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Florida Appeals Court Rules in Favor of Homeowners Unaware of Construction Defects and Lack of Permits

December 09, 2011 — CDJ STAFF

The Florida Court of Appeals has ruled that a homeowner is not liable for defects in unpermitted alterations, reversing a lower court’s decision in Jensen v. Bailey. The Jensens sold their house to the Baileys. During the sale, the Jensens filled out a property disclosure statement, checking “no” to a question about “any improvement or additions to the property, whether by your or by others that have been constructed in violation of building codes or without necessary permits.”

After moving in, the Baileys discovered several problems with the home. One involved a defective sewer connection leading to repeated backups. The Baileys also found problems with remodeling the Jensens had done in the kitchen, master bath, and bedroom. The remodeling work was not done with required permits nor was it up to code.

The court noted that an earlier case, Johnson v. Davis, established four criteria: “the seller of a home must have knowledge of a defect in the property; the defect must materially affect the value of the property; the defect must not be readily observable and must be unknown to the buyer; and the buyer must establish that the seller failed to disclose the defect to the buyer.” The court found that the first of these criteria was crucial to determining the case.

In the Johnson ruling, the then Chief Justice dissented, fearing that the courts “would ultimately construe Johnson’s requirement of actual knowledge to permit a finding of liability based on constructive knowledge,” quoting Justice Boyd, “a rule of constructive knowledge will develop based on the reasoning that if the seller did not know of the defect, he should have known about it before attempting to sell the property.” The Appeals Court concluded that the lower court hit this point in ruling on Jensen v. Bailey.

Citing other Florida cases, the court noted that the Johnson rule does require “proof of the seller’s actual knowledge of the defect.” The court cited a case in which it was concluded that the seller “should have known” that there was circumstantial evidence was that the seller did know about the defects, as the seller had been involved in the construction of the home.

In the case of the Jensens, the lower court concluded that they did not know that the work was defective, nor did they know that they were obligated to obtain permits for it. The Appeals Court found this one fact sufficient to reverse the decision and remand the case to the lower court for a final judgment in favor of the Jensens.

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Structural Engineer Found Liable for Defects that Rendered a Condominium Dangerously Unsafe

June 22, 2016 — Paul R. Cressman, Jr. – Ahlers & Cressman Construction Law Blog
On May 3, 2016, the Washington State Court of Appeals affirmed a jury’s verdict in favor of a condominium HOA against a structural engineer for $1,149,332 in damages.[1] The project in question was The Pointe, an upscale condominium building in Westport, Washington. The developer was Dodson-Duus, LLC. The architect was Elkins Architects (“Elkins”). The structural engineer was Engineers Northwest, Inc. (“ENW”). ENW contracted with Elkins for the structural engineering work. Birds flying past 3 construction cranesBoth the design and construction of the building suffered from defects. In particular, the lateral force resistance system was insufficient to withstand a large seismic event. The defects included improperly nailed shear walls, weak connections between shear walls and floor joists, improperly-sized floor sheathing, a weak second-floor diaphragm, and omitted hold-downs connecting shear walls to a steel beam. The use of gypsum sheathing also created a risk of corrosion to the building’s steel structure. Evidence tied each of these defects to some aspect of ENW’s structural calculations and designs. Evidence also tied omission of the hold-downs to the contractor’s construction decisions. Read the court decision
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Reprinted courtesy of Paul R. Cressman, Jr., Ahlers & Cressman PLLC
Mr. Cressman may be contacted at pcressman@ac-lawyers.com

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Erector Tops Out 850-Foot-Tall Rainier Square Tower in Only 10 Months

September 23, 2019 — Nadine M. Post - Engineering News-Record
As predicted, the Erection Co. topped out Seattle’s 850-ft-tall Rainier Square Tower, with its radical composite steel frame dubbed “speed core,” in only 10 months. Steel erection began last October in the lowest basement. Reprinted courtesy of Nadine M. Post, Engineering News-Record Ms. Post may be contacted at postn@enr.com Read the court decision
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Over a Hundred Thousand Superstorm Sandy Cases Re-Opened

March 12, 2015 — Beverley BevenFlorez-CDJ STAFF
The Federal Emergency Management Agency (FEMA) announced yesterday that they will be reopening 144,000 flood insurance claims, reported the New Jersey Law Journal. The announcement comes weeks after reports that “some insurance companies denied thousands of claims after fraudulently altering engineering reports, as well as complaints that insurance companies systematically underpay on claims because they fear a backlash from FEMA.” Read the court decision
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BofA Said to Near Mortgage Deal for Up to $17 Billion

August 06, 2014 — Tom Schoenberg – Bloomberg
Bank of America Corp. is nearing a $16 billion to $17 billion settlement with the U.S. Justice Department to resolve probes into sales of mortgage-backed bonds in the run-up to the financial crisis, a person familiar with the matter said. Under the proposed terms, the bank would pay about $9 billion in cash and the rest in consumer relief to settle federal and state claims, according to the person, who asked not to be named because the negotiations are private. Details of the proposed accord, such as the relief and a statement of facts, are still being negotiated, the person said. The outlines of the deal were reached last week after a phone call between Attorney General Eric Holder and Bank of America Chief Executive Officer Brian T. Moynihan, the person said. During the July 30 call, Holder said that the government was ready to file a lawsuit in New Jersey if the bank didn’t offer an amount closer to the department’s demand of about $17 billion, according to the person. Read the court decision
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Reprinted courtesy of Tom Schoenberg, Bloomberg
Mr. Schoenberg may be contacted at tschoenberg@bloomberg.net

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Neither Designated Work Exclusion nor Pre-Existing Damage Exclusion Defeat Duty to Defend

March 12, 2015 — Tred R. Eyerly – Insurance Law Hawaii
A duty to defend existed for alleged construction defects despite the designated work exclusion and the pre-existing damage exclusion. Gemini Ins. Co. v. N. Am Capacity Ins. Co., 2015 U.S. Dist. LEXIS 14836 (D. Nev. Feb. 6, 2015). Olsen Construction Company held three separate policies issued by Gemini from September 2002 to February 2005. North American issued a CGL policy to Olsen for the period February 2005 to February 2006. Olsen conducted repair work on decks at the location between 2002 and 2003. Olsen was sued for construction defects by the Homeowners' Association (HOA). Gemini defended and also tendered to North American. When North American refused the tender, Gemini sued for declaratory and equitable relief related to North American's duty to defend Olsen in the underlying case. North American moved for summary judgment. 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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California Court of Appeal Provides Clarity On What Triggers Supplemental Analysis Under California Environmental Quality Act

July 20, 2020 — Kelly Alhadeff-Black & Alexander N. Knaub - Lewis Brisbois
In a recent ruling, California’s Sixth District Court of Appeal clarified the need for supplemental environmental analysis under the California Environmental Quality Act (CEQA). Willow Glen Trestle Conservancy v. City of San Jose (6th Dist., May 18, 2020). Specifically, the court held that seeking additional discretionary approvals, such as regulatory permits, does not constitute a “new discretionary approval for the project” under the California Public Resources Code Section 21166 and the California Code of Regulations, title 14, section 15162 (the CEQA Guidelines). In 2014, the City of San Jose approved a project that included the demolition and replacement of a wooden railroad bridge known as the Willow Glen Trestle (the Project). CEQA review for the Project was conducted via mitigated negative declaration (MND). The Project was quickly challenged by a local group called Friends of the Willow Glen Trestle, alleging that the City should have prepared an Environmental Impact Report based on the allegation that the Willow Glen Trestle constituted an historic resource for CEQA purposes. Ultimately, the City prevailed in that litigation (See Friends of the Willow Glen Trestle v. City of San Jose, et al. (6th Dist., 2016), which remanded the case to the trial court for further review consistent with the Court of Appeal’s verdict) with the court eventually finding that the City correctly analyzed and answered the question of historic resource classification and significance in reference to the Willow Glen Trestle. Reprinted courtesy of Kelly Alhadeff-Black, Lewis Brisbois and Alexander N. Knaub, Lewis Brisbois Ms. Alhadeff-Black may be contacted at Kelly.Black@lewisbrisbois.com Mr. Knaub may be contacted at Alexander.Knaub@lewisbrisbois.com Read the court decision
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Architect Sues School District

November 20, 2013 — CDJ STAFF
SFL+A Architects is suing the Marlboro County, South Carolina School District over $690,000 that the architect claims is owed to it by the school district. The firm did design work for the Blenheim Elementary Middle School, which opened in January. The architectural firm contends that the school district refused to pay for anything outside of basic services and failed to pay the full amount on those either. Read the court decision
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