FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Fifth Circuit Holds Insurer Owes Duty to Defend Latent Condition Claim That Caused Fire Damage to Property Years After Construction Work

September 21, 2020 — Jeremy S. Macklin - Traub Lieberman
Most general liability policies only provide coverage for “property damage” that occurs during the policy period. Thus, when analyzing coverage for a construction defect claim, it is important to ascertain the date on which damage occurred. Of course, the plaintiffs’ bar crafts pleadings to be purposefully vague as to the date (or period) of damage to property. A recent Fifth Circuit decision applying Texas law addresses this coverage issue in the context of allegations of a condition created by an insured during the policy period that caused damage after the policy expired. In Gonzalez v. Mid-Continent Cas. Co., 969 F.3d 554 (5th Cir. 2020), Gilbert Gonzales (the insured) was a siding contractor. In 2013, the underlying plaintiff hired Gonzales to install new siding on his house. In 2016, the underlying plaintiff’s house was damaged in a fire. The underlying plaintiff sued Gilbert in Texas state court alleging that when Gonzalez installed the siding in 2013, he hammered nails through electrical wiring and created a dangerous condition that caused a fire three years later in 2016. At the time Gilbert performed construction work, he was insured by Mid-Continent Casualty Company. Mid-Continent disclaimed coverage to Gonzales on the basis that the complaint unequivocally alleged that property was damaged in 2016 and there were no allegations that property damage occurred prior to 2016 or was continuing in nature. Read the court decision
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Reprinted courtesy of Jeremy S. Macklin, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com

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Deadline for Hurricane Ian Disaster Recovery Applications Announced

October 17, 2022 — Lewis Brisbois
Washington, D.C. (October 11, 2022) - On Friday, October 7, 2022, the Florida Division of Emergency Management (FDEM) announced that applications for the Federal Emergency Management Agency’s (FEMA) Public Assistance Grant Program are due by October 29, 2022. FEMA provides disaster recovery assistance to eligible individuals, families, governments, and private non-profit entities. However, the process for recovering costs is complicated, and FEMA has broad discretion to determine whether applicants and their expenses are eligible. All too often, failure to understand FEMA regulations or submit sufficient documentation results in FEMA denying applicants’ claims, leaving individuals, local governments, and non-profits to bear the full cost of recovery. While ensuring successful recovery through the FEMA grant program can be challenging, clients can increase their likelihood of success when preparing the initial application and documentation by enlisting experienced legal counsel who understand the FEMA process and regulations. Read the court decision
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Reprinted courtesy of Lewis Brisbois

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The Texas Supreme Court Limits the Use of the Economic Loss Rule

September 03, 2014 — Beverley BevenFlorez-CDJ STAFF
According to David Fisk of Kane Russell Coleman & Logan PC, in an article published by JD Supra Business Advisor, “[T]he Texas Supreme Court issued a per curium opinion limiting the application of the economic loss doctrine or rule, as it is referred to in Texas, in the context of residential construction defect claims.” In Chapman Custom Homes, Inc. v Dallas Plumbing Co., the court “ruled that a plumbing subcontractor assumes an implied duty not to flood or otherwise damage a home while performing its contract with a builder” and that “the economic loss rule does not apply in this context.” Read the court decision
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Reprinted courtesy of

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Will There Be Construction Defect Legislation Introduced in the 2019 Colorado Legislative Session?

March 18, 2019 — David McLain - Colorado Construction Litigation Blog
With the 2019 Colorado legislative session well underway, the construction industry is waiting with bated breath to see what the Democrat controlled legislature might do with respect to construction defect legislation. In recent years, having a split legislature has prevented any attempts to roll back positive changes in the law, either from the legislature or Colorado courts, that have been hailed by the construction community. This year, odds are good that we will see at least one bill similar to two introduced last year that would hinder the ability to have disputes decided by binding arbitration. While not full frontal assaults on the Colorado Supreme Court decision in the Vallagio case, HB18-1261, the “Colorado Arbitration Fairness Act,” and HB 18-1262, the “Arbitration Services Provider Transparency Act,” would have negatively impacted the ability to resolve any type of case through arbitration. Anything that prevents the resolution of construction defect cases through arbitration will increase the judgments and settlements in such cases, ultimately increasing the costs of construction and for insurance for those in the industry. Read the court decision
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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLain may be contacted at mclain@hhmrlaw.com

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Subcontractor Allowed to Sue Designer for Negligence: California Courts Chip Away at the Economic Loss Doctrine (Independent Duty Rule)

August 30, 2017 — John P. Ahlers - Ahlers & Cressman PLLC
An architect may have to pay over $1 million to a subcontractor who was contractually obligated to rely on the designer’s plans – even though the architect was not a party to the contract.[1] That was the ruling in U.S. f/u/b/o Penn Air Control, Inc. v. Bilbro Constr. Co., Inc.[2] The dispute involved a $7.3 million design-build contract award to Bilbro Construction (“Bilbro”) to renovate a facility for the Naval Facilities Engineering Command in Monterey, California. Bilbro hired an architect (“FPBA”) to serve as the designer of record and provide all the architectural design services. FPBA’s design team included an acoustical sub-consultant (Sparling). The general contractor (design builder) also retained Alpha Mechanical (Alpha) as the mechanical electrical and plumbing (“MEP”) design/build subcontractor. Alpha, in turn, subcontracted the MEP design to Shadpour Consulting Engineers. During the design phase of this project, Alpha’s MEP design was reviewed by FPBA, Bilbro, and Sparling at the 35, 75, and 100 percent design completion levels. Alpha demonstrated that it regularly received direct communications during design development from Sparling and FPBA, including comments, changes, and revisions. One example Alpha cited was it raised some concerns about anticipated noise level in eight rooms. Sparling made several recommendations to Alpha and Shadpour that were implemented. Read the court decision
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Reprinted courtesy of John P. Ahlers, Ahlers & Cressman PLLC
Mr. Ahlers may be contacted at jahlers@ac-lawyers.com

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Rescission of Policy for Misrepresentation in Application Reversed

August 17, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The California Court of Appeal reversed the trial court's issuance of summary judgment to the insurer, finding that the insured did not make misrepresentations when applying for a policy to cover rental property. Duarte v. Pacific Spec. Ins. Co., 13 Cal. App. 5th 45 (2017). Duarte rented his house to Jennifer Pleasants. Duarte gave her a 45-day notice to quit in February 2012, but she did not leave. Two months later, Duarte applied for landlord-tenant coverage with Pacific. The application was submitted electronically and Pacific issued a policy to Durate the same day. In June 2012, Pleasants filed a lawsuit against Duarte, alleging ten causes of action arising from habitability defects which began in 2009. The suit claimed Pleasants had notified Duarte about the defects, she had suffered emotional distress and physical injury, and over paid rent, and had out-of-pocket expenses. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Construction Defects in Home a Breach of Contract

September 09, 2011 — CDJ STAFF

The Supreme Court of North Dakota has ruled in Leno v. K & L Homes, affirming the verdict of the lower court. K & L Homes argued that district court had erred in several ways, including by refusing to instruct the jury on comparative fault, denying a request for inspection, and not allowing a defendant to testify on his observations during jury viewing.

The Lenos purchased a home constructed by K & L Homes, after which they alleged they found cracks, unevenness, and shifting, which they attributed to improper construction. They claimed negligence on the part of K & L Homes. K & L Homes responded that the Lenos were responsible for damage to the home. The Lenos dropped their negligence claim, arguing breach of contract and implied warranties.

Before the trial, after the discovery period had passed, K & L Homes requested to inspect the home. This was rejected by the court. Kelly Moldenhauer, the owner of K & L Homes sought to testify about his observations during the jury’s viewing of the house. The court denied this too. The jury found that K & L was in breach of contract and awarded damages to the Lenos.

The North Dakota Supreme Court noted that K & L Homes gave “warranties that the home had been built according to local building codes and laws, and that the house was fit for its particular purpose as a residence.” The court found that a defective home breached this warranty. Further, the home violated an implied warranty of fitness.

The district court had denied K & L’s request to inspect the home, as the discovery period had ended and it would not give the Lenos time to do further discovery of their own. At the time of the request, there was only twenty-two days before the trial. The Supreme Court ruled that this was not an abuse of discretion of the part of the district court.

The Lenos had requested that Moldenhauer’s testimony not be permitted, as it would “have the same effect as if the court had granted K & L Homes’ pretrial request for inspection.” K & L Homes agreed to this in court, replying, “okay.”

The decision affirms the judgment of the district court and the damages awarded to the Lenos by the jury.

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Sinking Floor Does Not Meet Strict Definition of Collapse

August 17, 2020 — Tred R. Eyerly - Insurance Law Hawaii
The court determined that the sinking of the insured's floor caused by termites and rot deterioration did not meet the homeowners policy's definition of collapse. Stewart v. Metro. Lloyds Ins. Co., 2020 U.S. Dist. LEXIS 111527 (S.D. Tex. June 24, 2020). Beatrice Stewart, the homeowner, heard a loud bang one night as she lay in bed. The next day, she found that the floor near her bathroom and hallway had sunk and the house was sitting lower. She admitted the house never completely fell down. Upon investigation, Lloyds found that rot in the floor joists and subfloor decking were caused by a combination of termite damage and exposure to moisture. Lloyds denied the claim. Stewart sued. Lloyds argued the policy required an "entire collapse" of the building or any part of a building, which did not occur here. The policy defined "collapse" as "an abrupt falling down or caving in of a building or any part of a building." The record did not show that any part of Stewart's floor caved in. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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