CA Supreme Court: Right to Repair Act (SB 800) is the Exclusive Remedy for Residential Construction Defect Claims – So Now What?
January 31, 2018 —
Steven M. Cvitanovic & Omar Parra - Publications & InsightsA torrent of alerts have been flooding e-mail inboxes regarding the California Supreme Court’s decision in
McMillin v. Superior Court, to reverse the Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013) case, but with little discussion about the practical effects of the ruling. This alert will discuss how this ruling affects litigation of SB 800 Claims and Builders.
Background on Liberty Mutual Case
In 2002, the California Legislature enacted comprehensive construction defect litigation reform referred to as the Right to Repair Act (the “Act”). Among other things, the Act establishes standards for residential dwellings, and creates a prelitigation process that allows builders an opportunity to cure the construction defects before being sued. Since its enactment, however, the Act’s application has been up for debate. Most notably, in
Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013), the California Court of Appeal for the Fourth District held the Act was the exclusive remedy only in instances where the defects caused only economic loss, and that homeowners could pursue other remedies in situations where the defects caused actual property damage or personal injuries.
Reprinted courtesy of
Steve Cvitanovic, Haight Brown & Bonesteel LLP and
Omar Parra, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com
Mr. Parra may be contacted at oparra@hbblaw.com
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Construction on the Rise in Washington Town
June 16, 2011 —
CDJ STAFFThe Kitsap Sun reports that Gig Harbor, a town in the area near Tacoma, Washington, has had a 60% increase in building permit applications as compared to 2010. May, 2011 had as many permits issued for single-family residences in Gig Harbor as were issued for all of 2010. Additionally, a Safeway shopping center on Point Fosdick is described by Dick Bower, Gig Harbor Building and Fire Safety Director, as “a huge project and it’s going to bring in quite a bit of revenue.” He called the increase in building “economic recovery at the grassroots level.”
Bower said that the building officials in other towns have also seen upswings in construction. He anticipates more activity in the future.
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Rhode Island Affirms The Principle That Sureties Must be Provided Notice of Default Before They Can be Held Liable for Principal’s Default
August 21, 2023 —
Dennis Cavanaugh & Tasnuva Islam - Construction Law ZoneMost bond forms in use today, including the standard form AIA A312-2010, contain express condition precedents that trigger a surety’s obligations under the bond. Under a performance bond, the bond obligee is required to provide formal notice to the surety that the principal has materially defaulted and that the surety must begin to perform under the terms of the bond. This principle is grounded in the idea that the surety should have an opportunity to address the default and investigate the claim so as to mitigate its own liability. Failure to provide sufficient notice will discharge the surety of its obligations under the bond.
Reprinted courtesy of
Dennis Cavanaugh, Robinson & Cole LLP and
Tasnuva Islam, Robinson & Cole LLP
Mr. Cavanaugh may be contacted at dcavanaugh@rc.com
Ms. Islam may be contacted at tislam@rc.com
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Eleven Newmeyer Dillion Attorneys Named to 2023 U.S. News Best Lawyers in Multiple Practice Areas
August 29, 2022 —
Newmeyer DillionNEWPORT BEACH, Calif. – August 18, 2022 – Prominent business and real estate law firm Newmeyer Dillion is pleased to announce that eleven of the firm’s attorneys were recently selected for inclusion and will be recognized in their respective areas in The Best Lawyers in America© 2023.
Additionally, Greg Dillion, Thomas Newmeyer and Michael McClellan have been selected to Best Lawyers 2023 Lawyer of the Year list in Litigation - Construction, Construction Law and Litigation - Real Estate respectively.
The eleven 2023 Best Lawyers are:
Best Lawyers is the oldest peer-review publication for the legal profession. Attorneys are chosen through intensive peer-review surveys in which leading lawyers evaluate their professional peers. Best Lawyers listings are published in almost 70 countries worldwide and are recognized for their reliable and unbiased selections.
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Understanding Liability Insurer’s Two Duties: To Defend and to Indemnify
December 26, 2022 —
David Adelstein - Florida Construction Legal UpdatesA liability insurer has two duties that are the crux of a liability policy: the duty to defend the insured in legal actions and the duty to indemnify the insured from losses covered under the policy. Many times, policyholders (insureds) do not fully understand or appreciate these two important duties. They need to and this is why having private counsel assist with coverage-related considerations is an absolute must.
An insurers’ duty to defend is separate from its duty to indemnify. A recent opinion out of the Middle District of Florida in Progressive Express Ins. Co. v. Tate Transport Corp., 2022 WL 16963815 (M.D.Fla. 2022) clarifies the distinction between these duties with a focus on an insurer’s initial duty — the duty to defend. Please read below so you can have more of an appreciation of these duties. The court does a good job discussing Florida law with the emphasis on when an insurer’s initial duty to defend kicks-in:
Duty to Defend
Under Florida law, “an insurer’s duty to defend its insured against a legal action arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage.” The duty to defend is a broad one, broader than the duty to indemnify, and “[t]he merits of the underlying suit are irrelevant.” We determine whether an insurer has a duty to defend its insured based only on “the eight corners of the complaint and the policy,” and only as the complaint’s alleged facts are “fairly read[.]” The “facts” we consider in evaluating the duty to defend come solely from the complaint, regardless of the actual facts of the case and regardless of any later developed and contradictory factual record. “Any doubts regarding
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Contract Language and Insurance Coverage Must Be Consistent
July 30, 2015 —
Craig Martin – Construction Contract AdvisorHow often do you review both the additional insured language in the contract and the insurance policy provided by a subcontractor? My guess is, unless the project has gone off the rails, NEVER. Well, perhaps you should to make absolutely sure the extent of the subcontractor’s insurance obligations and whether those obligations are being fulfilled.
This point was recently addressed in a recent DRI article analyzing the Deepwater Horizon/BP lawsuit. My partner, Anne Marie O’Brien, also blogged on this a few months ago.
As you will recall, Transocean’s Deepwater Horizon oil-drilling rig exploded, killing 11 workers, and polluted the Gulf of Mexico. BP demanded that Transocean’s insurer pay for the loss. Transocean’s insurer said no, and the litigation ensued, in state court, federal court, and the Texas Supreme Court. It was quite an odyssey of litigation.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
CA Senate Report States Caltrans ‘Gagged and Banished’ its Critics
August 06, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the Sacramento Bee, the California Senate’s latest report said that “at least nine top experts for the new $6.5 billion San Francisco-Oakland Bay Bridge” were “’gagged and banished’” after complaining “about substandard work by the Shanghai, China, firm that built much of the span.”
According to the report, reported by the Sacramento Bee, Tony Anziano, Caltrans’ chief executive of the project, “removed or demoted quality-assurance and fabrication engineers who tried to force the contractor to fix cracked roadway welds.”
The report did not evaluate the bridge’s quality or safety, however, it “called for greater openness in large construction projects, a review of the weld problems by independent experts, and an investigation of allegations that engineering decisions were made by non-engineers.”
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Colorado Supreme Court Weighs in on Timeliness of Claims Against Subcontractors in Construction Defect Actions
March 16, 2017 —
Jean Meyer - Colorado Construction LitigationOn February 27, 2017, the Colorado Supreme Court announced its decision in the Goodman v. Heritage Builders, No. 16SA193, 2017 CO 13 (Colo. February 27, 2017) case. In ten short pages, the Colorado Supreme Court completely reshuffled Colorado construction law with respect to application of the statutes of limitation and repose on third-party claims in construction defect cases. Specifically, the Colorado Supreme Court overruled a series of earlier Court of Appeals' decisions that found C.R.S. § 13-80-104(1)(b)(II) (“104(1)(b)(II)”) had no effect on the six-year statute of repose. For context, 104(1)(b)(II) permitted third-party actions for indemnity and contribution to toll until ninety days after the claims in the underlying action were resolved by settlement or judgment. In the construction context, 104(1)(b)(II) was intended to allow a general contractor’s claims against liable subcontractors to toll for the statutorily defined period. This allowed the general contractor to first focus its attention on defending the claims against and thereafter to pursue its claims against the subcontractors.
However, beginning in 2008, in the Thermo Dev., Inc. v. Cent. Masonry Corp., 195 P.3d 1166 (Colo. App. 2008) case, the Colorado Court of Appeals began chipping away at the force of 104(1)(b)(II). This trend continued in the Shaw Constr., LLC v. United Builder Servs., Inc., 2012 COA 24, 296 P.3d 145 decision, the Sierra Pac. Indus., v. Bradbury, 2016 COA 132, _ P.3d_ decision, and culminating in the Sopris Lodging, LLC v. Schofield Excavation, Inc., 2016 COA 158, reh'g denied (Nov. 23, 2016) decision. Effectively, in these decisions, the Colorado Court of Appeals determined that third-party claims could not be brought beyond Colorado’s six-year statute of repose, regardless if they were brought within the ninety day tolling provision set forth in 104(1)(b)(II).
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com