Fairfield Connecticut Building Expert Directory

Quick Note: Third-Party Can Bring Common Law Bad Faith Claim

July 01, 2019 — David Adelstein - Florida Construction Legal Updates
A third-party claimant may bring a common law bad faith claim against a defendant’s liability insurer. Mccullough v. Royal Caribbean Cruises, 2019 WL 2076192, *2 (S.D.Fla. 2019). “A bad faith claim may be brought by a third party absent an assignment from the [defendant] insured.” Id. This can only be done in the third-party bad faith context with the argument that the insurer’s “bad faith” conduct resulted in a judgment against the defendant-insured in excess of the policy limits. However, in any third-party bad faith claim (and, really, bad faith claim in general), coverage must first be determined under the policy. 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

Construction Defect Leads to Death of Worker

January 28, 2013 — CDJ STAFF
The family of a Florida man has received $2.4 million in damages as a result of his death. Victor Lizarraga was killed when a steel column fell due to the anchor bolts being improperly secured. The general contractor on the project, R. L. Haines, told subcontractors that the epoxy had sufficient time to cure. An OSHA investigation determined that the epoxy was not used properly. Mr. Lizarraga worked for a subcontractor on the project. Mr. Lizarraga and his coworkers were hired to erect steel columns. The epoxy failed, sending a 1,750-pound column down onto Mr. Lizarraga. According to the lawsuit, "due to the sudden and unexpected nature of this incident Mr. Lizarraga had no ability, opportunity or time to get out of the way of the falling column." Other parties in the lawsuit settled with the family. R. L. Haines was the only defendant to go to a jury trial. Read the court decision
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The Dangers of an Unlicensed Contractor from Every Angle

January 11, 2021 — William L. Porter - Porter Law Group
The State of California requires that contractors in the building trades be licensed. Individuals and business entities obtain their contractors licenses by demonstrating to the California Contractors State License Board that they have the requisite knowledge, skill, and experience to be licensed. The CSLB issues licenses to those meeting requirements. As a construction attorney of longstanding tenure, I have witnessed the impact of unlicensed building contractors from every point of view. If you are considering hiring an unlicensed contractor, acting as an unlicensed contractor or even working for an unlicensed contractor as an employee, please consider the following perils: To the Owner Considering Hiring an Unlicensed Contractor: On the positive side for owners considering hiring an unlicensed contractor, the general rule in California is that an owner can escape the obligation to pay an unlicensed contractor for work performed and materials supplied because unlicensed contractors are prohibited from bringing legal actions against owners for payment. The law even goes so far as to allow the Owner to bring a legal action against the unlicensed Contractor for reimbursement of anything the owner paid to the unlicensed contractor. This is done through a “disgorgement” action (see, Business and Professions Code 7031. See also, the following article: Disgorgement Article). Despite this, there are a great many negative potential consequences to be considered by any owner who might consider hiring an unlicensed contractor. Among them are the following:

If you are considering not paying your unlicensed contractor because Business and Professions Code 7031 allows it, please consider that unlicensed contractors, who have clearly demonstrated a disinclination to follow legal obligations in the first place, may resort to “less than socially acceptable” means of exacting retribution against those who do not pay them or who demand the return of money paid through a disgorgement action I am sorry to say this. Let us leave it at that.

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Reprinted courtesy of William L. Porter, Porter Law Group
Mr. Porter may be contacted at bporter@porterlaw.com

Bank of America’s Countrywide Ordered to Pay $1.3 Billion

July 30, 2014 — Patricia Hurtado – Bloomberg
Bank of America Corp.’s Countrywide unit was ordered to pay $1.3 billion in penalties for defective mortgage loans it sold to Fannie Mae (FNMA) and Freddie Mac in the run-up to the 2008 financial crisis, a little more than half of what the U.S. had requested. U.S. District Judge Jed Rakoff in Manhattan issued the civil penalty against the Charlotte, North Carolina-based bank today in the first mortgage-fraud case brought by the federal government to go to trial. Countrywide and Rebecca Mairone, a former executive with the mortgage lender, were found liable in October for selling thousands of bad loans to the two government-sponsored enterprises. Mairone was ordered today to pay $1 million. Read the court decision
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Reprinted courtesy of Patricia Hurtado, Bloomberg
Ms. Hurtado may be contacted at pathurtado@bloomberg.net

Construction Defects Not Occurrences under Ohio Law

November 07, 2012 — CDJ STAFF
Concluding the “claims of defective construction or workmanship brought by a property owners are not claims for ‘property damage’ caused by an ‘occurrence’ under a commercial general liability policy,” the Supreme Court of Ohio has ruled in Westfield Insurance Co. v. Custom Agri Systems, Inc. In the underlying case, Custom Agri Systems, Inc. built a grain bin as a subcontractor to Younglove Construction, LLC. Younglove had been contracted by PSD Development, which withheld payment, claiming it had suffered damages due to defects in Custom Agri System’s work. Younglove filed a complaint against Custom Agri, which filed complaints against its subcontractors. Custom Agri also requested that its insurer, Westfield Insurance Company, defend and indemnify it. Westfield claimed that it had no such duty. The Ohio Supreme Court concurred. The decision notes that “Custom was being sued under two general theories: defective construction and consequential damages resulting from the defective construction.” Westfield argued that none of the claims were “for ‘property damage’ caused by an ‘occurrence” and therefore none of the claims were covered under the CGL policy.” Further, Westfield argued that “even if the claims were for property damage caused by an occurrence, they were removed from coverage by an exclusion in the policy.” The case was filed in the US District Court which issued a summary judgment for Westfield. The plaintiff appealed and Sixth Circuit Court of Appeals certified the questions to the Supreme Court of Ohio. The court noted that “all of the claims against which Westfield is being asked to defect and indemnify Custom relate to Custom’s work itself.” And so, the court concluded that they “must decide whether Custom’s alleged defective construction of and workmanship on the steel grain bin constitute property damage caused by an ‘occurrence.’” However, the court noted that under the terms of the insurance contract, an occurrence is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and the court noted that the “natural and commonly accepted meaning” of “accident” is something “unexpected, as well as unintended.” The Ohio Supreme Court also looked at court decisions in other places, and found that in many similar cases, courts have concluded that construction defects are not occurrences. In a dissenting opinion, Justice Pfeifer argues that “if the defective construction is accidental, it constitutes an ‘occurrence’ under a CGL policy.” Justice Pfeifer characterized the majority’s definition of “accidental” as “broad, covering unexpected, unintentional happenings.” Read the court decision
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New World to Demolish Luxury Hong Kong Towers in Major Setback

August 04, 2021 — Shawna Kwan - Bloomberg
New World Development Co. will demolish two towers at Hong Kong’s most popular housing development in decades and compensate buyers after finding unexpected defects, in a major setback for the real estate company. The developer will pull down and rebuild the existing floors of Towers 1 and 8 at its Pavilia Farm III project near Tai Wai station after it found the concrete strength in some areas did not meet design requirements, the Hong Kong-based company said in a statement. Shares of New World fell as much as 4.8% Thursday in Hong Kong, the most in more than seven months, before recovering to close 3.9% lower. Read the court decision
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Reprinted courtesy of Shawna Kwan, Bloomberg

The Future of Construction Defects in Utah Unclear

December 11, 2013 — CDJ STAFF
In recent years, more courts have started to view construction defects as accidents, covered under insurance policies. In a post on the Parr Brown Gee & Loveless web site, Jeffrey D. Stevens writes that “the number of courts siding with insurance companies to deny contractors and subcontractors insurance coverage in construction defect lawsuits has been shrinking.” Recently, the Supreme Court of West Virginia “switched sides on this issue completely.” The Utah Supreme Court has not made a ruling on this, but the Federal District Court for the District of Utah and the Tenth Circuit have looked at Utah law and concluded that “under Utah law damage caused by construction defects is not accidental.” But in another case, “the district court determined that property damage allegedly caused by defective or defectively installed windows was caused by an accident.” Mr. Stevens thinks that “it is likely” that the Utah Supreme Court “will follow the increasing number of courts that have held that damage caused by construction defects is an accident for insurance purposes. Read the court decision
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Brenner Base Tunnelers Conquer Peaks and Valleys in the Alps

October 21, 2019 — Scott Blair - Engineering News-Record
A logistics tangle decades in the unraveling, the Brenner Base Tunnel project is having a banner year. Twin tunnel boring machines in May were released on their relentless journey to mine the main tunnels underneath the Alps between Austria and Italy, while a multinational crew of 2,400 workers armed with a toolkit of just about every mining technique is swarming four major worksites, including a particularly challenging area where workers must undercut a river and pass through the fast-flowing aquifer below it. Read the court decision
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Reprinted courtesy of Scott Blair, ENR
Mr. Blair may be contacted at blairs@enr.com

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