Court Denies Insurers' Motions for Summary Judgment Under All Risk Policies
June 05, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found that the insurers could not escape coverage by summary judgment under their all risk policies. Eagle Harbour Condo Assoc'n v. Allstate Ins. Co., 2017 U.S. Dist. LEXIS 54761 (W.D. Wash. April 10, 2017).
Eagle Harbour Condominium Association sued several of its insurers who denied coverage for hidden water damage. Various insurers provided coverage from 1988 to 2015.
The Association asserted that wind-driven rain and inadequate construction allowed water to penetrate the buildings' sheathing and framing, causing decades of deterioration and decay, until the damage was exposed to view in August 2014. The insurers claimed that the loss resulted from poor decisions in constructing and inadequately maintaining a stucco building in the wet and windy Pacific Northwest. The Association argued that the policies did not explicitly exclude damage caused by wind-driven rain, so there was coverage.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Harmon Tower Case Settled Prior to Start of Trial
January 09, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to the Las Vegas Sun, MGM Resorts International settled with “six of seven contractors in a massive civil breach-of-contract lawsuit over a never-opened Las Vegas Strip tower called the Harmon.” Clark County District Court Judge Elizabeth Gonzalez announced the settlement agreement just before the trial was to begin.
The Las Vegas Sun reported that “just a list of exhibits — not the exhibits themselves — filled 100 banker's boxes.” Michael Infuso, Show Canada Inc.’s attorney, stated that “[b]ecause of the complexity of this case, it was going to be impossible to try it.”
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Ohio Court of Appeals Affirms Judgment in Landis v. Fannin Builders
April 20, 2011 —
Beverley BevenFlorez CDJ STAFFThe Ohio Court of Appeals affirmed the judgment in Landis v. William Fannin Builders. Landis contracted Fannin Builders to build their home. The case involved staining problems on the T1-11 siding chosen by the plaintiffs.
After a year and a half of discussion on how to resolve the problem of uneven staining on the siding, Landis filed suit “against Fannin Builders, alleging claims for breach of contract, breach of the express limited warranty, and violation of the Ohio Consumer Sales Practices Act (“OCSPA”). Fannin Builders, in turn, filed a third-party complaint against 84 Lumber, alleging claims for breach of contract and indemnification. With the trial court’s leave, Fannin Builders also later amended its answer to add a counterclaim against appellees for breach of contract and unjust enrichment. In the counterclaim, Fannin Builders alleged that appellees still owed it $3,908.98 for the construction of appellees’ home.”
“In its decision, the trial court found in appellees’ favor on their breach of contract claim and against appellees on their claims for breach of the express limited warranty and violation of the OCSPA. Additionally, the trial court found in Fannin Builders’ favor on its counterclaim for breach of contract and against Fannin Builders on its third-party claims for breach of contract and indemnity. The trial court determined that appellees’ damages amounted to $66,906.24, and after setting off the $3,908.98 that appellees owed Fannin Builders under the construction contract, the trial court awarded appellees $62,997.26. The trial court reduced its decision to judgment on May 18, 2010.”
Fannin Builders appealed this judgment and assigned the following errors:
[1.] The Trial Court Erred as a Matter of Law by Concluding that Appellant Breached its Contract with Appellees when it provided a Semi-Transparent Oil-Based Stain that Simply did not Meet their Approval.
[a.] The Contract does not Contain a Satisfaction Clause.
[b.] Even if the Court Implies a Satisfaction Clause, the Court Should Apply an Objective Standard.
[2.] The Trial Court Erred as a Matter of Law by Failing to Consider Appellant’s Right to Cure.
[3.] The Trial Court committed Reversible Error by not Assessing Damages Using “Diminished Value Standard,” and by Creating a Remedy that Constitutes Economic Waste.
[4.] The Trial Court Erred as a Matter of Law by Concluding that Appellant is Barred from Seeking Indemnification When 84 [Lumber] Never Fulfilled its Obligations Pursuant to the Settlement Agreement Entered on August 2, 2005.
In response to the first assigned error, the Court of Appeals stated: “Because the failure to provide siding of a uniform color, not appellees’ displeasure, breached the contract, we reject Fannin Builders’ contention that the trial court implied a satisfaction clause into the contract and found a breach of that clause. Accordingly, we overrule Fannin Builders’ first assignment of error.”
The Court of Appeals overruled the second assignment of error and provided the following reasoning: “Although Fannin Builders depends upon a term of the limited warranty for its right to cure, the trial court concluded that no breach of the limited warranty occurred. Fannin Builders breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIA’s Quality Standards. Consequently, the limited warranty does not apply to this case, and thus, it does not prevent appellees’ recovery of damages.”
The Appeals Court found “the trial court’s award of damages” was “both reasonable and supported by competent, credible evidence,” and therefore concluded “that the trial court did not err in setting appellees’ damages at $62,997.26.” The Fannin Builders third assignment of error was overruled.
The fourth and final assignment of error was also overruled by the Court of Appeals. “While Fannin Builders correctly asserts that 84 Lumber never installed the replacement siding, it ignores the fact that it ordered 84 Lumber to remove the replacement siding from appellees’ property. Thus, Fannin Builders precluded 84 Lumber from completely performing under the August 2, 2005 letter agreement. […] Consequently, Fannin Builders cannot now claim that the letter agreement is unenforceable or that it is entitled to indemnification from 84 Lumber. Because Fannin Builders assumed all liability for the defective siding in the letter agreement, it is responsible for appellees’ damages.”
James A. Zitesman, Columbus, Ohio Business Attorney, compared the case to Jones v. Centex (Ohio App. 2010), which had a different verdict:
“The common thread is the implied warranty of good workmanship. In the Jones case, the Court found that the buyers had in fact waived all implied warranties, including the implied warranty of good workmanship. In the contract between Jones and Centex, the builder stated that it “…would not sell the property to Purchasers without this waiver.” Probably should have been a sign to the buyers.
In the Landis case, the Court stated, “Contracts for the future construction of a residence include a duty, implied by law, that the builder must perform its work in a workmanlike manner.” The Court gave significant weight to the concept of the implied warranty of good workmanship. The builder relied upon the BIA Warranty which limits builders’ liability and exposure to legal issues. The trial court concluded there was no breach of the limited warranty, rather the builder “breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIAs Quality Standards.”
The Supreme Court of Ohio has accepted the Jones v. Centex Homes case for review.
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Can’t Get a Written Change Order? Document, Document, Document
August 29, 2018 —
Todd M. Heffner - Smith CurrieMost construction contracts require that any changes to the work be made formally, in writing, via a change order, work directive, or similar written document. Frequently, however, changes to the work or extra work are communicated orally by the architect, engineer, or owner’s representative, instead of in writing. What is the contractor to do in such a situation? The best option is follow the provisions of the contract and demand a written change order before performing changed work. Unfortunately, the realities of construction sometimes make it impossible to get the changes in the proper format in a timely manner. Savvy contractors will maintain schedule and produce written documentation of the change in lieu of a formal change order or directive. But many contractors will simply proceed with the changed work, relying on the owner, architect, or engineer to do the right thing and stand by their oral instructions.
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Todd M. Heffner, Smith CurrieMr. Heffner may be contacted at
tmheffner@smithcurrie.com
10 Haight Lawyers Recognized in Best Lawyers in America© 2022 and The Best Lawyers: Ones to Watch 2022
September 20, 2021 —
Haight Brown & Bonesteel LLPThree Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers in America© 2022.
Seven Haight Brown & Bonesteel LLP attorneys were selected for Best Lawyers®: Ones to Watch 2022.
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Federal Court Enforces “Limits” and “Most We Will Pay” Clauses in Additional Insured Endorsement
September 13, 2021 —
Craig Rokuson - Traub Lieberman Insurance Law BlogIn the recent case of Zurich Am. Ins. Co. v. XL Ins. Am., Inc., 20-CV-4614 (LJL), 2021 WL 3617218 (S.D.N.Y. Aug. 16, 2021), the United States District Court for the Southern District of New York—in deciding a motion for consideration—had occasion to review the 2013 ISO changes to the additional insured endorsement, and held that coverage under a policy providing additional insured coverage was limited to the $1,000,000 required by contract, and not the $2,500,000 limit to the policy.
In Zurich, Zurich and its named insured D.A. Collins sought the full limits of the primary policy issued by XL to the D.A. Collins’ subcontractor, HBI, which are $2,5000 per occurrence and in the aggregate, for an underlying personal injury lawsuit. XL also issued an excess policy in the amount of $5,000,000 to HBI.
The contract between D.A. Collins and HBI required HBI to obtain commercial liability coverage “in an amount of $1,000,000 per occurrence and $2,000,000 in the aggregate. It further provides that the “required limits for the umbrella excess coverage shall be sufficient to provide a total of $5,000,000 per occurrence/aggregate.”
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Craig Rokuson, Traub LiebermanMr. Rokuson may be contacted at
crokuson@tlsslaw.com
Toll Brothers Surges on May Gain in Deposits for New Homes
June 01, 2020 —
Prashant Gopal - BloombergToll Brothers Inc. shares surged after the company posted profit that beat estimates and said deposits on new homes were up in recent weeks, a potential sign of optimism for the luxury housing market.
The homebuilder, which focuses on higher-end customers, has struggled during the pandemic. It reported orders for the second quarter that missed estimates and said the key metric had plunged starting March 16, when much of the economy shut down.
But investors shrugged off those results, focusing instead on a 13% year-over-year gain this month in deposits, which the company called a “leading indicator of current market demand.”
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Prashant Gopal, Bloomberg
AB 1701 – General Contractor Liability for Subcontractors’ Unpaid Wages
November 08, 2017 —
Alex Baghdassarian, Eric M. Gruzen, and Kerri Sakaue - Peckar & Abramson, P.C.Contractors will soon find themselves on the frontline of wage disputes on projects if laborers working on behalf of their subcontractors or vendors are unpaid. On October 14, 2017, Governor Jerry Brown signed into law AB 1701, which will allow laborers to seek direct compensation from the general contractors on private projects, if their wages remain unpaid.
The legislative mandate requires direct contractors—defined as contractors who have a direct contractual relationship with an owner—to assume liability for any debt incurred by a subcontractor, at any tier, for a wage claimant’s performance of labor included in the subject of the original contract between the general contractor and the owner. The California bill will apply to all private construction contracts entered into on or after January 1, 2018. Previously, all laborers could maintain a mechanic’s lien claim against private property, without needing to serve a 20-day preliminary notice, but there was no statutory obligation on the “direct contractors” to reimburse the laborers their unpaid wages.
Reprinted courtesy of Peckar & Abramson, P.C. attorneys
Alex Baghdassarian,
Eric M. Gruzen and
Kerri Sakaue
Mr. Baghdassarian may be contacted at abaghdassarian@pecklaw.com
Mr. Gruzen may be contacted at egruzen@pecklaw.com
Ms. Sakaue may be contacted at ksakaue@pecklaw.com
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