Drop in Civil Trials May Cause Problems for Construction Defect Cases
August 27, 2013 —
CDJ STAFFOver the last fifty years, the number of lawsuits that have been settled by trial have dropped sharply, according to Kenneth Childs, writing in the Idaho Business Review. Childs notes that in 1962, 11.5% of federal civil cases were resolved at trial, but in 2002, only 1.8 % percent went to trial. He makes the supposition that, due to their complexity, construction defect trials are even less likely to be resolved at trial.
Instead, they are being resolved in mandatory arbitration. Views on arbitration have changed over the years and the courts have gone from what he describes as “somewhat hostile to it” to embracing, encouraging, and even mandating it.
Childs notes there are some problems to this climate of arbitration. He notes that arbitrators can “operate by their own rules and according to their own standards.” The decisions made by arbitrators “are not subject to appellate review,” which allows arbitrators “to ignore the law entirely.”
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General Release of Contractor Upheld Despite Knowledge of Construction Defects
February 27, 2019 —
Garret Murai - California Construction Law BlogAh, the elusive Lepus Cornutus, commonly known as the Jackalope. Rarely seen, we may have one in SI 59 LLC v. Variel Warner Ventures, LLC, Court of Appeals for the Second District, Case No. B285086 (November 15, 2018), an interesting case involving a developer, a contractor, a general release, and Civil Code section 1688.
SI 59 LLC v. Variel Warner Ventures, LLC
In 2005, Variel Warner Ventures, LLC (Variel Warner) entered into a construction contract with Verdugo Management & Investment, Inc. (Verdugo) to construct improvements at an 85 unit apartment complex. Under the terms of the contract, Verdugo agreed to construction the improvements in a good and workmanlike manner in strict compliance with all drawings and specifications and to comply with all laws. It didn’t. The work was defectively flashed, counterflashed, and waterproofed.
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Garret Murai, Wendel RosenMr. Murai may be contacted at
gmurai@wendel.com
Millennium’s Englander Buys $71.3 Million Manhattan Co-Op
September 03, 2014 —
Oshrat Carmiel – BloombergIsrael Englander, the founder and chief executive officer of hedge-fund firm Millennium Management LLC, bought a duplex apartment on New York’s Park Avenue for $71.3 million, a record price for a Manhattan co-op.
The seller was the government of France, New York City property records filed on Aug. 30 show. The six-bedroom unit at 740 Park Ave. was listed for $48 million in April, according to real estate website StreetEasy.com.
The Park Avenue tower, completed in 1931 and designed by Rosario Candela and Arthur Loomis Harmon, has been home to John D. Rockefeller Jr. and Jacqueline Kennedy Onassis, according to StreetEasy. Its 31 units include duplexes and triplexes of as much as 20,000 square feet (1,900 square meters). The 18-room co-op bought by Englander includes a private elevator, 35-foot (10.6-meter) marble gallery and five fireplaces, said the listing by John Burger of Brown Harris Stevens.
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Oshrat Carmiel, BloombergMs. Carmiel may be contacted at
ocarmiel1@bloomberg.net
Colorado Statutes of Limitations and Repose, A First Step in Construction Defect Litigation
December 20, 2012 —
CDJ STAFFGrund Dagner, a law firm operating in Denver and Boulder, Colorado notes on their blog that when defending a construction defect claim, one of their first steps is to determine if the claims are affected by the statutes of limitations or repose, and that they “have had much success raising these defenses with the court before trial.”
Colorado has a two-year statute of limitations, starting from when the homeowner discovers the defect. Further, Colorado’s statute of repose precludes lawsuits beginning “more than six years after the substantial completion of the improvement to the real property.”
Grund Dagner notes that they “recently obtained dismissal of claims related to eight of 22 buildings in a condominium project, where the homeowners in those building observed the defects more than two years before the HOA initiated its claims against our client.”
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Do You Have the Receipt? Pennsylvania Court Finds Insufficient Evidence That Defendant Sold the Product
December 23, 2024 —
Gus Sara - The Subrogation StrategistIn State Farm Fire & Cas. Co. v. Coway USA, Inc., No. 22-cv-3516, 2024 U.S. Dist. LEXIS 192849, the United States District Court for the Eastern District of Pennsylvania (District Court) considered whether the plaintiff produced sufficient evidence to establish that the defendant sold and/or marketed a product and, thus, could be held liable for an alleged defect in the product. The plaintiff, a subrogating insurance carrier, brought strict product liability and breach of warranty claims against the defendant—the installer of a bidet in its insured’s home—claiming that the defendant also marketed and sold the bidet. The sole evidence to support a finding that the defendant sold the bidet was the homeowner’s testimony that she bought the product from the installer. The court found that the insured’s testimony, without any documentation or other corroborating evidence, was insufficient to establish that the defendant sold the product. Since proof of a sale is a required element for strict product liability and breach of warranty claims, the District Court granted the defendant’s motion for summary judgment, dismissing the case.
This case involved a water loss to the Pennsylvania residence of Mikyung Kim and her husband Adrian Kim (collectively, the Kims) that was discovered in April 2021. An investigation revealed that the water loss originated from the failure of a bidet for a toilet in the second-floor bathroom. The Kims alleged that defendant, Coway USA, Inc. (Coway), sold the bidet and installed it around 2010. An employee of the plaintiff’s liability expert, a materials engineer, opined that a T-connector—a plastic valve that regulates the flow of water to and through the bidet—failed due to overtightening of the connector during the manufacturing process.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
A Win for Policyholders: Court Finds Flood Exclusion Inapplicable to Plumbing Leaks Caused by Hurricane Rainfall
October 21, 2024 —
Kelly A. Johnson & Damian S. Barquin - Saxe Doernberger & Vita, P.C. A recent decision by a federal court helps clear the path to coverage for property owners this hurricane season. The Court deemed one property policy’s flood exclusion inapplicable to bar coverage for water damage from backed-up drainage and overflow caused by excessive rainfall. The case, styled G.E.M.S. Partners LLC v. AmGUARD Ins. Co., — F.Supp. 3d —, No. CV 22-1664, 2024 WL 3568932 (D.N.J. July 29, 2024)), involved a familiar dispute between the insured and insurer following damage to covered property after a named storm’s heavy rainfall.
Here, G.E.M.S. Partners LLC (“Insured”) obtained a commercial property policy from AmGUARD Insurance Company (“AmGUARD”) to cover three neighboring buildings in Union, New Jersey. In September 2021, intense rainfall from Hurricane Ida overwhelmed the local infrastructure and sewer system, leading to water leakage from plumbing fixtures at the insured property. To secure coverage under its AmGUARD policy, the Insured wisely relied on its “Water Back-Up and Sump Overflow Endorsement” (“Back-Up/Overflow Endorsement”). Under this endorsement, AmGUARD promised to “pay for ... damage ... caused by ... water ... which backs up through or overflows or is otherwise discharged from a sewer.”1 Indeed, a plumber that inspected the buildings following Hurricane Ida described the root cause of the water damage as a “back up” of “sewer ... water.”2
Reprinted courtesy of
Kelly A. Johnson, Saxe Doernberger & Vita, P.C. and
Damian S. Barquin, Saxe Doernberger & Vita, P.C.
Ms. Johnson may be contacted at KJohnson@sdvlaw.com
Mr. Barquin may be contacted at DBarquin@sdvlaw.com
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Top Five General Tips for All Construction Contracts
October 26, 2020 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday here at Musings we welcome Spencer Wiegard. Spencer is a Partner with Gentry Locke Rakes & Moore, LLP. He is a member of the firm’s Construction Law and Commercial Litigation practice groups. Spencer focuses his practice in the areas of construction law and construction litigation. Spencer is a member of the Board of Governors for the Virginia State Bar Construction Law and Public Contracts Section, and a member of the Legislative Committee of the Associated General Contractors of Virginia and the Executive Committee for the Roanoke/SW Virginia District of the Associated General Contractors of Virginia.
I would like to thank Chris for inviting me to author today’s guest post. Over the past few days, I have found myself wading through the terms and conditions of a lengthy and complicated construction contract, while at the same time aggressively negotiating for Houston house leveling cost readjustments. As I slogged through the legalese, I was reminded of a presentation that I gave earlier this year to the Roanoke District of the Virginia Associated General Contractors. The district’s executive committee asked me to speak to its members concerning the broad topic of “Construction Contracts 101.” At the beginning of my presentation, I passed along my top five general tips for all construction contracts. Although some of these tips may sound like common sense, I often encounter situations where these basic rules are violated by experienced contractors, subcontractors, suppliers and design professionals. My top five general tips for all construction contracts are:
- Reduce the terms of the agreement to writing.
- The written agreement should include all important and relevant information and terms. If it was important enough to discuss prior to signing the contract, it is important enough to include in the written contract;
- At a minimum, include who, what, when, where, how, and how much;
- Both parties should sign the written agreement; and
- Don’t ignore handwritten changes to the contract, as these changes may either mean that you don’t have a deal, or they may become part of the contract when you sign it.
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Mr. Hill may be contacted at chrisghill@constructionlawva.com
Investigators Explain Focus on Pre-Collapse Cracking in Florida Bridge
June 06, 2018 — Scott Judy & Richard Korman - Engineering News-Record
The National Transportation Safety Board's preliminary report on the fatal collapse in March of a pedestrian bridge at Florida International University in Sweetwater focuses attention on the widely discussed pre-collapse cracking in the main span. The report also confirms accounts about what the construction crew working on the bridge was doing before the structure fell.
Reprinted courtesy of Scott Judy, ENR and Richard Korman, ENR
Mr. Judy may be contacted at judys@enr.com
Mr. Korman may be contacted at kormanr@enr.com
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