SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

The Biggest Change to the Mechanics Lien Law Since 1963

December 08, 2016 — Wally Zimolong – Supplemental Conditions
The New Year will bring with it the biggest change to Pennsylvania’s Mechanics Lien Law since the current law was passed in 1963. These changes will impact owner, contractors, and subcontractors equally. However, the biggest benefits will probably be for real estate developers and other project owners. On December 31, 2016, Pennsylvania will go live with a website known as the State Construction Notices Directory. On that date, owners will have the option of making projects costing $1,500,000 or more “searchable projects.” An owner makes a project a searchable project by filing with the Notices Directory a “Notice of Commencement” before works begins. The Notice of Commencement must include the name, address, and email address of the contractor, full name and location of the searchable project, the county where the project is located, a legal description of the searchable property, and the name address, and email address of the searchable project owner. Importantly, the owner must also post a copy of this Notice of Commencement at the project site. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

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Idaho District Court Affirms Its Role as the Gatekeeper of Expert Testimony

March 15, 2021 — Melissa Kenney - The Subrogation Specialist
Many subrogation claims involving fire losses rely heavily on expert testimony. Expert testimony is admissible under Federal Rule of Evidence 702 if it is both relevant and reliable. In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), whose standard has been incorporated into Federal Rule of Evidence 702, the Supreme Court instructed federal trial courts to act as a “gatekeeper” of expert testimony, giving them the power to exclude expert testimony that is not supported by sufficient evidence. In Maria Fernanda Elosu and Robert Luis Brace v. Middlefork Ranch Incorporated, Civil Case No. 1:19-cv-00267-DCN, 2021 U.S. Dist. LEXIS 14449 (D. Idaho Jan. 22, 2021) (Brace), the United States District Court for the District of Idaho exercised its gatekeeper role when it granted in part and denied in part the defendant’s motion to exclude expert testimony pursuant to Daubert and Federal Rule of Evidence 702. Brace, involved a fire at a vacation cabin in McCall, Idaho. The cabin, owned by Maria Elosu (Elosu) and Robert Brace (Brace and collectively with Elosu, Plaintiffs) was part of a homeowner’s association called Middlefork Ranch, Incorporated (MFR). The cabin had a “wrap around” deck with a propane-fired refrigerator on the north side. On the day before the fire, Brace stained the deck using an oil-based stain. That night, Elosu smoked cigarettes on the deck. The next morning, Plaintiffs used rags to clean up excess oil from the deck and an MFR employee changed the propane on the refrigerator and relit the pilot light. At 4:00 p.m., a fire started in or around the cabin while no one was home. The fire was discovered by a group of contractors who testified that the fire was isolated to the east side of the cabin when they first arrived. Importantly, one witness testified that there was no fire and no flames around the propane-fired refrigerator. The fire destroyed the cabin and the contents within. Read the court decision
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Reprinted courtesy of Melissa Kenney, White and Williams LLP
Ms. Kenney may be contacted at kenneyme@whiteandwilliams.com

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Construction Jobs Expected to Rise in Post-Hurricane Rebuilding

November 07, 2012 — CDJ STAFF
Businessweek reports that construction jobs and materials will see increased demand as property owners in New York and New Jersey rebuild after hurricane Sandy. Tom Jeffery, of Irvine, California-based CoreLogic, a real estate information service, noted that “a high percent of damaged properties are going to be repaired.” Experts estimate property damage to total anywhere from $7 billion to $40 billion. It is also estimated that about 739,000 properties in the area are underwater in the way that has nothing to do with flooding, with negative equity of 25 percent or more. Many of these homeowners are likely to walk away from their mortgages. Ken Simonson, chief economist of the Associated General Contractors of America, expects “localized spikes in construction employment throughout November and the winter.” Martin Connor, the chief financial officer of Toll Brothers, expects to see more a rise in labor costs than in materials. Read the court decision
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Loose Bolts Led to Sagging Roof in Construction Defect Claim

February 10, 2012 — CDJ STAFF

Though the sagging roof is neither leaking nor a safety hazard, the town of Waynesville, North Carolina is suing the builder of its new fire station, as reported in the Smoky Mountain News. The engineers who examined the roof found a substantial number of loose bolts in the roof trusses. Additionally, the trusses themselves have become bent.



Tom Galloway, Waynesville’s Town Manager said “it needs to be remedied and fixed.” He said that the builder, Construction Logic, “never indicated a willingness to fix the roof.” The town is seeking the cost of repair, which Galloway estimated could be $400,000, and an additional $30,000 in damages. The suit states that Construction Logic failed to follow the plan specifications for the roof.

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Businesspeople to Nevada: Revoke the Construction Defect Laws

March 01, 2012 — CDJ STAFF

The Nevada chapter of the National Federation of Independent Businesses has said that Nevada’s construction defect and minimum wage laws are hampering job growth. The organization conducted a survey, and although only about two percent of the members responded, they passed the opinions of the group on to Governor Brian Sandoval. Sandoval has said, according to the report by Fox News Reno, that he wants the state to be more business friendly. He supports reforms to Nevada’s construction defect laws, saying that he’d “like to see some reform” on the issue of mandatory attorney’s fees.



Randi Thompson, the spokesperson for the Nevada chapter of the National Federation of Independent Businesses, said that members of her organization would like to see current Nevada construction defect law revoked. She described current law as “driven towards lawyers and not toward protecting consumers.”

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Florida Chinese drywall, pollution exclusion, “your work” exclusion, and “sistership” exclusion.

May 26, 2011 — CDCoverage.com

In Auto-Owners Ins. Co. v. American Building Materials, Inc., No. 8:10-CV-313-T-24-AEP (M.D. Fla. May 17, 2011), insured drywall supplier ABM was sued by general contractor KB Homes seeking damages because property damage to houses built by KB Homes using defective Chinese drywall supplied by ABM. ABM’s CGL insurer Auto-Owners defended ABM under a reservation of rights and filed suit against ABM and KB Homes seeking a judicial declaration of no to duty to defend or indemnify ABM against the KB Homes lawsuit. On cross motions for summary, the federal district trial court directed entry of judgment in favor of ABM and KB Homes and against Auto-Owners, holding that Auto-Owners had a duty to defend and indemnify ABM against the KB Homes lawsuit.

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Reprinted courtesy of CDCoverage.com

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Before Celebrating the Market Rebound, Builders Need to Read the Fine Print: New Changes in Construction Law Coming Out of the Recession

November 26, 2014 — Alan H. Packer - Newmeyer & Dillion, LLP
As the homebuilding market continues to improve, many builders find themselves maneuvering familiar roads. That said, important new realities have taken hold since the market collapse. Navigating these changes requires extra thought for practical and legal reasons. Using Old Designs “Off the Shelf”? The adoption of the California Building Standards Code in 2010, with an updated schedule to go into effect January 1, may complicate the use of older designs. In addition, some builders are contemplating building on pads constructed five or more years ago, temporarily shelved until market conditions improved. Because of changes in both the applicable Code and due to possible changes in the underlying soils and drainage, these projects require additional scrutiny before starting construction. Mechanic’s Lien Law Changes Not too long ago, the California Legislature recently overhauled the entire mechanic’s lien law system in California. New forms, new statutory references, new rules and deadlines are all applicable to projects under construction now. Make sure your documents are up to date, as the use of older forms (particularly for liens, progress payments, and final payments) could create legal problems in the future. Indemnity Law Changes Since 2006, California lawmakers have passed four rounds of legislation aimed at limiting indemnity provisions in construction contracts. The laws are aimed at two aspects of indemnity law: “Type 1” indemnity provisions, and liability for the costs of defending a claim. Type 1 Indemnity. California law previously permitted a builder to obtain “Type 1” indemnity from its subcontractors for all claims. Under a Type 1 provision, if a claim arose out of the trade’s work, the trade was fully responsible to defend and indemnify the builder – even if other trades or the Builder were partially at fault. Some cases even allowed, typically in a commercial context, the builder to obtain Type 1 indemnity even if the trade was not negligent, as long as the claim involved its work. Defense Obligation. In 2008, California’s highest court issued an opinion in Crawford v. Weather Shield, evaluating an indemnity provision requiring trade (a window supplier/manufacturer) to defend the builder in claims involving allegations of damages arising out of the trade’s work. Because the trade had contractually agreed to defend the builder, the Court held it responsible for the builder’s defense costs -- even though, ultimately, the trade was found not liable for the actual damages claimed. Recent legislation after Crawford has dramatically shifted how indemnity provisions will be enforced. Builders may no longer obtain Type 1 indemnity for residential construction defect claims covered by SB800; instead, indemnity is limited to the extent a claim arises out of the trade’s work. Even more recent legislation applied these changes to claims arising out of commercial construction projects. The recent legislation allows the trades “options” on how to defend the builder, with an eye toward requiring that they pay only a “reasonably allocated” portion for the builder’s defense costs. Smart builders are refining their contract documents to take into account these new limitations on indemnity provisions. Insurance Market Changes Due to uncertainties in subcontractor insurance and other factors, many builders have also converted their liability insurance from a “bring your own” model to “wrap-up” insurance, where the builder’s policy also covers their trades. Builders should carefully examine their subcontracts in light of this change as well. Trade Partner Changes On a practical level, many trade partners, particularly in the residential sector, have gone out of business or moved on to greener pastures. Builders need to find and negotiate contracts with new trade partners on the fly, and educate them on the builders’ procedures for payment and construction. SB800 documentation A decade ago, most builders updated their purchase documents and subcontracts for California’s “Right to Repair Law” (also known as SB800), which set forth functionality standards for construction defects in residential housing, and procedures for resolving claims prior to litigation. Builders ramping up to meet market demand should examine how they implemented SB800 changes in contract documents. Issues to consider:

• Whether to opt out of -- or back into -- statutory procedures.
• Whether to include arbitration or judicial reference provisions to control where claims are litigated after the SB800 process.
• Re-training personnel to preserve SB800 rights, including sign-offs on purchase documentation and recordation of key documents.
• Recent Court of Appeal decisions have complicated the SB800 landscape, potentially opening the door to “common law” tort claims in at least subrogation contexts. Strategic planning at the document stage may be a good way to mitigate this risk as the cases wind their way through the judicial process.

The continuing surge in building activity is a welcome sign for builders who have weathered the storm. Before taking too many steps, builders should consult with counsel, their designers, and their insurance advisors to take into account the new realities of this recovering housing market. About the Author Alan H. Packer is a partner in the expanding Walnut Creek, CA, office of the law firm of Newmeyer & Dillion LLP whose specialties include real estate, insurance, and construction litigation. To reach Alan, call 925.988.3200 or email him at alan.packer@ndlf.com. Read the court decision
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The Law Clinic Paves Way to the Digitalization of Built Environment Processes

February 11, 2019 — Aarni Heiskanen - AEC Business
The Law Clinic offers legal advice on digitalization to built environment innovators and experimenters and in the process helps lawmakers find the pain points in legislation. In April 2018 the Finnish Ministry of the Environment launched an experimental legal service for real estate and construction professionals, municipalities, and lawmakers. The cost-free service is like a helpdesk for anyone who has questions about real estate and construction laws and regulations and their interpretation as it applies to new digital processes. The Law Clinic is part of the national KIRA-digi project, which includes 138 experiments, many of which need legal advice for their execution. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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