2017 Colorado Construction Defect Recap: Colorado Legislature and Judiciary Make Favorable Advances for Development Community
January 24, 2018 —
Kaitlin Marsh-Blake – Gordon & Rees Construction Law Blog Last March, the Colorado General Assembly introduced House Bill 17-1279 concerning the requirement that a unit owners’ association obtain approval through a vote of unit owners before filing a construction defect action. The bill, passed in May, requires a home owners’ association to first notify all unit owners and the developer or builder of a potential construction defect action, call a meeting where both the HOA and developer or builder have an opportunity to present arguments and potentially remedy the defect, and obtain a majority vote of approval from the unit owners to pursue a lawsuit before bringing a construction defect action against a developer or builder. The bill amends C.R.S. § 38-33.3-303.5, which previously only required substantial compliance with the above-mentioned actions. Moreover, the previous version of C.R.S. § 38-33.3-303.5 did not require the HOA to perform these actions prior to a suit being filed. HB 17-1279 also removed the provision of C.R.S. § 38-33.3-303.5 that made it only applicable to buildings of five or more units.
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Kaitlin Marsh-Blake, Gordon & ReesMs. Marsh-Blake may be contacted at
kmarsh-blake@grsm.com
What is the True Value of Rooftop Solar Panels?
April 15, 2014 —
Beverley BevenFlorez-CDJ STAFFIn Colorado, regulators are questioning the true value of rooftop solar panels, reported the Denver Business Journal: “Minneapolis-based Xcel Energy Inc. (NYSE: XEL), the biggest utility in Colorado, has said it believes Colorado’s current ‘net metering’ policy means the utility is overpaying customers who have rooftop solar power systems.”
Currently, “Xcel...credits customers at a rate of 10.5 cents per kilowatt hour of excess power produced.” However, the utility company believes that “the ‘true value’ of the rooftop solar electricity is about half what it’s paying—just 4.6 cents per kilowatt hour.”
According to the Denver Business Journal, supporters argue that “Xcel has undervalued the electricity and hasn’t accounted for the systems’ environmental and economic attributes.”
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When Construction Contracts Go Sideways in Bankruptcy
February 16, 2017 —
Tracy Green - California Construction Law BlogThe contractor on a project files a bankruptcy case. How should the property owner and subcontractors proceed? When a party to a contract files bankruptcy, the other party’s actions are constrained by the bankruptcy code.
Types of Bankruptcies
The typical bankruptcy case involves a chapter 7 complete liquidation, chapter 13 reorganization for an individual, or a chapter 11 reorganization or liquidation. In a chapter 7 the business ceases to operate and a panel trustee is appointed immediately upon the filing of the case. The chapter 7 trustee’s duties are to liquidate assets for the benefit of creditors and to prosecute litigation that can result in assets for the creditors. In a chapter 13, the individual debtor continues to operate, and there is a trustee, but the trustee’s roll is limited to reviewing the chapter 13 plan and making sure that the plan is performed. In a chapter 11, the debtor retains control of its assets and continues to operate its business until a plan is confirmed. During the chapter 11 period before a plan is approved, the debtor will decide which contracts it wants to assume or reject, all while operating the company and preparing a plan.
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Tracy Green, Wendel Rosen Black & Dean LLPMs. Green may be contacted at
tgreen@wendel.com
Hawaii Federal District Court Grants Preliminary Approval of Settlement on Volcano Damage
September 13, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court granted preliminary approval of the class action settlement reached on behalf of insureds who suffered property damage due to the 2018 Kilauea eruption on the Big Island. Aquilina v. Certain Underwriters at Lloyd's London, 2021 U.S. Dist. LEXIS 152614 (D. Haw. Aug. 13, 2021).
After destruction of their homes due to lava flow, plaintiffs sued various insurers and agents as a putative class action. Plaintiffs claimed they purchased surplus lines policies brokered and underwritten by various defendants. The policies each contained an exclusion for the peril of lava flow, which plaintiffs claimed rendered them worthless or unsuitable given that their properties were located in a high-risk lava zone.
Plaintiffs alleged that defendants breached obligations under the Hawaii Surplus Lines Act, which required that surplus lines insurers conduct a diligent search for other available coverage before placing a homeowner with surplus lines coverage. Plaintiffs alleged defendants should have advised them of the availability of lava-damage coverage through the Hawaii Property Insurance Association (HPIA), a statutorily created association of admitted insurers established in part in response to Kilauea's eruption patterns, which made the private insurance market less likely to Insure certain high-risk areas.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
The Oregon Tort Claims Act (“OTCA”) Applies When a Duty Arises from Statute or Common Law and is Independent from The Terms of a Specific Contract. (OR)
February 25, 2014 —
Natasha Khachatourians – Scheer & Zehnder LLP Liability NewsletterCase: Jenkins v. Portland Housing Authority, 260 Or.App. 26, 316 P.3d 369 (2013).
Issue: Do tort claims arising from a rental agreement fall within the exemption from the definition of a tort under the OTCA? NO.
Facts: Plaintiff rented an apartment in a public housing complex operated by the Portland Housing Authority (“PHA”). While walking in the hallway of the building, Plaintiff slipped on a puddle of water that had leaked from a broken washing machine in a nearby laundry room. Plaintiff fell and was injured. The trial court granted summary judgment to PHA, finding that the PHA was considered a public body under the OTCA and, as a result, enjoyed discretionary immunity from liability.
The issue before the court was whether the OTCA applied to a claim under the Oregon Residential Landlord Tenant Act (“ORLTA”) since an ORLTA claim generally arises out of a rental agreement. Plaintiff did not plead breach of a specific provision of the rental agreement, and she conceded that she had alleged a breach of a legal duty resulting in injuries. Plaintiff argued, however, that her claim involved a duty arising from the rental agreement. As such, she contended her claim fell within the exception of the definition of a “tort” under OTCA, and thus the OTCA should not apply to give PHA discretionary immunity.
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Natasha Khachatourians, Scheer & Zehnder LLP Ms. Khachatourians may be contacted at
natashak@scheerlaw.com
Concurrent Causation Doctrine Applies Where Natural and Man-made Perils Combine to Create Loss
January 19, 2017 —
Tred R. Eyerly – Insurance Law HawaiiThe Florida Supreme Court resolved a conflict between the District Courts in applying the Concurrent Causation Doctrine where there were multiple causes creating the loss. Sebo v. Am. Home Assur. Co., 2016 Fla. LEXIS 2596 (Fla. Dec. 1, 2016).
After purchasing his home, John Sebo procured an "all risks" homeowners policy provided by American Home Assurance Company (AHAC). Shortly after Sebo purchased the property, water began to intrude the home during rainstorms. Major water leaks occurred. It became clear that the home suffered from major design and construction defects. In October 2005, Hurricane Wilma further damaged the home.
AHAC denied coverage for most of the claimed losses. It provided $50,000 for mold. The residence could not be repaired and was eventually demolished.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Colorado’s Federal District Court Finds Carriers Have Joint and Several Defense Duties
October 10, 2013 —
Bret Cogdill — Higgins, Hopkins, McLain & Roswell, LLC.An issue that has plagued builders in Colorado construction defect litigation is the difficulty of getting additional insured carriers to fully participate in the builder’s defense, oftentimes leaving the builder to fund its own defense during the course of the litigation.
Many additional insurers offer a variety of positions regarding why they will not pay for fees and costs during the course of a lawsuit. Some insurers argue that, until after trial, it is impossible to determine its proper share of the defense, and therefore cannot make any payments until the liability is determined as to all of the potentially contributing policies. (This is often referred to as the “defense follows indemnity” approach.) Others may make an opening contribution to defense fees and costs, but fall silent as fees and costs accumulate. In such an event, the builder may be forced to fund all or part of its own defense, while the uncooperative additional insured carrier waits for the end of the lawsuit or is faced with other legal action before it makes other contributions.
Recent orders in two, currently ongoing, U.S. District Court cases provide clarity on the duty to defend in Colorado, holding that multiple insurers’ duty to defend is joint and several. The insured does not have to go without a defense while the various insurers argue amongst themselves as to which insurer pays what share.
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Bret CogdillBret Cogdill can be contacted at
cogdill@hhmrlaw.com
The CA Supreme Court Grants Petition for Review of McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App.5 Dist.) As to Whether the Right to Repair Act (SB800) is the Exclusive Remedy for All Defect Claims Arising Out of New Residential Construction
December 02, 2015 —
Richard H. Glucksman, Esq., Glenn T. Barger, Esq., Jon A. Turigliatto, Esq., & David A. Napper, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinAs anticipated in a prior CGDRB 2015 Bulletin that discussed the Fifth Appellate District Court’s noteworthy opinion in McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App.5 Dist), the California Supreme Court has granted the petition for review of the McMillin Albany decision. The Supreme Court will attempt to resolve the conflict of authority presented by the Fourth Appellate District Court’s opinion in Liberty Mut. Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 and the Fifth Appellate District Court’s rejection of the Liberty Mutual holding in McMillin Albany.
In Liberty Mutual, the Fourth District Court of Appeal held that compliance with SB800’s pre-litigation procedures prior to initiating litigation is only required for defect claims [violations of SB 800’s building standards] that have not yet resulted in actual property damage. Where damage has occurred, a homeowner may initiate litigation under common law causes of action without first complying with the pre-litigation procedures set forth in SB 800.
Two years later, the Fifth District Court of Appeal, in McMillin Albany, held that the California Legislature intended that all construction defect claims arising out new residential construction are subject to the standards and requirements of the Right to Repair Act [SB800], including specifically, the requirement that the claimant provide the builder with notice and an opportunity to repair prior to filing a lawsuit. According to the Court, SB 800 is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2003.
The holdings in Liberty Mutual and McMillin Albany present a conflict of authority that the California Supreme Court has appropriately deemed worthy of review. The parties will now be permitted to file briefs on the merits and amicus briefs will certainly be submitted by the defense and plaintiff bars.
Our firm will be closely monitoring this case, the outcome of which will significantly impact pre-litigation construction defect claims going forward. We will provide updates as to further activities and the Supreme Court’s decision.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Glenn T. Barger,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Barger may be contacted at gbarger@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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