Just Because I May Be An “Expert” Does Not Mean I Am Giving Expert Testimony
January 17, 2022 —
David Adelstein - Florida Construction Legal UpdatesOn a construction project, it’s hard to argue that the involved parties — whether an architect, engineer, contractor, subcontractor, developer, etc. — are not experts in their field, i.e., they all some scientific, technical, or specialized knowledge or skill particular to their industry. However, this does NOT mean when they testify in trial, at an arbitration, or at a deposition regarding the construction project they are offering expert opinions / testimony as it pertains to that project. Testifying as to facts based on personal knowledge or involvement on a project makes you a fact witness and is different than evaluating and rending an after-the-fact opinion as to the work of others. This does not minimize your knowledge or expertise; it simply means that relative to the construction project you are involved with, your testimony is that of a fact witness and not of an expert. (It is possible to wear both the fact witness and expert witness hat, but that depends on your subsequent role in the litigation or arbitration.)
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Seller Cannot Compel Arbitration for Its Role in Construction Defect Case<
March 01, 2012 —
CDJ STAFFThe buyer of a leaky home in Venice, California cannot be compelled to arbitration with the seller in a construction defect lawsuit, according to a decision in Lindemann v. Hume, which was heard in the California Court of Appeals. Lindemann was the trustee of the Schlei Trust which bought the home and then sued the seller and the builder for construction defects.
The initial owner was the Hancock Park Trust, a real estate trust for Nicholas Cage. Richard Hume was the trustee. In 2002, Cage agreed to buy the home which was being built by the Lee Group. Cage transferred the agreement to the Hancock Park Trust. Hancock had Richard Nazarin, a general contractor, conduct a pre-closing walk through. They also engaged an inspector. Before escrow closed, the Lee Group agreed to provide a ten-year warranty “to remedy and repair any and all damage resulting from water infiltration, intrusion, or flooding due to the fact that the door on the second and third floors of the residence at the Property were not originally installed at least one-half inch (1/2”) to one inch (1”) above the adjacent outside patio tile/floor on each of the second and third floors.”
Cage moved in and experienced water intrusion and flooding. The Lee Group was unable to fix the problems. Hume listed the home for sale. The Kamienowiczs went as far as escrow before backing out of the purchase over concerns about water, after the seller’s agent disclosed “a problem with the drainage system that is currently being addressed by the Lee Group.”
The house was subsequently bought by the Schlei Trust. The purchase agreement included an arbitration clause which included an agreement that “any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration.” The warranty the Lee Group had given to Hancock was transferred to the Schlei trust and Mr. Schlei moved into the home in May 2003.
Lindemann enquired as to whether the work done would prevent future flooding. Nazarin sent Schlei a letter that said that measures had been taken “to prevent that situation from recurring.” In February, 2004, there was flooding and water intrusion. Lindemann filed a lawsuit against the Lee Group and then added the Hancock Park defendants.
The Hancock Park defendants invoked the arbitration clause, arguing that Lindemann’s claims “were only tangentially related to her construction defect causes of action against the Lee Group.” On June 9, 2010, the trial court rejected this claim, ruling that there was a possibility of conflicting rulings on common issues of law. “With respect to both the developer defendants and the seller defendants, the threshold issue is whether there was a problem with the construction of the property in the first instance. If there was no problem with the construction of the property, then there was nothing to fail to disclose.” Later in the ruling, the trial court noted that “the jury could find there was no construction defect on the property, while the arbitration finds there was a construction defect, the sellers knew about it, and the sellers failed to disclose it.” The appeals court noted that while Hancock Park had disclosed the drainage problems to the Kamienowiczs, no such disclosure was made to Sclei.
The appeals court described Hancock Park’s argument that there is no risk of inconsistent rulings as “without merit.” The appeals court said that the issue “is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered.” Further, the court noted that “the Hancock Park defendants and the Lee Group have filed cross-complaints for indemnification against each other, further increasing the risk of inconsistent rulings.”
The court found for Lindemann, awarding her costs.
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Warren Renews Criticism of Private Equity’s Role in Housing
February 01, 2022 —
Akayla Gardner - BloombergSenator Elizabeth Warren is doubling down on her criticism of private equity’s involvement in the U.S. housing market as the nation grapples with an affordable-housing shortage.
In letters sent Thursday, the Massachusetts Democrat asked housing firms Progress Residential LLC, Invitation Homes Inc. and American Homes 4 Rent about recent rent hikes, plans to acquire more properties and the number of evictions in recent years.
Warren and other Democrats have scrutinized Wall Street’s role in the housing market since the 2008 financial crisis. During the pandemic, lawmakers have been on high alert for violations of eviction moratoriums and unfair treatment as Americans struggled financially to stay on their feet.
Warren also expressed concern about automated homebuying practices, which allow companies to buy up properties using algorithms. Bloomberg reported that last year Zillow offloaded thousands of homes to institutional investors.
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ACS Obtains Overwhelming Jury Trial Victory for General Contractor Client
March 28, 2022 —
Scott R. Sleight - Ahlers Cressman & Sleight PLLCACS is pleased to share news of our recent $19.2 million victory for a general contractor client after a lengthy virtual jury trial involving the Nexus condominium project in downtown Seattle. On Tuesday March 22, 2022, ACS obtained a jury verdict awarding significant damages to our general contractor client and denying nearly all damages claimed against our client by the project owner. The 28-day jury trial commenced via Zoom on January 24 and involved testimony from more than two dozen witnesses on more than 185 discrete change issues and subcontractor pass-through claims as well as counterclaims from the owner for liquidated damages and other damages. Amazingly, after only two days of deliberating the jury reached a verdict resolving all claims overwhelmingly in favor of our general contractor client.
Our client was awarded $19.5 million on its claims totaling $20.6 million and largely defeated the owner’s counterclaims of $4.3 million, with the jury awarding only $318,000 to the owner. This results in a net judgment of $19.2 million in favor of our client. The ACS team, along with the client, worked incredibly hard on this case. The team includes lawyers Scott Sleight, Saki Yamada, Kristina Southwell, Cam Sheldon and paralegals Christina Granquist, Cydney Fermstad, Auzree Hightower, Amy Capell, Samina Helsley and Bernadette Bresee.
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Scott R. Sleight, Ahlers Cressman & Sleight PLLCMr. Sleight may be contacted at
scott.sleight@acslawyers.com
How A Contractor Saved The Day On A Troubled Florida Condo Project
November 18, 2019 —
John Zander - Engineering News-RecordEnough isn’t said about general contractors on rocky, out-of-control projects who take the lead in solving problems they didn’t create. That’s what I found troubleshooting projects for a Chicago bank. A good example is a $200-million Florida apartment complex being built in 2007, when labor was as tight as it is now and in some places even tighter.
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John Zander, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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Differing Rulings On Construction Defect Claims Leave Unanswered Questions For Builders, and Construction Practice Groups. Impact to CGL Carriers, General Contractors, Builders Remains Unclear
March 07, 2011 —
CDJ STAFFIn the past year a number of state and federal courts have rendered a number of conflicting decisions that promise to alter or perhaps shift entirely the paradigm, of how builders manage risk.
According to a report today by Dave Lenckus in Property Casualty 360 “Nine state and federal courts and one state legislature over the past year have addressed whether a construction defect a defective product or faulty workmanship is fortuitous and therefore an occurrence under the commercial general liability insurance policy. Four jurisdictions determined it is; three said no; two ruled that a construction defect that causes consequential damage to property other than the work product is an occurrence; and one federal court contributed its conflicting case law that has developed in Oregon since its high court ruled in 2000 that a construction defect is not an occurrence”.
The article strongly suggests that in the absence of a clear consensus over what the recent rulings mean for builders and contractors coverage disputes will intensify and continue to proliferate.
Doing this on a state-by-state basis has caused a lot of confusion among buyers and sellers, said Jeffrey A. Segall, a Tampa-based senior vice president and the Florida Construction Practice leader at Willis of Florida, a unit of Willis Group Holdings.
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Trump Administration Waives Border Wall Procurement Rules
March 23, 2020 —
Mary B. Powers & Debra K. Rubin - Engineering News-RecordActing Homeland Security Secretary Chad Wolf on Feb. 20 waived federal contracting rules to expedite construction of the U.S-Mexico border wall in California, Arizona, New Mexico and Texas, citing legal authority under several U.S. laws, some dating back to the 1990s, to deal with what he claimed is "an acute and immediate need to construct physical barriers and roads ... to prevent unlawful entries."
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Mary B. Powers, Engineering News-Record and
Debra K. Rubin, Engineering News-Record
Ms. Rubin may be contacted at rubind@enr.com
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Busting Major Alternative-Lending Myths
July 22, 2024 —
Warren Miller - Construction ExecutiveAlternative capital is a broad term for financing provided by institutions or firms that typically fall outside of the purview of the larger, regulated institutions (i.e., not traditional banks). While these funding sources may not always be the first option for many businesses, alternative lending is a perfect option for many small and mid-sized capital-intensive companies, like construction companies, which often require fast access to capital that is incompatible with the stringent and laborious processes imposed by traditional banks.
Construction companies should take a closer look at alternative financing, understand its benefits, and evaluate its usefulness for achieving their unique funding requirements.
REALITY 1: ALTERNATIVE LENDING IS SAFE AND PROVEN
Private lending has been around for a long time, and has become increasingly common since the 1990s, when major consolidation took place in the banking industry. As the large, consolidated banks set their sights on providing loans to large enterprises, they left a gap in the small and mid-size market that was filled by alternative lenders. By 2000, alternative lenders had overtaken traditional banks for the majority of corporate loans. Stricter regulation of banks following the Global Financial Crisis of 2007 intensified underwriting standards for bank loans and further diminished banks’ appetites for SMB lending.
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Warren Miller, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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