Pennsylvania Court Extends Construction Defect Protections to Subsequent Buyers
December 20, 2012 —
CDJ STAFFThe Pennsylvania courts have long held that there is an implied warranty of habitability for the initial purchaser of a home. Now, as some defects may not immediately show up, the court has extended that implied warranty to second and subsequent purchasers. As Marc D. Brookman, David I. Haas, and Christopher Bender of Duane Morris note, “this judicially created doctrine shifts the risk of a latent defect in the construction of a new home from the purchaser to the builder-vendor.”
The Pennsylvania Supreme Court concluded that a contractual relationship is not needed for an implied warranty of habitability. The court’s concern was inequalities would result when a home was sold while other homes were protected by being within the statute of repose.
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Insurer Prevails on Summary Judgment for Bad Faith Claim
July 16, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe court granted summary judgment to the insurer on the insured's claim for bad faith due to denial of the claim. Treigle v. State Farm Fire and Cas. Ins. Co., 2023 U.S. Dist. LEXIS 87786 (E.D. La. May 19, 2023).
The insured's home sustained serious water damage due to Hurricane in August 2021. Her policy with State Farm excluded losses related to surface water and mold.
The insured reported the loss from Hurricane Ida after she returned to her home and found two inches of standing water in the house. State Farm advised the insured to hire a water mitigation company to help with the water. The insured contacted 7 Brothers Company to start mitigation, including tearing out the disposing of wet building materials.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Connecticut Gets Medieval All Over Construction Defects
February 10, 2012 —
CDJ STAFFThe Hartford Courant reports that Connecticut is trying a very old tactic in a construction defect suit. The law library building at the University of Connecticut suffered from leaks which have now been repaired. The state waited twelve years after was complete to file lawsuit, despite that Connecticut has a six-year statute of limitations on construction defect claims. Connecticut claims that the statute of limitations does apply to the state.
The state is arguing that a legal principle from the thirteenth century allows it to go along with its suit. As befits a medieval part of common law, the principle is called “nullum tempus occurrit regi,” or “time does not run against the king.” In 1874, the American Law Register said that nullum tempus occurrit reipublicae “has been adopted in every one of the United States” and “is now firmly established law.”
In the case of Connecticut, Connecticut Solicitor General Gregory D’Auria said that “the statute of limitations does not apply to the state.” He also noted that “the state did not ‘wait’ to file the lawsuit. The lawsuit was filed only after all other options and remedies were exhausted.”
Connecticut also argued that “nullus tempus occurrit regi” applied in another construction defect case at the York Correctional Institution. The judge in that case ruled in December 2008 to let the case proceed. But in the library case, Judge William T. Cremins ruled in February 2009 that the statute of limitations should apply to the state as well. Both cases have been appealed, with the library case moving more quickly toward the Connecticut Supreme Court.
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Contractor Entitled to Defense for Alleged Faulty Workmanship of Subcontractor
February 10, 2020 —
Tred R. Eyerly - Insurance Law HawaiiApplying Nevada law, the Federal District Court in Florida found that the general contractor was entitled to a defense of claims based upon alleged faulty workmanship of a subcontractor. KB Home Jacksonville LLC v. Liberty Mutual Fire Ins. Co, 2019 U.S. Dist. LEXIS 151235 (M.D. Fla. Sept 5, 2019).
KB Home completed six residential developments utilizing various subcontractors. One subcontractor was Florida State Plastering, LLC (FSP) for installing stucco. Eighty-eight complaints against KB Home implicated FSP's stucco work. Plaintiffs alleged that the stucco subcontractor's work suffered from construction defects, causing damages not only to the exterior stucco, but also the underling wire lath, paper backing, house wrap, wood sheathing, interior walls, interior floors and other property.
Ironshore insured FSP under a CGL policy. KB Home was an additional insured for liability for property damage caused by "your work." KB Home was also insured under its own CGL policy with Liberty Mutual. Both insurers refused to defend.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Newmeyer Dillion Partner Louis "Dutch" Schotemeyer Named One of Orange County's 500 Most Influential by Orange County Business Journal
January 25, 2021 —
Newmeyer DillionProminent business and real estate law firm Newmeyer Dillion is pleased to announce that partner
Louis "Dutch" Schotemeyer has been selected to the Orange County Business Journal's fifth annual "OC 500 Directory of Influence" list. The 2020 list recognizes the 500 most influential leaders who have made a positive mark on Orange County's business community over the last year.
Located in the Newport Beach office, Schotemeyer's practice areas include, Real Estate Litigation, Construction Operations and Litigation, Business Litigation and Labor & Employment. Additionally he provides risk management and legal advice to companies without dedicated in-house legal counsel. A seasoned litigator, he leverages his litigation experience to advise clients, including C-Level executives, regarding potentially litigious situations that touch their business operations and his practice areas.
"Dutch's deep knowledge and experience as in-house counsel has informed his business-first approach to complex legal disputes and made him an invaluable resource to the Orange County business community," said Firm Managing Partner Paul Tetzloff. "We are pleased that Dutch's contributions to the community have been recognized by Orange County Business Journal."
Schotemeyer
rejoined the firm in September after serving as Vice President and Associate General Counsel for William Lyon Homes, Inc., and Vice President and Deputy General Counsel for Taylor Morrison. While at William Lyon Homes, he was named 2019 "General Counsel Rising Star" by the Orange County Business Journal.
The full "OC 500 Directory of Influence" list was distributed in a special December supplement.
About Newmeyer Dillion
For over 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 60 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's operations, growth, and profits. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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Specific Source of Water Not Relevant in Construction Defect Claim
June 28, 2013 —
CDJ STAFFThe Nebraska Court of Appeals has concluded that a lower court came to the correct conclusion in a construction defect case involving water intrusion. The Hiatts built a home in North Platte, Nebraska, in in 2004 which they sold to the Oettingers in May, 2006. Shortly thereafter, the Oettingers started experiencing problems with water intrusion and contacted the Hiatts. The Hiatts responded by replacing the septic lift. Subsequently, the Oettingers landscaped their yard, which they allege was done with the assistance of the Hiatts. The water problems continued and “the parties took substantial remedial measures, including excavating the sidewalk and inspecting the downspouts.” The water problems continued, getting worse and requiring increasingly aggressive responses.
The Oettingers then had a series of inspections, and they hired the last of these inspectors to actually fix the water intrusion problem. At that point, they filed a lawsuit against the Hiatts alleging that the Hiatts “breached their contact by constructing and selling a home that was not built according to reasonable construction standards,” and that they “were negligent in the repair of the home in 2009.”
During the trial, Irving Hiatt testified that they “tarred the outside of the basement and put plastic into the tar and another layer of plastic over the top of that.” He claimed that the problem was with the Oettingers’ landscaping. This was further claimed in testimony of his son, Vernon Hiatt, who said the landscaping lacked drainage.
The Oettingers had three experts testify, all of whom noted that the landscaping could not have been the problem. All three experts testified as to problems with the Hiatts’ construction. The court concluded that the Hiatts had breached an implied warranty, rejecting the claim that the water intrusion was due to the landscaping. The Hiatts appealed the decision of the county court to the district court. Here, the judgment of the lowest court was confirmed, with the district court again finding a breach of the implied warranty of workmanlike performance.
The Hiatts appealed again. They alleged that the district court should not have held a breach of implied warranty existed without proving the source of the water intrusion, and that damages should have been apportioned based on the degree to which the Oettingers’ landscaping and basement alterations were responsible. The appeals court dispensed with the second claim first, noting that “they do not argue this error in their brief nor do they explain how or why the trial court should have apportioned damages.” The court also noted that although the Oettingers made a negligence claim in their suit, the case had been decided on the basis of a breach of implied warranty.
The appeals court upheld the Oettingers’ claim of a breach of implied warranty. In order to do this, the court noted that the Oettingers had to show that an implied warranty existed, that the Haitts breached that warranty, damage was suffered as a result, and that no express warranty limited the implied warranty. That court noted that “the record is sufficient to prove that the Hiatts breached the implied warranty in the method in which they constructed the basement” and that “this breach was the cause of the Oettingers’ damages.”
The court concluded that the Oettingers “provided sufficient evidence that the Hiatts’ faulty construction allowed water, whatever its source, to infiltrate the basement.” The court rejected the Hiatts’ claim that the Oettingers’ repairs voided the warranty, as it was clear that the Hiatts were involved in carrying out these repairs. The court’s final conclusion was that “the evidence in the record supports the trial court’s factual finding that the Hiatts’ flawed construction caused water damage to the Oettingers’ basement.”
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Do Engineers Owe a Duty to Third Parties?
June 10, 2015 —
Craig Martin – Construction Contractor AdvisorA Texas Court of Appeals, in USA Walnut Creek, DST v. Terracon Consultants, Inc., recently ruled that an engineer owed a duty to the buyer of an apartment complex, even though the engineer had no contractual relationship with the buyer. This is an expansion of the duty professionals owe on construction projects and could signal a change in the law.
In the case, Walnut Creek purchased a three year old apartment complex. A few years after taking possession, Walnut Creek noticed problems with the apartments, including cracking foundations, walls, breaking windows, and out of square door frames. Walnut Creek sued the developer and general contractor, alleging construction defects. The developer claimed that the engineer, Terracon, was at fault and Walnut Creek added Terracon to the lawsuit, asserting that Terracon was negligent in performing engineering services during construction. Terracon asked the court to dismiss the claim, arguing that it did not owe a duty to Walnut Creek. Walnut Creek in turn argued that engineers do owe a duty to subsequent owners. The trial court dismissed the case against the engineer and Walnut Creek appealed.
The appellate court reversed the trial court, finding that the engineer did owe a duty to subsequent purchasers. The court seemed persuaded by the allegations that the engineer actually created the construction defects which were the basis for the litigation.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
The Economic Loss Rule: From Where Does the Duty Arise?
January 24, 2022 —
Taylor Hite - Colorado Construction LitigationWhen entering a contract under Colorado law or attempting to enforce your rights when the other party breaches a contract, it is important to know and understand what rights you have and what claims you can bring or defenses you may have. One important consideration is Colorado’s version of the economic loss rule. The Colorado Supreme Court has issued several opinions clarifying the scope of the economic loss rule since it adopted the rule in 2000. The purpose of the economic loss rule is to maintain the boundary between contract law and tort law.
In Colorado, the economic loss rule provides that a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for the breach without an independent duty of care under tort law. In most instances the economic loss rule will not bar intentional tort claims. The question becomes: from where does the duty arise? Is there an independent duty in tort law? Did the duty arise solely from the contract?
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Taylor Hite, Higgins, Hopkins, McLain & Roswell, LLCMs. Hite may be contacted at
Hite@hhmrlaw.com
