Alabama Supreme Court Finds No Coverage for Construction Defect to Contractor's own Product
October 21, 2013 —
Tred Eyerly — Insurance Law HawaiiThe Alabama Supreme Court followed prior precedent and found that the contractor's faulty workmanship causing damage to his own product did not arise from an occurrence. Owners Ins. Co. v. Jim Carr Homebuilder, LLC, 2013 Ala. LEXIS 122 (Ala. Sept. 20, 2013).
The plaintiffs contracted with Carr to construct a new home. After completion of the home and taking occupancy, the plaintiffs noted several problems with the house related to water leaking through the roof, walls and floors, resulting in water damage to various areas of the house. The plaintiffs sued Carr and the case eventually went to arbitration. The arbitrator entered an award in favor of plaintiffs for $600,000.
Owners filed an action against Carr for a declaratory judgment seeking to establish there was no coverage because the property damage did not arise from an occurrence. The trial court granted summary judgment to Carr.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Texas Legislative Update
July 19, 2017 —
Matthew S.C. Moore & Justin (JD) D. Holzeauser – Peckar & Abramson, P.C.The marquee fight between Lt. Governor Patrick and Speaker Straus, otherwise known as the 85th Regular Legislative Session, concluded on May 29, 2017. While the political clash over the controversial “bathroom bill” will continue during the special legislative session, this article is intended to provide a brief summary of the construction-related bills that passed during the regular session and a few notable ones that did not pass. A special session has been called by Governor Abbott, but no construction-related bills were included on the agenda.
What Passed?
HB 2121 – Attorney’s fees for state breach of contract claims. A contractor who prevails on a state breach of contract claim pursuant to Chapter 2260 of the Government Code, that is also valued at less than $250,000.00, may recover attorney’s fees. By using the word “may”, the bill implies that the award of attorney’s fees will be at the discretion of the administrative law judge. This bill became law on June 15, 2017.
HB 1463 – Right to cure ADA violations. A person with a disability may assert a claim for discrimination based on a violation of the building and architectural standards established in Chapter 469 of the Government Code. However, this bill requires the claimant to provide the respondent written notice at least sixty (60) days before filing an action for the violation and further gives the respondent an opportunity to cure the alleged violation within the sixty (60) day period. The obvious benefit of this bill is that it allows the respondent, e.g., the owner or potentially the contractor, an opportunity to remediate the violation without incurring litigation costs. This bill becomes effective law on September 1, 2017.
Reprinted courtesy of
Matthew S.C. Moore, Peckar & Abramson, P.C. and
Justin (JD) D. Holzeauser, Peckar & Abramson, P.C.
Mr. Moore may be contacted at mmoore@pecklaw.com
Mr. Holzheauser may be contacted at jdholzheauser@pecklaw.com
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Settling with Some, But Not All, of the Defendants in a Construction Defect Case
March 28, 2018 —
David Adelstein – Florida Construction Legal UpdatesConstruction defect lawsuits can be complex multi-party disputes, especially when the plaintiff is doing what is necessary to maximize recovery. This means the plaintiff may sue multiple defendants associated with the defects and damage. For example, the owner (e.g., plaintiff) may sue the contractor, subcontractors, design professionals, etc. due to the magnitude of the damages. In many instances, the plaintiff is suing multiple defendants for overlapping damages. The law prohibits a plaintiff from double-recovering for the same damages prohibiting the windfall of a plaintiff recovering twice for the same damages. Perhaps this sentiment is straight common sense, but this sentiment is a very important consideration when it comes to settling with one or more of the defendants, while potentially trying the construction defect case as to remaining defendants.
Analysis and strategy is involved when settling with some but not all of the defendants in a construction defect case (and, really, for any type of case). Time must be devoted to crafting specific language in the settlement agreements to deal with this issue. Otherwise, the settlement(s) could be
set-off from the damage awarded against the remaining defendants.
The recent decision in
Addison Construction Corp. v. Vecellio, 43 Fla.L.Weekly D625(a) (Fla. 4th DCA 2018) details the analysis and strategy required when settling with some but not all of the defendants in a construction defect case, and the concern associated with a trial court setting-off the settlement amount from the damage awarded against the remaining defendants.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Grenfell Fire Probe Faults Construction Industry Practices
November 28, 2022 —
Peter Reina - Engineering News-Record"Incompetence and poor practices in the construction industry" and among others led to the June 2017 fire at London's Grenfell residential high-rise building, causing 72 deaths, according to the lead counsel for the public inquiry that ended Nov. 10.
Reprinted courtesy of
Peter Reina, Engineering News-Record
Mr. Reina may be contacted at reina@btinternet.com
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Court Narrowly Interprets “Faulty Workmanship” Provision
March 28, 2018 —
Jeffrey J. Vita and Thersa A. Guertin – SDV BlogIn a recent victory in their home state of Connecticut, Saxe Doernberger & Vita partners,
Jeffrey Vita and
Theresa Guertin, representing owner-developer 777 Main Street, LLC, overcame a summary judgment motion filed by Liberty Mutual Fire Insurance Company. The Connecticut Superior court refused to adopt the insurer’s broad interpretation of the “faulty workmanship” exclusion in an all-risk builders’ risk insurance policy.
In 2014, 777 Main Street, LLC began renovations on the 27-story former Hartford National Bank building in downtown Hartford, converting the property from an office building to a mixed residential and commercial space. During the renovation, a subcontractor hired to perform the cleaning the concrete façade of the building accidentally over-sprayed the cleaning material onto the property’s windows. The subcontractor’s attempts to clean the overspray further damaged the structural integrity and cosmetic look of the windows. As a result, the owner was forced to replace over 1,800 windows, costing millions.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Guertin may be contacted at tag@sdvlaw.com
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A Subcontractor’s Perspective On California’s Recent Changes to Indemnity Provisions
September 10, 2014 —
William M. Kaufman – Construction Lawyers BlogGreat news for California subcontractors and suppliers! “Type I” Indemnity provisions in California construction contracts entered into on or after January 1, 2013 are not enforceable. This change in the law prevents owners and general contractors from shifting enormous exposure and costs of litigation downstream to the little guy, namely subcontractors and suppliers. In October 2011, Governor Brown signed Senate Bill 474 into law, which represented a major legislative victory for subcontractors and suppliers. The new law also imposed exacting limitations on contractors that attempt to require their subcontractors and suppliers to cover their defense fees and costs in litigation.
New Law Prevents Indemnity or Cost of Defense for Active Negligence
Under a "Type I" indemnity provision, the downstream subcontractor agrees to indemnify the owner or contractor, even against liability caused by the upstream owner/contractor's own "active negligence." A “Type I” indemnity provision in general contractors’ subcontracts often require their subcontractors to defend and indemnify them from liability regardless of whether the general contractor is partially at fault. Subcontractors and suppliers historically have complained that they have little bargaining power when entering into these contracts and these types of provisions can result in ruinous liability for those in the construction industry that are most vulnerable-subcontractors and suppliers. Before this change, the law allowed a general contractor who is 99 percent at fault for an injury or damage to shift the entire risk to a subcontractor who is only one percent at-fault or a subcontractor who is not at fault at all, but tangentially involved in the claim. Subcontractors and suppliers joined forces and lobbied the legislature. The legislature and Governor Brown agreed. Under the new law, such "Type I" indemnity provisions will no longer be enforceable. SB 474 adds Civil Code section 2782.05 that precludes indemnity where the party to be indemnified is "actively negligent" and makes void and unenforceable these types of clauses.
Reprinted courtesy of
William M. Kaufman, Lockhart Park LP
Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com
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Home Prices on the Rise
September 03, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to CoreLogic, in July, housing prices rose 6.9% compared to last year, reported Housing Wire. Furthermore, prices increased by 1.7% compared to June 2015.
“Home sales continued their brisk rebound in July and home prices reflected that, up 6.9% from a year ago,” Frank Nothaft, chief economist for CoreLogic, told Housing Wire. “Over the same period, the National Association of Realtors reported existing sales up 10% and the Census Bureau reported new home sales up 26% in July.”
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New Jersey Construction Worker Sentenced for Home Repair Fraud
October 22, 2013 —
CDJ STAFFMarcin Gradziel, who formerly worked for a construction company in Camden County, New Jersey, has been sentenced to seven years in state prison for insurance fraud. Mr. Gradziel admitted to creating fraudulent property damage claims, which he did for Precision Network Solutions, which did business as Precision Builders.
Mr. Gradziel and others went through neighborhoods telling residents that their roofs or siding were damaged by hail and that they could get their homes repaired at no cost. Mr. Gradziel would then return to create damage before the inspectors arrived. Another employee, Dominik Sadowski, previously plead guilty, as did Precision Builders. The firm paid out $68,720 in restitution and is now out of business.
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