Cambridge Massachusetts Building Expert Directory

The Hidden Dangers of Construction Defect Litigation

March 28, 2012 — David M. McLain, Colorado Construction Litigation

David M. McLain, writing at Colorado Construction Litigation, has an interesting blog post republishing his article in Common Interests magazine, the monthly periodical of the Rocky Mountain Chapter of the Community Associations Institute. In his article, he touches on a number of pitfalls in construction defect litigation, including the potential conflicts of interests facing HOAs. He also considers the problems homeowners can face, including both “strong-arm tactics” taken by attorneys to compel homeowners to join the lawsuit, or situations in which the interests of the HOA do not match those of the homeowners. He writes:

There is also a conflict of interest with individual owners who attempt to opt out of the case. This can lead to shocking strong-arm tactics on the part of plaintiffs’ attorneys. In one instance, a plaintiffs’ attorney sent a letter to an individual homeowner that stated that as a 1/58th owner of the common elements, if he refused to go along with the suit, and there was ultimately a finding in favor of the HOA which was in any way limited by his refusal to participate, he would be personally liable for 1/58th of the HOA’s total damages. In another instance, a different plaintiffs’ attorney sent a letter to a homeowner who wanted the builder to perform warranty repairs, informing the owner that if he let the builder perform any repairs, the attorney would bill the HOA according to the fee agreement entered by the HOA board (without knowledge or consent of non-board members) and that the HOA would assess the homeowner for that expense. These are just two examples of conflicts which may arise between the HOA board and individual homeowners when the HOA pursues CD cases.

Another example of a conflict which will arise as a result of CD litigation occurs post-settlement. When an HOA settles for less than 100% of the amount necessary to fund all repairs outlined by its experts, plus attorneys’ fees and litigation costs, there will obviously be a shortfall in the amount necessary to fix the development. The HOA board must then choose to impose a special assessment to cover the shortfall or to make some, but not all, of the repairs outlined by its experts. In choosing the latter, the conflict arises with respect to which homes get fixed and which do not. In this situation, the HOA board has acted as the attorney-in-fact for the individual owners by bringing claims on their behalf, and has compromised those claims without their knowledge or consent.

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Reprinted courtesy of David M. McLain of Higgins, Hopkins, McClain & Roswell, LLC. Mr. McClain can be contacted at mclain@hhmrlaw.com.

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Public Contract Code 9204 – A New Mandatory Claims Process for Contractors and Subcontractors – and a Possible Trap for the Unwary

March 22, 2017 — Alex R. Baghdassarian & Joseph S. Sestay – Peckar & Abramson, P.C.
New California legislation affecting public works contractors was adopted pursuant to Assembly Bill 626, sponsored by the Union Trade Contractors Association of California and endorsed by various trade and contractor associations including the AGC. AB 626, which was intended to assist contractors in presenting claims against public agencies, affords new opportunities, and some potential pitfalls, to contractors and subcontractors submitting claims to public owners. The legislation, codified at California Public Contract Code (PCC) section 9204, is effective for public works contracts entered into after January 1, 2017. All public entities (including the CSUS and the UC system), other than certain Departments of the State (CalTrans, High-Speed Rail Authority, Water Resources, Parks and Recreation, Corrections and Rehabilitation, General Services and the Military) are bound by the provisions of PCC Section 9204. PCC 9204 establishes a mandatory pre-litigation process for all claims by contractors on a public works project. It is an attempt to address the reluctance of public owners to promptly and fairly negotiate change orders on projects, putting some teeth to the mandate of existing law under PCC Section 7104, which precludes public owners from shifting to the contractor the risk of addressing differing subsurface and/or concealed hazardous site conditions. Reprinted courtesy of Alex R. Baghdassarian, Peckar & Abramson, P.C. and Joseph S. Sestay, Peckar & Abramson, P.C. Mr. Baghdassarian may be contacted at abaghdassarian@pecklaw.com Mr. Sestay may be contacted at jsestay@pecklaw.com Read the court decision
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Freight Train Carrying Hot Asphalt, Molten Sulfur Plunges Into Yellowstone River as Bridge Fails

July 10, 2023 — Associated Press - Engineering News-Record
Associated Press COLUMBUS, Mont. (AP) — A bridge that crosses the Yellowstone River in Montana collapsed early Saturday, plunging portions of a freight train carrying hazardous materials into the rushing water below. Reprinted courtesy of The Associated Press, Engineering News-Record Read the full story... Read the court decision
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Back to Basics – Differing Site Conditions

December 19, 2018 — Tracey W. Pruiett - Smith Currie
Encountering an unexpected site condition is one of the more common risks on a construction project. A “differing site condition”, or it is sometimes called a “changed condition”, is generally understood to be a physical condition that is discovered while performing work and that was not visible or otherwise expected at the time of bidding. Often, the condition could not have been discovered by a reasonable site investigation. Examples of common differing site conditions include: soil with inadequate bearing capacity to support the building being constructed, soil that cannot be reused as structural fill, unanticipated groundwater, quicksand, mud, rock formations, or other artificial subsurface obstructions. Differing site conditions may also occur within the walls or ceilings of a renovation project such as the renovation of a hospital or historic building. Read the court decision
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Reprinted courtesy of Tracey W. Pruiett, Smith Currie
Ms. Pruiett may be contacted at twpruiett@smithcurrie.com

LA Lakers Partially Survive Motion to Dismiss COVID-19 Claims

June 13, 2022 — Tred R. Eyerly - Insurance Law Hawaii
While the appellate court affirmed dismissal of a majority of the claims submitted by the Los Angeles Lakers for closure of the Staples Center and other properties due to COVID-19, a portion of their claims survived. L.A. Lakers v. Fed Ins. Co., 2022 U.S. Dist. LEXIS 31503 (C.D. Calif. March 17, 2022). Government orders closed the Staples Center in March 2020. The Lakers alleged they lost tens of millions of dollars in revenue. They further alleged that the presence of coronavirus particles on fixtures and building systems caused physical alterations to the covered properties. The Lakers had to upgrade their properties to include new air filters, touchless light switches, toilets and sinks; sleeves or coatings for high-touch surfaces; and plexiglass dividers. The Lakers also alleged that five Metro stations within a mile of the Staples Center, that was used to get to games, were closed by civil authorities due to the presence of COVID-19. The Lakers submitted a claim for property damage and business interruption to Federal. The claim was denied and the Lakers filed suit. In February 2021, the court granted Federal's motion to dismiss without prejudice, after concluding that the Lakers' allegations of direct physical loss or damage were mere legal conclusions and not sufficient to state a claim. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

EPC Contractors Procuring from Foreign Companies need to Reconsider their Contracts

July 18, 2018 — Hwan Kim – Construction & Infrastructure Law Blog
A recent California case may force engineering, procurement and construction companies doing business with foreign suppliers to reconsider—and maybe rewrite—their contracts. In Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd., the California Court of Appeal held that parties may not contract around the formal service requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents, commonly referred to as the Hague Service Convention. The decision could have profound implications for international business. Read the court decision
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Reprinted courtesy of Hwan Kim, Sheppard, Mullin, Richter & Hampton LLP
Mr. Kim may be contacted at hkim@sheppardmullin.com

Crews Tested By Rocky Ground, Utility Challenges

September 03, 2019 — Louise Poirier - Engineering News-Record
Problematic utility locations and difficult ground conditions required the project team to develop innovative solutions on the University of Texas at San Antonio’s $95-million Science and Engineering Building. Reprinted courtesy of Louise Poirier, Engineering News-Record Ms. Poirier may be contacted at poirierl@enr.com Read the court decision
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A Court-Side Seat: “Inholdings” Upheld, a Pecos Bill Come Due and Agency Actions Abound

January 25, 2021 — Anthony B. Cavender - Gravel2Gavel
Here are some significant environmental and regulatory rulings and administrative actions from December 2020. THE U.S. SUPREME COURT Texas v. New Mexico On December 14, 2020, the U.S. Supreme Court decided a water rights controversy involving sharing the water of the Pecos River. The 1949 Pecos River Compact provides for the equitable apportionment of the use of the Pecos River’s water by New Mexico and Texas, and a “River Master’s Manual,” approved by the Court in 1988, implements the Compact. These are very dry areas, and access to this water is very important. In 2014, a rare tropical storm drenched the Pecos River Basin, and Texas asked New Mexico to temporarily store the water that would otherwise flow into Texas. A few months later, New Mexico released the water to Texas, but the quantity was reduced because some of the water held by New Mexico had evaporated. The River Master awarded a delivery credit to New Mexico, and after Texas objected, Texas “in response” filed the Original Jurisdiction of the Court, suing New Mexico and seeking a review of the River Master’s determination. The Court held for New Mexico, deciding that this dispute was subject to and resolved by the Manual. This case is important because it highlights the high value the states place on the equitable apportionment of water that flows through different states. 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

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