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Brown Paint Doesn’t Cover Up Construction Defects

April 25, 2012 — CDJ STAFF

In a decision that describes the case as illustrating “the perils that real estate brokers and their agents assume when acting as a dual listing agent to both the buyers and sellers of the same house,” the California Court of Appeals has issued a decision in William L. Lyon & Associates v. The Superior Court of Placer County. Lyon & Associates sought summary judgment to dismiss the claims of the Henleys who bought a home in a transaction where a Lyon agent represented both sides.

The prior owners of the home, the Costas, had used a Lyon agent in purchasing their home. When they later sought to sell it, that agent “became aware of some of the house’s defects and problems.” In response, the Costas sought the help of another agent, Connie Gidal, also of Lyons & Associates. Photos taken in the presence of Ms. Gidal show defects of the paint and stucco. The Costas also took the step of painting the house dark brown. During the sale process, “rain caused many of the painted-over defects to reappear.” The Costas “purchased more dark brown paint and covered up the newly visible damage prior to inspection by the Henleys.”

With the damage concealed, the Henleys bought the home in May 2006. The agreement with Lyons & Associates noted that “a dual agent is obligated to disclose known facts materially affecting the value or desirability of the property to both parties.” Escrow closed on May 9, 2006. The contract with the broker included a two-year limit on the time to bring legal action.

The Henleys moved in during June 2006, and “began to discover construction defects that had been concealed by the Costas.” In addition to the painted-over stucco problems, the Henleys found that the Costas had “installed quartzite stone overlays on the backyard steps in a manner that caused water intrusion on the house’s stucco walls.”

In May 2009, the Henleys sued the Costas, Ron McKim Construction, Lyons & Associates, and Ms. Gidal. Their complaint alleged that Lyons & Associates had committed breach of contact, negligence, fraud, breach of fiduciary duty, and negligent nondisclosure in connection with the construction defects. The Costas named Lyons in a cross complaint. Lyons moved for summary judgments on the grounds that the two-year statute of limitations had expired before the complaint and cross-complaint were filed. Both the Henleys and the Costas opposed this claim. The court denied the motion and Lyons appealed.

The appeals court upheld the denial, noting that the both California Supreme Court decision and later action by the legislature compels real estate brokers and salespersons “to conduct a reasonably competent and diligent visual inspection of the property offered for sale.” The court noted that under California law, brokers have responsibilities to both sellers and buyers. The section of law cited by Lyons applies to seller’s agents. The court rejected the contention by Lyons that they were “cooperating brokers.” The Henleys were “not constrained by the two-year statute of limitations.”

Lyons contended that even if California’s statute did not apply, there was a contractual limit of two years. The court also rejected this, agreeing with the Henleys that “the two-year limitation period must be extended by the discovery rule.”

The court noted that “Lyon & Associates may not reap the benefit of a shortened contractual limitation period when its own alleged malfeasance contributed to the delay in the discovery of the buyer’s injury.” The court found that the Henleys could proceed with their breach of contract claim, because, “when a breach of contract is committed in secret, such as the intentional nondisclosure of a real estate broker regarding a previously visible construction defect, the contractual limitations period is properly held subject to the discovery rule.” The court felt that the interpretation favored by the California Association of Realtors would “halve the applicable statute of limitations period.”

In addition to rejecting Lyon request for summary judgment on the claims made by the Henleys, the court also rejected the request of summary judgment on the claims made by the Costas, concluding that neither claim is time-barred. Costs were awarded to both the Henleys and Costas.

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Hawaii Federal District Court Denies Motion for Remand

December 21, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The federal district court refused to remand the insureds' case after the insurer removed from state court. Maui Land & Pineapple Co. v. Liberty Ins. Underwriters, 2016 U.S. Dist. LEXIS 15681 (D. Haw. Nov. 10, 2016). The underlying case was filed in state court on Maui. The underlying plaintiffs were condominium owners who brought claims against the insured, Maui Land and Pineapple Co., Inc. (MLP), and other defendants allegedly involved in the development of the project. Ryan Churchill, one of the named defendants, served as president of MLP and was on the board of the project's Association of Apartment Owners (AOAO). The underlying plaintiffs asserted claims for: breach of fiduciary duty; seeking access to books and records of the AOAO; and for injunctive/declaratory relief against MLP, Mr. Churchill, and all other defendants. 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

Brown and Caldwell Appoints Stigers as Design Chief Engineer

December 13, 2022 — Brown and Caldwell
WALNUT CREEK, Calif., Dec. 06, 2022 — Brown and Caldwell today announces Vice President Tracy Stigers has been appointed as design chief engineer in recognition of four decades of exceptional technical leadership and client service. She is the first woman in the firm's 75-year history to hold the esteemed title. Stigers will lead all design from a technical and delivery expertise perspective across all of Brown and Caldwell's design initiatives, implementing innovation, quality control, and project delivery throughout North America and the Pacific. Since joining the leading environmental engineering and construction services firm in 1980, Stigers has progressed from junior engineer to one of its top technical and delivery experts. She has vast experience in the design and construction of large-scale wastewater conveyance, treatment, and reuse facilities, including serving as project manager on the San Francisco Public Utilities Commission's $2.3 billion Biosolids Digester Facilities Project, the largest value design job in Brown and Caldwell's history. Early in her career, Stigers worked alongside and was mentored by company co-founder Dave Caldwell, helping shape its tradition of solving the most challenging water and environmental challenges. Her dedication to upholding Brown and Caldwell's reputation for project excellence and innovation was commended by CEO Rich D'Amato: "Tracy is the epitome of quality, commitment, and technical prowess," he said. "Her leadership, knowledge, and legacy of delivering solutions to clients perfectly embody our heritage and is a shining example for tomorrow's aspiring engineering leaders." Throughout her career, Stigers has held numerous leadership roles at industry organizations, including sitting on the board of trustees for the Water Environment Federation and the California Water Environment Association. She is a current member of the Clarkson University Engineering Advisory Council. About Brown and Caldwell Headquartered in Walnut Creek, California, Brown and Caldwell is a full-service environmental engineering and construction services firm with 52 offices and 1,800 professionals across North America and the Pacific. For 75 years, our creative solutions have helped municipalities, private industry, and government agencies successfully overcome their most challenging water and environmental obstacles. As an employee-owned company, Brown and Caldwell is passionate about exceeding our clients' expectations and making a difference for our employees, our communities, and our environment. For more information, visit www.brownandcaldwell.com Read the court decision
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Hunton Insurance Lawyer, Jae Lynn Huckaba, Awarded Miami-Dade Bar Association Young Lawyer Section’s Rookie of the Year Award

June 17, 2024 — Hunton Insurance Recovery Blog
Congratulations to Jae Lynn Huckaba on winning the Miami-Dade Bar Association Young Lawyer Section’s inaugural Rookie of the Year Award. This year, the MDB YLS Officers created the Rookie of the Year Award to recognize one new MDB Board of Director who consistently moves the YLS forward. President of the YLS, Beau Blumberg, stated, “Jae Lynn jumped right into the YLS, helping wherever it was needed, from the Breakfast with the Judiciary event to Miami Nights to multiple service projects and social events. After one year, we know Jae Lynn is destined for great things in the YLS.” Jae Lynn is a member of Hunton Andrews Kurth’s national Insurance Recovery practice and is based in the Firm’s Miami, Florida office. Jae Lynn serves as a director for the MDB YLS, which consists of MDB members aged 36 or under. The YLS has over 1,300 members. Read the court decision
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Reprinted courtesy of Hunton Andrews Kurth LLP

Rhode Island District Court Dismisses Plaintiff’s Case for Spoliation Due to Potential Unfair Prejudice to Defendant

September 04, 2018 — Lian Skaf - The Subrogation Strategist
In Amica Mutual Ins. Co. v. BrassCraft Mfg., Co., 2018 U.S. Dist. LEXIS 88986 (D.R.I. May 29, 2018), the United States District Court for the District of Rhode Island addressed the question of whether the defendant was so unfairly prejudiced by the subrogating insurer’s spoliation of evidence that dismissal of the plaintiff’s case was the appropriate Rule 37(b)(2)(a)(i)-(vi) sanction. The court, focusing on the potential for undue prejudice to the defendant, granted the defendant’s motion to dismiss. Read the court decision
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Reprinted courtesy of Lian Skaf, White and Williams, LLP
Mr. Skaf may be contacted at skafl@whiteandwilliams.com

Construction Defects could become Issue in Governor’s Race

October 22, 2014 — Jesse Howard Witt – Acerbic Witt
According to today’s Denver Business Journal, construction defects have emerged as a potential issue in Colorado’s gubernatorial race. During last night’s debate, Republican challenger Bob Beauprez criticized incumbent Democrat John Hickenlooper for failing to help senators with a last-minute push to enact a bill stripping away homeowner protections in construction disputes. Republicans had argued that the bill was needed to appease apartment developers who claim that quality control and insurance costs are too high on condominium projects. Read the court decision
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Reprinted courtesy of Jesse Howard Witt, The Witt Law Firm
Mr. Witt welcomes comments at www.wittlawfirm.net

Miller Act Claim for Unsigned Change Orders

June 30, 2016 — David Adelstein – Florida Construction Legal Updates
Contracts and subcontracts often contain language that requires change orders to be in writing and that no change order work shall be performed unless agreed to in advance in a signed change order. Oftentimes change order work is performed but the parties have not complied with the strict requirements of the contract by having this work signed off by the parties in a change order prior to the commencement of the work. Well, can such requirements be waived? If so, can such change orders form the basis of a Miller Act claim? The answer is generally yes provided the party arguing waiver can support the waiver with evidence (that the other party voluntarily relinquished the requirements through its course of conduct / actions). Read the court decision
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Reprinted courtesy of David M. Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Boston Catwalk Collapse Injures Three Workers

May 10, 2022 — Scott Van Voorhis - Engineering News-Record
The collapse of a catwalk in a defunct, 124-year-old power plant building in Boston on May 4 injured three workers in the latest in a spate of serious construction accidents in the city and its environs. Reprinted courtesy of Scott Van Voorhis, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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