Statutory Time Limits for Construction Defects in Massachusetts
November 27, 2013 —
CDJ STAFFConstruction defect claims are governed by a section of the Massachusetts laws and allow for three years after the work was completed, unless the defect is “inherently unknowable,” according to a post by John Shaffer on the web site of his firm, Marcus, Errico, Emmer & Brooks, a New England law firm that specializes in condominium law. Those “inherently unknowable” defects fall into the six-year statute of repose.
If, for example, a roof doesn’t show “significant water leakage” until after the end of the statutory period, “the association is out of luck and the responsible parties are off the hook,” writes Mr. Shaffer. “Even if the association could prove conclusively that the roof was improperly constructed and caused significant damage, the association’s claim will be barred.”
One problem condominium associations can face is that defects in the earliest phases of building can sometimes become apparent while the developer still controls the board. “While a developer in control of a board has the same fiduciary obligation as owner-elected trustees to protect the association’s interests, it is probably safe to assume that few developers will be inclined to sue themselves.” Here, Mr. Shaffer notes that owners can join together and either “hasten the transition to owner control of the association” or “convince them to correct the identified deficiencies.”
Mr. Shaffer notes that some questions concerning the statute of repose haven’t been answered by the Massachusetts courts. He does assure readers that “developers will no doubt argue that the statute of limitations has expired on defects because the association discovered or ‘should have discovered’ their existence more than three years before the lawsuit was started.” He advises condominium associations to calculate “their filing deadlines as conservatively as possible.”
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Facts about Chinese Drywall in Construction
September 10, 2014 —
William M. Kaufman – Construction Lawyers BlogMost of us have heard that there are problems with Chinese drywall, but do not really know what specifically is wrong with it when it comes to construction in the United States.
Let’s begin with a brief overview about why Chinese drywall came to be used in the United States in the first place. Chinese drywall was first imported into the United States beginning in 2001. Most of the homes that have Chinese drywall were built between 2001 and 2008. During the construction boom, Chinese drywall was being imported into the U.S. partly due to the shortage of American-made drywall as a result of several hurricanes that devastated Florida in 2004-2005, and the damage caused by Hurricane Katrina. Hundreds of millions of pounds of Chinese drywall were imported into the United States during that time period. While this is only a fraction of the percentage of drywall used in American homes, the problem has been concentrated in certain regions of the country, mostly the South.
So what is the problem with Chinese Drywall? To understand it, we must first explore what constitutes drywall. Drywall is a building material made of a gypsum-based sheet of plaster covered with heavy paper on both sides. Drywall is also referred to as plasterboard or sheetrock. Testing of Chinese drywall has found unusually high instances of pyrite. There is speculation that the pyrite oxidation results in sulfur compounds being released by the drywall during periods of high heat and humidity. The combination of high temperatures and humidity is ripe for bringing out problems associated with Chinese drywall. That is why most cases associated with Chinese drywall are found in the Southeastern United States. Reports show that homeowners typically complain of corroding copper in their homes, and a rotten egg odor emanating from copper surfaces that, in turn, turn black and exhibit a powdery ash type substance. Experts opine that this is a result of a reaction of the copper with hydrogen sulfide. Much of wiring or piping found in homes is made of copper. Exposure to Chinese drywall can result in nose bleeds, headaches, coughs, upper respiratory or sinus problems, rashes, and difficulty breathing. There have also been cases reported of pets dying due to exposure to Chinese drywall.
Reprinted courtesy of
William M. Kaufman, Lockhart Park LP
Mr. Kaufman may be contacted at wkaufman@lockhartpark.com, and you may visit the firm's website at www.lockhartpark.com
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Will European Insurers’ Positive Response to COVID-19 Claims Influence US Insurers?
August 10, 2020 —
Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery BlogLast month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims.
Another European insurer recently made headlines for similar reasons. Despite initially denying liability, Swiss insurance company, Helvetia Insurance, announced that most of its policyholders in the hospitality industry have accepted settlements following coverage disputes for COVID-19 related business interruption losses. The settlements reportedly included policyholders from Switzerland, Austria, and Germany.
The positive response from the European insurers appears to have influenced the insurance industry across the continent. For instance, in the U.K., the Financial Conduct Authority announced that it is taking certain insurers to court to seek clarity as to coverage for COVID-19 related losses. In Germany, the government and a group of insurers reached an agreement whereby the government will pay for 70% of business interruption losses for policyholders in the hospitality industry, and the insurers will pay for half of the business interruption losses not covered by the government.
Reprinted courtesy of
Sergio F. Oehninger, Hunton Andrews Kurth and
Daniel Hentschel, Hunton Andrews Kurth
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Hentschel may be contacted at dhentschel@HuntonAK.com
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Taking Care of Infrastructure – Interview with Marilyn Grabowski
February 06, 2019 —
Aarni Heiskanen - AEC BusinessMarilyn Grabowski leads Atlantic Infrared with a mission to protect and improve infrastructure. In this interview, we discuss her professional background, the technologies that her team uses, and why more women should consider construction as a career.
Marilyn Grabowski, known as “The Lady in Red”, and her team Atlantic Infra employees dubbed “The Red Crew” have been seamlessly filling potholes across the state of New Jersey since 2002. Under her leadership, The Red Crew uses infrared technology and unfailing attention to detail to expertly repair potholes, failed utility cuts and sunken trenches with no break in the road – creating safe and aesthetically pleasing repairs statewide, at a clip of 15,000 potholes per year.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Wood Smith Henning & Berman LLP Expands into Georgia
November 03, 2016 —
Beverley BevenFlorez – CDJ StaffWood 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.
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Terms of Your Teaming Agreement Matter
February 11, 2019 —
Christopher G. Hill - Construction Law MusingsThese days in construction, and other pursuits, teaming agreements have become a great method for large and small contractors to work together to take advantage of various contract and job requirements from minority participation to veteran ownership. With the proliferation of these agreements, parties must be careful in how they draft the terms of these agreements. Without proper drafting, the parties risk unenforceability of the teaming agreement in the evewnt of a dispute.
One potential pitfall in drafting is an “agreement to agree” or an agreement to negotiate a separate contract in the future. This type of pitfall was illustrated in the case of InDyne Inc. v. Beacon Occupational Health & Safety Services Inc. out of the Eastern District of Virginia. In this case, InDyne and Beacon entered into a teaming agreement that provided that InDyne as Prime would seek to use Beacon, the Sub, in the event that InDyne was awarded a contract using Beacon’s numbers. The teaming agreement further provided:
The agreement shall remain in effect until the first of the following shall occur: … (g) inability of the Prime and the Sub, after negotiating in good faith, to reach agreement on the terms of a subcontract offered by the Prime, in accordance with this agreement.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Beware: Hyper-Technical Labor Code Violations May Expose Employers to Significant Claims for Penalties under the Labor Code California Private Attorneys General Act of 2004 (PAGA)
May 10, 2017 —
Angela Reston-Nunez – Newmeyer & Dillion LLPMost employers know that companywide policies or practices that do not strictly comply with applicable state or federal employment laws can expose employers to class action lawsuits by large numbers of employees seeking recovery of massive sums in damages, attorneys’ fees and costs. Unfortunately, traditional class action lawsuits are not the only representative actions employers should be concerned with. Recent litigation trends have shown that California’s lesser known Labor Code Private Attorneys General Act of 2004 (“PAGA”) can be equally, if not more harmful to employers than class actions due to steep penalties for minor violations.
WHAT IS PAGA?
Under PAGA, “aggrieved employees” can sue employers for alleged Labor Code violations. Like class actions, a PAGA plaintiff sues on a representative basis on behalf of themselves and other workers. However, unlike class action plaintiffs, PAGA plaintiffs do not seek damages; rather, they seek civil and statutory penalties formerly recoverable solely by state agencies in enforcement actions.
The distinction between recovery of damages in class actions and recovery of penalties in PAGA actions reflects the often-insidious nature of PAGA claims. While workers have long alleged “derivative” PAGA claims for penalties in connection with more substantive underlying Labor Code violations (meal or rest break violations, for example), we have seen a recent spike in PAGA suits alleging hyper-technical Labor Code violations with no underlying substantive violation, and where the “aggrieved employees” have suffered no actual harm.
WHAT'S AT STAKE?
Equally troubling for employers is the method by which significant penalties are aggregated. With a few significant exceptions, penalties generally range from $50 to $250 per violation. At first blush, this may not seem like much, however total penalties rise rapidly when considering that calculations are made on a per-employee and a per-pay period basis.
AN EXAMPLE ON HOW PAGA WORKS
Consider the following example based on one recent case:
Issue: An employee brought a PAGA-only lawsuit on behalf of himself and 400 other “aggrieved employees” against his employer for alleged Labor Code violations.
Claim: The employee claimed the employer’s 30-year practice of paying employees 9 days after the close of the applicable payroll period violated Labor Code Section 204(d), which requires payment to be made within 7 days of the close of the payroll period. The employee claimed that, under PAGA, the employer was liable for a minimum penalty of $100 per employee, per pay period, going back at least one year (the statutory limitations period for PAGA claims).
Exposure: With 400 employees, 24 pay periods per year, and $100 per violation, the plaintiff sought a minimum of $960,000 in penalties (not including substantial attorneys’ fees, costs and interest also available under PAGA), despite offering no evidence of harm suffered by the employees or prior notice of the issue.
OTHER IMPORTANT CONSIDERATIONS
In addition to a draconian penalties scheme, there are a myriad of additional aggravating factors for employers involved in PAGA litigation, such as:
- PAGA plaintiffs are not required to meet the rigorous class certification standards required of class action plaintiffs, meaning plaintiffs’ attorneys may be more likely to bring meritless “strike suits” aimed at obtaining quick settlements based on significant alleged penalties exposure.
- 75% of PAGA penalties recovered by way of settlement or judgment are directed to the state of California, while the "aggrieved employees” only keep 25%, reinforcing the notion that PAGA claims are frequently attorneys’-fee-driven, rather than for protecting employees.
STEPS FOR EMPLOYERS TO PROTECT THEMSELVES
Fortunately, there are a number of measures employers can take prior to and during wage and hour litigation which can dramatically reduce, or even eliminate, exposure to substantial penalties and damages. This includes:
- Regular reviews. Prior to litigation, we recommend regular detailed reviews of company policies and practices in order to identify areas of possible concern and ensure compliance with California’s ever-changing labor laws.
- Take action. On receipt of a new PAGA claim, taking immediate action to remedy an alleged violation within the Labor Code’s 33-day “safe harbor” time-period may help limit an employer’s exposure, and could bar a plaintiff from filing suit at all.
- Be aggressive. Once a PAGA or class action claim is in litigation, a proactive, aggressive approach to claim evaluation, investigation and litigation is critical.
For these reasons and more, it’s in an employers’ best interest to monitor these issues closely and seek input when appropriate.
Angela Reston-Nunez is a labor and employment attorney in Newmeyer & Dillion’s Walnut Creek office. For questions regarding PAGA, class action or individual wage and hour issues, or other employment law matters, please feel free to contact Angela Reston-Nunez at (925) 988-3249 or angela.reston-nunez@ndlf.com.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
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Impaired Property Exclusion Bars Coverage When Loose Bolt Interferes with MRI Unit Operation
May 16, 2018 —
Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel, LLPIn All Green Electric v. Security National Ins. Co. (No. B279456, filed 3/19/18, ord. pub. 4/17/18), a California appeals court ruled that the impaired property exclusion barred coverage for a claim based on the insured’s failure to tighten a loose bolt that resulted in stray magnetic fields interfering with operation of an MRI machine and allegedly threatening the health of personnel.
All Green was an electrical contractor hired to perform wiring for an MRI unit installation. Stray magnetic fields interfered with the unit’s operation. Efforts to remediate the problem included installing shielding and ultimately relocating the unit to another room. An expert finally determined that a bolt left loose by All Green was causing the magnetic field, which disappeared when the bolt was properly tightened. The facility sought damages for negligence, including costs for unnecessary modifications and repairs, payments to outside sources for substitute mammography testing, operational costs and expenses, damage to reputation, lost profits, and the loss of an HMO contract.
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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