Fixing the Problem – Not the Blame
November 30, 2016 —
Curtis W. Martin – Peckar & Abramson, P.C. BulletinWho is responsible for defective design under Texas law? The contractor, under Lonergan? The
owner, under Spearin? A recent Fifth Circuit decision suggests that in some cases this might be the
wrong question when design responsibility is disputed. The appellate court recently remanded a
case back to the district court to determine whether the contractor or owner breached an implied
duty to cooperate in discovering defects in design and subsequently pricing the change required
to correct the problem.
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Curtis W. Martin, Peckar & Abramson, P.C.Mr. Martin may be contacted at
cmartin@pecklaw.com
Construction Law Alert: Builder’s Alternative Pre-litigation Procedures Upheld Over Strong Opposition
April 01, 2014 —
Steven M. Cvitanovic and Whitney L. Stefko - Haight Brown & Bonesteel, LLPLast week, the Court of Appeal, Fifth Appellate District, was tasked with evaluating the enforceability of provisions in home purchase contracts containing alternative pre-litigation procedures which differ from the standard Right to Repair Act procedures. The Court of Appeal, in McCaffrey v. Superior Court of Fresno, et al. ultimately upheld the contractual provisions, and in overturning the trial court's decision, preserved the rights of builders to contract around certain requirements set forth in the Right to Repair Act.
The McCaffrey Group, Inc. constructed single-family homes in a Fresno development. Plaintiffs consisted of 24 homeowners within the development who brought suit against McCaffrey for construction defects in their homes. The homeowners were comprised of three categories: (1) the original purchasers who bought their homes from McCaffrey before January 1, 2003 and had a 2001 version of McCaffrey's contract; (2) the original purchasers who bought their homes from McCaffrey on or after January 1, 2003 and signed a 2003 version of McCaffrey's contract; and (3) the subsequent purchasers who did not buy their homes directly from McCaffrey, but purchased their homes subject to either the 2001 or 2003 version of McCaffrey's home purchase agreement.
Reprinted courtesy of
Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and
Whitney L. Stefko, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com
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Walking the Tightrope of SB 35
December 22, 2019 —
Robert Howard, Alexander Walker and Matt Olhausen - Gravel2Gavel Construction & Real Estate Law BlogDevelopers in California know that getting approval to build new housing projects can be extremely difficult, time-consuming, and expensive. But a new policy is finally coming into full effect which could help developers cut through those barriers. SB 35, enacted in 2017, streamlines the approval process for housing developments in areas with inadequate housing supply, so long as the developments meet certain criteria.
We have written elsewhere about the initial impacts of SB 35. SB 35 has successfully allowed some developers to obtain their entitlements quickly and easily through a streamlined process, but some local governments have resisted the use of SB 35. For example, the City of Los Altos denied an application that attempted to obtain streamlining through SB 35, prompting a nonprofit housing organization to sue. In Cupertino, the Planning Commission Chairman advocated in April 2019 for rescinding the SB 35 approval of the redevelopment of the Vallco Mall, which would include over 2,400 units of housing, while some residents have sued to block the development. As a result, it is crucial for developers to understand the details of SB 35 and make sure to meet all of its requirements. Any misstep may allow a recalcitrant local government to deny that a development project qualifies for SB 35 treatment and attempt to block it.
In November 2018, the state Department of Housing and Community Development (HCD) released Guidelines to clarify the criteria for SB 35 and assist cities in determining whether projects qualify for streamlining.
Reprinted courtesy of Pillsbury attorneys
Robert Howard,
Alexander Walker and
Matt Olhausen
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Mr. Walker may be contacted at alexander.walker@pillsburylaw.com
Mr. Olhausen may be contacted at matt.olhausen@pillsburylaw.com
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Mondaq’s 2023 Construction Comparative Guide
February 27, 2023 —
Michael S. Zicherman - Peckar & AbramsonPeckar & Abramson partner
Michael S. Zicherman is the author of the United States chapter of
Mondaq‘s 2023 “Construction Comparative Guide.” The Guide provides an overview of some of the key points of construction law and practice and allows readers to compare regulatory environments and laws across multiple jurisdictions including Australia, Canada, Denmark, Ghana, India, Indonesia, Malaysia, Mexico, Qatar, Singapore, United Kingdom, United States, and United Arab Emirates.
Reprinted courtesy of
Michael S. Zicherman, Peckar & Abramson
Mr. Zicherman may be contacted at mzicherman@pecklaw.com
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The U.S. Tenth Circuit Court of Appeals Rules on Greystone
November 18, 2011 —
Derek J. Lindenschmidt, Higgins, Hopkins, McLain & Roswell, LLCOn November 1, 2011, the Tenth Circuit Court of Appeals ruled on the certified question of whether property damage caused by a subcontractor’s faulty workmanship is an “occurrence” for purposes of a commercial general liability (CGL) insurance policy. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., No. 09-1412 (10th Cir. Nov. 1, 2011), the Tenth Circuit determined that because damage to property caused by poor workmanship is generally neither expected nor intended, it may qualify under Colorado law as an occurrence and liability coverage should apply. Id. at 2.
The short history of the Greystone case is as follows. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., 649 F. Supp. 2d 1213 (D. Colo. 2009), two contractors and one of their insurers brought an action against a second insurer after the second insurer refused to fund the contractors’ defense in construction defect actions brought by separate homeowners. Id. at 1215. The U.S. District Court for the District of Colorado, relying on General Sec. Indem. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), granted summary judgment in favor of the second insurer on the basis that the homeowners’ complaints did not allege accidents that would trigger covered occurrences under the second insurer’s policies. Id. at 1220. Notably, the Greystone, General Security, and other similar decisions prompted the Colorado General Assembly to enact C.R.S. § 13-20-808, which was designed to provide guidance for courts interpreting perceived coverage conflicts between insurance policy provisions and exclusions. The statute requires courts to construe insurance policies to favor coverage if reasonably and objectively possible. C.R.S. § 13-20-808(5).
The Tenth Circuit began its analysis by determining whether C.R.S. § 13-20-808, which defines the term “accident” for purposes of Colorado insurance law, would have a retroactive effect, and thereby settle the question before the court. The Tenth Circuit gave consideration to several Colorado district court orders issued since the enactment of C.R.S. § 13-20-808 which have suggested that the statute does not apply retroactively, including Martinez v. Mike Wells Constr., No. 09cv227 (Colo. Dist. Ct., Mar. 1, 2011), and Colo. Pool. Sys., Inv. V. Scottsdale Ins. Co., No. 09cv836 (Colo. Dist. Ct., Oct. 4, 2010). The Tenth Circuit also attempted to ascertain the General Assembly’s intent behind the term “all insurance policies currently in existence...” Greystone, No. 09-1412, at 12. The Tenth Circuit determined that the General Assembly would have more clearly stated its intentions for the term if it was supposed to apply retroactively to expired policies, rather than those still running. Id. at 12-13. Ultimately, the Tenth Circuit decided that C.R.S. § 13-20-808 did not apply retroactively, but noted that “the retrospective application of the statute is not necessarily unconstitutional.” Id. at 9, 11-14. As such, the Tenth Circuit advised that it was required to decide the question presented in the appeal under the principles of Colorado insurance law. Id. at 15.
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Reprinted courtesy of Higgins, Hopkins, McLain & Roswell, LLC. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com
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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.
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Gus Sara, White and Williams LLPMr. Sara may be contacted at
sarag@whiteandwilliams.com
No Coverage for Hurricane Sandy Damage
August 02, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe magistrate recommended that summary judgment be entered in favor of the insurer, thereby eliminating coverage for property damage incurred during Hurricane Sandy. Madelaine Chocolate Novelties, Inc. v. Great Northern Ins. Co., 2017 U.S. Dist. LEXIS 103015 (E.D. N.Y. June 30, 2017).
Madelaine Chocolate owned a facility three blocks form the Atlantic Ocean and one block from the Jamaica Bay section of Long Island Sound. Hurricane Sandy arrived October 29, 2012. Madeline Chocolate's facility sustained significant damage to its inventory, production machinery and premises, as storm surge from both bodies of water hit the property. Operations ceased during the 2012 holiday season and beyond, resulting in millions of dollars in lost income.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Insurance Tips for Contractors
December 08, 2016 —
Patrick McNamara - Porter Law GroupMany contractors contentedly accept the insurance policies presented to them by their insurance carriers. However, it is a much better practice to be an active participant in choosing the most appropriate coverage for your business and the specific jobs that you are performing. Use the following tips to be sure your company has the best and most comprehensive coverage.
- Never purchase a Commercial General Liability (“CGL”) policy with a “sunset” provision limiting coverage under Products & Completed Operations liability (P&CO) to a 2, 3 or 4-year term. Why? Because the California statute of limitations for construction defect claims is generally 10 years.
- Never consider a “Claims-made” or “Modified Occurrence” coverage form which also have a built-in limitation as to the length or term of P&CO coverage. Example: If you purchase a claims-made policy and decide to “switch” your insurance to the preferred “occurrence” coverage form, unless a special provision is made prior to the new purchase, the claims-made coverage would become worthless after the sixty (60) day claims-reporting period.
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Patrick McNamara, Porter Law GroupMr. McNamara may be contacted at
pmcnamara@porterlaw.com