Lenders and Post-Foreclosure Purchasers Have Standing to Make Construction Defect Claims for After-Discovered Conditions
October 10, 2013 —
W. Berkeley Mann, Jr. — Higgins, Hopkins, McLain & Roswell, LLCThe Colorado Court of Appeals has decided a case which answers a question long in need of an answer: do banks/lenders have standing to assert construction defect claims when they receive title to a newly-constructed home following a foreclosure sale or deed-in-lieu of foreclosure? The decision was released on August 1, 2013, in the case of Mid Valley Real Estate Solutions V, LLC v. Hepworth-Pawlack Geotechnical, Inc., Steve Pawlak, Daniel Hadin, and S K Peightal Engineers, Ltd. (Colorado Court of Appeals No. 13CA0519).
The background facts of the case are typical of a Colorado residential construction defect case generally. A developer contracted for an analytical soil engineering report from a geotechnical engineering firm (H-P) which made a foundation recommendation. The developer’s general contractor then retained an engineering firm (SPKE) to provide engineering services, including a foundation design. The general contractor built the foundation in accordance with the H-P and SPKE criteria and plans.
The house was not sold by the developer and went into default on the construction loan. These events resulted in a deed-in-lieu of foreclosure to a bank-controlled entity which purchased the house for re-sale. Shortly after receiving the developer’s deed, the bank-related entity discovered defects in the foundation that resulted in a construction defect suit against the two design firms and related individuals.
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W. Berkeley Mann, Jr.W. Berkeley Mann, Jr. can be contacted at
mann@hhmrlaw.com
No Coverage for Sink Hole Loss
June 18, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found there was no coverage under the commercial property policy for loss suffered by the insured condominium association due to a sink hole. Bahama Bay II Condo. Ass'n. v. Untied Nat'l Ins. Co., 2019 U.S. Dist. LEXIS 67487 (M.D. Fla. April 11, 2019).
The plaintiff condominium association had thirteen buildings inside their complex. On December 9, 2016, a sinkhole appeared near Building 43. The building was vacated and declared unsafe. Plaintiff's board excused Building 43 owners from paying association dues.
Plaintiff submitted a claim to the insurer for benefits under the policy. The insurer inspected and accepted coverage for Building 43 under the policy's Catastrophic Ground Cover Collapse (CGCC) provision and issued a check for $290,000 for immediate repairs. The insurer denied coverage for Buildings 42, 44, and 45; repairs to the foundation of all buildings, the retaining wall and outdoor fences; land, landscaping, and patios, uncollected association dues, and condominium unit owner property.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Labor Shortage Confirmed Through AGC Poll
November 26, 2014 —
Craig Martin – Construction Contractor AdvisorOver 1,000 contractors participated in Associated General Contractors’ (“AGC”) survey asking whether they were facing a labor shortage. AGC crunched the numbers and provided an Analysis of its survey.
The survey revealed that 83% of construction firms were having trouble finding qualified workers. This survey certainly confirmed comments from construction firms in and around Omaha.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
White House Proposal Returns to 1978 NEPA Review Procedures
November 15, 2021 —
Karen C. Bennett - Lewis BrisboisWashington, D.C. (October 15, 2021) - The Council on Environmental Quality (CEQ) has requested comments, by November 22, 2021, on proposed revisions to the National Environmental Policy Act (NEPA) regulations. The proposal is Phase I in a two-phased approach that will eventually undo a final rule, effective September 2020, that updated NEPA regulations to reflect decades of agency experience and caselaw interpreting the 1969 Act.
Phase I proposes to reinstitute 1978 definitions for key terms used to determine the scope of review and the range of alternatives required when undertaking any major federal action. Phase II is expected to be an extensive rewrite of the 2020 regulations to incorporate climate change and environmental justice objectives. Businesses with projects, now or in the future, that require federal authorizations will need to pay close attention to these regulatory revisions.
The 2020 update rule intended to scale back the time and cost of producing NEPA analyses by focusing agency resources on evaluating effects that are within the agency’s ability to control and studying only those alternatives that would meet the project purpose. CEQ’s proposal eliminates these efficiencies.
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Karen Bennett, Lewis BrisboisMs. Bennett may be contacted at
Karen.Bennett@lewisbrisbois.com
Update – Property Owner’s Defense Goes up in Smoke in Careless Smoking Case
September 21, 2020 —
Michael J. Ciamaichelo - The Subrogation StrategistProperty owners owe a duty of reasonable care to avoid causing harm to neighboring properties. In Steamfitters Local Union No. 602 v. Erie Ins. Exch., 2020 Md. LEXIS 347 (July 27, 2020) (Steamfitters Local), a matter originally discussed in a June 2019 blog post, the Court of Appeals of Maryland affirmed that, where the property owner knows or should have known that people are habitually discarding hundreds of cigarette butts into a mulch bed along the boundary of the neighboring property, the property owner owes a duty to its neighbors to prevent the risk of fire.
As discussed in Steamfitters Local, a fire originated in a strip of mulch at property owned by the Steamfitters Local Union No. 602 (Union) and caused damage to neighboring properties. The fire occurred when an unknown person discarded a cigarette butt into the mulch. Following the fire, investigators found hundreds of cigarette butts in the mulch where the fire originated. A representative for the Union acknowledged that there were more butts in the mulch “than there should have been” and that, “[i]n the right situation,” a carelessly discarded cigarette could cause a fire. The Union, however, had no rules or signs to prohibit or regulate smoking at the property, where apprentices would often gather prior to class. The insurance companies for the damaged neighbors filed subrogation actions alleging that the Union, as the property owner, failed to use reasonable care to prevent a foreseeable fire. A jury found in favor of the subrogating insurers and the defendants appealed.
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Michael J. Ciamaichelo, White and Williams LLPMr. Ciamaichelo may be contacted at
ciamaichelom@whiteandwilliams.com
Tax Increase Pumps $52 Billion Into California Construction
April 20, 2017 —
JT Long - Engineering News-RecordThe first wave of new road projects could go out at the beginning of 2018 now that the California legislature has approved $52.4 billion over 10 years from a new 12-cent-per-gallon gasoline tax. SB-1 was approved late in the evening on April 6; by April 7, the California Dept. of Transportation was already working on a list of projects that could start construction by summer of 2018.
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JT Long, ENRENR may be contacted at
ENR.com@bnpmedia.com
Playing Hot Potato: Indemnity Strikes Again
September 17, 2015 —
Garret Murai – California Construction Law BlogIndemnity can be like playing hot potato (for those of you closer to the Minecraft generation, in the game of hot potato, a metaphoric “hot potato” is tossed between (ahem amongst) players while music is playing, and when the music stops, the player holding the hot potato is out. It’s a barrel of monkeys, trust me.).
Anyway, like hot potato, with indemnity an owner typically requires its general contractor to indemnify the owner (sometimes the property owner in TI projects and occasionally design professionals) from and against any and all claims arising out of, related to . . . blah, blah, blah . . . the general contractor’s scope of work . A general contractor in turn will usually require indemnity from its subcontractors. And subcontractors will require indemnity from their sub-subcontractors. And down the line it goes with each party pointing their finger at the next party down the proverbial “food chain.”
But it doesn’t always happen that way as the next case, American Title Insurance Company v. Spanish Inn, Case No D067137, California Court of Appeals for the Fourth District (August 14, 2015), illustrates.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Ten Firm Members Recognized as Super Lawyers or Rising Stars
July 13, 2017 —
Ceslie Blass - Ahlers & Cressman PLLCWhile we avoid using this blog as a platform for self-promotion, we recently received share-worthy distinctions, which both flatter and humble us. We invite you, our loyal readers, to celebrate in our success, which in great measure is due to you.
John P. Ahlers, one of the firm's founding partners, was ranked third overall across all practicing industries in Washington 2017 Super Lawyers and founding partner Paul R. Cressman, Jr. was ranked in the Top 100. The following other firm members were also recognized as Super Lawyers: Founding partner Scott R. Sleight, Bruce A. Cohen (Partner), Brett M. Hill (Partner), and Lawrence Glosser (Partner). In addition, Ryan W. Sternoff (Partner), James R. Lynch (Partner), Tymon Berger (Associate), and Lindsay (Taft) Watkins (Associate) were selected as Super Lawyers Rising Stars. Over half of the firm's lawyers received Super Lawyers distinction.
Super Lawyers selects attorneys using a patented multiphase selection process. Peer nominations and evaluations are combined with third party research. Each attorney candidate is evaluated on 12 indicators of peer recognition and professional achievement. Only five percent of the total lawyers in Washington State are selected for the honor of Super Lawyers and no more than 2.5 percent are selected for the honor of Super Lawyers Rising Stars.
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Ceslie Blass, Ahlers & Cressman PLLCMs. Blass may be contacted at
cblass@ac-lawyers.com