Structural Defects in Thousands of Bridges in America
November 06, 2013 —
CDJ STAFFWriting under the pseudonym “Babbage,” a technology blogger at The Economist takes note of some of the depressing facts about America’s infrastructure. Babbage notes that most of the United States’ transportation infrastructure was “built in a furious burst of road construction during the 1950s and 1960s.” Citing a report from the American Society of Civil Engineers, President Obama recently warned that “we’ve got about $2 trillion of deferred maintenance.”
Some of this deferred maintenance can cost lives. The 2007 collapse of the I-35W bridge in Minneapolis killed 13 people and injured 145 others. The cost of fixing structural defects in the nation’s bridges was estimated at $32 billion in 2004. In that year, about 66,500 bridges were deemed structurally defective. Another 84,000 were termed “structurally obsolete,” meaning they could be used, but with restrictions on vehicle weight and speed.
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The Investors Profiting Off Water Scarcity
June 10, 2024 —
Linda Poon - BloombergWe’re excited to share that the Bloomberg Green series Water Grab was named a Pulitzer Prize finalist. The series, which includes contributions from several CityLab writers and alums, explores how private investors are commandeering public water for profit at the expense of both the environment and less powerful communities.
Below is a sample of stories looking at how investors, private equity firms and Wall Street are taking advantage of the world’s scarce water supply. Read the full series here, which is now in front of the paywall.
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Linda Poon, Bloomberg
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Caveat Emptor (“Buyer Beware!”) Exceptions
May 10, 2021 —
David Adelstein - Florida Construction Legal UpdatesThere is value to a seller when it comes to entering into an as-is transaction and stating that the seller has NOT made any representation or warranty, all such representations or warranties are disclaimed, the buyer is NOT relying on any representation of the seller, and that the buyer is relying on its own inspection of the property. This shifts the onus to the buyer to undertake the inspection or due diligence it needs to take relating to the property it wants to buy.
With respect to commercial property transactions:
The doctrine of caveat emptor, which Florida courts continue to apply, “places the duty to examine and judge the value and condition of the property solely on the buyer and protects the seller from liability for any defects.” There are, however, three exceptions to this doctrine, including: “1) where some artifice or trick has been employed to prevent the purchaser from making independent inquiry; 2) where the other party does not have equal opportunity to become apprised of the fact; and, 3) where a party undertakes to disclose facts and fails to disclose the whole truth.”
Florida Holding 4800, LLC v. Lauderhill Mall Investment, LLC, 46 Fla. L. Weekly D785b (Fla. 4th DCA 2021).
These three exceptions to caveat emptor, or the doctrine of buyer beware, are not easy to prove because it places a burden on a buyer to prove an active effort from the seller to conceal a material fact to skirt around the as-is language. Again, this is not an easy burden to prove.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
West Virginia Couple Claim Defects in Manufactured Home
November 20, 2013 —
CDJ STAFFDouglas and Brenda Hess bought a manufactured home from Freedom Homes. Freedom Homes also hired workers to construct the basement and foundation, as well as install the home. Now the Hesses are claiming that the due to the installers, their home was damaged and that they cannot use it.
They claim that the defendants refuse to repair the damage, and also claim a variety of things including negligence, frustration of purpose, and the intentional infliction of emotional distress.
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Condo Owners Suing Bank for Failing to Disclose Defects
January 17, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Option Owners Association Inc., Condo Owners in Lincoln, Nebraska, filed suit against Security First Bank, “alleging the bank failed to disclose ‘hidden defects,’” reported the Lincoln Journal Star. Alleged defects include defective siding, improperly installed siding, and defective flashing. The condo owners are seeking at least $644,000 which they claim is the “fair market value of the repairs needed to fix the alleged construction defects.”
When the Lincoln Journal Star asked Jim Wefso, general counsel for Security First Bank, to comment, he stated, “The bank doesn't feel it has any liability in the case.”
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New California "Construction" Legislation
November 08, 2018 —
Richard H. Glucksman, Esq. & Chelsea L. Zwart, Esq. - Chapman Glucksman Dean Roeb & BargerGovernor Jerry Brown signed two potentially impactful Senate Bills relating to the construction of apartment buildings late last month. These Bills, discussed further below, were introduced, in part, in response to the Berkeley balcony collapse in June 2015, which was determined by the California Contractors State License Board to be caused by the failure of severely rotted structural support joists the repair of which were deferred by the property manager, despite indications of water damage.
SENATE BILL 721 ESTABLISHES HEIGHTENED “LOAD-BEARING” INSPECTION REQUIREMENTS
On August 21, 2018, the California State Senate passed SB 721, one of two bills by Senator Jerry Hill introduced this year seeking to address the safety of multifamily rental residences. Now that the Governor has signed the Bill, a new section will be added to the California Health and Safety Code, requiring that every 6 years, destructive testing be performed on at least 15% of each type of load-bearing, wood framed exterior elevated element (such as balconies, walkways, and stair landings) in apartment buildings with 3 or more units. Interestingly, prior to being passed by the State Senate, SB 721 was revised in June 2018, such that the inspection requirements do not apply to common interest developments (i.e., condominiums).
As set forth in the new Health and Safety Code Section 17973:
"the purpose of the inspection is to determine that exterior elevated elements and their associated waterproofing elements are in a generally safe condition, adequate working order, and free from any hazardous condition caused by fungus, deterioration, decay, or improper alteration to the extent that the life, limb, health, property, safety, or welfare of the public or the occupants is not endangered."
The inspection must be paid for by the building owner and performed by a licensed contractor, architect, or civil or structural engineer, or a certified building inspector or building official from a recognized state, national, or international association. Emergency repairs identified by the inspector must be made immediately. For non-emergency repairs, a permit must be applied for within 120 days and the repair completed within 120 days of the permit’s issuance. If repairs are not completed within 180 days, civil penalties of $100-$500 per day may be imposed.
The required inspection must be completed by January 1, 2025 and every 6 years thereafter, unless an equivalent inspection was performed during the 3 years prior to January 1, 2019, the effective date of the new law. For a building converted to condominiums that will be sold after January 1, 2019, the inspection required by Health and Safety Code Section 17973, must be performed prior to the first close of escrow.
SENATE BILL 1465 SETS CONTRACTOR REPORTING REQUIREMENTS
The Governor also signed SB 1465, adding Sections 7071.20, 7071.21, and 7071.22 to the California Business and Professions Code. The new law requires that a contractor licensed with the Contractors’ State License Board "report to the registrar in writing within 90 days after the licensee has knowledge of any civil action resulting in a final judgment, executed settlement agreement, or final arbitration award in which the licensee is named as a defendant or crossdefendant, filed on or after January 1, 2019," that meets certain and specific criteria, including that it is over $1 million and arises out of an action for damages to a property or person allegedly caused by specified construction activities of the contractor on a multifamily rental residential structure.
Where more than one contractor was named as a defendant or cross-defendant, each of the contractors apportioned more than $15,000 in liability must report the action. Importantly, the new statute also imposes similar reporting requirements on insurers of contractors. SB 1465 also addresses an impacted party’s failure to comply with the reporting requirements.
COMMENT
Both SB 721 and SB 1465 are potentially significant and seek “legislative reform” to address construction issues by placing a greater burden on apartment owners as well as builders and subcontractors. How pragmatic and what impact they will have on the industry is obviously developing. If you are interested in receiving further detail concerning the Bills, please contact us. We are analyzing the new legislation and its intent and will be providing our ongoing comments.
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RICHARD H. GLUCKSMAN, ESQ. CHELSEA L. ZWART, ESQ., CGDRBChelsea L. Zwart may be contacted at
czwart@cgdrblaw.com
Insured's Collapse Claim Survives Summary Judgment
October 28, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer's motion for summary judgment seeking to dispose of the insured's claim for collapse was denied. Life Skills, Inc. v. Harleysville Ins. Co., 2024 U.S. Dist. LEXIS 143658 (D. Mass. Aug. 13, 2024).
Life Skills was a non-profit social service agency providing residential and day habilitation services to adults with autism and intellectual and developmental disabilities. The head office was covered by a policy issued by Harleysville with building coverage limits of $3,038,300.
Damage occurred in a ceramics classroom located in the basement of the building. The floor sank between eight to twelve inches in the northeast corner. The ceramics classroom contained two large kilns weighing approximately 200 pounds.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Dear Engineer: Has your insurer issued a “Reservation of Rights” letter? (law note)
April 20, 2017 —
Melissa Dewey Brumback - Construction Law in North CarolinaIn my previous post, I made reference to getting a “Reservation of Rights” letter. I noted that the carrier may decide to defend you under a Reservation of Rights (i.e., hire your lawyer) but may not, necessarily, accept the responsibility for paying the claim. Does this mean that the insurance company has denied your claim, or will never pay? No.
Reservation of Rights (ROR) letters are sent for a variety of reasons- most notably, when some portion of the construction lawsuit against you is not covered under your E&O policy. The letter must state the reason(s) that the ROR is being issued.
With the ROR, the insurance company is telling you that it reserves the right to withdraw from your defense and/or deny payment of damages at a later date, depending upon how facts in the case develop. The notice is intended to let you know that there *may* be issues later, and to put you notice that you have the right to hire your own lawyer (at your own expense) to protect yourself from that future potential risk.
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Melissa Dewey Brumback, Ragsdale Liggett PLLCMs. Brumback may be contacted at
mbrumback@rl-law.com
