More on Fraud, Opinions and Contracts
February 06, 2019 —
Christopher G. Hill - Construction Law MusingsHere at Construction Law Musings, I have discussed the interaction between fraud and contracts on many occasions. Recently, I got to put my advice into action. I am counsel for the plaintiff in the matter of Environmental Staffing Acquisition Corp. v. Beamon, et. al. in the Portsmouth, VA Circuit Court and recently got a great opinion (.pdf) right on point that was recently featured in Virginia Lawyers Weekly.
The basic facts are these. My client, Environmental Staffing (En-Staff) filed a Little Miller Act claim and a claim for breach of contract for Beamon’s failure to pay for temporary staffing that En-Staff provided it at the Jeffry Wilson housing project demolition in Portsmouth, VA. Beamon then counterclaimed for fraud and breach of contract claiming that some statements to the effect that a particular supervisor was qualified along with presentation of the individual’s resume constituted fraud. My client demurred to the two fraud counts (actual and constructive).
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Used French Fry Oil Fuels London Offices as Buildings Go Green
December 10, 2015 —
Siobhan Wagner – BloombergPricewaterhouseCoopers LLP’s office above Charing Cross railway station in London is cooled, heated and fueled by an unlikely source: used cooking oil.
The system, which helped the property become the greenest building in the U.K. capital, uses oil refined less than two miles away at London Bridge. It also helps prevent an invisible problem: “fatbergs” formed when oils dumped in drains and pipes congeal with baby wipes and diapers and block the city’s sewers.
“We’re using London’s waste to fuel a London office building,” said Jon Barnes, head of building at PwC. The system contributed toward a one-third reduction in electricity costs after a two-year refurbishment of the One Embankment Place office building that finished last year.
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Siobhan Wagner, Bloomberg
Lawyer Claims HOA Scam Mastermind Bribed Politicians
June 28, 2013 —
CDJ STAFFThe lawyer defending one of the accused in the Las Vegas HOA scam is now claiming that the FBI investigated bribery of public officials. Chris Rasmussen represents Edith Gillespie, the half-sister of Leon Benzer. Benzer has been accused of being one of the masterminds behind the scheme to pack homeowner boards with members who would make construction defect settlements that were beneficial to the scam’s participants. Rasmussen is trying to get his client tried separately from her half-brother.
Rasmussen did not name any public officials. The Justice Department did not comment on his claims.
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Jury Awards 20 Million Verdict Against Bishop Abbey Homes
April 08, 2014 —
Beverley BevenFlorez-CDJ STAFFA Rockwall County, Texas “jury has awarded a $20.8 million verdict against a Dallas homebuilder for performing substandard work on a local family's home and refusing to accept responsibility,” according to a press release published in The Wall Street Journal.
The lawsuit alleged that “the defendants were aware that the site of the Hales' future Highpoint Lake Estates home had significant foundation defects before construction began. The Hales said Mr. Halsey later promised that his company would take responsibility by fixing the structural defects that arose after construction, but he reneged and refused to repair the problems.”
The award included “damages for the cost of repairs, lost value and additional penalties based on Mr. Halsey's actions and the defendants' ‘grossly negligent’ conduct, including violations of the Texas Deceptive Trade Practices Act. The jury award includes attorneys' fees for the Hales' legal team.”
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Keeping Detailed Records: The Best Defense to Constructive Eviction
October 24, 2023 —
Ben T. Welch & Ken Brown - Snell & WilmerInevitably, commercial property owners and managers will be faced with a claim by a tenant of constructive eviction. This article is intended to describe what constructive eviction is and to suggest what owners and managers can do to prepare for, and ward off, such claims.
Constructive eviction occurs where a tenant’s “right of possession and enjoyment” of the leasehold is disrupted by the landlord in a manner that renders the premises “unsuitable for the purposes intended.”i Put another way, it is interference that is so “substantial nature and so injurious as to deprive the tenant of the beneficial enjoyment of a part or the whole of the demised premises.”ii Although easy to describe in theory, constructive eviction can be devilishly difficult to determine in the real world. In litigation, determining when interference crosses over the line to constructive eviction is intensely fact-sensitive and resists sweeping generalizations.iii
For instance, Utah courts have held that tenants have been constructively evicted when they have been subjected to continual harassment or insults by the landlord or the landlord’s agent,iv prevented or impaired in their access to the leased premises during operating hours,v or when a landlord fails to provide an operable elevator (or other essential commercial amenities) necessary for a tenant’s business operations.vi By contrast, claims of “discomfort” or “inconvenience” have been rejected as a basis for constructive eviction.vii The same goes for claims that a landlord wrongfully served a three-day notice to pay or quit.viii
Generally, constructive eviction is an affirmative defense made in response to a landlord’s lawsuit for nonpayment of rent.ix It is not, as is commonly supposed, a basis for a tenant’s premature abandonment of the premises. In other words, the defense is raised after the tenant has vacated as a result of being effectively “evicted.”x Further, the defense requires the tenant to actually abandon the premises and do so within a “reasonable time” after the alleged interference.xi A tenant cannot stay in possession and simply refuse to pay rent on the basis of constructive eviction.xii
The key consideration in preparing for, and responding to, a claim of constructive eviction is keeping good records. A tenant claiming constructive evicting likely must prove that the issue was raised in a timely manner and, despite multiple entreaties, was never resolved.xiii As such, it is critical that landlords acknowledge tenant complaints as well as document in writing their efforts to ameliorate those complaints. While a landlord does not carry the burden of proof for constructive eviction, detailed documentation can thwart a tenant’s claim that a landlord has been inattentive or unwilling to address the tenant’s concerns.
Detailed records are also useful in disputes where a tenant claims substantial interference. “The whole point of constructive eviction is that the landlord basically drove the tenant out through the landlord’s action or inaction.”xiv As such, a landlord that is unable to document the steps taken in response to complaints will be grossly disadvantaged whereas the tenant, which had control and knowledge of the premises, will have a much easier time describing how the alleged interference deprived them of enjoying the premises.
Even with meticulous records, however, owners and managers may still face claims of construction eviction. In such instances, counsel should be retained to properly advise on compiling, preserving, and employing the evidence necessary to refute the tenant’s claims.
i Gray v. Oxford Worldwide Grp., Inc., 139 P.3d 267, 269 (Utah Ct. App. 2006).
ii Gray, 139 P.3d at 270 (citing Neslen, 254 P.2d at 850) (internal formatting omitted).
iii See Gray, 139 P.3d at 269–70 (citing Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847, 850 (Utah 1953)); Brugger v. Fonoti, 645 P.2d 647, 648 (Utah 1982).
iv See Gray, 139 P.3d at 270–71.
v Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847 (Utah 1953).
vi See Richard Barton Enterprises, Inc. v. Tsern, 928 P.2d 368, 375, 378 (Utah 1996) (citing Union City Union Suit Co. v. Miller, 162 A.D.2d 101, 556 N.Y.S.2d 864 (1990)).
vii See Myrah v. Campbell, 163 P.3d 679, 682–84 (Utah Ct. App. 2007).
viii Barton v. MTB Enterprises, 889 P.2d 476, 477 (Utah Ct. App. 1995); see also Brugger, 645 P.2d at 648 (stating that the tenant’s complaints revolved around standard problems commonly associated with building maintenance and did not rise to the level of substantial interference); viv Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 898–900 (Utah 1989) (upholding trial court’s findings of fact concerning insufficiency of disruption so as to justify claim for constructive eviction).
ix See Kenyon v. Regan, 826 P.2d 140, 142 (Utah Ct. App. 1992).
x See Kenyon, 826 P.2d at 142.
xi See Kenyon, 826 P.2d at 142; see also Barton v. MTB Enterprises, Inc., 889 P.2d 476, 477 (Utah Ct. App. 1995); Brugger, 645 P.2d at 648.
xii See Kenyon, 826 P.2d at 142 (citing Fernandez v. Purdue, 518 P.2d 684, 686 (Utah 1974)).
xiii See Brugger, 645 P.2d at 648 (noting that while the tenant had raised legitimate issues concerning state of the premises, the landorld had taken steps to remedy the problems within a reasonable time) (citing 49 Am.Jur.2d, Landlord and Tenant, § 617).
xiv Barton, 889 P.2d at 477.
Reprinted courtesy of
Ben T. Welch, Snell & Wilmer and
Ken Brown, Snell & Wilmer
Mr. Welch may be contacted at bwelch@swlaw.com
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Buy Clean California Act Takes Effect on July 1, 2022
July 25, 2022 —
Garret Murai - California Construction Law BlogThe Buy Clean California Act (BCCA) – Public Contract Code section 3500 et seq. – requires state agencies to consider the carbon content of the following products when awarding contracts:
- Structural steel;
- Concrete reinforcing steel;
- Flat glass; and
- Mineral wool board insulation.
It is anticipated that additional products may be added through future legislation.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Supreme Judicial Court of Maine Addresses Earth Movement Exclusion
March 01, 2021 —
James M. Eastham - Traub LiebermanIn Bibeau v. Concord Gen. Mut. Ins. Co., 2021 WL 243867, 2021 ME 4, the Supreme Judicial Court of Maine addressed an earth movement exclusion contained in a residential homeowners policy. In 2017, the insured submitted a claim to Concord for damage to the insured’s home which included foundation cracks and settlement resulting in interior damage to the home. The insured contended that the damage was the result of a 2006 water line leak. Concord denied the claim based on the Earth Movement exclusion contained in it’s policy which precluded coverage for losses caused by earthquakes, landslides, mudslides, mudflow, subsidence, sinkholes or “[a]ny other earth movement including earth sinking, rising or shifting; caused by or resulting from human or animal forces or any act of nature”.
The insured filed suit asserting a breach of the policy and unfair claims settlement practices. According to the insured’s expert, the damage was caused by a 2006 water line leak -- which in turn caused the foundation to settle. Concord's expert, however, concluded that the settling was caused by the house being built on “unprepared or uncontrolled fill” which allowed the house to settle at different rates. Despite the disagreement regarding the cause of the settling, the parties ultimately agreed that the damage was the result of earth moving under the house's foundation. Concord moved for summary judgment and the trial court entered summary judgment for Concord, reasoning that because there was no genuine dispute that the losses were caused by “subsurface soils being undermined and earth movement,” the Earth Movement exclusion precluded coverage. The trial court further concluded that the disagreement over the cause of the settlement was not material because regardless of the cause of the earth movement, the losses were clearly excluded by the policy's Earth Movement exclusion.
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James M. Eastham, Traub LiebermanMr. Eastham may be contacted at
jeastham@tlsslaw.com
Reference to "Man Made" Movement of Earth Corrects Ambiguity
December 20, 2012 —
TRED EYERLY, INSURANCE LAW HAWAIIIn
Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 NY3d 302 (2009), the New York Court of Appeals found an "earth movement" exclusion was ambiguous when applied to an excavation. The court now considered whether a similar exclusion, expressly made applicable to "man made" movement of earth, eliminated the ambiguity when loss was created by excavation.
Bentoria Holdings, Inc. v. Travelers Indem. Co., 2012 N.Y. LEXIS 3087 (N.Y. Oct. 25, 2012).
Plaintiff's building suffered cracks due to an excavation being conducted on the lot next door. A claim was submitted to Travelers, plaintiff's insurer. Travelers rejected the claim, relying on the earth movement exclusion.
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Tred R. Eyerly, Insurance Law Hawaii.Mr. Eyerly can be contacted at
te@hawaiilawyer.com
