policy.



The insurer filed suit for a declaratory judgment. The trial court granted the insurer’s motion as to Weather-Tite, but granted Larsen’s cross-motion for summary judgment.



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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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Substantial Completion Explained: What Contractors & Owners Should Know

January 17, 2022 — Travis Colburn - Ahlers Cressman & Sleight
A project’s Substantial Completion date is a critical construction milestone for contractors and owners. Depending on the contract, the date of Substantial Completion has project-specific contractual and statutory consequences. Substantial Completion is an “event” – there is no universal definition of the term. It is generally understood to be (1) a point in time (2) when work performed by the contractor is sufficiently complete (3) where it can be used or occupied for the owner’s intended purpose. The date of Substantial Completion is generally established at the time of contract formation (either as a negotiated or a contract set date), and that date may be adjusted over the course of a project to account for excusable delays. As a construction professional, your attorney should review and tailor any written agreement to your project-specific needs and risk tolerances prior to execution. Savvy construction professionals often start with standard form agreements promulgated by the American Institute of Architects (“AIA”), the Design-Build Institute of America (“DBIA”), or the Engineers Joint Contract Document Committee (“EJCDC”) as the basis for their construction contracts. The AIA, DBIA, and EJCDC standard forms each contains contract provisions relating to when and what happens once Substantial Completion has occurred, subject to any agreed-to, project-specific deviations. Read the court decision
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Reprinted courtesy of Travis Colburn, Ahlers Cressman & Sleight
Mr. Colburn may be contacted at travis.colburn@acslawyers.com

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