Insurers' Motion to Knock Out Bad Faith, Negligent Misrepresentation Claims in Construction Defect Case Denied
August 27, 2013 —
Tred Eyerly - Insurance Law HawaiiHaving previously decided that construction defect claims did not arise from an occurrence and were consequently not covered under Hawaii law, the Hawaii Federal District Court refused to dismiss the insured's second amended counterclaim alleging various claims for relief. Ill. Nat'l Ins. Co. v. Nordic PCL Construc., Inc., 2013 U.S. Dist. LEXIS 108932 (D. Haw. July 31, 2013).
In earlier proceedings, the court determined that the Nordic's allegedly deficient performance on construction contracts was not an "occurrence." The court also rejected Nordic's argument that the Hawaii legislature's Act 83 required the court to deviate from the Ninth Circuit's opinion in Burlington Ins. Co. v. Oceanic Design & Constr., Inc., 383 F.3d 940 (9th Cir. 2004) or the Hawaii Intermediate Court of Appeals' decision in Group Builders, Inc. v. Admiral Ins. Co., 123 Haw. 142, 231 P.3d 67 (Haw. Ct. App. 2010).
Admiral now moved for summary judgment on its complaint and for dismissal of Nordic's second amended counterclaim, alleging bad faith and negligent misrepresentation, among other counts. Summary judgment as to the Safeway claim was denied.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
After Restoring Power in North Carolina, Contractor Faces Many Claims
August 10, 2017 —
Jim Parsons - Engineering News-RecordHaving successfully helped to restore power to two North Carolina barrier islands, PCL Civil Constructors now faces the fallout from a July 27 construction incident that forced a week-long evacuation of 60,000 visitors, putting a potential multimillion-dollar dent in the region’s tourism-dependent economy.
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Jim Parsons, ENRENR may be contacted at
ENR.com@bnpmedia.com
He Turned Wall Street Offices Into Homes. Now He Vows to Remake New York
February 14, 2023 —
Natalie Wong - BloombergIn the lobby of a downtown Manhattan tower, Nathan Berman pauses to admire the marble walls and terrazzo floors. A real estate developer, he has a taste for old-world detail, like the fur lining in his navy overcoat, accented with a polka-dot scarf. It’s rush hour in the heart of Wall Street, and Berman’s at its white-hot center, 55 Broad St., former offices of Goldman Sachs Group Inc. But, like many buildings in the age of working from home, this onetime hub of capitalism is largely empty. Many of Berman’s rivals would be discouraged. He’s thrilled.
Berman transforms vacant office buildings into top-of-the-line apartments. At 63, he’s the king of office conversion. From the 23rd floor of 55 Broad, Berman can make out five of his projects in the bright December sunlight. They include 20 Broad, a midcentury modern building that had outlived its usefulness as the onetime headquarters of the New York Stock Exchange. Today, along with apartments, it features a rooftop terrace with views of the harbor, a theater, a yoga studio, a game room and a fitness center. Gazing into the distance, Berman points toward another of his alchemies: a former Tribeca bookbindery where Oscar-winning actor Jennifer Lawrence and pop star Harry Styles have owned homes.
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Natalie Wong, Bloomberg
Colorado’s Three-Bill Approach to Alleged Construction Defect Issues
May 01, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the Denver Post, two Colorado construction defect bills have “made their way out of the Senate Affairs Committee Wednesday, with a third reportedly on its way.”
The two bills that have made it out of committee are SB 219 and SB 216: “SB 219 would require the Colorado Division of Housing to prepare a study to present to legislators before March 15, 2015, on why there isn't more affordable housing construction in the state,” the Denver Post reported. “SB 216 directs the Colorado Division of Housing to design a program to rebate a portion of the insurance premiums builders pay as a way to boost their willingness to build more projects.”
However, a third bill would require “homeowners to pursue arbitration or mediation before litigation.”
All three bills are sponsored by Sen. Jessie Ulibarri, D-Commerce City.
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6,500 Bridges in Ohio Allegedly Functionally Obsolete or Structurally Deficient
June 17, 2015 —
Beverley BevenFlorez-CDJ STAFFThe Portsmouth Daily Times reported that U.S. Senator Sherrod Brown (D-OH) released a report that declared “6,500 bridges in Ohio are either functionally obsolete or structurally deficient as defined by the Federal Highway Administration (FHWA).” According to the Portsmouth Daily Times, the “FHWA defines Functionally Obsolete as a bridge that is no longer by design functionally adequate for its task” and “Structurally Deficient as a bridge that has one or more structural defects that require attention.” Brown’s solution to the issue is to pass a long-term transportation bill.
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Pollution Exclusion Bars Coverage for Inverse Condemnation Action
June 02, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe South Carolina Court of Appeals found there was no coverage for an inverse condemnation action based upon the policy's pollution exclusion. South Carolina Ins. Reserve Fund v. E. Richland County Public Service District, 2016 S. C. App. LEXIS 32 (S.C. Ct. App. March 23, 2016).
In 2010, Coley Brown filed a complaint against the East Richland County Public Service District ("District") for inverse condemnation, trespass, and negligence. The complaint alleged that the District had installed a sewage force main line and an air relief valve on Brown's street, and the valve released offensive odors on his property many times a day. The stench caused Brown to buy a new piece of property and move, but he was unable to sell the old property. The district tendered the complaint to the South Carolina Insurance Reserve Fund ("Fund"), but coverage was denied.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Right to Repair Reform: Revisions and Proposals to State’s “Right to Repair Statutes”
April 01, 2015 —
Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper – Chapman Glucksman Dean Roeb & Barger BulletinVirtually all of the states in the country have "Right to Repair" statutes. We follow the various states legislatures to determine what trends or developments are occurring. For years, Chapman, Glucksman, Dean, Roeb, and Barger has prepared a compendium that provides the salient points of these Right to Repair statutes. In this extended BULLETIN we provide a discussion of important and very recent developments that are occurring in
Nevada,
Arizona,
Florida, and
Colorado.
In Nevada, Governor Brian Sandoval very recently signed The Homeowner Protections Act of 2015, representing a massive transformation to Nevada's Right to Repair Act in the builder's favor, including but not limited to removal of the attorney fees provision as part of claimant's damages.
In Arizona, Governor Doug Ducey signed House Bill 2578 in March 2015, amending Arizona Revised Statutes § 12-1361 et. Seq. by eliminating a homeowner’s statutory opportunity to recover attorney and expert fees and providing a builder the right to repair the alleged defects.
In Florida, Bill 87 proposes to shorten the statute of limitations, requires more detail in the Homeowner's notice of defects, and allows a builder to use a prior settlement in lieu of repair as an affirmative defense against subsequent claims.
In Colorado, lawmakers are proposing to place additional conditions in front of an HOA board before filing suit and require alternative dispute resolution for HOA Condominium Defect Claims even if the requirement no longer exists at the time the claim is brought.
NEVADA: GOVERNOR SIGNIFICANTLY MODIFIES NEVADA'S RIGHT TO REPAIR ACT WITH THE SIGNING OF ASSEMBLY BILL 125
Nevada's Right to Repair Act has been extensively modified by the signing of Assembly Bill 125 also known as the Homeowner Protections Act of 2015. The Act considerably revises Chapter 40 of the Nevada Revised Statute ("NRS") governing construction defect actions. According to Governor Brian Sandoval, the signing of the first major bill of the legislative session in Nevada "discourages frivolous litigation and strengthens Nevada's rebounding housing market."1 Among other provisions, the Homeowner's Protection Act removes a claimant's ability to recover reasonable attorney fees as part of the claimant's damages, shortens the statutes of repose, defines the duty to defend, and prohibits a claimant from filing a notice of construction defects unless the claimant has submitted a claim under the homeowner's warranty and the insurer has denied the claim. Only claims that have been denied under the homeowner's warranty may be claimed.
Additionally, the term "construction defect" is now defined as a defect "(1) which presents an unreasonable risk of injury to a person or property; or (2) which is not completed in a good and workmanlike manner and proximately causes physical damage to the resident or appurtenance."
Critically, the Act now requires that the notice of construction defects (1) state in "specific detail" rather than reasonable detail, each defect, damage, and injury to each residence or appurtenance that is subject to the notice; (2) state the exact location of each defect, damage, and injury, rather than describe in reasonable detail the location of the defect; and (3) include a statement signed by the owner of the residence or appurtenance in the notice that the owner verifies that each defect, damage and injury exists in the residence or appurtenance.
Although not every revision is set forth above, the passing of The Homeowner's Protection Act appears to be a colossal victory for builders as the majority of the revisions to NRS Chapter 40 are favorable to the builder while additional or heightened requirements have been placed upon homeowners who wish to bring a claim. The following two Right to Repair updates concern proposed bills that also seek to radically change the pre-claim construction defect landscape.
ARIZONA: BUILDERS NOW HAVE THE RIGHT TO REPAIR INSTEAD OF AN OPPORTUNITY TO REPAIR WHILE HOMEOWNERS NO LONGER HAVE A STATUTORY RIGHT TO ATTORNEY FEES AND EXPERT FEES
In March 2015, Arizona Governor Doug Ducey signed into law House Bill 2578, revising key portions of the Right to Repair pursuant to the Purchaser Dwelling Act (Arizona Revised Statute ("A.R.S.") Section 12-1361 et. seq. Important categories of the Act affected by the new law include the builder's right to repair or replace, the process of repair or replacement, dwelling actions, and homeowners' association dwelling actions. Most notably, prior to filing a construction defect suit, or a "dwelling action" as defined in A.R.S. Section 12-1361 et. seq., a homeowner must provide written notice detailing the basis of a dwelling action and must allow the builder to repair or replace the alleged construction defects.
Another significant revision includes the elimination of the prevailing homeowner's statutory right to reasonable attorney fees, witness fees and taxable costs in a dwelling action. Bill 2578 also revised the definitions of "Construction Codes," "Construction Defect," "Construction Professional," and "Material Deficiency." Homeowner Associations now must disclose additional information regarding the claim to its members and must show compliance with procedures set forth in the community documents. Clearly, Arizona's legislature is seeking to reduce the amount of frivolous construction defects suits with the elimination of a prevailing homeowner's right to reasonable attorney fees and expert fees. Moreover, the Legislature now provides builders in Arizona with the right to make repairs to alleged construction defects if they so choose.
FLORIDA: FLORIDA GENERAL CONTRACTORS SEEK AGGRESSIVE AMENDMENT TO PRE-CLAIM CONSTRUCTION DEFECT PROCESS WITH BILL 87
Florida's Right to Repair Act, Chapter 558 of the Florida Statutes, may be extensively revised in the near future. With the help of the South Florida Chapter of the Associated General Contractors of America, House of Representatives Bill 87 will be presented as an amendment to the Pre-Claim Construction Defect requirements set forth in Chapter 558.
The proposed bill is aggressive and seeks to address issues in the current statute. These deficiencies have seemingly prevented construction defect claims from being resolved without the filing of a civil suit. Notably, the statute of limitations period for a property owner to file suit for construction defects would be shortened based upon the revision of the term "completion of a building or improvement" to include issuance of a temporary certificate of occupancy. Additionally, property owners would be subject to additional requirements for issuing a notice of claim, including specific identification of locations of each alleged construction defect as well as the specific provisions of the building code, project plans, project drawings, project specifications, or other documentation, information or authority that serve as the basis of the claim for each alleged construction defect.
Perhaps most importantly, the bill provides that if a construction defect is settled by repairs offered by the contractor during the Chapter 558 claims process but the repairs fail to fully correct the defects and the owner or association then files suit because the issue was not resolved, the defendant may claim that the issue was previously resolved and the plaintiff owner may face sanctions. Even if the bill as proposed does not pass in its current form, on the heels of Nevada's Right to Repair Act overhaul, it may serve to encourage other states, including California, to take another look at their Right to Repair Act procedures.
COLORADO: UPDATE FROM CGDRB SEPTEMBER 2014 BULLETIN: COLORADO PROPOSED LEGISLATION RE: HOA CONDOMINIUM DEFECT CLAIMS
In September 2014, we provided an important discussion of potential significant tort reform legislation presented in Colorado regarding construction claims by homeowner associations for condominiums. This Bulletin serves as an update to that discussion as intense debate over legislative reform to provide condominium builders in Colorado more legal protections has heated up again.
On October 13, 2014, the city of Lakewood became the first Colorado municipality to pass a “right to repair” measure with respect to common interest communities. The Lakewood measure gives builders a right to repair construction defects before homeowner associations take legal action and requires a homeowner majority approval before legal action is taken.
On February 10, 2015, two bipartisan Senators introduced Senate Bill 177, a bill proposing changes to the prerequisites for a homeowner association to file a construction defect action under the Colorado Common Interest Ownership Act. SB 177, if passed in its current form, would require:
- That when the governing documents of a common interest community require mediation or arbitration of a construction defect claim and the requirement is later amended or removed, mediation or arbitration is still required for a construction defect claim;
- That the mediation or arbitration take place in the judicial district in which the common interest community is located;
- That the arbitrator (1) be a neutral third party; (2) make certain disclosures before being selected; and (3) be selected as specified in the community's governing documents or, if not specified, in accordance with the Uniform Arbitration Act;
- That before a construction defect claim is filed on behalf of the homeowner association: (1) the parties must submit the matter to mediation; and (2) the board must give advance notice to all unit owners, together with a disclosure of the projected costs, duration, and financial impact of the construction defect claim, and must obtain the written consent of a majority of the unit owners.
- That the disclosures required prior to the purchase and sale of property in a common interest community a notice that the community's governing documents may require binding arbitration of certain disputes.
As explained in our previous Bulletin, currently, in Colorado, homeowner association boards are only required to obtain two condominium owners’ consent to file a construction defect suit. Similar to SB 220, which proposed a number of the same requirements, SB 177 would likely have the potential effect of reducing the number of lawsuits filed against builders and decrease the treat of frivolous claims; and allow the parties an opportunity to resolve their issues short of litigation.
On March 18, 2015, the Colorado Senate Committee on Business, Labor, and Technology voted 6-2 to forward SB-177 to the full Senate with four minor amendments. The amendments provide:
- The homeowner association’s attorney can prepare the disclosures that must be presented to unit owners prior to filing a construction defect claim;
- Voting may be done by proxy;
- The parties must agree on an arbitrator. If they cannot agree, they may petition the court to appoint one. Preference will be given to the arbitrator designated in the community’s governing documents; and
- A different list of disclosure topics is required.
Also introduced this year is SB 091, a bill to shorten the Colorado’s construction defect statute of repose to a homeowner from bringing an action after three years. On March 16, 2015, the Colorado Senate Committee on State, Veterans & Military Affairs voted to pass SB 091 to the full Senate with two substantive amendments. The first amendment excludes any multifamily developments from being effected by the shortened statute of repose. The second amendment proposes the statute of repose only be shortened to five years, plus an additional year if the defect manifests in year five. Currently, in Colorado, if a homeowner does not discover a construction defect within six years of a house’s completion, the homeowner may forfeit all legal rights to seek repair. Again, SB 091 would protect builders from frivolous or untimely claims by homeowners.
We will continue to monitor development of these bills and others that may be proposed in the future. If we can provide any further information concerning these developments or you are interested in receiving our compendium of the various right repair statutes please let us know.
1 As reported by KTVN-TV in Reno, Nevada: http://www.ktvn.com/story/28163519/senate-passes-constructiondefect-bill-sends-to-governor-sandoval.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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“Over? Did you say ‘over’?”
December 31, 2024 —
Daniel Lund III - LexologyThe United States Seventh Circuit Court of Appeals recently held that under the Federal Arbitration Act, an arbitrator – and not a court – is to determine the preclusive effect of an arbitrator’s earlier ruling.
In the case, insurers engaged in three reinsurance agreements had previously arbitrated concerning one of the insurer’s billing methodologies. When a similar dispute occurred years later, the victors in the first arbitration – rather than pursuing arbitration – filed in federal court in Chicago seeking to have the court declare that the prior arbitration award precluded re-arbitration of the latest dispute. The insurer on the other side of the dispute moved to compel arbitration, a motion granted by the district court. The plaintiff insurers appealed.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
