California Clarifies Its Inverse Condemnation Standard
December 30, 2019 —
Gus Sara - The Subrogation StrategistIn City of Oroville v. Superior Court, 446 P.3d 304 (Cal. 2019), the Supreme Court of California considered whether the City of Oroville (City) was liable to a dental practice for inverse condemnation damages associated with a sewer backup. The court held that in order to establish inverse condemnation against a public entity, a property owner must show that an inherent risk in the public improvement was a substantial cause of the damage. Since the dental practice did not have a code-required backwater valve — which would have prevented or minimized this loss — the court found that the city was not liable because the sewage system was not a substantial cause of the loss. This case establishes that a claim for inverse condemnation requires a showing of a substantial causal connection between the public improvement and the property damage. It also suggests that comparative negligence can be a defense to inverse condemnation claims.
In December 2009, a dental practice, WGS Dental Complex (WGS), located in the City, incurred significant water damage as a result of untreated sewage from the City’s sewer main backing up into WGS’ building. WGS submitted a claim to its insurance carrier, The Dentists Insurance Company (TDIC) and, in addition, sued the City for its uninsured losses, alleging inverse condemnation and nuisance. TDIC joined the litigation, alleging negligence, nuisance, trespass and inverse condemnation. Under California law, when a government entity fails to recognize that an action or circumstance essentially amounts to a taking for public use, a property owner can pursue an inverse condemnation action for compensation. The City filed a cross-complaint against WGS for failing to install a code-required backwater valve on their lateral sewer line, which would have prevented or minimized the backup.
The City filed a motion for summary judgment, which the trial court denied. WGS then sought a judicial determination on the issue of inverse condemnation. The City presented evidence that the sewage system was designed in accordance with industry standards, and that WGS failed to comply with the City’s plumbing code by failing to install a backwater valve on its private sewer lateral. The trial court found the City liable for inverse condemnation because the blockage that caused the backup originated in the City’s sewer line. The court held that the blockage was an inherent risk of sewer operation. The Court of Appeals affirmed the decision, holding that the City would have had to prove that the WGS’s lack of a backwater valve was the sole cause of the loss in order to absolve itself of liability.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
Expect the Unexpected (Your Design Contracts in a Post-COVID World)
April 18, 2023 —
Melissa Dewey Brumback - Construction Law in North CarolinaHave you adapted your post-COVID practice to better plan for the “unexpected” ? In particular, have you looked at–and revised– your professional services contracts to give yourself a little more breathing room for unaccounted issues that may arise? If not, no time like the present.
Don’t like that saying? How about ” a stitch in time saves nine?” No? Still nothing? What about a picture of something so completely unexpected it shocks you– say, a fireman commuting home, in fire-fighting regalia, on a tricycle? Okay, here you go…
Now that I have your attention– you should make it a practice to regularly review and update your professional services agreements, and you should consider issues such as:
- Does your agreement provide for extra compensation if you have to spend more time or a longer period providing construction administration services for material delays or labor shortages? If not, it should.
- Does your agreement have a well-written “act of God” provision– one that includes pandemic/epidemics as part of the “act of God” conditions in which a term may become void? If not, add it now!
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Melissa Dewey Brumback, Ragsdale LiggettMs. Brumback may be contacted at
mbrumback@rl-law.com
Jinx: Third Circuit Rules in Favor of Teamsters in Withdrawal Case
July 28, 2018 —
Wally Zimolong - Supplemental ConditionsBad omen. Last week, I wrote about a Appeals Court decision that affirmed a contractor’s escape from an over $600,000 withdrawal liability assessment from the Laborers Union. The next day the Third Circuit (which covers PA, NJ, and DE) handed down a decision affirming a federal court’s decision to assess withdraw liability. This one shows the dark side of not reading and understanding your CBA.
The belligerents in the litigation were, Penn Jersey, a construction material supplier, and Teamsters Local 676. Their collective bargaining agreement contained a clause purportedly covering withdrawal liability. Specifically, the clause stated “should the Employer withdraw from the Agreement in the future, there will be no withdrawal liability. The CBA expired and Penn Jersey did not renew its agreement with the Teamsters.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Reporting Requirements for Architects under California Business and Professions Code Section 5588
December 22, 2019 —
Jordan Golden - Gordon & Rees Construction Law BlogBelow is an overview of the changes to California Business and Professions Code Section 5588 and its effect on the reporting requirements, for architects, in the construction industry.
Section 5588 Prior to 2005 Legislative Changes
Section 5588 of the California Business and Professions Code sets forth the reporting requirements for many business professionals including architects. Since 1979, Section 5588 has required architects and their insurers to report to the California Architect Board (the Board) “any settlement or arbitration award in excess of five thousand dollars ($ 5,000) of a claim or action for damages caused by the license holder’s fraud, deceit, negligence, incompetency, or recklessness in practice.”1
The language of the code section left open for interpretation the question of what types of settlement claims must be reported to the Board. Thus, in 2004, the Attorney General of the State of California published an opinion stating that a reportable settlement includes “any agreement resolving all or part of a demand for money which is based upon an insured architect’s alleged wrongful conduct.”2 He then went on to conclude that the only qualifications placed on the term “claim” for purposes of Section 5588 is that “(1) the demand be premised on the license holder’s alleged ‘fraud, deceit, negligence, incompetency, or recklessness in practice,’ and (2) the value of the claim, as measured by the settlement amount or arbitration award, exceeds $5,000.”3
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Jordan Golden, Gordon & Rees Scully Mansukhani
UPDATE: ACS Obtains Additional $13.6 Million for General Contractor Client After $19.2 Million Jury Trial Victory
June 27, 2022 —
Kristina Southwell - Ahlers Cressman & Sleight PLLCIn March 2022, ACS obtained a $19.2 million jury verdict in favor of its general contractor client after a lengthy trial against the project owner. Since that time, ACS has successfully obtained awards through post-trial motion practice for an additional $13.6 million in favor of the general contractor. These awards increased to total judgment to more than $32 million.
When moving to enter judgment on the jury verdict, ACS successfully argued for and obtained more than $5 million in prejudgment interest on the jury verdict to compensate the general contractor for having to go years without payment for work performed. ACS also successfully obtained a decree of foreclosure on its construction lien and incorporated language in the judgment requiring the owner to pay an additional $1.9 million in Washington State sales tax on the jury award. Finally, under the authority of the Washington construction lien statute (RCW 60.04.181), ACS sought to recover the attorneys’ fees, costs, and expenses incurred by the general contractor client during the course of litigation. ACS succeeded in obtaining an award for more than $6.6 million for various expenses and costs including ACS’s attorney fees, all the costs of hiring expert witnesses, costs and expenses related to subcontractors’ presentation of pass-through claims against the owner, and other litigation costs and expenses.
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Kristina Southwell, Ahlers Cressman & Sleight PLLCMs. Southwell may be contacted at
wendy.wheatmccoy@acslawyers.com
Social Engineering Scams Are On the Rise – Do I Have Insurance Coverage for That?
June 01, 2020 —
Jeffrey Dennis & Heather Whitehead - Newmeyer DillionCyber attackers all know that the majority of organizations are currently working from home due to the ongoing COVID-19 (commonly referred to as the Coronavirus) pandemic. And, as would be expected, social engineering scams are on the rise. Nonetheless, there may be limitations in your cyber liability insurance policy for these types of claims. It is advisable to take the initiative to review such insurance policies in detail for coverage considerations prior to the occurrence of any cyber incident. And, of course, protect your business from attacks by engaging in precautious cyber safety efforts.
What Is Social Engineering?
Social engineering refers to various means to manipulate individuals in the online environment so that they divulge sensitive, personal information, such as banking information, which may include account numbers and passwords. This can also take the form of receiving a request to transfer funds to what the victim believes is another employee, trusted financial information or other party with whom the person has a business relationship with. Unfortunately, however, those funds ultimately are received by the engineer of the cyber attack.
Reprinted courtesy of
Jeffrey M. Dennis, Newmeyer Dillion and
Heather Whitehead, Newmeyer Dillion
Mr. Dennis may be contacted at jeff.dennis@ndlf.com
Ms. Whitehead may be contacted at heather.whitehead@ndlf.com
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Los Angeles Team Secures Summary Judgment for Hotel Owner & Manager in Tenant’s Lawsuit
July 08, 2024 —
Lewis Brisbois NewsroomLos Angeles, Calif. (June 11, 2024) - Los Angeles Partners David Samuels and Meegan Moloney recently obtained summary judgment for the owner and manager of a Southern California hotel in a lawsuit brought by a tenant who alleged that she suffered injuries due to the presence of mold in her leased space.
The plaintiff had entered into a commercial lease for space within the Crowne Plaza Hotel in Redondo Beach, California, for use for her spa and massage business. The lease contained "exculpatory provisions" absolving Lewis Brisbois' clients "from any and all liability and responsibility for any loss, injury or damage incurred or claimed by reason of damage to property located on the leased premises."
Shortly after taking possession of the space in September 2019, the plaintiff claimed she became ill and subsequently discovered the presence of mold in the heating, ventilation, and air conditioning ducts. In October 2022, she sued the hotel's owner and manager, asserting a host of claims including negligence, fraud - negligent and intentional misrepresentation, negligent infliction of emotional distress, breach of contract, breach of covenant of quiet enjoyment, private nuisance, and unfair business practices.
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Lewis Brisbois
Reduce Suicide Risk Among Employees in Remote Work Areas
November 24, 2019 —
Sandra Moran - Construction ExecutiveIn the construction industry, a disturbing and unnerving trend has been developing over the past few decades. Construction and resource extraction have the highest rate of deaths by suicide compared to any other industry. This phenomenon is not limited to a single country. The statistics from three developed countries with strong construction and resource extraction industries (United States, United Kingdom and Australia), reflect the same pattern.
A major risk factor that has not been given much attention and scrutiny is the requirement for many workers to be away from their homes for long periods of time, based in remote locations and basecamps. This isolation contributes to loneliness and disconnectedness that increases the vulnerability to employees at risk due to underlying mental health disorders, such as depression and anxiety, or those with suicidal ideations or prior attempts. Basecamps or remote work locations remove workers from the support networks of family, friends, and even medical and psychological caregivers.
Employers placing employees in remote work locations should be mindful that simply wanting to work in a remote location does not necessarily equate to being able to cope well in such an environment—unless appropriate supports are provided. Companies need to become proactive to lead employees to become true teams to help reduce the risk of suicide among their workers.
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Sandra Moran, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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