Colorado Senate Revives Construction Defects Reform Bill
March 01, 2017 —
Beverley BevenFlorez-CDJ STAFFA re-booted construction defects reform bill recently passed its first Senate committee, according to the Denver Business Journal. Next, Senate Bill 156, sponsored by Sen. Owen Hill, R-Colorado Springs, heads to the Senate floor for debate.
SB 156 “would require that condominium owners alleging construction defects take their disputes to arbitration or mediation if requested by builders,” the Denver Business Journal reported. “It also would require that homeowners be informed of the consequences of filing legal actions over purported disputes and that a majority of all owners in a condominium complex vote to proceed with legal action, rather than just a majority of homeowners association board members.”
However, it is almost identical to the failed measures that were introduced in 2014 and 2015.
Homeowners association group members and owners of defective condominiums argued against the measure, stating “that the effort would not improve the quality of building in the state, but simply would block aggrieved Coloradans from taking their complaints before a jury of their peers.”
Proponent of the bill, Tom Clark, CEO of Metro Denver Economic Development Corp., said “that Denver’s housing costs have risen since the first bill was introduced in 2013 to the sixth-most-expensive in the country – and are tops for any metro area not on a coast.”
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Federal Court Asks South Dakota Supreme Court to Decide Whether Injunction Costs Are “Damages,” Adopts Restatement’s Position on Providing “Inadequate” Defense
August 13, 2019 —
Anthony L. Miscioscia & Timothy A. Carroll - White and Williams LLPDo costs associated with complying with an injunction constitute covered “damages?” The U.S. District Court for the District of South Dakota recently certified that question to the South Dakota Supreme Court, in Sapienza v. Liberty Mutual Fire Insurance Company, No. 3:18-CV-03015-RAL, 2019 U.S. Dist. LEXIS 84973 (D.S.D. May 17, 2019). If the South Dakota Supreme Court takes on the question, it will become one of the few highest state courts to do so.[1] The Sapienza case is also notable because the court adopted § 12 of the Restatement of the Law of Liability Insurance (Restatement) regarding an insurer’s potential liability for providing an “inadequate” defense. In doing so, the Sapienza court joins a growing list of courts to rely upon or cite to the Restatement.
The Sapienza case arose out of an underlying dispute between residential neighbors over the size and location of the Sapienzas’ new house they built in a historic district in Sioux Falls, SD. The newly-built house allegedly prevented the neighbors from using their fireplace, blocked natural light the neighbors previously enjoyed, and decreased the value of the neighbors’ house. The neighbors sought a permanent injunction requiring the Sapienzas to modify or relocate the house. The Sapienzas’ homeowners’ insurer provided them with defense counsel, but the insurer instructed the Sapienzas that it would not cover any costs associated with an injunction as such costs did not constitute covered “damages.”
Reprinted courtesy of
Timothy Carroll, White and Williams LLP and
Anthony Miscioscia, White and Williams LLP
Mr. Schulman may be contacted at carrollt@whiteandwilliams.com
Mr. Anderson may be contacted at misciosciaa@whiteandwilliams.com
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LEED Certified Courthouse Square Negotiating With Insurers, Mulling Over Demolition
June 06, 2011 —
Douglas Reiser, Builders Council BlogApparently, Courthouse Square is still unresolved. The County hasnow hired an attorney to handle its insurance claim against Affiliated FM. Is there a lawsuit coming?
Right now, no lawsuit is expected. According to officials, the insurer has been acting in good faith. But, its been quite a while since Salem officials learned that the Courthouse Square building had significant concrete issues that would result in probable demolition of the LEED certified building.
If you have yet to hear about Courthouse Square, let me fill you in briefly. The Salem building was substantially completed in 2000 and LEED certified by the US Green Building Council in 2002. The project cost more than $30 Million to complete and the building was revered for its innovation as a crowning achievement for city leaders.
But, structural problems in the building’s core were discovered as early as 2002, writes Chris Cheatham of Green Building Law Update. Final tests earlier in the year, determined that the building had to be vacated. The building has been clear since July 2010.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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Texas Federal Court Delivers Another Big Win for Policyholders on CGL Coverage for Construction-Defect Claims and “Rip-and-Tear” Damages
March 14, 2022 —
Blake A. Dillion, Jared De Jong & Scott S. Thomas - Payne & FearsInsurers regularly argue that commercial general liability (“CGL”) policies are not performance bonds and therefore there is no coverage for claims seeking damages for defective or faulty workmanship. Insurers also argue there is no coverage for so-called “tear-out” or “rip-and-tear” damages, where fixing property damage requires replacing defective work that has not itself been damaged. Fortunately, in a newly decided case, a Texas federal district court rejected both arguments by an insurer. Amerisure Mutual Insurance Company v. McMillin Texas Homes, LLC, No. SA-20-CV-01332-XR, 2022 WL 686727 (W.D. Tex. Mar. 8, 2022).
As with most construction-defect claims, this case involved homeowner claims against a residential developer, McMillin Texas Homes (“McMillin”). After the homes were completed, homeowners complained about defects in the artificial stucco exterior finish and filed suit. McMillin tendered to its insurer, Amerisure Mutual Insurance Company (“Amerisure”). Amerisure then sued McMillin for declaratory relief, arguing that it had no duty to defend or indemnify the homeowner claims. McMillin filed a counterclaim alleging Amerisure breached its policies by refusing to defend or indemnify McMillin.
Reprinted courtesy of
Blake A. Dillion, Payne & Fears,
Jared De Jong, Payne & Fears and
Scott S. Thomas, Payne & Fears
Mr. Dillion may be contacted at bad@paynefears.com
Mr. De Jong may be contacted at jdj@paynefears.com
Mr. Thomas may be contacted at sst@paynefears.com
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Revolutionizing Buildings with Hybrid Energy Systems and Demand Response
January 08, 2024 —
Aarni Heiskanen - AEC BusinessA recent study conducted by the Finnish Building Services 2030 group explores the potential technologies and business prospects for adaptable energy systems within buildings.
Building Services 2030 is a Finnish consortium of Aalto University, Tampere University, and 14 industry partners. The consortium has defined a shared vision for the Finnish building service sector and researches topics that help reach the vision. My company is responsible for the group’s communication, so I eagerly read the research reports as they come out.
One of the new reports I found very timely is about the energy flexibility of buildings. The authors are Senior Researcher Juha Jokisalo and Professor Matti Lehtonen from Aalto University. They highlight how the contemporary energy landscape is undergoing a significant transformation.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Earthquake Hits Mid-Atlantic Region; No Immediate Damage Reports
November 30, 2017 —
The Associated Press (Randall Chase) - BloombergDover, Del. (AP) -- An earthquake has jolted the Mid-Atlantic region of the East Coast, but there are no immediate reports of damage or injuries.
The U.S. Geological Survey says the 4.1 magnitude quake struck just after 4:45 p.m. Thursday, and was centered about 6 miles (10 kilometers) east-northeast of Dover, Delaware. It was felt as far away as Baltimore.
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The Associated Press (Randall Chase), Bloomberg
The "Dark Overlord" Strikes The Practice Of Law: What Law Firms Can Do To Protect Themselves
April 17, 2019 —
Ivo G. Danielle – Newmeyer & DillionCybersecurity breaches involving law firms are on the rise with each passing year. Law firms are prime targets for cyber criminals seeking confidential and sensitive information because of the various types of legal work that law firms normally handle for their clients. Whether it be mergers and acquisitions, the use of intellectual property, purchase agreements, bankruptcy or even litigation involving divorce, law firms are a rich depository for highly confidential and sensitive information. As a result, law firms must employ comprehensive security measures to protect themselves from security breaches or risk being on the losing end of a costly malpractice claim, and suffer severe reputational harm.
Law Firms Continue To Be Targeted By Cybercriminals
According to the American Bar Association ("ABA") 2018 Legal Technology Survey Report, 23% of the law firms who participated in the survey reported that their law firm experienced a data breach. Although this may be just a 1% increase from the 22% who reported a breach in 2017, it is important to understand that this is an increase of 8% from the stable percentages reported from 2013 through 2016.1 The 2018 survey report also revealed that security breaches fluctuated with firm size – 14% for solo law firms, 24% for firms employing 2-9 attorneys, approximately 24% for firms with 10-49 attorneys, 42% for firms with 50-99 attorneys, and approximately 31% for those firms employing 100 or more attorneys.
Latest Law Firm Security Breaches
The notorious criminal group called "The Dark Overlord" has a history of committing data breaches of high profile companies such as Gorilla Glue, Netflix, Larson Studios, multiple healthcare companies, and Little Red Door Cancer Agency. Their goal is simple – steal sensitive information and then extort payment from the victims by threatening to release the sensitive information to the public.
On December 31, 2018, this cybercriminal group announced to the world that they had acquired 18,000 documents containing highly sensitive legal information related to insurance based litigation connected to the 9/11 tragedy. The stolen information was the attorney/client property of Lloyd's of London, Silverstein Properties, and Hiscox Syndicates, Ltd. In its announcement, The Dark Overlord boasted that they were in possession of client sensitive information, such as: "emails; retainer agreements; non-disclosure agreements; settlements, litigation strategies; liability analysis; defense formation; collection of expert witness testimonies; communication with government officials in countries all over the world; voice mails; dealings with the FBI, USDOJ, DOD, confidential communications, and so much more."
Subsequent to the data breach, The Dark Overlord announced to the public that they designed a compensation plan that would allow for public crowd-funding for its organization to permit the public to view the stolen information in exchange for bitcoin payment. The more public funding it receives, the more stolen sensitive information will be unlocked and released to the public. It is estimated that this cybercriminal group already distributed information to the public on two separate occasions during the month of January 2019.
High profile cybersecurity breaches of law firms is nothing new – for example, the infamous Panama Papers breach, where cybercriminals leaked 11.5 million documents exposing the shadowy business of setting up offshore corporations as tax shelters for businesses, celebrities, and politicians - and the infamous Petya Malware attack which resulted in a digital lockdown of one of the world's largest law firms, DLA Piper. However, despite the infrequency of publicized cyber-attacks of law firms by the media, the FBI has recently announced that law firms should expect an increase in security attacks by cybercriminals because law firms are now viewed as "one-stop shops" for cybercriminals. Therefore, in order to combat the inevitable increase in cyber-attacks, law firms must get prepared.
How Law Firms Can Protect Themselves
All law firms will agree that the most serious consequence of a security breach for their firm would be the unauthorized access to sensitive client data. The American Bar Association's Model Rules of Professional Conduct, specifically Rules 1.1 and 1.62 and related Comments, require an attorney to take competent and reasonable measures to safeguard information relating to their clients. This duty to "safeguard' information imposes a significant challenge to firms when using technology in connection with protecting client information because most law firms are not savvy with technology and lack proper cyber security training.
In order for a law firm to protect itself from security breaches and inadvertently violate its duty of safeguarding a client's sensitive information, it is important to take the following actions:
- Start by taking an inventory and risk assessment of the firm to determine what needs to be protected – the inventory should include both technology and data;
- Develop, implement and maintain an appropriate cybersecurity program that complies with applicable ethical and legal obligations;
- Ensure the cybersecurity program addresses people, policies and procedures, and technology. The cybersecurity program must designate an individual or a group to be in charge and coordinate security;
- Develop an incident response plan scaled to the size of the firm;
- Continually train staff and attorneys to identify and understand potential cybersecurity threats;
- Consider implementing a third-party assessment of firm's cybersecurity program and policies;
- Purchase cyber liability for insurance which not only covers first party losses to law firms (like lost productivity, data restoration, and legal expenses) but also liability protection to third parties;
- Implement authentication and access controls for network, computers and mobile devices used by the firm's staff and attorneys;
- Consider the use of full-drive encryption for computers and mobile devices;
- Have staff and attorneys avoid and/or limit the use of public WiFi when working remotely; and
- Create a disaster recovery plan to backup all data in the event of a cyber-attack or natural catastrophe.
Continually reviewing, implementing, training and updating a firm's cybersecurity program and protocols will help safeguard sensitive and confidential client information and/or data. No law firm wants to be the next data breach headline – so take the necessary steps to avoid a potential disaster.
1 Past ABA Legal Technology Surveys reported 14% in 2016, 15% in 2015, 14% in 2014 and 15% in 2013.
2 On November 1, 2018, California adopted ethics rules patterned after the ABA Model Rules of Professional Conduct.
Ivo Daniele is a seasoned associate in Newmeyer & Dillion's Walnut Creek office. His practice includes representing private and public companies with both their transactional and litigation needs. You can reach Ivo at ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business law, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
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Lumber Drops to Nine-Month Low, Extending Retreat From Record
August 30, 2021 —
Marcy Nicholson - BloombergLumber futures slid to the lowest in more than nine months after sawmills ramped up production and demand from builders stabilized.
September futures in Chicago fell as much as 4.4% to $482.90 per thousand board feet, the lowest for a most-active contract since Oct. 30. Prices have dropped more than 70% from the record high reached just three months ago.
The tumble marks a stark turnaround for the common building material after strong U.S. construction demand during the pandemic spurred a surge in orders for lumber, causing prices to more than quadruple to their May peak and fueling inflation concerns. Sawmills have since increased output, and a shortage of other building supplies such as siding and windows has slowed the pace of construction, said Brian Leonard, an analyst with RCM Alternatives.
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