Seattle Washington Building Expert Directory

New York Court Holds That the “Lesser of Two” Doctrine Limits Recoverable Damages in Subrogation Actions

September 23, 2019 — Michael L. DeBona - The Subrogation Strategist
In New York Cent. Mut. Ins. Co. v. TopBuild Home Servs., Inc., 2019 U.S. Dist. LEXIS 69634 (April 24, 2019), the United States District Court for the Eastern District of New York recently held that the “lesser of two” doctrine applies to subrogation actions, thereby limiting property damages to the lesser of repair costs or the property’s diminution in value. In New York Cent. Mut. Ins. Co., New York Central Mutual Insurance Company’s (New York Central) insureds, Paul and Karen Mazzola, suffered a fire to their home. After the fire, New York Central paid the Mazzolas $708,465.74 to repair the property. New York Central brought a subrogation action against TopBuild Home Services, Inc. (TopBuild), alleging that the fire was caused by negligent work performed by TopBuild. New York Central sought to recover the repair costs it paid to the Mazzolas. TopBuild conceded liability but disputed the proper measure of damages. TopBuild filed a motion for partial summary judgment, arguing that under the “lesser of two” doctrine, New York Central could recover only the lesser of the costs to repair the property or the property’s diminution in value. TopBuild, therefore, asserted that New York Central was not entitled to the repair costs of $708,465.74 but, rather, could recover only the property’s decline in value following the fire – approximately $250,000.[1] In response, New York Central argued that New York’s “lesser of two” doctrine does not apply to subrogation actions because an insurance company cannot mitigate the payment it makes to its insured. Read the court decision
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Reprinted courtesy of Michael L. DeBona, White and Williams LLP
Mr. DeBona may be contacted at debonam@whiteandwilliams.com

Managing Once-in-a-Generation Construction Problems – Part II

April 03, 2023 — Jeffrey S. Wertman - Construction Executive
Part I of this series discussed the benefits of construction participants using alternative project delivery methods and properly addressing change order issues, rising costs and payment structure issues to manage construction during these uncertain times. Part II below explores the possibility that higher prices and steady consumer demand could lead to an increase in unscrupulous contractor practices—and how owners can mitigate that risk, managing the challenges posed by the unforeseen labor shortage and turnover in the industry and evolving your construction team for short-term and long-term success. Higher Prices and Steady Demand With the demand for construction projects relatively stable, contractors remaining in high demand and a surge in prices for construction materials and components, owners are under great pressure to accept less favorable construction terms. This has presented unscrupulous contractors with perceived leverage over owners and new opportunities to engage in questionable business practices and fraud. Although some contractors may seek to stretch the boundaries of a construction contract, other contractors are more deliberate. Falsifying payment applications and invoices to inflate labor or materials costs, billing for work not yet performed or materials not yet delivered to the project site and manipulating change orders are examples of illicit and fraudulent practices by contractors. Reprinted courtesy of Jeffrey S. Wertman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Chinese Drywall Manufacturer Claims Product Was Not for American Market

October 22, 2013 — CDJ STAFF
Taishan Gypsum Co. Ltd. Claimed in a hearing at the Fifth Circuit Court of Appeals that when they sold about $8.5 million of contaminated drywall to Venture Supply Inc. of Virginia, that they had no awareness that the drywall would be sold in the United States. Joe Cyr, an attorney for Taisan told the court that “Venture Supply never said it was going to distribute the goods in Virginia.” One of the judges on the three-judge panel, Judge Jennifer Walker Elrod, was skeptical of Taishan’s claim, asking, “it was packed and labeled for the Virginia market, isn’t that correct?” When asked by a judge if Taishan was trying to avoid accountability, Cyr said that Tiashan “has not said that it doesn’t want to be accountable for its drywall.” Taishan holds the position that claims against it should be arbitrated in the People’s Republic of China. Read the court decision
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How Many Homes have Energy-Efficient Appliances?

October 08, 2014 — Beverley BevenFlorez-CDJ STAFF
The National Association of Home Builders’ Eye on Housing analyzed data from the Census Bureau’s 2011 American Housing Survey to “reveal the share of owner-occupied homes that contain various Energy Star related appliances.” Eye on Housing reported that in “new homes, the leading shares of Energy Star rated appliances were refrigerators (70%), washing machines (69%), dishwashers (65%), and central air conditioning (52%).” In “owner-occupied homes,” the survey demonstrated that “refrigerators are the most common Energy Star appliance.” Read the court decision
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Construction Needs Collaborative Planning

January 20, 2020 — Aarni Heiskanen - AEC Business
What makes construction different from manufacturing is its dynamic nature. Unlike a systemized production plant, a construction site is a mesh of interconnected processes that are far from optimized. The traditional top-down planning practice does not solve problems on the construction site, as recent research reveals. Making planning collaborative is a necessary step in making construction less wasteful. Everybody in the industry has felt frustration with inefficiencies in construction, but seeing the data is still disconcerting. I’ve had the pleasure of attending several workshops organized by the Finnish Aalto University’s research teams. These eye-opening events both revealed how much waste we have in construction today and suggested solutions to this problem. Four Aalto University graduate students shared insights from their research at a workshop of the Waste Workgroup of the Building 2030 consortium. They focused on projects where takt production, a lean construction method, had been used. Takt production breaks the work down into equally timed work batches and typically shortens project lead time considerably—up to 50%. However, even these well-planned projects included waste and unnecessary movement, as the researchers found out. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

Quick Note: Do Your Homework When it Comes to Selecting Your Arbitrator

July 26, 2017 — David Adelstein - Florida Construction Legal Updates
Many construction contracts contain arbitration provisions. Instead of litigating a dispute arising out of the contract, the parties will arbitrate the dispute per the arbitration provision. There are advantages to arbitration and certain disputes bode well for arbitration. The key is you want to make sure you select the RIGHT arbitrator or arbitrators. Do your homework regarding the arbitrator list presented to you by, say, the American Arbitration Association. Strike out those on the list that either do not have the requisite experience you need to decide the dispute or you believe they are not going to be impartial. For instance, if you want an arbitrator that you think will specifically follow the letter of the law or the precise terms of a contract, select those on the list that meet this requirement; strike out others that do not. The same philosophy would apply if you want an arbitrator to have specific factual knowledge or a factual understanding regarding a driving issue in the dispute. Do not neglect the homework required to select –or try to select — the arbitrator you believe is the most qualified to understand the issues. Now, why is this important? It is important because you need to arbitrate a dispute with the understanding that the arbitrator’s award (decision) is FINAL. There are no appellate rights. None. Vacating an arbitrator’s award is very challenging and the bases to vacate an award are limited and, most of the time, will NOT apply. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at Dadelstein@gmail.com

Time Limits on Hidden Construction Defects

November 06, 2013 — CDJ STAFF
From the time a home is built, California starts a ten-year countdown, which Alan I. Schimmel, writing at California Lawyer, notes is not a statute of limitations, but a statute of repose. During that time, homeowners might be able file a claim over construction defects that don’t immediately become evident. After that ten-year limit, “any latent defects they discover would have to be corrected using money from their own pockets.” The readily observable defects, the patent defects, have a four-year limit. Mr. Schimmel focusses on latent defects, “which generally lurk behind walls or underground.” He also notes that “they may cause catastrophic damage before they are even detected.” If a construction defect is found, the “law requires the owner of a single-family residence to notify the builder in writing of the claimed defects.” Read the court decision
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Arizona Court Determines Statute of Limitations Applicable to a Claim for Reformation of a Deed of Trust (and a Related Claim for Declaratory Judgment)

October 16, 2018 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog
In a recent Arizona Court of Appeals case, Deutsche Bank National Trust Co. v. Pheasant Grove LLC, 798 Ariz. Adv. Rep. 15 (August 23, 2018), the Court of Appeals addressed the question of what statute of limitations was applicable to a declaratory judgment claim. In that case, a bank’s deed of trust inadvertently omitted one of the lots that was supposed to secure that bank’s loan. The deed of trust should have covered lots 8 and 9, but by its terms covered only lot 8. A different bank subsequently recorded a deed of trust that encumbered lot 9. In connection with the second bank’s foreclosure of its deed of trust, the first bank sought reformation and a declaratory judgment with regard to its deed of trust, seeking to have that deed of trust cover both lots 8 and 9, as intended. The trial court determined that the first bank’s reformation claim was filed too late, and also determined that the declaratory judgment claim was filed too late, beyond the applicable statute of limitations. Read the court decision
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Reprinted courtesy of Kevin J. Parker, Snell & Wilmer
Mr. Parker may be contacted at kparker@swlaw.com

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