Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors
April 10, 2019 —
Thomas Cronin - Gordon & Rees Construction Law BlogIn a recent decision, the Illinois Supreme Court held that a purchaser of a newly constructed home could not assert a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser. Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, ¶ 1. The decision overruled Minton v. The Richards Group of Chicago, which held that a purchaser who “has no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor” could assert a claim of a breach of the warranty of habitability against the subcontractor. 116 Ill. App. 3d 852, 855 (1983).
In Sienna Court Condo. Ass’n, the plaintiff alleged that the condo building had several latent defects which made individual units and common areas unfit for habitation. 2008 IL 122022 at ¶ 3. The Court rejected the plaintiff’s argument that privity should not be a factor in determining whether a claim for a breach of the warranty of habitability can be asserted. Id. at ¶ 19. The Court also rejected the plaintiff’s argument that claims for a breach warranty of habitability should not be governed by contract law but should instead be governed by tort law analogous to application of strict liability. Id.
The Court reasoned that the economic loss rule, as articulated in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 91 (1982), refuted the plaintiff’s argument that the implied warranty of habitability should be covered by tort law. 2008 IL 122022 at ¶ 20. Under the economic loss rule, a plaintiff “cannot recover for solely economic loss under the tort theories of strict liability, negligence, and innocent misrepresentation.” National Tank Co., 91 Ill. 2d at 91. The Court explained that the rule prevented plaintiffs from turning a contractual claim into a tort claim. 2008 IL 122022 at ¶ 21. The Court further noted that contractual privity is required for a claim of economic loss, and an economic loss claim is not limited to strict liability claims. Id. Because the plaintiff’s claim was solely for an economic loss, it was a contractual claim in nature; therefore, the Court concluded that “the implied warranty of habitability cannot be characterized as a tort.” Id. at ¶ 22.
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tcronin@grsm.com
Texas Condo Construction Defect Code Amended
September 17, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to David H. Fisk of Kane Russell Coleman & Logan PC, “Before filing a lawsuit or initiating an arbitration proceeding pertaining to a construction defect, a condominium association in Texas with eight or more units must now comply with the newly added Section 82.119 to Chapter 82 of the Texas Property Code.”
Fisk reported that the new section “requires affected associations to have a licensed professional engineer inspect the units and common elements in question and prepare a written report that (1) identifies the specific units or common elements, (2) describes the present physical condition of the units or common elements, and (3) describes any modifications, maintenance, or repairs to the units or common elements performed by the unit owners or the association.”
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Construction Defects Are Occurrences, Says South Carolina High Court
December 20, 2012 —
CDJ STAFFThe South Carolina Supreme Court has left the legislature’s new, expanded definition of “occurrence” in place, declining to declare it unconstitutional. South Carolina included faulty workmanship as an occurrence in response to a Supreme Court decision, which the court later reversed. One of the parties in that earlier decision, Harleysville Insurance, challenged the new law, claiming that the legislature didn’t have the power to pass a law to overturn a court ruling. The court did not concur.
However, the court did determine that the law was not retroactive and covered only claims filed after the law became effective in May 2011. The Chief Justice of South Carolina noted that “insurance coverage for construction liability lacks clarity, particularly with respect to whether construction defects constitute ‘occurrences’ under construction general insurance policies.”
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Construction Defect Litigation at San Diego’s Alicante Condominiums?
March 25, 2011 —
Alicante HOA WebsiteAccording to recent posts in the Alicante HOA website, construction experts and legal counsel have been retained. The HOA board has been informed that testing of a variety of the building’s components are underway or will begin in the near future.
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New Certification Requirements for Veteran-Owned Small Business Concerns and Service-Disabled Veteran-owned Small Business Concerns Seeking Public Procurement Contracts
March 27, 2023 —
Jennifer Harris, Timothy D. Matheny & Abby Bello Salinas - ConsensusDocsEffective January 1, 2023, Veteran-Owned Small Business Concerns (VOSBs) and Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBs) will be required to obtain Small Business Administration (SBA) certification to participate in any federal government agency VOSB or SDVOSB sole source or set-aside prime contracts. This change originated from a Final Rule (87 FR 73400) published by the SBA on November 29, 2022. As a result of this Final Rule, not only will VOSBs and SDVOSBs be required to re-visit, and in some cases re-apply for various certifications, but these new regulations will also impact joint ventures that rely on their member’s VOSB or SDVOSB status to bid public work.
New Regulation
Previously, a VOSB and SDVOSB could self-certify to perform set-aside and sole source projects on non-U.S. Department of Veteran Affairs (VA) procurements—a VOSB and SDVOSB only needed to be certified by the VA Center for Verification and Evaluation (CVE) when bidding on VA procurements contingent on its status.
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Jennifer Harris, Peckar & Abramson, P.C.,
Timothy D. Matheny, Peckar & Abramson, P.C. and Abby Bello Salinas, Law Clerk, Peckar & Abramson, P.C.
Ms. Harris may be contacted at jharris@pecklaw.com
Mr. Matheny may be contacted at tmatheny@pecklaw.com
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Musk’s Cousins Battle Utilities to Make Solar Rooftops Cheap
April 15, 2015 —
John Lippert and Christopher Martin – BloombergIn September 2013, Hawaiian Electric Co. told thousands of customers they couldn’t connect their new solar panels to its distribution grid. In some neighborhoods, HECO said, its system couldn’t absorb any more unused energy from home solar arrays. The moratorium, which lasted 13 months, made Hawaii a central battleground in the effort by utilities to control the rapid growth of independent solar companies across the U.S. And it was a big deal to people such as Robert Gould, a retired Northwest Airlines pilot living near Honolulu. He’d just paid $53,000 to have solar panels installed.
Gould and other customers protested loudly to state officials. They finally got help from Lyndon Rive, the CEO of SolarCity. The San Mateo, California, company is the biggest installer of rooftop solar panels in the U.S. and has 10,000 Hawaiian customers, Bloomberg Markets magazine reports in its May issue. Rive studied the situation and zeroed in on a key fact: HECO had never directly measured how much solar its grid could handle, relying on computer simulations instead. “Because the technology is brand-new, no one had ever done this in the field before,” says Colton Ching, HECO’s vice president for energy delivery.
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Defense Dept. IG: White House Email Stonewall Stalls Border Wall Contract Probe
December 14, 2020 —
Mary B. Powers & Debra K. Rubin - Engineering News-RecordAfter nearly one year of work, the U.S. Defense Dept.’s Inspector General can’t finish a congressionally-ordered probe of a $400-million U.S-Mexico border wall construction award last December to contractor Fisher Sand & Gravel because agency attorneys won't allow release of requested DOD and White House e-mails related to the contract, Acting Inspector General Sean O’Donnell said in a Nov. 30 report to Congress.
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Mary B. Powers, Engineering News-Record and
Debra K. Rubin, Engineering News-Record
Ms. Rubin may be contacted at rubind@enr.com
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Why Employees Are Taking Ownership of Their Architecture Firms
January 22, 2024 —
Kriston Capps - BloombergThe architecture firm BNIM has always been a leader on sustainable design. In the late 1980s, principal emeritus Bob Berkebile was one of the first architects to push the industry to take the idea of green buildings seriously. Then-President Bill Clinton even recruited him to lead a climate-minded restoration of the White House. Berkebile and his Kansas City, Missouri–based firm — he’s the “B” in BNIM, alongside Tom Nelson, David Immenschuh and Steve McDowell — received top honors from the American Institute of Architects in 2011, among many other accolades.
Now the firm behind such projects as the US Embassy expansion in Kampala, Uganda, and a proposed South Loop park to deck over a highway in downtown Kansas City hopes to stand out in another way. In October, BNIM announced its transition to an employee stock ownership plan, or ESOP. The firm is one of a handful in the industry to recently embrace the employee-ownership model, following similar moves in 2021 by SHoP Architects and Zaha Hadid Architects.
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Kriston Capps, Bloomberg