Is The Enforceability Of A No-Damage-For-Delay Provision Inappropriate For Summary Judgment
February 24, 2020 —
David Adelstein - Florida Construction Legal UpdatesIs the enforceability of a no-damage-for-delay provision inappropriate for resolution on a summary judgment? The recent decision in U.S. f/u/b/o Kingston Environmental Services, Inc. v. David Boland, Inc., 2019 WL 6178676 (D. Hawaii 2019), dealing with Florida law, suggests that it is inappropriate for a summary judgment resolution, particularly when there is a right to a jury trial.
In this case, a prime contractor was hired on a federal construction project in Hawaii. The prime contractor hired a subcontractor and the subcontractor sued the prime contractor and its surety under the Miller Act. Of interest, the subcontractor was seeking to recover for the costs it incurred due to construction delays. The prime contractor moved for summary judgment as to the no-damage-for-delay provision in the subcontract. The no-damages-for-delay provision read as follows (and it is a well-written no-damage-for-delay provision):
The Subcontractor expressly agrees that the Contractor shall not be liable to the Subcontractor for any damages or additional costs, whether foreseeable or unforeseeable, resulting in whole or in part from a delay, hindrance, suspension, or acceleration of the commencement or execution of the Work, caused in whole or in part by the acts or omissions, whether negligent or not, of the Contractor including other subcontractors or material suppliers to the Project, its agents, employees, or third parties acting on behalf of the Contractor. The Subcontractor’s sole remedy for any such delay, hindrance, suspension, or acceleration shall be a noncompensable time extension.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Former Hoboken, New Jersey Mayor Disbarred for Taking Bribes
September 17, 2014 —
Beverley BevenFlorez-CDJ STAFFThe New Jersey Law Journal reported that Peter Cammarano III, a former Hoboken, New Jersey, mayor, was disbarred after admitting “four years ago that he took $25,000 in bribes from a federal informant in exchange for promising his help in getting approval for a high-rise.” Cammarano “was one of 44 public officials and rabbis arrested in July 2009 as part of a massive federal investigation, known as Operation Bid Rig, into public corruption and money laundering operations.”
The Disciplinary review board had recommended a three year suspension, however, the New Jersey Supreme Court rejected that recommendation.
“An elected official who sells his office—who offers favored treatment in exchange for money—betrays a solemn public trust,” Justice Barry Albin wrote for the court, as quoted by the New Jersey Law Journal. “This form of corruption is corrosive to our democracy and undermines public confidence in honest government, and its rippling pernicious effects are incalculable.”
“I believe the Disciplinary Review Board’s decision was right,” Joseph Jr. Hayden, Cammarano’s attorney, told the New Jersey Law Journal. “There were sufficient mitigating factors to justify only a suspension.”
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Washington Supreme Court Upholds King County Ordinance Requiring Utility Providers to Pay for Access to County’s Right-of-Way and Signals Approval for Other Counties to Follow Suit
March 02, 2020 —
Kristina Southwell - Ahlers Cressman & Sleight PLLCOn December 5, 2019, the Washington State Supreme Court released its opinion in King County v. King County Water Districts, et al.,[1] upholding King County’s Ordinance 18403, which requires utility companies who are franchise grantees to pay “franchise compensation” for their use of the County rights-of-way. Generally, utility companies must apply for and obtain from the County a franchise permitting it to do necessary work in the County rights-of-way. [2] Previously, King County only charged an administrative fee associated with issuing such a franchise. But with the new franchise compensation charges, King County estimates that it will raise approximately $10 million dollars per year for its general fund.
Ordinance 18403 passed in November 2016 and was the first of its kind in the state. The ordinance created a rule, set forth in RCW 6.27.080, requiring electric, gas, water, and sewer utilities who are granted a franchise by King County to pay “franchise compensation” in exchange for the right to use the County’s rights-of-way. The rule provides that franchise compensation is in the nature of an annual rent payment to the County for using the County roads. King County decides an initial estimate of the charge by considering various factors such as the value of the land used, the size of the area that will be used, and the density of the households served. But utility companies can negotiate with the County over the final amount of franchise compensation.
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Kristina Southwell, Ahlers Cressman & Sleight PLLCMs. Southwell may be contacted at
kristina.southwell@acslawyers.com
Eighth Circuit Remands to Determine Applicability of Collapse Exclusion
January 06, 2012 —
Tred R. Eyerly - Insurance Law HawaiiThe Eighth Circuit determined a jury instruction regarding the applicability of the "all-risk" policy’s exclusion for "collapse" was inadequate. See KAAPA Ethanol, LLC v. Affiliated FM Ins. Co., 2011 U.S. App. LEXIS 22158 (8th Cir. Nov. 3, 2011).
KAAPA had nine large, cylindrical, stainless steel tanks fabricated at its location. Soon after operations began in 2003, some of the tanks experienced unusual movement and began to shift. A geotechnical engineer found "silty clay" had been used for infill instead of compacted granular fill called for in engineering drawings. A year long plan to repair all nine tanks was implemented.
Affiliated’s "all-risk" policy excluded damage caused by faulty workmanship. It also excluded damage caused by settling or cracking. The settling exclusion went on to provide, "This exclusion will not apply to loss or damage resulting from collapse of: a building or structure; or material part of a building or structure." Affiliated denied coverage because of the faulty workmanship and settling exclusions.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Gillotti v. Stewart (2017) 2017 WL 1488711 Rejects Liberty Mutual, Holding Once Again that the Right to Repair Act is the Exclusive Remedy for Construction Defect Claims
June 05, 2017 —
Richard H. Glucksman, Esq. & Chelsea L. Zwart, Esq. - Chapman Glucksman Dean Roeb & Barger BulletinBackground
In Gillotti v. Stewart (April 26, 2017) 2017 WL 1488711, which was ordered to be published on May 18, 2017, the defendant grading subcontractor added soil over tree roots to level the driveway on the plaintiff homeowner’s sloped lot. The homeowner sued the grading subcontractor under the California Right to Repair Act (Civil Code §§ 895, et seq.) claiming that the subcontractor’s work damaged the trees.
After the jury found the subcontractor was not negligent, the trial court entered judgment in favor of the subcontractor. The homeowner appealed, arguing that the trial court improperly construed the Right to Repair Act as barring a common law negligence theory against the subcontractor and erred in failing to follow Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98. The Third District Court of Appeal disagreed and affirmed the trial court’s judgment in favor of the subcontractor.
Impact
This is the second time the Third District Court of Appeal has held that Liberty Mutual (discussed below) was wrongly decided and held that the Right to Repair Act is the exclusive remedy for construction defect claims. The decision follows its holding in Elliott Homes, Inc. v. Superior Court (Hicks) (2016) 6 Cal.App.5th 333, in which the Court of Appeal held that the Right to Repair Act’s pre-litigation procedures apply when homeowners plead construction defect claims based on common law causes of action, as opposed to violations of the building standards set forth in the Right to Repair Act. Elliott is currently on hold at the California Supreme Court, pending the decision in McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132, wherein Liberty Mutual was rejected for the first time by the Fifth District. CGDRB continues to follow developments regarding the much anticipated McMillin decision closely, as well as all related matters.
Discussion
The Right to Repair Act makes contractors and subcontractors not involved in home sales liable for construction defects only if the homeowner proves they negligently cause the violation in whole or part (Civil Code §§ 911(b), 936). As such, the trial court in Gillotti instructed the jury on negligence with respect to the grading subcontractor. The jury found that while the construction did violate some of the Right to Repair’s building standards alleged by the homeowner, the subcontractor was not negligent in anyway. After the jury verdict, the trial court found in favor of the grading subcontractor.
The homeowner moved for a judgment notwithstanding the verdict or a new trial on the grounds that the trial court improperly barred a common law negligence theory against the grading subcontractor. The trial court denied the motions on the grounds that “[t]he Right to Repair Act specifically provides that no other causes of action are allowed. See Civil Code § 943.” The trial court specifically noted that its decision conflicted with Liberty Mutual, in which the Fourth District Court of Appeal held that the Right to Repair Act does not eliminate common law rights and remedies where actual damage has occurred, stating that Liberty Mutual was wrongly decided and that the Liberty Mutual court was naïve in its assumptions regarding the legislative history of the Right to Repair Act.
In Gillotti, the Third District Court of Appeal stated that the Liberty Mutual court failed to analyze the language of Civil Code § 896, which “clearly and unequivocally expresses the legislative intent that the Act apply to all action seeking recovery of damages arising out of, or related to deficiencies in, residential construction, except as specifically set forth in the Act. The Act does not specifically except actions arising from actual damages. To the contrary, it authorizes recovery of damages, e.g., for ‘the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards....’ ([Civil Code] § 944).”
The Court also disagreed with Liberty Mutual’s view that because Civil Code §§ 931 and 943 acknowledge exceptions to the Right to Repair Act’s statutory remedies, the Act does not preclude common law claims for damages due to defects identified in the Act. The Court stated: “Neither list of exceptions, in section 943 or in section 931, includes common law causes of action such as negligence. If the Legislature had intended to make such a wide-ranging exception to the restrictive language of the first sentence of section 943, we would have expected it to do so expressly.”
Additionally, the Court of Appeal rejected the argument that Civil Code § 897 preserves a common law negligence claims for violation of standards not listed in Civil Code § 986. It explained that the section of Civil Code § 897, which provides, “The standards set forth in this chapter are intended to address every function or component of a structure,” expresses the legislative intent that the Right to Repair Act be all-encompassing. Anything inadvertently omitted is actionable under the Act if it causes damage. Any exceptions to the Act are made expressly through Civil Code §§ 931 and 934. The Court concluded in no uncertain terms that the Right to Repair Act precludes common law claims in cases for damages covered by the Act.
The homeowner further argued that she was not precluded from bringing a common law claim because a tree is not a “structure,” and therefore the alleged tree damage did not fall within the realm of the Right to Repair. The Court of Appeal also rejected this argument, holding that while the tree damage itself was not expressly covered, the act of adding soil to make the driveway level (which caused the damage) implicated the standards covered by the Right to Repair Act. The Court explained that since under the Act a “structure” includes “improvement located upon a lot or within a common area” (Civil Code § 895(a)), as the driveway was an improvement upon the lot, the claim was within the purview of the Right to Repair Act. As the soil, a component of the driveway, caused damage (to the trees), it was actionable under the Act.
Reprinted courtesy of
Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and
Chelsea L. Zwart, Chapman Glucksman Dean Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Ms. Zwart may be contacted at czwart@cgdrblaw.com
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Don’t Ignore the Dispute Resolution Provisions in Your Construction Contract
June 05, 2023 —
David Adelstein - Florida Construction Legal UpdatesDon’t ignore dispute resolution provisions in a construction contract. Sometimes, you may want to. But dispute resolution provisions should be one of the first provisions you look to when a dispute arises recognizing these provisions will be raised if you fail to comply. Not only will they be raised, but the presumption is they will be enforced. This is the situation that was raised in Seminole County, Florida v. APM Construction Corp., 2023 WL 3555356 (Fla. 5th DCA 2023).
Here, a contractor was terminated for cause by Seminole County. The contractor then filed suit against the County. The County moved to dismiss the lawsuit because the contractor failed to comply with contractual presuit administrative procedures in the contract prior to filing a lawsuit. While the trial court denied the County’s motion to dismiss, the appellate court granted the County’s petition for writ of certiorari quashing the trial court’s order denying the motion to dismiss. For purposes of granting the writ of certiorari, the appellate court held irreparable harm existed because “certiorari jurisdiction is properly exercised when a trial court permits a party to litigate when there is a contractual or legal obligation to first administrative proceed.” Seminole County, supra, at *2.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
“Source of Duty,” Tort, and Contract, Oh My!
September 06, 2023 —
Christopher G. Hill - Construction Law MusingsHere at Construction Law Musings, I have discussed the general rule in Virginia that
tort and contract do not mix. I have also discussed a
few narrow exceptions. A Virginia Supreme Court case from October of 2019 lays out both sides of this issue in one glorious opinion.
In
Tingler v. Graystone Homes, Inc., a summary of the facts and lawsuit(s) are as follows: Water leaks developed after the home was built. Graystone’s post-construction efforts to repair the leaks and remediate mold were unsuccessful. The Tinglers and their children abandoned the home after developing mold-related medical problems. The Tinglers and their children sued Graystone in tort for personal injury, property damage, and economic loss. In other litigation that will not be discussed in this post, but that is described in the opinion linked above, Belle Meade sued Graystone in contract for property damage and economic losses. George and Crystal Tingler filed a separate complaint alleging the same contract claims.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Distinguishing Hawaii Law, New Jersey Finds Anti-Assignment Clause Ineffective
March 22, 2017 —
Tred R. Eyerly – Insurance Law HawaiiThe New Jersey Supreme Court found that an anti-assignment provision could not be applied to bar a post-loss claim assignment. Givaudan Fragrances Corp. v. Aetna Cas. & Sur. Co., 2017 N.J. LEXIS 121 (N.J. Feb. 1, 2017). In reaching its decision, the court distinguished a decision from the Hawaii Supreme Court enforcing consent-to-assignment clauses and failing to recognize any post-loss exception to such clauses. See Del Monte Fresh Produce (Hawaii), Inc. v. Fireman's Fund Ins. Co., 183 P.3d 734 (Haw. 2007).
Plaintiff Givaudan Fragrances Corporation (Fragrances) was sued for environmental contamination at a manufacturing site. A related corporate entity had operated the facility from the 1960s to 1990. Fragrances sought coverage under policies issued to its predecessor. The predecessor attempted to assign to Fragrances post-loss rights under the policies. The insurers resisted, claiming the predecessor was the named insured, not Fragrances, and that the insurers did not consent to an assignment of the predecessor's policies.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
