Disjointed Proof of Loss Sufficient
June 11, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe court found that when considered as a whole, separately filed proofs of loss and estimates of damage were sufficient to meet the requirements of a flood policy. Young v. Imperial Fire & Cas. Ins. Co., 2014 U.S. Dist. LEXIS 51863 (April 15, 2014).
On August 29, 2012, plaintiffs' property sustained flood damage due to Hurricane Isaac. After Imperial's adjustor inspected the property, advance payments were made for $5000 under the building coverage and $5000 under the contents coverage.
On October 26, 2012, the plaintiffs' adjustor submitted a proof of loss for building damages, stating the amount of loss was $175,100, which was the policy limit minus the deductible. The insured wife signed the proof of loss. The actual case value, full cost of replacement or repair, and applicable depreciation were listed "undetermined."
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Equipment Costs? It’s a Steal!
July 08, 2011 —
CDJ STAFFKCBD reports on the problems of a Lubbock, Texas contractor. It’s hard to do the job when your tools keep getting stolen. Corey Meadows, owner of Top Cut Interiors, told KCBD that he had chained an air compressor to a table saw. Since the thieves couldn’t cut the chain, they cut the table saw “and just took the air compressor and the chain.” Meadows estimates the thieves cost him $2,000 in damaged or stolen equipment and time lost.
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Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy
December 15, 2016 —
Richard H. Glucksman & Ravi R. Mehta – Chapman Glucksman Dean Roeb & Barger Bulletin I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016
The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”). In
Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (
Civil Code §896). The Court answered this question affirmatively.
The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects. Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act. The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act. Elliott appealed. The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.
To answer this question, the Court analyzed a recent case decided by the Court of Appeal for the Fourth Appellate District:
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98. In this subrogation case, a builder’s insurer asserted common law causes of action (but not statutory building standard violations) alleging construction defects against the builder to recover amounts paid to the homeowner after a sprinkler system failure caused extensive damage to the subject property. The trial court sustained the builder’s demurrer to the Complaint on the ground that it was time-barred under the Act. The Court of Appeal reversed the trial court’s order, holding that common law construction defect claims arising from actual damages are not covered by the Act because “the Act does not provide the exclusive remedy in cases where actual damage has occurred.” (
Liberty Mutual, 219 Cal.App.4th 98, 109).
The
Elliott Court declined to follow
Liberty Mutual, finding that that Court failed to properly analyze the language of the Act. The
Elliott Court analyzed both the statutory scheme and the legislative history of the Act to arrive at the conclusion that common law causes of action for construction defects do indeed fall within the purview of the Act.
According to the
Elliott Court, the Act “broadly applies to
any action seeking recovery of damages arising out of, or related to deficiencies in…residential construction and in such an action, a homeowner’s claims or causes of action shall be limited to violation of the standards set forth in the Act, except as specified.” Further, the Act expressly provides that “no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.”
Civil Code §943(a). In turn,
Civil Code §944 allows for a recovery for the cost of repairing a building standard violation, or for the cost of repairing any damage caused by such a violation, among other things.
The limited exceptions to the Act’s applicability concern the enforcement of a contract, or any action for fraud, personal injury, or violation of a statute. Civil Code §943(a). Additionally, the Act does not apply to condominium conversions. Civil Code §896.
The Elliott Court explains that apart from these exceptions, the Legislature intended the Act to apply to all construction defect claims (regardless of damage) relating to the construction of residential properties whose sales contracts are signed after January 1, 2003. There is no exception in the Act, express or implied, for common law causes of action.
Next, the Court turns to the Act’s legislative history to buttress this conclusion. This history makes clear that the Act is a legislative response to the California Supreme Court’s holding in
Aas v. Superior Court (2000) 24 Cal.4th 627, that construction defects in residential properties are only actionable in tort when actual property damage manifests. Senate Judiciary Committee hearings indicate that the Act was the product of protracted negotiations between varying interested parties, including construction industry trade groups and consumer protection groups. The Legislature intended (1) to promulgate building standards, violations of which would be actionable, even without damage, and (2) to allow homeowners to recover for actual damage caused by construction defects not covered by the building standards. In other words, the Act was intended to provide homeowners redress regardless of whether damage had manifested.
Therefore, the Court concluded that common law causes of action for construction defects, regardless of damage, are subject to the pre-litigation procedure set forth in the Act. The Court issued a writ of mandate directing the trial court to vacate its earlier order, and to enter a new order granting Elliott’s motion to stay the litigation until the homeowners (and Elliott) have satisfied the pre-litigation procedure of the Act.
II. McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132
Similar to the Third Appellate District Court’s ruling in
Elliott, the Fifth Appellate District Court also rejected the holding of
Liberty Mutual in a matter now pending before the California Supreme Court:
McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132 (review granted and opinion superseded sub nom.
Albany v. Superior Court 360 P.3d 1022). Also similar to
Elliott, in
McMillin a group of homeowners filed common law construction defect claims against the builder of their homes. The builder,
McMillin, moved to stay the litigation pending compliance with the Act’s pre-litigation procedure. The trial court denied the motion, holding that the Act does not apply because the homeowners have not asserted statutory building standard violations contained within the Act.
In reasoning substantially similar to that of
Elliott, the
McMillin Court rejected Liberty Mutual’s holding that the Act is not the exclusive remedy for pursuing construction defect claims, with or without damage. Thus, the
McMillin Court issued a writ of mandate to vacate the trial court’s earlier order and to enter a new order granting McMillin’s motion to stay.
On November 24, 2015, the California Supreme Court granted the homeowners’ petition for review. In August of 2016, briefing was completed and the matter is now awaiting the scheduling of arguments. CGDRB will continue to closely monitor the pending appeal of this matter to the California Supreme Court, as well as all related developments.
Reprinted courtesy of
Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and
Ravi R. Mehta, Chapman Glucksman Dean Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Mehta may be contacted at rmehta@cgdrblaw.com
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Florida Enacts Sweeping Tort Reform Legislation, Raising Barriers to Insurance Coverage Claims
April 18, 2023 —
Walter J. Andrews, Andrea DeField & Jae Lynn Huckaba - Hunton Insurance Recovery BlogAs discussed in a recent
client alert, on March 24, 2023, Florida Governor Ron DeSantis signed House Bill (HB) 837 into law, making it more difficult and costly for insurance policyholders of all sizes to sue insurers for bad faith by eliminating fee-shifting for most policyholders and requiring something “more than” negligence for bad faith claims.
HB 837’s Impact on Insurance Coverage Claims:
HB 837 is another in a series of reform legislation recently passed in Florida that significantly impacts policyholders’ ability to hold their insurers accountable for the wrongful failure to pay benefits due under the insurance contract. Recent efforts include last year’s repeal of the one-way fee-shifting statute for claims brought under residential and commercial property insurance policies. Previously, the fee-shifting statute allowed policyholders to recover attorneys’ fees from their insurers when the policyholder prevailed in a coverage action. HB 837 repeals
Section 627.428 of the Florida Statutes entirely, extending the repeal of the one-way fee-shifting statute to all types of insurance coverage disputes—not just those under residential and commercial property insurance policies.
Reprinted courtesy of
Walter J. Andrews, Hunton Andrews Kurth,
Andrea DeField, Hunton Andrews Kurth and
Jae Lynn Huckaba, Hunton Andrews Kurth
Mr. Andrews may be contacted at wandrews@HuntonAK.com
Ms. DeField may be contacted at adefield@HuntonAK.com
Ms. Huckaba may be contacted at jhuckaba@HuntonAK.com
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Renovation Contractors: Be Careful How You Disclose Your Projects
December 09, 2011 —
Derek J. Lindenschmidt, Colorado Construction LitigationIn Palu and Beyer v. Toney, 2011 WL 2560249 (Bankr. D. Colo.), the United States Bankruptcy Court for the District of Colorado determined that a Colorado District Court order granting summary judgment in favor of plaintiff home buyers was binding on the Bankruptcy Court in the defendant contractor’s bankruptcy proceeding based on issue preclusion.
Pertinent to this column is the subject matter of the summary judgment motion: Colorado’s Seller’s Property Disclosure (Form LC-18-5-04). In the underlying state court action, the plaintiff home buyers filed a motion for summary judgment contending that the defendant contractor represented to them, through the Seller’s Property Disclosure, that there were no present or past conditions involving moisture or water problems, roof problems or leaks, skylight problems, or gutter downspout problems.
In granting plaintiffs’ motion, the state court determined that the defendant contractor made these representations on her Seller’s Property Disclosure despite witnessing water leaking from the skylight onto the floor and being aware of repairs to the roof, skylight, and interior drywall prior to the sale of the property.
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Reprinted courtesy of Derek J. Lindenschmidt of Higgins, Hopkins, McClain & Roswell, LLP. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com
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Florida Accuses Pool Contractor of Violating Laws
June 28, 2013 —
CDJ STAFFOne customer said that after his pool was finished, he started having problems with the concrete and tiles. He’s still waiting for the $7,300 he was awarded at arbitration. Others have complained that Nationwide Pools dug up their back yards and didn’t finish the work. Construction defects were not repaired, despite promises. And even after the company stopped doing any work anywhere, they continued to charge their customers “progress payments.”
The State of Florida has stepped into this, seeking restitution for homeowners who were charged for partially built or defective pools, and preventing the company officials from ever working in the pool construction industry. According to the suit, customers who complained about delays were told “a series of lies and misrepresentations about ‘supply shortages’ and ‘damaged items’ in order to string them along.”
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No Indemnity After Insured Settles Breach of Implied Warranty of Habitability Claims
June 09, 2016 —
Tred R. Eyerly – Insurance Law HawaiiApplying Illinois law, the federal district court ruled that there was no coverage for the insured's settlement of claims based upon breach of the implied warranty of habitability. Allied Prop. & Cas. Ins. Co. v. Metro North Condo. Ass'n, 2016 U.S. Dist. LEXIS 43452 (E.D. Ill. March 31, 2016).
Metro North sued the developer of its condominium and a number of its contractors and subcontractors for defective construction that caused various problems, including water infiltration. One subcontractor, CSC, was to provide window and glazing services. After a rainstorm, water infiltrated the project due to CSC's work. Metro North claimed that CSC was liable for breach of the implied warranty of habitability.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Economist Predicts Housing Starts to Rise in 2014
February 12, 2014 —
Beverley BevenFlorez-CDJ STAFFDavid Crowe, chief economist of the National Association of Home Builders (NAHB), predicts “that single-family home starts in the U.S. could rise more than 30 percent in 2014,” according to Dallas News. “My single-family forecast for 2014 is pretty aggressive — it’s 822,000 starts,” Crowe said to Dallas News. “Which is roughly 200,000 starts more than what we will likely end up with in 2013.”
Dallas News also reported specifically on the Texas market. The NAHB forecasts that “by next year, Texas’ housing production will be back to ‘normal’ levels.” However, that is still below “the pre-recession peak” numbers.
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