Buyer Alleges Condo Full of Mold and Mice
March 26, 2014 —
Beverley BevenFlorez-CDJ STAFFSarah Schottenstein purchased a New York condo for $1.65 million, and claimed that “she wound up getting a moldy, mouse-infested mess,” according to DNAinfo New York. Schottenstein alleged that “within a month of moving in she found her apartment was infested with mice, had toxic mold growing beneath her floors, brown water coming from the tap and leaks from the ceiling, according to court documents.”
According to DNAinfo New York, “Microecologies Inc., an environmental health firm, found 'very heavy levels' of the infectious mold Aspergillus Chaetomium under the floor of Schottenstein's apartment.”
However, Larry Pittinsky, an attorney for the condo board, told DNAinfo New York that “the case was "about a woman trying to escape her obligation to pay money.”
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Hunton Insurance Partner Syed Ahmad Serves as Chair of the ABA Minority Trial Lawyer Committee’s Programming Subcommittee
January 13, 2020 —
Michelle M. Spatz - Hunton Insurance Recovery BlogSyed Ahmad, a partner in Hunton Andrews Kurth’s Insurance Coverage practice, has volunteered to serve as Chair of the
ABA Minority Trial Lawyer Committee’s Programming Subcommittee. The Minority Trial Lawyer Committee (MTL) serves as a resource for minority litigators, in-house counsel and law students, aiming to foster professional development, legal scholarship, advocacy and community involvement. As Chair of the Programming Subcommittee, Syed, who was named to Benchmark Litigation’s 40 & Under Hot List earlier this year, will help advance MTL’s mission of facilitating discussions about diversity and the law and providing career network opportunities for minority trial lawyers.
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Michelle M. Spatz, Hunton Andrews KurthMs. Spatz may be contacted at
mspatz@HuntonAK.com
When Are General Conditions and General Requirements Covered by Builder's Risk
December 18, 2022 —
Michael V. Pepe & Grace V. Hebbel - Saxe Doernberger & VitaGeneral conditions and general requirements are terms of art in the construction industry that describe the indirect costs necessary to complete a construction project. After physical loss or damage to a project, the following question often arises: Are “general conditions” and “general requirements” covered under a builder’s risk policy?
General Conditions vs. General Requirements
General conditions are usually described as the cost of managing a construction project. Examples include salaries for personnel like project managers, supervisors, engineers, field office staff, as well as the cost of field trailers, office equipment and supplies, and anything necessary to support the staff.
General requirements are the non-management indirect costs of executing the project, including items such as pre-development costs, permits, security, dumpsters, fences, temporary lighting, worker amenities, and clean-up costs.
Reprinted courtesy of
Michael V. Pepe, Saxe Doernberger & Vita and
Grace V. Hebbel, Saxe Doernberger & Vita
Mr. Pepe may be contacted at MPepe@sdvlaw.com
Ms. Hebbel may be contacted at GHebbel@sdvlaw.com
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Can I Record a Lis Pendens in Arizona if the Lawsuit is filed Another Jurisdiction?
September 26, 2022 —
Ben Reeves - Snell & Wilmer Real Estate Litigation BlogRecent research I did on a case led me to the conclusion that Arizona law recognizes foreign litigation (i.e., a lawsuit filed outside of Arizona) as a justification for the recording of a lis pendens against real property located within Arizona. See
TWE Retirement Fund Trust v. Ream, 198 Ariz. 268 (Ct. App. 2000). Apparently, there’s some debate about whether foreign litigation can support a local lis pendens. See
Boca Petroco, Inc. v. Petroleum Realty II, 285 Ga. 487 (Ga. 2009). As noted in the TWE case, Arizona’s lis pendens statute
(A.R.S. 12-1191) does not discriminate between local or foreign “actions.” As such, if litigation is pending anywhere that affects Arizona real property, a lis pendens can (and probably should) be filed.
Reprinted courtesy of
Ben Reeves, Snell & Wilmer
Mr. Reeves may be contacted at breeves@swlaw.com
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Builder’s Risk Coverage—Construction Defects
August 20, 2019 —
Brian Hearst - Construction ExecutiveThis is the second of three articles bringing clarity to the complex and challenging course of construction exposures and providing solutions for mitigating risk through builder’s risk insurance coverage. Part I, Builder’s Risk Coverage – Language Matters, addressed a select few critical exposures to projects under the course of construction. Part II addresses how a standard builder’s risk policy may respond to a loss arising from defective construction and alternative insurance market offerings that can help with specific costs associated with construction defect loss.
Coverage for Loss Ensuing from Faulty Workmanship
Part I tackled the standard builder’s risk exclusion that applies to losses arising from faulty materials or workmanship. Traditionally, carriers do not have an appetite for covering a contractor’s failure to perform their work properly. There is one exception, which is coverage is available for ensuing loss – or the resulting damage to other property from faulty workmanship.
If the excluded cause of loss (i.e., faulty workmanship) causes resultant damage, the builder’s risk policy will cover the damages to the extent the peril of fire is covered. The ensuing loss exception limits the faulty work exclusion to costs directly related to repairing or replacing the faulty work.
For example, suppose faulty wiring work leads to a fire which damages part of a structure under construction. The faulty workmanship exclusion would apply to the actual faulty wiring work, but if fire is a covered peril under the policy (this is nearly always the case), the policy would respond to the structure’s fire damage.
Reprinted courtesy of
Brian Hearst, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Hearst may be contacted at
Brian.Hearst@lockton.com
Revisiting the CMO; Are We Overusing the Mediation Privilege?
November 19, 2021 —
Michael T. Kennedy Jr. - BERDING|WEILOne of the most common features in construction defect cases is the Case Management Order (“CMO”) or Pre-Trial Order (“PTO”) to govern pre-trial and mediation procedures. CMOs and PTOs arose in the days when the HOA would sue the developer, the developer would cross-complaint against the subcontractors, and each defendant and cross-defendant might have 2 or 3 insurance carriers defending, each of whom may retain their own panel counsel. In a large case there may have been 20 parties and 30 defense attorneys. In order to avoid the cost and chaos of all of those parties propounding their own discovery, and in order to prepare these cases for mediation well before trial and the associated costs, it became standard practice in California to include provisions in the CMO to stay all discovery until just before trial.
Plaintiff would provide a Defect List or Statement of Claims and the parties experts would meet and exchange information as part of the mediation process. All of the information exchanged would be subject to mediation privileges and inadmissible at trial. The benefit of this practice was that the parties (and carriers) would avoid the cost of formal discovery and allow the experts to discuss compromised scopes of repair to help settle the case while being able to take a more aggressive position at trial. The disadvantages are that each party uses its privileged initial expert reports to stake out negotiating positions more extreme than what they would put on at trial, with each side losing credibility with the other in assessing the value of the case, and for those cases that did not settle, the parties would be faced with having to do all of the depositions and discovery in the last 60 days, or delaying trial, or both.
Over the last 10 or 15 years with the advent of wrap-up insurance policies, these cases now usually involve 2 sides instead of 20; only the HOA and the developer remain in the case. However, old habits die hard, and the standard CMO/PTO hasn’t evolved with other aspects of these cases. The practice of staying all discovery and exchanging information only under mediation privileges remains, and as a result insurance carriers don’t receive the admissible evidence that they need to determine coverage and evaluate the real settlement value of the case until just before trial. On the plaintiff’s side, if most of the experts’ work is done under the guise of mediation privilege, those costs may not be recoverable. Outside the context of mediation, costs incurred in investigation of the defects and preparation of a scope and cost of repair are recoverable.
This reflexive claim of mediation privilege over all information exchanged during the case has outlived its usefulness. The CMO can and should remain to regulate formal discovery and to help the parties prepare for mediation, but regulated discovery should be opened early in the case. In California, the SB800 process already provides for the exchange of admissible information during the prelitigation right to repair process. Continuing that exchange during the early litigation allows the parties to continue to prepare for mediation, but waiving privileges had advantages for both sides.
A senior claims manager once commented that Plaintiff’s mediation-protected Statement of Claims “might as well be a stack of blank paper” for all of its usefulness to the carrier in assessing the value of the case. If the Plaintiff and it expects are free to inflate their claims early in the case without having to worry about every supporting those claims in front of a jury, they have little or no credibility. And if those claims are inflated or not “real,” not only can the carrier not properly assess the verdict range and settlement value of the case, but it may also be hampered in making a coverage determination. Simply put, if the exchange of real information through formal discovery is put off until just before trial, the defense cannot be ready to settle until then. Worse, the cost of defense goes through the roof in the last 60 days before trial as the lawyers’ scramble to take all of the depositions and to all of the other work that had been stayed for the previous year or two.
The Plaintiff is faced with the same question of credibility of defense experts where they are free to take a “low ball” negotiating position without having to support that position through cross-examination in front of the jury. Just as the carrier behind the defense attorney needs the Plaintiff’s “real” evidence to assess the claim, so does the HIOA Board of Directors behind the Plaintiff’s counsel. Additionally, in California as in most states, the cost of experts’ preparation for mediation may not be recoverable as costs or damages, but investigation of the defects and preparation of the scope and cost of repair is recoverable.
The biggest challenge is resolving construction defect claims for both sides is how to resolve these cases quickly while keeping costs under control. Practices that worked 20 years ago are no longer applicable with changes in insurance, and in light of some of the bad habits that arise when all of the information exchanged was confidential.
The CMO/PTO process can still be useful to regulate the discovery and mediation schedule given the volume of documents and other information to be exchanged but exchanging “real” information in a form that may come into evidence at trial should foster earlier resolution, resulting in cost savings for the parties. The CMO can provide for the parties to respond to controlled discovery, and the exchange of expert reports and potentially depositions can and should be done earlier in the case, well before the eve of trial. The parties can then assess the true value of each case and prepare for more substantive mediation without waiting until they are on the figurative courthouse steps.
Construction defect cases have a pattern, and it is tempting for busy lawyers to just put each case through the same algorithms that they have used for years. However, these cases have evolved and those of us handling these cases need to reevaluate our approach to these cases. Taking aggressive negotiating positions that no longer have any credibility with the other side has become counterproductive, and the exchange of real evidence earlier in the case would better serve our clients and carriers.
BERDING|WEIL is the largest and most experienced construction defect and common interest development law firm in California. For more information, please visit https://www.berding-weil.com
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Michael T. Kennedy Jr., BERDING|WEILMr. Kennedy may be contacted at
mkennedy@berdingweil.com
Coverage Denied for Insured's Defective Product
October 15, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe court found there was no coverage obligations for the insured's defective product. Titanium Indus., Inc. v. Federal. Ins. Co., 2014 WL 4428324 (N.J. Super. Ct. App. Div. Sept. 10, 2014).
The insured, Titanium Industries, supplied titanium bar materials to Biomet Manufacturing Corporation. Biomet manufactured orthopedic implants and devises. The titanium was used to manufacture screws to incorporate into Biomet's products.
Biomet notified the insured of a potential defect in some of the titanium material, described as "alloy segregation," i.e., the failure of alloys in a metal to completely melt, causing the alloy to separate and undermine the strength of the finished product. The insured and Biomet negotiated a settlement, which included lost profits and the cost of returning the titanium.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
EEOC Sues Whiting-Turner Over Black Worker Treatment at Tennessee Google Project
October 18, 2021 —
James Leggate - Engineering News-RecordThe Whiting-Turner Contracting Co., which ranks as one of the industry’s largest contractors, has been accused in a federal civil rights lawsuit of creating a racially hostile work environment at a Tennessee project site and of retaliating against employees who complained.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at https://www.enr.com/leggatej@enr.com
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