Insurer Able to Refuse Coverage for Failed Retaining Wall
October 28, 2011 —
CDJ STAFFThe Eleventh District of the US Court of Appeals has ruled in the case of Nix v. State Farm Fire & Casualty Company. In this case, the Nixes filed a claim after a portion of the retaining wall in their home collapsed and their basement flooded. State Farm denied the claim “on the ground that the policy excluded coverage for collapses caused by defects in construction and for damage caused by groundwater.”
The court reviewed the Nixes’ policy and found that State Farm’s statement did specifically exclude both of these items. In reviewing the lower court’s ruling, the appeals court noted that State Farm’s expert witness, Mark Voll, determined that the retaining wall “lacked reinforcing steel, as required by a local building code, and could not withstand the pressure created by groundwater that had accumulated during a heavy rainfall.” Additionally, a french drain had been covered with clay soil and so had failed to disperse the groundwater.
The Nixes argued that the flooding was due to a main line water pipe, but their opinions were those of Terry Nix and the contractor who made temporary repairs to the wall. “Those opinions were not admissible as lay testimony. Neither Nix nor the contractor witnessed the wall collapse or had personal knowledge about the construction of the Nixes’ home.”
The lower court granted a summary judgment to State Farm which has been upheld by the appeals court.
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Real Estate & Construction News Roundup (1/16/24) – Algorithms Affect the Rental Market, Robots Aim to Lower Construction Costs, and Gen Z Struggle to Find Their Own Space
February 12, 2024 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, New York’s Prompt Payment Act comes into question, vacancy rates rise in commercial office space, the Biden administration applies project labor agreements on certain federal construction projects, and more!
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Pillsbury's Construction & Real Estate Law Team
Manhattan Homebuyers Pay Up as Sales Top Listing Price
October 01, 2014 —
Oshrat Carmiel – BloombergManhattan apartment prices rose 4.2 percent in the third quarter, bolstered by buyers who increasingly agreed to pay what sellers were asking or more.
The median sale price of condominiums and co-ops was $908,242, up from $872,000 a year earlier, according to a report today from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The average price per square foot increased 12 percent to $1,270, the third-highest in records dating to 1989, the firms said.
Prices in Manhattan have climbed for four consecutive quarters, encouraging more owners to list properties after an inventory shortage last year. With the number of apartments on the market up 28 percent from the third quarter of 2013, buyers focused on those that were not-too-ambitiously priced, said Jonathan Miller, president of New York-based Miller Samuel.
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Oshrat Carmiel, BloombergMr. Carmiel may be contacted at
ocarmiel1@bloomberg.net
Late Notice Kills Insured's Claim for Damage Due to Hurricane
December 27, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer's motion for summary judgment was granted based upon the insured's late notice nearly two years after a hurricane caused property damage. Ramirez v. Scottsdale Ins. Co., 2021 U.S. Dist. LEXIS 209716 (S.D. Fla. Oct. 29, 2021).
Plaintiff alleged he suffered property loss due to wind and water damage from Hurricane Irma on September 10, 2017. The roof, exterior, and interior of the home were damaged.
On May 20, 2019, twenty months after the hurricane, plaintiff first notified Scottsdale of his claim for damages. An adjuster inspected and observed wind, wear and tear, and deterioration damage to the roof tile, as well as interior water damage to portions of the home. The claim was denied based upon wind, wear and tear, and deterioration exclusions in the policy.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
I’m Sorry Ms. Jackson, I [Sovereign Immunity] am For Real
June 08, 2020 —
Greggory Jacobs - Florida Construction Law News BlogThe Supreme Court of Florida issued its opinion in Florida Highway Patrol v. Jackson, 2020 Fla. LEXIS 108 (Fla. Jan 23, 2020), which answered the following certified question of great public importance:
Does rule 9.130 [(A)(3)(C)(XI)] permit an appeal of a non-final order denying immunity if the record shows that the defendant is entitled to immunity as a matter of law but the trial court did not explicitly preclude it as a defense?
The Court’s answer to this question was “no.” But this opinion stands for much more than just a negative answer to a certified question. Indeed, this opinion has significant implications upon procedural and substantive areas of construction law, which may affect agents of the state of Florida, including Construction Engineering and Inspection professionals and consultants (“CEI”).
Procedurally, the Court recognizes that Fla. R. App. P. 9.130 insufficiently protects the public and governmental interests as “it leaves too great a risk that erroneous denials of operational sovereign immunity will go unreviewed until it is too late.” Id. at * 19. By extension of this risk, the Jackson Court announced that “courts should determine entitlement to sovereign immunity as early as the record permits.” Id. at * 18. In fact, on that basis, courts can address a motion for summary judgment asserting entitlement to sovereign immunity even if there are outstanding disputes as to, say, the existence of a duty of care. Id. at 17-18. Accordingly, and in an effort to remedy the risk of erroneous denials going unreviewed until it is too late, the Court amended Fla. R. App. P. 9.130 to expand appellate review of nonfinal orders denying sovereign immunity. Jackson, 2020 Fla. LEXIS 108 at * 19; In re Amendments to Fla. Rule of Appellate Procedure 9.130, No. SC19-1734 (Fla. Jan. 23, 2020). The new form of Fla. R. App. P. 9.130 cements the policy mentioned above because it allows an appeal of a nonfinal order denying a motion for summary judgment due to entitlement to sovereign immunity. Meanwhile, under the old rule, the order was only appealable if the trial court order determined – as a matter of law – that a party was not entitled to sovereign immunity. As such, the new rule focuses on what was argued in the motion as opposed to what was written in the order.
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Greggory Jacobs, Cole, Scott & Kissane, P.A.Mr. Jacobs may be contacted at
greggory.jacobs@csklegal.com
Right to Repair Reform: Revisions and Proposals to State’s “Right to Repair Statutes”
April 01, 2015 —
Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper – Chapman Glucksman Dean Roeb & Barger BulletinVirtually all of the states in the country have "Right to Repair" statutes. We follow the various states legislatures to determine what trends or developments are occurring. For years, Chapman, Glucksman, Dean, Roeb, and Barger has prepared a compendium that provides the salient points of these Right to Repair statutes. In this extended BULLETIN we provide a discussion of important and very recent developments that are occurring in
Nevada,
Arizona,
Florida, and
Colorado.
In Nevada, Governor Brian Sandoval very recently signed The Homeowner Protections Act of 2015, representing a massive transformation to Nevada's Right to Repair Act in the builder's favor, including but not limited to removal of the attorney fees provision as part of claimant's damages.
In Arizona, Governor Doug Ducey signed House Bill 2578 in March 2015, amending Arizona Revised Statutes § 12-1361 et. Seq. by eliminating a homeowner’s statutory opportunity to recover attorney and expert fees and providing a builder the right to repair the alleged defects.
In Florida, Bill 87 proposes to shorten the statute of limitations, requires more detail in the Homeowner's notice of defects, and allows a builder to use a prior settlement in lieu of repair as an affirmative defense against subsequent claims.
In Colorado, lawmakers are proposing to place additional conditions in front of an HOA board before filing suit and require alternative dispute resolution for HOA Condominium Defect Claims even if the requirement no longer exists at the time the claim is brought.
NEVADA: GOVERNOR SIGNIFICANTLY MODIFIES NEVADA'S RIGHT TO REPAIR ACT WITH THE SIGNING OF ASSEMBLY BILL 125
Nevada's Right to Repair Act has been extensively modified by the signing of Assembly Bill 125 also known as the Homeowner Protections Act of 2015. The Act considerably revises Chapter 40 of the Nevada Revised Statute ("NRS") governing construction defect actions. According to Governor Brian Sandoval, the signing of the first major bill of the legislative session in Nevada "discourages frivolous litigation and strengthens Nevada's rebounding housing market."1 Among other provisions, the Homeowner's Protection Act removes a claimant's ability to recover reasonable attorney fees as part of the claimant's damages, shortens the statutes of repose, defines the duty to defend, and prohibits a claimant from filing a notice of construction defects unless the claimant has submitted a claim under the homeowner's warranty and the insurer has denied the claim. Only claims that have been denied under the homeowner's warranty may be claimed.
Additionally, the term "construction defect" is now defined as a defect "(1) which presents an unreasonable risk of injury to a person or property; or (2) which is not completed in a good and workmanlike manner and proximately causes physical damage to the resident or appurtenance."
Critically, the Act now requires that the notice of construction defects (1) state in "specific detail" rather than reasonable detail, each defect, damage, and injury to each residence or appurtenance that is subject to the notice; (2) state the exact location of each defect, damage, and injury, rather than describe in reasonable detail the location of the defect; and (3) include a statement signed by the owner of the residence or appurtenance in the notice that the owner verifies that each defect, damage and injury exists in the residence or appurtenance.
Although not every revision is set forth above, the passing of The Homeowner's Protection Act appears to be a colossal victory for builders as the majority of the revisions to NRS Chapter 40 are favorable to the builder while additional or heightened requirements have been placed upon homeowners who wish to bring a claim. The following two Right to Repair updates concern proposed bills that also seek to radically change the pre-claim construction defect landscape.
ARIZONA: BUILDERS NOW HAVE THE RIGHT TO REPAIR INSTEAD OF AN OPPORTUNITY TO REPAIR WHILE HOMEOWNERS NO LONGER HAVE A STATUTORY RIGHT TO ATTORNEY FEES AND EXPERT FEES
In March 2015, Arizona Governor Doug Ducey signed into law House Bill 2578, revising key portions of the Right to Repair pursuant to the Purchaser Dwelling Act (Arizona Revised Statute ("A.R.S.") Section 12-1361 et. seq. Important categories of the Act affected by the new law include the builder's right to repair or replace, the process of repair or replacement, dwelling actions, and homeowners' association dwelling actions. Most notably, prior to filing a construction defect suit, or a "dwelling action" as defined in A.R.S. Section 12-1361 et. seq., a homeowner must provide written notice detailing the basis of a dwelling action and must allow the builder to repair or replace the alleged construction defects.
Another significant revision includes the elimination of the prevailing homeowner's statutory right to reasonable attorney fees, witness fees and taxable costs in a dwelling action. Bill 2578 also revised the definitions of "Construction Codes," "Construction Defect," "Construction Professional," and "Material Deficiency." Homeowner Associations now must disclose additional information regarding the claim to its members and must show compliance with procedures set forth in the community documents. Clearly, Arizona's legislature is seeking to reduce the amount of frivolous construction defects suits with the elimination of a prevailing homeowner's right to reasonable attorney fees and expert fees. Moreover, the Legislature now provides builders in Arizona with the right to make repairs to alleged construction defects if they so choose.
FLORIDA: FLORIDA GENERAL CONTRACTORS SEEK AGGRESSIVE AMENDMENT TO PRE-CLAIM CONSTRUCTION DEFECT PROCESS WITH BILL 87
Florida's Right to Repair Act, Chapter 558 of the Florida Statutes, may be extensively revised in the near future. With the help of the South Florida Chapter of the Associated General Contractors of America, House of Representatives Bill 87 will be presented as an amendment to the Pre-Claim Construction Defect requirements set forth in Chapter 558.
The proposed bill is aggressive and seeks to address issues in the current statute. These deficiencies have seemingly prevented construction defect claims from being resolved without the filing of a civil suit. Notably, the statute of limitations period for a property owner to file suit for construction defects would be shortened based upon the revision of the term "completion of a building or improvement" to include issuance of a temporary certificate of occupancy. Additionally, property owners would be subject to additional requirements for issuing a notice of claim, including specific identification of locations of each alleged construction defect as well as the specific provisions of the building code, project plans, project drawings, project specifications, or other documentation, information or authority that serve as the basis of the claim for each alleged construction defect.
Perhaps most importantly, the bill provides that if a construction defect is settled by repairs offered by the contractor during the Chapter 558 claims process but the repairs fail to fully correct the defects and the owner or association then files suit because the issue was not resolved, the defendant may claim that the issue was previously resolved and the plaintiff owner may face sanctions. Even if the bill as proposed does not pass in its current form, on the heels of Nevada's Right to Repair Act overhaul, it may serve to encourage other states, including California, to take another look at their Right to Repair Act procedures.
COLORADO: UPDATE FROM CGDRB SEPTEMBER 2014 BULLETIN: COLORADO PROPOSED LEGISLATION RE: HOA CONDOMINIUM DEFECT CLAIMS
In September 2014, we provided an important discussion of potential significant tort reform legislation presented in Colorado regarding construction claims by homeowner associations for condominiums. This Bulletin serves as an update to that discussion as intense debate over legislative reform to provide condominium builders in Colorado more legal protections has heated up again.
On October 13, 2014, the city of Lakewood became the first Colorado municipality to pass a “right to repair” measure with respect to common interest communities. The Lakewood measure gives builders a right to repair construction defects before homeowner associations take legal action and requires a homeowner majority approval before legal action is taken.
On February 10, 2015, two bipartisan Senators introduced Senate Bill 177, a bill proposing changes to the prerequisites for a homeowner association to file a construction defect action under the Colorado Common Interest Ownership Act. SB 177, if passed in its current form, would require:
- That when the governing documents of a common interest community require mediation or arbitration of a construction defect claim and the requirement is later amended or removed, mediation or arbitration is still required for a construction defect claim;
- That the mediation or arbitration take place in the judicial district in which the common interest community is located;
- That the arbitrator (1) be a neutral third party; (2) make certain disclosures before being selected; and (3) be selected as specified in the community's governing documents or, if not specified, in accordance with the Uniform Arbitration Act;
- That before a construction defect claim is filed on behalf of the homeowner association: (1) the parties must submit the matter to mediation; and (2) the board must give advance notice to all unit owners, together with a disclosure of the projected costs, duration, and financial impact of the construction defect claim, and must obtain the written consent of a majority of the unit owners.
- That the disclosures required prior to the purchase and sale of property in a common interest community a notice that the community's governing documents may require binding arbitration of certain disputes.
As explained in our previous Bulletin, currently, in Colorado, homeowner association boards are only required to obtain two condominium owners’ consent to file a construction defect suit. Similar to SB 220, which proposed a number of the same requirements, SB 177 would likely have the potential effect of reducing the number of lawsuits filed against builders and decrease the treat of frivolous claims; and allow the parties an opportunity to resolve their issues short of litigation.
On March 18, 2015, the Colorado Senate Committee on Business, Labor, and Technology voted 6-2 to forward SB-177 to the full Senate with four minor amendments. The amendments provide:
- The homeowner association’s attorney can prepare the disclosures that must be presented to unit owners prior to filing a construction defect claim;
- Voting may be done by proxy;
- The parties must agree on an arbitrator. If they cannot agree, they may petition the court to appoint one. Preference will be given to the arbitrator designated in the community’s governing documents; and
- A different list of disclosure topics is required.
Also introduced this year is SB 091, a bill to shorten the Colorado’s construction defect statute of repose to a homeowner from bringing an action after three years. On March 16, 2015, the Colorado Senate Committee on State, Veterans & Military Affairs voted to pass SB 091 to the full Senate with two substantive amendments. The first amendment excludes any multifamily developments from being effected by the shortened statute of repose. The second amendment proposes the statute of repose only be shortened to five years, plus an additional year if the defect manifests in year five. Currently, in Colorado, if a homeowner does not discover a construction defect within six years of a house’s completion, the homeowner may forfeit all legal rights to seek repair. Again, SB 091 would protect builders from frivolous or untimely claims by homeowners.
We will continue to monitor development of these bills and others that may be proposed in the future. If we can provide any further information concerning these developments or you are interested in receiving our compendium of the various right repair statutes please let us know.
1 As reported by KTVN-TV in Reno, Nevada: http://www.ktvn.com/story/28163519/senate-passes-constructiondefect-bill-sends-to-governor-sandoval.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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Homebuilders See Record Bearish Bets on Shaky Recovery
June 18, 2014 —
Callie Bost – BloombergSomeone thinks the housing rebound is built on shaky foundations.
A record 180,000 puts traded on the SPDR S&P Homebuilders (XHB) exchange-traded fund on June 11, according to data compiled by Bloomberg. The contract with the highest ownership pays off in the event of a 20 percent slump by December in the ETF tracking stocks from DR Horton Inc. to Williams-Sonoma Inc.
Prospects for rising interest rates and an uneven recovery in the housing market have hurt returns this year, sending the SPDR Homebuilders ETF down 3.3 percent. While economic data yesterday showed that builders broke ground on 1 million U.S. homes in May, permits, a proxy for future construction, decreased because of fewer applications for condominiums and apartment buildings.
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Ms. Bost may be contacted at
cbost2@bloomberg.net
Joint Venture Dispute Over Profits
January 27, 2020 —
David R. Cook - AHC Construction and Procurement BlogA recent Georgia Court of Appeals case demonstrates the risk of joint ventures failing to carefully define accounting rules in their joint venture agreement. Two trade contractors teamed up to accomplish certain tasks on a job at a wastewater lift station at Fort Gordon. A joint venture agreement provided for an equal split of the profits and losses. Unfortunately, the parties did not define “profit,” and particularly did not define what cost would be deducted in calculating profit. They disputed in particular whether certain large payments to individuals and 15% overhead charges should be deducted in calculating profits.
One party presented the expert testimony of an accountant while the other did not. The party presenting expert testimony asked the court to dismiss the other party’s claim because it was not supported by expert testimony of an accountant. The trial court granted the motion and dismissed the claim.
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David R. Cook, Autry, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
