Class Actions Under California’s Right to Repair Act. Nope. Well . . . Nope.
January 15, 2019 —
Garret Murai - California Construction Law BlogIt’s the holidays. A time when family and friends, and even neighbors, gather together.
And nothing brings neighbors closer together than class action residential construction defect litigation.
In Kohler Co. v. Superior Court, Case No. B288935 (November 14, 2018), the Second District Court of Appeal addressed whether neighbors can bring class action lawsuits under the Right to Repair Act. For those who are regular readers of the California Construction Law Blog you’re familiar with the Right to Repair Act codified at Civil Code sections 895 et seq.
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Garret Murai, Wendel RosenMr. Murai may be contacted at
gmurai@wendel.com
Skipping Depositions does not Constitute Failure to Cooperate in New York
March 09, 2020 —
Ryan G. Nelson - Saxe Doernberger & VitaInsurance policies typically impose, on the insured, a duty to cooperate with the insurer during investigation and litigation of a claim. Non-cooperation can be grounds for denying coverage. This begs the question: what constitutes non-cooperation?
Recently, a New York appellate court affirmed a trial court’s decision that failure by an employee of the insured to show up for three court-ordered depositions did not rise to the level of “willful and avowed obstruction” and therefore, the insurer could not deny coverage on the basis of non-cooperation. See Foddrell v. Utica First Insurance Co., 178 A.D.3d 901 (N.Y. App. Div. 2019). In so holding, the Foddrell court applied the Thrasher test: “To effectively deny coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured’s cooperation, (2) that the efforts employed by the insured were reasonably calculated to obtain the insured’s cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction.” Id.; see Thrasher v. U. S. Liab. Ins. Co., 19 N.Y.2d 159, 167 (1967).
Thomas Foddrell’s suit against Utica First Insurance Company (“Utica First”) stemmed from his personal injury suit against Janey & Rana Construction Corporation (“J&R” (Utica First’s insured). During that lawsuit, J&R’s principal, Gardeep Singh, failed to appear for two court-ordered depositions. After his failure to appear at those depositions, Utica First sent an investigator to inform Singh that he was scheduled for a third deposition. Singh responded to the investigator that he would speak with J&R’s attorneys about the matter. Ultimately, Singh did not appear for the third court-ordered deposition. In response to Singh’s repeated failure to appear for the depositions, Utica First sent Singh a letter advising him that because of his lack of cooperation, Utica would no longer agree to indemnify J&R.
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Ryan G. Nelson, Saxe Doernberger & VitaMr. Nelson may be contacted at
rgn@sdvlaw.com
Pool Contractor’s Assets Frozen over Construction Claims
October 22, 2013 —
CDJ STAFFThe State of Florida has frozen the assets of Nationwide Pools over claims of deceptive practices. Nationwide will be allowed to engage in pool construction during the lawsuit. The Florida Attorney General’s office alleges that Nationwide Pools failed to pay subcontractors, misrepresented warranties, and left customers with unfinished pools. The State of Florida is seeking restitution to consumers who did business with Nationwide Pools.
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Be Wary of Construction Defects when Joining a Community Association
February 07, 2013 —
CDJ STAFFThere are some benefits to living in small developments with correspondingly small community association. Marilyn Briscoe told the Chicago Tribune that in her 34-unit town home association, "people kind of look out for each other here."
But the article also cautions to not only meet the other owners, but that you should "know the developer" and "be leery if you discover litigation for construction defects." Ryan Shpritz, an association attorney said that "you don't want to start out your new association by spending money on lawyer fees or repairing defects." Whether the development is large or small, "having construction defect litigation going on will have an impact on salability."
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No Duty to Defend Suit That Is Threatened Under Strict Liability Statute
July 09, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe Washington Court of Appeals found there was no duty to defend the insured under a strict liability statute for alleged contamination when no action was threatened by the agency. Gull Indus., Inc. v. State Farm Fire and Cas. Co., 2014 Wash. App. LEXIS 1338 (Wa. Ct. App. June 2, 2014).
Gull leased a gas station to the Johnsons from 1972 to 1980. In 2005, Gull notified the Department of Ecology (DOE) that there had be a release of petroleum product at the station. DOE sent a letter acknowledging Gull's notice of suspected contamination. In 2009, Gull tendered its defense to its insurer, Transamerica Insurance Group. Gull also tendered its claims as an additional insured to the Johnson's insurer, State Farm. Neither insurer accepted the tenders.
Gull then sued the insurers, arguing they had a duty to defend. Gull contended that because the state statute imposed strict liability, the duty to defend arose whether or not an agency had sent any communications about the statute or cleanup obligations. The insurers moved for partial summary judgment. The trial court ruled in favor of the insurers.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Traub Lieberman Attorneys Lisa M. Rolle and Justyn Verzillo Win Motion for Summary Judgment
December 23, 2024 —
Lisa M. Rolle & Justyn Verzillo - Traub LiebermanIn this subrogation action brought in the Supreme Court of the State of New York, Dutchess County, Traub Lieberman attorneys Lisa M. Rolle and Justyn Verzillo successfully obtained dismissal of a third-party complaint against their client, a fire-system protection company. In the underlying case, a fire sprinkler system within a commercial building leaked water into multiple tenant spaces, causing damage. The tenants’ insurers alleged that they each paid several hundred thousand dollars to cover their insureds’ claims. The insurers then filed complaints against the company which originally installed the sprinkler (the “Installer”), asserting that the company breached its duty of care. The Installer commenced a third-party action against the property owner and two fire-system protection companies—including Traub Lieberman’s client—who had separately conducted annual inspections of the sprinkler system over the years. The property owner and the two fire-system protection companies each asserted cross-claims against each other.
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Lisa M. Rolle, Traub Lieberman and
Justyn Verzillo, Traub Lieberman
Ms. Rolle may be contacted at lrolle@tlsslaw.com
Mr. Verzillo may be contacted at jverzillo@tlsslaw.com
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Colorado Construction-Defects Reform Law Attempt Expected in 2015
January 14, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to the Denver Post, another attempt to change Colorado’s construction defect laws to spur condo development is likely this term. Reform supporters are encouraged by the city of Lakewood’s ordinance, Denver Post reported: “"A patchwork around the state on this issue is not the way to go," Rep. Brian DelGrosso, R-Loveland, said. "Hopefully, the Lakewood measure will spur the conversation this year."
Lakewood’s “measure gives builders a ‘right to repair’ faulty work before facing legal action and requires that a majority of home owners approve legal action before it is taken.”
However, “Nancy Stockton, president of the homeowners association at the Vallagio at Inverness in Arapahoe County, said following Lakewood's example statewide would only make it that much harder to hold builders accountable for the quality of their work.”
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Ohio Court of Appeals Affirms Judgment in Landis v. Fannin Builders
April 20, 2011 —
Beverley BevenFlorez CDJ STAFFThe Ohio Court of Appeals affirmed the judgment in Landis v. William Fannin Builders. Landis contracted Fannin Builders to build their home. The case involved staining problems on the T1-11 siding chosen by the plaintiffs.
After a year and a half of discussion on how to resolve the problem of uneven staining on the siding, Landis filed suit “against Fannin Builders, alleging claims for breach of contract, breach of the express limited warranty, and violation of the Ohio Consumer Sales Practices Act (“OCSPA”). Fannin Builders, in turn, filed a third-party complaint against 84 Lumber, alleging claims for breach of contract and indemnification. With the trial court’s leave, Fannin Builders also later amended its answer to add a counterclaim against appellees for breach of contract and unjust enrichment. In the counterclaim, Fannin Builders alleged that appellees still owed it $3,908.98 for the construction of appellees’ home.”
“In its decision, the trial court found in appellees’ favor on their breach of contract claim and against appellees on their claims for breach of the express limited warranty and violation of the OCSPA. Additionally, the trial court found in Fannin Builders’ favor on its counterclaim for breach of contract and against Fannin Builders on its third-party claims for breach of contract and indemnity. The trial court determined that appellees’ damages amounted to $66,906.24, and after setting off the $3,908.98 that appellees owed Fannin Builders under the construction contract, the trial court awarded appellees $62,997.26. The trial court reduced its decision to judgment on May 18, 2010.”
Fannin Builders appealed this judgment and assigned the following errors:
[1.] The Trial Court Erred as a Matter of Law by Concluding that Appellant Breached its Contract with Appellees when it provided a Semi-Transparent Oil-Based Stain that Simply did not Meet their Approval.
[a.] The Contract does not Contain a Satisfaction Clause.
[b.] Even if the Court Implies a Satisfaction Clause, the Court Should Apply an Objective Standard.
[2.] The Trial Court Erred as a Matter of Law by Failing to Consider Appellant’s Right to Cure.
[3.] The Trial Court committed Reversible Error by not Assessing Damages Using “Diminished Value Standard,” and by Creating a Remedy that Constitutes Economic Waste.
[4.] The Trial Court Erred as a Matter of Law by Concluding that Appellant is Barred from Seeking Indemnification When 84 [Lumber] Never Fulfilled its Obligations Pursuant to the Settlement Agreement Entered on August 2, 2005.
In response to the first assigned error, the Court of Appeals stated: “Because the failure to provide siding of a uniform color, not appellees’ displeasure, breached the contract, we reject Fannin Builders’ contention that the trial court implied a satisfaction clause into the contract and found a breach of that clause. Accordingly, we overrule Fannin Builders’ first assignment of error.”
The Court of Appeals overruled the second assignment of error and provided the following reasoning: “Although Fannin Builders depends upon a term of the limited warranty for its right to cure, the trial court concluded that no breach of the limited warranty occurred. Fannin Builders breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIA’s Quality Standards. Consequently, the limited warranty does not apply to this case, and thus, it does not prevent appellees’ recovery of damages.”
The Appeals Court found “the trial court’s award of damages” was “both reasonable and supported by competent, credible evidence,” and therefore concluded “that the trial court did not err in setting appellees’ damages at $62,997.26.” The Fannin Builders third assignment of error was overruled.
The fourth and final assignment of error was also overruled by the Court of Appeals. “While Fannin Builders correctly asserts that 84 Lumber never installed the replacement siding, it ignores the fact that it ordered 84 Lumber to remove the replacement siding from appellees’ property. Thus, Fannin Builders precluded 84 Lumber from completely performing under the August 2, 2005 letter agreement. […] Consequently, Fannin Builders cannot now claim that the letter agreement is unenforceable or that it is entitled to indemnification from 84 Lumber. Because Fannin Builders assumed all liability for the defective siding in the letter agreement, it is responsible for appellees’ damages.”
James A. Zitesman, Columbus, Ohio Business Attorney, compared the case to Jones v. Centex (Ohio App. 2010), which had a different verdict:
“The common thread is the implied warranty of good workmanship. In the Jones case, the Court found that the buyers had in fact waived all implied warranties, including the implied warranty of good workmanship. In the contract between Jones and Centex, the builder stated that it “…would not sell the property to Purchasers without this waiver.” Probably should have been a sign to the buyers.
In the Landis case, the Court stated, “Contracts for the future construction of a residence include a duty, implied by law, that the builder must perform its work in a workmanlike manner.” The Court gave significant weight to the concept of the implied warranty of good workmanship. The builder relied upon the BIA Warranty which limits builders’ liability and exposure to legal issues. The trial court concluded there was no breach of the limited warranty, rather the builder “breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIAs Quality Standards.”
The Supreme Court of Ohio has accepted the Jones v. Centex Homes case for review.
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