A Homeowner’s Subsequent Action is Barred as a Matter of Law by way of a Prior “Right to Repair Act” Claim Resolved by Cash Settlement for Waiver of all Known or Unknown Claims
February 26, 2015 —
Richard H. Glucksman, Esq., Jon A. Turigliatto, Esq., and David A. Napper, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinDavid Belasco v. Gary Loren Wells et al. (2015) B254525
OVERVIEW
In a decision published on February 17, 2015, the Second District Court of Appeal made clear that settlement agreements containing waivers of unknown claims in connection with a construction of a property, absent fraud or misrepresentation, will be upheld. In brief, the homeowner plaintiff had made a claim against the builder pursuant to California Code of Civil Procedure Section 896 (“Right to Repair”) and settled for a cash payment and obtained a Release of all Claims including for all known and unknown claims. The court held that homeowner’s subsequent construction defect claim was barred pursuant to the terms and conditions of the earlier release.
DISCUSSION
Plaintiff and Appellant, David Belasco ("Belasco"), purchased a newly construction home in Manhattan Beach from builder Gary Loren Wells ("Wells"). Two years after purchasing the property, Belasco filed a Complaint for construction defects, which eventually resulted in settlement between the parties. The settlement agreement included a California Civil Code Section 1524 waiver of all known or unknown claims with the word "claims" defined in part as “any and all known and unknown construction defects." Six years later in 2012, Belasco filed a Complaint alleging a claim, amongst others, that the defective and leaky roof breached the statutory warranty on new construction under California Civil Code section 896 ("Right to Repair Act").
Relying on San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, Wells and Wells' surety, American Contractors Indemnity Company (collectively "Wells"), filed a motion for summary judgment contending that the 2012 action was barred by the settlement of Belasco’s prior Complaint against Wells for construction defects to his home. When the trial court ruled in favor of Wells, Belasco appealed. Belasco, a patent attorney, made the following contentions:(1) the general release and section 1542 wavier in the settlement agreement for patent construction defects is not a "reasonable release" of a subsequent claim for latent construction defects within the meaning of section 929 and the “Right to Repair” Act; (2) a reasonable release can only apply to a "particular violation" and not to a latest defect under the language of section945.5, subdivision (f), and the settlement was too vague to be valid because it does not reference a "particular violation;" (3) section 932 of the California Civil Code specifically authorizes an action on "[s]subsequently discovered claims of unmet standards;" (4) public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and (5) a genuine issue of material fact exists concerning Belasco's fraud and negligence claims that would have voided the settlement pursuant to section 1668.
Pursuant to the "Right to Repair Act" Section 929 subsection (a), a builder can make a cash offer in lieu of a repair and the homeowner is free to accept or reject such offer. Section 929subsection (b) goes on to state that
"[t]he builder may obtain a reasonable release in exchange for the cash payment. The builder may negotiate the terms and conditions of any reasonable release in terms of scope and consideration in conjunction with a cash payment under this chapter."
The Second District Court of Appeal ruled that the prior cash settlement, with a release and section 1524 wavier, was a "reasonable release" under the language of California Civil Code Section 929.
On multiple occasions, the Court noted that Belasco is an attorney and was represented by an attorney during the negotiation of the settlement agreement. By executing the agreement with express language regarding what claims were to be release, Belasco released Wells of "any and all claims" due to "any and all known and unknown construction defects." The Court reasoned that because Belasco is an attorney in his own right, he should have understood the import of the Section 1542 waiver and had the opportunity to reject or revise the settlement agreement prior to binding himself to it. The Court further found that the agreement "could not have been more clear" regarding the waiver of all unknown and known construction defect claims and therefore was not vague. Belasco's additional contentions were found to be without merit because Belasco availed himself of the statutory remedy of a cash settlement in lieu of repairs and voluntarily entered into a negotiated settlement agreement. Lastly, Belasco failed to present any evidence regarding his misrepresentation claim.
When a homeowner files a "Right to Repair Act" claim, often it seems that only two options exist: either repair the alleged defects or go to court. However, Belasco is a reminder to builders that the "Right to Repair Act" does offer an avenue for settlement. The Second District Court of Appeal presented a clear, unqualified opinion regarding the validity and enforceability of settlement agreements releasing all known or unknown construction defects in a single family home case. The Court will hold parties to the settlements they agree to. This is especially so when one of the parties is an attorney and provides deposition testimony expressly acknowledging that he understood the scope of the agreement. Attorneys for builders should always include a waiver of all known and unknown claims, which pursuant to Belasco and San Diego Hospice, will ensure that any future claims at the property will be effectively barred by the terms of the settlement agreement.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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U.K. Puts Tax on Developers to Fund Safer Apartment Blocks
March 08, 2021 —
Emily Ashton & Olivia Konotey-Ahulu - BloombergThe U.K. announced an extra 3.5 billion pounds ($4.8 billion) toward the cost of stripping dangerous cladding from apartment blocks in England, with a new tax on developers from next year to help cover the costs.
Housing Secretary Robert Jenrick said the new cash will add to a previously announced 1.6 billion-pound “safety fund” to remove the material, which was blamed for the deaths of 72 people in a catastrophic fire at London’s Grenfell Tower in 2017.
A new tax will be introduced for U.K. residential developers in 2022 to raise at least 2 billion pounds over the next decade to ensure homebuilders “make a fair contribution” to solving the problem, Jenrick told the House of Commons on Wednesday.
Reprinted courtesy of
Emily Ashton, Bloomberg and
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Illinois Legislature Enables Pre-Judgment Interest in Personal Injury Cases
February 01, 2021 —
Justin Zimmerman - Lewis BrisboisOn January 13, 2021, the Illinois General Assembly passed HB 3360, which will enable pre-judgment interest of 9% in personal injury cases. The legislation was sponsored by Madison County, Illinois-area representative Jay Hoffman (D-Belleville) and Illinois state senator Dan Harmon (D-Oak Park).
Under current Illinois law, plaintiffs are not entitled to pre-judgment interest in personal injury cases because the nature and extent of a plaintiff’s damages cannot be calculated in advance and liability is uncertain (compared, for example, to a breach of contract claim).
If signed by the governor, personal injury actions in Illinois will be subject to 9% per annum pre-judgment interest accruing “on the date the defendant has notice of the injury from the incident itself or a written notice." Notably, the bill will also impact pending litigation as interest begins to accrue on the effective date of the legislation for cases already filed.
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Justin Zimmerman, Lewis BrisboisMr. Zimmerman may be contacted at
Justin.Zimmerman@lewisbrisbois.com
How Well Do You Know the 2012 IECC Code?
January 31, 2014 —
Beverley BevenFlorez-CDJ STAFFThe online publication Big Builder reports that “only a handful of states have implemented the 2012 International Energy Conservation Code (IECC),” according to the International Code Council. However, because of “the aggressive 2015 IECC” approaching, they “anticipate wider implementation of the 2012 IECC to snowball.”
Big Builder challenges their readers to test their knowledge of “2012 IECC mandates” by taking their quiz.
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Meritage Acquires Legendary Communities
July 23, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Big Builder, Meritage entered Atlanta through its acquisition of Legendary Communities for $130 million, “completing a two-year quest.”
“Probably for about two years, we’ve been looking in the market, talking to builders, and studying the geography, and meeting different people to learn who the players are and learn about the area,” Meritage Homes chairman and CEO Steven J. Hilton told Big Builder.
This acquisition makes Meritage Homes “the number one builder in the Greenville-Anderson-Mauldin, S.C. market, owning more than 16 percent of the 2013 market share with 266 closings, according to Metrostudy data. It also owns almost seven percent of the market share in nearby Spartanburg, S.C. with 44 closings.”
Legendary fits “in very nicely with what we do at Meritage,” Hilton said to Big Builder. “We’re a strong first and second move up builder, as are they at Legendary. It’s a very complementary fit between the two companies.”
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The New “White Collar” Exemption Regulations
August 19, 2015 —
Craig Martin – Construction Contractor AdvisorThis summer the Department of Labor’s Wage and Hour Division issued proposed changes to the white-collar overtime regulations under the Fair Labor Standards Act (FLSA). The white collar exemptions include the executive, administrative, professional, outside sales and computer employee exemptions. The focus of the proposed regulations is to increase the salary level required to qualify for the exemption from $23,660 per year to $50,440 per year. The DOL predicts this will cause employers to change the exempt status of nearly 5 million workers who are currently exempt from overtime requirements to non-exempt status – requiring the payment of overtime.
Current Regulations
Under today’s regulations, the white collar exemption applies to employees who are paid at least $455 per week ($23,660 per year) and who customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.
Proposed Changes
The most significant change is the sizeable increase in the minimum salary requirements for the exemptions. The proposed regulations more than double the current minimum salary of $455 per week to $921. This corresponds to the 40th percentile of weekly earnings projected for the first quarter of 2016, based on the Bureau of Labor Statistics. The DOL also proposes annual adjustments to the minimum salary requirements.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Manhattan to Get Tall, Skinny Tower
October 21, 2013 —
CDJ STAFFAt its narrowest, it’s going to be only sixty feet wide. And that will run 1,350 feet into the air. A new apartment tower is going up in New York, and one of its amenities will be that residents in the top floors will be able to look down on the Empire State Building. “It may be the skinniest building ever,” said Gregg Pasquarelli, the principal of SHoP Architects, the firm that designed the building. He estimates its ratio of height to width as “something like 25-to-1.”
For all its height, the building will be divided into about 100 units. As part of the development deal, the tower will incorporate and preserve the landmark Steinway Hall. The chair of the Landmarks Preservation Commission, Robert Tierney, described it as “the best of both worlds of new construction and design and historic preservation.”
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Montana Theater Threatened by Closure due to Building Safety
January 14, 2015 —
Beverley BevenFlorez-CDJ STAFFPhil Henderson, owner of Stevensville Hardware which is adjacent to the theater, has sued the Stevensville Playhouse, alleging that one of the theater building’s walls leans over into his property, according to the Bitterroot Star. Henderson stated that the leaning wall is interfering with construction plan, and he also alleges that the building is not safe and should be condemned.
A building inspector hired by Henderson declared that “…it seems necessary to notify the Stevensville Playhouse that their structure is to be immediately considered unsafe for entry, occupancy, etc.” However, another engineering firm presented a different view on the situation: “The playhouse has withstood many snow storms and earthquakes during its life and will likely continue to function well into the future. We do not mean to downplay the need to perform the recommended repairs, but we do not feel that the building needs to be condemned at this point.”
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