Background Owner of Property Cannot Be Compelled to Arbitrate Construction Defects
November 07, 2012 —
CDJ STAFFIn Truppi v. Pasco Engineering, John Quattro sued Property Management Contractors, Inc. over construction defects in William Truppi’s home. All parties are named in the suit. The California Court of Appeals ruled that Property Management Contractors, Inc. (PMCI) could not compel Mr. Quattro to arbitration.
The background of the case involves two houses built in Encinitas, California by PCMI: one for Mr. Truppi at 560 Neptune, and one for Mr. Quattro at 566 Neptune. Both contracts contained an arbitration provision. Mr. Quattro signed the contract for his residence and Mr. Truppi signed the other. Mr. Quattro then sued PCMI and its principal, William Gregory. Mr. Quattro claimed to be the true contracting party for the 560 Neptune residence and a third party beneficiary of the contract Mr. Truppi signed, and stated that PCMI was aware of this.
PCMI in a demurrer stated that Quattro “had only a ‘prospective beneficial interest in the property upon its eventual sale or lease.’” Mr. Quattro amended his complaint to account for the issues raised by PCMI. The court rejected PCMI’s demurrer to the amended complaint.
Finally, PCMI and Gregory asserted that Quattro was “not the real party in interest” and could not sue. PCMI continues to assert that Quattro lacks standing, but their attorney sent Quattro an e-mail stating, “While my client disputes that you are a party, and that you lack standing to assert the claim, to the extent you do so I believe you are obligated to proceed by way of arbitration.”
The court did not cover the issue of Quattro’s standing in the case, only if he could be compelled to arbitration. The court affirmed the lower court’s finding that Quattro could not be compelled to arbitrate the construction defect claim as neither he nor Gregory signed the contract in an individual capacity. Further, the court noted that PCMI and Gregory “denied the existence of an agreement between themselves and Quattro on the 560 contract,” and cannot compel arbitration on a non-existent agreement. And while non-signatories can, in some situations be compelled to arbitrate, the court found that “these cases are inapplicable because here they seek to have the alleged third party beneficiary (Quattro) compelled by a nonsignatory (Gregory).” The arbitration clause in question “expressly limited its application to persons or entities that signed the 560 contract.”
As Mr. Quattro was not a signatory to that agreement, the court found that he could not be held to its arbitration provision.
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Towards Paperless Construction: PaperLight
June 02, 2016 —
Aarni Heiskanen – AEC BusinessI just toured the newly built headquarters of a financial corporation. Our guide, a M&A specialist, boasted that they have completely removed paper from their offices. Could paperless construction become feasible any time soon? PaperLight is a portable smart board that could replace paper drawings on many occasions.
Rollout, Inc., the developer of PaperLight, says that 90% of contractors still use paper plans. AEC firms spend, on average, $1600 per employee on printing annually. Over 37 million construction drawings are printed every year. Finding a usable solution that reduces these numbers makes economic sense. Even more so if you consider all the costs of errors that result from using outdated paper drawings.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aarni@aepartners.fi
Crisis Averted! Pennsylvania Supreme Court Joins Other Courts in Finding that Covid-19 Presents No Physical Loss or Damage for Businesses
October 21, 2024 —
Edward M. Koch & Marc L. Penchansky - White and Williams LLPSeeking to find some relief from business losses experienced during the COVID-19 pandemic, many businesses turned to their property insurers for coverage for their lost income. A clear national trend emerged among courts deciding the issue, as most businesses could not establish coverage because they had not experienced a “direct physical loss of or damage to their covered property” as required by most policies.
While this legal question may have become an afterthought for many attorneys, the question remained an open one in Pennsylvania while the Pennsylvania Supreme Court considered two contradictory holdings issued in the Superior Court on this topic. Compare Macmiles, LLC v. Erie Ins. Exch., 286 A.3d 331 (Pa. Super. 2022) (holding there was no coverage for loss of use of a commercial property unaccompanied by any physical alteration or other physical condition that rendered the property unusable or uninhabitable) with Ungarean v. CNA, 286 A.3d 353 (Pa. Super. 2022) (holding that the policy at issue was ambiguous and therefore the policy covered the insured for COVID-related business losses). Last week, the Supreme Court considered the Superior Court’s holdings in Macmiles and Ungarean and held, at long last, that COVID-19 did not cause a direct physical loss of or damage to covered property.
Reprinted courtesy of
Edward M. Koch, White and Williams LLP and
Marc L. Penchansky, White and Williams LLP
Mr. Koch may be contacted at koche@whiteandwilliams.com
Mr. Penchansky may be contacted at penchanskym@whiteandwilliams.com
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Boston Nonprofit Wants to Put Grown-Ups in Dorms
March 19, 2015 —
Patrick Clark – BloombergHere's a broad summary of millennials' housing problems: Stagnant wages and heavy debt loads have made it hard to afford a house, while high demand for rental units in the most happening cities allow landlords to raise rents, making it even harder to save for a down payment.
In Boston, where these forces are particularly acute, urban policy wonks are offering a new solution: Put the young people in pens.
OK, not quite. The authors of a new report from the Boston Foundation, a philanthropic organization that funds local nonprofits, prefer the phrase "millennial villages," dorm-like developments that maximize space by combining smaller living spaces with lots of common areas. Specifically, the report suggests building 10,000 units that make up for cramped living quarters by including shared lounges, health clubs, and shared areas for study, music practice, or launching a technology startup. For young tenants really interested in cutting costs, some could be built with shared kitchens.
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Patrick Clark, BloombergMr. Clark may be contacted at
jclark185@bloomberg.net
Landmark San Diego Hotel Settles Defects Suit for $6.4 Million
March 04, 2011 —
Beverley BevenFlorezCDJ STAFFAfter five years of legal battles, the condo owners of the El Cortez Hotel building in downtown San Diego settled for $6.4 million, as reported by The San Diego Union-Tribune on March 28, 2011. The Homeowners Association will net just over $3 million from the settlement.
The litigation may have had an adverse effect on the value of the condos within the El Cortez Hotel building. According to an article by Kelly Bennett of Voice of San Diego, “Many condos in the building originally sold for more than $600,000. Currently, the three units on the market are asking for just more than $200,000, the U-T said.”
Andrew Berman, the owners’ attorney, told The San Diego Union-Tribune that the five years of litigation included six lawsuits, 200 depositions, and multiple construction tests.
Read the full story... (San Diego Union Tribune)
Read the full story... (Voice of San Diego)
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Use of Dispute Review Boards in the Construction Process
December 27, 2021 —
Sarah B. Biser - ConsensusDocsDispute Review Boards: Overview
Problems, disagreements and claims arise in most large and complex construction projects regardless of the project delivery method. These disputes can and do delay and significantly increase the cost of the project. Dispute Review Boards, also known as Dispute Resolution Board, Dispute Board, Dispute Avoidance Board or DRB, are often found in large construction projects to assist the parties to minimize, resolve or avoid disputes and mitigate adverse impacts to projects. To date, over $270 billion worth of construction projects have used the dispute review board process to avoid numerous disputes and achieve significant savings.[1]
Unlike mediation and arbitration, a DRB is convened at the very beginning of the project and conducts regular meetings and visits at the project site throughout, allowing the DRB to discuss, observe and monitor construction, progress and potential disputes. At these meetings, DRB members become familiar with many of the facts and acquaint themselves with the job site personnel. If a dispute is submitted to them, the panelists have a great deal of knowledge about the circumstances of the problem to aid them in reaching their recommendations or conclusions. DRBs also encourage open and honest communications among or between the parties during the project, which in turn, encourages avoidance or resolution of disputes before they become formal claims. In short, the DRP process involves real-time discussion of the dispute with highly qualified people who know the particular project from day one and can provide recommendations on how to resolve disputes.
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Sarah B. Biser, Fox Rothschild LLPMs. Biser may be contacted at
sbiser@foxrothschild.com
No Coverage for Collapse of Building
January 04, 2021 —
Tred R. Eyerly - Insurance Law HawaiiDamage to a building caused by the break of a water pipe was not a collapse under the policy. Naabani Twin Stars v. Travelers Cos., 2020 U.S. Dist. LEXIS 196443 (D. N. M. Oct. 22, 2020).
An underground water line ruptured on plaintiffs property This caused a collapse under the adjacent parking lot, which in turn caused land beneath the building go change positions and damage the building. A geotechnical consultant concluded that a material change in the site conditions occurred as a direct result of the rupture of the water pipe in the parking lot, and that those changes directly affected the settlement of the building.
Travelers denied coverage for the damage. Travelers concluded that the building settlement was the result of subsurface movement, which invoked the earth movement exclusion. Travelers inspection concluded that the building was not in a state of collapse. The policy defined collapse as "an abrupt falling down or caving in of a building or structure, or any part of a building or structure, with the result that the building, or part of the building, cannot be occupied for its intended purpose."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
New York Considering Legislation That Would Create Statute of Repose For Construction
April 05, 2021 —
Richard W. Brown & Anna M. Perry - Saxe Doernberger & Vita, P.C.New York is considering legislation, which, if enacted, would create a statute of repose limiting the number of years after completion of a construction project that legal action may be asserted against a contractor. New York currently remains the only state without a statute of repose for construction. Earlier this year, however, the New York State Legislature introduced Bills S04127 and A01706 (the “Bill”) , which would impose a 10-year period of repose in which an injured party may bring suit against a design professional and/or a contractor for bodily injury or property damage resulting from a construction defect.
Currently, contractors and design professionals have exposure to bodily injury and property damage claims resulting from construction defects for an unlimited number of years after completion of a project. If enacted, the Bill would limit the period of repose to 10 years after the project is completed, which is deemed to occur upon substantial completion or acceptance by the owner. An additional 1-year grace period is provided for an injured party to file suit where bodily injury or property damage occurs in the tenth year after completion. The Bill notably limits the applicability of the 10-year statute of repose to third-party actions and thereby preserves the existing 3-year and 6-year statutes of limitation applicable to actions asserted by an owner or client for professional malpractice and breach of contract, respectively.
Reprinted courtesy of
Richard W. Brown, Saxe Doernberger & Vita, P.C. and
Anna M. Perry, Saxe Doernberger & Vita, P.C.
Mr. Brown may be contacted at RBrown@sdvlaw.com
Ms. Perry may be contacted at APerry@sdvlaw.com
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