Home Construction Thriving in Lubbock
December 30, 2013 —
CDJ STAFFThe 2013 numbers for home construction aren’t ready yet, but the January through November numbers for Lubbock, Texas show a 42% increase over the number of construction permits issued for single-family homes in the first 11 months of 2012. The number look even better compared to 2011’s totals, according to KFYO.
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Arizona Court of Appeals Decision in $8.475 Million Construction Defect Class Action Suit
May 09, 2011 —
CDJ STAFFIn the case of Leflet v. Fire (Ariz. App., 2011), which involved an $8.475 million settlement in a construction defect class action suit, the question put forth to the Appeals court was “whether an insured and an insurer can join in a Morris agreement that avoids the primary insurer’s obligation to pay policy limits and passes liability in excess of those limits on to other insurers.” The Appeals court provided several reasons for their decision to affirm the validity of the settlement agreement as to the Non-Participatory Insurers (NPIs) and to vacate and remand the attorney fee awards.
First, the Appeals court stated, “The settlement agreement is not a compliant Morris agreement and provides no basis for claims against the NPIs.” They conclude, “Appellants attempt to avoid the doctrinal underpinnings of Morris by arguing that ‘the cooperation clause did not prohibit Hancock from assigning its rights to anyone, including Appellants.’ This narrow reading of the cooperation clause ignores the fact that Hancock did not merely assign its rights — it assigned its rights after stipulating to an $8.475 million judgment that neither it nor its Direct Insurers could ever be liable to pay. Neither Morris nor any other case defines such conduct as actual ‘cooperation’—rather, Morris simply defines limited circumstances in which an insured is relieved of its duty to cooperate. Because Morris agreements are fraught with risk of abuse, a settlement that mimics Morris in form but does not find support in the legal and economic realities that gave rise to that decision is both unenforceable and offensive to the policy’s cooperation clause.”
The Appeals court further concluded that “even if the agreement had qualified under Morris, plaintiffs did not provide the required notice to the NPIs.” The court continued, “Because an insurer who defends under a reservation of rights is always aware of the possibility of a Morris agreement, the mere threat of Morris in the course of settlement negotiations does not constitute sufficient notice. Instead, the insurer must be made aware that it may waive its reservation of rights and provide an unqualified defense, or defend solely on coverage and reasonableness grounds against the judgment resulting from the Morris agreement. The NPIs were not given the protections of this choice before the agreement was entered, and therefore can face no liability for the resulting stipulated judgment.”
Next, the Appeals court declared that “the trial court abused its discretion in awarding attorney’s fees under A.R.S § 12-341.” The Appeals court reasoned, “In this case, the NPIs prevailed in their attack on the settlement. But the litigation did not test the merits of their coverage defenses or the reasonableness of the settlement amount. And Plaintiffs never sued the NPIs, either in their own right or as the assignees of Hancock. Rather, the NPIs intervened to test the conceptual validity of the settlement agreement (to which they were not parties) before such an action could commence. In these circumstances, though it might be appropriate to offset a fee award against some future recovery by the Plaintiff Leflet v. Fire (Ariz. App., 2011) class, the purposes of A.R.S. § 12-341.01 would not be served by an award of fees against them jointly and severally. We therefore conclude that the trial court abused its discretion in awarding fees against Plaintiffs ‘jointly and severally.’”
The Appeals court made the following conclusion: “we affirm the judgment of the trial court concerning the validity of the settlement agreement as to the NPIs. We vacate and remand the award of attorney’s fees. In our discretion, we decline to award the NPIs the attorney’s fees they have requested on appeal pursuant to A.R.S. § 12-341.01(A).”
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2025 Construction Law Update
January 07, 2025 —
Garret Murai - California Construction Law BlogIt’s that time of year again.
The second half of the 2023-2024 legislative session saw the introduction of 2,124 bills, of which, 1418 were signed into law. Among the bills signed by the governor impacting contractors is an increase in the small work licensing exemption for $500 to $1,000, the licensing of Indian tribes by the CSLB, and a number of project-specific bills, as is typical, related to project-specific alternative project delivery methods.
Wishing you and yours a great 2025!
Licensing
AB 2622 – Increases the small work licensing exemption from $500 to $1,000 provided that the work: (1) does not require a building permit; and (2) does not involve the employment of others to perform or assist in the work.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
A General Contractors Guide to Bond Thresholds by State
June 13, 2018 —
Wally Zimolong – Supplemental Conditions Author: Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.
For general contractors in construction, there are many facets of business management that must be considered and then accomplished over time. Operating a successful general contractor business regardless of size or niche requires an understanding of bookkeeping, personnel management, regulatory compliance, as well as revenue potential for each project. However, one often overlooked aspect of being a general contractor – having the appropriate contractor license and minimum surety bond – correlates to each of these required fragments of the business from the start.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Burg Simpson to Create Construction Defect Group
November 06, 2013 —
CDJ STAFFBurg Simpson Eldredge Hersh & Jardine, P.C. has announced that the attorneys of Sullan2, Sandgrund, Perczak & Nuss, P.C. will be joining them as S2SPN Construction Defect Group of Berg Simpson. The group will be headquartered at Burg Simpson’s Engelwood offices.
The combined firms will comprise 55 attorneys. Michael Burg, founding shareholder at Burg Simpson, said that “in Colorado for the past 29 years, these lawyers have provided the highest level of construction defect representation.” His counterpart, Scott Sullan of Sullan2, Sandgrund, Perczak & Nuss said that he and his colleagues are “delighted to be a part of the Burg Simpson team.” The two firms join forces effective January 1, 2014.
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WSHB Secures Victory in Construction Defect Case: Contractor Wins Bench Trial
October 01, 2024 —
Wood Smith Henning & BermanWood Smith Henning & Berman is pleased to announce a significant victory in a bench trial led by trial attorney
Thomas Fama. The case, which had been pending for nearly five years due to pandemic-related delays and unreasonable demands by the plaintiff, concluded with a resounding judgment in favor of the defendant.
"The result of this trial is a testament to our team's unwavering tenacity and strategic focus throughout the entire process," stated WSHB partner Tom Fama, lead counsel in the case. "We kept our eye on the proverbial ball and diligently worked to expose the lack of evidence supporting the plaintiff's claims."
The matter involved allegations of defective installation of a solar energy system, which the plaintiff claimed leaked during inclement weather. Fama and his team successfully demonstrated that the plaintiff's claims lacked substance, highlighting numerous pre-existing conditions on the roof that could have been responsible for the problem.
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Wood Smith Henning & Berman
Keeping Detailed Records: The Best Defense to Constructive Eviction
October 24, 2023 —
Ben T. Welch & Ken Brown - Snell & WilmerInevitably, commercial property owners and managers will be faced with a claim by a tenant of constructive eviction. This article is intended to describe what constructive eviction is and to suggest what owners and managers can do to prepare for, and ward off, such claims.
Constructive eviction occurs where a tenant’s “right of possession and enjoyment” of the leasehold is disrupted by the landlord in a manner that renders the premises “unsuitable for the purposes intended.”i Put another way, it is interference that is so “substantial nature and so injurious as to deprive the tenant of the beneficial enjoyment of a part or the whole of the demised premises.”ii Although easy to describe in theory, constructive eviction can be devilishly difficult to determine in the real world. In litigation, determining when interference crosses over the line to constructive eviction is intensely fact-sensitive and resists sweeping generalizations.iii
For instance, Utah courts have held that tenants have been constructively evicted when they have been subjected to continual harassment or insults by the landlord or the landlord’s agent,iv prevented or impaired in their access to the leased premises during operating hours,v or when a landlord fails to provide an operable elevator (or other essential commercial amenities) necessary for a tenant’s business operations.vi By contrast, claims of “discomfort” or “inconvenience” have been rejected as a basis for constructive eviction.vii The same goes for claims that a landlord wrongfully served a three-day notice to pay or quit.viii
Generally, constructive eviction is an affirmative defense made in response to a landlord’s lawsuit for nonpayment of rent.ix It is not, as is commonly supposed, a basis for a tenant’s premature abandonment of the premises. In other words, the defense is raised after the tenant has vacated as a result of being effectively “evicted.”x Further, the defense requires the tenant to actually abandon the premises and do so within a “reasonable time” after the alleged interference.xi A tenant cannot stay in possession and simply refuse to pay rent on the basis of constructive eviction.xii
The key consideration in preparing for, and responding to, a claim of constructive eviction is keeping good records. A tenant claiming constructive evicting likely must prove that the issue was raised in a timely manner and, despite multiple entreaties, was never resolved.xiii As such, it is critical that landlords acknowledge tenant complaints as well as document in writing their efforts to ameliorate those complaints. While a landlord does not carry the burden of proof for constructive eviction, detailed documentation can thwart a tenant’s claim that a landlord has been inattentive or unwilling to address the tenant’s concerns.
Detailed records are also useful in disputes where a tenant claims substantial interference. “The whole point of constructive eviction is that the landlord basically drove the tenant out through the landlord’s action or inaction.”xiv As such, a landlord that is unable to document the steps taken in response to complaints will be grossly disadvantaged whereas the tenant, which had control and knowledge of the premises, will have a much easier time describing how the alleged interference deprived them of enjoying the premises.
Even with meticulous records, however, owners and managers may still face claims of construction eviction. In such instances, counsel should be retained to properly advise on compiling, preserving, and employing the evidence necessary to refute the tenant’s claims.
i Gray v. Oxford Worldwide Grp., Inc., 139 P.3d 267, 269 (Utah Ct. App. 2006).
ii Gray, 139 P.3d at 270 (citing Neslen, 254 P.2d at 850) (internal formatting omitted).
iii See Gray, 139 P.3d at 269–70 (citing Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847, 850 (Utah 1953)); Brugger v. Fonoti, 645 P.2d 647, 648 (Utah 1982).
iv See Gray, 139 P.3d at 270–71.
v Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847 (Utah 1953).
vi See Richard Barton Enterprises, Inc. v. Tsern, 928 P.2d 368, 375, 378 (Utah 1996) (citing Union City Union Suit Co. v. Miller, 162 A.D.2d 101, 556 N.Y.S.2d 864 (1990)).
vii See Myrah v. Campbell, 163 P.3d 679, 682–84 (Utah Ct. App. 2007).
viii Barton v. MTB Enterprises, 889 P.2d 476, 477 (Utah Ct. App. 1995); see also Brugger, 645 P.2d at 648 (stating that the tenant’s complaints revolved around standard problems commonly associated with building maintenance and did not rise to the level of substantial interference); viv Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 898–900 (Utah 1989) (upholding trial court’s findings of fact concerning insufficiency of disruption so as to justify claim for constructive eviction).
ix See Kenyon v. Regan, 826 P.2d 140, 142 (Utah Ct. App. 1992).
x See Kenyon, 826 P.2d at 142.
xi See Kenyon, 826 P.2d at 142; see also Barton v. MTB Enterprises, Inc., 889 P.2d 476, 477 (Utah Ct. App. 1995); Brugger, 645 P.2d at 648.
xii See Kenyon, 826 P.2d at 142 (citing Fernandez v. Purdue, 518 P.2d 684, 686 (Utah 1974)).
xiii See Brugger, 645 P.2d at 648 (noting that while the tenant had raised legitimate issues concerning state of the premises, the landorld had taken steps to remedy the problems within a reasonable time) (citing 49 Am.Jur.2d, Landlord and Tenant, § 617).
xiv Barton, 889 P.2d at 477.
Reprinted courtesy of
Ben T. Welch, Snell & Wilmer and
Ken Brown, Snell & Wilmer
Mr. Welch may be contacted at bwelch@swlaw.com
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Massachusetts Roofer Killed in Nine-story Fall
January 08, 2019 —
Johanna Knapschaefer - Engineering News-RecordA 41-year-old roofer from Haverhill, Mass. fell through a roof hole nine stories to his death on Dec. 18 while working on an apartment building project in Haverhill, a city north of Boston.
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Johanna Knapschaefer, ENRENR may be contacted at
ENR.com@bnpmedia.com
