Construction Defect Suit Can Continue Against Plumber
June 28, 2013 —
CDJ STAFFThe Kansas Court of Appeals has reversed a district court ruling that a homeowner’s suit against a plumber was barred under the economic loss doctrine. However, subsequently the Kansas Supreme Court “refused to extend the economic loss doctrine to homeowner claims against construction contractors.” In light of this, the appeals court sent the case back to the lower court.
The case, Coker v. Siler, was brought by Gregory Coker, who had bought a home from J.M.C. Construction. JMC purchased an unfinished house from Michael D. Siler in August 2006. As part of the completion process, John M. Chaney, the president of JMC, installed the water line into the residence. Mr. Coker bought the home in September 2007.
Starting in April 2008, Mr. Coker noticed that his water bills had increased. Mr. Coker could find “no evidence of a leak above the ground,” so he contacted JMC Construction. Mr. Chaney had R.D. Johnson Excavation dig up the water line, after which a gap was discovered that had been allowing water to flow under the foundation. In addition to the higher water bills, an engineer determined that the water “resulted in cracks in the wall and uneven doors.”
Mr. Coker sued, Siler, J.M.C. and Chaney for negligence, breach of implied warranty, strict liability, and breach of express warranty. J.M.C. and Chaney requested a summary judgment. The court dismissed Mr. Coker’s claims of negligence, strict liability, and breach of implied warranty on the basis of the economic loss doctrine, rejecting a petition from Mr. Coker to reconsider. The court, however, allowed Mr. Cocker to proceed with his claim of express warranty. In December, 2011, Mr. Coker accepted an offer from J.M.C. of $40,000.
Mr. Coker then appealed the summary judgment, making the claim that while the court’s decision was based on Prendiville v. Contemporary Homes, Inc., this has now been overruled by David v. Hett. In this case, “the court ultimately found the rationale supporting the economic loss doctrine failed to justify a departure from a long time of cases in Kansas that establish a homeowner’s right to assert claims against residential contractors.” The appeals court concluded that “although the district court properly relied on the law as it existed at the time of its ruling, the intervening change in the law necessarily renders the conclusion reached by the district court erroneous as a matter of law.”
In sending this case back to the district court, the appeals court noted that the lower court will need to determine if the “defendant accused of negligence did not have a duty to act in a certain manner towards the plaintiff,” in which case “summary judgment is proper. Mr. Coker claims that Mr. Chaney did indeed have this duty.
Further, Mr. Coker claimed that Mr. Chaney had a duty arising out of implied warranty. The appeals court questioned whether the district court properly applied the economic loss doctrine to this claim, because despite being president of the construction company, Mr. Chaney “in his individual capacity as a plumber performing work for Coker, was not a party to the J.M.C. contract.” The court found that “Coker’s claim that Chaney breached an implied duty within such a contract fails as a matter of law.”
However, the court did uphold Cocker’s claim of a contractor liability for injury to a third party, noting that “Chaney owed Coker a legal duty independent of Coker’s contact with J.M.C.” The appeals court left it to the district court to determine if the defect that caused the damage was present when the house left J.M.C.’s possession.
The case was reversed and remanded “with directions to reinstate Coker’s claim of negligence against Chaney in his individual capacity as a plumber.”
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Deck Police - The New Mandate for HOA's Takes Safety to the Next Level
November 18, 2019 —
Joseph Ferrentino – Newmeyer DillionA recent California law will hold homeowners’ associations accountable for the safety of their decks. SB326 now mandates all homeowners' associations to have decks inspected at least once every nine years by an architect or structural engineer to determine whether the decks are safe and waterproof. This law (Civil Code section 5551) follows SB721 which was passed in 2018 and requires a similar inspection every six years for other multifamily dwelling units. Failure to comply can result in paying the enforcement costs of local building agencies.
DETAILS ON THE MANDATE:
More specifically, the 2019 law requires inspections of wood “decks, balconies, stairways, and their railings” more than six feet off of the ground and designed for human use. Additionally, the engineer or architect must (1) certify that he or she has inspected for safety and waterproofing, and (2) certify the remaining useful life of the system. Further, the inspector must inspect a random sample of enough units to provide 95% confidence that “the results are reflective of the whole.” In other words, in addition to the inspector, the association will have to hire a statistician.
The nine-year timetable for inspection is no coincidence. After all, the statute of limitations for construction defects is ten years. In fact, associations are required to give notice to their members before filing a suit against a builder. However, under the new law, the association can delay giving notice to its members “if the association has reason to believe that the statute of limitations will expire.” Also, recent case law held that builders could add requirements to CC&R’s to limit a board’s authority to file lawsuits – i.e. adding a supermajority vote by members. Under SB326, any such provisions are now void. Hence, “supermajority” voting provisions are now invalid.
IMPACT ON CONSTRUCTION LITIGATION
These recent laws are clearly a reaction to the tragic collapse of an apartment balcony in Berkley in 2015 that resulted in the death of six college students. While it is imperative that decks be structurally safe, the requirements of SB326 will fuel more construction defect litigation.
Joseph Ferrentino is a Partner in Newmeyer Dillion's Newport Beach office. With 25 years of experience, Joe guides clients through construction law issues, among other areas. For more information on how Joe can help, contact him at joe.ferrentino@ndlf.com
ABOUT NEWMEYER DILLION
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that align with the business objectives of clients in diverse industries. With over 70 attorneys working as an integrated team to represent clients in all aspects of business, employment, real estate, privacy & data security and insurance law, Newmeyer Dillion delivers tailored legal services to propel clients’ business growth. 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 Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com
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Big Changes and Trends in the Real Estate Industry
February 06, 2023 —
Rachel Mihai - Bremer Whyte Brown & O'Meara LLPIn my practice, I am fortunate enough to attend a real estate conferences on a regular basis. And, without exception, we always get a run down on hot trends/cases from industry leaders. Some issues that are being attacked in hot cases/trends are:
- Are the typical commission structures – e.g., the typical 5% to 6% divided in half – fair or creating an antitrust issue?
- Is MLS commission anti-competitive and artificially inflates commission rates?
- Can a buyer’s agent advertise/represent that it is working for its client for free, as generally happens and has been allowed?
- What is the impact of agent only showing their clients houses with higher typical commissions, like 6%? And how is this being advertised, pushed for and manipulated contrary to the interests of consumers?
There are currently some big, national cases that will likely bring about big changes in the entire national real estate community with regard to how real estate brokers’/agents’ commissions are determined, explained and advertised. These cases revolve around antitrust and alleged conspiracy claims – asserting that the use of commissions in today real estate markets are creating an overcharging to consumers and artificially manipulation of the market.
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Rachel Mihai, Bremer Whyte Brown & O'Meara LLPMs. Mihai may be contacted at
rmihai@bremerwhyte.com
Certificates of Merit: Is Your Texas Certificate Sufficient?
January 22, 2024 —
Gus Sara - The Subrogation StrategistIn Eric L. Davis Eng’g, Inc. v. Hegemeyer, No. 14-22-00657-CV, 2023 Tex. App. LEXIS 8899, the Court of Appeals of Texas (Court of Appeals) considered whether the plaintiffs’ certificate of merit, in support of their professional malpractice claim against the defendant engineers, adequately set forth the experience and qualifications of the expert who submitted the certificate. The defendants filed a motion to dismiss, alleging that the certificate of merit was inadequate because it failed to establish that the expert practiced in the same specific areas as the defendants in relation to the work at issue. The lower court denied the defendants’ motion. The Court of Appeals affirmed the lower court’s decision, finding that there was sufficient information for the lower court to have reasonably found that the plaintiffs’ expert practiced in the same area as the defendants.
In Hegemeyer, the plaintiffs sued Eric L. Davis Engineering, Inc. (Davis) and Kenneth L. Douglass (Douglass), alleging improper design of their home’s foundation. The plaintiffs retained Davis to design and engineer the home and Douglass prepared the plans for the home. The plans called for the installation of post-tension cables in the home’s foundation. The plaintiffs alleged that the foundation design was improper and brought professional malpractice claims against Davis and Douglass.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
Bert L. Howe & Associates Returns as a Sponsor at the 30th Annual Construction Law Conference in San Antonio
January 13, 2017 —
Don MacGregor - Bert L. Howe & Associates, Inc.Bert L. Howe & Associates, Inc. is proud to join with the Texas Institute of CLE, and return for the third year as a sponsor and exhibitor at the 30th Annual Construction Law Conference to be held March 2nd & 3rd, 2017 at the La Cantera Resort and Spa in San Antonio.
With offices in San Antonio and Houston serving all of Texas, Bert L. Howe & Associates, Inc. (BHA) offers the experience of over 20 years of service to carriers, defense counsel, and insurance professionals as designated experts in nearly 6,500 cases. BHA’s staff encompasses a broad range of licensed and credentialed experts in the areas of general contracting and specialty trades, as well as architects, and both civil and structural engineers, and has provided services on behalf of developers, general contractors and sub-contractors.
BHA’s experience covers the full range of construction and construction defect litigation, including single and multi-family residential (including high-rise), institutional (schools, hospitals and government buildings), commercial, and industrial claims. BHA specializes in coverage, exposure, premises liability, and delay claim analysis as well.
As the litigation climate in Texas continues to change, and as the number of construction defect and other construction related cases continues to rise, it is becoming more important for contractors and builders to be aggressive in preparing for claims before they are made, and in defending against those claims once they are filed. Since 1993, Bert L. Howe & Associates has been an industry leader in providing construction consulting services, and has been a trusted partner with builders and insurance carriers, both large and small, across the Western and Southern United States. Here in Texas, we have been providing construction defect and construction-claims related forensic expert services for the past decade with a proven track record of successful results. To-date, we have participated in the successful defense of claims involving thousands homes here in Texas alone.
For those of you planning on attending the conference, or those who may know someone who will be, we encourage you to stop by the BHA booth and we welcome the opportunity to discuss further the broad range of services provided by BHA.
For your convenience, here is a link to the information page for the 30th Annual Construction Law Conference: https://www.clesolutions.com/store.aspx?categoryid=2
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Don MacGregor, Bert L. Howe & Associates, Inc.Mr. MacGregor may be contacted at
dmac@berthowe.com
Guardrail Maker Defrauded U.S. of $175 Million and Created Hazard, Jury Says
October 22, 2014 —
Patrick G. Lee – BloombergSecret changes by Trinity Industries Inc. to its guardrail systems were found to have cheated the U.S. government, exposing the company to $1 billion in damages and penalties and sending shares plummeting as states question the safety of the product.
The east Texas jury’s verdict comes as scrutiny of the highway-safety product called the ET-Plus intensifies across the country after it’s been blamed for multiple deaths. The Federal Highway Administration this month asked all states to start submitting information on crashes involving the ET-Plus to the agency’s safety office.
The agency will evaluate the findings of the case and “consider whether it affects the continued eligibility of the ET-Plus,” Brian Farber, a spokesman for the Department of Transportation, said in an e-mail.
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Patrick G. Lee, BloombergMr. Lee may be contacted at
plee315@bloomberg.net
A Word to the Wise: The AIA Revised Contract Documents Could Lead to New and Unanticipated Risks - Part II
October 16, 2018 —
George Talarico - Construction ExecutivePart I addressed general conditions, revised insurance terms, revisions that affect owner’s required insurance and revisions that affect contractor’s required insurance.
REVISIONS THAT AFFECT DISPUTE RESOLUTION
A seemingly minor but noteworthy change is to the definition of “Claim.” Under Section 15.1 a “Claim” is defined to:
- include a request for a modification of contract time; and
- exclude any requirement that an owner must file a claim to impose liquidated damages.
Notably, any request relating to contract time must be brought within the specified time period for Notice of Claim and in the prescribed manner. There are at least two traps for the unwary. First, even though email is regularly used for communications among the parties, the revised contract documents do not recognize email as an acceptable form of delivery of a Notice of Claim. Second, an unwary contractor may wrongly assume that an owner’s failure to assert a claim for LDs means that LDs will not be imposed. This may lull the contractor into failing to timely assert its own claim for a time extension and thereby waiving its ability to do so.
Reprinted courtesy of
George Talarico, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Talarico may be contacted at
gtalarico@sillscummis.com
Texas Legislative Update
July 19, 2017 —
Matthew S.C. Moore & Justin (JD) D. Holzeauser – Peckar & Abramson, P.C.The marquee fight between Lt. Governor Patrick and Speaker Straus, otherwise known as the 85th Regular Legislative Session, concluded on May 29, 2017. While the political clash over the controversial “bathroom bill” will continue during the special legislative session, this article is intended to provide a brief summary of the construction-related bills that passed during the regular session and a few notable ones that did not pass. A special session has been called by Governor Abbott, but no construction-related bills were included on the agenda.
What Passed?
HB 2121 – Attorney’s fees for state breach of contract claims. A contractor who prevails on a state breach of contract claim pursuant to Chapter 2260 of the Government Code, that is also valued at less than $250,000.00, may recover attorney’s fees. By using the word “may”, the bill implies that the award of attorney’s fees will be at the discretion of the administrative law judge. This bill became law on June 15, 2017.
HB 1463 – Right to cure ADA violations. A person with a disability may assert a claim for discrimination based on a violation of the building and architectural standards established in Chapter 469 of the Government Code. However, this bill requires the claimant to provide the respondent written notice at least sixty (60) days before filing an action for the violation and further gives the respondent an opportunity to cure the alleged violation within the sixty (60) day period. The obvious benefit of this bill is that it allows the respondent, e.g., the owner or potentially the contractor, an opportunity to remediate the violation without incurring litigation costs. This bill becomes effective law on September 1, 2017.
Reprinted courtesy of
Matthew S.C. Moore, Peckar & Abramson, P.C. and
Justin (JD) D. Holzeauser, Peckar & Abramson, P.C.
Mr. Moore may be contacted at mmoore@pecklaw.com
Mr. Holzheauser may be contacted at jdholzheauser@pecklaw.com
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