“Details Matter” is the Foundation in a Texas Construction Defect Suit
March 01, 2012 —
CDJ STAFFThe Court of Appeals of Texas has ruled in the case of Barzoukas v. Foundation Design. Mr. Barzoukas contracted with Heights Development to build a house. He subsequently sued Heights Developments and “numerous other defendants who participated in the construction of his house.” Barzoukas eventually settled with all but two defendants, one who went bankrupt and Foundation Design, the defendant in this case. In the earlier phase, Barzoukas made claims of “negligence, negligent misrepresentation, fraud, fraudulent inducement, conspiracy, and exemplary damages in connection with the foundation.”
Foundation Design had been hired to install 15-foot piers to support the foundation. The engineer of record, Larry Smith, sent a letter to Heights Development noting that they had encountered hard clay stone when drilling. Smith changed the specifications to 12-foot piers. Initially, the City of Houston called a halt to work on the home when an inspector concluded that the piers were too shallow. Heights Development later convinced the city to allow work to continue. Subsequently, experts concluded that the piers were too shallow.
Foundation Design filed a motion for summary judgment. The trial court granted this, “without specifying the basis for its ruling.” Barzoukas contends the court was in error. Foundation Design contends that “Barzoukas failed to proffer competent evidence establishing that their conduct proximately caused damages.” Further, they did not feel that Smith’s letter gave “rise to viable claims for fraud and fraudulent inducement.”
One problem the court had was a lack of evidence. The court noted that “the purported subcontract is entirely missing” in the pleadings. The court has no contract between Bazourkas and Heights Development, nor one between Heights Development and either Foundation Design or Smith. The court underscored the importance of this, writing, “details matter.” They found that “the details are largely missing here.” Without the contract, the court found it impossible to determine if “Smith or an entity related to him agreed to indemnify Heights Development for damages arising from Smith’s negligent performance.”
As the material facts are in dispute, the appeals court found that there were no grounds for a summary judgment in the case. “Pointing to the existence of a contract between Heights Development and Barzoukas, or to the existence of a subcontract, is the beginning of the analysis ? not the end.”
Foundation Design and Smith also claimed that Barzoukas’s expert did not proffer competent evidence and that the expert’s opinions were conclusory. The trial court did not rule on these claims and the appeals court has rejected them.
Finally, Barzoukas made a claim that the trial court should not have rejected his argument of fraud and fraudulent inducement. Here, however, the appeals court upheld the decision of the lower court. “Barzoukas did not present evidence supporting an inference that Smith or Foundation Design made a purposeful misrepresentation.
The court remanded the case to the trial court for reconsideration. One member of the panel, Judge Charles Seymore, upheld the entire decision of the trial court. He dissented with the majority, finding that the economic loss rule foreclosed the claim of negligence.
Read the court’s decision…
Read the court decisionRead the full story...Reprinted courtesy of
Seattle Expands Bridge Bioswale Projects
May 11, 2020 —
Jim Parsons - Engineering News-RecordThe success of engineered systems to capture stormwater runoff from Seattle’s Aurora Avenue Bridge has spurred construction of additional measures that proponents say will increase total filtering capacity by another two million gallons per year.
Jim Parsons, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
Read the full story... Read the court decisionRead the full story...Reprinted courtesy of
Does Stricter Decertification Mean More “Leedigation?”
August 04, 2015 —
Christopher G. Hill – Construction Law MusingsRecently, my friend and fellow construction attorney/consultant, Chris Cheatham (@chrischeatham) posted the news that USGBC will be more stringent on the de-certification front. This statement relates to the continued energy performance of LEED certified buildings and increases the likelihood that energy performance (as opposed to mere reporting) could lead to de-certification.
I have discussed on several occasions the potential legal risks relating to green building. One of the big potential sources for such litigation (or “leedigation” as coined by Mr. Cheatham) is the possible de-certification of a previously certified building. With this latest statement by USGBC the specter of such de-certification seems even stronger.
Couple this potential with the fact that anyone can challenge the certification of a building at any time and contractors, subcontractors and other construction professionals face potential liability for the performance of a building in ways well beyond their control.
Read the court decisionRead the full story...Reprinted courtesy of
Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
ABC Announces Disaster Relief Efforts and Resources Following Hurricane Milton
October 15, 2024 —
ABC - Construction ExecutiveHURRICANE RELIEF
Florida, Georgia, South Carolina, North Carolina, Virginia and Tennessee were hit with
Hurricane Helene, and now Florida is facing additional damage from
Hurricane Milton, which is expected to make landfall on Wednesday, Oct. 9. Damages from Helene have already been catastrophic, and our hearts and prayers go out to all currently affected and those who may be in the path of Milton. Florida Gov. DeSantis has
declared a state of emergency for 51 counties ahead of this impending storm.
Donate to the ABC Cares Foundation via the online portal.
The ABC Florida East Coast chapter and the ABC Cares Foundation Inc. are committed to assisting communities impacted by Hurricanes Helene and Milton. 100% of donations made to the ABC Cares Foundation—an IRS 501(c)(3)—for this purpose will be restricted, directly supporting regional needs, and are 100% tax deductible.
Donate to the American Red Cross through ABC’s donation portal.
Your Red Cross disaster relief gift will help people whose lives have been upended by wildfires, storms, floods and countless other crises. This custom website tracks donations by the ABC community and can be dedicated to a friend or loved one.
Donate
Reprinted courtesy of
ABC, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Colorado Statutes of Limitations and Repose, A First Step in Construction Defect Litigation
December 20, 2012 —
CDJ STAFFGrund Dagner, a law firm operating in Denver and Boulder, Colorado notes on their blog that when defending a construction defect claim, one of their first steps is to determine if the claims are affected by the statutes of limitations or repose, and that they “have had much success raising these defenses with the court before trial.”
Colorado has a two-year statute of limitations, starting from when the homeowner discovers the defect. Further, Colorado’s statute of repose precludes lawsuits beginning “more than six years after the substantial completion of the improvement to the real property.”
Grund Dagner notes that they “recently obtained dismissal of claims related to eight of 22 buildings in a condominium project, where the homeowners in those building observed the defects more than two years before the HOA initiated its claims against our client.”
Read the court decisionRead the full story...Reprinted courtesy of
Mitsubishi Estate to Rebuild Apartments After Defects Found
March 19, 2014 —
Kathleen Chu and Takahiko Hyuga – BloombergMitsubishi Estate Co. (8802), Japan’s biggest developer by market value, will rebuild a Tokyo residential complex where it stopped selling apartments that went for as much as 350 million yen ($3.4 million) after finding defects.
The reconstruction will take about three to four years to complete, and builder Kajima Corp. will be in charge of the project and cover the cost, said Masayuki Watanabe, a spokesman at Tokyo-based Mitsubishi Estate. The building was constructed by Kajima along with Kandenko (1942) Co., according to the developer.
Mitsubishi Estate stopped selling apartments in the building in central Tokyo’s upscale Aoyama neighborhood after finding it needed repairs, including to some of the pipes, the developer said in an e-mail on Feb. 3. Eighty-three out of 86 units were under contract and were expected to be handed over to the owners on March 20, the company said last month.
Ms. Chu may be contacted at kchu2@bloomberg.net; Mr. Hyuga may be contacted at thyuga@bloomberg.net
Read the court decisionRead the full story...Reprinted courtesy of
Kathleen Chu and Takahiko Hyuga, Bloomberg
4 Lessons Contractors Can Learn From The COVID-19 Crisis
May 25, 2020 —
Patrick Hogan - Handle.comAt the start of 2020, the industry outlook in construction was positive. Many contractors were optimistic about what the year had in store for construction businesses in terms of profit, expansion of operations, and even payment issues. That was until the COVID-19 pandemic put a wrench in everyone’s business plans.
There’s no question about how huge the impact of the novel coronavirus crisis is on business operations. With the federal and state governments implementing strict measures to slow down the spread of COVID-19, construction businesses are experiencing significant delays and disruptions in their operations. Because of the lockdowns and stay-at-home orders, many construction projects are forced to postpone operations or, worse, cancel them altogether.
Nevertheless, there are lessons in the COVID-19 pandemic that contractors can learn. Here are some of them.
1. Contractors need to be proactive in meeting preliminary notice requirements
Cash is tight in times of crisis. As the economy comes to a standstill, construction businesses will need to deal with decreasing profits. They may even have to dip into their own cash reserves to cover fixed expenses and their employees’ salaries.
In times like this, it is crucial that contractors perform due diligence in protecting their right to get paid. The first step in doing so is to prepare
preliminary notices. These notices are an important step in the mechanics lien process and without them, chances contractors will not be able to recover the unpaid compensation for the materials they furnished and services they rendered.
2. Force majeure provisions are crucial parts of a contract
The novel coronavirus pandemic has highlighted the importance of force majeure provisions in construction contracts. Before the COVID-19 crisis hit business operations, force majeure provisions were typically considered as simple boilerplate clauses. This means they were just there as a standard part of contracts.
However, the same force majeure clauses, as well as impossibility of performance provisions, have become crucial in the current crisis. As many construction businesses experience difficulties with their operations, they may not be able to fulfill their contractual responsibilities. The said clauses can give contractors a much-needed reprieve.
As the current crisis continues, contractors should review contracts as these provisions can give them more time to finish the job. And in the hopefully near future when the crisis ends, business owners should review the contract creation process and ensure that these clauses included in contracts will be able to address the impact of situations similar to COVID-19.
3. Having solid internal communication is crucial
There’s a lot of uncertainty with the COVID-19 situation. With work operations temporarily stopping, the circumstances can be quite stressful for employees. There will be doubts and fears within your workforce on whether work will be back to normal as soon as possible or not.
Keeping your workforce well-informed and trusting of your organization is crucial, especially in this time of uncertainty. That is why it is paramount that you have a solid internal communication infrastructure to disseminate information about the current work situation and the next steps that the business will take. In addition, only through proper employee communication can the implementation of social distancing and hygiene measures be effective.
4. Contractors can benefit from flexible work arrangements
As the coronavirus crisis has made it necessary for everyone to stay at home, construction businesses should look for ways to continue operations. Expanded work arrangements such as work-from-home setups may just be the solution.
Of course, most of the physical work that is needed to be done on-site will be impossible to do at home, but office-based functions such as sales, client relations, design, and administrative roles can still continue. This can even have additional benefits to productivity and health. And when the crisis is over, business owners should consider incorporating these work arrangements into their operations permanently.
The COVID-19 crisis is not showing any sign of stopping soon, and even when it ends, it will take quite a long time before we can be back to business as usual. As the crisis continues, however, business owners should take the situation as a learning experience.
Once the COVID-19 crisis is over, it will take a long time for things to go back to normal. In fact, things may not end up going back to the way they were before and businesses will need to adapt to the new normal. However the situation evolves, business owners should take this opportunity to learn new things and maintain resilience in trying times.
About the Author:
Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.
Read the court decisionRead the full story...Reprinted courtesy of
Four Key Steps for a Successful Construction Audit Process
May 03, 2021 —
Ronald L. Williams, Fox Rothschild LLP - ConsensusDocsThe implications of the audit provisions contained in construction agreements between owners and contractors owners extend far beyond post-completion bean counting, and can affect multiple aspects of a project, from project administration to relationships with key subcontractors. It is critically important that contractors give audits the attention they deserve by taking the following four steps. First, invest the time to negotiate the audit provisions that ultimately appear in contracts with the owner. Second, ensure that the project team and the owner’s project auditors engage in timely communication during construction. Third, make certain that post-completion audit administration is prompt and complete. And finally, carefully draft adequate “flow-down” provisions with subcontractors and vendors so that they understand and comply with their contractual obligations, as well as the expectations of the contractor and owner. All four aspects are critical, and if not addressed effectively can undermine the profitability of the contract, and contractors’ business relationships with both upstream and downstream parties.
Negotiations
At the outset of contract negotiations, a contractor must completely understand the owner’s audit process expectations. An owner’s understanding of the audit process and its potential pitfalls depends on their own experience, as well as the knowledge of their personnel, including internal audit members and external auditors. Negotiations, which like the audit itself need not be adversarial, can be educational for both the owner and any representatives involved.
Read the court decisionRead the full story...Reprinted courtesy of
Ronald L. Williams, Fox Rothschild LLPMr. Williams may be contacted at
rwilliams@foxrothschild.com
