Design and Construction Defects Not a Breach of Contract
February 14, 2013 —
CDJ STAFFThe California Court of Appeals tossed out a breach of contract award in Altman v. John Mourier Construction. The decision, which was issued on January 10, 2013, sent the construction defect case back to a lower court to calculate damages based on the conclusions of the appeals court.
The case involved both design issues and construction issues. According to the plaintiffs’ expert, the design plans did not make the buildings sufficiently stiff to resist the wind, and that the framing was improperly constructed, further weakening the structures, and leading to the stucco cracking. Additionally, it was alleged that the roofs were improperly installed, leading to water intrusion. The contractor’s expert “agreed the roofs needed repair, but disputed what needed to be done to repair the roofs and the cost.”
The jury rejected the plaintiffs’ claims of product liability and breach of warranty, but found in their favor on the claims of breach of contract and negligence. The plaintiffs were awarded differing amounts based on the jury’s conclusions about their particular properties.
Both sides sought new trials. JMC, the contractor, claimed that the jury’s verdicts were “inconsistent in that the relieved JMC of liability for strict products liability and breach of warranty, but found JMC liable for breach of contract and negligence.” The plaintiffs “opposed the setoff motion on the ground that the jury heard evidence only of damages not covered by the settlements.” Both motions were denied. After this, the plaintiffs sought and received investigative costs as damages. JMC appealed this amended judgment.
The appeals court rejected JMC’s claims that evidence was improperly excluded. JMC sought to introduce evidence concerning errors made by the stucco subcontractor. Earlier in the trial, JMC had insisted that the plaintiffs not be allowed to present evidence concerning the stucco, as that had been separately settled. When they wished to introduce it themselves, they noted that the settlement only precluded the plaintiffs from introducing stucco evidence, but the trial court did not find this persuasive, and the appeals court upheld the actions of the trial court. Nor did the appeals court find grounds for reversal based on claims that the jury saw excluded evidence, as JMC did not establish that the evidence went into the jury room. Further, this did not reach, according to the court, a “miscarriage of justice.”
The court rejected two more of JMC’s arguments, concluding that the negligence award did not violate the economic loss rule. The court also noted that JMC failed to prove its contention that the plaintiffs were awarded damages for items that were covered in settlements with the subcontractors.
The appeals court did accept JMC’s argument that the award for breach of contract was not supported by evidence. As the ruling notes, “plaintiffs did not submit the contracts into evidence or justify their absence; nor did plaintiffs provide any evidence regarding contract terms allegedly breached.”
The court also did not allow the plaintiffs to claim the full amount of the investigative costs. Noting that the trial court had rational grounds for its decision, the appeals court noted that “the jury rejected most of the damages claimed by plaintiffs, and the trial court found that more than $86,000 of the costs itemized in plaintiffs’ invoices ‘appear questionable’ as ‘investigation’ costs/damages and appeared to the trial court to be litigation costs nonrecoverable under section 1033.5.”
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Sometimes, Being too Cute with Pleading Allegations is Unnecessary
June 06, 2018 —
David Adelstein - Florida Construction Legal UpdatesThere are times where being too darn cute with your pleading allegations is unnecessary and does not work. But, the point is really that the cuteness is unnecessary.
In a Miller Act payment bond dispute in Boneso Brothers Construction, Inc. v. Sauer, Inc., 2018 WL 2387833 (N.D.Cal. 2018), a claimant asserted claims against a Miller Act payment bond surety for breach of the payment bond, breach of a subcontract, open account, and account stated. The question is why would the claimant sue the payment bond surety for breach of subcontract (when the subcontract was not with the surety), and open account and account stated. I have no clue, other than such claims appeared quite unnecessary when the claimant asserted an action on the Miller Act payment bond (which is what the surety is liable under — actions under the statutory payment bond). Such claims were dismissed. And, they should have been.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
As the Term Winds Down, Several Important Regulatory Cases Await the U.S. Supreme Court
September 03, 2019 —
Anthony B. Cavender - Gravel2GavelThe Supreme Court will be deciding some very important regulatory law cases in the new few weeks as the term winds down.
CERCLA Circled
Last week, the Court granted a petition to review a significant CERCLA case, Atlantic Richfield Company v. Christian, et al., decided by the Supreme Court of Montana on state law grounds. This case involves state litigation which could result in a cleanup whose scope is allegedly inconsistent with an ongoing and expensive federal CERCLA cleanup at the Anaconda Smelter site. CERCLA basically provides that no one may challenge an ongoing Superfund cleanup, yet this state common law proceeding seeking a cleanup of the plaintiff’s homes and properties arguably threatens the EPA-approved cleanup remedy. ARCO filed a petition for certiorari with the Supreme Court, which the Court has now granted despite the Solicitor General’s brief which argued that the Court should wait to see the results of the Montana trial. (It is unusual for the Court to reject the advice of the Solicitor General.)
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Texas Supreme Court Holds Stipulated Extrinsic Evidence May Be Considered in Determining Duty to Defend
May 10, 2022 —
Tred R. Eyerly - Insurance Law HawaiiResponding to certified questions from the Fifth Circuit, the Texas Supreme Court held that in limited circumstances, extrinsic evidence may be considered in determining the duty to defend. Monroe Guar. Ins. Co. v. Bitco Gen. Ins. Corp., 2022 Tex. LEXIS 148 (Tex. Feb. 11, 2022).
The two insurers each provided CGL coverage to the insured, 5D Drilling & Pump Service, Inc., at different times. BIitco provided two consecutive one-year CGL policies covering October 2013 to October 2015. Monroe's CGL policy covered 5D from October 2015 to October 2016.
5D was sued by David Jones for breach of contract and negligence, seeking damage allegedly resulting from 5D's drilling operations on Jones's property. Jones contracted with 5D in the summer of 2014 to drill a 3600-foot irrigation well on his farmland. The complaint did not detail when 5D's purportedly negligent acts occurred or even when 5D began or stopped the work.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Supreme Court of Idaho Rules That Substantial Compliance With the Notice and Opportunity to Repair Act Suffices to Bring Suit
July 31, 2018 —
Lian Skaf - The Subrogation StrategistIn Davison v. Debest Plumbing, Inc., 416 P.3d 943 (Ida. 2018), the Supreme Court of Idaho addressed the issue of whether plaintiffs who provided actual notice of a defective condition, but not written notice as stated in the Notice and Opportunity to Repair Act (NORA), Idaho Code §§ 6-2501 to 6-2504, et. seq., substantially complied with the act and if the plaintiffs’ notice was sufficient to bring suit. Section 6-2503 of the NORA states that, “[p]rior to commencing an action against a construction professional for a construction defect, the claimant shall serve written notice of claim on the construction professional. The notice of claim shall state that the claimant asserts a construction defect claim against the construction professional and shall describe the claim in reasonable detail sufficient to determine the general nature of the defect.” Any action not complying with this requirement should be dismissed without prejudice. The court held that the defendant’s actual notice of the defect was sufficient to satisfy the objectives of the NORA and, thus, the plaintiffs’ action complied with the NORA.
In Davison, Scott and Anne Davison hired general contractor Gould Custom Builders (Gould) to remodel a vacation home in McCall, Idaho. Gould subcontracted out the plumbing work to Debest Plumbing (Debest). This work included installing a bathtub. When the Davisons arrived at their home for the first time on July 25, 2013, they noticed a leak from the subject bathtub. The Davisons contacted Gould and, the next morning, Gil Gould arrived with a Debest employee to inspect the home. In addition to inspecting the home, the Debest employee repaired the leak and helped Gould remove some water-damaged material.
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Lian Skaf, White and Williams, LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Power to the Office Worker
September 03, 2019 —
Aarni Heiskanen - AEC BusinessModern offices consist of variable spaces that cater to personal preferences and functional needs. The indoor air quality is typically not as adaptive to various tasks, which can lead to suboptimal worker performance and dissatisfaction. A pilot project led by Senate Properties used BIM and building data to develop an operational model that helps workers get a better grip on indoor conditions.
Around 55,000 government employees work in the 9,000 premises managed by Senate Properties, a Finnish, state-owned enterprise. For decades, Senate has been at the forefront of digitalizing construction and property management. They routinely use BIM both in new building projects and in retrofitting. Over the last few years, Senate Properties has developed and piloted the use of BIM for the purpose of maintenance and operations.
Testing BIM as a Property Management Platform
“We want to improve the work conditions of office users, and consequently employee satisfaction and work productivity,” says Esa Halmetoja, Senior Expert at Senate Properties. “In this pilot project, we wanted to demonstrate how to use a building information model as a platform for locating service requests and performance monitoring in a three-dimensional environment.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Is Arbitration Okay Under the Miller Act? It Is if You Don’t Object
October 15, 2014 —
Christopher G. Hill – Construction Law MusingsI have discussed both payment bond claims under the Miller Act and alternate dispute resolution (ADR) here at Construction Law Musings on many an occasion. A question that is sometimes open is what to do when there is contractually mandated arbitration for claims “relating to the contract or the work.”
While here in Virginia, as in most places, the courts will almost automatically send any breach of contract case with such a clause to arbitration, a question exists whether the claim against the bond held by a surety that is not a party to the contract is subject to being referred. Well, in a recent opinion the District Court for the Eastern District of Virginia in Norfolk weighed in on this question where there was no opposition or objection to a motion to stay pending arbitration.
In U.S. for Use of Harbor Construction Co. Inc. v. THR Enterprises Inc. the Court considered a fairly typical payment dispute leading to a Miller Act claim. The general contractor and surety filed a motion to dismiss or alternatively stay the litigation based upon a clause in the contract between general contractor and subcontractor allowing the general contractor to elect the type of ADR to be used to resolve the dispute.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Insurer Rejecting Construction Defect Claim Must Share in Defense Costs
March 02, 2020 —
Tred R. Eyerly - Insurance Law HawaiiOne insurer, who accepted the tender of defense in a construction defect case, successfully moved for summary judgment against the second insurer, who denied the insured's tender. Interstate Fire & Cas. v. Aspen Ins. UK Ltd., 2019 N.Y. Misc. LEXIS 5800 (N.Y. Sup. Ct. Oct. 25,2019).
Standard Waterproofing Corporation was hired by the construction manager, G Builders, to perform waterproofing work as part of condominium conversion project. After the project was completed,the condominium occupants experienced water damage in their units. The Condominium Board retained an engineer who reported numerous issues of water infiltration relating to Standard's work.
The Condominium Board filed suit against the construction manager, who filed a third party complaint against Standard. Standard tendered to four different insurers, including plaintiff Interstate and defendant Aspen. Interstate agreed to defend, while Aspen and the other two insurers declined. Aspen argued there were no allegations of an occurrence resulting in property damage during its policy periods. Interstate filed for declaratory relief against Aspen and Standard.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
