SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Shifting Fees and Costs in Nevada Construction Defect Cases

November 26, 2014 — Casey J. Quinn - Newmeyer & Dillion LLP
In Nevada, homeowners who sue a builder for residential constructional defects may recover attorneys’ fees and costs caused by the defect. Many times, the request for attorneys’ fees can outpace the size of the actual claim for defects. However, Nevada provides builders with two ways to potentially shift the right to recover attorneys’ fees and costs away from the homeowner and to the builder. The first arises during the Nevada Revised Statutes (NRS) Chapter 40 process (Nevada’s Right to Repair law). After a builder receives notice of construction defects, it is required to provide the claimant with a written response to each defect, which may include a proposal for monetary compensation (including contribution from a subcontractor, supplier, or design professional). See NRS 40.6472. If a claimant unreasonably rejects a reasonable written offer of settlement included in the response and decides to commence litigation, the court may deny the claimant’s attorneys’ fees and costs and award attorneys’ fees and costs to the builder. See NRS 40.650. Thus, by including a reasonable offer of monetary compensation in a Chapter 40 response, a builder could possibly avoid paying any fees and costs and even recover its own fees in defending against the claim. A second method for shifting fees and costs is through a written offer of judgment (OOJ). See NRS 17.115 and NRCP 68. Not limited solely to construction defect matters, an OOJ is a useful tool in all kinds of litigation. OOJs are designed to facilitate and encourage pre-trial settlement by incentivizing parties to make reasonable settlement offers that—when unreasonably rejected—have the consequence of shifting the right to recover attorneys’ fees. Basically, when a party rejects an OOJ and fails to obtain a more favorable judgment, the court cannot award any attorneys’ fees and costs to the rejecting party and may award attorneys’ fees incurred from the date of the offer to the entry of judgment, as well as all reasonable costs, to the party who made the offer. In a recent decision, the Nevada Supreme Court affirmed that when a homeowner rejects an OOJ and fails to obtain a more favorable judgment, it can wipe out that homeowner’s right to Chapter 40 fees and costs. See Gunderson, et al. v. D.R. Horton, 130 Nev. Adv. Op. 9 (Feb. 27, 2014). In other words, “While NRS Chapter 40 permits an award of reasonable attorney fees proximately caused by a construction defect, it does not guarantee it.” Id. Because of the potentially harsh consequences of rejecting an OOJ, there are specific requirements that must be met to trigger them. An offer of judgment must be made in writing, can be made at any time at least 10 days before trial, and is irrevocable for 10 days with no provision for withdrawal before the 10 days expire. See Nava v. Second Judicial Dist. Court, 118 Nev. 396, 46 P.3d 60 (2002). A party may make successive offers of judgment, but the most recent offer extinguishes previous offers and is controlling for determining the date from which attorneys’ fees may be awarded. See Albios v. Horizon Communities, Inc. 132 P.3d 1022 (2006). In Beattie v. Thomas, 99 Nev. 579, 668 P.2d 268, 274 (1983), the Nevada Supreme Court explained that the purpose of OOJs are not to cause plaintiffs to unfairly forego legitimate claims. However, when a valid offer of judgment is made, the offer is rejected, and the party rejecting the offer fails to obtain a more favorable judgment, a court must evaluate whether the plaintiff's claim was brought in good faith; whether the offer of judgment was reasonable and in good faith in both its timing and amount; whether the plaintiff's decision to reject the offer and proceed to trial was grossly unreasonable or in bad faith; and whether the fees sought by the offer are reasonable and justified. “After weighing the foregoing factors, the district judge may, where warranted, award up to the full amount of fees requested.” Id. It is worth noting that in Albios v. Horizon Communities, Inc. 132 P.3d 1022 (2006), the Nevada Supreme Court held that when a party rejects a reasonable OOJ and is foreclosed from recovering fees and costs, the party is likewise foreclosed from an award of fees and costs under Chapter 40. This means that even if a builder fails to include a monetary settlement offer as part of a Chapter 40 response, it may still avoid paying the claimant’s fees and costs with a reasonable and timely OOJ. Finally, it is important to remember that OOJs are a powerful tool that can cut both ways. If an OOJ is not reasonable and timely, or if it fails to contemplate all the potential recovery of an offeree, the OOJ may have no effect on the outcome of a case. Moreover, if a party rejects an OOJ and fails to obtain a more favorable judgment, that party could end up paying the offeror’s costs and attorney’s fees incurred from the date of the offer. Given this powerful impact, OOJs should be an integral part of pre-litigation planning and overall litigation strategy. About the Author Casey J. Quinn is an associate in the Las Vegas office of Newmeyer & Dillion LLP. His practice focuses on complex commercial, construction, and insurance litigation and appellate work. Casey can be reached by email at Casey.Quinn@ndlf.com. Read the court decision
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The Biggest Trials Coming to Courts Around the World in 2021

January 04, 2021 — Anthony Lin - Bloomberg
Several former world leaders, a Hong Kong media tycoon, the CEO of Theranos and Jeffrey Epstein’s confidante — all are scheduled to have their day in court next year. With vaccinations heralding a return to normalcy, the next year should see courtrooms around the world coming back to life. Ghislaine Maxwell, China critic Jimmy Lai and Samsung heir Jay Y. Lee are among those facing high-profile criminal cases in 2021. Some proceedings, including the fraud trial of Theranos founder Elizabeth Holmes, are resuming after being postponed by the pandemic. Another delayed case, UBS’s appeal of its $4.9 billion French government tax penalty, is among the many that will be heard by higher-level and supreme courts. There are also a number of cases against former world leaders, including France’s Nicolas Sarkozy, Malaysia’s Najib Razak and South Africa’s Jacob Zuma. One of the most tantalizing questions will be whether a certain former U.S. president could find himself facing trial as well. Read the court decision
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Reprinted courtesy of Anthony Lin, Bloomberg

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Industry Practices Questioned After Girder Fractures at Salesforce Transit Center

April 10, 2019 — Nadine M. Post - Engineering News-Record
Attendees of a recent presentation on the earthquake-resistant structure of San Francisco’s Salesforce Transit Center—intended to provide a safe haven when the Big One hits—lauded the engineering of the 4.5-block-long hollow tube that supports the 1.2-million-sq-ft “groundscraper.” But there also was much talk of the project’s black eye, as a consequence of brittle fractures of the bottom flanges of two bridge-like built-up plate girders that span 87 ft over Fremont Street. Read the court decision
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Reprinted courtesy of Nadine M. Post, ENR
Ms. Post may be contacted at postn@enr.com

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Definitions Matter in Illinois: Tenant Held Liable Only for Damage to Apartment Unit

September 09, 2024 — Gus Sara - The Subrogation Strategist
In Phila. Indem. Ins. Co. v. Gonzalez, No. 1-23-0833, 2024 Ill. App. Unpub. LEXIS 1372, the Appellate Court of Illinois considered whether the terms of a lease agreement limited a tenant’s liability for fire damages, a fire caused by her negligence, to her apartment unit only. The plaintiff insured the subject apartment building, which incurred damage to several units as result of a fire in the tenant’s unit. The lease defined “Premises” as the specific apartment unit occupied by the tenant and held the tenant responsible for damage caused to the Premises. While the court found that the lease permitted the plaintiff to subrogate against the tenant, it held that the lease terms limited the damages to the tenant’s apartment unit only. In Gonzalez, the plaintiff’s insured owned a multi-unit apartment building in Chicago. In September 2019, the building owner entered into a lease agreement with the defendant for apartment Unit 601. The lease stated that Unit 601 was the “Leased Address (Premises).” Another provision stated that building owner “hereby leases to Tenant(s) and Tenant(s) hereby leases from Landlord(s) for use as a private dwelling only, the Premises, together with the fixtures and appliances (if any) in the premises…” The lease also stated that “Tenant shall be liable for any damage done to the premises as a result of Tenant’s or Tenant’s invitees, guests or others authorized to reside in the Premises [sic] direct action, negligence, or failure to inform Landlord of repairs necessary to prevent damage to the Premises.” Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Feds Move To Indict NY Contractor Execs, Developer, Ex-Cuomo Aide

November 30, 2016 — Mary B. Powers – Engineering News-Record
Executives at Buffalo, N.Y.-based contractor LPCiminelli and developer COR Development, Syracuse, N.Y., were indicted Nov. 22 on charges of bribery, corruption and fraud in the award of hundreds of millions of dollars in construction contracts. Read the court decision
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Reprinted courtesy of Mary B. Powers, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com

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CDJ’s Year-End Review: The Top 10 CD Topics of 2014

December 31, 2014 — Beverley BevenFlorez-CDJ STAFF
Construction Defect Journal’s year-end review presents the top ten most popular topics featured in the journal in 2014. Some of the topics involved analysis of important construction defect cases, while others covered current events such as proposed state legislation. Most issues were heavily discussed on CDJ as well as in board rooms and during teleconferences. We hope you enjoy the look-back at 2014 interspersed throughout the issue, and we wish you and yours a prosperous 2015! CDJ’s #1 Topic of the Year: Indalex Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2013 Pa. Super 311 (Dec. 3, 2013) According to Darrin J. McMullen of Anderson Kill, “[t]he Indalex decision reverses a nearly decade-long trend of Pennsylvania decisions narrowing the scope of insurance coverage for construction and defect-related claims under commercial general liability insurance policies. Equally important, the Indalex ruling dealt a blow to the insurance industry’s continual efforts to win overbroad expansion of the rulings in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., and Erie Ins. Exchange v. Abbott Furnace Co., which found that claims of faulty workmanship in some circumstances may not constitute coverage-triggering ‘occurrences.’” Read the court decision
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Real Estate & Construction News Roundup (08/15/23) – Manufacturing Soars with CHIPS Act, New Threats to U.S. Infrastructure and AI Innovation for One Company

September 25, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, wildfires wreak havoc in Maui, JLL unveils an AI specifically for commercial real estate, the lasting effects of the CHIPS ACT, and more!

• So far, 11,000 JLL employees have used the company’s new proprietary large language model that has generative AI capabilities specifically for the commercial real estate industry. (Lindsey Wilkinson, Construction Dive)
• Since the enactment of the CHIPS Act, manufacturing activity has boomed with a nearly 80% increase from June 2022. (Sebastian Obando and Julia Himmel, Construction Dive)
• Construction-tech-focused investors among others have poured $35 million into an Israeli startup that develops leakage detection technology using artificial intelligence to prevent water damage. (Sharon Wrobel, Times of Israel)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Short on Labor, Israeli Builders Seek to Vaccinate Palestinians

February 01, 2021 — Ivan Levingston & Fadwa Hodali - Bloomberg
Israeli builders want the government to vaccinate Palestinian construction workers to help rally a battered housing industry. While Israel is racing to inoculate its citizens, the West Bank-based Palestinian Authority has no vaccination program in place. Beyond being a critical health issue, the gap is also an economic problem because the Israeli construction sector relies heavily on Palestinian workers who’ve been cut off repeatedly from building sites due to lockdowns. Before the pandemic, about 65,000 Palestinians worked for Israeli contractors inside Israel, accounting for a third of their workforce. Closures and restrictions on both sides led to a 30% drop in housing starts despite rising demand. Reprinted courtesy of Ivan Levingston, Bloomberg and Fadwa Hodali, Bloomberg Read the court decision
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