Florida Construction Defect Decision Part of Lengthy Evolution
August 05, 2013 —
CDJ STAFFLawyers are still working out all the implications of Florida Supreme Court’s ruling in Maronda Homes. Three members of the firm Lowndes, Drosdick, Doster, Kantor & Reed PA, Alexander Dobrev, Michael S. Provenzale, and Tara L. Tedrow on the firm’s web site. They characterize it as a “consumer-protection oriented decision,” quoting the court that the “house is the fondest dream and largest investment, both emotionally and financially, for Florida families.”
The court found that Section 553.835 of the Florida laws could not be applied to construction that occurred before the statute become effective in July, 2012. They describe the underlying issue as “the culmination of forty years of evolution to the implied warranty of habitability that is granted by the builder of a new home to the purchaser.” This lead to a 2010 District Court decision that expanded the area covered from “merely the structure itself, along with improvements ‘immediately supporting the residence’” but also those “which provide ‘essential services’ which support the home, make it habitable, or are necessary for living accommodations.”
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The Devil is in the Details: The Texas Construction Trust Fund Pitfalls Residential Remodelers (and General Contractors) Should Avoid
December 26, 2022 —
Rochelle Cabe & Roni Most - Kahana FeldA tale of Texas Construction Trust Account woe. You’re a contractor running a business doing interior remodels for clients in a major metropolitan Texas area. You sign up clients with a contract developed by our friends at LegalZoom and get your team to work. Three months into your remodeling project with Mr. and Mrs. “you thought they were happy” Clients, you get this letter:
“Consistent with the requirements of §162.006 and §162.007 of the Texas Property Code, Mr. and Mrs. “you thought they were happy” Clients demand a full and complete accounting of all funds you have received from any source relating to this project.”
What should you do? Should you ignore it? Should you respond? Fear sets in, you call your crew, and you stop the work. Mr. and Mrs. “you thought they were happy” Clients become Mr. and Mrs. “irate and angry” Clients and they sue you alleging breach of fiduciary duty, breach of contract, and perhaps fraud.
Reprinted courtesy of
Rochelle Cabe, Kahana Feld and
Roni Most, Kahana Feld
Ms. Cabe may be contacted at rcabe@kahanafeld.com
Mr. Most may be contacted at rmost@kahanafeld.com
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Hawaii Federal District Court Again Rejects Coverage for Faulty Workmanship
January 13, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court for the District of Hawaii continued its longstanding pattern of finding no coverage for claims based upon construction defects. Am. Auto. Ins. Co. v. Haw. Nut & Bolt, 2016 U.S. Dist. LEXIS 174243 (D. Haw. Dec. 16, 2016).
Safeway filed a complaint against Hawaii Nut & Bolt (HNB). The complaint involved issues pertaining to the construction of the roof deck at a Safeway store. HNB was a subcontractor hired to supply a coating system on the roof of the store to make it waterproof. The product was manufactured by VersaFlex. After the store opened, there were water leaks from the roof. This disrupted business operations and caused damage to Safeway's business and reputation. HNB tendered the claims to its CGL carrier, Fireman's Fund Insurance Corporation (FFIC). FFIC defended the underlying lawsuit for six years under a reservation of rights.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
A Court-Side Seat: Clean Air, Clean Water, Citizen Suits and the Summer of 2022
November 01, 2022 —
Anthony B. Cavender - Gravel2GavelThis is a selection of significant environmental and regulatory law cases decided by the federal courts after the Supreme Court’s 2021 Term concluded.
The U.S. Court of Appeals for the DC Circuit
National Association of Broadcasters v. Federal Communications Commission
On July 12, 2022, the DC Circuit held that an order of the FCC requiring radio broadcasters to follow a prescribed five-step process to verify the identity of program sponsors was not authorized by the Communications Act. According to the court, the FCC “decreed a duty that the statute does not require, and that the statute does not empower the FCC to impose.” Here, the agency failed to identify the statutory authority it needed to authorize the issuance of such an order. While certainly not as significant as the Supreme Court’s ruling in West Virginia v. EPA, decided only a few days before this decision was released, it is a strong reminder that the courts want to know if a challenged rule is authorized by law.
Humane Society of the U.S., et al., v. U.S. Department of Agriculture
On July 22, 2022, the court decided a case involving the steps the Administrative Procedure Act and the Federal Register Act require to be taken before a final agency rule is legally promulgated. Customarily, when there has been a change in Presidential administrations, the incoming administration “quietly” withdraws rules awaiting Federal Register publication without much ceremony. The majority of this panel agreed that public notice should have been provided to the regulated community to comment on the new administration’s action to pull back a new rule which had been made available for public inspection before Federal Register publication that would have strengthened the protections afforded “show horses,” as now required by law. The court noted that “it seems clear that filing with the Federal Register constituted promulgation of a regulation even though publication may not occur until a later date.” Circuit Judge Rao filed a strong dissent. “By cutting off agency discretion at public inspection, the majority imposes judicial burden on agency procedures that conflicts with circuit precedent, the statutory framework and a longstanding regulation permitting withdrawals prior to publication.” There could be a further review of this unique ruling.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
California Court of Appeal Holds a Tenant Owes No Duty to Protect a Social Guest From a Defective Sidewalk Leading to a Condominium Unit
May 22, 2023 —
Garrett A. Smee & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPOn May 5, 2023, the California First District Court of Appeal, Division One, issued an opinion in Moses v. Roger-McKeever (A164405), holding that a condominium tenant owes no duty to a social guest using a walkway that leads to the unit.
Eleanor Moses fell on a walkway outside a condo rented by Pascale Roger-McKeever. Moses would not have used the walkway but for Roger-McKeever’s invite to a small gathering for members of a political activist group. Upon entering the condo for the event that night, Moses brought to Roger-McKeever’s attention the poor lighting in the entryway. Roger-McKeever apologized, and stated that her landlord had delayed repairing the porch light. The accident supposedly happened on a short walkway that had three steps leading away from a street sidewalk. Supposedly, Moses tripped on the second step while leaving the social gathering because of the poor lighting.
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Garrett A. Smee, Haight Brown & Bonesteel and
Lawrence S. Zucker II, Haight Brown & Bonesteel
Mr. Smee may be contacted at gsmee@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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New Jersey Supreme Court Issue Important Decision for Homeowners and Contractors
September 08, 2016 —
Wally Zimolong – Supplemental ConditionsThe lack of insurance coverage for a contractor’s faulty workmanship is the bane of both homeowners looking to recover damage for defective work and contractors seeking to defend against such claims. In many states, like Pennsylvania, courts hold that faulty workmanship is not an “occurrence” that is covered by a standard commercial general liability insurance policy. In other words, courts hold that CGL policies cover damage to other property not part of the construction project itself.
This is problematic for both the homeowner and the insured. For the homeowner, the lack of a policy providing indemnification sometimes means the homeowner is left trying to collect against a defendant, who is otherwise but has little to no assets against which to collect a judgment. For the contractor, the lack of a policy providing coverage means that assets are at risk and it could be forced to spend significant sums in attorneys fees defending the case.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Reduce Suicide Risk Among Employees in Remote Work Areas
November 24, 2019 —
Sandra Moran - Construction ExecutiveIn the construction industry, a disturbing and unnerving trend has been developing over the past few decades. Construction and resource extraction have the highest rate of deaths by suicide compared to any other industry. This phenomenon is not limited to a single country. The statistics from three developed countries with strong construction and resource extraction industries (United States, United Kingdom and Australia), reflect the same pattern.
A major risk factor that has not been given much attention and scrutiny is the requirement for many workers to be away from their homes for long periods of time, based in remote locations and basecamps. This isolation contributes to loneliness and disconnectedness that increases the vulnerability to employees at risk due to underlying mental health disorders, such as depression and anxiety, or those with suicidal ideations or prior attempts. Basecamps or remote work locations remove workers from the support networks of family, friends, and even medical and psychological caregivers.
Employers placing employees in remote work locations should be mindful that simply wanting to work in a remote location does not necessarily equate to being able to cope well in such an environment—unless appropriate supports are provided. Companies need to become proactive to lead employees to become true teams to help reduce the risk of suicide among their workers.
Reprinted courtesy of
Sandra Moran, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Developer’s Fraudulent Statements Are His Responsibility Alone in Construction Defect Case
February 10, 2012 —
CDJ STAFFThe Texas Court of Appeals ruled on December 21 in the case of Helm v Kingston, a construction defect case. After purchasing what was described as “an extremely well-built” two-bedroom townhouse, Mr. Kingston made complaints of construction defects. Greenway Development did not repair the defects to Kingston’s satisfaction, and he filed notice of suit. In his suit, he claimed that GDI and its president, John Helm, had committed fraud and negligent misrepresentation. Kingston claimed that Helm “fraudulently induced Kingston to believe that the townhouse evidenced the highest quality of workmanship when in fact the quality of workmanship was atrocious.” Helms brought a counterclaim that Kingston’s suit was frivolous.
About four years after Kingston purchased the townhome, the suit proceeded to trial. The trial court determined that Helm was not “liable in his individual capacity,” but this was reversed at appeal.
A second trial was held ten years later on the question of whether Kingston’s unit was a townhome or an apartment. A jury found that Helm “engaged in a false, misleading or deceptive act or practice that Kingston relied on to his detriment.” Kingston was awarded $75,862.29 and an additional $95,000 in attorney fees by the jury. Helms made an unsuccessful appeal to the Appeals Court, after which Kingston was awarded an additional $10,000. Helms then made an unsuccessful appeal to the Texas Supreme Court, which lead to an additional $3,000 for Kingston. There was also a verdict of $48,770.09 in pre-judgment interest and “five percent post-judgment interest accruing from the date of the judgment until the time the judgment is paid. Helm appealed.
In his appeal, Helm raised seven issues, which the court reorganized into five Kingston raised one issue on cross-appeal.
Helms’ first claim was that Kingston “failed to satisfy the requirement of” Texas’s Residential Construction Liability Act and that by not filing under the RCLA, Kingston’s fraud and misrepresentation claims were preempted. Further Helms claimed that the RCLA limited Kingston’s damages. The court rejected this, as the RCLA deals with complaints made to a contractor and not only did Helm fail to “conclusively establish” his “status as a ‘contractor’ under the statutory definition,” Helm testified that he was “not a contactor” at the pre-trial hearing.
Helms’s second claim was that Kingston’s later claim of a misconstructed firewall should be barred, claiming that Kingston “‘had knowledge of a defect in the firewall’ as early as 1997 but did not assert them until 2007.” The court rejected this because Kingston’s claim was that “Helm ‘fraudulently induced Kingston to believe that the townhouse evidenced the highest quality of workmanship when in fact the quality of the workmanship was atrocious.’”
Helms also challenged whether his statements that the residence was of “good quality” constituted fraud and misrepresentation under Texas’s Deceptive Trade Practices-Consumer Protection Act. The court concluded that Helm was in a position to make knowledgeable statements and further that “residential housing units are not artistic works for which quality is inherently a matter of subjective judgment.” Helm also claimed that Kingston could have avoided certain repair expenses through the “exercise of reasonable care.” Helms argued that the repairs could have been made for $6,400. The court disagreed, as these claims were cited only to invoke the DTPA, and that later petitions established additional defects.
Helms’s next claim was that he was not allowed to designate responsible third parties. The court rejected this because there GDI represented matters concerning the residence only through Helm’s statements. The court noted that “Helm is correct that?third parties may be liable for fraud if they ‘participated in the fraudulent transactions and reaped the benefits,’” but they note that “Helm never specifically alleged that GDI or CREIC participated in Helm’s alleged fraudulent transactions.
The final issue in the decision was about court costs, and here the court denied claims on both sides. Helm argued that the award of legal fees were excessive, as they exceeded the actual damages. The court noted that they “may not substitute our judgment for that of the jury,” and also that “the ratio between the actual damages awarded and the attorney’s fees is not a factor that determines the reasonableness of the fees.” But the court also rejected Kingston’s claim for post-judgment interest on $10,312.30 that Helm had deposited in the trial court’s registry. The court noted that the monies were to be paid out upon final judgment, but the mandate did not include any reference to interest.
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