Insurer Has No Obligation to Cover Arbitration Award in Construction Defect Case
May 22, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe court determined there was no coverage for an adverse arbitration decision suffered by the insured in a construction defect case. Am. Fire and Cas. Co. v. Unforgettable Coatings, Inc., 2023 U.S. Dist. LEXIS 64846 (D. Nev. April 13, 2023).
Unforgettable contracted with Muirfield Village Homeowner's Association for painting and related services. Following completion of the project, Muirfield alleged that Unforgettable's work was defective and filed suit. The parties agreed to arbitration. The arbitrator found that Unforgettable breached the contract and its implied warranty. Damages were awarded to Muirfield.
American Fire and Casualty Company (AFCC) was Unforgettable's insurer and defended Unforgettable at the arbitration. AFCC sued for a declaration that it had no obligation to indemnify Unforgettable for the damages awarded. Unforgettable and Murifiled counterclaimed, alleging that AFCC breached the policy by not covering the award, as well as a variety of extracontractual claims related to the investigation process. AFCC moved for judgment on the pleadings. The motion was granted with leave to amend.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Statute of Limitations Upheld in Construction Defect Case
September 30, 2011 —
CDJ STAFFThe Missouri Court of Appeals has ruled in Ball v. Friese Construction Co., finding that Mr. Ball’s claims were barred by the statute of limitations.
Mr. Ball hired Friese Construction Company to build a single-family home. The sale was completed on March 29, 2001. That December, Mr. Ball complained of cracks in the basement floor. SCI Engineering, n engineering firm, hired by Friese, determined that the home’s footing had settled and recommended that Mr. Ball hire a structural engineer to determine if the footings were properly designed and sized. In September 2002, the structural engineer, Strain Engineering, determined that the cracks were due to slab movement, caused in part by water beneath the slab, recommending measures to move water away from the foundation. In 2005, Mr. Ball sent Friese correspondence “detailing issues he was having with the home, including problems with the basement slab, chimney structure, drywall tape, and doors.” All of these were attributed to the foundation problems. In 2006, Friese stated that the slab movement was due to Ball’s failure to maintain the storm water drains.
In 2009, Ball received a report from GeoTest “stating the house was resting on highly plastic clay soils.” He sued Friese in May, 2010. Friese was granted a summary judgment dismissing the suit, as the Missouri has a five-year statute of limitations. Ball appealed on the grounds that the extent of the damage could not be determined until after the third expert report. The appeals court rejected this claim, noting that a reasonable person would have concluded that after the conclusion of SCI and Strain Engineering that “injury and substantial damages may have occurred.”
The court concluded that as there were not “continuing wrongs causing new and distinct damages,” he should have filed his lawsuit after the first two expert reports, not waiting seven years for a third expert to opine.
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Victoria Kajo Named One of KNOW Women's 100 Women to KNOW in America for 2024
May 13, 2024 —
Lewis Brisbois NewsroomLos Angeles, Calif. (April 30, 2024) – Los Angeles Partner Victoria Kajo has been named to global media company KNOW Women's 2024 100 Women to KNOW in America list, which honors the top 100 female leaders across North America. The honorees were recognized at the annual KNOW Women Summit, held from April 21-23 at The Palomar Hotel in Phoenix, Arizona.
The annual 100 Women to KNOW in America award, presented by JPMorgan Chase, recognizes women entrepreneurs, executives, creatives, and philanthropists who "exemplify what it means to be high achieving and ambitious on the next level and who continue to pour into their communities as they do so," according to KNOW Women. Ms. Kajo was selected as one of this year's honorees following a nomination and interview process.
Ms. Kajo is a member of Lewis Brisbois' Professional Liability Practice. She has extensive experience with professional liability litigation, having defended lawyers, design professionals and real estate professionals against claims of alleged negligent acts and omissions in the performance of their professional services. Ms. Kajo also has broad experience in general civil litigation matters involving errors and omissions, real estate, wrongful foreclosures, labor and employment law, civil rights, fraud, personal injury, breach of contract and unlawful detainer matters, amongst others.
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Lewis Brisbois
More Regulations for Federal Contractors
October 08, 2014 —
Craig Martin – Construction Contractor AdvisorThe Office of Federal Contract Compliance Programs (OFCCP) has been busy. In the last several weeks, the OFCCP has proposed regulations that will require contractors and subcontractors to provide summary compensation data and another rule prohibiting federal contractors and subcontractors from discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant.
Equal Pay Report
The OFCCP has proposed Summary Compensation regulations which would require federal contractors and subcontractors with more than 100 employees to “provide summary data on the compensation paid to employees by sex, race, ethnicity, specified job categories, and other relevant data points.” Covered employers would have to submit three types of information:
1. the total number of workers within a specific EEO-1 job category by race, ethnicity and sex;
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Craig Martin, Lamson Dugan and Murray, LLPMr. Gopal may be contacted at
pgopal2@bloomberg.net
Nevada’s Home Building Industry can Breathe Easier: No Action on SB250 Leaves Current Attorney’s Fees Provision Intact
June 21, 2017 —
Aaron Lovaas – Newmeyer & Dillion LLPConstruction and design professionals in Nevada’s home building industry breathed a collective sigh of relief on June 5, 2017 when the 79th Session of the Nevada Legislature adjourned without entertaining Senate Bill 250, which sought to reinstate homeowner plaintiffs’ nearly automatic right to recover attorneys’ fees, expert costs, and costs of investigation when bringing suit for alleged constructional defects.
Until 2015, homeowners’ recovery of such damages was the reality of the construction defect landscape in Nevada. While Chapter 40 of the Nevada Revised Statutes specifically allowed for recovery of “reasonable” attorneys’ fees, expert costs, and costs of investigation, the trend in Nevada was that plaintiffs were all but guaranteed awards of all such sums. Of course, this environment incentivized plaintiffs’ lawyers to bring claims of questionable or little repair value in cases where the attorney’s fees and expert costs often far exceeded the costs of repair.
HOW AB125 CHANGED THE LANDSCAPE
Such was the reality in Nevada until 2015 and the passage of Assembly Bill 125, which eliminated the nearly automatic award of attorneys’ fees and expert costs and overhauled Chapter 40 in many other respects. AB125 made over portions of Chapter 40 by:
- Placing awards of attorneys’ fees into the framework of offers of judgment, utilized extensively in other fields of civil litigation and available equally to homeowner plaintiffs as well as construction industry defendants; and
- Reworking expert costs and costs of investigation to allow for the award of those items only in the case of proven defects and only as to those costs directly related to the investigation and proof of those defects.
INTRODUCING SB250
The 2017 Legislative Session saw efforts to return Chapter 40 to its pre-2015 version through the introduction of SB250. Fortunately for construction and design professionals in the home building industry in Nevada, the State Senate Judiciary Committee did not act upon the bill and the effort died having never made it to a floor vote. Considering that Nevada’s Legislature meets biannually, the current framework of Chapter 40 is intact until at least 2019. The 2017 Legislative Session, however, is an illustration to how quickly those of the construction defect plaintiffs’ bar can move to initiate efforts to turn back the clock to a much riskier time for construction and design professionals.
Those in the industry should remain vigilant and monitor future legislative efforts to reinstate such awards or other clearly anti-builder measures. Such measures simply drive-up the overall cost and expense of home construction and, in turn, home ownership, which it is often said, is one of the cornerstones of the American dream.
Aaron Lovaas is a partner in the Las Vegas office of Newmeyer & Dillion. As a transactional attorney and business litigator, Aaron has the ability to evaluate legal issues from both points of view and help his clients understand their best option. He can be reached at aaron.lovaas@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
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Tenants Underwater: Indiana Court of Appeals Upholds Privity Requirement for Property Damage Claims Against Contractors
April 25, 2022 —
Melissa Kenney - The Subrogation StrategistIn United States Automatic Sprinkler Corp. v. Erie Ins. Exch., et al., No. 21A-CT-580, 2022 Ind. App. LEXIS 87 (Automatic Sprinkler), the Court of Appeals of Indiana (Court of Appeals) considered whether there is a privity requirement for property damage claims against contractors. The court imposed a privity requirement. The court also addressed whether a subrogation waiver in a contract with a tenant applied to damage caused by work done outside the contract, at the landlord’s request. The court held that the waiver did not apply.
In this case, United States Automatic Sprinkler (Automatic Sprinkler) contracted with a tenant (Contract Tenant) to inspect and test a sprinkler system at a commercial building in Indiana. The contract included a waiver of subrogation provision. The building landlord subsequently hired Automatic Sprinkler to repair a leak in the sprinkler system. After completing the repairs, the system failed and flooded the building, causing significant property damage to several tenancies.
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Melissa Kenney, White and Williams LLPMs. Kenney may be contacted at
kenneyme@whiteandwilliams.com
Five Actions Construction and Energy Risk Managers Can Take to Avoid the Catastrophic Consequences of a Cyber Attack
June 27, 2022 —
Eve-Lynn Gisonni - Saxe Doernberger & VitaWith the ever-increasing usage of technology in the construction and energy industries, risks to business operations have also increased. Property developers and construction contractors rely on electronic data and communications more than ever to streamline projects, ensure efficient and timely supply chain delivery, and facilitate immediate communications between parties. However, with this dependence upon technology comes the heightened risk of cyber criminals frustrating construction operations and driving up costs.
Similarly, as the energy sector has grown more dependent upon online networks for deliverables, vulnerabilities have become more pronounced in trades dependent upon electrical grids. When an entire electricity network must be taken offline in defense of a cyber-attack, this impacts countless industries such as hospitals and health care operations, manufacturers and suppliers, and local and interstate traffic systems.
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Eve-Lynn Gisonni, Saxe Doernberger & VitaMr. Gisonni may be contacted at
EGisonni@sdvlaw.com
KB to Spend $43.2 Million on Florida Construction Defects
August 27, 2013 —
CDJ STAFFIn their second quarter filing with the SEC, KB Homes estimates that repairing damage caused by defects in framing, stucco, roofs, and sealant will cost it $43.2 million. That estimate includes homes that are yet to be identified. KB had estimated lower costs earlier, but subsequently determined it was necessary to increase the funds by $15.9. As a result, the firm showed a loss in the second quarter. The company hopes to recover some funds in insurance settlements.
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