First-Time Buyers Shut Out of Expanding U.S. Home Supply
August 13, 2014 —
Prashant Gopal – BloombergThe four-bedroom house that Ilia Nielsen-Dembe purchased in west Denver earlier this year wasn’t her top choice. The first-time buyer had to settle on a home in a neighborhood with a high crime rate after losing out on bids for five properties in more desirable areas.
“I definitely sacrificed in terms of location,” said Nielsen-Dembe, 33, who lives with her husband and two daughters in the house she bought in April for $184,500. “I had to cross streets that were not ideal in order to get a house.”
While the supply of U.S. homes for sale is at an almost two-year high and price gains are moderating, buyers such as Nielsen-Dembe wouldn’t know it. An inventory crunch for entry-level houses has only worsened during the past year as discounted foreclosures become scarce and cash-paying investors snap up affordable listings to convert to rentals. Properties at the lower end of the market are also the most likely to have underwater mortgages, keeping would-be sellers from moving.
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Prashant Gopal, BloombergMr. Gopal may be contacted at
pgopal2@bloomberg.net
More Broad-Based Expansion for Construction Industry Expected in 2015
January 07, 2015 —
Garret Murai - California Construction Law BlogIt’s a short week for most of us this week.
Christmas is over and New Year’s is approaching.
So, what will 2015 bring us?
According Dodge Data & Analytics’s 2015 Dodge Construction Outlook: Continuing expansion of the construction sector, but one that is more broad-based than in recent years.
“The economic environment going forward carries several positives that will help to further lift total construction starts,” said Robert Murray, Chief Economist and Vice President at Dodge Data & Analytics. “Financing for construction projects is becoming more available, reflecting some easing of bank lending standards, a greater focus on real estate development by the investment community, and more construction bond measures getting passed. While federal funding for construction programs is still constrained, states are now picking up some of the slack. Interest rates for the near term should stay low, and market fundamentals (occupancies and rents) for commercial building and multifamily housing continue to strengthen.”
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Landmark Montana Supreme Court Decision Series: Known Loss Doctrine & Interpretation of “Occurrence”
March 06, 2022 —
Lorelie S. Masters, Patrick M. McDermott & Rachel E. Hudgins - Hunton Insurance Recovery BlogIn this final post in the Blog’s
Landmark Montana Supreme Court Decision Series, we discuss the court’s ruling on the known loss doctrine and its interpretation of “occurrence” in
National Indemnity Co. v. State, 499 P.3d 516 (Mont. 2021).
Personal injury claims against the State of Montana arose out of its alleged failure to warn Libby residents about the danger of asbestos exposure despite the State’s regulatory inspections of the Libby Mine as early as the 1950s and through the 1970s. Among other defenses, the insurer contended that there was no coverage for these claims because the asbestos claims arising out of the Libby Mine were a “known loss.” A “known loss” defense, as the court explained, is “not based upon a provision of the Policy, but a common law principle which courts have imposed upon liability policies” that “requires that losses arise without the insureds’ knowledge.”
Reprinted courtesy of
Lorelie S. Masters, Hunton Andrews Kurth,
Patrick M. McDermott, Hunton Andrews Kurth and
Rachel E. Hudgins, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. McDermott may be contacted at pmcdermott@HuntonAK.com
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com
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Ninth Circuit Rules Supreme Court’s Two-Part Test of Implied Certification under the False Claims Act Mandatory
May 13, 2019 —
Meredith Thielbahr - Gordon & Rees Construction Law BlogFor those contractors in the government arena, read on.
The False Claims Act (“FCA”) was enacted to deter knowingly fraudulent actions by contractors which resulted in a loss of property to the Government. Intent to defraud with resulting financial hardship was required. Contrary to popular misconception, the statute was not designed to punish all false submissions to the Government simply because those submissions, or claims, are later found to be false. The statute’s inclusion of the requisite element of knowledge is consistent with this notion:
- A defendant must submit a claim for payment to the Government;
- the claim must be false or fraudulent;
- the defendant must have known the claim was fraudulent when it was submitted (also known as scienter); and
- the claim must have caused the Government to pay out money.
See 31 U.S.C. § 3729(a).
Despite these explicit elements (in addition to common law elements of fraud), over the last two decades, contractors have seen ever-expanding theories of FCA recovery presented by qui tam plaintiffs and the Government. For example, under the FCA, the false “claim” evolved over time: the claim no longer needs to be an express false claim (i.e. the truthfulness of the claim is a direct condition of payment); the claim can be “implied” misrepresentation or “half-truth”.
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Meredith Thielbahr, Gordon & Rees Scully MansukhaniMs. Thielbahr may be contacted at
mthielbahr@grsm.com
COVID-19 Could Impact Contractor Performance Bonds
March 30, 2020 —
Ben Williams & MG Surety - Construction ExecutiveAs COVID-19 continues to expand around the United States and the world, it may only be a matter of time before U.S. construction projects are affected by the virus. Performance bonds guarantee that a project will be completed by a contractor according to the contract. However, what if a contractor cannot complete a project on time due to widespread disease? What, if any, impact could the virus have on a contractor’s surety bond program?
Risk Factors
Several risks associated with the virus could trigger a performance bond claim.
1. Materials. The Chinese account for a large supply of construction materials, including steel, copper, cabinetry, etc. An inability to obtain these materials could significantly delay or stop a project all together. Even if a contractor is able to obtain them from other sources, it may be at a significantly higher cost than they put into the bid.
2. Labor. There is already a shortage of qualified labor in the construction industry. Additionally, construction already lends itself to the spreading of viruses; workers are often in close proximity, handling common materials, and they may not have an easily accessible place to wash their hands. Furthermore, even though many now have paid sick leave, there is often pressure not to use it. These things could magnify the labor shortage and make it difficult to complete projects on time.
3. Safety. Finally, the world is having a serious shortage of respirators. Because of widespread panic, many people have been purchasing N95 respirators—so much that the Surgeon General has asked people to stop buying them. It has created a shortage for people who really need them, like contractors. If contractors can’t get these safety masks, certain trades will either be unable to work, or risk continuing the project without masks, which would endanger workers and open them up to OSHA penalties.
Reprinted courtesy of
Ben Williams and MG Surety, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Williams may be contacted at
benw@mgsuretybonds.com
Lewis Brisbois Appellate Team Scores Major Victory in Bad Faith Insurance Action
May 24, 2021 —
Raul Martinez & Elise Klein - Lewis Brisbois NewsroomAppellate Partner Raul L. Martinez and Los Angeles Partners Elise D. Klein and Celia Moutes-Lee recently secured a major win in an appeal of a bad faith insurance action. In Wexler v. California Fair Plan Association (Apr. 14, 2021, B303100) __Cal.App.5th__, Division Eight of the Second Appellate District (Los Angeles), the court held that the plaintiff, the daughter of insurance policy holders, had no standing to pursue bad faith allegations against her parents’ insurer for smoke damage to her personal possessions.
The daughter’s parents owned a home in the mountains where there was a heightened risk of fires. The parents insured their home with a California FAIR Plan Association (FAIR Plan) owner-occupied dwelling policy (the FAIR Plan Policy). The FAIR Plan Policy only insured the dwelling and its contents against damage from fire, lightning, and internal explosion with limited coverage for smoke damage. The FAIR Plan Policy also expressly disclaimed coverage for individuals not specifically named in the policy. Furthermore, the plaintiff’s name did not appear in any of her parents’ insurance documents.
Reprinted courtesy of
Raul Martinez, Lewis Brisbois and
Elise Klein, Lewis Brisbois
Mr. Martinez may be contacted at Raul.Martinez@lewisbrisbois.com
Ms. Klein may be contacted at Elise.Klein@lewisbrisbois.com
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Expanded Virginia Court of Appeals Leads to Policyholder Relief
January 29, 2024 —
Michael S. Levine & Olivia G. Bushman - Hunton Insurance Recovery BlogExercising its newly expanded jurisdiction that now permits Virginia’s intermediate appellate courts to hear insurance coverage disputes, the Court of Appeals recently reversed a lower court decision that allowed a two-year “Suits Against Us” provision to serve as a basis for an insurer’s refusal to reimburse repair and replacement costs incurred more than two years after the date of loss. Bowman II v. State Farm Fire and Casualty Co., Record No. 1256-22-3 (Nov. 21, 2023). CAV (unpublished opinion).
In the proceeding below, the circuit court found no justiciable controversy and dismissed the complaint where repairs to the policyholder’s fire-damaged home continued more than two years after the date of the fire. The circuit court relied on a two-year limitation in the policy that governed the period within which the policyholder must bring suit against the insurer.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Olivia G. Bushman, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. Bushman may be contacted at obushman@HuntonAK.com
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New Mexico Holds One-Sided Dispute Resolution Provisions Are Unenforceable
November 05, 2024 —
Bill Wilson - Construction Law ZoneDispute resolution provisions that grant one party the unilateral right to choose either litigation or arbitration to resolve disputes are common in the construction industry. The main difference between the two forums is that courts are more likely to strictly enforce contract terms as written as well as the applicable law, while arbitrators make decisions on more equitable considerations, untethered to the contract terms and—to some degree—the law. The party with the sole discretion to select the dispute resolution procedure can select the process most beneficial to its interests based on the nature of the dispute, regardless of who brings the claims. In Atlas Electrical Construction, Inc. v. Flintco, LLC, 550 P.3d 881 (N.M. Ct. App. 2024), the Court of Appeals of New Mexico recently held that an arbitration provision in a subcontract, under which the contractor retained the exclusive right to choose whether disputes arising under the subcontract were litigated in court or arbitrated was unreasonably one-sided, substantively unconscionable, and unenforceable.
The Atlas Electrical case involved two sophisticated entities with equal bargaining strength to negotiate the terms of a subcontract. The parties agreed to a subcontract provision which provided in the relevant part:
In the event [contractor] and [subcontractor] cannot resolve the dispute through direct discussions or mediation … then the dispute shall, at the sole discretion of [contractor], be decided either by submission to (a) arbitration … or (b) litigation …
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
