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SB800 CONFIRMED AS EXCLUSIVE REMEDY FOR CONSTRUCTION DEFECT CLAIMS

January 24, 2018 — Jeffrey Brower and Nathan Owens - Newmeyer & Dillion, LLP
In McMillin Albany LLC v. Superior Court (Cal. Ct. App., Aug. 26, 2015) 2015 Daily Journal D.A.R. 9931 (“McMillin”), the Fifth Appellate District Court of Appeal in California published a resounding win for builders, general contractors, and others entities seeking the protections of the Right to Repair Act, Civil Code sections 895, et seq. (“SB800”). The McMillin Court firmly rejected the reasoning and outcome of both Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 (“Liberty Mutual”) and Burch v. Superior Court (2014) 223 Cal.App.4th 1411 (“Burch”), and held that:

the Legislature intended that all claims arising out of defects in residential construction, involving new residences sold on or after January 1, 2003 (§ 938), be subject to the standards and the requirements of the Act; the homeowner bringing such a claim must give notice to the builder and engage in the prelitigation procedures in accordance with the provisions of Chapter 4 of the Act prior to filing suit in court.

(McMillin, Opinion, p. 15.) The McMillin Court further held that even if the claimant’s counsel intentionally pleads around SB800 by asserting only tort causes of action, SB800 still applies to all defect claims and a stay of the action to require SB800 compliance is appropriate. Newmeyer & Dillion has strongly supported builders’ efforts to enforce the Right to Repair Act since its inception. The firm filed an amicus brief in McMillin on behalf of Leading Builders of America (“LBA”), an association of the leading residential homebuilders in the United States. For years, LBA members developed their warranty and dispute resolution procedures according to the Right to Repair Act and performed prelitigation repairs to the satisfaction of thousands of homeowners. Liberty Mutual and Burch undermined the Right to Repair Act by allowing plaintiffs’ attorneys to circumvent the prelitigation procedures to the detriment of homeowners and builders, resulting in confusion and increased litigation. The McMillin decision breathes new life into the Right to Repair Act and sets the stage for future review by the California Supreme Court. The McMillin Court focused on the express language of the Right to Repair Act to arrive at its conclusion that Civil Code sections 896, 897, 943 and 944 demonstrate a clear Legislative intent to occupy the field of construction defect litigation – a belief held by nearly all in the construction industry and the California Superior Courts before Liberty Mutual. The McMillin Court found further support for SB800’s comprehensive nature in the Legislative history, which consistently described the Act as “groundbreaking reform” and a “major change” in construction defect litigation, designed to “significantly reduce the cost of construction defect litigation and make housing more affordable.” (McMillin, Opinion, pp. 18-19.) The McMillin Court found it inescapable that the Right to Repair Act exclusively governs construction defect litigation involving homes sold on or after January 1, 2003. The McMillin, decision will have a significant impact on construction litigation moving forward in two respects. First, McMillin, is the only appellate decision to date to address whether a builder has the right to enforce SB800 when the claimant’s counsel deliberately attempts to plead around SB800 by asserting only tort claims. Second, the decision provides trial courts with the authority and precedent to ensure compliance with the Right to Repair Act. Trial courts may also find it necessary to revisit prior rulings against builders that relied on Liberty Mutual. Newmeyer & Dillion will continue to advocate in support of builders and general contractors by working vigorously to gain further support for the McMillin, decision and setting the stage for review by the California Supreme Court. Jeffrey R. Brower is an associate at the Newport Beach office of Newmeyer & Dillion, LLP. His practice focuses on business and construction litigation. Jeffrey can be reached at jeffrey.brower@ndlf.com. Nathan Owens is the managing partner of the Las Vegas office for Newmeyer & Dillion, LLP. He represents businesses and individuals operating in a wide array of economic sectors including real estate, construction, insurance and health care in all stages of litigation in state and federal court. Nathan can be reached at nathan.owens@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 www.ndlf.com Read the court decision
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Update Relating to SB891 and Bond Claim Waivers

June 10, 2015 — Christopher G. Hill – Construction Law Musings
Several bills were passed and will go into effect on July 1, 2015 that affect the construction industry here in Virginia. The most interesting of these was an amendment to the mechanic’s lien statutes relating to waivers of lien rights. As I posted in March, SB891 amended the mechanic’s lien statute, Va. Code Section 43-3, to remove proactive waivers of lien and bond rights. This bill has been signed into law with a minor modification. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Golf Resorts Offering Yoga, Hovercraft Rides to the Green

June 18, 2014 — Nadja Brandt – Bloomberg
Florida’s Woodmont Country Club, which once boasted 1,200 members, has been hit hard in the past decade as hurricanes and then the recession kept golfers away. Now the club’s owner is adding conference space, stores, restaurants, a spa and a hotel as part of a planned revival. About $100 million will be spent on the revamp of the property in Tamarac, about 14 miles (23 kilometers) northwest of Fort Lauderdale, owner Mark Schmidt said. After years of negotiations with local authorities, he expects to receive approval this month for the planned Woodmont improvements. While tennis courts and swimming pools have long had a place at golf clubs, a growing number of course owners are embracing mixed-use real estate, a concept more often used in urban developments to hedge risk and diversify returns. Property investors are adding everything from medical facilities to amphitheaters and hovercraft operations to increase revenue. Read the court decision
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Reprinted courtesy of Nadja Brandt, Bloomberg
Ms. Brandt may be contacted at nbrandt@bloomberg.net

$1.9 Trillion Stimulus: Five Things Employers Need to Know

March 15, 2021 — Matthew C. Lewis & Rana Ayazi - Payne & Fears
On March 11, 2021, President Biden signed H.R.1319 - American Rescue Plan Act of 2021 (“Rescue Plan”) into law—a $1.9 trillion stimulus bill. Here are five things every employer should know about the bill. 1. FFCRA Tax Credits Have Been Extended The Rescue Plan extends the Families First Coronavirus Response Act (FFCRA) tax credit provisions—again—through September 30, 2021. (The ability to recoup the cost of FFCRA leave was previously extended in December 2020 through March 31, 2021: See related article here. Employers that opt to voluntarily provide FFCRA leave will be credited 100 percent for all qualifying wages paid under the FFCRA. Any employer already providing FFCRA-like leave to employees under state, county, and/or local paid sick leave ordinances, especially if their business is located in California (e.g., Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standards) should consider opting to voluntarily provide FFCRA-compliant leave, as by doing so they may be able at least partially to recoup the cost of leave they are otherwise already required to provide. Reprinted courtesy of Matthew C. Lewis, Payne & Fears and Rana Ayazi, Payne & Fears Mr. Lewis may be contacted at mcl@paynefears.com Ms. Ayazi may be contacted at ra@paynefears.com Read the court decision
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There Are Consequences to Executed Documents Such as the Accord and Satisfaction Defense

October 01, 2024 — David Adelstein - Florida Construction Legal Updates
A federal government contractor in Jackson Construction Co., Inc. v. U.S., 62 Fed.Cl. 84 (Fed.Cl. 2024) sought delay damages against the government. It lost. The reason for the loss is a crucial reminder that documents parties sign ALWAYS matter. ALWAYS!! In Jackson Construction Co., the contractor’s delay claim was premised on relocating a waterline. The contractor, however, received additional money for relocating the waterline, but no additional time, and this was memorialized in a modification to the contract (i.e., a change order). In executing the modification for the additional work, the contractor did NOT reserve rights for time or money. Indeed, the modification reflected that the monetary adjustment constitutes full compensation for the additional work including delay, namely:

The contract period of performance remains the same. It is further understood and agreed that this adjustment constitutes compensation in full on behalf of the contractor and his subcontractors and suppliers for all costs and markup directly or indirectly, including extended overhead, attributable to the change order, for all delays related thereto, and for performance of the change within the time frame stated.

Jackson Construction Co., supra, at 90.

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

ASCE Report Calls for Sweeping Changes to Texas Grid Infrastructure

March 28, 2022 — C.J. Schexnayder - Engineering News-Record
A just-released detailed analysis of the catastrophic 2021 Texas winter storm finds systemic flaws in the state's electric sector contributed to a “cascade of failures” that overwhelmed its power grid and left millions freezing in the dark. Reprinted courtesy of C.J. Schexnayder, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Duty to Defend Sorted Between Two Insurers Based Upon Lease and Policies

November 02, 2017 — Tred R. Eyerly - Insurance Law Hawaii
Two insurers disagreed on which was responsible for defense costs in the underlying personal injury suit against the insured. Nautilus Ins. Co. v. Westfield Ins. Co., 2017 U.S. Dist. LEXIS 158480 (E.D. Pa. Sept. 27, 2017). Knerr Group, Inc. lease property to Podcon, Inc. pursuant to a written lease. A man named Anthony Postell suffered an injury in an accident on the premises during the term of the lease. Postell filed a personal injury action against Knerr and Podcon, among others. Nautilus provided a defense to Knerr in the Postell case pursuant to a policy Nautilus issued to Knerr. Podcon was insured by Westfield. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

No Coverage for Construction Defects Under Arkansas Law

January 13, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The federal district court found there was no coverage for the insured contractor under Arkansas law when sued for construction defects by two homeowners. Auto-Owners Ins. Co. v. Hambuchen Constr., 2016 U.S. Dist. LEXIS 160364 (W.D. Ark. Nov. 18, 2016). In one case, the Pierces hired Hambuchen, the insured contractor for the construction of a new home, which was completed in 2006. Two years after moving in, the Pierces experienced water leaks at various locations inside the home and the basement flooded. Water damage rendered the back deck unstable. In 2010 and 2011, Hambuchen made repairs to stop leaks on the decks, but in 2012 the back deck again showed signs of water damage. The Pierces sued, and Auto-Owners provided a defense under a reservation of rights. In the second case, the Lessmanns hired Hambuchen in 2005 as general contractor to construct their new home. Following completion of the home, the Lessmanns complained about scratched windows. The Lessmanns filed suit against Hambuchen for breach of the construction contract by failing to build their home in a workmanlike manner. The Lessmanns filed suit in May 2009. Auto-Owners was not aware of the suit until 2015 when it received notice that the Lessmanns had filed an amended complaint. The Lessmans' suit went to trial and Hambuchen prevailed. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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