Insurance Company Prevails in “Chinese Drywall” Case
June 17, 2011 —
CDJ STAFFThe Louisiana Court of Appeals rejected an appeal to reverse a summary judgment granted to Louisiana Citizens Property Insurance Company. Terrence and Rhonda Ross contracted for a remodel of their home in which Chinese-made drywall was used. When the drywall emitted harmful gasses, the Rosses filed a claim under their insurance policy. This claim was rejected under four exclusions: for faulty materials, latent defect, loss by corrosion, and loss by pollution. After the claim was denied, the Rosses sued Louisiana Citizens.
In April 2010, the lower court granted a summary judgment, followed by a May, 2010 order dismissing the Rosses’ claims against Louisiana Citizens. The Rosses appealed this decision. In the court’s review, they agreed with Louisiana Citizens and the lower court on all counts. Although the Rosses maintained that the drywall was not defective (as it still functioned as drywall), the court ruled that its emission of sulfuric gases was a defect. Further, as it was in place for two years before this became evident, it was also a latent defect. Damage to the Rosses’ home consisted of corrosion damage caused by the pollutants in the drywall.
The Rosses made an additional claim that since their policy covered smoke damage, this should be covered, as the harm was done by sulfuric gases. The court noted that the contract specifies “fumes or vapors from a boiler, furnace, or related equipment,” none of which apply in this case.
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Illinois Court Determines Duty to Defend Construction Defect Claims
March 22, 2021 —
Tred R. Eyerly - Insurance Law HawaiiGiven the underlying allegations of damage to personal property, the court determined the insurer had a duty to defend. Certain Underwriters at Lloyd's London v. Metropolitan Builders, Inc., 2019 Ill. App. LEXIS 979 (Ill. Ct. App. Dec. 18, 2019).
Metropolitan was hired as the general contractor for construction, renovation and demolition at contiguous properties - the 1907 Property, 1909 Property, and 1911 Property. During construction activities, the structures on the 1907 Property and 1909 Property collapsed. The existing structures on the properties were later deemed unsafe and were demolished by the city of Chicago.
AIG insured the owner of the buildings and paid over $1.8 million for repairs and associated expenses arising from the collapse. AIG then invoked its rights of subrogation against Metropolitan by filing suit. Metropolitan tendered the suit to its insurer, Lloyd's, who denied coverage and filed for a declaratory judgment. The trial court found the underlying complaint alleged property damage, but not an occurrence. Summary judgment was awarded to Lloyd's.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Congratulations to Partner Madeline Arcellana on Her Selection as a Top Rank Attorney in Nevada!
July 02, 2024 —
Dolores Montoya - Bremer Whyte Brown & O'Meara LLPBremer Whyte Brown & O’Meara, LLP is proud to announce that Las Vegas Partner
Madeline Arcellana was once again selected by Nevada Business Magazine as a Top Rank Attorney in Nevada for her work in Civil Litigation, General Liability, and Personal Injury!
Nevada Business Magazine‘s Top Rank Attorneys list is comprised of attorneys in both private and public practice who are voted for by nearly 3,000 Nevada-licensed attorneys.
The attorneys on this list are at the top of their field and each nomination is put through an extensive verification process. To view Nevada’s 2024 Top Rank Attorneys, please click
here.
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Dolores Montoya, Bremer Whyte Brown & O'Meara LLP
Caltrans Hiring of Inexperienced Chinese Builder for Bay Bridge Expansion Questioned
July 16, 2014 —
Beverley BevenFlorez-CDJ STAFFThe construction of the new eastern span of San Francisco’s bay bridge has been criticized for the $6.5 billion cost, welding crack violations, and alleged cover ups by Caltrans. The Sacramento Bee reported that the company Shanghai Zhenhua Port Machinery Co. Ltd. (ZPMC) “had never built a bridge.” In fact, ZPMC “was a manufacturer of giant cranes for container ports.”
How then did ZPMC manage to obtain the contract? The Sacramento Bee stated that the company “had established a reputation as fast and cost-effective, offering savings of about $250 million compared to the competing bidder.” The project was already “years behind schedule and billions of dollars over budget by political squabbles and construction delays” and there were some fears that the “old bridge might not survive a major quake.”
Caltrans was told by an outside expert that ZPMC was a “high risk,” however, the company received a “contingent pass.” Sacramento Bee reported that an audit showed “ZPMC didn’t have enough qualified welders or inspectors…and routinely welded in the rain, a basic error that often causes defects.” Regardless, Caltrans signed off on the project.
“In August 2007, Caltrans auditors approved ZPMC outright, although the firm still lacked adequate quality control, even for ‘fracture critical’ materials,” the Sacramento Bee reported.
During the California Senate committee hearing in January, Doug Coe, a senior Caltrans engineer, said “’The race for time’ created overwhelming pressure to keep moving as planned….But there’s no excuse for building something defective like that because we are in a race for time.”
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A Homeowner’s Subsequent Action is Barred as a Matter of Law by way of a Prior “Right to Repair Act” Claim Resolved by Cash Settlement for Waiver of all Known or Unknown Claims
February 26, 2015 —
Richard H. Glucksman, Esq., Jon A. Turigliatto, Esq., and David A. Napper, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinDavid Belasco v. Gary Loren Wells et al. (2015) B254525
OVERVIEW
In a decision published on February 17, 2015, the Second District Court of Appeal made clear that settlement agreements containing waivers of unknown claims in connection with a construction of a property, absent fraud or misrepresentation, will be upheld. In brief, the homeowner plaintiff had made a claim against the builder pursuant to California Code of Civil Procedure Section 896 (“Right to Repair”) and settled for a cash payment and obtained a Release of all Claims including for all known and unknown claims. The court held that homeowner’s subsequent construction defect claim was barred pursuant to the terms and conditions of the earlier release.
DISCUSSION
Plaintiff and Appellant, David Belasco ("Belasco"), purchased a newly construction home in Manhattan Beach from builder Gary Loren Wells ("Wells"). Two years after purchasing the property, Belasco filed a Complaint for construction defects, which eventually resulted in settlement between the parties. The settlement agreement included a California Civil Code Section 1524 waiver of all known or unknown claims with the word "claims" defined in part as “any and all known and unknown construction defects." Six years later in 2012, Belasco filed a Complaint alleging a claim, amongst others, that the defective and leaky roof breached the statutory warranty on new construction under California Civil Code section 896 ("Right to Repair Act").
Relying on San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, Wells and Wells' surety, American Contractors Indemnity Company (collectively "Wells"), filed a motion for summary judgment contending that the 2012 action was barred by the settlement of Belasco’s prior Complaint against Wells for construction defects to his home. When the trial court ruled in favor of Wells, Belasco appealed. Belasco, a patent attorney, made the following contentions:(1) the general release and section 1542 wavier in the settlement agreement for patent construction defects is not a "reasonable release" of a subsequent claim for latent construction defects within the meaning of section 929 and the “Right to Repair” Act; (2) a reasonable release can only apply to a "particular violation" and not to a latest defect under the language of section945.5, subdivision (f), and the settlement was too vague to be valid because it does not reference a "particular violation;" (3) section 932 of the California Civil Code specifically authorizes an action on "[s]subsequently discovered claims of unmet standards;" (4) public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and (5) a genuine issue of material fact exists concerning Belasco's fraud and negligence claims that would have voided the settlement pursuant to section 1668.
Pursuant to the "Right to Repair Act" Section 929 subsection (a), a builder can make a cash offer in lieu of a repair and the homeowner is free to accept or reject such offer. Section 929subsection (b) goes on to state that
"[t]he builder may obtain a reasonable release in exchange for the cash payment. The builder may negotiate the terms and conditions of any reasonable release in terms of scope and consideration in conjunction with a cash payment under this chapter."
The Second District Court of Appeal ruled that the prior cash settlement, with a release and section 1524 wavier, was a "reasonable release" under the language of California Civil Code Section 929.
On multiple occasions, the Court noted that Belasco is an attorney and was represented by an attorney during the negotiation of the settlement agreement. By executing the agreement with express language regarding what claims were to be release, Belasco released Wells of "any and all claims" due to "any and all known and unknown construction defects." The Court reasoned that because Belasco is an attorney in his own right, he should have understood the import of the Section 1542 waiver and had the opportunity to reject or revise the settlement agreement prior to binding himself to it. The Court further found that the agreement "could not have been more clear" regarding the waiver of all unknown and known construction defect claims and therefore was not vague. Belasco's additional contentions were found to be without merit because Belasco availed himself of the statutory remedy of a cash settlement in lieu of repairs and voluntarily entered into a negotiated settlement agreement. Lastly, Belasco failed to present any evidence regarding his misrepresentation claim.
When a homeowner files a "Right to Repair Act" claim, often it seems that only two options exist: either repair the alleged defects or go to court. However, Belasco is a reminder to builders that the "Right to Repair Act" does offer an avenue for settlement. The Second District Court of Appeal presented a clear, unqualified opinion regarding the validity and enforceability of settlement agreements releasing all known or unknown construction defects in a single family home case. The Court will hold parties to the settlements they agree to. This is especially so when one of the parties is an attorney and provides deposition testimony expressly acknowledging that he understood the scope of the agreement. Attorneys for builders should always include a waiver of all known and unknown claims, which pursuant to Belasco and San Diego Hospice, will ensure that any future claims at the property will be effectively barred by the terms of the settlement agreement.
Reprinted courtesy of Chapman Glucksman Dean Roeb & Barger attorneys
Richard H. Glucksman,
Jon A. Turigliatto and
David A. Napper
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Mr. Napper may be contacted at dnapper@cgdrblaw.com
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Affordable Global Housing Will Cost $11 Trillion
October 08, 2014 —
Flavia Krause-Jackson – BloombergReplacing the world’s substandard housing and building affordable alternatives to meet future global demand would cost as much as $11 trillion, according to initial findings in a McKinsey & Co. report.
The shortage of decent accommodation means as many as 1.6 billion people from London to Shanghai may be forced to choose between shelter or necessities such as health care, food and education, data disclosed at the 2014 CityLab Conference in Los Angeles show. McKinsey will release the full report in October.
The global consulting company says governments should release parcels of land at below-market prices, put housing developments near transportation and unlock idle property hoarded by speculators and investors. The report noted that China fines owners 20 percent of the land price if property is undeveloped after a year and has the right to subsequently confiscate it.
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Flavia Krause-Jackson, BloombergMs. Krause-Jackson may be contacted at
fjackson@bloomberg.net
Preliminary Notices: Common Avoidable But Fatal Mistakes
August 26, 2019 —
William L. Porter - Porter Law GroupIn the California building and construction industry, service of a “Preliminary Notice” is a prerequisite for Subcontractor and Supplier claims for payment through the Mechanics Lien, Stop Payment Notice and Payment Bond Claim process. Without proper drafting and service of a Preliminary Notice, these extremely valuable claims cannot be protected. Unfortunately, despite the vital importance of the Preliminary Notice, Subcontractors and Suppliers often make common self-defeating mistakes that make their Preliminary Notice efforts completely ineffective, resulting in loss of their claims rights. The purpose of this article is to list some of these common mistakes in the hope that the reader will avoid such mistakes, preserve the integrity of the Preliminary Notice, and protect the claims rights it makes available:
Not Sending out the Preliminary Notice Within 20 Days After Supplying Labor or Materials:
The protection of a Preliminary Notice begins 20 days before it sent out. This means that if a Subcontractor or Supplier claimant delivered $100,000 in materials on February 1, that same claimant must serve the Preliminary Notice on or before February 21 (the sooner the better), or the claimant will not be able to pursue an enforceable Mechanics Lien, Stop Payment Notice or Payment Bond claim for that $100,000. There are very few exceptions. Best practice: A Subcontractor or Supplier must send out the Preliminary Notice as soon as an agreement to provide work or materials to a California construction project is in place (See California Civil Code 8204).
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
As of July 1, 2024, California Will Require Most Employers to Have a Written Workplace Violence Prevention Program (WVPP) and Training. Is Your Company Compliant?
June 17, 2024 —
Jason L. Morris & Louis "Dutch" Schotemeyer - Newmeyer DillionThe California legislature passed Senate Bill 553 (SB 553) in 2023. This bill requires most California employers to implement a written Workplace Violence Prevention Program (WVPP) and to train employees on the WVPP. At Newmeyer Dillion, we are dedicated to helping you navigate these requirements and maintain a safe, compliant work environment.
Act Now: Two Weeks to Comply
With SB 553's July 1st compliance deadline, employers have just two weeks to develop and implement a compliant Workplace Violence Prevention Program (WVPP). The clock is ticking, and it is imperative to act swiftly to ensure compliance and protect your employees.
What is SB 553?
SB 553 is a legislative measure aimed at enhancing workplace safety by mandating specific actions from employers to prevent workplace violence. This bill recognizes the growing concern around workplace violence incidents and the need for proactive measures to maintain a safe workplace. The key components of SB 553 include:
- Establishment of a Workplace Violence Prevention Program (WVPP): Employers are required to develop and implement a comprehensive written WVPP tailored to their specific workplace environment and risks.
Reprinted courtesy of
Jason L. Morris, Newmeyer Dillion and
Louis "Dutch" Schotemeyer, Newmeyer Dillion
Mr. Morris may be contacted at jason.morris@ndlf.com
Mr. Schotemeyer may be contacted at dutch.schotemeyer@ndlf.com
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