Toll Brothers Report End of Year Results
December 11, 2013 —
CDJ STAFFThe largest luxury home builder in the U.S. saw some significant gains in their final quarter for 2013. Their pre-tax income for the year was $150.2 million, up from last year’s $60.7 million, more than doubling. The firm’s revenues went up 65% to $1.04 billion, and the average price of homes was up as well. Toll Brothers is currently selling homes in 232 communities, also increasing over 2012. Due to the upcoming acquisition of Shapell, Toll Brothers projects that at the end of 2014 they will be selling in 250 to 290 communities.
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Insurance Tips for Contractors
December 08, 2016 —
Patrick McNamara - Porter Law GroupMany contractors contentedly accept the insurance policies presented to them by their insurance carriers. However, it is a much better practice to be an active participant in choosing the most appropriate coverage for your business and the specific jobs that you are performing. Use the following tips to be sure your company has the best and most comprehensive coverage.
- Never purchase a Commercial General Liability (“CGL”) policy with a “sunset” provision limiting coverage under Products & Completed Operations liability (P&CO) to a 2, 3 or 4-year term. Why? Because the California statute of limitations for construction defect claims is generally 10 years.
- Never consider a “Claims-made” or “Modified Occurrence” coverage form which also have a built-in limitation as to the length or term of P&CO coverage. Example: If you purchase a claims-made policy and decide to “switch” your insurance to the preferred “occurrence” coverage form, unless a special provision is made prior to the new purchase, the claims-made coverage would become worthless after the sixty (60) day claims-reporting period.
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Patrick McNamara, Porter Law GroupMr. McNamara may be contacted at
pmcnamara@porterlaw.com
Ten-Year Statute Of Repose To Sue For Latent Construction Defects
November 12, 2019 —
David Adelstein - Florida Construction Legal UpdatesIf you are dealing with latent construction defects, it is imperative that you consult with counsel to understand your rights. This not only includes claims for property damage stemming from latent construction defects, but also personal injury stemming from such defects. There is a ten-year statute of repose to sue for latent construction defects. See Fla.Stat. s. 95.11(3)(c). After the expiration of this statute of repose you are out of luck, meaning you can no longer sue.
Now, I probably will not be the first to tell you that the statute of repose is not written so clear that you know the precise date it ends (or the last date you can sue for a latent defect). For this reason, you really want to operate conservatively, meaning it is always better to sue early if you think you could be running on the end of the statute of repose period. It is always advisable to avoid any legitimate argument that you filed your construction defect lawsuit too late.
In Harrell v. The Ryland Group, 44 Fla. L. Weekly D2054b (Fla. 1st DCA 2019), a subsequent owner of a house sued the original homebuilder in negligence for a construction defect causing a personal injury. The subsequent owner claimed the homebuilder defectively installed an attic ladder (that provided access to the attic for the original construction) which collapsed as he was using it. The homebuilder filed a motion for summary judgment that the statute of repose expired so the owner’s claim was time-barred. The First District agreed.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Upturn in Silicon Valley
August 17, 2011 —
CDJ STAFFWork resumed after nearly three years on an office tower in Santa Clara, according to the San Jose Mercury News. Work had stalled on the building due to the economy, but now the developer is planning a second five-story building on the site. Other dormant projects in the area are also getting restarted. Santa Clara County saw the addition of 1,800 construction jobs in June.
A spokesperson for the Operating Engineers Local 3 in Alameda told the paper, “two years ago we had five thousand folks on the out-of-work list. It’s now down to about 1,700.”
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History of Defects Leads to Punitive Damages for Bankrupt Developer
March 01, 2012 —
CDJ STAFFThe South Carolina Court of Appeals has ruled that evidence of construction defects at a developer’s other projects were admissible in a construction defect lawsuit. They issued their ruling on Magnolia North Property Owners’ Association v. Heritage Communities, Inc. on February 15, 2012.
Magnolia North is a condominium complex in South Carolina. The initial builder, Heritage Communities, had not completed construction when they filed for bankruptcy protection under Chapter 11. The remaining four buildings were completed by another contractor. The Property Owners’ Association subsequently sued Heritage Communities, Inc. (HCI) alleging defects. The POA also sued Heritage Magnolia North, and the general contractor, BuildStar.
The trial court ruled that all three entities were in fact one. On appeal, the defendants claimed that the trial court improperly amalgamated the defendants. The appeals court noted, however, that “all these corporations share officers, directors, office space, and a phone number with HCI.” Until Heritage Communities turned over control of the POA to the actual homeowners, all of the POA’s officers were officers of HCI. The appeals court concluded that “the trial court’s ruling that Appellants’ entities were amalgamated is supported by the law and the evidence.”
Heritage also claimed that the trial court should not have allowed the plaintiffs to produce evidence of construction defects at other Heritage properties. Heritage argued that the evidence was a violation of the South Carolina Rules of Evidence. The court cited a South Carolina Supreme Court case which made an exception for “facts showing the other acts were substantially similar to the event at issue.” The court noted that the defects introduced by the plaintiffs were “virtually identical across all developments.” This included identical use of the same products from project to project. Further, these were used to demonstrate that “HCI was aware of water issues in the other projects as early as 1998, before construction on Magnolia North had begun.”
The trial case ended with a directed verdict. Heritage charged that the jury should have determined whether the alleged defects existed. The appeals court noted that there was “overwhelming evidence” that Heritage failed “to meet the industry standard of care.” Heritage did not dispute the existence of the damages during the trial, they “merely contested the extent.”
Further, Heritage claimed in its appeal that the case should have been rejected due to the three-year statute of limitations. They note that the first meeting of the POA was on March 8, 2000, yet the suit was not filed until May 28, 2003, just over three years. The court noted that here the statute of limitation must be tolled, as Heritage controlled the POA until September 9, 2002. The owner-controlled POA filed suit “approximately eight months after assuming control.”
The court also applied equitable estoppel to the statute of limitations. During the time in which Heritage controlled the board, Heritage “assured the unit owners the construction defects would be repaired, and, as a result, the owners were justified in relying on those assurances.” Since “a reasonable owner could have believed that it would be counter-productive to file suit,” the court found that also prevented Heritage from invoking the statute of limitations. In the end, the appeals court concluded that the even apart from equitable tolling and equitable estoppel, the statute of limitations could not have started until the unit owners took control of the board in September, 2002.
Heritage also contested the jury’s awarding of damages, asserting that “the POA failed to establish its damages as to any of its claims.” Noting that damages are determined “with reasonable certainty or accuracy,” and that “proof with mathematical certainty of the amount of loss or damage is not required,” the appeals court found a “sufficiently reasonable basis of computation of damages to support the trial court’s submission of damages to the jury.” Heritage also claimed that the POA did not show that the damage existed at the time of the transfer of control. The court rejected this claim as well.
Finally, Heritage argued that punitive damages were improperly applied for two reasons: that “the award of punitive damages has no deterrent effect because Appellants went out of business prior to the commencement of the litigation” and that Heritages has “no ability to pay punitive damages.” The punitive damages were upheld, as the relevant earlier decision includes “defendant’s degree of culpability,” “defendants awareness or concealment,” “existence of similar past conduct,” and “likelihood of deterring the defendant or others from similar conduct.”
The appeals court rejected all of the claims made by Heritage, fully upholding the decision of the trial court.
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The Prompt Payment Act Obligation is Not Triggered When the Owner Holds Less Retention from the General Contractor
October 27, 2016 —
John P. Ahlers – Ahlers & Cressman PLLCMost states have laws known as “prompt payment” statutes which govern the timing of payments on public works projects[i] from project owners to general contractors, and from general contractors to subcontractors.[ii] The purpose of these statutes is to ensure that contractors and subcontractors who may have less leverage than the project owners and prime contractors, respectively, are paid for their work on a timely basis.
Prompt Payment Act cases are rare, and, since many of the prompt payment statutes are founded on the same principles, when we come across a Prompt Payment Act case, it is “blog worthy.” This dispute arose from the construction of the Exposition Light Rail Line Project connecting downtown Los Angeles with Culver City on which FCI/Fluor/Parsons (“FFP”) was the prime contractor, and Bloise Construction, Inc. (“Bloise”) was the excavation subcontractor to FFP. Under the prime contract, Expo,[iii] the owner, was permitted to withhold ten percent of the payments owed to FFP, and FFP, pursuant to its subcontract with Bloise, was entitled to also withhold ten percent of the payments to Bloise as retention.
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John P. Ahlers, Ahlers & Cressman, PLLCMr. Ahlers may be contacted at
jahlers@ac-lawyers.com
Terms of Your Teaming Agreement Matter
July 30, 2019 —
Christopher G. Hill - Construction Law MusingsThese days in construction, and other pursuits, teaming agreements have become a great method for large and small contractors to work together to take advantage of various contract and job requirements from minority participation to veteran ownership. With the proliferation of these agreements, parties must be careful in how they draft the terms of these agreements. Without proper drafting, the parties risk unenforceability of the teaming agreement in the evewnt of a dispute.
One potential pitfall in drafting is an “agreement to agree” or an agreement to negotiate a separate contract in the future. This type of pitfall was illustrated in the case of InDyne Inc. v. Beacon Occupational Health & Safety Services Inc. out of the Eastern District of Virginia. In this case, InDyne and Beacon entered into a teaming agreement that provided that InDyne as Prime would seek to use Beacon, the Sub, in the event that InDyne was awarded a contract using Beacon’s numbers. The teaming agreement further provided:
The agreement shall remain in effect until the first of the following shall occur: … (g) inability of the Prime and the Sub, after negotiating in good faith, to reach agreement on the terms of a subcontract offered by the Prime, in accordance with this agreement.
InDyne was subsequently awarded a contract with the Air Force and shortly thereafter sent a subcontract to Beacon and requested Beacon’s “best and final” pricing. Beacon protested by letter stating that it was only required to act consistently with its original bid pricing. Beacon then returned the subcontract with the original bid pricing and accepting all but a termination for convenience provision. Shortly thereafter, InDyne informed Beacon that InDyne had awarded the subcontract to one of Beacon’s competitors. Beacon of course sued and argued that the teaming agreement required that InDyne award the subcontract to Beacon.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Client Alert: Release of Liability Agreement Extinguishes Duty of Ordinary Care
February 05, 2015 —
R. Bryan Martin and Whitney L. Stefko – Haight Brown & Bonesteel LLPOn January 27, 2015, the California Court of Appeal, Fourth Appellate District, in Eriksson v. Nunnink (Case No. E057158), held a release of liability between Decedent and Defendant was enforceable as a defense to the Decedent's Parents' wrongful death and negligent infliction of emotional distress ("NIED") claims. In Eriksson, the Court concluded that on the basis of the signed release agreement, Defendant did not owe a duty of care to Decedent and thus could only be liable for Decedent's death if caused by the Defendant's gross negligence. The Court held that Plaintiffs failed to establish gross negligence and affirmed the lower court's judgment.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
R. Bryan Martin and
Whitney L. Stefko
Mr. Martin may be contacted at bmartin@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com
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