Construction Litigation Roundup: “Give a Little Extra …”
July 31, 2024 —
Daniel Lund III - LexologySurplus lines insurers in Louisiana are considered by the state to be “an alternative type of property and casualty insurance coverage for consumers who cannot get coverage on the standard market … for specialty risk or high-risk situations….”
As a quid pro quo for undertaking the exceptional risk, a surplus lines insurer argued to the United States Fifth Circuit Court of Appeals that an arbitration clause within its surplus line policy should be enforceable, notwithstanding a Louisiana statute applying to the insurance industry and prohibiting terms in insurance policies “delivered or issued for delivery” in Louisiana which have the effect of “[d]epriving the courts of this state of the jurisdiction or venue of action against the insurer.” La. R.S. 22:868.
Historically in Louisiana, arbitration clauses have been understood to divest courts of jurisdiction, and, consequently, §22:868 has been held to memorialize an “anti-arbitration policy,” although the statute does not specifically mention arbitration.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
What is the Effect of an Untimely Challenge to the Timeliness of a Trustee’s Sale?
April 13, 2017 —
Ben Reeves - Snell & Wilmer Real Estate Litigation BlogEver wonder what happens if a person challenges the timeliness of a trustee’s sale after the sale already occurred? Waiver of the argument of course! And, in the case of Wells Fargo Bank, N.A. v. Waltner, the affirmance of an eviction judgment.
In the Waltner case, Wells Fargo Bank, N.A., as Trustee for WaMu Mortgage Pass-Through Certificates, Series 2005-PR4 Trust (the “Bank”), purchased a residential property at a trustee’s sale in September 2015. The Bank gave the occupant of the house, Sarah Waltner (“Waltner”), notice to vacate the property, but she did not do so. Accordingly, the Bank filed a summary action to evict Waltner, which the trial court ultimately granted.
After the trial court granted the Bank relief, Waltner filed a motion to dismiss and a motion to vacate the eviction judgment arguing, among other things, that the judgment was void because the Bank conducted the trustee’s sale after the statute of limitations expired. Both motions were denied, and Waltner appealed.
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Ben Reeves, Snell & WilmerMr. Reeves may be contacted at
breeves@swlaw.com
Congratulations to BWB&O’s Las Vegas Team on Obtaining Summary Judgment for the Firm’s Landowner Client!
August 03, 2022 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara, LLP is proud to announce Partner Anthony Garasi, Senior Associate Madeline Arcellana, and Associate Laura Rios successfully won a Motion for Summary Judgment (“MSJ”), while also defeating two competing MSJs filed by Plaintiff, and ultimately obtaining a full dismissal of their landowner client against claims of premises liability.
Plaintiff, who sued both BWB&O’s client (the landowner) and its tenant, alleged injury when he slipped and fell, while utilizing a temporary wooden board as a ramp that was placed on the subject property by the tenant, who was occupying the property subject to a lease-to-own arrangement with BWB&O’s client.
In this Motion practice, the BWB&O team successfully obtained a ruling from the Court to find that BWB&O’s client had effectively contracted to delegate its maintenance responsibilities to its tenant, and also that the tenant owed BWB&O’s client full indemnity for Plaintiff’s alleged losses.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
Sales of U.S. New Homes Decline After Record May Revision
July 30, 2014 —
Victoria Stilwell – BloombergFewer new U.S. homes were sold in June than forecast and May data showed the biggest downward revision on record, painting a picture of a housing market that is struggling to gain traction.
Sales of newly built homes declined 8.1 percent to a 406,000 annualized pace, the fewest since March and less than any economist surveyed by Bloomberg forecast, Commerce Department figures showed today in Washington. That followed a May reading of 442,000 that was 12.3 percent lower than estimated last month.
Restrictive lending rules, limited land supply, higher mortgage rates and more expensive properties are keeping a lid on how much the housing recovery can accelerate. Continued employment gains and bigger increases in wages will be needed to support further growth in the industry, which has stalled since interest rates started climbing last year.
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Victoria Stilwell, BloombergMs. Stilwell may be contacted at
vstilwell1@bloomberg.net
Powering Goal Congruence in Construction Through Smart Contracts
February 22, 2021 —
Michael Matthews - Construction ExecutiveThe $814 billion U.S. commercial construction market requires a unique assembly of designers, contractors, subcontractors and suppliers to work together in a highly orchestrated manner to make sure that the right labor, material, equipment, tools and information all comes together at the right place and time. Alignment and coordination between companies is critical for a project to be successful; completed safely, on time, on budget and resulting in an asset that performs as designed.
Yet the industry is slowed by an operating model bogged down by transactional and informational barriers that destroys value across the construction supply chain. Companies are connected through contracts and purchase orders that are undercut by mistrust that yields adversarial relationships and conflicting priorities that result in restricted transparency, elongated payment cycles and an abundance of resource-sucking reconciliations, audits and disputes.
With margins already razor thin, company protectionism cascades down from owners, developers and operators to contractors, subcontractors and suppliers with each player focused on optimizing their piece at the expense of the whole. Perhaps this is part of the reason 98% of megaprojects experience cost overruns or delays, 95% of projects are unable to meet even one business objective; and 70% of all construction projects are not completed within 10% of the proposed budget.
Reprinted courtesy of
Michael Matthews, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Investing in Metaverse Real Estate: Mind the Gap Between Recognized and Realized Potential
May 10, 2022 —
Robert G. Howard, David W. Wright & Craig A. de Ridder - Gravel2Gavel Construction & Real Estate Law BlogThe Metaverse is an immersive world combining virtual reality and augmented reality, where users are represented by avatars and roam virtual spaces. It comprises a variety of platforms and environments that can be explored, experienced, and developed. Online social games like Second Life, Fortnite and Minecraft are among the first wave of successful Metaverse games. Now, Meta and Microsoft see the Metaverse as a place to play, live, and work. A JP Morgan white paper stated that opportunities in the Metaverse seem “limitless.” The bank predicted that virtual worlds will “infiltrate every sector in some ways in the coming years.” A March 31 report by Citi concluded that the Metaverse has the potential to become a $13 trillion opportunity by 2030, with total global users of between one and five billion. According to Citi, the Metaverse will become a significant part of the next iteration of the internet (referred to as Web3) enabled by a variety of existing and emerging technologies, including 5G connectivity, secure blockchain and payment platforms, crypto assets, cloud computing, artificial intelligence, 3D modeling tools and headset devices.
A Land Rush, Virtually Speaking
Not surprisingly, investors are speculating regarding the value and potential of “virtual land” within the Metaverse, where land sales in 2021 exceeded $500 million and attracted a lot of attention and hype. The Sandbox, Decentraland, Somnium Space and CryptoVoxels are the most active platforms and owners can build almost anything on their virtual parcels. The open-source Ethereum blockchain, with self-executing smart contract functionality, operates as the foundational layer for most platforms. Parcels of land in The Sandbox and Decentraland are purchased with cryptocurrencies (called SAND and MANA, respectively) on their platforms and can also be sold and purchased on secondary marketplaces like OpenSea.
Reprinted courtesy of
Robert G. Howard, Pillsbury,
David W. Wright, Pillsbury and
Craig A. de Ridder, Pillsbury
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Mr. Wright may be contacted at david.w.wright@pillsburylaw.com
Mr. Deridder may be contacted at craig.deridder@pillsburylaw.com
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“Details Matter” is the Foundation in a Texas Construction Defect Suit
March 01, 2012 —
CDJ STAFFThe Court of Appeals of Texas has ruled in the case of Barzoukas v. Foundation Design. Mr. Barzoukas contracted with Heights Development to build a house. He subsequently sued Heights Developments and “numerous other defendants who participated in the construction of his house.” Barzoukas eventually settled with all but two defendants, one who went bankrupt and Foundation Design, the defendant in this case. In the earlier phase, Barzoukas made claims of “negligence, negligent misrepresentation, fraud, fraudulent inducement, conspiracy, and exemplary damages in connection with the foundation.”
Foundation Design had been hired to install 15-foot piers to support the foundation. The engineer of record, Larry Smith, sent a letter to Heights Development noting that they had encountered hard clay stone when drilling. Smith changed the specifications to 12-foot piers. Initially, the City of Houston called a halt to work on the home when an inspector concluded that the piers were too shallow. Heights Development later convinced the city to allow work to continue. Subsequently, experts concluded that the piers were too shallow.
Foundation Design filed a motion for summary judgment. The trial court granted this, “without specifying the basis for its ruling.” Barzoukas contends the court was in error. Foundation Design contends that “Barzoukas failed to proffer competent evidence establishing that their conduct proximately caused damages.” Further, they did not feel that Smith’s letter gave “rise to viable claims for fraud and fraudulent inducement.”
One problem the court had was a lack of evidence. The court noted that “the purported subcontract is entirely missing” in the pleadings. The court has no contract between Bazourkas and Heights Development, nor one between Heights Development and either Foundation Design or Smith. The court underscored the importance of this, writing, “details matter.” They found that “the details are largely missing here.” Without the contract, the court found it impossible to determine if “Smith or an entity related to him agreed to indemnify Heights Development for damages arising from Smith’s negligent performance.”
As the material facts are in dispute, the appeals court found that there were no grounds for a summary judgment in the case. “Pointing to the existence of a contract between Heights Development and Barzoukas, or to the existence of a subcontract, is the beginning of the analysis ? not the end.”
Foundation Design and Smith also claimed that Barzoukas’s expert did not proffer competent evidence and that the expert’s opinions were conclusory. The trial court did not rule on these claims and the appeals court has rejected them.
Finally, Barzoukas made a claim that the trial court should not have rejected his argument of fraud and fraudulent inducement. Here, however, the appeals court upheld the decision of the lower court. “Barzoukas did not present evidence supporting an inference that Smith or Foundation Design made a purposeful misrepresentation.
The court remanded the case to the trial court for reconsideration. One member of the panel, Judge Charles Seymore, upheld the entire decision of the trial court. He dissented with the majority, finding that the economic loss rule foreclosed the claim of negligence.
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Professor Stempel's Excpert Testimony for Insurer Excluded
October 07, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe court denied Daubert motions for several experts with the exception of Professor Stempel's expert testimony opining that the insurer did not act in bad faith Adell Plastics, Inc. v. Mt. Hawley Ins. Co., 2019 U.S. Dist. LEXIS 102942 (D. Md. June 19, 2019).
A fire demolished several buildings at Adell's facility. Adell was insured under a commercial property policy issued by Mt. Hawley. Mt. Hawley sued Adell, seeking a declaration that it owed no coverage, and requesting recoupment of a substantial advance payment. Adell filed a counterclaim, alleging that Mt. Hawley had breached the policy and had acted with a lack of good faith. Before the court were several pretrial motions, including motions to exclude testimony of eight expert witnesses.
The court denied Adell's motion to exclude several experts to be called by Mt. Hawley. The accountant's testimony was relevant. Adell had to prove damages on its breach of contract claim, and the accountant's testimony would aid the jury in evaluating Adell's documentation and calculating documented damages. Mt. Hawley's fire safety expert investigated the Adell fire. Mt. Hawley had shown that his expert opinion would be sufficiently reliable for admissibility. Further, three fire protection engineers offered by Mt. Hawley and two fire protection engineers to be called by Adell were allowed to testify. Each expert based his investigation and conclusions on the standards of fire investigation as set out in the NEPA Guide for Fire and Explosion Investigations. This was a fire insurance case, and fire protection engineers would be allowed to testify and illuminate the circumstances of the fire.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
