D.R. Horton Earnings Rise as Sales and Order Volume Increase
May 07, 2015 —
John Gittelsohn – BloombergD.R. Horton Inc., the largest U.S. homebuilder by revenue, said fiscal second-quarter earnings rose as sales increased in a sign of growing demand for new homes.
Net income climbed to $147.9 million, or 40 cents a share, for the three months ended March 31 from $131 million, or 38 cents, a year earlier, the Fort Worth, Texas-based company said Wednesday in a statement. The average of 15 analyst estimates was 38 cents a share, according to data compiled by Bloomberg.
“The spring selling season at D.R. Horton is off to a strong start,” Chairman Donald R. Horton said in the statement. “Our increasingly diverse product offerings are enabling us to expand our industry-leading market share.”
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John Gittelsohn, BloombergMr. Gittelsohn may be contacted at
johngitt@bloomberg.net
Indiana Court of Appeals Rules Against Contractor and Performance Bond Surety on Contractor's Differing Site Conditions Claim
April 03, 2013 —
Brian M. Falcon - Frost Brown Todd LLCEarlier this year, the Indiana Court of Appeals issued an important opinion that impacts contractors and sureties alike. The decision should give contractors in Indiana pause before ceasing work while a dispute with the owner is pending. Sureties also have been placed on notice that strict compliance with the terms of their bonds is amongst their best defenses to claims made by owners and bond claimants.
In Dave's Excavating, Inc. and Liberty Mutual Insurance Co. v. City of New Castle, Indiana, 959 N.E.2d 369 (Ind. Ct. App. 2012), the contractor (“Dave’s”) was the successful bidder on a public sanitary sewer and water main extension project. Dave's procured a performance bond from Liberty Mutual to guarantee its performance obligations to the owner (the "City"). After encountering what it deemed different subsurface conditions—and indeed after having been previously granted a change order to use excavated materials as backfill in light of the subsurface conditions on site—Dave’s placed the project engineer on notice of a differing site conditions claim. The total claim amounted to an 84% increase in the total contract price. With the claim, Dave's advised the project engineer it was ceasing further work until the project engineer provided direction.
While the project engineer reviewed the claim, it reminded Dave's of its contractual obligation to "carry on the work and adhere to the progress schedule during all disputes or disagreements with the OWNER." A dispute immediately occurred regarding whether Dave's was required to continue to work while the project engineer resolved the differing site condition claim. After Dave's maintained its position that it was not required to continue to work, the project engineer placed it on notice of default and copied the letter to Liberty Mutual.
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Brian M. FalconBrian M. Falcon can be contacted at http://www.frostbrowntodd.com/contact.html
Recommencing Construction on a Project due to a Cessation or Abandonment
October 26, 2017 —
David Adelstein - Florida Construction Legal UpdatesThere are instances where the owner of a construction project terminates its general contractor prior to the completion of the project. There are instances where the owner suspends the work prior to the completion of the project, meaning there is a cessation in the construction. And, there are instances where the project is simply abandoned. I have been involved in all instances, and the owner’s reasons vary…from an owner claiming a termination for default, termination for convenience, or a suspension or abandonment due to the market or financial factors. Regardless of the owner’s reasoning, at some point—hopefully—the owner will want to resume or, more properly stated, recommence construction and complete the project.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Court Again Defines Extent of Contractor’s Insurance Coverage
November 26, 2014 —
Craig Martin – Construction Contractor AdvisorThe ever changing landscape of insurance coverage for contractors continues to be clarified in Texas. The Fifth Circuit Court of Appeals applied Texas law in Crownover v. Mid-Continent Casualty Company, concluding that contractors do have insurance coverage to cover claims that a project was not constructed in a good and workmanlike manner.
In this case, the Crownovers hired a contractor to build a house. The contract contained a warranty-to-repair clause. Shortly after construction was completed, cracks began to appear in the walls and foundation, and there were problems with the heating and air conditioning system. The Crownovers demanded that the contractor repair the problems and the contractor refused. The Crownovers brought an arbitration proceeding against the contractor and prevailed, obtaining a judgment that the contractor must pay for repairs to the foundation and HVAC system. The contractor then filed for bankruptcy and the bankruptcy court allowed the Crownovers to pursue their claim against the contractor’s insurer.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
The Condo Conundrum: 10 Reasons Why There's a 'For Sale' Shortage in Seattle
December 20, 2017 —
Dave Suggs - CDJ STAFFSeattle Washington is experiencing a shortage of in-city condos. Of the 27,000 units of new housing being built in downtown Seattle, 94 percent will be rentals. As housing prices are rising in the US’s fastest-growing large city, the median home price is $660,000. Dean Jones of the Seattle Magazine reports on why consumers consider condos, but home developers don’t in his article “The Condo Conundrum: 10 Reasons Why There's a 'For Sale' Shortage in Seattle.”
Reason 1, condominiums don’t always offer high returns and can be riskier for the home developer. Reason 2, the Washington State Condo Act “overprotects” buyers of condos with over-the-top warranties that makes everyone in the industry afraid to work with condos. Reason 3, the cost of condo building is increased because of the risk of defect litigation. Reason 4, condo presale buyers are not required to deposit a percentage to invest in a new development and before closing could decide to walk away. Reason 5, there is a lot of interest in apartment buildings from investment groups.
Reason 6, investors whose goal is to own “trophy” assets in rising markets can’t wait the years it takes developers to plan and construct a new multistory community. Reason 7, since rent prices have risen 50 percent on average in the last 7 years, it’s profitable to be a landlord. Reason 8, the millennials who live and work in this tech oriented region prefer to rent because of living through the rise and fall of the housing market. Reason 9, the costs is rising each year to deliver new projects. Reason 10, high-rise zoning was adopted 2 years before the recession, so just as condo development was gearing up, apartment building took over.
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St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc.
January 18, 2021 —
Michael Velladao - Lewis BrisboisIn St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc., ----Cal.App.5th--- (November 23, 2020), the California First District Court of Appeal reversed the trial court's entry of judgment in favor of SBC Insurance Services ("SBC") regarding a claim for water damage sustained by a residence owned by St. Mary & John Coptic Church ("St. Mary") under property coverage afforded by a policy issued by Philadelphia Indemnity Insurance Company ("Philadelphia"). The policy was procured by SBC on behalf of St. Mary. Philadelphia denied coverage of the claim based on the vacancy exclusion in its policy, but entered into a settlement and loan receipt agreement, whereby St. Mary gave Philadelphia the right to control litigation in St. Mary’s name against SBC or third parties who might be liable for the loss in exchange for a loan of money to repair and remediate the damage sustained by the residence. The loan was to be repaid out of any recovery made against SBC or third parties. After a bench trial, the trial court found in favor of SBC and held that the vacancy exclusion was ambiguous. Essentially, the exclusion did not apply to the time period prior to the time St. Mary purchased the residence, such that the 60-day vacancy requirement could not be satisfied. The trial court reasoned that since St. Mary did not have an insurable interest in the property before it purchased the property, the 60-day requirement did not include the period before such residence was purchased and St. Mary held an insurable interest.
The parties’ dispute arose of out of the Pope of the Coptic Church requesting St. Mary to purchase a home to be used as his papal residence in the Western United States. St. Mary also intended to use the home as a residence for visiting bishops. The home was purchased on May 28, 2015. As part of the purchase, SBC placed the home under St. Mary’s commercial policy, rather than purchasing a separate homeowner’s policy for the residence. Subsequently, the home sustained water damage due to a broken pipe. The water damage was discovered on July 24, 2015, 57 days after the inception of the Philadelphia policy and the loss. St. Mary tendered the property loss to Philadelphia, which denied coverage of the claim based on the reasoning that the home had been vacant for 60 consecutive days prior to the loss. Subsequently, St. Mary filed suit against SBC after securing the loan receipt agreement with Philadelphia based on the argument that the vacancy exclusion barred coverage of the claim and SBC breached its duty of care by not securing the proper coverage of the home. The trial court entered judgment in favor of SBC finding that the vacancy exclusion did not apply to bar coverage of the loss, such that SBC did not breach its duty of care owed to St. Mary as its broker.
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Michael Velladao, Lewis BrisboisMr. Velladao may be contacted at
Michael.Velladao@lewisbrisbois.com
Ninth Circuit Construes Known Loss Provision
August 19, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Ninth Circuit reversed the district court's award of summary judgment to the insurer after analyzing the known loss provision in the insured subcontractor's policy. Kaady v. Mid-Continent Cas. Co., 2015 U.S. App. LEXIS 10754 (9th Cir. June 25, 2015).
The insured was awarded a subcontract to install manufactured stone at the residential project. The stone was affixed to the wall sheathing. The insured also wrapped deck posts with manufactured stone and installed masonry caps on the toe of the stone that was wrapped around the deck posts.
After construction was completed, the insured was called back to the project to inspect cracks in the manufactured stone and masonry caps he installed. The insured told the general contractor that the cracks were likely due to settling. Three months after inspecting the cracks, the insured purchased a CGL policy from Mid-Continent.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Work to Solve the Mental Health Crisis in Construction
September 05, 2022 —
Bruce Morton & Diane Andrea - Construction ExecutiveThe suicide rate for construction is one of the highest among major industries. That statistic is from a 2018 report from the Centers for Disease Control and Prevention. And it’s one major reason why the concern about mental health in the construction industry has grown. Research shows that as many as 90% of all people who die by suicide have a mental health condition. Depression is the most common cause, but other conditions such as substance use disorders may have an impact as well.
What is causing mental health conditions in the construction industry? According to the U.S. Bureau of Labor Statistics, 97% of the U.S. construction industry is male—and men experience the highest rate of suicides. Yet, while the suicide rate for women in construction is lower than that for men in the construction industry, it appears to be much higher than the suicide rate for the general female population. Being “tough” and “strong” are highly valued; acknowledging mental health concerns—or even seeking help—may be considered a sign of weakness. There is often fear of shame and judgment for admitting you have a problem.
In addition, the nature of construction industry jobs may affect mental health. Injuries may cause chronic pain, which can result in substance disorders like opioid use. Seasonal work can result in layoffs, which puts a strain on family relationships and finances. The job is high-stress and the work is deadline-driven. Employees work long hours, potentially resulting in fatigue. Sometimes work is away from home for extended periods. The pandemic has exacerbated every other problem while creating its own.
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Bruce Morton and Diane Andrea, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Morton may be contacted at bruce.morton@marshmma.com
Ms. Andrea may be contacted at Diane.Andrea@MarshMMA.com
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