The Vallagio HOA Appeals the Decision from the Colorado Court of Appeals
August 04, 2015 —
David M. McLain – Colorado Construction LitigationAs highlighted in our most recent post, the Colorado Court of Appeals’ Vallagio decision upheld a declaration provision that prohibited the amendment of a mandatory arbitration clause without the consent of the developer/declarant. Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc., et al., 2015COA65 (Colo. App. May 7, 2015). This case protects a developer/declarant’s ability to arbitrate construction defect claims with a well-crafted declaration that requires declarant consent in order to amend the mandatory arbitration provisions for construction defect actions.
However, the Vallagio ruling still hangs in the balance while the Colorado Supreme Court considers the condominium association’s petition for certiorari review, filed June 18, 2015. In its petition, the association argues that the declarant consent requirement violates public policy and four separate sections of the Colorado Common Interest Act (“CCIOA”).
For instance, the association argued in the courts below that a declarant consent requirement violates section 217 of CCIOA, which governs unit owners’ voting percentage requirements and provides that declarations may not require more than 67% affirmative vote for amendments. The Court of Appeals rejected this argument, reasoning that other provisions of section 217 contemplate consent requirements by parties other than unit owners, such as first mortgagees.
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Flood Sublimits Do Not Apply to Loss Caused by Named Windstorm
May 07, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe New Jersey Superior Court considered whether recovery for storm surge was limited by the policy's sublimit for loss caused by flood. Public Serv. Enter. Group, Inc. v. Ace Am. Ins. Co., 2015 N. J. Super. Unpub. LEXIS 620 (N.J. Super. Ct. Law Div. March 23, 2015).
Storm surge from Superstorm Sandy inundated and damaged Public Service Enterprise Group, Inc.'s (PSEG) property, including eight large generating stations. PSEG had coverage of $1 billion under policies with defendant carriers. There was no sublimit in the policies for "named windstorms," other than named windstorms in Florida. A $250 million sublimit appeared in the policies for losses caused by "flood."
The carriers paid only a portion of PSEG's claim. The total damages exceeded $500 million.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Warranty of Workmanship and Habitability Cannot Be Disclaimed or Waived Under Any Circumstance
May 01, 2023 —
Jason Feld & Stephanie Wilson - Kahana & Feld LLPArizona residential construction and single-family home production is growing at a rapid pace. And just as fast as the homes are sold, homeowners are constantly seeking warranty repairs from their homebuilders. Despite having strong purchase documents with express warranty language, the Arizona Supreme Court in
Zambrano v. M & RC, II LLC, 254 Ariz. 53 (2022) adopted a bright line rule that regardless of the contract, the implied warranty of workmanship and habitability (“implied warranty”) cannot be disclaimed or waived under any circumstance. The Arizona Supreme Court opinion provides clear guidance of the law in this area on the scope of the implied warranty in contracts between homebuyers and builder/vendors, specifically on the issue of whether an express warranty can negate and effectively waive the common law implied warranty – which is a definitive violation of public policy.
The Zambrano decision involved a licensed real estate broker who bought a new single family home for herself in a newly constructed master planned community in Surprise, AZ. Zambrano entered into a valid sales contract with Scott Homes (homebuilder) which contained a stand-alone 45-page pre-printed form express warranty. The express warranty was to be the “only warranty applicable to the home.” The contract further clarified that the buyer was expressly disclaiming (and, thus, waiving) the implied warranty. The sales documents and express warranty were signed and authorized by Zambrano. A short time later, the home developed alleged “design and construction defects” that were “either time barred or outside the coverage” of the express warranty. Zambrano filed suit for the alleged defects based on the implied warranty. Scott Homes filed summary judgment based on the Zambrano’s waiver and disclaimer of the implied warranty in the purchase agreement. The trial court granted summary judgment and the matter was appealed up to the Arizona Supreme Court.
Reprinted courtesy of
Jason Feld, Kahana & Feld LLP and
Stephanie Wilson, Kahana & Feld LLP
Mr. Feld may be contacted at jfeld@kahanafeld.com
Ms. Wilson may be contacted at swilson@kahanafeld.com
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ASCE Statement on The Partial Building Collapse in Surfside, Florida
June 28, 2021 —
Tom Smith - American Society of Civil EngineersThe following is a statement by Tom Smith, Executive Director, American Society of Civil Engineers (ASCE):
WASHINGTON, DC. – We are saddened by the tragic news coming out of Surfside, Florida, regarding the fatal partial building collapse of a condominium early Thursday morning. Safety is the top priority of every civil engineer, and protecting public health and safety is core to our mission at ASCE. We share our deepest condolences to all of those affected by this tragedy.
Collapses like these are fortunately highly unusual and extremely rare. However, it is imperative to identify the root cause of failures when they do occur, and to ensure that proactive steps are taken to prevent future incidents. ASCE fully supports the need for continued engineering assessments to pinpoint the cause of the collapse, and we stand ready to support official investigations with technical expertise and advice available through our 150,000 civil engineer members worldwide.
While rescue and recovery operations are underway, it is important that we support our first responders who are conducting essential rescue efforts and are operating as quickly as possible. We will also continue to keep those who have been injured and those who have not yet been accounted for in our hearts and thoughts, and we share our heartfelt sympathies to all of those affected.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Does the Recording of a Mechanic’s Lien Memorandum by Itself Constitute Process? Read to Find Out
August 04, 2021 —
Christopher G. Hill - Construction Law MusingsAs a Virginia construction attorney representing those in the construction industry, mechanic’s liens are near and dear to my heart. The enforcement of mechanic’s lien rights in Virginia is a two-step process. The first step is the recording of a properly-timed memorandum of lien that includes all of the statutorily required information. The second step is a suit to enforce that memorandum of lien filed in Circuit Court. A recent case out of Norfolk, VA examined the first of these steps.
In Central Radio Co. v. Warwick Builders, et al., and as Count III of a three-count Complaint, the Plaintiff, Central Radio Co., alleged that the Defendant, Warwick Builders, recorded a memorandum of lien that Warwick knew to be without merit and therefore committed an abuse of process. However, Warwick did not file any Circuit Court suit to enforce that lien. Central Radio Co. essentially alleged that the filing of the memorandum by itself constituted an attempt to extort payment and therefore was an abuse of process.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Limiting Liability: Three Clauses to Consider in your Next Construction Contract
June 25, 2019 —
Tara Lynch - Gordon & Rees Construction Law BlogIn your next contract, consider including some (or all!) of the following clauses to limit your liability and maximize your profits.
Waiver of Consequential Damages
While a proven breach of contract will leave a design professional or contractor exposed to direct or compensatory damages, a waiver of consequential damages will help “stop the bleeding” and protect the design professional or contractor from paying every damage that might flow from the breach. Consequential damages include those damages which indirectly flow from the breach of contract, for example, lost rents, lost profits, lost use, lost opportunity, loss of employee productivity, and damages to reputation.
The American Institute of Architects (AIA) has included a mutual waiver of consequential damages in its sample A201 for over 20 years. The AIA provision includes a definition of consequential damages which are waived, including many of the examples cited above. However, the AIA waiver of consequential damages clause carves out an exception for liquidated damages to the owner. Prudent design professionals and contractors will strike this exception so as not to render the clause meaningless. A well-drafted waiver clause will be mutual, will define which damages are consequential versus direct, and will not contain exceptions.
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Tara Lynch - Gordon & Rees Scully MansukhaniMs. Lynch may be contacted at
tlynch@grsm.com
Coyness is Nice. Just Not When Seeking a Default Judgment
March 04, 2019 —
Garret Murai - California Construction Law BlogAs Morrissey of the Smith’s sang: Coyness is nice, but Coyness can stop you, from saying all the things in life you’d like to.
It’s not uncommon in litigation to see a complaint asking for “damages according to proof.” Call it laziness. Call it hiding the ball. Call it coy, even. I call it risky.
And here’s why: If a defendant doesn’t appear and you need to seek a default judgment against him, her, or it, you are barred from doing so, since you are limited to recovering the amount you sought. And last I checked, something of nothing is nothing.
In Yu v. Liberty Surplus Insurance Corporation, California Court of Appeals for the Fourth District, Case No. G054522 (December 11, 2018), one plaintiff found this out the hard way, although perhaps not quite in the way they expected it.
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Garret Murai, Wendel RosenMr. Murai may be contacted at
gmurai@wendel.com
General Contractor’s Ability to Supplement Subcontractor Per Subcontract
July 10, 2018 —
David Adelstein - Florida Construction Legal UpdatesAs a subcontractor, you need to appreciate that the subcontract you (more than likely) sign is going to have you bear risk associated with furnishing manpower to maintain the prime contractor’s schedule and progress. A subcontractor can factor some of this risk into the lump sum amount it agrees to in the subcontract. But, from the general/prime contractor’s perspective, it is very important that this risk is borne by the subcontractor because there is no such thing as a schedule written in stone. The baseline schedule, whether attached to the subcontract or not, will change. Activities will be re-sequenced. Activities will be added. Activities will overlap. Activity start dates and finish dates will change. It is the nature of construction. As a subcontractor, you know all of this because it is the same no matter the project. Schedules are never written in stone — they change on a regular basis.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
