Seattle Washington Building Expert Directory

Addressing the Defective Stucco Crisis

November 28, 2018 — Wally Zimolong - Supplemental Conditions
I received several emails regarding the expose by Caitlin McCabe and Erin Arvedlund in the Philadelphia Inquirer titled “Rotting Within.” The story outlines the epidemic of defective stucco and other “building envelope” issues in Southeastern Pennsylvania that is causing homes to literally rot from within. Having litigated several of these cases, they are frustrating for both the attorneys that handle them and the homeowners who must deal with the reality that their home is rotting away. The story points to the multiple (and all too common) causes for the epidemic: unskilled subcontractors, lack of oversight and care, and poor construction drawings. The is no quick solution to the crisis and litigation regarding these defects is sure to proliferate. However, there is one potential solution that the story does not cover and which could help alleviate some of the challenges homeowners face in recovering damages for their claims. The Pennsylvania Legislature must act to change the insurance laws in Pennsylvania to make defective construction covered by a developer’s, contractor’s, and subcontractor’s commercial general liability policy (“CGL”). Most homeowners and many attorneys incorrectly assume that defective construction is covered by insurance. This assumption makes sense. If someone operates a car in a negligent manner and hits your car and causes damage, the negligent driver’s insurance company with cover your loss. In reality, Pennsylvania courts follows a minority of states that holds that generally speaking defective workmanship is not a “covered occurrence” under an insurance policy. (There are several exceptions to this rule and thorough discussion is beyond this blog post and would probably bore you.) Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

Burlingame Construction Defect Case Heading to Trial

December 30, 2013 — CDJ STAFF
A condominium association in the Aspen, Colorado area will likely go to trial over its claims of construction defects, reports Aspen Daily News Online. According to the suit, siding and trim were improperly manufactured and installed. The homeowners engaged experts to determine the appropriate remedy, and then sought bids from contractors. Shaw Construction, which built the condos, responded with a counteroffer. Chris Rhody, the lawyer for the homeowners, said there was “a big difference” between the association’s request and the builder’s counteroffer. According to Mr. Rhody, settlement is still possible, but seems unlikely. A date for the trial is yet to be set. Read the court decision
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Insured's Complaint Against Flood Insurer Survives Motion to Dismiss

May 07, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The insurer's attempt to dismiss the insured's multi-count complaint for failure to provide full coverage for flood damage failed. Ragusa Corp. v. Standard Fire Ins. Co., 2014 U.S. Dist. LEXIS 40812 (D. Conn. March 27, 2014). The insureds' house suffered significant damage due to flood associated with Hurricane Irene. The insureds submitted a claim. Standard Fire paid $35,216.75, well below what the insureds thought they were owed. The insureds returned the check and demanded what they believed was full payment. The insureds demanded an appraisal because the parties did not agree on the amount being paid under the policy, including disagreement about the amount owed for items that both sides agreed were covered under the policy. Standard Fire refused to participate in an appraisal. The insureds ended up suing Standard Fire, alleging, among other things, breach of contract, negligent misrepresentation, and breach of the implied covenant of good faith and fair dealing. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

No One to Go After for Construction Defects at Animal Shelter

January 28, 2013 — CDJ STAFF
The Riverside County Animal Shelter in Thousand Palms has had problems since it opened in 2006, including floors that weren't able to withstand scratching by dogs and a malfunctioning HVAC system. The county's expenses only started with the $6.9 million cost of building the shelter, as the building has required almost constant repairs. Riverside County Supervisor John Benoit said that "there were shortcomings in the construction that became apparent later." The County can't sue, because the builder closed operations after a bankruptcy. "There's no one to go after," said Benoit. Read the court decision
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Vertical vs. Horizontal Exhaustion – California Supreme Court Issues Ruling Favorable to Policyholders

May 11, 2020 — Alan Packer & James Hultz - Newmeyer Dillion
For years, when faced with damage or injury spanning several policy periods, excess general liability insurers have argued that all potentially applicable underlying policies must be exhausted before the excess drops down to provide coverage (“horizontal exhaustion”). Insureds, on the other hand, insist that they are entitled to immediately access an excess policy for any given policy year, if that year’s underlying policy has exhausted (“vertical exhaustion”). Vertical exhaustion not only enables insureds to directly tap into the excess insurance for which they paid substantial premiums, but also enables the insured to moderate risk given that different lower level policies might (1) be needed for other claims, (2) have larger self-insured retentions, or (3) have other less favorable coverage provisions. Allowing an insured to proceed via vertical exhaustion would also eliminate the heavy administrative and logistical burden that could result from having to pursue and exhaust all underlying coverage on multi-year claims. In Montrose Chemical Corp. v. Superior Court, 2020 WL 1671560 (April 6, 2020), the California Supreme Court has come down in favor of policyholders and vertical exhaustion. The Montrose case involved contamination that allegedly occurred between 1947 and 1982 and different liability insurance towers (comprised of primary and excess layers) for each year. The insured, Montrose, maintained a tower of insurance coverage, year by year, and faced claims asserting damage that spanned several decades. Montrose sought coverage from excess insurers under a vertical exhaustion approach. Not surprisingly, Montrose’s excess insurers insisted that horizontal exclusion was required and that Montrose was required to exhausted all other policies with lower attachment points in every single involved policy period. The California Supreme Court ruled in Montrose’s favor, holding that the insured may insist upon full coverage from an excess insurer once the layer directly below it has exhausted. The Court reasoned that the burden of spreading the loss among insurers is one that is appropriately borne by insurers, not insureds. Reprinted courtesy of Alan H. Packer, Newmeyer Dillion and James S. Hultz, Newmeyer Dillion Mr. Packer may be contacted at alan.packer@ndlf.com Mr. Hultz may be contacted at james.hultz@ndlf.com Read the court decision
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AI in Construction: What Does It Mean for Our Contractors?

December 17, 2024 — Patrick Scarpati - Construction Executive
Artificial intelligence is revolutionizing the construction industry by enhancing efficiency, safety and decision-making throughout the project lifecycle. AI in construction involves the application of advanced technologies like machine learning, computer vision and data analytics to various construction processes. Through AI, machines can learn and imitate human cognitive functions. The possibilities may sound endless, but as an industry traditionally looking from the outside in at technology, we must first step back to educate ourselves on the basics. This paper is meant to function as a starting point in your journey to understand AI and its potential impact on the construction industry. By reading through definitions, construction use cases and considerations, the reader should walk away with a base level of knowledge to ensure they can actively participate in future conversations on AI in construction. Reprinted courtesy of Patrick Scarpati, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Pancakes Decision Survives Challenge Before Hawaii Appellate Court

March 12, 2015 — Tred R. Eyerly – Insurance Law Hawaii
In 1997, the Hawaii Intermediate Court of Appeals (ICA) decided Pancakes of Hawaii, Inc. v. Pomare Prop. Corp., 85 Haw. 286, 944 P.2d 83 (Haw. Ct. App. 1997). Although not an insurance coverage case, Pancakes addressed the duty to defend in terms of a contractual indemnity obligation. Under challenge in a recent appeal before the ICA, the Court reaffirmed the holding in Pancakes. Arthur v. State of Hawaii, Dept. of Hawaiian Home Lands, 2015 Haw. App. LEXIS 109 (Haw. Ct. App. Feb. 27, 2015). The decision is long with detailed facts complicated and many indemnities running in favor of various parties. This post focuses on the decision's discussion of Pancakes. A resident, Mona Arthur, of the Kalawahine Streamside Housing Development, was killed when she apparently slipped and fell from a hillside adjacent to the project. She was on the hillside tending to her garden there. At the bottom of the hill was a two foot fence in front of a drainage ditch, where Mona allegedly hit her head. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Jinx: Third Circuit Rules in Favor of Teamsters in Withdrawal Case

July 28, 2018 — Wally Zimolong - Supplemental Conditions
Bad omen. Last week, I wrote about a Appeals Court decision that affirmed a contractor’s escape from an over $600,000 withdrawal liability assessment from the Laborers Union. The next day the Third Circuit (which covers PA, NJ, and DE) handed down a decision affirming a federal court’s decision to assess withdraw liability. This one shows the dark side of not reading and understanding your CBA. The belligerents in the litigation were, Penn Jersey, a construction material supplier, and Teamsters Local 676. Their collective bargaining agreement contained a clause purportedly covering withdrawal liability. Specifically, the clause stated “should the Employer withdraw from the Agreement in the future, there will be no withdrawal liability. The CBA expired and Penn Jersey did not renew its agreement with the Teamsters. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

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