Housing Buoyed by 20-Year High for Vet’s Loans: Mortgages
July 23, 2014 —
Prashant Gopal and Jody Shenn – BloombergDuring his third deployment in Afghanistan, Air Force Staff Sgt. Claude Hunter was so eager to return to the U.S. and buy a house that he signed a contract for a property that his agent showed him over Skype.
Hunter got back in time to close the deal, paying $219,000 in May for the four-bedroom Waldorf, Maryland, house that he financed with a U.S. Department of Veterans Affairs mortgage. It didn’t require a down payment.
“On Facebook, my friends have started posting: ‘I got my VA loan, I got my house,’” said Hunter, 31. “Everybody is just ready. A lot of them have done their jobs overseas and are coming home.”
America’s fragile housing recovery is getting a boost from military buyers using VA mortgages as the U.S. draws down troops after more than a decade of combat in Iraq and Afghanistan. About 4.7 million full-time troops and reservists served during the wars and many are now able to take advantage of one of the easiest and cheapest paths to homeownership. The program’s share of new mortgages, at a 20-year high, is also increasing as other types of government-backed loans have grown more costly.
Mr. Gopal may be contacted at pgopal2@bloomberg.net; Ms. Shenn in New York at jshenn@bloomberg.net
Read the court decisionRead the full story...Reprinted courtesy of
Prashant Gopal and Jody Shenn, Bloomberg
Supreme Court of Kentucky Holds Plaintiff Can Recover for Stigma Damages in Addition to Repair Costs Resulting From Property Damage
August 15, 2018 —
Gus Sara - The Subrogation StrategistIn Muncie v. Wiesemann, 2018 K.Y. LEXIS 257, the Supreme Court of Kentucky considered whether stigma damages[1] in a property casualty case are recoverable in addition to the costs incurred to remediate the actual damage. The court held that stigma damages are recoverable in addition to repair costs, but the total of the stigma damages and repair costs cannot exceed the diminution in the fair market value of the property. The court’s decision establishes that if the repair costs are insufficient to make the plaintiff whole, a recovery for stigma damages up to the amount of the diminution in the market value of the home is appropriate.
Appellants Cindy and Jim Muncie incurred significant property damage to their home as a result of an oil leak originating from a neighboring property owned by the Estate of Martha Magel. In 2011, Auto Owners Insurance Company (Auto Owners), the liability carrier for the Estate’s testatrix, Patricia Weisman, filed an impleader complaint in federal court to discharge its obligation to settle the third-party liability claims on behalf of Ms. Weisman. Auto Owners reached a settlement with the Muncies for $60,000 which represented the remediation costs for the actual damage to the property. The settlement release reserved the Muncies’ right to pursue a claim for stigma damages associated with the oil leak.
Read the court decisionRead the full story...Reprinted courtesy of
Gus Sara, White and Williams LLPMr. Sara may be contacted at
sarag@whiteandwilliams.com
Supreme Court of New York Denies Motion in all but One Cause of Action in Kikirov v. 355 Realty Assoc., et al.
April 28, 2011 —
Beverley BevenFlorez CDJ STAFFIn the construction defect suit Kikirov v. 355 Realty Associates, LLC, et al., the Supreme Court of the State of New York granted a dismissal of the plaintiff’s fourth cause of action, but denied the defendants’ motion in all other respects. The plaintiff alleged breach of contract, among other claims. “355 Realty was the sponsor of 355 Kings Highway Condominium, a condominium project located at 355 Kings Highway, in Brooklyn, New York. The condominium units were allegedly marketed as ‘ultra luxury condos,’ and a ‘Manhattan style condominium building,’ which would be the ‘epitome of luxury and quality.’ The construction of the six-story 28 unit residential condominium building began in approximately November 2003. […] Plaintiff entered into a purchase agreement, dated December 21, 2005, with 355 Realty (which was executed on behalf of 355 Realty by Michael Marino, as its member) for the purchase of Unit 2G in the building.”
The plaintiff alleged that construction defects emerged soon after moving into the unit: “After taking occupancy of his condominium unit, plaintiff allegedly experienced serious leakage and moisture problems in his unit, which caused a dangerous mold condition to develop, in addition to causing actual damage to the structural elements of his unit. According to plaintiff, the walls, moldings, and wood floors of his unit are constantly wet and moist, and there is severe buckling of the wood floors. Plaintiff claims that these problems have caused his unit to be uninhabitable. Plaintiff alleges that he has been forced to remove all of his personal belongings from his unit and has been unable to occupy his unit.”
According to the plaintiff, Foremost attempted to repair the defects, but only made the situation worse: “Specifically, plaintiff asserts that Foremost’s contractors opened his walls to remove the stained drywall, but never corrected the cause of the leaks, destroyed the walls, and never properly taped and painted the sheet rock. Plaintiff alleges that Foremost repaired the openings in a defective manner. Plaintiff also claims that his floor was repaired at that time by a subcontractor hired by Foremost, but the basic structural problem was never resolved and the leaks continued, compromising the beams and causing the mold conditions, in addition to all of the physical damage present in the unit. On or about July 16, 2009, plaintiff allegedly sent a notice of the defects to 355 Realty and to the managing agent designated by the condominium board, by certified mail, return receipt requested. Plaintiff asserts that defendants have failed and refused to repair and remedy the defective condition, and that the damage is extensive and requires major structural repairs.”
The plaintiff filed suit on May 4, 2010, and the original complaint asserted eight causes of action. “By decision and order dated September 13, 2010, the court granted a motion by defendants to dismiss plaintiff’s second cause of action for breach of implied covenants of good faith and fair dealing, his third cause of action for breach of implied warranties, his fifth cause of action for negligence as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his seventh cause of action for negligence as against Vision, Foremost, and MMJ, and his eighth cause of action for violations of General Business Law § 349 and § 350, and granted plaintiff leave to replead his first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his fourth cause of action for breach of statutory warranties, and his sixth cause of action for breach of contract as against Vision, Foremost, and MMJ.”
The plaintiff amended their complaint on October 18, 2010, and “has repleaded these three causes of action by asserting a first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, a second cause of action for breach of statutory warranties, and a third cause of action for breach of contract as against Vision, Foremost, and MMJ. In addition, plaintiff, in his amended complaint, has added a fourth cause of action for fraud.”
The defendants, on the other hand, “argue that each of the four causes of action alleged by plaintiff in his amended complaint fail to state a claim upon which relief may be granted, and that plaintiff’s amended complaint must be dismissed pursuant to CPLR 3211 (a) (7). Defendants also cite to CPLR 3211 (a) (1), and (5), asserting that dismissal is also required based upon documentary evidence and the Statute of Limitations contained in the limited warranty.” The defendants’ motion to dismiss the first cause of action, breach of contract against 355 Realty, was denied: “While defendants dispute that the alleged defects are actually structural in nature, plaintiff’s allegations as to their structural nature are sufficient, at this juncture, to withstand defendants’ motion to dismiss. Thus, dismissal of plaintiff’s first cause of action must be denied.”
Next, the court reviewed the second cause of action, which was breach of statutory warranties: “Defendants’ motion also seeks dismissal of plaintiff’s second cause of action for breach of statutory warranties, which alleges that, under applicable law, including General Business Law § 777-a, et seq., the sponsor warranted to purchasers of units that the units would be constructed in a skillful, careful, and workmanlike manner, consistent with proper design, engineering, and construction standards and practices, and free of material latent, design, and structural defects. Defendants argue that General Business Law § 777-a, known as the housing merchant implied warranty, is inapplicable to this case because it is limited to the construction of a ‘new home,’ defined in General Business Law § 777 (5) as ‘any single family house or for-sale unit in a multi-unit residential structure of five stories or less.’ As noted above, the building in which plaintiff’s condominium unit is located is a six-story building.”
The motion to dismiss the second cause of action is denied. The court provided this reasoning: “the full text of the offering plan has not been provided, the court is unable to examine the entire written agreement so as to determine the purpose of the inclusion of the text of General Business Law § 777.”
In the third cause of action, the plaintiff alleges “a breach of contract claim as against Vision, Foremost, and MMJ based upon their contract with 355 Realty, pursuant to which they agreed to be the general contractors/construction managers for the condominium, to undertake oversight responsibility for the design and construction of the condominium, to prepare and/or review drawings, plans, and specifications for the condominium, and to otherwise manage and oversee the project. Plaintiff alleges that Vision, Foremost, and MMJ breached their contractual obligations in that the condominium units were improperly and inadequately designed and constructed, and completed in an incompetent and unworkmanlike manner, with material design and construction defects.”
The motion to dismiss the third cause of action was denied as well: “Plaintiff alleges, in his amended complaint, that Vision, Foremost, and MMJ have acknowledged notice of the defects and have not denied that they are responsible for providing a warranty to plaintiff. Plaintiff also refers to this warranty, in his amended complaint, by noting that paragraph 16 of the purchase agreement stated that the ‘[s]eller shall not be liable to . . . the [p]urchaser for any matter as to which an assignable warranty . . . has been assigned . . . to [p]urchaser and in such case the sole recourse of such . . . [p]urchaser . . . shall be against the warrantor . . . except that in the event a contractor or subcontractor is financially unable or refuses to perform its warranty . . . [s]eller shall not be excused from its obligations enumerated in the [offering p]lan under Rights and Obligations of Sponsor.’ Consequently, the court finds that dismissal of plaintiff’s third cause of action as against Foremost and MMJ must also be denied.”
In the fourth cause of action, the plaintiff alleges “that defendants made false statements and representations orally, in advertisements, and in the purchase agreement, that the condominium was properly and adequately designed and constructed and completed in a competent and workmanlike manner, in accordance with the condominium plans and specifications and proper design, engineering, and construction standards and practices consistent with applicable standards for a first class, luxury condominium in Brooklyn.”
The court dismissed the fourth cause of action stating, “it must be dismissed because it is duplicative of his first cause of action for breach of contract.” Therefore, “defendants’ motion to dismiss plaintiff’s amended complaint is granted to the extent that it seeks dismissal of plaintiff’s fourth cause of action, and it is denied in all other respects.”
Read the court’s decision… Read the court decisionRead the full story...Reprinted courtesy of
Business Risk Exclusions Bar Faulty Workmanship Claim
December 21, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe manufacturer of roofing and waterproofing systems was unsuccessful in securing coverage for alleged faulty workmanship due to the "your work" and "your product" exclusions. Siplast, Inc. v. Emplrs Mut. Cas. Co., 2020 U.S. Dist. LEXIS 176539 (N.D. Texas Sept. 25, 2020).
Siplast was sued in New York by the Archdiocese for work done at Cardinal Spellman High School. The Archdiocese purchased a Siplast Roof System for the high school. Vema Enterprises installed the roof system. The roof system was covered by a guarantee.
After completion, school officials noticed water damage in the ceiling tiles throughout the school. A consultant hired by the Archdiocese concluded that the leaks were caused by the workmanship and the materials that were compromising the entire roof membrane and system. Siplast determined the guarantee was not applicable. The Archdiocese informed Siplast that it would repair the roof and hold Siplast liable for the costs. Siplast gave notice of the claim to Employers, but coverage was denied.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Last Parcel of Rancho del Oro Masterplan Purchased by Cornerstone Communties
August 06, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to San Diego Source, “A partnership controlled by Ure Kretowicz's Cornerstone Communities has paid a reported $25 million for a 28-acre residential parcel located on the northwest corner of College Avenue and Old Grove Road in the Rancho del Oro masterplan in Oceanside,” California.
Cornerstone plans to create a “338-unit luxury apartment development,” with amenities including “resort-level clubhouse with an Olympic size swimming pool, spa, barbecue area, conferencing center” and more.
Read the court decisionRead the full story...Reprinted courtesy of
Home Builders and Developers Beware: SC Supreme Court Beats Up Hybrid Arbitration Clauses Mercilessly
November 15, 2022 —
Matthew Devries - Best Practices Construction LawToday’s guest post is by one of my favorite construction lawyers and friends, Burr partner Ned Nicholson in our Columbia, SC office. Ned regularly represents clients in construction defect and compensation claims, manufacturer/dealer disputes, and insurance coverage lawsuits. He is also a South Carolina certified mediator. Ned can be reached at nnicholson@burr.com or (803) 799-9800.
If you are a homebuilder, residential housing developer, construction industry insurer, or any one of the many participants in the industry providing affordable and decent housing for the citizens of South Carolina, you are already aware that South Carolina courts have for decades prioritized the promotion of consumer (i.e., home buyer) rights, usually at the expense of the providers of housing. There is nothing inherently wrong with that; the goal is laudable. But as in so many things, the implementation has been extremely costly for the residential construction industry as a savvy plaintiff’s bar has taken advantage of grey areas that are inevitably created in our judicial system.
Read the court decisionRead the full story...Reprinted courtesy of
Matthew Devries, Burr & Forman LLPMr. Devries may be contacted at
mdevries@burr.com
The Fourth Circuit Applies a Consequential Damages Exclusionary Clause and the Economic Loss Doctrine to Bar Claims by a Subrogating Insurer Seeking to Recover Over $19 Million in Damages
February 23, 2016 —
William L. Doerler – White and Williams LLPIn Severn Peanut Company, Inc. v. Industrial Fumigant Company, 807 F.3d 88 (4th Cir. (N.C.) 2015), the United States Court of Appeals for the Fourth Circuit (Fourth Circuit), applying North Carolina law, considered whether a consequential damages clause in a contract between the Severn Peanut Company, Inc. (Severn) and Industrial Fumigant Company (IFC) barred Severn and its subrogating insurer, Travelers Property Casualty Company of America (Travelers), from recovering over $19 million in damages that Severn suffered as the result of a fire and explosion at its Severn, North Carolina plant. The Fourth Circuit, rejecting Severn’s unconscionability and public policy arguments related to the consequential damages clause and finding that the economic loss doctrine barred Severn from pursuing negligence claims, affirmed the trial court’s judgment granting summary judgment in IFC’s favor.
As noted in the Severn decision, the facts showed that Severn and IFC signed a Pesticide Application Agreement (PAA) requiring IFC to use phosphine, a pesticide, to fumigate Severn’s peanut storage dome and to apply the pesticide “in a manner consistent with instructions . . . and precautions set forth in [its] labeling.” With respect to damages, the PAA specified that IFC’s charge for its services, $8,604 plus applicable sales tax, was “based solely upon the value of the services provided” and was not “related to the value of [Severn’s] premises or the contents therein.” In addition, the PAA specified that the $8,604 sum to which the parties agreed was not “sufficient to warrant IFC assuming any risk of incidental or consequential damages” to Severn’s “property, product, equipment, downtime, or loss of business.”
Read the court decisionRead the full story...Reprinted courtesy of
William L. Doerler, White and Williams LLPMr. Doerler may be contacted at
doerlerw@whiteandwilliams.com
Mississippi Sues Over Public Health Lab Defects
October 29, 2014 —
Beverley BevenFlorez-CDJ STAFFThe state of Mississippi “is suing architects and designers of a new Public Health Lab, saying the $28 million lab wasn't up to containing deadly diseases, biohazards and chemicals,” reported The Clarion-Ledger.
Dale Partners Architects, Earl Walls Associates, Eldridge and Associates, and Environmental Management Plus have been named as defendants.
"The estimated damages are $3 million," attorney Dorsey Carson told The Clarion-Ledger. "This building is where they test tuberculosis, or where they would test anthrax or any other (biohazards). You don't have a choice – it has to meet rigorous standards."
Charlie Alexander, a partner with Dale Partners, stated that “any allegations of design defects by his company and its team ‘are unfounded,’” reported The Clarion-Ledger.
Read the court decisionRead the full story...Reprinted courtesy of
