Court Grants Partial Summary Judgment on Conversion Claim Against Insurer
February 01, 2023 —
Tred R. Eyerly - Insurance Law HawaiiAlthough the court was incredulous that the parties were disputing the possession of a gate opener allegedly damaged in a lightning strike, it granted the insured's motion for partial summary judgment finding the insurer had converted the gate opener. Privratsky v. Liberty Mut. Fire Ins Co., 2022 U.S. Dist. LEXIS 196002 (D. Haw. Oct. 27, 2022). (Full disclosure, our office is co-counsel for the insured).
Mr. Privratsky alleged his home on Maui was struck by lightning which caused an electrical surge. The home and personal property were damaged. The alleged cost of repair work at one point was as much as $325,000. A claim was submitted under a homeowner's policy issued by Liberty Mutual. Liberty paid for only some of the damage. Privratsky filed suit alleging three causes of action for: (1) declaratory judgment that the losses were covered by the policy issued by Liberty; (2) bad faith; and (3) conversion of personal property, namely, the damaged gate operator.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Court Sharpens The “Sword” And Strengthens The “Shield” Of Contractors’ License Law
July 24, 2023 —
Kyle S. Case - ConsensusDocsPerforming construction work without the necessary license can have significant repercussions on a contractor’s business. California in particular has become known for its imposition of “strict and harsh” penalties for a contractor’s failure to maintain proper licensure. In the realm of public works projects, any contract with an unlicensed contractor is deemed void. See Business & Professions Code Section 7028.15(e). On private projects, California’s Contractors’ License Law prohibits contractors from maintaining any action to recover payment for their work, and more severe, may require a contractor to disgorge all funds paid to it for performing unlicensed work. See Business & Professions Code Section 7031). These methods of deterrence are referred to as the “shield” and “sword” of the Contractors’ State License Law. Loranger v. Jones, 184 Cal. App. 4th 847, 854 (2010).
In any discussion surrounding licensure, it is important to review the language of the Business and Professions Code (“Bus. & Prof.”). Section 7031(a) states:
Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person…
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Kyle S. Case, Watt, Tieder, Hoffar & Fitzgerald LLPMr. Case may be contacted at
kcase@watttieder.com
Failing to Release A Mechanics Lien Can Destroy Your Construction Business
May 01, 2023 —
William L. Porter - Porter Law GroupIs the title to this article possibly true? Yes, absolutely! I have seen it happen. Let me tell you how it happens so you can avoid such a result.
When contractors, subcontractors or suppliers in California construction projects are not paid they often record a mechanics lien on the property on which they worked. This is a customary accepted legal process for the claimant to secure its right to payment. The mechanics lien enables the claimant to eventually sell the property and obtain payment from the proceeds to the extent they remain unpaid. California Civil Code Section 8460 generally requires that a lawsuit to foreclose on a mechanics’ lien must be filed in court within ninety (90) days after the mechanics’ lien is recorded. If no lawsuit has been filed in court within this 90-day period, then the lien generally becomes unenforceable. Because the mechanics lien remains a cloud on the title to the property if not released, the lien claimant usually releases the mechanics lien if they have failed to meet the lawsuit deadline. Lien claimants will also release a lien and/or dismiss the foreclosure lawsuit in exchange for payment. It is rare that the property is actually sold to obtain payment. This is a brief description of the pathway to payment through the use of a mechanics lien.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Exclusions Bar Coverage for Damage Caused by Chinese Drywall
July 05, 2011 —
Tred R. EyerlyThe insured homeowners were unsuccessful in arguing around the policy's exclusions when seeking coverage for damage caused by Chinese drywall. Ross v. C. Adams. Constr. & Design, L.L.C., 2011 La. App. LEXIS 769 (La. Ct. App. June 14, 2011).
Before the insureds purchased and moved into their home, it was renovated. After moving in, the insures discovered foreign gypsum drywall, or Chinese drywall. The insureds submitted a claim to Louisiana Citizens Property Insurance Company. In an investigation, the insurer confirmed the presence of Chinese drywall and damage to the metal surfaces caused by corrosion. Louisiana Citizens refused coverage and the insureds sued. The trial court denied the insured's motion for summary judgment and granted summary judgment to Louisiana Citizens.
The court of appeal affirmed. Initially, the court determined the insureds sustained a direct physical loss. The inherent qualities of the Chinese drywall created a physical loss to the home and required that the drywall be removed and replaced.
Four exclusions, however, barred coverage. First, damages due to faulty or defective materials were excluded from coverage. The Chinese drywall emitted high levels of sulfuric gas which caused the damage to the insured's plumbing, electrical wiring and metal components.
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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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Is the Issuance of a City Use Permit Referable? Not When It Is an Administrative Act
January 10, 2018 —
Adam E. Lang - Real Estate Litigation BlogArizona’s Constitution gives electors in cities, towns, and counties the ability to refer legislation that was enacted by their local elected officials to the ballot for popular vote. Ariz. Const. art. IV, Pt. 1 § 1(8). But only legislative acts are referable; administrative acts are not. In general, a legislative act makes new law and creates policy, is permanent in nature, and is generally applied. On the other hand, an administrative act is one that executes and implements a law already in place. Wennerstrom v. City of Mesa, 169 Ariz. 485, 489-90, 821 P.2d 146, 150-51 (1991).
For more than fifty years, Arizona courts have been clear: zoning and rezoning ordinances are legislative acts and therefore referable to popular vote. City of Phoenix v. Fehlner, 90 Ariz. 13, 17, 363 P.2d 607, 609 (1961) (holding that “what constitutes an appropriate zone is primarily for the legislature”); Fritz v. City of Kingman, 191 Ariz 432, 432, 957 P.2d 337, 337 (1998) (noting “we reaffirm our view that zoning decisions are legislative matters subject to referendum”); Pioneer Trust Co. of Arizona v. Pima Cty., 168 Ariz. 61, 64–65, 811 P.2d 22, 25–26 (1991) (holding “that, in Arizona, zoning decisions are legislative acts subject to referendum” and that even a “conditional approval of . . . rezoning was a legislative act”); Cottonwood Dev. v. Foothills Area Coal. of Tucson, Inc., 134 Ariz. 46, 653 P.2d 694 (1982) (analyzing whether zoning referendum complied with statutory requirements); Wait v. City of Scottsdale, 127 Ariz. 107, 108, 618 P.2d 601, 602 (1980) (noting “that the enactment and amendment of zoning ordinances constitute legislative action”); City of Phoenix v. Oglesby, 112 Ariz. 64, 65, 537 P.2d 934, 935 (1975) (“The matter of zoning is appropriately one for the legislative branch of government.”); Queen Creek Land & Cattle Corp. v. Yavapai Cty. Bd. of Sup’rs, 108 Ariz. 449, 452, 501 P.2d 391, 394 (1972) (denying an attempt to enjoin referendum on county’s zoning decision).
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Adam E. Lang, Snell & WilmerMr. Lang may be contacted at
alang@swlaw.com
Settlement Conference May Not Be the End in Construction Defect Case
February 21, 2013 —
CDJ STAFFThe builder has been sentenced to jail for theft. The building has been condemned over construction defects. And the settlement conference probably won’t bring an end to the case. The building in question is a condominium complex, located at 770 Sandy Street in Norristown, Pennsylvania. Bruce Fazio took out a $2.5 million construction loan to build it. And when it was done, there were inspections over construction defects, the building was condemned, and then the court ordered repair work. The city of Norristown has sued Fazio to recover the more than $1.5 million it took to repair the building and allow at least some condominium owners to move back in.
The suit alleges that Norristown officials failed to properly inspect the construction work, and that inspectors were not properly certified. Further, it is alleged that secretaries and clerks signed off on inspection reports and certificates of occupancy.
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Consider Manner In Which Loan Agreement (Promissory Note) Is Drafted
March 02, 2020 —
David Adelstein - Florida Construction Legal UpdatesConsider who you loan money too and, perhaps more importantly, the manner in which your loan agreements (promissory notes) are drafted. By way of example, in what appears to be a failed construction project in Conrad FLB Management, LLC v. Diamond Blue International, Inc., 44 Fla. L. Weekly D2897a (Fla. 3d DCA 2019), a group of lenders lent money to a limited liability company (“Company”) in connection with the development of a project. Promissory notes were executed by Company and executed by its managing member as a representative of Company, and not in a personal capacity. Company, however, did not own the project. Rather, an affiliated entity owned the project (“Affiliated Entity”). Affiliated Entity had the same managing member as Company. Once the Company received the loan proceeds, it transferred the money to Affiliated Entity, presumably for purposes of the project.
The loans were not repaid and the lenders sued Company, Affiliated Entity, and its managing member, in a personal capacity. The lenders claimed they were all jointly liable under the promissory notes. Although the trial court granted summary judgment in favor of the lenders, this was reversed on appeal as to the Affiliated Entity and the managing member because there was a factual issue as to whether they should be bound by the note executed on behalf of Company.
First, Florida Statute s. 673.4011(1) provides that “a person is not liable on a promissory note unless either (a) the person signed the note, or (b) the person is represented by an agent who signed the note.” Conrad FLB Management, LLC, supra. Affiliated Entity is a separate entity and did not execute the note.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Suing a Local Government in Land Use Cases – Part 1 – Substantive Due Process
February 16, 2017 —
Wally Zimolong – Supplemental ConditionsBecause of my personal political persuasions (pro-freedom) and success in litigating cases against the government and other media about those cases businesses frequently approach me about bringing claims against local governments and agencies for interfering with their Constitutional rights. Actions by local government agencies that could give rise to a Constitutional violation include: treating a developer’s project differently than a similar project, revoking a previously issued zoning or building permit, disqualifying a contractor from bidding on a government contract, retaliating against a business owner for speaking out against the local agency or one of its members, or unnecessarily delaying the issuance of a permit. The Constitutional rights most typically implicated in these cases are those guaranteed by the 5th and 14th Amendments to the United States Constitution. However, the 1st Amendment is also frequently implicated.
Suing a local government agency for violating your Constitutional rights is not easy. However, the federal statute under which the cases are brought, 42 U.S.C. Section 1983, provides for the award of a successful plaintiff’s attorneys fees. This is true even if the Judge or jury awards a mere $1 is damages. Moreover, sometimes there can be a strategic value in the litigation.
This is the first in a series of blog posts exploring claims available to businesses harassed by local government agencies and officials and the challenges inherent in successfully bringing those claims. We will start with a claim for a substantive due process violation.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
