FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

California Supreme Court to Examine Arbitration Provisions in Several Upcoming Cases

December 09, 2011 — CDJ STAFF

Glen C. Hansen, writing on Abbott & Kinderman’s Land Use Law Blog looks at several cases pending before the California Supreme Court which ask if a developer can insist on arbitration of construction defect claims, based on provision in the CC&Rs. Currently, there is a split of opinions in the California appeals courts on the issue.

Four of the cases are in California’s Fourth Appellate District. In the earliest case, Villa Milano Homeowners Association v. Il Davorge, from 2000, the court concluded that the arbitration clause was sufficient to require that construction defect claims undergo arbitration. However, the Fourth Appellate District Court concluded in three later cases that the arbitration clauses did not allow the developer to compel arbitration. In two cases, argued in 2008 and 2010, the court concluded that to do otherwise would deprive the homeowners of their right to a jury trial. In the most recent case, Villa Vicenza Homeowners Association v. Nobel Court Development, the court decided that the CC&Rs did not create contractual rights for the developer.

The Second Appellate District Court came to a similar decision in Promenade at Playa Vista Homeowners Association v. Western Pacific Housing, Inc. In their decision, the court noted that CC&Rs could be enforced by homeowners and homeowners associations, but not developers.

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Wood Smith Henning & Berman LLP Expands into Georgia

November 03, 2016 — Beverley BevenFlorez – CDJ Staff
Wood Smith Henning & Berman LLP (WSHB) has opened a new regional office in Atlanta, Georgia. Richard E. Zelonka, Jr., will be the Managing Partner. With over a decade of trial experience, Mr. Zelonka has handled complex litigation in both state and federal courts throughout the Southeastern United States. “I am thrilled to be joining Wood Smith Henning & Berman. WSHB’s sterling reputation, coupled with its national footprint, is especially attractive. That, coupled with the Firm’s passionate dedication to their clients, made this move a very easy choice for me,” said Mr. Zelonka. “I could not be more excited to lead WSHB’s new Georgia office.” The Firm’s Atlanta office is located at 1170 Peachtree Street NE, Suite 1200, Atlanta, Georgia 30309. The main phone number is (404) 885-5700. The fax number is (404) 506-9108. Read the court decision
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Construction Law Advisory: Mechanical Contractor Scores Victory in Prevailing Wage Dispute

September 03, 2014 — Steven M. Cvitanovic & Jessica M. Lassere Ryland - Haight Brown & Bonesteel LLP
On August 27, 2014, the First District Court of Appeal weighed in on whether prevailing wages are required for public contracts in situations where work is performed in furtherance of the project but at a permanent offsite manufacturing facility that is not exclusively dedicated to the project. In Sheet Metal Workers' International Association, Local 401 v. John C. Duncan and Russ Will Mechanical, the project at issue was for a community college district where Russ Will was the HVAC subcontractor. The contract documents required contractors to pay prevailing wages but they did not limit where or how Russ Will would fabricate sheet metal required for the job. Russ Will used its existing fabrication facility to form the sheet metal. An employee of Russ Will filed a complaint with the DIR alleging he should have been paid prevailing wages for work related to the project. The worker fabricated sheet metal for the project but at Russ Will’s Hayward facility, not at the site. The DIR issued a coverage determination in which it concluded that Russ Will was required to pay prevailing wages for the offsite fabrication work associated with the project. The DIR's determination turned on whether Russ Will was exempt from the prevailing wage law as a material supplier. To qualify for the material supplier exemption, the employer must sell supplies to the general public and its fabrication or manufacturing facility must not be established for the particular public works contract or be located at the site of the public work. Following the DIR determination, Rush Will filed an administrative appeal. The department reversed its initial coverage determination, concluding that the offsite fabrication performed by Russ Will was not subject to the prevailing wage law. Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and Jessica M. Lassere Ryland, Haight Brown & Bonesteel LLP Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com; Ms. Ryland may be contacted at jlassere@hbblaw.com Read the court decision
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Tightest Credit Market in 16 Years Rejects Bernanke’s Bid

October 08, 2014 — Prashant Gopal – Bloomberg
James Bregenzer, a 31-year-old marketing strategist in Chicago, was rejected for a mortgage in May after successfully financing two previous home purchases. The hitch this time: his monthly payment would have been $100 more than the lender was willing to approve. Bregenzer is in good company. Standards in the U.S. are so high and inflexible that former Federal Reserve Chairman Ben S. Bernanke, now a Brookings Institute fellow-in-residence with a net worth of at least $1.1 million, said at a conference last week that he couldn’t refinance his house in Washington. Even some doctors struggle to get home loans if they’re self-employed. “We asked if we could go over by $100 and were told that’s just not going to work,” said Bregenzer, who bought his first home before getting married in 2008. “The process of buying a home used to be stupid easy. Now, my wife and I were buying a home with two salaries, we make a heck of a lot more than I used to, and I have to go into great and terrible detail to show documentation.” Read the court decision
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Reprinted courtesy of Prashant Gopal, Bloomberg
Mr. Gopal may be contacted at pgopal2@bloomberg.net

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Pine River’s Two Harbors Now Targets Non-Prime Mortgages

November 05, 2014 — Jody Shenn - Bloomberg
Count Two Harbors Investment Corp. (TWO) among investors looking for profits in riskier home loans -- and expecting a market for bonds backed by them to re-emerge even with safer issuance showing limited signs of life. The real-estate investment trust, whose 74 percent total return over the past three years is almost double that of peers, recently told the lenders that have been selling it big, high-quality mortgages that it’s now also seeking to purchase non-prime loans and those with low down payments, Chief Investment Officer Bill Roth said today during a conference call for analysts and investors. “Our expectation and certainly hope would be as this market opens up and becomes fairly meaningful that a securitization market would develop,” he said. Of course, he sees the timeline as “probably measured in years, not months.” Read the court decision
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Reprinted courtesy of Jody Shenn, Bloomberg
Ms. Shenn may be contacted at jshenn@bloomberg.net

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The Montrose Language Interpreted: How Many Policies Are Implicated By A Construction Defect That Later Causes a Flood?

March 17, 2011 — Shaun McParland Baldwin

The Court of Appeals of Indiana recently addressed the “Montrose” language added to the CGL ISO form in 2001 in the context of a construction defect claim where a fractured storm drain caused significant flooding a year after the drain was damaged. The insuring agreement requires that “bodily injury or “property damage” be caused by an occurrence and that the “bodily injury or “property damage” occur during the policy period. The Montrose language adds that the insurance applies only if, prior to the policy period, no insured knew that the “bodily injury or “property damage” had occurred in whole or in part. Significantly, it also states that any “bodily injury” or “property damage” which occurs during the policy period and was not, prior to the policy period known to have occurred, includes a continuation, change or resumption of that “bodily injury” or “property damage” after the end of the policy period.



In Grange Mutual Cas. Co. v. West Bend Mut. Ins. Co., No. 29D04-0706-PL-1112 (Ct. App. IN March 15, 2011), http://www.ai.org/judiciary/opinions/pdf/03151109ehf.pdf, Sullivan was the General Contractor for a school construction project. Its subcontractor, McCurdy, installed the storm drain pipes. One of the storm pipes was fractured in 2005 while McCurdy was doing its installation work. More than a year later, the school experienced significant water damage due to flooding. It was later discovered that the flooding was due to the fractured storm drain. Sullivanrsquo;s insurer paid $146,403 for the water damage. That insurer brought a subrogation claim against McCurdy and its two insurers: West Bend and Grange. West Bend had issued CGL coverage to McCurdy while the construction was ongoing, including the date in which the storm pipe was fractured. Grange issued CGL coverage to McCurdy at the time of the flooding. Those two carriers jointly settled the subrogation claim and then litigated which insurer actually owed coverage for the loss. Significantly, the loss that was paid included only damages from the flooding, not any damages for the cost of repairing the pipe.



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Reprinted courtesy of Shaun McParland Baldwin of Tressler LLP. Ms Baldwin can be contacted at sbaldwin@tresslerllp.com

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Northern District of Mississippi Finds That Non-Work Property Damages Are Not Subject to AIA’s Waiver of Subrogation Clause

July 11, 2018 — Shannon M. Warren - The Subrogation Strategist
In recent months, the Northern District of Mississippi has grappled with how to interpret waivers of subrogation in American Institute of Architects (AIA) construction industry contracts and, specifically, how they apply to work versus non-work property. The distinction between work and non-work property has been commonly litigated and remains a hotly debated topic when handling subrogation claims involving construction defects. In Liberty Mutual Fire Ins. Co. v. Fowlkes Plumbing, 2018 U.S. Dist. LEXIS 23515 (February 12, 2018), a fire consumed the entire insured risk when one of the defendants was performing window restoration services. Subsequently, the insured’s subrogated insurer filed suit against several defendants involved in the construction project at issue. In response to the defendants’ motion for summary judgment, the District Court for the Northern District of Mississippi considered whether the waiver of subrogation clause in AIA contract form A201-2007 precluded the subrogated insurer from recovering damages from the defendants. The court held that the waiver of subrogation provision contained in AIA document A201-2007 barred the insurer from recovering for damages to the work itself, but did not apply to non-work property. Read the court decision
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Reprinted courtesy of Shannon M. Warren, White and Williams LLP
Ms. Warren may be contacted at warrens@whiteandwilliams.com

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The Latest News on Fannie Mae and Freddie Mac

May 01, 2014 — Beverley BevenFlorez-CDJ STAFF
The Federal Housing Finance Agency released a report on April 30th, which stated that in a severe economic downturn Fannie Mae (FNMA) and Freddie Mac (FMCC) “could require an additional bailout of as much as $190 billion… according to the results of stress tests,” according to Clea Benson writing for Bloomberg. “These results of the severely adverse scenario are not surprising given the company’s limited capital,” FNMA Senior Vice President Kelli Parsons said in a statement, as reported by Benson published in Bloomberg. “Under the terms of the senior preferred stock purchase agreement, Fannie Mae is not permitted to retain capital to withstand a sudden, unexpected economic shock of the magnitude required by the stress test.” Furthermore, in another Bloomberg article, Cheyenne Hopkins and Clea Benson reported that Democrats remain divided on how to replace FNMA and FMCC. “If we don’t get this right, we’ll create major disturbances in the housing market which will have a profound impact on families, on homeownership and certainly on our national economy,” Oregon Democrat Jeff Merkley said in an interview, as reported by Cheyenne and Benson. “Merkley described himself as ‘still in negotiations’ with the bill’s sponsors.” Read the full story, Clea Benson Article... Read the full story, Cheyenne Hopkins & Clea Benson Article... Read the court decision
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