A Performance-Based Energy Code in Seattle: Will It Save Existing Buildings?
August 11, 2011 —
Douglas Reiser, Builders Council BlogThe City of Seattle has one of the most stringent energy codes in the nation. Based upon the Washington State Energy Code (which has been embroiled in litigation over its high standards), the code demands a lot from commercial developers. But, does it prevent developers from saving Seattle?s classic and old buildings? Perhaps.
The general compliance procedure requires buildings to be examined during the permitting process. This means that buildings are examined before they begin operating. The procedure is not malleable and is applicable to all buildings, old and new, big and small.
The downside of this procedure is that it eliminates awarding compliance to those buildings exhibiting a number of passive features, such as siting, thermal mass, and renewable energy production. This problem has prevented a number of interesting and architecturally pleasing existing building retrofits from getting off the ground. The cost of complying with the current system can be 20% more, and it might prevent builders from preserving a building?s historical integrity.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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Flying Solo: How it Helps My Construction Clients
February 18, 2015 —
Christopher G. Hill – Construction Law MusingsTwo and a half years ago, on July 1, 2010, I opened my solo practice. At the time, I really had no insight into how big this change would be from a positive, customer service, perspective.
When I made the decision to go solo with my construction law practice, I knew I wanted to have flexibility to serve my client base of contractors and subcontractors in Virginia. I started some flat rate billing and had the ability to take cases that were below the dollar value of those that my old firm was willing to take. I also knew that I would be a master of my own destiny for better or worse (and it has been much more of the former than the latter).
What I did not realize is the impact that owning my own business would have on my perspective. I have always believed that, in most cases where construction disputes occur, mediation is a great option. However mediation only occurs with conflict. For any business, whether construction or otherwise, conflict creates expenses that were not likely to have been anticipated or built in to the budget. Litigation is not something that most businesses can, or should, build into their operating budgets.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Treasure Island Sues Beach Trail Designer over Concrete Defects
September 10, 2014 —
Beverley BevenFlorez-CDJ STAFFThe city of Treasure Island, Florida “has filed a lawsuit against Graham Landscape Design of St. Petersburg and Coastal Technology Corp. of Vero Beach for failing to properly design the 1-mile trail along the city's beachfront, which has hundreds of cracks in its concrete surface,” reported the Tampa Bay Times.
"The city has been unable to resolve the construction defects of the Central Beach Trail outside of the litigation process," City Attorney Maura Kiefer said to the Tampa Bay Times.
Cracks allegedly began appearing on the $1.2 million dollar trail soon after the project was concluded (March 2013). Treasure Island “submitted a performance bond claim and notified insurance companies representing Graham Landscape of the problem.”
Consultants hired by Phil Graham IV, the owner of the design company, determined that the cracking was caused by “a combination of problems in the design, construction and composition of materials.”
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SB800 CONFIRMED AS EXCLUSIVE REMEDY FOR CONSTRUCTION DEFECT CLAIMS
January 24, 2018 —
Jeffrey Brower and Nathan Owens - Newmeyer & Dillion, LLPIn
McMillin Albany LLC v. Superior Court (Cal. Ct. App., Aug. 26, 2015) 2015 Daily Journal D.A.R. 9931 (“
McMillin”), the Fifth Appellate District Court of Appeal in California published a resounding win for builders, general contractors, and others entities seeking the protections of the Right to Repair Act, Civil Code sections 895, et seq. (“SB800”). The
McMillin Court firmly rejected the reasoning and outcome of both
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 (“
Liberty Mutual”) and
Burch v. Superior Court (2014) 223 Cal.App.4th 1411 (“
Burch”), and held that:
the Legislature intended that all claims arising out of defects in residential construction, involving new residences sold on or after January 1, 2003 (§ 938), be subject to the standards and the requirements of the Act; the homeowner bringing such a claim must give notice to the builder and engage in the prelitigation procedures in accordance with the provisions of Chapter 4 of the Act prior to filing suit in court.
(
McMillin, Opinion, p. 15.) The
McMillin Court further held that even if the claimant’s counsel intentionally pleads around SB800 by asserting only tort causes of action, SB800 still applies to all defect claims and a stay of the action to require SB800 compliance is appropriate.
Newmeyer & Dillion has strongly supported builders’ efforts to enforce the Right to Repair Act since its inception. The firm filed an amicus brief in
McMillin on behalf of Leading Builders of America (“LBA”), an association of the leading residential homebuilders in the United States. For years, LBA members developed their warranty and dispute resolution procedures according to the Right to Repair Act and performed prelitigation repairs to the satisfaction of thousands of homeowners.
Liberty Mutual and
Burch undermined the Right to Repair Act by allowing plaintiffs’ attorneys to circumvent the prelitigation procedures to the detriment of homeowners and builders, resulting in confusion and increased litigation. The
McMillin decision breathes new life into the Right to Repair Act and sets the stage for future review by the California Supreme Court.
The
McMillin Court focused on the express language of the Right to Repair Act to arrive at its conclusion that Civil Code sections 896, 897, 943 and 944 demonstrate a clear Legislative intent to occupy the field of construction defect litigation – a belief held by nearly all in the construction industry and the California Superior Courts before
Liberty Mutual. The
McMillin Court found further support for SB800’s comprehensive nature in the Legislative history, which consistently described the Act as “groundbreaking reform” and a “major change” in construction defect litigation, designed to “significantly reduce the cost of construction defect litigation and make housing more affordable.” (
McMillin, Opinion, pp. 18-19.) The
McMillin Court found it inescapable that the Right to Repair Act exclusively governs construction defect litigation involving homes sold on or after January 1, 2003.
The
McMillin, decision will have a significant impact on construction litigation moving forward in two respects. First,
McMillin, is the only appellate decision to date to address whether a builder has the right to enforce SB800 when the claimant’s counsel deliberately attempts to plead around SB800 by asserting only tort claims. Second, the decision provides trial courts with the authority and precedent to ensure compliance with the Right to Repair Act. Trial courts may also find it necessary to revisit prior rulings against builders that relied on
Liberty Mutual.
Newmeyer & Dillion will continue to advocate in support of builders and general contractors by working vigorously to gain further support for the
McMillin, decision and setting the stage for review by the California Supreme Court.
Jeffrey R. Brower is an associate at the Newport Beach office of Newmeyer & Dillion, LLP. His practice focuses on business and construction litigation. Jeffrey can be reached at jeffrey.brower@ndlf.com.
Nathan Owens is the managing partner of the Las Vegas office for Newmeyer & Dillion, LLP. He represents businesses and individuals operating in a wide array of economic sectors including real estate, construction, insurance and health care in all stages of litigation in state and federal court. Nathan can be reached at nathan.owens@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit
www.ndlf.com
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Landlords, Brace Yourselves: New Law Now Limits Your Rental Increases & Terminations
March 02, 2020 —
Kyle Janecek – Newmeyer DillionCalifornia can be an especially expensive place to live. While this is the common wisdom, residents of the state are also painfully aware that location is an equally important factor. Yet, to curb unscrupulous actions in certain areas and expansive rental increases, Governor Gavin Newsom has signed AB-1482, which is a state-wide limitation on yearly rental increases, prompting potential additions to leases, and additional notices that landlords are required to give to tenants. Failure to do so may cost landlords unnecessary costs and unforeseen complications around the termination of a tenancy.
How Does the Rental Cap Work?
The law sets forth three ways that rental increases may be limited: (1) a cap of 5% plus the percent change in the cost of living; (2) a cap of 10%; or (3) where local rent or price control that restricts annual increases in the rental rate to an amount less than the state law. The cap that applies is the one that is the most restrictive on the landlord. For example, if the cost of living has gone up by 6%, and there is a local law that restricts rental increases by 15%, then the state law would cap the landlord to a rental increase of 10%.
Notably, this doesn't count any discounts or incentives that are applied to the rent, if they are (a) listed separately and (b) clearly stated within the residential lease agreement. Thus, even if the effective increase would be beyond the applicable cap, the landlord is not obligated to cap rent using the discounted rental fees.
Finally, this does not prohibit the landlord from freely setting a rent for new tenants. The cap only applies to existing tenants.
Exempt Properties from the Law
Certain properties are also exempt from the rental cap law, allowing landlords to increase rents without limitation for the residential properties below:
- Housing restricted by deed for purposes of affordable housing.
- New housing with a certificate of occupancy that has been granted within the previous 15 years.
- Condominiums or townhouses provided that the owner is not (a) a real estate investment trust; (b) a corporation, or (c) a limited liability trust.
- A duplex in which one of the units is owner-occupied as the owner's primary residence.
'Just Cause' for Terminations Is a Necessity
Notably, AB-1482 is not limited to rent restrictions. AB-1482 also restricts the ability of a landlord to evict tenants after the tenant has been occupying the property for over 12 months without just cause. Just cause includes items typical to an ordinary eviction action, such as a failure to pay rent or a default of a material term of the lease, or nuisance actions. Importantly, the legislature provided "no-fault just cause" such as the intent to occupy the real property by the owner or one of their family members, withdrawal of the property from the rental market, compliance with a government agency or an intent to substantially remodel the property.
In the event that the just cause is "no-fault," then the owner must either (a) assist the tenant in relocating by providing a direct payment of a full month's rent to the tenant within 15 calendar days of the notice; or (b) waive the payment of the last month's rent. Effectively, this puts a cost on the landlord to terminate a tenancy. Importantly, an owner's failure to do either of those actions will render the termination of tenancy void, and cannot be contractually waived.
This does not apply to any of the housing types exempt under the rental cap provision, or (a) transient and tourist hotel occupancy; (b) housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, or in an adult residential facility; (c) housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner; (d) single-family owner-occupied residences where the owner leases no more than two units or bedrooms; or (e) student housing for kindergartens or grades 1 to 12.
Notwithstanding, landlords must also provide additional language within their lease giving notice of the rental cap law and the tenant's rights regarding termination. This language is stated within the law, and must be given in 12 point font.
What Landlords Must Do Right Now
Ultimately, landlords will have to show more care towards termination processes and rental increases moving forward.
At a bare minimum, landlords will have to revise their form leases for new tenants and prepare addendums for any tenancies continuing in 2020. While the bare minimum is the new, state-mandated language to inform tenants of their rights, other language may be required if the landlord wishes to reserve a right to terminate in order to take occupancy for themselves.
Furthermore, for any leases going forward, any landlord that wants to provide a temporary discount or incentive to rent their units will have to include language outlining and specifically stating the presence of the discount or incentive, or chance that a tenant may contest the increase in rent as a violation of the rental cap portion of the law. Similarly, the changes above will have to be implemented as an addendum to any leases being renewed.
A failure to do any of these actions risks that a tenant may contest either the termination for being improper or an increase in rent, as an excessive rent hike.
Kyle Janecek is an associate on the firm's Transactional team, and has experience with drafting leases for landlords and tenants, real estate purchase and sale agreements, and loans secured by real estate. For more information on how Kyle can help, contact him at kyle.janecek@ndlf.com.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's success and bottom line. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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Whose Employee is it Anyway?: Federal Court Finds No Coverage for Injured Subcontractor's Claim Based on Modified Employer's Liability Exclusion
September 28, 2020 —
Jeffrey J. Vita & Kerianne E. Kane - Saxe Doernberger & VitaIn Nagog Real Estate Consulting Corp. v. Nautilus Insurance Co.,1 the United States District Court for the District of Massachusetts held that an insurer had no duty to defend its insureds against claims brought by an injured subcontractor, based on an overbroad employer’s liability exclusion in the policy.
Nautilus Insurance Company issued a commercial general liability policy to developer Nagog Homes LLC and its related construction company, Nagog Real Estate. The policy was endorsed with an Employer’s Liability Exclusion (the L205 Endorsement) that expanded the scope of the standard exclusion in the coverage form to include bodily injury claims of employees of “any” insured and their contractors or subcontractors, as opposed to simply the employees of the named insured.
Nagog Homes was the developer, and Nagog Real Estate was the general contractor for a residential construction project. An employee of the framing subcontractor hired by Nagog Real Estate was injured while working on the project and sued both Nagog entities for his injuries. Nautilus, relying on the modified employer’s liability exclusion, denied coverage for the lawsuit based on allegations that the Nagog entities hired the framing subcontractor to perform work, which effectively made the plaintiff an employee of one or both of the Nagog entities.
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Jeffrey J. Vita , Saxe Doernberger & Vita and
Kerianne E. Kane, Saxe Doernberger & Vita
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Kane may be contacted at kek@sdvlaw.com
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Land Planners Not Held to Professional Standard of Care
October 10, 2013 —
Heather Anderson — Higgins, Hopkins, McLain & Roswell, LLC.Recently, the Colorado Court of Appeals indicated that there is no professional duty of care applicable to land planners. See Stan Clauson Associates, Inc. v. Coleman Brothers Constr., LLC, 297 P.3d 1042 (Colo. App. 2013). Stan Clauson Associates, Inc. (“SCA”) agreed to provide land planning services to Coleman Brothers Construction, LLC (“Coleman”) for property referred to as Crown Mountain in a letter and then verbally agreed to provide a development analysis for another property, located on Emma Road in Basalt, Colorado. Thereafter, SCA sent letters to the defendant concerning the possible subdivision and development of the Emma Road property.
Approximately two years later, SCA sued Coleman for breach of the verbal agreement concerning the Emma Road property. Coleman then asserted counterclaims against SCA for negligently providing inaccurate advice about whether the Emma Road property could be subdivided and developed, and that the county had denied the planned unit development sketch plan SCA prepared and submitted on behalf of Coleman. The district court granted SCA’s motion for summary judgment thereby concluding that the economic loss rule barred Coleman’s negligence counterclaims. The Court of Appeals agreed.
In its opinion, the Court of Appeals reiterated the economic loss rule espoused in the Colorado Supreme Court in the Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000) case. “Under the economic loss rule, ‘a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.’”
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Heather AndersonHeather Anderson can be contacted at
anderson@hhmrlaw.com
CDJ’s Year-End Review: The Top 10 CD Topics of 2014
December 31, 2014 —
Beverley BevenFlorez-CDJ STAFFConstruction Defect Journal’s year-end review presents the top ten most popular topics featured in the journal in 2014. Some of the topics involved analysis of important construction defect cases, while others covered current events such as proposed state legislation. Most issues were heavily discussed on CDJ as well as in board rooms and during teleconferences. We hope you enjoy the look-back at 2014 interspersed throughout the issue, and we wish you and yours a prosperous 2015!
CDJ’s #1 Topic of the Year: Indalex Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2013 Pa. Super 311 (Dec. 3, 2013)
According to Darrin J. McMullen of Anderson Kill, “[t]he Indalex decision reverses a nearly decade-long trend of Pennsylvania decisions narrowing the scope of insurance coverage for construction and defect-related claims under commercial general liability insurance policies. Equally important, the Indalex ruling dealt a blow to the insurance industry’s continual efforts to win overbroad expansion of the rulings in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., and Erie Ins. Exchange v. Abbott Furnace Co., which found that claims of faulty workmanship in some circumstances may not constitute coverage-triggering ‘occurrences.’”
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