Insurer Must Defend General Contractor
April 03, 2023 —
Tred R. Eyerly - Insurance Law HawaiiInterpreting Massachusetts law, the federal district court determined consequential damage resulting from the insured's faulty work triggered a duty to defend. Capitol Spec. Ins. Corp. v. Dello Russo Enter. LLC, 2023 U.S. Dist. LEXIS 11627 (D. Mass. Jan. 24, 2023).
Peta-Gay and Michael Print sued the insured, Dello Russo, who they hired as the general contractor for extensive remodelling and renovation of their building. During the demolition work, certain structural load-bearing walls were removed, including a portion of an exterior bricked masonry wall. Shoring of other parts of the building was inadequate and removal of the masonry wall reduced the structural integrity of the building. Cracks began to appear in the remaining portion of the masonry wall and increased over the next few days. Soon thereafter, the City of Boston determined the building was dangerous and that salvage of the undamaged portions was not feasible. Therefore, the building was demolished.
Certain Underwriters at Lloyd's, London, filed suit against Dello Russo as subrogee of the Prinns. Dello Russo tendered the complaint to its insurer, Capitol Specialty Insurance Corporation, who defended under a reservation of rights,. Capitol then filed a suit seeking a declaratory judgment that it had no duty to defend or to indemnify. The parties cross-claimed for summary judgment.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Association Insurance Company v. Carbondale Glen Lot E-8, LLC: Federal Court Reaffirms That There Is No Duty to Defend or Indemnify A Builder For Defective Construction Work
December 20, 2017 —
David M McLain - Colorado Construction Litigation BlogIn a case that squarely confronts the juxtaposition of an insurer’s duty to defend or indemnify its insured for construction related defects, the United States District Court for the District of Colorado recently granted an insurer’s motion for summary judgment on both matters against a construction subrogee, in Ass’n Ins. Co. v. Carbondale Glen Lot E-8, LLC, No. 15-cv-02025-RPM, 2016 WL 9735743, at *1 (D. Colo. Oct. 10. 2017).
Mountainview Construction Services, LLC (“MCS”) served as the general contractor for the construction of a residence on a lot owned by Glen Lot E-8, LLC (“E-8”). MCS took out a Commercial General Liability Policy (“Policy”) with Association Insurance Company (“AIC”) that provided coverage to MCS for the relevant time period for the construction of the residence. E-8 then asserted a series of claims against MCS, based on the allegation that MCS and its subcontractors defectively constructed the home by, among other things, building the residence two feet too high in violation of applicable codes. E-8 also argued that MCS and its subcontractors made significant alterations and/or deviations from the original project specifications without obtaining E-8’s consent or approval from relevant authorities. MCS tendered the claim to AIC for defense and indemnity. In turn, AIC declined coverage on the argument that the Policy precluded any coverage for defective work MCS may have performed on the project, absent damage to person or other property.
Read the court decisionRead the full story...Reprinted courtesy of
David M McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Are Construction Defect Laws Inhibiting the Development of Attached Ownership Housing in Colorado?
October 29, 2014 —
James M. Mulligan, Esq. – Snell & Wilmer, LLPThis article responds to the article published in the September 18, 2014 issue of the Construction Defect Journal. It provides a different perspective to this issue, based on the author's experience with these matters during the past decade of attention to this specific challenge.
During recent years, there has been much discussion about the lack of attached ownership housing construction in Colorado. The main culprit, according to several sources within the community, seems to be our state's construction defect laws.
Since 2001, there has been a periodic series of legislative fixes to our construction defect laws that saw the pendulum swing back and forth between the interests of the consuming public who purchase the homes and certain protections of the developers and homebuilders from excessive and unnecessary litigation. Some say that the current state of the law is more onerous than necessary on the developers and homebuilders and it is artificially inhibiting the development of multifamily ownership housing in a time of high demand and low supply.
A recent opinion article in the September 29th, 2014 issue of the Denver Post stated, in part:
"No one is suggesting that developers escape liability for construction defects or that homeowners be denied the right to sue. But under the state's current defect laws, the scales have tilted too far in favor of litigation as the default tool for resolving disputes. And this appears to be the biggest reason for the collapse in the number of new multifamily [ownership] dwellings in recent years."
Rather than the typical conflict between the plaintiffs’ bar (representing the homebuyer) and the homebuilding industry that has produced the "back-and-forth" nature of our construction defect laws in the past, this 2014 legislative session found new constituents and a different perspective on the issue. A broad ranging coalition that included the Metro Mayors Caucus, major segments of the affordable housing community, and the general business community came together to address what their research showed as an astonishing lack of construction of ownership attached housing. There was a continuing boom going on in the development of multifamily "rental" housing, but an even more unusual deficit in multifamily "ownership" housing. Research apparently showed that, although about 20% + of construction of attached housing was in the ownership format throughout the Rocky Mountain West, Colorado was only producing about 2%. Interviews conducted by the research group that was retained by this coalition revealed that the development and homebuilding community were not willing to commence construction of ownership attached housing because of the continuing threat of litigation available under current interpretations of our state's construction defect laws. Lenders were also reluctant to provide financing for such projects faced with the apparent real threat of litigation that could shut down their projects and materially impact their loan viability and the value of the loan's collateral. Moreover, insurance premiums to cover such claims were so high, and many times unavailable, as to make such projects unfeasible.
This lack of available multifamily ownership housing was creating an ever-increasing concern over the resulting imbalance of housing options in and around the metro area, where the urban character of the metro region would need such ownership options in the attached housing format in order to address the more dense character of the urban setting. This imbalance of ownership attached housing was thwarting the advancement of "community" in the context of creating opportunities for all options of housing so important for a community balance. This included ownership options in this format that address the need for the younger professionals entering the workforce, newly forming households, seniors desiring to scale down their housing size and location, as well as the segment of the market who have limited means and need to address the affordability of homeownership. This was being most clearly felt along the FasTracks lines where attached ownership housing was an important element in originally advancing the TOD communities that are expected to be developed around these transit stops.
Rather than engage the battle of creating more contention in the various aspect of construction defect legislation per se, this coalition attempted to temper their approach and address specific issues that seemed to advance protection of the consuming homeowner while, at the same time, advocating a method of dispute resolution encouraged in the state's laws regarding such issues.
Normally, attached ownership housing is developed under our state laws governing the creation of Common Interest Communities ("CIC's"), including those communities where there are units that are attached and contain common elements. These CIC's will be encumbered by certain recorded documents (normally referred to as "Declarations") that structure the "community" within which the units are located and set up certain rules and restrictions that are intended to respect the common interests of the unit owners within that community. There is also a Homeowners Association ("HOA") organized for the common interest community that is charged with the management of the common elements and the enforcement of the rule and regulations governing the community.
The coalition chose to address their concerns through a bill including a couple of changes in the state laws governing CIC's, which would provide further protection to the homeowner and advance alternative dispute resolution as an expedient approach to resolving disputes should they arise. Those changes included:
1. Majority Owner Vote Re: Litigation -Rather than allowing two owners plus a vote of the HOA Board to determine whether or not to file litigation alleging construction defects in a CIC, the proposed change would require a simple majority vote of the unit owners who are members in the respective HOA where the alleged defect occurred. This approach addressed the increasing concern of unit owners whose homes are unmarketable and not financeable during the course of any such litigation.
This does not prevent an aggrieved owner from pursuing claims regarding that person's own unit, it just requires a majority of the owners to vote for litigation that affects the entire CIC in such litigation. This approach also included a provision for advance notice to the owners of such pending litigation accompanied by several disclosures regarding the potential litigation and its potential impact on the respective owner. This approach to protecting the rights of homeowners in a CIC seemed to be in line with everyone's interests, while not preventing an individual consumer/unit owner to advance its own claims.
2. Alternative Dispute Resolution -This proposal clarified the stated intent of the CIC statutes that advances alternative dispute resolution by providing that any mandatory arbitration provisions that are already contained in the Declaration that encumbers the respective unit in a CIC shall not be changed or deleted without the permission of the Declarant (e.g.; the developer of the CIC). This provision was to affirm a provision that the purchasing unit owner was aware of at the time of purchase and that it follows the spirit and intent of the state statutes governing such CIC's.
Notwithstanding the curative nature of these proposals, the legislation did not address the issue because a legislative maneuver was employed that did not allow for its consideration during the waning days of the session.
More recently, one of Colorado's municipalities, the home rule city of Lakewood, passed a local ordinance addressing this issue in a similar fashion, with a few more definitive suggestions regarding how to alleviate the lopsided nature of our current state of law. Without going into detail at this time with that specific ordinance, or the issue of its ability to address matters of a state-wide concern at the local level, the point is that several of Colorado's local communities, frustrated with the inability of the state legislature to deal with the issue are, at the very least, sending a signal that something must be done and, if the state is unwilling to lead on this matter, local communities will have to act.
This issue has not receded into the back room, and we will see a continuing crusade from an updated coalition to address these reasonable modifications to our state laws that will at least provide some protections to the CIC homeowner regarding unwanted litigation and some relief to the homebuilding industry from excessive litigation.
James M. Mulligan is a partner in the Denver office of Snell & Wilmer, LLP, a full-service commercial law firm located in nine cities throughout the Western United States and in Mexico. The firm’s website is http://www.swlaw.com.
Read the court decisionRead the full story...Reprinted courtesy of
Jury Trials: A COVID Update
July 18, 2022 —
Joshua Lane - Ahlers Cressman & Sleight PLLCJURY TRIALS. Budd v. Kaiser Gypsum Co., Inc., — Wn. App. 2d –, 505 P.3d 120 (Wash. Ct. App. 2022). (1) Courts must ensure that juries are randomly selected to provide a fair and impartial jury. (2) While the Sixth and Fourteenth Amendments prohibit the systematic exclusion of distinctive groups from jury pools, Washington Courts’ COVID-19 policy to excuse people who were ages 60 and older and did not wish to report for duty was not a “systematic” exclusion.
Raymond Budd developed mesothelioma after working with a drywall product called “joint compound” from 1962 to 1972. He sued Kaiser Gypsum Company, Inc. and others for damages, contending that the company’s joint compound caused his illness. A jury returned a verdict in Budd’s favor and awarded him nearly $13.5 million. Kaiser appeals, claiming (1) insufficient randomness in the jury-selection process, (2) erroneous transcription of expert testimony, (3) lack of proximate causation, (4) lack of medical causation, (5) an improper jury instruction on defective design, (6) improper exclusion of sexual battery and marital discord evidence, (7) improper admission of post-exposure evidence, (8) improper exclusion of regulatory provisions, and (9) a failure to link its product to Budd’s disease. The Court of Appeals, Division 1, affirmed the verdict in favor of Budd.
Read the court decisionRead the full story...Reprinted courtesy of
Joshua Lane, Ahlers Cressman & Sleight PLLCMr. Lane may be contacted at
joshua.lane@acslawyers.com
Quick Note: Unenforceable Language in Arbitration Provision
November 06, 2018 —
David Adelstein - Florida Construction Legal UpdatesAlthough arbitration is a dispute resolution provision provided for in a contract, the scope of judicial review of an arbitrator’s award is still governed by law. There are limited circumstances in which an arbitrator’s award can be challenged under the law. One of those circumstances is not because a party believes that an arbitrator applied the incorrect law.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Multifamily Building Pushes New Jersey to Best Year since 2007
December 04, 2013 —
CDJ STAFFOne project that might be seen as typical for New Jersey is Fair Lawn Promenade, which is being built at the former site of a Kodak film processing plant. The development will revitalize an existing area, rather than send people further from the cities into the New Jersey countryside. The development is within walking distance of a commuter rail station.
This project and ones like it have pushed New Jersey to a 37% increase in residential building over last year. Almost 60% of this year’s residential building in New Jersey has been multifamily. And it’s likely to stay that way for a while, according to Patrick O’Keefe, an economist at CohnReznick. He says that millennials have less of a “commitment to the American dream of homeownership.”
Read the court decisionRead the full story...Reprinted courtesy of
Concrete Worker Wins Lawsuit and Settles with Other Defendant
December 04, 2013 —
CDJ STAFFHildo De Franca was injured in 2010 while pouring concrete for a residence in Perkasie, Pennsylvania. According to the lawsuit, when a concrete line plugged, the truck operator increased pump pressure, despite this not being the appropriate procedure. Mr. De Franca was injured when the hose snapped back after the clog burst free. Mr. De Franca sued both the Trans-Fleet Concrete Inc. and Albino Concrete Construction. Mr. De Franca was employed by a third party, Girafa Construction Inc., which had been hired by Albino.
Albino Construction settled with Mr. De Franca for $500,000. Trans-Fleet did not settle. The judgment against them was for $2.25 million, of which $2 million was for pain and suffering. As a result of the accident, Mr. De Franca suffered a mild brain injury and a compression fracture in his spine.
Read the court decisionRead the full story...Reprinted courtesy of
Manhattan Vacancies Rise in Epicenter Shift: Real Estate
August 20, 2014 —
David M. Levitt – BloombergThe luster is fading on some of midtown Manhattan’s shiniest skyscrapers.
Buildings in Midtown, from 30th Street to Central Park South at 59th Street, have more vacant blocks of contiguous office space than at the height of the recession in 2009, as landlords face increased competition from buildings downtown and at Hudson Yards on the far west side, according to a study by Savills Studley Inc., a New York-based real estate brokerage.
“The epicenter of this city has shifted several times before and is in the process of shifting again,” Michael Cohen, tri-state region president of brokerage Colliers International, said in an interview. Midtown is “the hole in the doughnut,” where landlords are vulnerable to extended vacancies and rents that probably won’t rise dramatically.
Read the court decisionRead the full story...Reprinted courtesy of
David M. Levitt, BloombergMr. Levitt may be contacted at
dlevitt@bloomberg.net
