School System Settles Design Defect Suit for $5.2Million
October 01, 2013 —
CDJ STAFFA school district in New York State has settled a dispute with its architectural and engineering firm for $5.2 million. Greece School District alleged that the multi-million dollar remodel lead to a variety of problems due to design defects. The problems included leaking roofs, malfunctioning drainage systems, and problems with heating systems. Tetra Tech had one work at 20 schools in the district.
The state Comptroller audited the $119.5 million renovation project and concluded that haste in the planning resulted in costly changes. Prior to the lawsuit, the architectural and engineering firm managed to recoup about $200,000 on behalf of the school district for work that was defective.
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Construction Litigation Roundup: “Builder’s Risk Indeed”
October 24, 2023 —
Daniel Lund III - LexologyA contractor for a hotel in Seattle was tasked with constructing the hotel utilizing premanufactured modular hotel rooms. The modular unit portion of the project was the subject of a $15.8 million subcontract between the general contractor and the manufacturer. The manufacturer was also responsible to the GC for shipping and installing the modular units.
Shipping was to be “DDP,” or “Delivery Duty Paid” – which, according to a New York federal court, “is an international shipping term meaning that the seller assumes all responsibilities and costs for delivering property to the named place of destination, including export and import clearance, fees, duties, and taxes.” Additionally, per the subcontract, the manufacturer was responsible for “ensur[ing] all modular units [were] covered, secured[,] and protected from damage during the shipping process….” The modular units were shipped from Poland to Seattle. In the shipping process, the units spent some time in the Port of Everett in Washington state, where the units sustained water damage while sitting in port.
A related damage claim made by the subcontractor against the general contractor’s builder’s risk policy. On the face of the policy, the policy covered subcontractors as “additional insured” parties, covered all manner of materials and the like to be used on the project, and would provide that coverage in the process of transporting the materials insofar as “inland or coastal waters” were concerned. Yet, the builder’s risk insurer refused to cover the claim for the damages to the modular units which occurred while sitting in port in Everett.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
The Colorado Supreme Court affirms Woodbridge II’s “Adverse Use” Distinction
December 20, 2021 —
Luke Mecklenburg - Snell & Wilmer Real Estate Litigation BlogLast year, I posted regarding the Colorado Court of Appeals’ decision in Woodbridge II, which concluded that the “adverse use” element for prescriptive easement claims only requires the claimant to “show a nonpermissive or otherwise unauthorized use of property that interfered with the owner’s property interests.” Viento Blanco, LLC, 2020 COA 34 (Woodbridge II), ¶ 2. Thus, Woodbridge II concluded, the claimants acknowledgement or recognition of an owner’s title alone is insufficient to defeat “adverse use” in the prescriptive easement context. Id. That decision was up for review by the Colorado Supreme Court at the time of my prior post. It has now been affirmed, thereby settling an arguable appellate decision split created by Woodbridge II. See Lo Viento Blanco, LLC v. Woodbridge Condo. Ass’n, Inc., 2021 CO 56 (“Woodbridge”).
“Like the division below, and for much the same reasons,” the Colorado Supreme Court affirmed in Woodbridge “that under Colorado law, a claimant’s acknowledgement or recognition of the owner’s title during the claimant’s asserted prescriptive period does not interrupt the prescriptive use or undermine the claimant’s adverse use.” Woodbridge, ¶ 2. Writing for a unanimous court, Justice Gabriel’s opinion agreed with the Court of Appeals’ reasoning “that although Woodbridge recognized that it did not hold title, no evidence indicated that it had acted in subordination to the owner’s title.” Id. ¶ at 13. The Court further agreed with Woodbridge II’srejection of Lo Viento’s “permissive use” argument because “the permission offered … was conditional and Woodbridge never agreed to any of the conditions set forth therein.” Id. On that basis, Woodbridge confirmed that “a claimant seeking to establish a prescriptive easement need not show that it asserted exclusive ownership of the property during the prescriptive period,” but only “that its use was without permission or otherwise unauthorized and that it interfered with the owner’s property interests.” Id. at ¶ 23.
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Luke Mecklenburg, Snell & WilmerMr. Mecklenburg may be contacted at
lmecklenburg@swlaw.com
Charlotte, NC Homebuilder Accused of Bilking Money from Buyers
April 01, 2015 —
Beverley BevenFlorez-CDJ STAFFThe Charlotte Observer reported that a homebuilder couple “was arrested Tuesday on charges alleging that they kept more than $600,000 three families paid them to build Lake Wylie homes that were never completed.”
Robert Scott Kuhlkin and wife, Sherry Lynn Kuhlkin “accepted $189,000 from one family, $239,000 from another family, and $233,000 from a third family to build houses, 16th Circuit assistant solicitor Matthew Hogge said in court, but instead they ‘took the money for themselves.’”
The alleged victims told the court that the homes had defects or were left unfinished.
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Homebuilder Predictions for Tallahassee
October 10, 2013 —
CDJ STAFFThe cost of putting up a new home in Tallahassee has risen, but Joe Manausa thinks that builders might be putting up homes that will cost more than home buyers are able to pay. He notes that permits and sales are up, but numbers are still well below those in 2006.
Mr. Manusa thinks that Tallahassee could face “a need (demand) for homes priced below $300,000, but a glut of supply for those priced above $300,000.” He says that home builders “need to target construction opportunities below that price point.”
He notes that average price of new construction is $272,000, but resales are going for $161,000, which puts quite a premium on a new home.
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California Supreme Court Allows Claim Under Unfair Competition Statute To Proceed
October 16, 2013 —
Tred Eyerly — Insurance Law HawaiiThe California Supreme Court determined that insurance practices violating the state's Unfair Insurance Practices Act (UIPA) could support a claim under the state's unfair competition law (UCL). Zhang v. Superior Court, 57 Cal. 4th 353 (2013).
Zhang purchased a CGL policy from California Capital Insurance Company. She sued California Capital in a dispute over coverage for fire damage to her commercial property. The complaint included causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the UCL. In her UCL claim, Zhang alleged that California Capital had "engaged in unfair, deceptive, untrue, and/or misleading advertising" by promising to provide timely coverage in the event of a compensable loss, when it had no intention of paying the true value of the insureds' covered claims.
Zhang specifically alleged unreasonable delays causing deterioration of her property; withholding of policy benefits; refusal to consider cost estimates; misinforming her as to the right to an appraisal; and falsely telling her mortgage holder that she did not intend to repair the property, resulting in foreclosure proceedings.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Hawaii Federal District Court Rejects Bad Faith Claim
November 30, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe federal district court for the district of Hawaii rejected the insured's argument that the insurer acted in bad faith because the insured had to contribute to a settlement of the underlying case. Hanover Ins. Co. v. Anova Food, LLC, 2016 U.S. Dist. LEXIS 146114 (D. Haw. Oct. 21, 2016).
After a prior round of briefing, the court determined that Hanover had a duty to defend, but rejected Anova's claim for pre-tender fees.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Insurers Get “Floored” by Court of Appeals Regarding the Presumptive Measure of Damages in Consent Judgments
May 13, 2014 —
Mark Scheer and Brent Williams-Ruth – Scheer & Zehnder LLPCASE: Miller v. Kenny, 68594-5-I, 2014 WL 1672946 (Wash. Ct. App. Apr. 28, 2014).
Snapshot Synopsis: $21 million bad faith consent judgment verdict upheld. $4.15 million underlying stipulated consent judgment was the “floor,” and additional damages allowed.
ISSUES:
1. Can a jury award damages for an insurer’s bad faith in excess of the amount of the stipulated covenant judgment? YES
2. Can a trial court admit evidence of insurance liability reserves in a bad faith action? YES
3. *Note: Other evidentiary and procedural issues were addressed by the court in its decision but not analyzed in this summary*
FACTS: This appeal arose out of an automobile accident on August 23, 2000. Patrick Kenny was driving a 1994 Volkswagen Passat owned by one of the passengers, when he rear-ended a cement truck. The accident severely injured his three passengers: Ryan Miller, Ashley Bethards, and Cassandra Peterson. Kenny was covered for liability under the insurance policy issued to Peterson's parents by Safeco Insurance Company. Safeco defended Kenny without a reservation of rights.
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Mark Scheer, Scheer & Zehnder LLP and
Brent Williams-Ruth, Scheer & Zehnder LLP
Mr. Scheer may be contacted at mscheer@scheerlaw.com; Mr. Williams-Ruth may be contacted at bwilliamsruth@scheerlaw.com
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