$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed To Prove Supplier’s Negligence Or Breach Of Contract Caused A SB800 Violation
June 05, 2017 —
Jon A. Turigliatto & Chelsea L. Zwart - CGDRB News & PublicationsThe Fourth District California Court of Appeal published its decision, Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, holding that claims against a material supplier under SB800 (Civil Code §895, et. seq.) require proof that the SB800 violation was caused by the supplier’s negligence or breach of contract.
In this case, Acqua Vista Homeowners Association (“the HOA”) sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development. The HOA’s complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building. At trial, the HOA presented evidence that the pipes supplied by MWI contained manufacturing defects, that they leaked, and that the leaks had caused damage to various parts of the condominium development. The jury returned a special verdict against MWI, and the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury’s finding that MWI was 92% responsible for the HOA’s damages.
MWI filed a motion for a directed verdict prior to the jury’s verdict and motion for judgment notwithstanding the verdict following the entry of judgment, both on the grounds that the HOA had failed to present any evidence that MWI had caused a SB800 violation as a result of its negligence or breach of contract, and had therefore failed to prove negligence and causation as required by SB800. MWI relied on the Fourth District’s prior decision in Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, and its interpretation therein of Civil Code §936, which states, in relevant part, that the statute applies “to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract….” (emphasis added.) However, the trial court denied both motions, relying on the last sentence of Civil Code §936, which states in part, “[T]he negligence standard in this section does not apply to any…material supplier…with respect to claims for which strict liability would apply.”
Reprinted courtesy of
Jon A. Turigliatto, Chapman Glucksman Dean Roeb & Barger and
Chelsea L. Zwart, Chapman Glucksman Dean Roeb & Barger
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Ms. Zwart may be contacted at czwart@cgdrblaw.com
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Texas Supreme Court to Rehear Menchaca Bad Faith Case
January 10, 2018 —
Sean P. Mahoney – Complex Insurance Coverage ReporterOn December 15th, the Texas Supreme Court agreed to revisit its April 7, 2017 decision in
USAA Texas Lloyds Co. v. Menchaca, No. 14-0721, a “bad faith” case arising out of Hurricane Ike damage, in which the court held that a policyholder could potentially recover policy benefits for statutory bad faith under Texas law, even though a jury concluded that the insurer did not breach the terms of the policy, if the policyholder could show that she was nevertheless entitled to the benefit. The decision to rehear this matter comes at the urging of insurers and interested groups, including the Insurance Council of Texas and the U.S. Chamber of Commerce, who argued that the April 7, 2017 ruling substantially unsettled Texas insurance law.
Menchaca is a first-party property insurance coverage case. After Hurricane Ike struck in 2008, plaintiff Menchaca submitted a claim under her homeowners policy to USAA. A USAA adjuster later concluded that Menchaca’s property suffered only “minimal damage” that fell below the deductible. Menchaca sued claiming breach of contract and unfair claims settlement practices in violation of the Texas Insurance Code. As damages, she sought only the policy benefit, court costs, and attorneys’ fees.
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Sean P. Mahoney, White and Williams LLP Mr. Mahoney may be contacted at
mahoneys@whiteandwilliams.com
Homebuilder Confidence Takes a Beating
October 21, 2013 —
CDJ STAFFHomebuilder confidence dropped to fifty-five percent in October, the lowest percentage seen in the last four months. The score had been rising on the strength of renewed home sales. The current slump is attributed to increases in interest rates, which have made home purchases more expensive for prospective buyers, and the uncertainty of the budget struggle in Washington.
John Stumpf, the chairman and CEO of Wells Fargo said that “home price appreciation remains strong and affordability remains excellent.” Mr. Strum has “guarded optimism” over the effects of the budget struggle.
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After 15 Years, Settlement Arrested at San Francisco's Millennium Tower
June 26, 2023 —
Nadine M. Post - Engineering News-RecordAfter overcoming several snags, the team for the voluntary effort to stem future significant settlement and tilting at San Francisco’s 645-ft-tall Millennium Tower has declared the project a success, now that loads have been fully transferred to 18 new perimeter piles driven to bedrock.
Reprinted courtesy of
Nadine M. Post, Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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The Court-Side Seat: FERC Reviews, Panda Power Plaints and Sovereign Immunity
April 26, 2021 —
Anthony B. Cavender - Gravel2GavelThis is a brief report on new environmental law decisions, regulations and legislation.
THE U.S. SUPREME COURT
Massachusetts Lobsterman’s Association v. Raimondo, Secretary of Commerce
On March 22, 2021, the Supreme Court rejected a petition to review a Presidential decision to invoke the Antiquities Act of 1906 to designate as a monument “an area of submerged land about the size of Connecticut” in the Atlantic Ocean. This action forbids all sorts of economic activity, which compelled the filing of litigation in the First Circuit challenging this designation. Chief Justice Roberts supported the Court’s denial of certiorari, but remarked that a stronger legal case may persuade the Court to review such liberal uses of the Antiquities Act.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
The Little Ice Age and Delay Claims
January 24, 2018 —
Wally Zimolong - Supplemental ConditionsMuch of the Eastern United States is just now emerging from a historic two week cold snap. In much of the Northeast and Mid-Atlantic, the temperature stayed below freezing for 15 days straight. Cities recorded the lowest temperatures in a quarter century. Winter Storm Grayson reeked havoc along the Eastern Coast bringing snow to places like Charleston and a crippling blizzard to Boston.
The record cold snap also impacted the construction industry. Delivery delays, the inability to apply weather sensitive applications (like cast in place concrete), and the unavailability of labor are just a few things that extreme weather can cause on a construction project. If they happen at the wrong time, delays can destroy project schedules and make previous delays even worse. Delays cost money and can mean the difference between a profitable project from both the owner and contractors perspective.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Insurer’s Duty to Defend: When is it Triggered? When is it Not?
February 18, 2015 —
Zach McLeroy – Colorado Construction LitigationIn Colorado it is well recognized that an insurer has a broad duty to defend its policyholder against pending claims. An insurer’s duty to defend is triggered when the underlying complaint against the insured alleges any set of facts that might fall within the coverage policy. Greystone Construction, Inc. v. National Fire & Marine Insurance, Co., 661 F.3d 1272, 1284 (10th Cir. 2011). Even if the insurer’s duty to defend is not clear from the pleadings filed against the insured, the insurer’s duty to defend is triggered if the claim is potentially or arguably within the policy coverage. Id. If there is any doubt as to whether a theory of recovery falls within the policy coverage, such doubt is decided in favor of the insured and the insurer’s duty to defend is triggered. Id. In order to avoid this duty to defend, an insurer must show that an exemption to the policy applies and that no other basis exists for coverage under the policy.
In Cornella Brothers, Inc. v. Liberty Mutual Fire Insurance Company, 2014 WL 321335 (D. Colo. Jan. 29, 2015), the Court was to determine whether Liberty Mutual Fire Insurance Company (“Liberty Mutual”) had a duty to defend a lawsuit filed against its insured, Cornella Brothers, Inc. (“Cornella”). The underlying lawsuit alleged construction defects at a recharging facility. Upon being named a party to the underlying litigation, Cornella provided notice to Liberty Mutual and demanded that Liberty Mutual defend Cornella.
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Zach McLeroy, Higgins, Hopkins, McLain & Roswell, LLCMr. McLeroy may be contacted at
mcleroy@hhmrlaw.com
Florida Adopts Daubert Standard for Expert Testimony
October 07, 2019 —
Michael L. DeBona - The Subrogation StrategistSeven months ago, the Florida Supreme Court declined to adopt Daubert as the standard for admitting expert testimony in Florida state courts. In DeLisle v. Crane Co., 258 So. 3d 1219 (2018), the court reaffirmed that “Frye, not Daubert, is the appropriate test in Florida.” On May 23, 2019, however, Florida’s high court did an about-face. In In Re: Amendment to the Florida Evidence Code, No. SC19-107, the Florida Supreme Court overruled its decision in DeLisle and declared that Florida will now apply the Daubert standard to determine whether scientific evidence is admissible.
The Daubert standard comes from the case of Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), which held that the longstanding Frye test[1] for admitting expert testimony was superseded by Rule 702 of the Federal Rules of Evidence. Daubert instructed that federal judges should act as “gatekeepers” to ensure expert testimony is rooted in scientifically valid principles and that those principles are properly applied to the facts at issue. In determining whether scientific evidence should be admitted, Daubert sets forth several factors to consider: the testability of the theory or technique; the peer review and publication of the theory or technique; the error rate for the technique; the standards controlling the technique’s operation; and the general acceptance of the theory or technique.[2] The Daubert standard is generally considered a more onerous test than Frye, precluding expert testimony that might otherwise go to the jury under Frye.[3] Whereas Frye is a single factor test that applies only to new or novel science, Daubert is a multifactor test that applies to all expert testimony.
Since Daubert, a growing number of states have moved away from the Frye test in favor of the Daubert standard; it is now followed by a majority of jurisdictions in the country. In 2013, the Florida State legislature attempted to move Florida in this direction by amending the Florida Evidence Code to codify the Daubert standard. But because the Florida Supreme Court is vested with the power to make procedural rules and it was unclear whether the Daubert standard was a procedural or substantive rule, it was uncertain whether the 2013 Daubert amendments were controlling law. Then in 2017, in In Re: Amendment to the Florida Evidence Code, No. SC16-181, the Florida Supreme Court expressly declined adopting the Daubert amendments to the extent they were procedural. This decision signaled that, if faced with the Daubert standard on appeal from a litigated case, the Florida Supreme Court would reaffirm that Frye – not Daubert – controlled the admissibility of expert testimony in Florida state courts.
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Michael L. DeBona, White and Williams LLPMr. DeBona may be contacted at
debonam@whiteandwilliams.com
