California Court Invokes Equity to Stretch Anti-Subrogation Rule Principles
June 18, 2019 —
Gus Sara & William L. Doerler - The Subrogation StrategistIn Western Heritage Ins. Co. v. Frances Todd, Inc. 2019 Cal. App. Lexis 299, the Court of Appeals of California, First Appellate District, addressed whether a commercial condominium association’s carrier could subrogate against the tenants (aka lessees) of one of its member unit owners. After examining the condominium association’s declarations, as well as the lease terms between the owner and the lessees, the court held that the association’s carrier could not subrogate against the lessees because they were implied co-insureds on the policy. To reach its decision, the court explained that an insurer steps into the shoes of its insured, not the party with whom it is in privity. Although the first-party property portion of the association’s insurance policy did not, as required by the association’s declarations, have the owner listed as an additional named insured, the court held that it would be inequitable to treat the association as the sole insured for purposes of determining Western Heritage’s right to bring a subrogation action.
In Western Heritage, William R. de Carion d/b/a Surfwood Properties (de Carion or Lessor), owned a commercial unit within a multi-unit commercial building. The building was managed by the East Shore Commercial Condominiums Owners’ Association (the Association). As a unit owner, de Carion was a member of the Association. The Association’s Declarations of Codes, Covenants and Restrictions (CC&Rs) required the Association to procure fire insurance for the commercial units by adding the unit owners as additional named insureds. The CC&Rs also prohibited owners and their “tenants” from procuring their own fire insurance policies for the premises. In 2013, de Carion leased his commercial space to Frances Todd, Inc. d/b/a The Wooden Duck, Eric Todd Gellerman and Amy Frances Feber (Lessees).
Reprinted courtesy of
Gus Sara, White and Williams LLP and
William L. Doerler, White and Williams LLP
Mr. Sara may be contacted at sarag@whiteandwilliams.com
Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com
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Colorado House Bill 17-1279 – A Misguided Attempt at Construction Defect Reform
March 29, 2017 —
David McClain - Colorado Construction LitigationOn March 17th, House Bill 17-1279, concerning the requirement that a unit owners’ association obtain approval through a vote of unit owners before filing a construction defect action, was introduced and assigned to the House State, Veterans, and Military Affairs Committee. The bill is currently scheduled for its first committee hearing on March 29th, at 1:30 in the afternoon. While, on its face, this appears to be a step in the right direction towards instituting “informed consent” before an HOA can file a construction defect action, the bill actually restricts the ability of developer to include more stringent requirements in the declaration of covenants, conditions, and restrictions for an association, thereby lowing the threshold of “consent” required to institute an action.
House Bill 17-1279 would amend C.R.S. § 38-33.3-303.5 to require an association’s executive board to mail or deliver written notice of the anticipated commencement of a construction defect action to each unit owner and to call a meeting of the unit owners to consider whether to bring such an action. Any construction professional against which a claim may attend the unit owners’ meeting and have an opportunity to address the unit owners and may include an offer to remedy any defect in accordance with C.R.S. § 13-20-803.5(3). The conclusion of the meeting would initiate a 120-day voting period, during which period the running of any applicable statutes of limitation or repose would be tolled. Pursuant to this bill, an executive board may only institute a construction defect action only if authorized by a simple majority of the unit owners, not including: 1) any unit owned by any construction professional, or affiliate of a construction professional, involved in the design, construction, or repair of any portion of the project; 2) any unit owned by a banking institution; 3) any unit owned in which no defects are alleged to exist, and/or 4) any unit owned by an individual deemed “nonresponsive.”
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Emotional Distress Damages Not Distinct from “Annoyance and Discomfort” Damages in Case Arising from 2007 California Wildfires
February 16, 2017 —
Kirsten Lee Price & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Hensley v. San Diego Gas & Elec. Co., (No. D070259, filed 1/31/17), the California Court of Appeal for the Fourth Appellate District held that emotional distress damages are available on claims for trespass and nuisance as part of “annoyance and discomfort” damages.
In Hensley, plaintiffs sustained fire damage to their home and property during the 2007 California wildfires. The Hensleys were forced to evacuate as the fires advanced. Although their home was not completely destroyed, it sustained significant damage and they were not able to return home permanently for nearly two months. Thereafter, the Hensleys filed suit against San Diego Gas and Electric Company (“SDG&E”) asserting causes of action for trespass and nuisance, among others. Mr. Hensley, who had suffered from Crohn’s disease since 1991, further claimed that as a result of the stress from the fire, he experienced a substantial increase in his symptoms and his treating physician opined that “beyond a measure of reasonable medical certainty... the stress created by the 2007 San Diego fires caused an increase of [Mr. Hensley’s] disease activity, necessitating frequent visits, numerous therapies, and at least two surgeries since the incident.” SDGE moved, in limine, to exclude evidence of Mr. Hensley’s asserted emotional distress damages arguing he was not legally entitled to recover them under theories of trespass and nuisance. The trial court agreed and excluded all evidence of such damages.
Reprinted courtesy of
Kirsten Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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California Contractors: Amended Section 7141.5 Provides Important License Renewal Safety Net
July 25, 2021 —
Amy L. Pierce, Mark A. Oertel, John Lubitz & Adam B. Wiens - Lewis BrisboisUnder California’s Contractors State License Law, Cal. Bus. & Prof. Code §§ 7000 et seq., contractors’ licenses expire two years from the last day of the month in which the license was issued or two years from the date on which the renewed license last expired. The Contractors State License Board (CSLB) sends licensees a renewal application 60 to 90 days in advance of the date the license is set to expire. Even with various controls in place, mistakes happen and a renewal application filing deadline can be missed.
During the August 5-6, 2019 Executive, Licensing, and Legislative Committee Meetings, the CSLB discussed proposed amendments to Section 7141.5 to reduce both the burden on it to review applications for retroactive renewal of a license that had not been timely submitted and to provide contractors with some relief from the high burden to establish “the failure to renew was due to circumstances beyond the control of the licensee.” Not long after, the CSLB’s Board of Directors gave staff approval to seek an author for the bill and, on September 29, 2020, Governor Newsom signed Senate Bill 1474 into law, which includes the CSLB’s proposed amendments to Section 7141.5, effective January 1, 2021.
Reprinted courtesy of
Amy L. Pierce, Lewis Brisbois,
Mark A. Oertel, Lewis Brisbois,
John Lubitz, Lewis Brisbois and
Adam B. Wiens, Lewis Brisbois
Ms. Pierce may be contacted at Amy.Pierce@lewisbrisbois.com
Mr. Oertel may be contacted at Mark.Oertel@lewisbrisbois.com
Mr. Lubitz may be contacted at John.Lubitz@lewisbrisbois.com
Mr. Wiens may be contacted at Adam.Wiens@lewisbrisbois.com
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Housing Starts Rebound in U.S. as Inflation Eases: Economy
August 20, 2014 —
Lorraine Woellert and Victoria Stilwell – BloombergHome construction rebounded in July and the cost of living rose at a slower pace, showing a strengthening U.S. economy has yet to generate a sustained pickup in inflation.
A 15.7 percent jump took housing starts to a 1.09 million annualized rate, the strongest since November, and halted a two-month slide, the Commerce Department said in Washington. The consumer price index increased 0.1 percent after rising 0.3 percent in June, the Labor Department also reported.
An improving job market and cheaper borrowing costs are helping revive residential real estate, helping boost sales at companies such as Home Depot Inc. (HD) As inflation continues to run below the Federal Reserve’s target, it gives the central bank room to keep interest rates low well after the projected end of its bond-buying program in October.
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Lorraine Woellert and Victoria Stilwell, Bloomberg
What I Learned at My First NAWIC National Conference
September 25, 2023 —
Ivette Kincaid - Kahana FeldOn August 9-12, 2023, I attend my first National Association of Women in Construction (“NAWIC”) National Conference in beautiful Portland, Oregon. What is NAWIC, you ask? NAWIC originated as Women in Construction of Fort Worth, Texas and was founded in 1953 by sixteen women in the construction industry. Knowing that back then women only represented a fraction of the construction industry, the founders organized to create a support network for women to work in a male dominated field. The organization has grown by leaps and bounds and now consists of 115 chapters throughout the United States.
NAWIC’s core purpose is to “Strengthen and amplify the success of women in the construction industry.”
I joined this organization in December of 2022 at the suggestion of my law partner Jason Feld. Before Jason’s suggestion I had never heard of NAWIC. I joined the Orange County chapter and attended my first meeting in December and did not look back. In NAWIC I found a group of women kindred spirits in whom a found a commonality of interests, experiences, and goals. This is an organization that provides support, encouragement, education, and advocacy for women in all aspects of the construction industry. It also provides an outlet to share ideas, network and build relationships. I am happy to report that on September 12, 2023, I will be installed as one of the directors of the Orange County Chapter.
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Ivette Kincaid, Kahana FeldMs. Kincaid may be contacted at
ikincaid@kahanafeld.com
Settling with Some, But Not All, of the Defendants in a Construction Defect Case
March 28, 2018 —
David Adelstein – Florida Construction Legal UpdatesConstruction defect lawsuits can be complex multi-party disputes, especially when the plaintiff is doing what is necessary to maximize recovery. This means the plaintiff may sue multiple defendants associated with the defects and damage. For example, the owner (e.g., plaintiff) may sue the contractor, subcontractors, design professionals, etc. due to the magnitude of the damages. In many instances, the plaintiff is suing multiple defendants for overlapping damages. The law prohibits a plaintiff from double-recovering for the same damages prohibiting the windfall of a plaintiff recovering twice for the same damages. Perhaps this sentiment is straight common sense, but this sentiment is a very important consideration when it comes to settling with one or more of the defendants, while potentially trying the construction defect case as to remaining defendants.
Analysis and strategy is involved when settling with some but not all of the defendants in a construction defect case (and, really, for any type of case). Time must be devoted to crafting specific language in the settlement agreements to deal with this issue. Otherwise, the settlement(s) could be
set-off from the damage awarded against the remaining defendants.
The recent decision in
Addison Construction Corp. v. Vecellio, 43 Fla.L.Weekly D625(a) (Fla. 4th DCA 2018) details the analysis and strategy required when settling with some but not all of the defendants in a construction defect case, and the concern associated with a trial court setting-off the settlement amount from the damage awarded against the remaining defendants.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Consult with Counsel when Preparing Construction Liens
April 13, 2017 —
David Adelstein – Florida Construction Legal UpdatesAll too often entities prepare their own construction liens. Sure, it is an effective way to save a few bucks. No doubt about it. But, by doing so, you are (i) not relying on advice of counsel that is important when it comes to lien preparation and (ii) not relying on strategy that goes along with the preparation of a lien. When you are liening, the reason you are doing so is because you have not been paid. You therefore want to collateralize your nonpayment against the real property—the leverage of a construction lien. This is a very beneficial statutory tool if implemented correctly, so it only makes sense to do it “strategically” right.
A construction lien is a statutory form. So, how hard can it be? Filling out the “form” is not hard, however, there is legal significance to the information and amounts included in a lien. For instance:
- There is significance to the amount you are liening. Are you liening for disputed change order work? Are you liening for amounts unrelated to base contract work?
- There is significance to the final furnishing date. Are you liening within 90 days of performing base contract work unrelated to punchlist or warranty work?
- There is significance to date the Notice to Owner was served (if you are not in privity with the owner). Was the Notice to Owner served within 45 days of initial furnishing?
- There is significance to the legal description identified in the lien. Are you liening the right property based on the type of project you are working on?
- There can even be significance to the initial furnishing date. Assuming you are the general contractor, what was your initial furnishing date in comparison with when the Notice of Commencement was recorded? If you are not a general contractor, when was the initial furnishing date in comparison with when you served the Notice to Owner?
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
