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Court Orders House to be Demolished or Relocated

April 26, 2011 — Beverley BevenFlorezCDJ STAFF

Decision Affirmed in Central Arkansas Foundation Homes, LLC v. Rebecca Choate

The Arkansas Court of Appeals affirmed the decision by the trial court in Central Arkansas Foundation Homes, LLC v. Rebecca Choate. In the trial case, Central Arkansas Foundation Homes (CAFH) sought payment for a home built for Choate, while Choate alleged that the builders committed multiple construction defects including using the wrong foundation materials and positioning the house in the wrong direction.

After the house was built, CAFH contacted Choate regarding payment, however, Choate alleged that the finished product did not match the contract. “ After CAFH completed construction, it obtained permanent home financing for Choate and tried to contact her to close the transaction. Choate did not respond until October 2005, when she sent CAFH a list of alleged construction defects, including that the house was facing in the wrong direction; that it was not built on a slab; and that the fireplace, garbage disposal, driveway, and storage area were missing. CAFH replied to Choate in writing, telling her that she had until January 6, 2006, to close on the house or CAFH would sell it. The correspondence enclosed worksheets showing that the amount Choate would owe at closing exceeded $94,000, which included interest that had accrued on the as-yet unpaid construction loan.”

Initially, the court found in favor of CAFH. “On April 18, 2007, Choate’s attorney withdrew from representing her. Soon thereafter, CAFH’s attorney asked the court to set a final hearing on the case. The attorney purportedly sent Choate a letter by regular mail on May 15, 2007, advising her that the case was set for trial on July 9, 2007. Choate, however, did not appear. CAFH did appear, and its general manager, John Oldner, testified to events leading up to the case and the amount of damages claimed. According to Oldner, the interest on the construction loan had accrued to the point that CAFH now sought $104,965.88 from Choate. The court found in favor of CAFH and entered judgment for that amount, plus attorney fees, on July 18, 2007. The court ruled that CAFH could sell the house and either remit any excess to Choate or look to Choate for the deficiency if the sales price did not cover the judgment.”

However, Choate successfully argued that she did not receive notice of the trial. A new trial was ordered, and the outcome was quite different. “On June 6, 2008, the circuit court entered judgment for Choate, ruling that the house was not in substantial compliance with the parties’ contract and that the contract should be rescinded. The court found that the house suffered from numerous construction defects, that the contract contemplated a slab rather than a concrete-pier foundation, and that CAFH ignored Choate’s complaints that the house was facing the wrong way. The judgment directed CAFH to hold Choate harmless on the construction loan, to deed Choate’s two acres back to her, and to remove the house from Choate’s property.”

The Court of Appeals “found that Choate would be unjustly enriched by retaining the benefit of the septic systems and utility lines that CAFH installed on her land. The court therefore awarded $5340 to CAFH as a quantum-meruit recovery for the value of that work. CAFH contends that the award is not sufficient, but we see no clear error.” In the end, the Court of Appeals provided this reason for declining to reverse the trial court’s decision: “The court in this case apparently concluded that the house constructed by CAFH was so fundamentally at odds with Choate’s contractual expectations that she was not unjustly enriched and should simply be, as nearly as possible, returned to the status quo ante. Accordingly, the court ordered the house removed from her property and permitted CAFH to either relocate the house or salvage the house’s materials and unused appliances. We decline to reverse the court’s weighing of the equities in this manner.”

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The Rise of Modular Construction – Impacts for Consideration

December 04, 2023 — Chad V. Theriot - ConsensusDocs
Modular construction is not new. However, over the last several years, modular construction has seen significant growth with no signs of slowing down. In 2021, global modular construction represented a market of approximately $130 billion and is projected to reach upwards of $235 billion by 2031. Modular construction growth in the US is largely due to the technological advances and globalization. In general, modular construction involves the manufacturing and fabrication of standardized components of a structure in an off-site, controlled environment. Once those components are fabricated, they are then transported to the project site and assembled by an installer or contractor. Moving these fabrication and construction activities off-site allows the fabricator to control the quality standards over the fabrication process and gain the economic advantage of an assembly line and manufacturing process. This leads to a reduction in cost. This cost savings is then passed on to the owner, thereby driving down the overall price of construction. Read the court decision
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Reprinted courtesy of Chad V. Theriot, Jones Walker (ConsensusDocs)
Mr. Theriot may be contacted at ctheriot@joneswalker.com

CISA Guidance 3.1: Not Much Change for Construction

June 22, 2020 — Laura Bourgeois LoBue - Gravel2Gavel Construction & Real Estate Law Blog
This week, the Cybersecurity & Infrastructure Security Agency (CISA) issued Version 3.1 of its Guidance on the Essential Critical Infrastructure Workforce. For the most part, CISA’s Guidance 3.1 did not change from Version 3.0 as it relates to construction. However, CISA added a few construction-related services to “Essential Critical Infrastructure”:

“Workers who support the construction and maintenance of electric vehicle charging stations.”
“Engineers performing or supporting safety inspections.”

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Reprinted courtesy of Laura Bourgeois LoBue, Pillsbury
Ms. LoBue may be contacted at laura.lobue@pillsburylaw.com

School System Settles Design Defect Suit for $5.2Million

October 01, 2013 — CDJ STAFF
A school district in New York State has settled a dispute with its architectural and engineering firm for $5.2 million. Greece School District alleged that the multi-million dollar remodel lead to a variety of problems due to design defects. The problems included leaking roofs, malfunctioning drainage systems, and problems with heating systems. Tetra Tech had one work at 20 schools in the district. The state Comptroller audited the $119.5 million renovation project and concluded that haste in the planning resulted in costly changes. Prior to the lawsuit, the architectural and engineering firm managed to recoup about $200,000 on behalf of the school district for work that was defective. Read the court decision
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Real Estate & Construction News Roundup (3/20/24) – Construction Backlog Falls, National Association of Realtors Settle Litigation, and Commercial Real Estate Market’s Effect on City Cuts

April 15, 2024 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, bad loans outweigh loss reserves at top six U.S. banks, the FCC announces a proposed rule aimed at “bulk billing,” office-to-multifamily conversion projects grow in major metro cities, and more!

The National Association of Realtors has agreed to settle litigation that accused them of artificially inflating real estate commissions – a major decision that could reshape the housing market for buyers, sellers and agents. (Rachel Siegel, The Washington Post)
An NYU professor considers the positives and negatives of cities cutting services or raising other kinds of taxes to offset the continued faltering of the commercial real estate market. (Alan Rappeport, The New York Times)
Construction backlog fell in February for every size of contractor except for those with under $30 million in annual revenue, while, over the past year, the largest contractors – those with greater than $50 million in revenue – have experienced the greatest decline in backlog. (Sebastian Obando, Construction Dive).

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

Kentucky Supreme Court Creates New “Goldilocks Zone” to Limit Opinions of Biomechanical Experts

July 24, 2023 — Aimee E. Muller - Lewis Brisbois
Lexington, Ky. (June 26, 2023) – In a recent decision, the Kentucky Supreme Court placed stricter limitations on the opinions that biomechanical engineers may offer at trials in Kentucky courts. Specifically, the published opinion issued in Renot v. Securea, Supreme Ins. Co., 2023 Ky. LEXIS 163, recognizes a new space for the testimony of biomechanics experts – “The Goldilocks Zone.” Where is the Goldilocks Zone? The Goldilocks Zone is a perfect place in which the proffered testimony is neither too specific such that it wanders into the realm of medical causation, nor too general such that it fails to help a lay jury. Specifically, a biomechanical engineer’s expert testimony must be limited to the forces generated by the subject collision, the generally anticipated responses of a hypothetical person’s body to those forces, and the range of typical injuries resulting from such forces. Moreover, following Renot, a biomechanical engineer’s proffered opinions no longer may enter into the realm of diagnosing a specific medical condition associated with a traumatic injury. Instead, the question of whether a trauma actually caused or exacerbated a plaintiff’s injuries falls solely within the purview of a medical doctor. Read the court decision
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Reprinted courtesy of Aimee E. Muller, Lewis Brisbois
Ms. Muller may be contacted at Aimee.Muller@lewisbrisbois.com

Conflicting Exclusions Result in Duty to Defend

October 21, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The Seventh Circuit affirmed the district court's finding that the insurer had a duty to defend in light of conflicting endorsements in the policy. Panfil v. Nautilus Ins. Co., 2015 U.S. App. LEXIS 14621 (7th Cir. Aug. 20, 2015). JRJ Ada, LLC was a contractor. JRJ's two members, Joe Panfil and Renee Michelon, had a CGL policy with Nautilus. The employee of JRJ's subcontractor, Astro Insulation, fell through a hole while performing insulation work, injuring himself. The employee sued JRJ, who sought a defense from Nautilus. Nautilus refused to defend because JRJ was not an insured under the policy. Further, Nautilus relied upon the policy's Contractor-Subcontrated Work Endorsement and Employee Exclusion to deny coverage. Panfil and Michelon sued Nautilus. Cross-motions for summary judgment were filed and the court granted plaitniffs' motion while denying Nautilus' motion. The district court first found that the policy should be reformed to inlcude JRJ as an insured. Nautilus did not appeal this determination. The court also found that Nautilus breached its duty to defend and was therefore estopped from asserting policy defenses to coverage. 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

WSDOT Excludes Non-Minority Women-Owned DBEs from Participation Goals

June 15, 2017 — Ellie Perka - Ahlers & Cressman PLLC
A drastic change has been implemented by the Washington State Department of Transportation (“WSDOT”) to the Disadvantaged Business Enterprise (“DBE”) Program in Washington. Effective June 1, 2017, WSDOT has implemented a “waiver” to exclude women-owned DBEs[i] from qualifying toward Condition of Award (“COA”) Goals on federally-funded projects. This move is significant. It will likely result in long-lasting detrimental impacts on the DBE community, women-owned businesses, and the entire construction community in Washington. The construction industry should be in an uproar over this change. Instead, it has largely gone unnoticed (likely because its impacts have not yet been felt). It is a de facto exclusion of women-owned businesses from the DBE program, and the severity of this change cannot be overstated. Under the waiver, women-owned businesses no longer satisfy COA Goals on federally-funded projects (i.e., projects receiving funding from the Federal Highway Administration) advertised after June 1, 2017. Existing contracts are not impacted and may continue to utilize women-owned DBEs to satisfy COA Goals until the project is complete. The waiver is not retroactive. Read the court decision
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Reprinted courtesy of Ellie Perka, Ahlers & Cressman PLLC
Ms. Perka may be contacted at eperka@ac-lawyers.com

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