What are the Potential Damages when a House is a Lemon?
September 01, 2016 —
Haldon L. Greenberg, Esq. – Florida Construction Law NewsIt seems that lemons are front page news these days. Beyonce just released a chart-topping[1] album all about what to do when life hands you lemons. In today’s vernacular, we use the term “Lemon” to describe a person or thing that is unsatisfactory, disappointing, or feeble.[2] In Florida, there is a “Lemon Law” that provides a way for consumers to receive a replacement or full refund for vehicles found to have defects which may affect the vehicle’s safety, value or use.[3] While there is no “Lemon Law” for construction projects, in Gray v. Mark Hall Homes, Inc.,[4] Florida’s Second District Court of Appeal cited to Florida Supreme Court precedent in holding that a home builder was on the hook for the entire contract value of a home he contracted to build for the Plaintiff, when it was revealed the home was a “Lemon”, or as the evidence at trial showed, “valueless.”
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Haldon L. Greenberg, Esq., Cole, Scott & Kissane, P.A.Mr. Greenberg may be contacted at
haldon.greenburg@csklegal.com
Tom Newmeyer Elected Director At Large to the 2017 Orange County Bar Association Board of Directors
October 20, 2016 —
Newmeyer & Dillion LLPNEWPORT BEACH, Calif. – OCTOBER 17, 2016 – Prominent business and real estate law firm Newmeyer & Dillion LLP is pleased to announce that co-founding partner Tom Newmeyer has been elected Director at Large to the 2017 Orange County Bar Association Board of Directors. Newmeyer was elected to the Board for a three-year term beginning January 2017 and will be installed during the OCBA Judges’ Night & Annual Meeting in January along with the 2017 Officers and other Board members.
“It’s an honor to be selected by my fellow OCBA members to represent their interests as a Board member,” said Tom Newmeyer. “As Director at Large, I will do my utmost to preserve and enhance the OCBA’s commitment to the members it serves.”
Tom Newmeyer is one of the founding partners of Newmeyer and Dillion LLP, which has grown from three attorneys in 1984 to over 70 lawyers in Newport Beach and Walnut Creek, California and Las Vegas, Nevada. Newmeyer has an active trial and appellate practice covering all areas of business litigation, including unfair competition, trade secrets, contract disputes, corporate and partnership dissolutions, trusts and estates, and labor and employment. He has extensive experience in representing clients in diverse areas including “green” technologies, subprime mortgages, internet and computer software, as well as real estate.
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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Contract Change #8: Direct Communications between Owners and Contractors (law note)
March 28, 2018 —
Melissa Dewey Brumback - Construction Law in North CarolinaAs the Engineer or Architect of Record, you probably have frequently experienced Owners and Contractors communicating directly, in direct contravention of the language of the contract that requires them to endeavor to route all communications through the design team. With the latest version of the 201,
direct communication is now authorized, to recognize both the reality of what was happening on the ground and to recognize that sometimes Owners and Contractors may need to communicate without waiting for the design team.
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Melissa Dewey Brumback, Construction Law in North Carolina
Additional Insured Not Entitled to Coverage for Named Insured's Defective Work
September 02, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Court of Appeals for the Seventh Circuit determined there was no duty to defend or to indemnify the additional insured for the named insured's defective work. St. Paul Guardian Ins. Co., et al. v. Walsh Construction Co., 99 F. 4th 1035 (7th Cir. 2024).
The City of Chicago contracted with Walsh Construction Company to manage the construction of a canopy and curtain wall system at O'Hare International Airport. Walsh entered into a contract with Carlo Steel Corporation, which in turn subcontracted with LB Steel, LLC to fabricate and install steel columns to support the wall and canopy. LB Steel listed Walsh as an additional insured in its commercial general liability policies. LB Steel's insurers were St. Paul, Travelers, and Charter Oak Fire Insurance Company.
Several years into the project, the City discovered cracks in the welds of the steel columns and sued Walsh. Walsh, in turn, sued LB Steel under its subcontract. Walsh also asked LB Steel's insurers to defend it in the City's lawsuit, but they refused to do so. Walsh eventually secured a judgment against LB Steel, but LB Steel declared bankruptcy. Walsh then sued LB Steel's insurers to recover the costs of defending against the City's lawsuit and indemnification for any resulting losses.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage
September 30, 2011 —
CDJ STAFFThe California Court of Appeals has ruled in the case of Allied Framers, Inc. v. Golden Bear Insurance Company. Allied had been sued in a construction defect case and its primary insurer had become insolvent. Coverage for Allied’s defense was paid for by the California Insurance Guarantee Association through June 8, 2006. When warned that CIGA’s involvement was ending, Allied notified Golden Bear, which declined to provide coverage.
In the matters that followed, Golden Bear claimed that Allied had not exhausted its $1 million in primary insurance. Allied then showed that $1 million had already been paid out in the case. A few months thereafter, Golden Bear offered a $500,000 settlement on behalf of Allied which was rejected. Thereafter, Golden Bear hired new counsel to defend Allied. Golden Bear received, but allegedly did not pay, invoices Allied sent from their former counsel. Golden Bear finally settled the construction defect case for $2 million.
Allied’s original counsel sued Allied for payment. Golden Bear declined coverage. Allied then claimed that Golden Bear liable on several counts, arising from its failure to settle the construction defect action earlier than it did and its failure to pay Allied’s counsel. Golden Bear demurred, arguing that Allied had now exhausted is coverage with the $2 million settlement. The lower court sustained Golden Bear’s demurrer, dismissing Allied’s complaints.
The appeal court reviewed Allied’s seven complaints and sustained most of them. However, the court did reverse the trial court’s order in regard to Allied’s complaint that Golden Bear breached an implied covenant of good faith and fair dealing. The appeals court was not convinced that Golden Bear properly evaluated the settlement demand in the underlying construction defect case. The court found three other ways in which Golden Bear’s actions might show bad faith, in refusing to pay defense fees “after promising [Allied] such costs would be paid in full,” “failing to advise Allied about ‘actual or potential negative consequences of agreeing to the proposed settlement,’” and that their choice of counsel “failed to protect [Allied’s] interests in the negotiation.”
Read the court’s decision…
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San Diego Developer Strikes Out on “Disguised Taking” Claim
October 26, 2017 —
Michael C. Parme – Haight Brown & Bonesteel LLPIn Dryden Oaks, LLC v. San Diego County Regional Airport Authority et al.(D068161, filed 9/26/17, publication order 10/19/17), the California Court of Appeal, Fourth Appellate District held that the County of San Diego (County) and the San Diego Regional Airport Authority (Authority) were entitled to summary judgment on a developer’s “disguised taking” theory of inverse condemnation.
In 2001, the developer purchased two large lots (designated Lot 24 and Lot 25) adjacent to the end of a runway at the Palomar Airport in Carlsbad. Plaintiff obtained the necessary permits from the City of Carlsbad and successfully completed construction of an industrial building on Lot 24 in 2005. However, the plaintiff never began development of Lot 25 and the building permit for the property expired in 2012. The developer was then unable to renew the building permit because the Authority had adopted the Airport Land Use Compatibility Plan (ALUCP) in the interim period, which reclassified the Lots as part of a Runway Protection Zone (RPZ). The developer received a letter explaining that “despite the earlier approval the proposed development was no longer feasible because the ALUCP was more restrictive than the prior compatibility plan and the application's proposed use of ‘research and development’ was not permissible.”
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Michael C. Parme, Haight Brown & Bonesteel LLPMr. Parme may be contacted at
mparme@hbblaw.com
Labor Development Impacting Developers, Contractors, and Landowners
June 25, 2019 —
John Bolesta & Keahn Morris - Sheppard Mullin Construction & Infrastructure Law BlogIt is unlawful for unions to secondarily picket construction sites or to coercively enmesh neutral parties in the disputes that a union may have with another employer. This area of the law is governed by the National Labor Relations Act (“NLRA”), the federal law that regulates union-management relations and the National Labor Relations Board (“NLRB”), the federal administrative agency that is tasked with enforcing the NLRA. But NLRB decisions issued during the Obama administration have allowed a union to secondarily demonstrate at job sites and to publicize their beefs over the use of non-union contractors there, provided the union does not actually “picket” the site. In those decisions, the NLRB narrowed its definition of unlawful “picketing,” thereby, limiting the scope of unlawful activity prohibited by law. Included in such permissible nonpicketing secondary activity is the use of stationary banners or signs and the use of inflatable effigies, typically blow-up rats or cats, designed to capture the public’s attention at an offending employer’s job site or facilities.
A recently released NLRB advice memo, however, signals the likely reversal of those earlier decisions and that contractors and owners may now be able to stop such harassing union job site tactics simply by filing a secondary boycott unfair labor practice change with the NLRB. The 18 page memo, dated December 20, 2018 (and released to the public on May 14, 2019), directs the NLRB’s Region 13 to issue a complaint against the Electrician’s Union in a dispute coming out of Chicago where the union erected a large, inflatable effigy, a cat clutching a construction worker by the neck, and posted a large stationary banner proclaiming its dispute to be with the job’s general contractor over the use of a non-union electrical sub at the job site’s entrance. Though not an official Board decision, the memo suggests the NLRB General Counsel’s (GC) belief that the earlier Obama era decisions may have been wrongly decided and should be reconsidered by the NLRB on the theories that the Union’s nonpicketing conduct was tantamount to unlawful secondary picketing, that it constituted “signal” picketing that unlawfully induced or encouraged the employees of others to cease working with the subs or that it constituted unlawful coercion.
Reprinted courtesy of
John Bolesta, Sheppard Mullin and
Keahn Morris, Sheppard Mullin
Mr. Bolesta may be contacted at jbolesta@sheppardmullin.com
Mr. Morris may be contacted at kmorris@sheppardmullin.com
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Termination of Construction Contracts
November 30, 2020 —
Stuart Rosen - Construction ExecutiveLately, in view of the COVID-19 pandemic, there is a heightened concern that some construction projects will not proceed as planned. Therefore, it is important to review each party’s right to terminate a construction contract and to examine some of the resulting consequences.
While the parties to a construction contract can, as always, agree to other mutually acceptable terms and provisions, in broad terms, a typical construction contract includes four triggering events that can lead to termination.
First, an owner can terminate a construction contract if the contractor defaults and thereafter fails to cure such default, which may include, without limitation, the failure to remediate deficient work, the failure to meet the construction schedule, the failure to pay subcontractors and the failure to comply with applicable law. A contractor must be mindful of the fact that in the case of such termination by the owner for cause, the vast majority of construction contracts provide that the contractor will not be entitled to receive any further payment for work performed by the contractor until the work is finished.
Reprinted courtesy of
Stuart Rosen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Rosen may be contacted at
srosen@proskauer.com
