A Lack of Sophistication With the Construction Contract Can Play Out In an Ugly Dispute
November 07, 2022 —
David Adelstein - Florida Construction Legal UpdatesThere are times where a lack of sophistication can come back to haunt you. This is not referring to a lack of sophistication of the parties. The parties, themselves, could be quite sophisticated. This is referring to a lack of sophistication with the construction contract forming the basis of the relationship. While parties don’t always want to buy into the contract drafting and negotiation process, it is oftentimes the first document reviewed. Because contract terms and conditions are important. They govern the relationship, the risk, scope, amount, and certain outcomes with disputes. However, a lack of sophistication can play out when that contract that should govern the relationship, the risk, the scope, the amount, and certain outcomes doesn’t actually do that, or if it does, it does it poorly. An example of how bad a dispute can play out when it comes to the lack of sophistication on the front end is Avant Design Group, Inc. v. Aquastar Holdings, LLC, 2022 WL 6852227 (Fla. 3d DCA 2022), where a cost-plus contract was treated as a lump sum contract.
Here, an owner planned to perform an extensive interior build-out to a residential unit. The owner had an out-of-country architect; because the architect was not licensed in Florida, the owner hired a local architect/designer to oversee construction and obtain goods and services for the residential interior build-out. The contract was nothing but a proposal of items and costs. The proposal stated the owner “would pay the cost of goods and services of the vendors, plus pay a ‘20% Interior Design & Administrative Fee’” to the local designer. Avant Design Group, 2022 WL at *1. The proposal further stated, “This preliminary budget of the Client’s construction costs include [sic] anticipated costs for construction materials, labor and sales tax. Any other cost, including but not limited to freight, cartage, shipping, receiving, storage and delivery are not included in the preliminary budget and will be invoiced separately.” Id., n.2.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Arizona Court of Appeals Upholds Judgment on behalf of Homeowners against Del Webb Communities for Homes Riddled with Construction Defects
February 26, 2015 —
Law Offices of Kasdan Weber Turner LLPARIZONA COURT OF APPEALS UPHOLDS LOWER COURT DECISION APPROVING $13,703,039 JUDGMENT ON BEHALF OF 460 SUN CITY GRAND HOMEOWNERS AGAINST DEL WEBB COMMUNITIES, INC., A SUBSIDIARY OF PULTEGROUP, INC., FOR HOMES RIDDLED WITH CONSTRUCTION DEFECTS
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In a separate case, an Arizona Superior Court awards $10,619,640 to another 279 Sun City Grand homeowners who sued Del Webb over construction defects, which Del Webb has appealed--
PHOENIX, Arizona – The Arizona Court of Appeals, Division One, [on Tuesday] issued a unanimous ruling upholding a lower court decision awarding $13,703,039 to 460 Sun City Grand homeowners who sued developer Del Webb Communities, Inc., a subsidiary of PulteGroup, Inc., for numerous construction defects that severely damaged the plaintiffs’ homes. Sun City Grand is an age-restricted community located in Surprise.
In a separate case, an Arizona Superior Court awarded $10,619,640 to another group of 279 Sun City Grand homeowners for multiple construction defects in their homes.
Stephen Weber, the managing partner in the Phoenix office of Kasdan Weber Turner LLP, which represents the homeowners, said that the case is based on construction defects that damaged the plaintiffs’ homes and took several years to resolve. The defects include defective windows, poorly installed stucco, expansive soil conditions that resulted in cracking of drywall, and deteriorating concrete foundation systems, among other problems.
“Del Webb placed an arbitration clause in the sales contracts and the homeowners honored it. The binding arbitration that includes the owners of 460 homes in Sun City Grand was completed in late 2011 when the arbitration panel unanimously awarded the homeowners $13,703,039. Del Webb then challenged the award in Superior Court and the Superior Court confirmed the award in full,” Weber explained. “Del Webb did not like the Superior Court ruling either and challenged it in the Court of Appeals. And now three justices of the Arizona Court of Appeals have unanimously affirmed the Superior Court order and the arbitration award stands. Now they will have the funds to repair their homes, restore their value, and live in comfort,” Weber said.
The $13,703,309 award includes amounts for home repairs, attorney fees, expert fees, court costs and pre-judgment interest. An additional $1,401,236 in post-judgment interest also accrued while the case was on appeal. The other construction defect case that awarded $10,619,640 to homeowners was not covered by binding arbitration.
Del Webb has also appealed that case which will now go through the appeals process. That could take two to three years and again the homeowners will have to wait for the final judgment, Weber noted.
Ken Kasdan, senior and managing partner of the Kasdan Weber Turner firm and one of the nation’s leading experts on construction defect litigation, said the defects are egregious. “The multiple defects rob them of pride of ownership,” he said. “A home is something that a homeowner wants to be proud of. Unfortunately, defective workmanship and poor construction have caused damage to the homes. Now these homes can be repaired and the homeowners will no longer have to deal with defective windows and cracked slabs. Developers need to understand that arbitration awards are final and binding,” Kasdan noted.
The Kasdan Weber Turner law firm has offices in Phoenix, Arizona and in Irvine, California and Walnut Creek, California. The firm represents property owners in major construction defect litigation. For more information on the firm, visit www.kasdancdlaw.com. Stephen Weber may be contacted at (602) 224-7800.
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David M. McLain, Esq. to Speak at the 2014 CLM Claims College
August 13, 2014 —
David M. McLain, Esq. – Colorado Construction LitigationDavid McLain will be a speaker at the School of Construction. The Claims College will be held from September 7-10 in Philadelphia, Pennsylvania. Mr. McLain is a founding member of Higgins, Hopkins,McLain & Roswell, LLC, a firm which specializes in construction law and construction litigation throughout Colorado. Mr. McLain received his undergraduate degree from Colorado State University, graduating cum laude, and his law degree from the University of Denver, College of Law. Mr. McLain completed the Claims and Litigation Management Alliance Litigation Management Institute, earning the designation from that organization as a Certified Litigation Management Professional. He has a general civil litigation practice with an emphasis on the defense of complex construction lawsuits on behalf of developers and general contractors. As a result of the experience gained by defending some of Colorado’s largest residential construction defect lawsuits, developers, general contractors, and subcontractors seek out Mr. McLain to consult on risk avoidance and risk management strategies. Currently among his clients are several of the state’s largest home builders, regional and custom builders, and numerous insurance carriers. Mr. McLain is an AV® Preeminent™ Peer Review Rated attorney by Martindale-Hubbell and is a regular speaker at local, regional, and national seminars regarding construction defect litigation in Colorado.
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Report Highlights Trends in Construction Tech, Digitization, and AI
November 11, 2024 —
Aarni Heiskanen - AEC BusinessBluebeam, a top technology provider for AEC professionals, has just released its “Building the Future: Bluebeam AEC Technology Outlook 2025” report. This report highlights key global trends in construction technology, including the role of AI and digital tools. Based on insights from over 400 AEC technology leaders, the report also uncovers challenges that prevent full-scale adoption of these tools.
The online research surveyed technology decision-makers (managers or above) within AEC firms in the US, UK, Canada, France, Spain, Germany, Australia, and New Zealand in July 2024.
AI’s Growing Role in Construction
According to the report, 74% of surveyed AEC professionals are now using AI in one or more phases of building projects. AI is especially popular in the design (48%) and planning (42%) stages. Many AEC firms recognize its value: over half (55%) of companies using AI say it’s crucial, and most now allocate up to 25% of their budgets to AI initiatives. Despite this support, concerns over AI regulation are significant. About 54% of respondents are worried about regulations, and 44% say this impacts their use of AI.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Creating a Custom Home Feature in the Great Outdoors
July 09, 2014 —
Beverley BevenFlorez-CDJ STAFFWhen a resort designer and a spa director join together to create a custom home, what do you get? An outdoor tub that resides on a balcony overlooking the San Francisco Bay.
According to Custom Home, Scott Lee, president of SB Architects, and his wife had the “custom cast concrete tub…craned into place on the third-story deck while avoiding an established oak tree.” A radiant heat lamp makes the outdoor bathing area practical, while the curved backrest, remote controlled dimmable lights, and music make the experience luxurious.
“Tubs are more about relaxing then getting clean,” Lee told Custom Home. “Being out here among the branches with views of San Francisco, it really is like a resort.”
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HB 20-1046 - Private Retainage Reform - Postponed Indefinitely
May 04, 2020 —
David M. McLain – Colorado Construction LitigationOn Tuesday, February 18th, the Colorado House Business Affairs & Labor Committee voted 10-0 to postpone indefinitely House Bill 1046. If it had been enacted, HB 1046 would have required, for all for all construction contracts of at least $150,000:
- A property owner to make partial payments to the contractor of any amount due under the contract at the end of each calendar month or as soon as practicable after the end of the month;
- A property owner to pay the contractor at least 95% of the value of satisfactorily completed work;
- A property owner to pay the withheld percentage within 60 days after the contract is completed satisfactorily;
- A contractor to pay a subcontractor for work performed under a subcontract within 30 calendar days after receiving payment for the work, not including a withheld percentage not to exceed 5%;
- A subcontractor to pay any supplier, subcontractor, or laborer who provided goods, materials, labor, or equipment to the subcontractor within 30 calendar days after receiving payment under the subcontract; and
- A subcontractor to submit to the contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment to the subcontractor for the work.
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David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
It’s Time for a Net Zero Building Boom
May 02, 2022 —
James S. Russell - BloombergIs it too much to ask Americans to take their foot off the gas and reset their thermostats? On March 18, the International Energy Agency released a 10-point plan for reducing oil use, arguing that advanced economies can readily cut demand by 2.7 million barrels a day in the next four months, an amount large enough to avoid major supply shortages as Russia’s invasion of Ukraine roils the energy market.
The plan’s major prescriptions will look familiar to anyone who recalls the OPEC shocks of the 1970s: reducing speed limits to improve gas mileage, boosting transit use, and discouraging non-essential car and air travel. But its exclusive focus on the transportation sector overlooks the substantial efficiency gains to be had from the built environment: Buildings consume about 40% of the energy used in the U.S. every year.
Yet reducing energy use in buildings has been stigmatized by fossil-fuel interests as a lifestyle deprivation — an argument that’s been internalized by pundits and politicians even as geopolitical turmoil drive spikes in oil prices and climate change impacts upend millions of lives.
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James S. Russell, Bloomberg
The Burden of Betterment
February 23, 2017 —
Ryan M. Charlson, Esq. - Florida Construction Law NewsThe concept of betterment has long been used by defendants in cases involving defective design or construction to limit the damages awarded to a plaintiff.[1] The theory behind betterment is that: “if in [the] course of making repairs [an] owner adopts a more expensive design, recovery should be limited to what would have been the reasonable cost of repair according to original design.”[2] Betterment is often raised as an affirmative defense, requiring a defendant to prove that the plaintiff has received a good or service that is superior to that for which the plaintiff originally contracted. A recent South Florida case seems, at first blush, to suggest the burden of establishing the value of betterments may fall to the plaintiff, although a closer reading indicates the decision is likely to have limited applicability.
In Magnum Construction Management Corp. v. The City of Miami Beach, the Third District Court of Appeal was asked to review the damages award to the City for construction defects associated with the redesign and improvement of a park.[3] The completed project contained landscaping deficiencies, along with other “minor defects” in the playground’s construction.[4] After a unilateral audit, and without providing the contractor its contractually required opportunity to cure the defects, the City “removed, redesigned, and replaced the playground in its entirety.”[5] It did so despite no recommendation by the City’s own expert to perform such work.[6] During the bench trial, the “only measure of damages provided by the City was the costs associated with the planning, permitting, and construction of a park that is fundamentally different from the one it contracted with [the contractor] to build.”[7]
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Ryan M. Charlson, Cole, Scott & Kissane, P.A.Mr. Charlson may be contacted at
ryan.charlson@csklegal.com
