Texas Supreme Court Finds Payment of Appraisal Award Does Not Absolve Insurer of Statutory Liability
April 19, 2021 —
Allison Griswold & Sarah Smith - Lewis BrisboisThe Texas Supreme Court recently published its long-awaited decision in the Hinojos v. State Farm Lloyds. In it, the court affirmed its holding in Barbara Technologies, finding that payment of an appraisal award does not absolve an insurer of statutory liability when the insurer accepts a claim but pays only part of the amount it owes within the statutory deadline, and a policy holder can proceed with an action under the Texas Prompt Payment of Claims Act.
In 2013, Louis Hinojos made a claim for storm damage to his home. State Farm’s initial inspection resulted in an estimate below the deductible, but Hinojos disagreed and requested a second inspection. At the second inspection, the adjuster identified additional damage resulting in a payment to Hinojos of $1,995.11. Hinojos then sued State Farm – and State Farm invoked appraisal approximately 15 months after suit was filed. The appraisal resulted in State Farm tendering an additional payment of $22,974.75. State Farm moved for summary judgment, arguing that timely payment of an appraisal award precluded prompt payment (or Chapter 542) damages. The trial court granted summary judgment and Hinojos appealed (notably Barbara Technologies had not yet been decided). The Court of Appeals affirmed State Farm’s victory on the basis that “State Farm made a reasonable payment on Hinojos’s claim within the sixty-day statutory limit….” Hinojos petitioned the Texas Supreme Court for review.
Reprinted courtesy of
Allison Griswold, Lewis Brisbois and
Sarah Smith, Lewis Brisbois
Ms. Griswold may be contacted at Allison.Griswold@lewisbrisbois.com
Ms. Smith may be contacted at Sarah.Smith@lewisbrisbois.com
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Gut Feeling Does Not Disqualify Expert Opinion
July 06, 2011 —
CDJ STAFFThe New Jersey Supreme Court issued a ruling in June on the case of Nevins v. Toll in which they reversed an earlier decision and remanded the case to a lower court for retrial. At issue in the case was the testimony of the plaintiff’s expert, J. Anthony Dowling. In depositions, Mr. Dowling said that his estimates for repair were based on a “gut feeling.” Dowling said he had “very little” experience in cost estimates for single-family homes. The defendants sought to bar Dowling’s testimony which was granted by the judge. Without an expert, Ms. Nevin’s case was dismissed.
Describing Dowling’s report as “far from a model of how an expert’s opinion in a construction case should be presented,” the court noted that Dowling is not a professional expert witness. However, the court did note that Dowling is a professional cost estimator. Despite Mr. Dowling using his “gut feeling” to construct his estimate, the New Jersey Supreme Court felt that whether his estimate is convincing is “a question for the jury.”
Read the court’s opinion…
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Persimmon Offers to Fix Risky Homes as Cladding Crisis Grows
February 22, 2021 —
Olivia Konotey-Ahulu - BloombergPersimmon Plc, the U.K.’s biggest homebuilder, has offered to pay for work on potentially unsafe buildings in the wake of the cladding scandal that arose from London’s Grenfell Tower fire.
The firm has made a provision of 75 million pounds ($104 million) in its 2020 results for any necessary repair work on 26 buildings it developed that may be affected by the issue, it said in a statement Wednesday. It no longer owns the properties and said it would provide support where owners failed to accept their legal responsibilities.
“The concern around now banned cladding is affecting many thousands of homeowners who live in high-rise buildings right across the country,” Chairman Roger Devlin said in the statement. “We believe we have a clear duty to act to address this issue.”
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Olivia Konotey-Ahulu, Bloomberg
NYC-N.J. Gateway Rail-Tunnel Work May Start in 2023
March 28, 2022 —
Elise Young - BloombergThe $12.3 billion Gateway rail tunnel linking New York City and New Jersey has reached a major preconstruction milestone with the completion of geotechnical studies necessary for the engineering phase.
The analysis of rock and silt from 75 earth samples on both sides of the Hudson River marks the latest in a series of swift leaps toward a potential 2023 start date. The project had been delayed years by former President Donald Trump, who had argued that costs should be covered solely by the states, not U.S. taxpayers.
The samples, from depths of 48 feet to 505 feet (14.6 meters to 154 meters), will guide design, according to the Gateway Development Commission, the project’s overseer. Some areas of particular interest to the researchers were on Manhattan’s West Side, parts of which were underwater before landfill was added many years ago.
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Elise Young, Bloomberg
SCOTUS Opens Up Federal Courts to Land Owners
July 15, 2019 —
Wally Zimolong - Supplemental ConditionsFor nearly 36 years, the United States Supreme Court’s decision in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985) severely frustrated, if not all but foreclosed, a property owner’s right to bring a claim in federal court based on a regulatory taking. Under the Fifth Amendment, a property owner whose land has been “taken” by the government is entitled to just compensation. There are two types of takings direct or “inverse” or regulatory takings. A direct taking is where the government declares that it needs your land for public use and offers to pay you compensation. You might disagree with the amount offered – and that often is the case. But, a mechanism exists whereby a neutral third party – a condemnation board – will arrive at the compensation that is owed. On the other hand, an inverse condemnation or regulatory taking occurs when the government takes some action that restricts the use of the land in such a way as to severely impact it beneficial economic use. For example, if you own a strip of commercial property and intend to develop it and then the municipality comes along and suddenly changes the zoning classification of the parcel such that you can no longer develop it in a beneficial way, then you might have a regulatory takings case.
Under the Court’s Williamson County decision, property owners falling within the later category were required to exhaust state remedies before proceeding to federal court under a claim that their Fifth Amendment rights were violated. The problem with this is that, as the Supreme Court explained, it creates a Catch-22. If property owners exhaust their state remedies and the state remedies result in an unfavorable outcome, the federal court is powerless to overturn that decision under the doctrines of res judicata and the full faith and credit clause of the Constitution.
Well, yesterday, the Court overturned Williamson County, in Knick v. Township of Scott, 588 U.S. _____ (2019). There the Court held unequivocally a “property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under Section 1983 at that time.”
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Court Holds That Trimming of Neighbor’s Trees is Not an Insured Accident or Occurrence
June 10, 2015 —
Christopher Kendrick and Valerie A. Moore – Haight Brown & Bonesteel LLPIn Albert v. Mid-Century Insurance Co. (No. B257792, filed 4/28/15, ord. pub. 5/20/15), a California Court of Appeal held that an insured’s trimming of a neighbor’s trees which allegedly damaged the trees was not an accident or occurrence covered by her homeowners insurance, despite a mistaken and good faith belief as to where the property line lay.
Ms. Albert was sued by her adjoining neighbor, who alleged damage to his property when she erected an encroaching fence and pruned nine mature olive trees on his property. The two parcels shared a reciprocal roadway easement providing for access to the main public road. At some point, Ms. Albert erected a fence that was subsequently determined to be on the neighbor’s land, and which enclosed a grove of nine mature olive trees. Ms. Albert claimed that the trees straddled the property line and were mutually owned. She pointed out that she had regularly been notified by the Los Angeles Fire Department to clear the area, and that she had been trimming the trees for years. Thus, she claimed a good faith belief that the trees were hers and that she was required to trim them.
Contending that her trimming had caused severe damage by reducing the aesthetic and monetary value of the trees, the neighbor sued alleging causes of action for trespass to real property and trees; abatement of private nuisance; declaratory relief; and for quiet title. He sought treble damages under Civil Code sections 733 and 3346, for injury to timber or trees.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com; Ms. Moore may be contacted at vmoore@hbblaw.com
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Behavioral Science Meets Construction: Insights from Whistle Rewards
September 09, 2024 —
Aarni Heiskanen - AEC BusinessIn
this episode of the AEC Business Podcast, Aarni Heiskanen hosts Drew Carter, CEO of Whistle Rewards, and Dr. Laurel Newman, a behavioral scientist, to discuss instant rewards for driving behavioral change in construction. Laurel shares her psychology background and academic career, studying how the environment influences behavior. Drew introduces himself as a data scientist, focusing on predictive modeling. Tune in to learn how they collaborate to create motivating environments in the construction industry.
Whistle Rewards is a platform specializing in rewards, recognition, and incentives in the AEC industry. It is designed to enhance employee engagement, safety compliance, performance, and technology adoption in construction companies.
The Guests
Drew Carter, CEO and Co-Founder at Whistle Systems, Inc.
Drew is improving employee retention using data science and behavioral science.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Design Professionals Owe a Duty of Care to Homeowners
July 09, 2014 —
Stephen A. Sunseri - Gatzke Dillon & Ballance LLPToday, the California Supreme Court, in Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (Jul. 3, 2014, S208173) __Cal.4th__ [2014 WL 2988058], held that architects owe a duty of care to future homeowners of residential buildings, particularly if they act as principal architects on a project, and are not subordinate to any other design professional. Until now, design professionals were rarely held liable, if at all, for third-party claims for design deficiencies.
In Beacon, architectural and engineering firms provided sole design services for The Beacon residential condominium project, a 595 unit project located in San Francisco. The condominiums were initially leased after construction, but were eventually sold to individual owners. The design firms claimed their role was limited to only providing design recommendations to the project's owner, who ultimately controlled and directed which design elements to construct. Not long after completion of the project, the homeowners' association sued the design firms (among others) for construction defects and damages related to alleged water infiltration, inadequate fire separations, structural cracks, and other purported safety hazards. The claims included allegations under SB 800 (the "Right to Repair Act," Civil Code §895, et seq.) and common law negligence theories.
The design firms demurred to the complaint, which the trial court sustained. On appeal, however, the Court of Appeal reversed the trial court's ruling, concluding that the design firms owed a duty of care to third parties. The Supreme Court affirmed.
Historically, liability for deficient goods and services hinged on whether there is a contractual relationship between a buyer and seller. However, the Supreme Court recognized that in certain circumstances a contractual relationship is not required. In its ruling, the Supreme Court relied on fifty year old precedent, Biankanja v. Irving (1958) 49 Cal.2d 647. In Biankanja, the California Supreme Court outlined several factors to determine whether a duty of care is owed to non-contracting third parties. Although Biankanja analyzes many factors, emphasis was placed placed on whether a purported harm was foreseeable by a defendant's conduct and how close of a connection there is between that conduct and an injury.
Here, the Court recognized that even though the design firms did not actually build the project, they did conduct weekly inspections, monitored contractor compliance, altered design elements when issues arose, and advised the owners of any nonconforming work. In applying the Biankanja factors to these circumstances, the Supreme Court determined the homeowners were intended beneficiaries of the design work and the design firms' primary role in the project bore a close connection to the alleged injuries. As a result, the Supreme Court held that the allegations in the complaint were sufficient and, if proven, establishes the defendants owed a duty of care to the homeowners' association.
Interestingly, the Supreme Court sidestepped the issue of whether SB 800 was intended to exclusively capture design defects in its scope, even though the Court indicated it may. Nevertheless, the Supreme Court's ruling is significant. The case will affect how design professionals allocate risk on future residential projects, perhaps by raising design prices or insuring around the liability exposure. The likely outcome, however, is that design professionals are now targets in construction defect lawsuits.
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Stephen A. Sunseri, Gatzke Dillon & Ballance LLPMr. Sunseri may be contacted at
ssunseri@gdandb.com
