Seattle Washington Building Expert Directory

California Case Is a Reminder That Not All Insurance Policies Are Alike Regarding COVID-19 Losses

April 05, 2021 — Neal I. Sklar & Joshua A. Morehouse - Peckar & Abramson, P.C.
A recent case from the Central District of California reminds us that not all insurance policies are alike. Depending on the particular policy, losses from the COVID-19 outbreak could qualify as property damage and therefore could be recoverable under an all-risk insurance policy. COVID-19 has in many cases imposed significant costs on contractors, and in a host of ways. Contractors’ attempts to recover these costs from owners or insurers have at times been frustrated by contractual or policy language written after a lengthy time, during which the risk of a pandemic on the scale of COVID-19 was not as much of a concern as it is now. This has led contractors to explore new, often creative legal theories in their attempts to recover costs flowing from COVID-19. A recent Complaint filed in the Central District of California focuses on all-risk property insurance policies and the potential for contractors who have purchased such policies to classify contamination from COVID-19 as an insurable property loss. In AECOM v. Zurich Insurance Company, Case No. 2:21-cv-00237-JAK-MRW (C.D. Cal), a contractor purchased “all-risk” property insurance from Zurich. This policy covered “economic losses from all risks not expressly excluded.” According to the Complaint, the presence of COVID-19 on its properties “physically alter[ed] air, airspace, and surfaces preventing… (the contractor) from using its properties for their intended purpose and function.” Reprinted courtesy of Neal I. Sklar, Peckar & Abramson, P.C. and Joshua A. Morehouse, Peckar & Abramson, P.C. Mr. Sklar may be contacted at nsklar@pecklaw.com Mr. Morehouse may be contacted at jmorehouse@pecklaw.com Read the court decision
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Negligent Misrepresentation Claim Does Not Allege Property Damage, Barring Coverage

December 20, 2017 — Tred Eyerly - Insurance Law Hawaii
The Tennessee Court of Appeals reversed the trial court's determination that the seller's alleged negligent misrepresentation regarding the propensity of the property to flood was covered. Erie Ins. Exh. v. Maxwell, 2017 Tenn. App. LEXIS 746 (Tenn. Ct. App. Nov. 15, 2017). The Chapmans purchased a residence from the Maxwells on March 7, 2014. Prior to the sale, the Maxwells completed a residential property disclosure in which they allegedly misrepresented the propensity of the property to flood. Five months after the purchase, the residence sustained damage as a result of two floods within three days. The Chapmans sued, alleging they relied on the Maxwells' representations regarding the propensity of the property to flood. The Chapmans further alleged that they sustained property damage as a result of the Maxwells' negligence and negligent misrepresentations. Read the court decision
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Reprinted courtesy of Tred Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Denver Court Rules that Condo Owners Must Follow Arbitration Agreement

November 07, 2012 — CDJ STAFF
Prior to initiating a construction defect lawsuit, the Glass House Residential Association voted to invalidate the arbitration agreement that had been written into its declaration and bylaws by the developer and general contractor. After the association started their construction defect claims, the developer and general contractor argued that the case must go to arbitration, as the arbitration clause contained a provision that it could not be altered without the agreement of the developer and general contractor. The Denver District Court has ruled against that association, determining that the res triction was not in violation of Colorado condominium law. And, as a post from Polsinelli Shughart PC on JDSupra notes, the Colorado Common Interest Ownership Act encourages the use of arbitration procedures to settle disputes. The CCIOA does prohibit “certain restrictions on the homeowners association’s ability to amend the condominium declarations,” however, preserving an arbitration agreement is not one of them. Read the court decision
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How to Protect the High-Tech Home

March 19, 2015 — Beverley BevenFlorez-CDJ STAFF
Remodeling explained how the new high-tech home gadgets can be vulnerable to “digital or actual break-ins” without the right security in place. Though it isn’t clear how often home hacking is occurring. "I haven't heard of any major hackers breaking into many houses at one time, and the likelihood that someone will try to break into your house by unlocking your door instead of smashing the window is probably low," Tim McInerney, director of product marketing for Savant told Remodeling. "But as devices get more popular and clear winners start to emerge, you may see more and more of those kinds of attacks. When there's a million of one type of connected thermostat out there, that creates more chances for hackers to test the connections and catch someone off-guard." Remodeling includes tips on making your home more secure, including changing the default device password, creating multiple networks, and consider hard-coding the hardware address. Read the court decision
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Eleven Newmeyer Dillion Attorneys Named to 2023 U.S. News Best Lawyers in Multiple Practice Areas

August 29, 2022 — Newmeyer Dillion
NEWPORT BEACH, Calif. – August 18, 2022 – Prominent business and real estate law firm Newmeyer Dillion is pleased to announce that eleven of the firm’s attorneys were recently selected for inclusion and will be recognized in their respective areas in The Best Lawyers in America© 2023. Additionally, Greg Dillion, Thomas Newmeyer and Michael McClellan have been selected to Best Lawyers 2023 Lawyer of the Year list in Litigation - Construction, Construction Law and Litigation - Real Estate respectively. The eleven 2023 Best Lawyers are:

Best Lawyers is the oldest peer-review publication for the legal profession. Attorneys are chosen through intensive peer-review surveys in which leading lawyers evaluate their professional peers. Best Lawyers listings are published in almost 70 countries worldwide and are recognized for their reliable and unbiased selections. Read the court decision
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Construction Litigation Roundup: “This Is Sufficient for Your Purposes …”

April 08, 2024 — Daniel Lund III - Lexology
… but just barely. Federal courts are “notice” pleading courts. One source writes: “Notice pleading refers to pleading standards that merely notify the opposing party and court of the general issues in the case. In contrast to fact pleading standards, notice pleading standards do not require pleadings to include hyper-detailed facts in support of each claim.” Some state courts – including Louisiana – are fact pleading courts. Ordinarily, no one practicing in Louisiana state courts would describe the fact pleading requirements for initiating a lawsuit as mandating “hyper-detailing” of the facts, but … why risk it? In a construction mechanics lien case – the jurisprudence for which requires that courts strictly construe the related law because liens empower lien holders with rights which are “in derogation” of common property ownership rights – the defendant was successful in having the trial court dismiss a lien suit for failing to affirmatively set forth in the complaint (a “petition” in Louisiana) the date of substantial completion. The lien claimant appealed. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

Seller Cannot Compel Arbitration for Its Role in Construction Defect Case<

March 01, 2012 — CDJ STAFF

The buyer of a leaky home in Venice, California cannot be compelled to arbitration with the seller in a construction defect lawsuit, according to a decision in Lindemann v. Hume, which was heard in the California Court of Appeals. Lindemann was the trustee of the Schlei Trust which bought the home and then sued the seller and the builder for construction defects.

The initial owner was the Hancock Park Trust, a real estate trust for Nicholas Cage. Richard Hume was the trustee. In 2002, Cage agreed to buy the home which was being built by the Lee Group. Cage transferred the agreement to the Hancock Park Trust. Hancock had Richard Nazarin, a general contractor, conduct a pre-closing walk through. They also engaged an inspector. Before escrow closed, the Lee Group agreed to provide a ten-year warranty “to remedy and repair any and all damage resulting from water infiltration, intrusion, or flooding due to the fact that the door on the second and third floors of the residence at the Property were not originally installed at least one-half inch (1/2”) to one inch (1”) above the adjacent outside patio tile/floor on each of the second and third floors.”

Cage moved in and experienced water intrusion and flooding. The Lee Group was unable to fix the problems. Hume listed the home for sale. The Kamienowiczs went as far as escrow before backing out of the purchase over concerns about water, after the seller’s agent disclosed “a problem with the drainage system that is currently being addressed by the Lee Group.”

The house was subsequently bought by the Schlei Trust. The purchase agreement included an arbitration clause which included an agreement that “any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration.” The warranty the Lee Group had given to Hancock was transferred to the Schlei trust and Mr. Schlei moved into the home in May 2003.

Lindemann enquired as to whether the work done would prevent future flooding. Nazarin sent Schlei a letter that said that measures had been taken “to prevent that situation from recurring.” In February, 2004, there was flooding and water intrusion. Lindemann filed a lawsuit against the Lee Group and then added the Hancock Park defendants.

The Hancock Park defendants invoked the arbitration clause, arguing that Lindemann’s claims “were only tangentially related to her construction defect causes of action against the Lee Group.” On June 9, 2010, the trial court rejected this claim, ruling that there was a possibility of conflicting rulings on common issues of law. “With respect to both the developer defendants and the seller defendants, the threshold issue is whether there was a problem with the construction of the property in the first instance. If there was no problem with the construction of the property, then there was nothing to fail to disclose.” Later in the ruling, the trial court noted that “the jury could find there was no construction defect on the property, while the arbitration finds there was a construction defect, the sellers knew about it, and the sellers failed to disclose it.” The appeals court noted that while Hancock Park had disclosed the drainage problems to the Kamienowiczs, no such disclosure was made to Sclei.

The appeals court described Hancock Park’s argument that there is no risk of inconsistent rulings as “without merit.” The appeals court said that the issue “is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered.” Further, the court noted that “the Hancock Park defendants and the Lee Group have filed cross-complaints for indemnification against each other, further increasing the risk of inconsistent rulings.”

The court found for Lindemann, awarding her costs.

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New Safety Standards Issued by ASSE and ANSI

March 28, 2012 — Melissa Brumback, Construction Law in North Carolina

The American National Standards Institute (ANSI) and the American Society of Safety Engineers (ASSE) have recently announced their approval of two new safety standards to enhance construction site safety.

The two new standards, which are set to take effect during June 2012, are the ANSI/ASSE A10.1-2011 Pre-Project and Pre-Task Safety and Health Planning for Construction and Demolition Operations, and the ANSI/ASSE A10.26-2011 Emergency Procedures for Construction and Demolition Sites.

The new A10.1-2011 standard was designed to assist construction owners, contractors, and designers by ensuring that safety and health planning were standard parts of their pre-construction planning. It is also intended to help owners of construction sites to establish a process for evaluating constructor candidates with regard to their safety and health performance planning.

The A10.26 standard applies to emergency situations, including fires, collapses, and hazardous spills. The standard deals with emergency rescue, evacuation, and transportation of injured workers, and also plans for coordinating with emergency medical facilities ahead of potential disasters.

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Reprinted courtesy of Melissa Dewey Brumback of Ragsdale Liggett PLLC. Ms. Brumback can be contacted at mbrumback@rl-law.com.