How to Defend Stucco Allegations
February 07, 2014 —
Beverley BevenFlorez-CDJ STAFFManaging partner Paul McBride discusses how to defend stucco defect allegations in his article in Kring & Chung, LLP’s online publication. According to McBride, about “80% of construction defect lawsuits which [Kring & Chung] defend involve stucco-clad houses.” In the article, McBride addresses “improper building paper installation and stucco cracks.”
“If you are defending the stucco subcontractor,” McBride advises to look “first, at the windows section of the plaintiffs’ defect report and cost of repair estimate.” He explains that “this is the section where the plaintiffs’ expert will allege water intrusion that will be allocation to your stucco subcontractor.”
McBride declares that the “most important thing to understand about stucco cracks is that stucco cracking is common. This is both a common sense observation and a perfectly valid legal defense.”
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Hawaii Federal District Court Remands Coverage Dispute
June 15, 2020 —
Tred R. Eyerly - Insurance Law HawaiiAccepting the insured's amended complaint, the federal district court of Hawaii remanded the coverage action to state court. Hale v. Lloyd's, London, 2020 U.S. Dist. LEXIS 9061 (D. Haw. Jan. 17, 2020).
Hale purchased a policy for his home in Hilo, Hawaii, from Defendant Pyramid Insurance Centre. The policy was memorialized by a Lloyd's Certificate issued by Defendant Lloyd's. On September 19, 2017, Hale entered Chapter 7 Bankruptcy. Included in the bankruptcy proceeding was Hale's home and a secured home mortgage loan now owned by Defendant Specialized Loan Servicing, LLC. The Bankruptcy Court issued a discharge order on January 18, 2018.
On May 9, 2018, Hale's home was destroyed, being covered with lava from the Kilauea volcano eruption. Hale filed a claim with Lloyd's based upon the loss of his home. The claim was denied. Subsequently, however, Lloyd's issued a check for the full amount of the policy. Both Hale and Specialized Loan were listed as payees on the check.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Quick Note: Be Careful with Pay if Paid Clauses (Both Subcontractors and General Contractors)
June 17, 2015 —
Christopher G. Hill – Construction Law MusingsAside from waiver of lien rights (something that will be illegal in Virginia after July 1, 2015), the most troublesome contractual impediment to payment for a subcontractor or supplier on a project often is the “pay if paid” clause. As a general rule, in Virginia, these clauses where drafted in the proper fashion, are enforceable. As I have said many times, in Virginia freedom of contract almost always wins out.
While this is the case, I emphasize that such clauses must be very explicit and specific. Furthermore, and in something that should be obvious, these clauses are generally limited by the Courts of Virginia to only be enforceable and to only forgive the need for payment if the upstream contractor on the construction job has not been paid for the work that the sub claiming non payment has done.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Alert: AAA Construction Industry Rules Update
June 07, 2021 —
Christopher G. Hill - Construction Law MusingsThe American Arbitration Association has made some needed updates to their Construction Industry Arbitration and Mediation Rules, effective July 1, 2015. Among the changes listed at their website are:
- A mediation step for all cases with claims of $100,000 or more (subject to the ability of any party to opt out).
- Consolidation and joinder time frames and filing requirements to streamline these increasingly involved issues in construction arbitrations.
- New preliminary hearing rules to provide more structure and organization to get the arbitration process on the right track from the beginning.
- Information exchange measures to give arbitrators a greater degree of control to limit the exchange of information, including electronic documents.
- Availability of emergency measures of protection in contracts that have been entered into on or after July 1, 2015.
- Enforcement power of the arbitrator to issue orders to parties that refuse to comply with the Rules or the arbitrator’s orders.
- Permissibility of dispositive motions to dispose of all or part of a claim or to narrow the issue in a claim.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Coverage for Injury to Insured’s Employee Not Covered
June 10, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe employee exclusions in the employer's CGL and Umbrella policies barred coverage. Piatt v. Indiana Lumbermen's Mut. Ins. Co., 2015 Mo. LEXIS 32 (Mo. April 28, 2015).
Linda Nunley was killed while working for Missouri Hardwood Charcoal, Inc. The kiln's large steel door had been removed and was leaning upright against another kiln when it blew over and crushed Ms. Nunley. Her family filed a wrongful death suit against Junior Flowers, the company's sole owner, director, and executive officer. The complaint alleged that Flowers was negligent in ordering employees to lean the kiln doors upright, even though he knew it was unsafe. The complaint further alleged that Flowers breached a personal duty of care owed to Ms. Nunley and that his actions were "something more" that a breach of the company's duty to provide a safe workplace.
Flowers requested a defense under CGL and Umbrella policies issued by Lumbermen's. The policies insured Missouri Hardwood and its executive officers, but excluded liability for a work-related injury to an "employee of the insured." The policies also had a "separation of insureds" provision, stating that the insurance applied "separately to each insured against whom claim is made or suit is brought." Lumbermen's denied coverage.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
The Condo Conundrum: 10 Reasons Why There's a 'For Sale' Shortage in Seattle
December 20, 2017 —
Dave Suggs - CDJ STAFFSeattle Washington is experiencing a shortage of in-city condos. Of the 27,000 units of new housing being built in downtown Seattle, 94 percent will be rentals. As housing prices are rising in the US’s fastest-growing large city, the median home price is $660,000. Dean Jones of the Seattle Magazine reports on why consumers consider condos, but home developers don’t in his article “The Condo Conundrum: 10 Reasons Why There's a 'For Sale' Shortage in Seattle.”
Reason 1, condominiums don’t always offer high returns and can be riskier for the home developer. Reason 2, the Washington State Condo Act “overprotects” buyers of condos with over-the-top warranties that makes everyone in the industry afraid to work with condos. Reason 3, the cost of condo building is increased because of the risk of defect litigation. Reason 4, condo presale buyers are not required to deposit a percentage to invest in a new development and before closing could decide to walk away. Reason 5, there is a lot of interest in apartment buildings from investment groups.
Reason 6, investors whose goal is to own “trophy” assets in rising markets can’t wait the years it takes developers to plan and construct a new multistory community. Reason 7, since rent prices have risen 50 percent on average in the last 7 years, it’s profitable to be a landlord. Reason 8, the millennials who live and work in this tech oriented region prefer to rent because of living through the rise and fall of the housing market. Reason 9, the costs is rising each year to deliver new projects. Reason 10, high-rise zoning was adopted 2 years before the recession, so just as condo development was gearing up, apartment building took over.
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Construction Defect Reform Dies in Nevada Senate
May 10, 2013 —
CDJ STAFFNevada’s SB161 has failed to move out of the Senate Judiciary Committee. The bill would have reduced the time in which homeowners could file suits and also would have forbidden the inclusion of attorney’s fees as damages. A similar bill remains active in the Nevada House.
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Teaming Agreements- A Contract to Pursue a Solicitation and Negotiate
November 23, 2020 —
David Adelstein - Florida Construction Legal UpdatesTeaming agreements are practical and useful agreements on public projects where a prime contractor teams with a subcontractor for purposes of submitting a bid or proposal in response to a solicitation. The prime contractor and subcontractor work together to pursue that solicitation and have the government award the contract to the prime contractor. The teaming agreement allows for information to be confidentially shared (estimating and pricing, construction methodologies, systems, and suggestions, value engineering, etc.) where the subcontractor agrees that it will only pursue the solicitation with the prime contractor. In other words, the subcontractor ideally is not going to submit pricing to another prime contractor proposing or bidding on the same project and is not going to share information the prime contractor has furnished to it. Likewise, the prime contractor is not going to use the subcontractor’s information for purposes of finding another subcontractor at a lower price and is agreeing to use its good faith efforts or best attempts to enter into a subcontract with the subcontractor if it is awarded the project. This is all memorialized in the teaming agreement.
The potential problem lies with language that requires the parties to use their good faith efforts or best attempts to enter into a subcontract if the project is awarded to the prime contractor. In essence, this can become a disfavored “agreement to agree” to a future contract that could allow either party to create an argument to back out of the deal under the auspice that they could not come to terms with the subcontract.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com