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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, LLC

On 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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New Jersey Appeals Court Ruled Suits Stand Despite HOA Bypassing Bylaw

January 22, 2014 — Beverley BevenFlorez-CDJ STAFF
In the case Port Liberte II Condominium Association v. New Liberty Residential Urban Renewal Company, a New Jersey appeals court ruled that a homeowners association (HOA) could bypass a bylaw that requires unit owners to approve litigation before it is filed, the New Jersey Law Journal reported. Two construction-defect suits were reinstated by the appeals court, and both had been “dismissed based on alleged violation of the bylaws.” The first suit “claimed the defendants' negligence contributed to major construction defects at the 225-unit condominium development, which was completed in 2004” while “the second suit claimed that one section of the development is sinking into the ground because of a failure to properly investigate soil conditions at the former industrial site where the buildings sit.” According to the New Jersey Law Journal, the HOA did not obtain approval from the unit owners prior to commencing litigation because “the statute of limitations was about to expire.” However, the HOA met with the residents in October of 2009 and a vote was cast “72 to 3 to pursue litigation.” In May of 2011 the second suit was dismissed because defendants stated “approval of residents was not obtained.” Another meeting of residents occurred, and another vote cast ratified “both suits by a vote of 65 to 1.” However, Judge Baber, who had previously dismissed both suits, refused to reinstate them. “The Appellate Division said in its ruling that the Condominium Act, N.J.S.A. 46:8B-1, gives the association the exclusive authority to file suit against builders and other third parties for damage to common areas in the community,” the New Jersey Law Journal reported. “Given its legal responsibility for upkeep of common areas, and its statutory authorization to sue for damages to such areas, the association had standing to file suit, the appeals court said.” Read the court decision
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Fourth Circuit Confirms Scope of “Witness Litigation Privilege”

November 21, 2018 — Anthony B. Cavender - Gravel2Gavel
On October 26, in the case of Day v. Johns Hopkins Health Sys. Corp., divided panel of the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s ruling that the common law “Witness Litigation Privilege” protects an expert witness in a Black Lung Benefits Act benefits proceeding against civil claims that allege a federal RICO violation and Maryland state law claims for fraud, tortious interference, negligent misrepresentation and unjust enrichment attended the testimony of the expert witness. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Thirteen Payne & Fears Attorneys Honored by Best Lawyers

August 19, 2024 — Payne & Fears LLP
Congratulations to the 13 Payne & Fears attorneys included in the 2025 Edition of “Lawyer of the Year,” The Best Lawyers In America®, and Best Lawyers: Ones to Watch®. Attorneys have been recognized in the following practice areas: 2025 Edition “Lawyer of the Year” Orange County Benjamin A. Nix

Trade Secrets Law

Daniel F. Fears

Litigation – Labor and Employment

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Reprinted courtesy of Payne & Fears LLP

CSLB Begins Processing Applications for New B-2 License

June 21, 2021 — Garret Murai - California Construction Law Blog
As we wrote about in our 2021 Construction Law Update, one of the new laws to take effect on January 1, 2021 was the enactment of SB 1189 which created a new B-2 Residential Remodeling Contractor’s license. The new license is available to contractors working on existing homes with residential wood frame structures requiring at least three (3) unrelated trades or crafts under a single contract. Beginning June 1, 2021, the Contractors State License Board began accepting applications for the B-2 Residential Remodeling Contractor’s license. According to a press release from the CSLB:

The B-2 classification provides a pathway to licensure for many unlicensed people who are currently working on remodeling and small home improvement projects that don’t qualify for a B-General Building License because the contracted work does not include framing or rough carpentry. Consumers employing a licensed contractor have reduced liability and greater consumer protection. Licensees benefit from licensure as they have opportunities to lawfully advertise, and compete on a level playing field for jobs.

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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Paycheck Protection Flexibility Act Of 2020: What You Need to Know

July 20, 2020 — Amy R. Patton & Rana Ayazi - Payne & Fears
On June 5, 2020, President Trump signed into legislation the bipartisan bill titled the Paycheck Protection Program Flexibility Act of 2020 (PPPFA). The PPPFA modifies the Paycheck Protection Program, which was first introduced under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The modifications provide borrowers more control over the use of funds and make it easier to obtain forgiveness. The following is a summary of the key changes. 1. Extended Maturity Date From 2 Years to 5 Years Under the CARES Act, the minimum maturity date for loan amounts after the forgiveness period was not defined. The Small Business Administration (SBA) then released an Interim Final Rule clarifying that the minimum maturity date was two years. The PPPFA has extended the term to five years: “The covered loan shall have a minimum maturity of 5 years and a maximum maturity of 10 years from the date on which the borrower applies for loan forgiveness under that section.” 2. Extension of Covered Period From Eight Weeks to a Maximum of 24 Weeks Under the CARES Act, the covered period of the loan (i.e., the time period in which you may spend the loan funds) was February 15, 2020 to June 30, 2020, an eight-week period. The PPPFA extended the covered period to 24 weeks from the origination date of the loan, or December 31, 2020, whichever is earlier. Reprinted courtesy of Amy R. Patton, Payne & Fears and Rana Ayazi, Payne & Fears Ms. Patton may be contacted at arp@paynefears.com Ms. Ayazi may be contacted at ra@paynefears.com Read the court decision
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Navigating Construction Contracts in the Energy Sector – Insights from Sheppard Mullin’s Webinar Series

October 01, 2024 — Cesar Pereira - Sheppard Mullin
Construction contracts in the energy sector involve unique challenges and risks, particularly with respect to bonds and mechanic’s liens. Understanding how to navigate these challenges is key to protecting your projects from disputes with general contractors, subcontractors and suppliers. In our recent webinar, “Construction Contracts: Bond and Mechanic’s Lien Primer for Energy Projects,” I was joined by my Sheppard Mullin colleagues Chris Kolosov and Emily Anderson to discuss navigating common contract pitfalls and negotiation strategies to protect your interests. Here are our key takeaways.

Know Local Mechanic’s Lien Laws: Mechanic’s liens are statutory and vary significantly from state to state. It is critical to understand the local laws and regulations at play in your project’s jurisdiction.

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Reprinted courtesy of Cesar Pereira, Sheppard Mullin
Mr. Pereira may be contacted at cpereira@sheppardmullin.com

No Coverage For Damage Caused by Chinese Drywall

December 02, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The Florida Court of Appeals determined that there was no coverage for damage to the insured's home caused by the installation of Chinese drywall. Peek v. Am. Integrity Ins. Co., 2015 Fla. App. LEXIS 14147 (Fla. Ct. App. Sept. 25, 2015). Chinese drywall was installed in the Peek's new home. After moving in, the Peeks reported to American Integrity a sulfur odor caused by the Chinese drywall. The odor caused the Peeks to vacate their home. The Peeks also claimed corrosion and deterioration of copper coils in the air conditioning system were caused by the Chinese drywall. American Integrity denied coverage based upon policy exclusions for latent defects, corrosion, pollutants, and faulty, inadequate or defective constrution materials. The Peeks sued American Integrity. 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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