CA Court of Appeal Reinstates Class Action Construction Defect Claims Against Homebuilder
September 03, 2015 —
Beverley BevenFlorez-CDJ STAFFLaurence R. Phillips, Andrew S. Azarmi, and Stefani Warren of Dentons reported that “on August 19, the California Court of Appeal, Fourth District, reinstated a class action asserting construction defect claims against a nationwide homebuilder.” According to the article, the decision is significant because “it effectively opens the door to class claims against homebuilders (and potentially other service providers employed in the homebuilding industry) arising out of alleged construction defects on California residential development and construction projects.”
The decision is unpublished, but “could signal a troubling trend for companies involved in the homebuilding industry in California. It is not yet clear whether the decision will be appealed to the California Supreme Court.”
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Not Everything is a Pollutant: A Summary of Recent Cases Supporting a Common Sense and Narrow Interpretation of the CGL's Pollution Exclusion
October 26, 2020 —
Philip B. Wilusz & Jeffrey J. Vita - Saxe Doernberger & VitaThose of us who suffered through law school are familiar with the argument that there are fundamental rules applicable to contract interpretation and that a certain contract language interpretation would “swallow the rule.” However, insurance companies have long advocated for an interpretation of the CGL policy’s pollution exclusion that would “swallow the coverage” that the insureds thought they were purchasing. Insurers have successfully argued in several states that the pollution exclusion’s definition of “pollutant” should be read literally, and be applied to any “solid, liquid, gaseous, or thermal irritant or contaminant including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.” As anyone with children can attest to, the range of items and substances that can be considered an “irritant” is limitless. The logical extent of the insurer’s interpretation brings to mind the high school student who, for his science fair project, convinced his fellow students to ban “dihydrogen monoxide.”1 Citing evidence such as the fact that everyone who has ever died was found to have consumed “dihydrogen monoxide,” he convinced them of the dangers of . . . water. Similarly, an overly expansive reading of the definition of “pollutant” could lead to the absurd result of even applying it to ubiquitous harmless substances such as water. The pollution exclusion, therefore, has run amok in many states and has allowed insurers to avoid liability for otherwise covered claims.
Fortunately, insureds in many states have successfully argued that the pollution exclusion is subject to a more limited interpretation based on several different theories. For example, some courts have agreed that the pollution exclusion, as initially introduced by the insurance industry, should be limited to instances of traditional environmental pollution. Others have held that the exclusion is ambiguous as to its interpretation. The reasonable expectations of the insureds do not support a broad reading of the defined term “pollutant.” Below, this article addresses a number of recent decisions that have adopted a pro policyholder interpretation of the pollution exclusion. As with most insurance coverage issues, choice of law clearly matters.
Reprinted courtesy of
Philip B. Wilusz, Saxe Doernberger & Vita and
Jeffrey J. Vita, Saxe Doernberger & Vita
Mr. Wilusz may be contacted at pbw@sdvlaw.com
Mr. Vita may be contacted at jjv@sdvlaw.com
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Confidence Among U.S. Homebuilders Little Changed in January
January 28, 2015 —
Bloomberg News(Bloomberg) -- Confidence among U.S. homebuilders hovered in January close to a nine-year high, indicating the residential real estate market is poised to expand this year.
While the National Association of Home Builders/Wells Fargo builder sentiment gauge fell to 57 this month from 58 in December, readings greater than 50 mean more respondents report good market conditions, according to figures issued from the Washington-based group Tuesday. The median forecast in a Bloomberg survey called for 58.
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Bloomberg News
Condominium Construction Defect Resolution in the District of Columbia
October 26, 2017 —
Nicholas D. Cowie - Maryland Condo Construction Defect Law BlogNewly constructed and newly converted condominiums in the District of Columbia often contain concealed or “latent” construction defects. Left undetected and unrepaired, defects in the construction of a condominium can cause extensive damage over time, requiring associations to assess their members substantial repair costs that could have been avoided by making timely developer warranty claims.
This article provides a general overview of how Washington DC condominium associations transitioning from developer control can proactively and successfully identify defects and resolve construction defect claims with condominium developers and builders.
Condominium Association Responsibility for Timely Evaluation of Common Element Construction
Condominium associations are charged with the responsibility of overseeing and maintaining condominium common element facilities, typically consisting of building roofs, exterior walls, foundations, lobbies, common hallways, elevators, surrounding grounds, and the common structural mechanical, electrical, and plumbing systems. Following the period of developer control, it is incumbent upon a condominium association’s first unit owner elected board of directors to evaluate the construction of the condominium common element facilities and determine whether the existing, developer-created, budget and reserve fund are adequate to cover the cost of maintaining, repairing, and ultimately replacing the condominium facilities over time.
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Nicholas D. Cowie, Cowie & Mott, P.A.Mr. Cowie may be contacted at
ndc@cowiemott.com
Why Is It So Hard to Kill This Freeway?
April 18, 2023 —
Benjamin Schneider - BloombergKeith Pete remembers what Claiborne Avenue was like before the interstate.
As a child in the early 1960s, the native New Orleanian would come to Claiborne Avenue with his dad to buy chickens from the local grocers. Sometimes, as a treat, father and son would get hamburgers on French rolls and pineapple juice and picnic on the neutral ground — the avenue’s wide, grassy median, which was thick with live oak trees and azaleas.
“People used to sit and enjoy the weather,” Pete, 68, recalls. “There was beautiful grass all the way down. It was gorgeous.”
At the time, Claiborne Avenue coursed through the heart of New Orleans’ Tremé neighborhood and a major center of Black commerce and culture. “It was safe; it was thriving,” Pete said. “It was mostly wiped out.”
In 1966, workers began removing the avenue’s oaks and driving the pilings that would transform 18 blocks of the tree-lined boulevard into a viaduct carrying Interstate 10. While plans for a Robert Moses-designed waterfront freeway through the French Quarter were halted in 1969 after intense resistance from historic preservationists, the state- and city-backed Claiborne Expressway proceeded. The elevated highway and its tangle of off-ramps destroyed some 500 homes and 326 Black-owned businesses. The once-thriving corridor became a dark, noisy netherworld, unsafe for pedestrians and unhealthy for anyone who breathes.
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Benjamin Schneider, Bloomberg
Mechanic’s Liens and Leases Don’t Often Mix Well
May 03, 2021 —
Christopher G. Hill - Construction Law MusingsAs those who read my “musings” here at this construction law blog are well aware, the topic of Virginia mechanic’s liens is one that is much discussed. From the basic statutory requirements to the more technical aspects of these tricky beasts. One aspect of mechanic’s liens that I have yet to discuss in detail it how these liens attach in the situation where the contractor does work for a lessee and not for the owner of the underlying fee interest in the property.
A recent case out of the Western District of Virginia federal court, McCarthy Building Companies Inc. v. TPE Virginia Land Holdings LLC, discusses the interaction of Va. Code 43-20, work on a leasehold, and parties necessary to any litigation relating to a lien for the work on that leasehold. The basic facts, outlined more thoroughly in the linked opinion, are these. MBC provided certain work to TPE Kentuck Solar, LLC on property leased from TPE Virginia Land Holdings, LLC. The lease was for a fixed term and for a fixed amount regardless of the work performed at the property. MBC was unpaid by the Kentuck entity and then recorded a lien on the property and then sued to enforce that lien and for unjust enrichment against TPE Land Holdings. TPE Land Holding filed a motion to dismiss the mechanic’s lien and unjust enrichment counts.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
The “Climate 21 Project” Prepared for the New Administration
December 21, 2020 —
Anthony B. Cavender - Gravel2GavelThis is a brief review of the recently released “Climate 21 Project” policy memo. It is the work of many former members of the Obama Administration who are deeply concerned about climate change and what steps the new administration can take in the first 100 days to confront a problem. Offering “actionable advice” rather than a policy agenda, the group recognizes that Congress must do its part by providing new statutory authorities within the early days of the new administration, and the President must be prepared to aggressively exercise the powers of his office. As the members of the Group see it, there are four interlocking crises facing the President: (a) the COVID-19 pandemic; (b) the economic devastation visited upon many people by the pandemic; (c) racial injustice; and (d) accelerating threats posed by climate change.
Accordingly:
1. The Executive Office of the President must take stronger steps to reduce greenhouse gas emissions through domestic investment, rulemakings, policy changes, and international diplomacy. A new Special Assistant for Climate Change must be created to take charge of these climate change initiatives. There should also be established in the Executive Office of the President a National Climate Change Council. All agencies must be advised of the urgency of this problem. The paper seems to envision a substantial growth in the White Hose staff.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Texas Federal Court Delivers Another Big Win for Policyholders on CGL Coverage for Construction-Defect Claims and “Rip-and-Tear” Damages
March 14, 2022 —
Blake A. Dillion, Jared De Jong & Scott S. Thomas - Payne & FearsInsurers regularly argue that commercial general liability (“CGL”) policies are not performance bonds and therefore there is no coverage for claims seeking damages for defective or faulty workmanship. Insurers also argue there is no coverage for so-called “tear-out” or “rip-and-tear” damages, where fixing property damage requires replacing defective work that has not itself been damaged. Fortunately, in a newly decided case, a Texas federal district court rejected both arguments by an insurer. Amerisure Mutual Insurance Company v. McMillin Texas Homes, LLC, No. SA-20-CV-01332-XR, 2022 WL 686727 (W.D. Tex. Mar. 8, 2022).
As with most construction-defect claims, this case involved homeowner claims against a residential developer, McMillin Texas Homes (“McMillin”). After the homes were completed, homeowners complained about defects in the artificial stucco exterior finish and filed suit. McMillin tendered to its insurer, Amerisure Mutual Insurance Company (“Amerisure”). Amerisure then sued McMillin for declaratory relief, arguing that it had no duty to defend or indemnify the homeowner claims. McMillin filed a counterclaim alleging Amerisure breached its policies by refusing to defend or indemnify McMillin.
Reprinted courtesy of
Blake A. Dillion, Payne & Fears,
Jared De Jong, Payne & Fears and
Scott S. Thomas, Payne & Fears
Mr. Dillion may be contacted at bad@paynefears.com
Mr. De Jong may be contacted at jdj@paynefears.com
Mr. Thomas may be contacted at sst@paynefears.com
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