Arizona Purchaser Dwelling Actions Are Subject to a New Construction
September 04, 2019 —
William L. Doerler - The Subrogation StrategistArizona recently amended its Purchaser Dwelling Action statute to, among other things, involve all contractors in the process, establish the parties’ burdens of proof, add an attorney fees provision, establish procedural requirements and limit a subcontractor’s indemnity exposure. The governor signed the bill—2019 Ariz. SB 1271—on April 10, 2019, and the changes go into effect and apply, retroactively “to from and after June 30, 2019.” The following discussion details some of the changes to the law.
Notice to Contractors and Proportional Liability
Under the revised law, a “Seller” who receives notice of a Purchaser Dwelling Action (PDA) from a residential dwelling purchaser pursuant to A.R.S. § 12-1363* has to promptly forward the notice to all construction professionals—i.e. architects, contractors, subcontractors, etc., as defined in A.R.S. § 12-1361(5)—that the Seller reasonably believes are responsible for an alleged construction defect. A.R.S. § 12-1363(A). Sellers can deliver the notice by electronic means. Once construction professionals are placed on notice, they have the same right to inspect, test and repair the property as the Seller originally placed on notice. A.R.S. § 12-1362(B), (C).
To the extent that the matter ultimately goes to suit, A.R.S. § 12-1632(D) dictates that, subject to Arizona Rules of Court, construction professionals “shall be joined as third-party defendants.” To establish liability, the purchaser has the burden of proving the existence of a construction defect and the amount of damages. Thereafter, the trier of fact determines each defendant’s or third-party defendant’s relative degree of fault and allocates the pro rata share of liability to each based on their relative degree of fault. However, the seller, not the purchaser, has the burden of proving the pro rata share of liability for any third-party defendant. A.R.S. § 12-1632(D).
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William L. Doerler, White and Williams LLPMr. Doerler may be contacted at
doerlerw@whiteandwilliams.com
Mortar Insufficient to Insure Summary Judgment in Construction Defect Case
January 06, 2012 —
CDJ STAFFThe US District Court of Nevada issued a summary judgment in the case of R&O Construction Company V. Rox Pro International Group, Ltd. on December 19, 2011. The case involved the installation of stone veneer at a Home Depot location (Home Depot was not involved in the case). R&O’s subcontractor, New Creation Masonry, purchased the stone veneer from Arizona Stone. Judge Larry Hicks noted that “the stone veneer failed and R&O was forced to make substantial structural repairs to the Home Depot store.”
Rox Pro asked the court for a summary judgment, which the court granted only in part. The court looked at two issues in the case, whether the installation instructions constituted a breach of implied warranty of merchantability, and whether there was a breach of an implied warranty of fitness for a particular purpose.
Judge Hicks found that there was a breach of implied warranty of merchantability. The instructions drafted by Real Stone and distributed by Arizona Stone were not sufficient for affixing the supplied stones, according to R&O’s expert, a claim the plaintiffs dispute. “Because there is an issue of material fact concerning the installation guidelines, the court shall deny Arizona Stone’s motion for a summary judgment on this issue.”
On the other hand, the judge did not find that the instructions had any bearing as to whether R&O bought the stone, since the stone was selected by the shopping center developer. This issue was, in the view of the judge, appropriately dismissed.
Read the court’s decision…
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Skipping Depositions does not Constitute Failure to Cooperate in New York
March 09, 2020 —
Ryan G. Nelson - Saxe Doernberger & VitaInsurance policies typically impose, on the insured, a duty to cooperate with the insurer during investigation and litigation of a claim. Non-cooperation can be grounds for denying coverage. This begs the question: what constitutes non-cooperation?
Recently, a New York appellate court affirmed a trial court’s decision that failure by an employee of the insured to show up for three court-ordered depositions did not rise to the level of “willful and avowed obstruction” and therefore, the insurer could not deny coverage on the basis of non-cooperation. See Foddrell v. Utica First Insurance Co., 178 A.D.3d 901 (N.Y. App. Div. 2019). In so holding, the Foddrell court applied the Thrasher test: “To effectively deny coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured’s cooperation, (2) that the efforts employed by the insured were reasonably calculated to obtain the insured’s cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction.” Id.; see Thrasher v. U. S. Liab. Ins. Co., 19 N.Y.2d 159, 167 (1967).
Thomas Foddrell’s suit against Utica First Insurance Company (“Utica First”) stemmed from his personal injury suit against Janey & Rana Construction Corporation (“J&R” (Utica First’s insured). During that lawsuit, J&R’s principal, Gardeep Singh, failed to appear for two court-ordered depositions. After his failure to appear at those depositions, Utica First sent an investigator to inform Singh that he was scheduled for a third deposition. Singh responded to the investigator that he would speak with J&R’s attorneys about the matter. Ultimately, Singh did not appear for the third court-ordered deposition. In response to Singh’s repeated failure to appear for the depositions, Utica First sent Singh a letter advising him that because of his lack of cooperation, Utica would no longer agree to indemnify J&R.
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Ryan G. Nelson, Saxe Doernberger & VitaMr. Nelson may be contacted at
rgn@sdvlaw.com
South Carolina Supreme Court Finds that Consequential Damage Arise From "Occurrence"
October 10, 2013 —
Tred Eyerly — Insurance Law HawaiiThe South Carolina Supreme Court held that continuing damage that was part of a continuum of property damage constituted an "occurrence." Auto-Owners Ins. Co. v. Rhodes, 2013 S.C. LEXIS 248 (Sept. 25, 2013).
Rhodes hired Eadon to design, fabricate, and erect three outdoor advertising signs on Rhodes' property bordering an interstate highway. After the signs were erected, one fell across the highway, blocking both lanes of southbound traffic. The state Department of Transportation ordered Rhodes to remove the remaining two signs and revoked Rhodes' permit to maintain signs on the property.
Rhodes sued Eaton. Eaton's insurer, Auto-Owners, filed a declaratory judgment action to determine whether there was coverage under the CGL policy. The trial court found the sign falling on the interstate constituted an "occurrence" that resulted in damages beyond the defective work to property other than the defective work itself.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Insurer Waives Objection to Appraiser's Partiality by Waiting Until Appraisal Issued
October 21, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Eleventh Circuit affirmed the district court's denial of the insurer's objections on partiality grounds to the insured's appraiser. Biscayne Beach Club Condominium Association, Inc. v. Westchester Surpus Lines Ins. Co., 2024 U.S. App. LEXIS 19663 (11th Cir. Aug. 6. 2024).
Storms damaged buildings at Biscayne Beach Club Condominium. Biscayne Beach filed claims with its insurer, Westchester. Unsatisfied with Westchester's payments, Biscayne Beach sued. Westchester then invoked the appraisal provision in the policy. The district court abated the action so the parties could pursue appraisal.
Biscayne Beach appointed Lester Martin, its public adjuster, as its appraiser on a 10 percent contingency fee. Westchester objected because Martinez's retainer created a conflict of interest that would hinder his impartiality. Biscayne Beach then retained Blake Pyka as its appraiser. Westchester appointed its appraiser and and umpire was selected by the parties' two appraisers.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Climate Disasters Are an Affordable Housing Problem
October 01, 2024 —
Juan Pablo Garnham & Arjuna Heim - BloombergWhen Maui was devastated by wildfires in August 2023, some residents were initially fortunate. The neighborhood of Makawao, for example, was spared the worst effects of the fire that engulfed Lahaina, 35 miles to the west.
Recently, though, we met a woman in that neighborhood who faces a different kind of threat: Her landlord has now demanded that she pay double her rent or face eviction. As housing advocates in the region, we’ve heard stories like this repeatedly, as residents report an acute fear of displacement and homelessness.
A year after the fires killed more than 100 people, displaced 12,000 and disrupted the economy of the island, the disaster lingers for many in Maui and Hawai'i. Rents across the island have increased sharply, offering a cautionary tale for the rest of the US about how climate change, a housing crisis and the lack of adequate public policies can multiply the suffering of a community already in pain.
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Bloomberg
Video: Contractors’ Update on New Regulations Governing Commercial Use of Drones
September 01, 2016 —
David R. Cook Jr. – AHHC Construction Law BlogAt a presentation before the AGC of Georgia, AHHC attorneys Mark Hanrahan, David Cook, and Chadd Reynolds covered “Contractors’ Update on New Regulations Governing Commercial Use of Drones.” View the presentation here: https://vimeo.com/177566370
On June 23, 2016, the Department of Transportation and Federal Aviation Administration issued new regulations regarding non-hobby and non-recreational civil operation of small unmanned aircraft systems. These regulations are intended to limit interference with federal airspace while advancing research and safety in commercial industries. They also addressed practical implications and how to comply by the August 29, 2016 deadline.
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David R. Cook Jr., Autry, Hanrahan, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
Construction Contract Basics: Indemnity
October 30, 2023 —
Christopher G. Hill - Construction Law MusingsI’m back after a welcome
change of offices from a Regus location to a separate and more customer-friendly
local shared office space location. I thought I’d jump back into posting with a series of construction contract-related posts, the first of which relates to indemnification clauses.
An indemnification clause in a contract obligates one party (the Indemnitor) to take on liability (read pay for) any damages to another party (the Indemnitee) under certain circumstances. In a construction context, this type of arrangement can arise in a
bonding context with a general indemnity obligation to the surety among other contexts outside of the four corners of any prime or subcontract. I will not be discussing those other contexts and will focus on the typical indemnity clause found in most if not all, construction contracts. These clauses most often state that the “downstream” party is to indemnify all of the upstream parties for any and all damages incurred by the indemnitees due to any action of the downstream party, its employees, subcontractors, sub-subcontractors, etc. The clauses are often not limited in scope and generally include attorney fee provisions and generally require indemnity for breaches of contract by their terms.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
