Seattle Washington Building Expert Directory

Court Strikes Down Reasonable Construction Defect Settlement

December 20, 2012 — CDJ STAFF
The Court of Appeals of Washington has struck down a construction defect settlement between a building owner and the companies she hired to repair the siding, among other repairs to bring the building up to code. Yuan Zhang hired Hawk Construction LLC to do repair work. Hawk, in turn, hired Ready Construction LLC for some aspects of the project. Hawk and Ready were both insured by Capital Specialty Insurance Corporation. There were several problems with Ready’s work. After removing old siding, they did not protect the building, nor did they remove all of the damaged layers. Ready covered, but did not fix, a mildew problem under the old siding. When new siding was reattached, the nails used were too short to adequately attach it. After paying for an inspection of the work, Zhang had Hawk and Ready begin the repairs again, but the work was abandoned without being completed. Zhang sued Hawk for breach of contract. Hawk then sued Ready, claiming that “Ready was liable to Hawk to the extent that Hawk was liable to Zhang.” Capitol retained defense for both contractors. Zhang settled with Hawk, in an agreement that gave her “the right to collect and/or pursue all costs and attorney fees paid by Hawk or its insurance company defending against the Zhang’s claims and pursuing claims against Ready.” Subsequently, she also settled with Ready. Both companies ceased operations. Zhang had the settlements reviewed by a court, which concluded that the settlements were reasonable. Capital was allowed to appeal, claiming that the settlement included costs that were Zhang’s responsibility. The appeals court did not examine the question of the reasonableness of the settlement, concluding that Capitol’s interests were relevant only to “questions of bad faith, collusion, and fraud.” In the case of Zhang, the court concluded that the relationship between Zhang and her former contractors was collusive. The court noted that “bad faith or collusion may exist when the evidence indicates a joint effort to create, in a non-adversarial atmosphere, a resolution beneficial to both parties, yet highly prejudicial to the insurer as intervener.” The court noted that both companies had minimal assets which were, in any case, exempted from the agreement. Further, the court found that the agreements failed to determine “what amount of the repairs related to preexisting water damage.” Zhang’s calculation of costs also included her expenses for architectural and engineering services, which the court points out, “where always Zhang’s costs to bear.” The court concluded that “the overall structure of the settlements is highly probative of collusion, fraud, or bad faith.” Zhang’s agreements with Hawk and Ready allowed her to collect compensation from Hawk and then collect Ready’s compensation to Hawk for their portion of the settlement, allowing Zhang to collect the monies twice. Further, she was allowed to pursue Capitol for Hawk’s attorney expenses, even though Hawk had none. “The right to recover Hawk’s fees merely set up a windfall recovery for Zhang.” The court described the agreements among Zhang, Hawk, and Ready as “precisely the type of manipulation [the law] is intended to preclude.” Read the court decision
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Bridges Crumble as Muni Rates at Least Since ’60s Ignored

June 26, 2014 — William Selway and Brian Chappatta – Bloomberg
No state is needier than West Virginia when it comes to fixing crumbling highways, airports and water works, with annual repair needs of $1,035 per resident that’s three times the national average. Yet even with borrowing costs hovering close to four-decade lows, lawmakers rejected a January proposal to sell $1 billion of bonds to repair roads that run through the Appalachian Mountains. Budget cuts were a more immediate concern, they said. Across the U.S., localities are refraining from raising new funds in the $3.7 trillion municipal-bond market after the worst financial crisis since the Great Depression left them with unprecedented deficits. Rather than take advantage of Federal Reserve (FDTR) policy that’s held benchmark interest rates at historic lows since December 2008, they’re repaying obligations by the most on record. Mr. Selway may be contacted at wselway@bloomberg.net; Mr. Chappatta may be contacted at bchappatta1@bloomberg.net Read the court decision
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Reprinted courtesy of William Selway and Brian Chappatta, Bloomberg

Aurora Joins other Colorado Cities by Adding a Construction Defect Ordinance

September 03, 2015 — Beverley BevenFlorez-CDJ STAFF
According to the Aurora Sentinel, the city council of Aurora, Colorado, approved an ordinance targeted at making it more difficult for homeowners to sue builders over construction defect claims. Similar to other recent Colorado city construction defect measures, “the new rule gives builders the right to repair defects before the litigation is pursued, requires that the majority of home owners in a home owners association – as opposed to just a majority of HOA board members – approve of any lawsuits, and allows builders to offer monetary settlements to homeowners in lieu of repairs.” Read the court decision
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Undocumented Debris at Mississippi Port Sparks Legal Battle

July 26, 2017 — Jim Parsons - Engineering News-Record
Undocumented underground debris fields at a Gulf of Mexico port project are at the heart of a contractor’s nearly $50-million federal lawsuit against the Mississippi Development Authority and eight engineering and construction consultants. Read the court decision
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Reprinted courtesy of Jim Parsons, ENR
ENR may be contacted at ENR.com@bnpmedia.com

U.K. Developer Pledges Building Safety in Wake of Grenfell

April 19, 2022 — Ryan Hesketh - Bloomberg
Crest Nicholson Plc intends to sign the building safety pledge set up in the aftermath of the Grenfell fire in 2017 to improve standards that may cost the U.K. developer as much as 120 million pounds ($157 million). The company’s best estimate of further liability as a result of the pledge would be 80 million pounds to 120 million pounds, according to a statement Tuesday. Since 2019, Crest Nicholson has recorded 47.8 million pounds of net charges from obligations imposed after the fire at Grenfell Tower in London in which flammable cladding materials contributed to the deaths of 72 people. The Secretary of State for the Department for Levelling Up, Housing and Communities announced in January the government’s intention to increase the legal obligation on developers to fix potentially dangerous buildings. Since then, Crest Nicholson has engaged in “intensive dialogue” with the government about the new guidelines, resulting in the decision to sign the pledge, the firm said in the statement. The new restrictions will be enacted in law through proposed amendments to the Building Safety Bill that is currently passing through parliament. Crest Nicholson is currently considering whether any further regulatory approvals are required in respect of the proposed laws, according to the statement. Read the court decision
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Reprinted courtesy of Ryan Hesketh, Bloomberg

The Right to Repair Act Means What it Says and Says What it Means

December 18, 2022 — Garret Murai - California Construction Law Blog
A rather short case for a short week. In Gerlach v. K. Hovnanian’s Four Seasons at Beaumont, LLC, 82 Cal.App.5th 303 (2022), the 4th District Court of appeals examined provisions of the Right to Repair Act (Civ. Code §§895 et. seq), also known as “SB 800” after its original bill number, as it applies to roofs. The Gerlach Case Lynn Gerlach and Lola Seals are homeowners who purchased their homes in the Four Seasons at Beaumont adult community, for those 55 year old and older, located in Beaumont, California. Gerlach purchased her home when it was built in 2006. Seals purchased her home from the original owners in 2015. In 2015 and 2016, Gerlach and Seals served the developer, K. Hovnanian’s Four Seasons at Beaumont, LLC, with claim notices under the Right to Repair Act. The Right to Repair Act, as its name implies, provides notice requirements and repair rights by developers of new single-family homes. The Right to Repair Act also includes construction standards, the violation of which, provides homeowners with a statutory basis for bringing construction defect claims. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Judge Rejects Extrapolation, Harmon Tower to Remain Standing

November 07, 2012 — CDJ STAFF
CityCenter has filed an emergency motion asking the Nevada Supreme Court to intervene in Judge Elizabeth Gonzalez’ order that the building’s defects cannot be extrapolated from those tested. CityCenter’s structural engineering expert “evaluated 397 of the Harmon’s critical structural elements and found all but one defective,” according to the article on Vegas.Inc. Judge Gonzalez would not permit this to be extrapolated to the untested 1,072, as the locations tested were not random. Judge Gonzalez also ruled that if CityCenter does additional testing, they may not appeal her order that ruled the extrapolation inadmissible. CityCenter argued to the Nevada Supreme Court that “the notion that CityCenter should be forced to incur additional millions of dollars in testing costs and sanctions – on the condition that it waive its right to appeal this ruling – just to be permitted to present its own damages evidence, shocks the conscience.” Gonzalez gave the okay to CityCenter to demolish the building, but its demolition would make any further testing impossible. Under Gonzalez’ ruling, the untested structural elements cannot b assumed to be defective. Read the court decision
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How A Contractor Saved The Day On A Troubled Florida Condo Project

November 18, 2019 — John Zander - Engineering News-Record
Enough isn’t said about general contractors on rocky, out-of-control projects who take the lead in solving problems they didn’t create. That’s what I found troubleshooting projects for a Chicago bank. A good example is a $200-million Florida apartment complex being built in 2007, when labor was as tight as it is now and in some places even tighter. Reprinted courtesy of John Zander, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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