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$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed To Prove Supplier’s Negligence Or Breach Of Contract Caused A SB800 Violation

June 05, 2017 — Jon A. Turigliatto & Chelsea L. Zwart - CGDRB News & Publications
The Fourth District California Court of Appeal published its decision, Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, holding that claims against a material supplier under SB800 (Civil Code §895, et. seq.) require proof that the SB800 violation was caused by the supplier’s negligence or breach of contract. In this case, Acqua Vista Homeowners Association (“the HOA”) sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development. The HOA’s complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building. At trial, the HOA presented evidence that the pipes supplied by MWI contained manufacturing defects, that they leaked, and that the leaks had caused damage to various parts of the condominium development. The jury returned a special verdict against MWI, and the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury’s finding that MWI was 92% responsible for the HOA’s damages. MWI filed a motion for a directed verdict prior to the jury’s verdict and motion for judgment notwithstanding the verdict following the entry of judgment, both on the grounds that the HOA had failed to present any evidence that MWI had caused a SB800 violation as a result of its negligence or breach of contract, and had therefore failed to prove negligence and causation as required by SB800. MWI relied on the Fourth District’s prior decision in Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, and its interpretation therein of Civil Code §936, which states, in relevant part, that the statute applies “to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract….” (emphasis added.) However, the trial court denied both motions, relying on the last sentence of Civil Code §936, which states in part, “[T]he negligence standard in this section does not apply to any…material supplier…with respect to claims for which strict liability would apply.” Reprinted courtesy of Jon A. Turigliatto, Chapman Glucksman Dean Roeb & Barger and Chelsea L. Zwart, Chapman Glucksman Dean Roeb & Barger Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com Ms. Zwart may be contacted at czwart@cgdrblaw.com Read the court decision
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New Jersey Strengthens the Structural Integrity of Its Residential Builds

March 11, 2024 — Matthew D. Stockwell - Gravel2Gavel Construction & Real Estate Law Blog
In response to the June 2021 Champlain Towers collapse in Florida, New Jersey supplemented its State Uniform Construction Code Act by enacting legislation (effective January 8, 2024) to strengthen laws related to the structural integrity of certain residential structures in the State. The legislation applies to condominiums and cooperatives (but not single-family dwellings or primarily rental buildings) with structural components made of steel, reinforced concrete, heavy timber or a combination of such materials. The legislation also supplements the Planned Real Estate Development Full Disclosure Act to ensure that associations created under the Act maintain adequate reserve funds for certain repairs. The legislation requires structural engineering inspections of any primary load-bearing system (structural components applying force to the building which deliver force to the ground including any connected balconies). Buildings that are constructed after the date the legislation was signed must have their first inspection within 15 years after receiving a Certificate of Occupancy. Buildings that are 15 years or older must be inspected within two years of the legislation. Thereafter, the structural inspector will determine when the next inspection should take place, which will be no more than 10 years after the preceding inspection, except for buildings more than 20 years old which must be inspected every five years. Also, if damage to the primary load-bearing system is otherwise observable, an inspection must be performed within 60 days. Read the court decision
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Reprinted courtesy of Matthew D. Stockwell, Pillsbury
Mr. Stockwell may be contacted at matthew.stockwell@pillsburylaw.com

There’s Still No Amazon for Housing, But Fintech’s Working on It

February 14, 2022 — Patrick Clark - Bloomberg
It’s hard to imagine a better scenario for real estate technology than the one that played out in 2021. Low interest rates and pent-up demand ignited the hottest housing market on record, while the pandemic gave buyers and sellers new reasons to conduct business virtually. And yet the year will be better remembered for the way some of the biggest names in the industry struggled. The highest-profile flop was Zillow Group Inc., the online listings giant that pulled the plug on its nascent instant homebuying operation in the face of mounting losses. Compass Inc., the tech-driven real estate brokerage, saw its shares plummet 50% as part of a broader selloff in property-related technology stocks. Better, an online mortgage company, fired 9% of its staff. The bumpy year underscored a problem that’s been holding back the adoption of technology in real estate for the past two decades. Each sale of a home involves hundreds of thousands if not millions of dollars, and no two properties are exactly alike. Silicon Valley-backed companies have gone a long way in making searching for homes and advertising them simpler and faster. But it’s a difficult process to move fully online and involves a lot of people such as agents, appraisers, brokers, and contractors, as well as entrenched interests. For example, Zillow’s house buying business—billed as a way for customers to get out of their homes quickly and speed the moving process—faltered in part because the company couldn’t find enough contractors to fix up those homes to resell them. Read the court decision
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Reprinted courtesy of Patrick Clark, Bloomberg

Colorado Senate Bill 15-177: This Year’s Attempt at Reasonable Construction Defect Reform

February 18, 2015 — Zach McLeroy – Colorado Construction Litigation
On February 10, 2015, Senators Scheffer and Ulibarri introduced Senate Bill 15-177, which is sponsored in the House by Representatives DelGrosso and Singer. SB 15-177 amends the prerequisites, found in the Colorado Common Interest Ownership Act (“CCIOA”), for an association to file a construction defect action. The bill has been assigned to the Senate Committee on Business, Labor, and Technology but not yet scheduled for hearing. The major points of the bill include: 1) enforcement of a mediation or arbitration provision contained in the original governing documents of a common interest community, even if subsequently amended or removed; 2) the addition of a requirement that mediation take place before a construction defect action can be filed; 3) heightened requirements that an association board provide advanced notice to all unit owners, together with a disclosure of projected costs, duration, and financial impact of the construction defect claim; 4) the addition of a requirement that the board obtain the written consent of a majority of the owners of units, and; 5) a requirement that prior to the purchase and sale of a property in a common interest community, the purchaser receive notice that binding arbitration may be required for certain disputes. Read the court decision
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Reprinted courtesy of Zach McLeroy, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLeroy may be contacted at mcleroy@hhmrlaw.com

Product Liability Economic Loss Rule and “Other Property” Damage

November 28, 2022 — David Adelstein - Florida Construction Legal Updates
One of the best defenses a manufacturer has, particularly in non-personal injury cases, is the economic loss rule. Lo and behold, a recent opinion out of the Middle District of Florida, Dero Roofing, LLC v. Triton, Inc., 2022 WL 14636884 (M.D.Fla. 2022), touches on this very subject with cogent analysis regarding “other property” damage for purposes of the economic loss rule. In Dero Roofing, a roofing contractor repaired hurricane damage to roofs of condominium buildings. The roofing contractor became a certified applicator of the manufacturer Triton’s products. After the roofer applied certain products with a sprayer, the products “streaked down the roof tiles onto ‘the exterior and interior of the [Condos], including penetration of the residents’ screens, gutters, and other related areas.” Dero Roofing, supra, at *1. The roofing contractor obtained an assignment of the condominium’s claims and sued the manufacturer and distributor of the (Triton manufactured) products. The defendants moved to dismiss under the economic loss doctrine. The economic loss doctrine “prohibits tort recovery when a product damages itself, causing economic loss, but does not cause personal injury or damage to any property other than itself.” Dero Roofing, supra, at *3 (quotation and citation omitted). Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Research Institute: A Shared Information Platform Reduces Construction Costs Considerably

October 26, 2017 — Aarni Heiskanen - AEC Business
A new Danish study shows how the use of a shared digital management and communication platform on large-scale construction projects leads to considerable cost reductions. The Danish Building Research Institute conducted a six-month research project that studied the effects of using a specific IT concept during construction. The three case studies were: 1. The Maersk Tower, a 15-story, 42,700-square-meter extension to the Panum complex. 2. The Niels Bohr Building, a 52,000-square-meter new laboratory and academic building. 3. The Danish Defence’s Property Agency’s construction project portfolio (FES). Each of them used GenieBelt as the shared IT platform. It was used for the progress management of a construction project portfolio, management of construction activities, and communication between the construction management team and contractors. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at info@aepartners.fi

Federal Court Ruling Bolsters the “Your Work” Exclusion in Standard CGL Policies

October 27, 2016 — Daniel E. Levin – Florida Construction Law News
In Evanston Insurance Company v. Dimucci Development Corportion of Ponce Inlet, Inc., the United states District Court for the Middle District of Florida further clarified the standard CGL policy exclusion (L) – the “Your Work” exclusion, one of the several business risk exclusions in a standard CGL policy which insurers and insureds are most likely to encounter in a typical construction defect claim. No. 6:15-cv-486-Orl-37DAB, 2016 U.S. Dist. LEXIS 123678, at *26 (M.D. Fla. Sep. 13, 2016). The lawsuit between Evanston Insurance Company and DiMucci Development Corp. of Ponce Inlet Inc. (“DiMucci”) arose out of initial claims by the homeowners’ association at the Towers Grande high rise in Daytona Beach Shores, Florida, against DiMucci for various construction defect related issues. The lawsuit alleged that DiMucci’s work was defective on a portion of the high rise condominium project, which caused property damage to other elements of the building that DiMucci was also responsible for constructing. Specifically, pertinent here, the Association alleged water damage as a result of DiMucci’s improper waterproofing of the building. Read the court decision
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Reprinted courtesy of Daniel E. Levin, Cole, Scott & Kissane, P.A.
Mr. Levin may be contacted at daniel.levin@csklegal.com

Let’s Talk About a Statutory First-Party Bad Faith Claim Against an Insurer

February 19, 2024 — David Adelstein - Florida Construction Legal Updates
Let’s talk about a statutory first-party bad faith claim against an insurer under Florida law. A recent opinion, discussed below, does a nice job providing a synopsis of a first-party statutory bad faith claim against an insurer: The Florida Legislature created the first-party bad faith cause of action by enacting section 624.155, Florida Statutes, which imposes a duty on insurers to settle their policyholders’ claims in good faith. The statutory obligation on the insurer is to timely evaluate and pay benefits owed under the insurance policy. The damages recoverable by the insured in a bad faith action are those amounts that are the reasonably foreseeable consequences of the insurer’s bad faith in resolving a claim, which include consequential damages. “[A] statutory bad faith claim under section 624.155 is ripe for litigation when there has been (1) a determination of the insurer’s liability for coverage; (2) a determination of the extent of the insured’s damages; and (3) the required [civil remedy] notice is filed pursuant to section 624.155(3)(a).” Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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