Seattle Washington Building Expert Directory

South Caroline Holds Actual Cash Value Can Include Depreciation of Labor Costs

July 05, 2021 — Tred R. Eyerly - Insurance Law Hawaii
Answering a certified question, the South Carolina Supreme Court held that the insurer could calculate actual cash value (ACV) by including an estimate of the depreciation of embedded labor costs. Butler v. Travelers Home & Marine Ins. Co., 2021 S. C. LEXIS 51 (S.C. May 12, 2021). Two insureds had their homes damaged in separate fires. Each held homeowners' policies with Travelers. The policies provided replacement cost value coverage to repair or replace damaged portions of homes. In the event that the insures chose not to immediately repair or replace the damaged home, the policies afforded payment to the insured for the actual cash value instead of replacement cost value. Both insured elected not to immediately repair or replace their homes, thereby deciding to accept a cash payment for the ACV of the damaged property. Neither was satisfied with the payment and both filed suit in federal district court. Travelers determined the ACV payment by estimating the replacement cost value (RCV) of the damage and then subtracting depreciation. The certified question presented by the federal district court was whether Travelers could depreciate the labor component of the costs of repair or replacement when determining the ACV. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Five-Year Statute of Limitations on Performance-Type Surety Bonds

December 01, 2017 — David Adelstein - Florida Construction Legal Updates
The statute of limitations on a claim against a performance-type bond is 5 years from the breach of the bond, i.e., the bond-principal’s default (based on the same statute of limitations that governs written contracts / obligations). See Fla. Stat. s. 95.11(2)(b). This 5-year statute of limitations is NOT extended and does NOT commence when the surety denies the claim. It commences upon the default of the bond-principal, which would be the act constituting the breach of the bond. This does not mean that the statute of limitations starts when a latent defect is discovered. This is not the case. In dealing with a completed project, the five-year statute of limitations would run when the obligee (beneficiary of the bond) accepted the work. See Federal Insurance Co. v. Southwest Florida Retirement Center, Inc., 707 So.2d 1119, 1121-22 (Fla. 1998). This 5-year statute of limitations on performance-type surety bonds has recently been explained by the Second District in Lexicon Ins. Co. v. City of Cape Coral, Florida, 42 Fla. L. Weekly D2521a (Fla. 2d DCA 2017), a case where a developer planned on developing a single-family subdivision. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

Builder and County Tussle over Unfinished Homes

November 13, 2013 — CDJ STAFF
Rivard, Florida has been trying to get rid of a group of unfinished homes destroyed. Now Hernando County officials have decreed that the partially-built homes are unsafe and must be demolished. However, after the building permits were withdrawn, Costa Homes filed a lawsuit asking that they be reinstated. The county had given the builder a deadline to file new permits, but were met with a lawsuit. Costa Homes seeks to be relived of the county’s requirement that each of the six homes be provided with $10,000 bond and also finds the county’s completion schedule to be “so short it constitutes a prescription for failure.” Building officials had declared the structures unsafe in August and had stipulated that they had to be made safe. Read the court decision
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Court of Appeal Holds That Higher-Tiered Party on Construction Project Can be Held Liable for Intentional Interference with Contract

December 07, 2020 — Garret Murai - California Construction Law Blog
In Caliber Paving Company, Inc. v. Rexford Industrial Realty and Management, Inc., Case No. G0584406 (September 1, 2020), the 4th District Court of Appeal examined whether a higher-tiered party on a construction project can be held liable for intentional interference with contract when it interferes with the contract between lower-tiered parties even though the higher-tiered party has an economic interest in the contract between the lower-tiered parties. The Caliber Paving Case Project owner Rexford Industrial Realty and Management, Inc. owns and operates industrial property throughout Southern California. In 2017, Rexford hired contractor Steve Fodor Construction to perform repaving work at Rexford’s property in Carson, California. Fodor Construction in turn hired subcontractor Caliber Paving Company, Inc. to perform the repaving work. The subcontract divided the parking lot into four areas, with separate costs to repave each area, and Caliber completed its work in one area in June 2017. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Brief Discussion of Enforceability of Anti-Indemnity Statutes in California

September 10, 2014 — William M. Kaufman – Construction Lawyers Blog
California Civil Code Section 2782 has been amended numerous times over the last several years. Essentially, Anti-indemnity statutes may not be fully effective for contracts entered into before January 1, 2009. Some developers and general contractors attempted to comply with the new law, and changed the indemnity provisions of their contracts post January 1, 2006. The time bracket, or zone of danger if you will, is between 1/1/06 and 1/1/09—during those three years California Civil Code §2782 was amended several times. After 1/1/09 Type I indemnity is gone in a residential construction context. The 2005 amendment to Civil Code §2782 rendered residential construction contracts entered into after 1/1/06 containing a Type I indemnity provision in favor of builders unenforceable; The 2007 amendment added contractors not affiliated with the builder to the list of contracting parties who could not take advantage of a Type I indemnity provision; However, the 2008 amendment changed the effective date to 1/1/09, dropped any mention of 2006, and added GCs, other subs, their agents and servants, etc., to the list of possible contracting parties who could not take advantage of a Type I indemnity provision[.] Reprinted courtesy of William M. Kaufman, Lockhart Park LP Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com Read the court decision
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Don’t Do this When it Comes to Construction Liens

September 07, 2020 — David Adelstein - Florida Construction Legal Updates
When it comes to preparing and recording a construction lien, this case is an example of what NOT TO DO! I mean it — this exemplifies what NOT TO DO! It is also a case study of why a party should always work with counsel in preparing a construction lien so that you can avoid the outcome in this case–your lien being deemed fraudulent. In Witters Contracting Company v. West, 2020 WL 4030845 (Fla. 2d DCA 2020), homeowners hired a contractor to renovate their home under a cost-plus arrangement where the contractor was entitled to a 10% fee on construction costs. The contract also required extra work to be agreed in writing between the owner and contractor. During construction a dispute arose. The contractor texted the owner that it will cancel the permit and record a $100,000 construction lien if the owner did not pay it $30,000. Shortly thereafter, the contractor’s counsel sent the homeowners a demand for $59,706 with back-up documentation. Less than a week later, the contractor recorded a construction lien for $75,000. The owners initiated a lawsuit against the contractor that included a claim for fraudulent lien. The contractor then amended its construction lien for $87,239. 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

Vancouver’s George Massey Tunnel Replacement May Now be a Tunnel Instead of a Bridge

January 06, 2020 — Tim Newcomb - Engineering News-Record
The constant political back-and-forth in British Columbia, Canada, over how to deal with an aging George Massey Tunnel, opened in 1959, has ping-ponged from uncertainty to a $3.5 billion, 10-lane bridge, back to uncertainty, to no bridge and now to an eight-lane submerged tunnel. Tim Newcomb, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Dust Infiltration Due to Construction Defect Excluded from Policy

September 09, 2011 — CDJ STAFF

A summary judgment was affirmed in the case of Brown v. Farmers Group, by the California Court of Appeals. The Browns bought a new home in Oakley, California. At the time, they signed disclosure statement “acknowledging that the area around their home experienced gusty winds and would be in development for years to come, which might result in dust and airborne mold.”

The Browns found an unusual amount of dust in their home, which became worse when they ran their heating and air conditioning system. Shelia Brown was later diagnosed with chronic valley fever, which was attributed to airborne mold. The Browns contacted Farmers which investigated the house. Although the adjustor from Farmers said the Browns would be covered, Farmers denied the claim.

After the Browns moved out of the house, an inspector found that the HVAC line in the attic was disconnected, sending dust into the home. The Browns brought action against Mid-Century Insurance, which managed the policy, and Farmers. The identified the HVAC defect, window problems, and valley fever as causes, suing for breach of contact, breach of implied covenant of good faith and fair dealing, and the intentional infliction of emotional distress.

The court rejected all these claims. The policy with Farmers excluded losses due to defective construction. This ruled out the faulty HVAC system and any problems there might have been from the windows. The policy also specifically excluded losses from contamination, fungi, pathogens, and noxious substances. The court further found that the adjustor’s opinion was irrelevant to the question of what the policy actually covered. Finally, the court found no evidence of intentional infliction of emotional stress.

On review, the appeals court upheld the trial court’s conclusions and affirmed the summary judgment.

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