California Homeowners Can Release Future, Unknown Claims Against Builders
June 10, 2015 —
Edward A. Jaeger, Jr. and William L. Doerler – White and Williams LLPIn Belasco v. Wells, 183 Cal. Rptr.3d 840, 234 Cal. App. 4th 409 (2015), the California Court of Appeals for the Second District addressed the question of whether a homeowner, when settling an administrative complaint against a licensed homebuilder, can release future, unknown claims. Despite the presence of a California statute, Cal. Civ. Code § 1542, stating that a general release does not extend to claims that the releasor does not know about, the court held that the homeowner’s express release of future claims was enforceable. Thus, the homeowner’s release - signed as part of a 2006 settlement of the homeowner’s construction defect claims against the defendant, a homebuilder - barred the homeowner’s 2012 claims against the builder based on latent defects in the roof of the home that the homeowner discovered in 2011.
Background
The plaintiff, David Belasco, a patent attorney, bought a newly-constructed home from the defendant-builder, Gary Wells, in 2004. Wells holds a Class B General Building Contractor license issued by the Contractors State License Board (the Board). In 2006, Belasco filed a complaint against Wells with the Board based on alleged construction defects in the home.
As a result of Belasco’s complaint to the Board, the parties engaged in arbitration. At the arbitration, both parties were represented by counsel. Wells offered to settle the dispute for the sum of $25,000 and Belasco accepted Wells’ offer.
Reprinted courtesy of
Edward A. Jaeger, Jr., White and Williams LLP and
William L. Doerler, White and Williams LLP
Mr. Jaeger may be contacted at jaegere@whiteandwilliams.com; Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com
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Another TV Fried as Georgia Leads U.S. in Lightning Costs
June 26, 2014 —
Kelly Gilblom – BloombergGeorgia tops a shocking list: most likely place to have property damaged by lightning.
Georgia residents were reimbursed for $56 million of lightning-related damage in homes last year tied to more than 11,000 claims, according to a top-10 list from the Insurance Information Institute. Texas ranked second at $54.2 million.
Once lightning is “in the wiring, it’s electrifying anything connected to that,” John Jensenius, a lightning-safety specialist at the National Weather Service, said today in a phone interview. “Televisions, and even things like microwaves, they all have little chips in them so they all can get fried pretty easily.”
Lightning cost insurers $5,869 per claim in the U.S. last year, more than double the average in 2004, as homeowners added electronics such as computers and high-definition televisions. Still, the total expense for the industry declined 8.4 percent nationwide in that span, to $673.5 million in 2013, because better lightning-protection systems and fewer storms decreased the frequency of claims, the industry group said.
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Kelly Gilblom, BloombergMs. Gilblom may be contacted at
kgilblom@bloomberg.net
Apartment Investors Turn to Suburbs After Crowding Cities
March 12, 2015 —
Nadja Brandt and Oshrat Carmiel – Bloomberg(Bloomberg) -- Real estate investor Robert Hart pulled into the lot of a 400-unit apartment community in a San Diego suburb last month, prepared to pay up for the recently completed project on a quiet residential street. A competitor from a publicly traded landlord was already there, he said.
“It was on the one hand reassuring to know that we were both chasing the same opportunity,” said Hart, president and chief executive officer of closely held TruAmerica Multifamily. “On the other hand, it reinforced my opinion that large institutional real estate investors will be chasing yield far beyond the urban core.”
Reprinted courtesy of
Nadja Brandt, Bloomberg and
Oshrat Carmiel, Bloomberg
Ms. Brandt may be contacted at nbrandt@bloomberg.net
Ms. Carmiel may be contacted at ocarmiel1@bloomberg.net
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The California Legislature Passes SB 496 Limiting Design Professional Defense and Indemnity Obligations
June 15, 2017 —
Mark Himmelstein & Jenny Guzman – Newmeyer & Dillion LLPSince 2008 when the California legislature limited subcontractor indemnity obligations, the design professional community has been shouting “what about us?” Well, the legislature finally responded and a new law that limits design professional’s defense and indemnity obligations to their percentage of fault goes into effect on January 1, 2018.
THE NEW LAW – SB 496
SB 496 amends California Civil Code section 2782.8 and states that indemnity agreements must be limited to the negligence, recklessness or willful misconduct of the indemnitee (i.e. no more Type I indemnity with design professionals). The amendment also provides that “in no event shall the cost to defend charged to the design professional exceed the design professional’s proportionate percentage of fault”, with a limited opportunity for reallocation in the event another defendant is judgment proof.
However, the duty to defend still remains and still arises at the time of the tender of the defense (both issues that were unsuccessfully targeted by the design professional lobbyists).
WHAT CAN BE DONE NOW?
Developers and Owners should strongly consider reviewing and revising the indemnity provisions in their consultant contracts to comply with the new legislation before the first of the year. This includes master agreements because project addenda entered into after January 1 are subject to the new law. The statute does not apply to current contracts, so these do not need to be amended.
Questions? Newmeyer & Dillion is happy to assist in navigating the process to ensure you are compliant prior to January’s deadline. Please let us know how we can help.
Mark Himmelstein is a partner focused in the areas of construction, real estate, business and insurance litigation. He has an in-depth experience in drafting and negotiating construction and real estate contracts. You can reach him at mark.himmelstein@ndlf.com.
Jenny Guzman is a litigation associate in the Newport Beach office, focusing her practice in the areas of business and real estate litigation and transactions. You can reach her at jenny.guzman@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit http://newmeyeranddillion.com/
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How a 10-Story Wood Building Survived More Than 100 Earthquakes
June 26, 2023 —
Todd Woody - BloombergOne sunny morning last month, an earthquake jolted northeast San Diego. Minutes later, another temblor hit, causing a 10-story wood building to sway.
The quakes, though, were triggered by a computer and the shaking was confined to a 1,000-square-foot platform on which the building — a full-size test model — stood.
The structure is the tallest ever subjected to simulated earthquakes on the world’s largest high-performance “shake table,” which uses hydraulic actuators to thrust the steel platform through six degrees of motion to replicate seismic force. The shake-table trials at a University of California at San Diego facility are part of the TallWood Project, an initiative to test the seismic resiliency of high-rise buildings made of mass timber. An engineered wood building material, mass timber is increasingly popular as a more sustainable alternative to carbon-intensive concrete and steel.
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Todd Woody, Bloomberg
Traub Lieberman Attorneys Recognized as 2021 New York – Metro Super Lawyers®
October 18, 2021 —
Traub LiebermanTraub Lieberman is pleased to announce that six Partners from the Hawthorne, NY Office have been selected to the 2021 New York - Metro Super Lawyers list.
2021 New York – Metro Super Lawyers
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Traub Lieberman
Practical Pointers for Change Orders on Commercial Construction Contracts
December 31, 2014 —
John E. Bowerbank - Newmeyer & DillionConstruction projects pose unique challenges, including keeping costs within budget, meeting project deadlines, and coordinating the work of numerous contractors and subcontractors in the wake of inevitable design revisions and changes to the plans. Anticipating potential project challenges and negotiating contract provisions before commencing work on a project is critical for all parties. Careful planning should reduce the number of contract disputes. This, in turn, can facilitate the completion of a project within budget and on schedule.
“Changes” Clauses in Construction Contracts
Most commercial construction contracts have a clause addressing changes to the contract. A “changes” clause typically requires the mutual agreement of the parties on the scope of any modifications to the contract, as well as the effect on the contract price and timeframe for the work to be performed. This results in what is generally referred to as a “change order.” Many projects have a large number of change orders, which can result in significant cost overruns and delays to the project if the contract contains a complicated change order process. Therefore, in order to minimize cost overruns and project delays, it is crucial to keep the change order process as simplified and streamlined as possible.
In the most basic terms, change orders memorialize modifications to the original contract, and typically alter the contract's price, scope of work, and/or completion dates. A typical change order is a written document prepared by the owner or its design professional, and signed by the owner, design professional, and affected contractors and subcontractors. An executed change order indicates the parties’ agreement as to what changes are taking place, including approval for additional costs and schedule impacts.
While the reasons for change orders and the parties initiating them may vary, all change orders have one feature in common. Effective change orders alter the original contract and become part of the contract. Therefore, from a legal standpoint, change orders must be approached with the same caution and forethought as the original contract.
Practice Pointers for Change Orders
In light of the foregoing, some practice pointers for change orders in commercial construction contracts are as follows:
- Carefully Negotiate and Draft Change Order Provisions in the Original Contract.
A carefully negotiated and drafted “changes” clause that accounts for “unexpected circumstances” or “hidden conditions” can protect the parties from downstream costly disputes.
- Immediately Address Changes by Following the Change Order Process, Including Obtaining Necessary Signatures.
Regardless if you are an owner, general contractor or subcontractor, you should address any proposed change order immediately. Even if a decision maker gives “verbal” approval to go ahead with changed work, the work should not proceed without following the change order process in the original contract. This includes making sure to obtain any necessary signatures for the change order, if at all possible.
- Analyze the Plans and Specifications to Determine Whether “Changes” are Within the Scope of the Original Contract, or Whether They are Extra Work.
Prior to entering an original contract, it is imperative that the parties review the plans and specifications for ambiguities regarding work included in the original contract, versus potential extra work that would require a change order. This is important because a careful review of the plans and specifications sometimes reveals that work believed to be a change order is, in fact, original work, or vice versa.
- Make Sure Requests and Approvals for Change Orders are Done by an Authorized Representative.
When a party requests or gives its approval to a change order, it is important to confirm the request or approval came from an authorized representative.
- Avoid Vague and Open-Ended Change Orders.
Indeed, the vaguer a change order, the more likely it can lead to a dispute. Vague and open-ended change orders, including change orders that provide for payment on a time and materials basis, can be difficult for an owner to budget and schedule. This can lead to disputes as to cost and/or time extensions.
- Oral Assurances for Payment Without a Signed Change Order May Not Be Recoverable.
When a party provides verbal assurances to another party for extra work without following the change order process, there is a much higher likelihood that disputes will occur. Although there is case law that may allow a contractor to recover for extra work in private contracts based on oral promises, the parties should avoid placing themselves in such a legal position. Notably, in public contracts, a contractor may not be able to recover for any extra work without a signed changed order, even with verbal assurances of payment from the owner.
About the Author:
John E. Bowerbank, Newmeyer & Dillion
Mr. Bowerbank is a partner in the Newport Beach office and practices in the areas of business, insurance, real estate, and construction litigation. You can reach John at john.bowerbank@ndlf.com
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Around the State
March 27, 2019 —
Richard Glucksman & Chelsea Zwart – Construction Claims MagazineIn late 2018, Governor Jerry Brown signed two potentially impactful Senate bills relating to the construction of apartment buildings. These bills, discussed further below, were introduced, in part, in response to the Berkeley balcony collapse in June 2015, which was determined by the California Contractors State License Board to have been caused by the failure of severely rotted structural support joists—the repairs of which were deferred by the property manager despite indications of water damage.
In addition, 2018 saw the passage of California’s updated 2019 Building Energy Efficiency Standards. The new standards, which take effect in 2020, require, in part, the installation of solar systems on certain homes. The goal of the standards is to significantly decrease the energy usage in new homes while contributing to California’s greenhouse gas emissions reduction plans. Relatedly, new legislation, effective in 2019, aims to increase consumer protections for homeowners purchasing solar energy systems.
Reprinted courtesy of
Richard H. Glucksman, Chapman, Glucksman, Dean, Roeb & Barger and
Chelsea Zwart, Chapman, Glucksman, Dean, Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Ms. Zwart may be contacted at czwart@cgdrblaw.com
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