Claimants’ Demand for Superfluous Wording In Release Does Not Excuse Insurer’s Failure to Accept Policy Limit Offer Within Time Specified
September 15, 2016 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Barickman v. Mercury Casualty Co. (No. B260833, filed 7/25/16, ord. pub. 8/15/16) a California appeals court affirmed a $3 million bad faith award against Mercury Casualty Co. based upon its failure to accept a policy limit demand within the time provided, finding that wording inserted by the claimants’ counsel into the release did not affect the insured’s rights such that the refusal to agree to the wording was unreasonable and in bad faith, exposing the insurer to liability for the insured’s stipulated judgment.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Breach Of Duty of Good Faith And Fair Dealing Packaged With Contract Disputes Act Claim
March 27, 2023 —
David Adelstein - Florida Construction Legal UpdatesAn interesting opinion on a motion to dismiss came out of the United States Court of Federal Claims dealing with the claim that the government breached its duty of good faith and fair dealing in administering the prime contract. The contractor’s argument was that the government breached its duty of good faith and fair dealing by denying the contractor’s claim under the Contract Disputes Act (CDA). This was a creative claim and argument that deserves consideration because it tied in the contracting officer’s denial of the CDA claim for additional money with a breach of the duty of good faith and fair dealing.
In this case, Aries Construction Corp. v. U.S., 2023 WL 2146598 (Fed. Cl. 2023), a prime contractor was hired for a water pipeline construction project. The contractor encountered unexpected difficult site conditions that required additional equipment and labor. The contractor informed the contracting officer and alleged it was instructed to proceed with the additional equipment and labor. The contractor submitted a claim under the CDA but the contracting officer denied the claim. The contractor pursued the claim in the United States Court of Federal Claims arguing the government breached the contract and, of interest, breached its duty of good faith and fair dealing.
The government moved to dismiss the breach of good faith and fair dealing claim arguing that besides failing to state a cause of action the Court of Federal Claims had no jurisdiction because the breach of the duty of good faith and fair dealing was not properly presented to the contracting officer under the CDA. The Court of Federal Claims denied the government’s motion.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Tension Over Municipal Gas Bans Creates Uncertainty for Real Estate Developers
February 07, 2022 —
Sidney L. Fowler, Robert G. Howard & Emily Huang - Gravel2Gavel Construction & Real Estate Law BlogOn November 15, 2021, the New York City Council approved a bill banning gas hookups in new buildings, making the biggest city in the U.S. the latest in a string of municipalities to prohibit natural gas infrastructure in new homes and buildings. In the two-and-a-half years since Berkeley, California, passed its then-novel municipal ban on new natural gas infrastructure, numerous cities have found themselves at odds with state governments and industry groups on the issue of full electrification in residential and commercial real estate. The resulting disputes, litigation and regulatory uncertainty have created headaches for the real estate industry. Although not all view the restrictions as negative, and many developers have embraced the push for more climate-neutral buildings, these bans introduce complexity to the real estate market, raising additional legal and commercial challenges.
Background
According to the U.S. Environmental Protection Agency, the use of natural gas in homes and businesses accounts for 13 percent of annual U.S. greenhouse gas emissions. For that reason, advocacy groups have pushed cities to prohibit natural gas infrastructure in new construction and encourage full electrification of newly constructed buildings. In addition to New York and Berkeley, cities that have either passed or considered such ordinances include San Francisco, Sacramento, Seattle and Denver, as well as numerous smaller cities. New York City’s newly passed gas ban, in particular, prohibits natural gas hookups in new buildings under seven stories by 2024, and in taller buildings by 2027, but exempts hookups in commercial kitchens.
Reprinted courtesy of
Sidney L. Fowler, Pillsbury,
Robert G. Howard, Pillsbury and
Emily Huang, Pillsbury
Mr. Fowler may be contacted at sidney.fowler@pillsburylaw.com
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Ms. Huang may be contacted at emily.huang@pillsburylaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Understand the Dispute Resolution Provision You Are Agreeing To
September 20, 2021 —
David Adelstein - Florida Construction Legal UpdatesWhen negotiating a contract, do not overlook the dispute resolution provision. It is one of the more important provisions in your construction contract. This provision will come into play and have ramifications if there is a dispute, which is certainly not uncommon on a construction project.
In dispute resolution provisions in subcontracts on federal projects, it is not unusual for that provision to include language that requires the subcontractor to STAY any dispute that concerns actions or inactions of the owner pending the resolution of any dispute between the owner and prime contractor relating to that action or inaction. A provision to this effect should be included for the benefit of the prime contractor. For instance, the provision may say the subcontractor agrees to stay any such claim against the prime contractor or prime contractor’s surety pending the outcome of any pass-through claim (or otherwise) submitted under the Contract Disputes Act.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
What California’s COVID-19 Reopening Means for the Construction Industry
July 05, 2021 —
Garret Murai - California Construction Law BlogThis past Wednesday, Governor Newsom announced that California would reopen after being in lockdown for over a year due to COVID-19. Gone is Governor’s Stay at Home Executive Order. Gone is California’s Blueprint for a Safer Economy. And gone is the state’s somewhat confusing four-tier, yellow (minimal), orange (moderate), red (substantial) and purple (widespread), risk-level mapping system.
So what does this mean for the construction industry?
Well it’s not quite business back to usual. CalOSHA’s Standards Board voted this past Thursday to pass revised COVID-19 Emergency Temporary Standards (“Revised Standards”). That same day, Governor Newsom signed Executive Order N-09-21 implementing the Revised Standards immediately while they are being reviewed by the Office of Administrative Law.
Read the court decisionRead the full story...Reprinted courtesy of
Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed to Prove Supplier’s Negligence or Breach of Contract Caused an SB800 Violation
March 16, 2017 —
Jon A. Turigliatto, Esq. & Chelsea L. Zwart, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinAcqua Vista Homeowners Assoc. v. MWL Inc. (2017) 2017 WL 371379
COURT OF APPEAL EXTENDS GREYSTONE HOMES, INC. v. MIDTEC, INC., HOLDING THAT CIVIL CODE §936 CREATES A NEGLIGENCE STANDARD FOR CLAIMS AGAINST MATERIAL SUPPLIERS BROUGHT UNDER SB800.
The Fourth District California Court of Appeal recently published its decision Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 2017 WL 371379, holding that claims against a material supplier under SB800 (Civil Code §895 and §936) require proof that the SB800 violation was caused by the supplier's negligence or breach of contract.
Civil Code §936 states in relevant part, that it applies "to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract .... [T]he negligence standard in this section does not apply to any general contractor, subcontractor, material supplier, individual product manufacturer, or design professional with respect to claims for which strict liability would apply."
Acqua Vista Homeowners Association (the "HOA") sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development. The HOA's complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building. After trial, the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury's finding that MWI was 92% responsible for the HOA's damages.
MWI filed a motion for a directed verdict and motion for judgment notwithstanding the verdict on the grounds that the HOA had failed to present any evidence that MWI had caused an SB800 violation as a result of its negligence or breach of contract, and had therefore failed to prove negligence and causation as required by SB800, citing to Greystone Homes, Inc. v. Midtec, Inc.(2008) 168 Cal.App.4th 1194. The trial court denied both motions, relying on the last sentence of Civil Code §936, which states in part, "[T]he negligence standard in this section does not apply to any ... material supplier ... with respect to claims for which strict liability would apply."
The Court of Appeal reversed and ordered the trial court to enter judgment in favor of MWI. The Court of Appeal relied on the legislative history of S8800 and Greystone, which held that the first sentence of Civil Code §936 contains an "explicit adoption of a negligence standard" for S8800 claims against product manufacturers. The Court of Appeal reasoned that since §936 treats product manufacturers and material suppliers identically, the holding of Greystone must equally apply to material suppliers.
Because the complaint did not state a common law cause of action for strict liability, the HOA was required to prove that the damages were caused by MWI' s negligence or breach of contract. Although, the Court of Appeal found that while the HOA's evidence may have supported a finding that the manufacturer of the leaking pipes was negligent, the HOA had not provided any evidence that MWI, the supplier, had failed to supply the type of pipe ordered, acted unreasonably in failing to detect any manufacturing defects present in the pipe, or damaged it during transportation. Accordingly, the HOA could not prove that the alleged S8800 violation was caused, in whole or in part, by MWI' s negligence, omission, or breach of contract.
In light of the decision, homeowner and associations that allege only violations of SB800 standards without asserting a common law cause of action for strict liability cannot prevail by simply producing evidence of a violation, and are required to prove that violation was caused by the negligent act or omission, or breach of contract, of the defendant contractor, material supplier, and/or product manufacturer.
Reprinted courtesy of
Jon A. Turigliatto, Esq, Chapman Glucksman Dean Roeb & Barger and
Chelsea L. Zwart, Esq., Chapman Glucksman Dean Roeb & Barger
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Ms. Zwart may be contacted at czwart@cgdrblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Trial Victory in San Mateo County!
February 24, 2020 —
Wilke FleuryWilke Fleury attorneys
Adriana Cervantes and
Matt Powell recently prevailed at trial in a case involving a real property dispute in San Mateo County.
Wilke Fleury represented the owner of an apartment building in an action against an individual who recently acquired the duplex on the adjoining property. As set forth in the pleadings, the Apartment’s owner, tenants, and invitees, used the property in many ways including access, parking, and recreational purposes for over five years, and the new owner had actual notice of that use before the purchase. Nonetheless, the new owner insisted the Apartment had no right to use the property, and filed an action to quiet title.
Wilke Fleury filed a cross-complaint on behalf of the Apartment alleging that it had a prescriptive easement over the property.
Read the court decisionRead the full story...Reprinted courtesy of
Wilke Fleury
Traub Lieberman Partner Jonathan Harwood Obtains Summary Judgment Determining Insurer Has No Duty to Defend or Indemnify
February 27, 2023 —
Jonathan R. Harwood - Traub LiebermanTraub Lieberman Partner Jonathan Harwood obtained summary judgment in favor of the Plaintiff determining that it had no duty to defend or indemnify an insured in a personal injury action, in a case brought in the Eastern District of New York.
The Plaintiff, an insurance provider (“the Insurer”), issued a General Commercial Policy (the “Policy”) to the Defendant, a commercial property owner (the “Property Owner”). In the underlying action, a former employee (the “Employee”) of a concrete vendor sued the Property Owner, and others, in New York Supreme Court, Queens County, for an injury that occurred on the street in front of the Property Owner’s premises during the course of repairs of sewer pipes that serviced the Property Owner’s premises.
Read the court decisionRead the full story...Reprinted courtesy of
Jonathan R. Harwood, Traub LiebermanMr. Harwood may be contacted at
jharwood@tlsslaw.com
