Client Alert: Naming of Known and Unknown Defendants in Initial Complaints: A Cautionary Tale
September 24, 2014 —
R. Bryan Martin & Whitney L. Stefko – Haight Brown & Bonesteel LLPOn September 12, 2014, the Ninth Circuit Court of Appeals, in Butler v. National Community Renaissance of California, upheld a district court's dismissal of certain defendants named in amended complaints, affirming the necessity of naming those known and unknown defendants in Plaintiff's original complaint.
In April 2009, Plaintiff Zina Butler filed an action in federal district court, naming a single defendant, National Community Renaissance Corporation ("National"), for an alleged warrantless search of Plaintiff's apartment on April 18, 2007. The single page complaint asserted that the apartment manager provided a Section 8 investigator, a City employee and Sherriff deputies keys to Plaintiff's apartment and conducted a search in violation of her Fourth Amendment rights. Shortly after, Plaintiff filed a first amended complaint, with the only change being the addition of defendant, the Housing Authority of the County of Los Angeles ("HACoLA") in the caption. In May 2009, the court (on its own accord) dismissed the first amended complaint with leave to amend as "it [was] unclear whom Plaintiff intend[ed] to sue."
In June 2009, Plaintiff filed a second amended complaint, identifying National and HACoLA in the caption as defendants, but separately identifying several other individuals and entities allegedly involved in the incident occurring in April of 2007 in the complaint's statement of facts. The Court, once again, dismissed the second amended complaint with leave to amend for the same reasons it dismissed Plaintiff's first amended complaint.
Reprinted courtesy of
R. Bryan Martin, Haight Brown & Bonesteel LLP and
Whitney L. Stefco, Haight Brown & Bonesteel LLP
Mr. Martin may be contacted at bmartin@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com
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California Appellate Court Holds “Minimal Causal Connection” Satisfies Causation Requirement in All Risk Policies
July 20, 2020 —
Scott P. DeVries & Michael S. Levine - Hunton Andrews KurthOn May 26, 2020, a California Court of Appeals (4th District) issued its decision in Mosley et al. v. Pacific Specialty Ins. Co. The case arose in the context of a marijuana-growing tenant who rerouted a home’s electrical system and caused an electrical fire. The issue was whether the homeowner’s policy covered the loss. The trial court granted the insurer’s motion for summary judgment and, in a divided decision, the Court of Appeals reversed in part.
The policy excluded losses “resulting from any manufacturing, production or operation, engaged in … the growing of plants.” The parties agreed that the fire resulted from the rewiring of the electrical system, but disagreed on “whether that means the damage” “result[ed] from” “the growing of plants.” The Court held that “resulting from” “broadly links a factual situation with the event creating liability, and connotes only a minimal causal connection or incidental relationship.” In doing so, it equated the terms “results from” and “arising from.” Concluding that a “common sense” approach was to be used, it found a “minimal causal connection” to be present. This expansive standard could be beneficial to policyholders in arguing the causal connection between COVID-19 and ensuing business interruption losses; specifically, that the pandemic, a covered event, is the underlying and proximate cause of the insureds’ physical loss and/or damage and the insured’s resulting business interruption loss, and that intervening events, whether they be orders of civil authority, prevention of ingress/egress or otherwise, would not sever the chain of causation.
Reprinted courtesy of
Scott P. DeVries, Hunton Andrews Kurth and
Michael S. Levine, Hunton Andrews Kurth
Mr. DeVries may be contacted at sdevries@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
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Substituting Materials and Failure to Comply with Contractual Requirements
November 19, 2021 —
David Adelstein - Florida Construction Legal UpdatesIt is important to remember that if you are going to substitute materials from those specified, you need to make sure there is proper approval in doing so–make sure to comply with the contractual requirements to substitute materials. Otherwise, you could be in a situation where you are contractually required to remove the installed substituted materials and replace with the correct specified materials. This is not the situation you want to find yourself in because this is oftentimes a costly endeavor. This was the situation in Appeal-of-Sauer, Inc., discussed below, on a federal project. The best thing that you can do is comply with the contractual requirements if you want to substitute materials. If you are in the situation where it is too late, i.e., you already installed incorrect materials, you want to demonstrate the substituted materials are functionally equivalent to the specified materials and/or come up with an engineering solution, as required, that could be less costly then ripping out the installed material and replacing with the correct material. Even doing so, however, is not a “get out of jail free card” and does not necessarily mean there is not a strong basis to require you to install the correct specified material.
In Appeal of- Sauer, Inc., ASBCA 61847, 2021 WL 4888192 (ASBCA September 29, 2021), a federal project’s engineering requirements required cast iron piping for the above ground sanitary system. However, the prime contractor installed PVC piping instead of cast iron piping. The prime contractor believed it had the appropriate approval through its submittal. The government, through its contracting officer, directed the prime contractor to remove installed PVC piping to replace with cast iron. The government did not believe PVC piping was the functional equivalent of cast iron piping for the above ground sanitary system due to its concern with the noise level of waste materials flowing through the piping. The prime contractor submitted a claim for its removal and replacement costs which was denied by the contracting officer. On appeal with the Armed Services Board of Contract Appeals, the Board agreed with the contracting officer explaining: “While we agree that a design change could be approved by the designer of record and brought to the attention of the government before being incorporated into the design documents, the [prime contractor’s] task order required that such a design change meet the minimum requirements of the solicitation and accepted proposal. The plumbing submittal [the prime contractor] issued here, showing the use of PVC instead of cast iron for the above ground waste piping, did not meet the minimum requirements of the solicitation.” Appeal of-Sauer, Inc., supra.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Missouri Construction Company Sues Carpenter Union for Threatening Behavior
February 10, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to KMOV News, Raineri Construction Company in Missouri filed suit against the Local Carpenters’ District Council claiming employees had been “stalked and threatened” by the union. However, the Carpenters Union “denies the allegations” and said “it has the right to protest against a company that doesn’t always meet the union standards for pay and benefits.”
Tony Raineri, one of the construction company’s executives, said to KMOV News: “For me it wasn’t such a big deal until they started making threats of bodily harm, started following me and my wife to our home, started following my employees to their homes.”
KMOV News reported that a “union representative told News 4’s Craig Cheatham that no one acting on behalf of the Carpenters Union ever threatened, harassed or stalked Raineri, his employees or their clients.”
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Modern Tools Are Key to Future-Proofing the Construction Industry
September 19, 2022 —
Guillaume Le Gouic - Construction ExecutiveThe U.S. construction industry is facing a tech revolution that’s upending the roles of skilled workers. Many traditional contractors are struggling to embrace the new technologies customers increasingly demand, while the industry struggles to attract young professionals. According to the latest
American Community Survey data, the median age of a construction worker is 41.
This is particularly concerning given the confluence of two trends: the construction industry is facing a critical workforce shortage that’s only
expected to intensify, and the workforce is aging—
NCCER is predicting around 40% are expected to retire by 2031. Industry leaders must prioritize using the latest industry solutions and innovations to modernize construction work, transform the construction industry and appeal to the next generation of contractors.
Throughout COVID-19, the construction sector experienced a higher number of workers quitting jobs as opposed to being laid off, indicating the older workforce likely took the opportunity to retire early, along
with more than three million other Americans who did the same. Currently, industry leaders are not doing enough to communicate opportunities to help shift the career perception of electrical contractors from simply being “blue collar” and un-exciting. A 2019 National Association of Home Builders (NAHB) found only
3% of people ages 18 to 25 were interested in pursuing a construction career, with most respondents noting the desire for a less physically demanding job.
Reprinted courtesy of
Guillaume Le Gouic, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Don’t Sign a Contract that Doesn’t Address Covid-19 (Or Pandemics and Epidemics)
December 14, 2020 —
David Adelstein - Florida Construction Legal UpdatesDo yourself a favor: Don’t sign a construction contract that doesn’t address COVID-19 or any pandemic or epidemic from this point forward!
As the number of COVID-19 numbers rise, it would be reasonable to think this could have an impact on ongoing or future construction projects. For this reason, I want to revisit the subject of addressing COVID-19 (and any pandemic or epidemic) in your construction contract.
The potential impact caused by COVID-19 could result from governmental regulations that impact construction of the project, shutdowns due to affected workers, owners’ decisions to suspend performance or adjust the way the project is being constructed, increased deep cleaning requirements, and increased measures associated with social distancing and re-sequencing of shifts. This all plays into the timeliness of performance and the productivity of manpower and equipment usage. When submitting a price, a lot of these considerations may not be factored in because doing so could lead to a price that will never get accepted.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Defect Lawsuit May Affect Home Financing
February 14, 2013 —
CDJ STAFFHomeowners in the Burlingame Ranch I Condominium Association already say they have problems with the siding on their units. The Aspen Business Journal says that their next problem might be with lenders. According to the homeowners’ attorney, Chris Brody, the association attempted to work things out, but this was not successful.
Mr. Brody was unaware of any issues with sales or refinancing, but the article notes that “at least one homeowner was told he could not refinance with a Fannie Mae backed loan if there’s pending litigation.” Last year, Fannie Mae did adopt a guideline that made homes involved in construction defect lawsuits ineligible for home loans.
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OH Supreme Court Rules Against General Contractor in Construction Defect Coverage Dispute
October 30, 2018 —
Theresa A. Guertin - Saxe Doernberger & Vita, P.C.On October 9, 2018, the Ohio Supreme Court issued a decision in Ohio Northern University v. Charles Construction Services, Inc., Slip Op. 2018-Ohio-4057, finding that a general contractor was not entitled to defense or indemnity from its CGL insurer in a construction defect suit brought by a project owner post-project completion. With this decision, Ohio has solidified its place amongst a diminishing number of states, including Pennsylvania and Kentucky, which hold that there is no coverage for defective construction claims because those losses do not present the level of fortuity required to trigger CGL coverage. This places Ohio amongst the worst in the country on this issue at a time when numerous states have abandoned old precedent and moved towards a policyholder friendly analysis.
Ohio Northern University (“ONU”) hired Charles Construction Services, Inc. (“CCS”) to construct the University Inn and Conference Center, a new hotel and conference center on their campus in Ada, Ohio. CCS purchased CGL insurance from Cincinnati Insurance Company (“CIC”) insuring the project. Following completion of the project, ONU sued CCS alleging defects in the construction of the completed project, including allegations that windows improperly installed by one subcontractor led to damage to walls built by another subcontractor. CIC agreed to defend CCS under a reservation of rights but intervened in the action between ONU and CCS to pursue a declaratory judgment that it had no obligation to defend or indemnify its insured for the alleged losses.
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Theresa A. Guertin, Saxe Doernberger & Vita, P.C.Ms. Guertin may be contacted at
tag@sdvlaw.com
