BERT HOWE
  • Nationwide: (800) 482-1822    
    multi family housing building expert Seattle Washington custom homes building expert Seattle Washington housing building expert Seattle Washington hospital construction building expert Seattle Washington production housing building expert Seattle Washington retail construction building expert Seattle Washington condominiums building expert Seattle Washington institutional building building expert Seattle Washington townhome construction building expert Seattle Washington parking structure building expert Seattle Washington high-rise construction building expert Seattle Washington low-income housing building expert Seattle Washington industrial building building expert Seattle Washington custom home building expert Seattle Washington Medical building building expert Seattle Washington Subterranean parking building expert Seattle Washington tract home building expert Seattle Washington structural steel construction building expert Seattle Washington concrete tilt-up building expert Seattle Washington casino resort building expert Seattle Washington office building building expert Seattle Washington mid-rise construction building expert Seattle Washington
    Seattle Washington engineering expert witnessSeattle Washington consulting architect expert witnessSeattle Washington expert witness windowsSeattle Washington forensic architectSeattle Washington construction forensic expert witnessSeattle Washington structural concrete expertSeattle Washington building envelope expert witness
    Arrange No Cost Consultation
    Building Expert Builders Information
    Seattle, Washington

    Washington Builders Right To Repair Current Law Summary:

    Current Law Summary: (SB 5536) The legislature passed a contractor protection bill that reduces contractors' exposure to lawsuits to six years from 12, and gives builders seven "affirmative defenses" to counter defect complaints from homeowners. Claimant must provide notice no later than 45 days before filing action; within 21 days of notice of claim, "construction professional" must serve response; claimant must accept or reject inspection proposal or settlement offer within 30 days; within 14 days following inspection, construction pro must serve written offer to remedy/compromise/settle; claimant can reject all offers; statutes of limitations are tolled until 60 days after period of time during which filing of action is barred under section 3 of the act. This law applies to single-family dwellings and condos.


    Building Expert Contractors Licensing
    Guidelines Seattle Washington

    A license is required for plumbing, and electrical trades. Businesses must register with the Secretary of State.


    Building Expert Contractors Building Industry
    Association Directory
    MBuilders Association of King & Snohomish Counties
    Local # 4955
    335 116th Ave SE
    Bellevue, WA 98004

    Seattle Washington Building Expert 10/ 10

    Home Builders Association of Kitsap County
    Local # 4944
    5251 Auto Ctr Way
    Bremerton, WA 98312

    Seattle Washington Building Expert 10/ 10

    Home Builders Association of Spokane
    Local # 4966
    5813 E 4th Ave Ste 201
    Spokane, WA 99212

    Seattle Washington Building Expert 10/ 10

    Home Builders Association of North Central
    Local # 4957
    PO Box 2065
    Wenatchee, WA 98801

    Seattle Washington Building Expert 10/ 10

    MBuilders Association of Pierce County
    Local # 4977
    PO Box 1913 Suite 301
    Tacoma, WA 98401

    Seattle Washington Building Expert 10/ 10

    North Peninsula Builders Association
    Local # 4927
    PO Box 748
    Port Angeles, WA 98362
    Seattle Washington Building Expert 10/ 10

    Jefferson County Home Builders Association
    Local # 4947
    PO Box 1399
    Port Hadlock, WA 98339

    Seattle Washington Building Expert 10/ 10


    Building Expert News and Information
    For Seattle Washington


    From Both Sides Now: Looking at Contracts Through a Post-Pandemic Lens

    The Business of Engineering: An Interview with Matthew Loos

    CC&Rs Not the Place for Arbitration Agreement, Court Rules

    Hammer & Hand’s Top Ten Predictions for US High Performance Building in 2014

    Newmeyer & Dillion Ranked Fourth Among Medium Sized Companies in 2016 OCBJ Best Places to Work List

    Beyond the Flow-Down Clause: Subcontract Provisions That Can Expose General Contractors to Increased Liability and Inconsistent Outcomes

    Wildfire Insurance Coverage Series, Part 7: How to Successfully Prepare, Submit and Negotiate the Claim

    Dispute Resolution in Your Construction Contract

    Federal Judge Refuses to Limit Coverage and Moves Forward with Policyholder’s Claims Against Insurer and Broker

    Neighbor Allowed to Remove Tree Roots on Her Property That Supported Adjoining Landowners’ Two Large Trees With Legal Immunity

    When is Mediation Appropriate for Your Construction Case?

    Contract Provisions That Help Manage Risk on Long-Term Projects

    Congratulations to Haight’s 2019 Northern California Super Lawyers

    Equal Access to Justice Act Fee Request Rejected in Flood Case

    Insurer Motion to Intervene in Underlying Case Denied

    Homebuilder Confidence Takes a Beating

    Construction Job Opening Rise in October

    New Defendant Added to Morrison Bridge Decking Lawsuit

    Call Me Maybe? . . . Don’t Waive Your Rights Under the Right to Repair Act’s Prelitigation Procedures

    Hawaii Federal District Court Again Rejects Coverage for Faulty Workmanship

    Terminating A Subcontractor Or Sub-Tier Contractor—Not So Fast—Read Your Contract!

    Quick Note: Attorney’s Fees on Attorney’s Fees

    Best Lawyers Honors 48 Lewis Brisbois Attorneys, Recognizes Four Partners as 'Lawyers of the Year'

    Repairs Could Destroy Evidence in Construction Defect Suit

    Turmoil Slows Rebuilding of Puerto Rico's Power Grid

    Missouri Construction Company Sues Carpenter Union for Threatening Behavior

    Texas Federal Court Finds Total Pollution Exclusion Does Not Foreclose a Duty to Defend Waterway Degradation Lawsuit

    Conflicting Exclusions Result in Duty to Defend

    The Evolution of Construction Defect Trends at West Coast Casualty Seminar

    How a 10-Story Wood Building Survived More Than 100 Earthquakes

    Five Facts About Housing That Will Make People In New York City and San Francisco Depressed

    Government’s Termination of Contractor for Default for Failure-To-Make Progress

    The End of Eroding Limits Policies in Nevada is Just the Beginning

    Hawaii Court Looks at Changes to Construction Defect Coverage after Changes in Law

    MTA Implements Revised Contractors Debarment Regulations

    The ARC and The Covenants

    Traub Lieberman Partner Lisa Rolle Obtains Summary Judgment in Favor of Defendant

    Sixth Circuit Lifts Stay on OSHA’s COVID-19 Temporary Emergency Standards. Supreme Court to Review

    North Carolina Supreme Court Addresses “Trigger of Coverage,” Allocation and Exhaustion-Related Issues Arising Out of Benzene-Related Claims

    CDJ’s #3 Topic of the Year: Burch v. The Superior Court of Los Angeles County, 223 Cal.App.4th 1411 (2014)

    The Jersey Shore gets Beach Prisms Designed to Reduce Erosion

    Attempt to Overrule Trial Court's Order to Produce Underwriting Manual Fails

    Construction Defects Lead to Demolition of Seattle’s 25-story McGuire Apartments Building

    Bribe Charges Take Toll on NY Contractor

    Lasso Needed to Complete Vegas Hotel Implosion

    Wilke Fleury Secures Bid Protest Denial

    Construction Contract Clauses Only a Grinch Would Love – Part 4

    Peckar & Abramson Once Again Recognized Among Construction Executive’s “Top 50 Construction Law Firms™”

    Parking Garage Collapse May Be Due to Construction Defect

    Taking Service Network Planning to the Next Level
    Corporate Profile

    SEATTLE WASHINGTON BUILDING EXPERT
    DIRECTORY AND CAPABILITIES

    The Seattle, Washington Building Expert Group is comprised from a number of credentialed construction professionals possessing extensive trial support experience relevant to construction defect and claims matters. Leveraging from more than 25 years experience, BHA provides construction related trial support and expert services to the nation's most recognized construction litigation practitioners, Fortune 500 builders, commercial general liability carriers, owners, construction practice groups, and a variety of state and local government agencies.

    Building Expert News & Info
    Seattle, Washington

    Ongoing Operations Exclusion Bars Coverage

    December 09, 2019 —
    The insurer denied the insured contractor's claim seeking a defense for faulty workmanship based upon the ongoing operations exclusion. PJR Constr. of N.J. v. Valley Forge Ins. Co., 2019 U.S. Dist. LEXIS 127973 (D. N. J. July 31, 2019). PJR Construction was the general contractor to build a swim club and pavilion building for Cambridge Real Property, LLC. PJR began construction on May 29, 2012, and was to complete the construction by March 1, 2013. The project took much longer than anticipated. PJR was denied access to the site on November 13, 2014. Cambridge contended PJR tolerated shoddy workmanship and breached the terms of the contract documents. Cambridge estimated that the project was between 55% and 74.3% complete. PJR and Cambridge went to arbitration. PJR sought a defense from the insurers. Coverage was denied based upon exclusions j (5) and j (6). Exclusion j (5), which the court referred to as the "Ongoing Operations Exclusion," provided the policy did not apply to,
    Property Damage to . . . [t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the property damage arises out of those operations.
    Read the court decision
    Read the full story...
    Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
    Mr. Eyerly may be contacted at te@hawaiilawyer.com

    Washington State Enacts Law Restricting Non-Compete Agreements

    September 23, 2019 —
    Washington State has enacted a new law that means big changes for employers. The new law, in effect on January 1, 2020, will dramatically limit the enforcement of non-compete agreements in our state and imposes tough penalties on employers found to be in violation. While the new law does not take effect for many months, businesses should nonetheless act quickly and before year’s end to evaluate practices and, if necessary, revise existing and future non-compete agreements to ensure compliance. Under the new law, if an employee successfully proves a company’s non-compete agreement is unenforceable, then the employer will be required to pay the greater of $5,000 or an employee’s actual damages, plus the employee’s attorneys’ fees (and its own, in defending the non-compete), expenses and costs incurred in challenging the agreement. Brief Summary of Changes Washington Courts have typically disfavored restrictive covenants but usually enforced a non-competition agreement that protected an employer’s legitimate business interests and was reasonable in scope, geographic reach, and duration. The Legislature halted this trend through passage of Engrossed Substitute House Bill 1450. Read the court decision
    Read the full story...
    Reprinted courtesy of Ellie Perka, Ahlers Cressman & Sleight PLLC
    Ms. Perka may be contacted at ellie.perka@acslawyers.com

    Lockton Expands Construction and Design Team

    July 19, 2011 —

    Lockton Companies, LLC, the largest privately held independent insurance broker, has announced that it is expanding its construction and design team with the hiring of Karen Erger and Tom Miller.

    Ms. Erger will provide professional liability practice management, loss prevention, contract and complex claims management consulting services to Lockton's architectural, engineering and construction clients in her role as Vice President, Director of Practice Management. Her background includes construction litigation at a leading construction law firm, professional liability claims defense and claims consulting for major professional liability underwriters.

    Miller joins Lockton as a Senior Vice President within the Design and Construction Unit. His role will be dedicated to serving the needs of engineering, architecture and construction firms performing services around the globe. He has spent more than 15 years concentrating on professional liability for design professionals and contractors in multiple roles. He previously managed the professional liability underwriting of one of the largest construction insurers and has developed numerous manuscript insurance products as well as focused on strategic planning to enhance business unit opportunities.

    Read the full story…

    Read the court decision
    Read the full story...
    Reprinted courtesy of

    Construction Defect Coverage Summary 2013: The Business Risks Shift To Insurers

    January 13, 2014 —
    In 2013, courts examining insurance coverage for construction defect claims departed from earlier precedent and trended toward allowing construction companies to shift the costs of their faulty workmanship to their insurers, thereby reversing the previous public policy trend against coverage for such claims. The tension in all construction defect insurance disputes is typically over which party—the insured or insurer—should bear the cost of the repair and replacement work to fix or complete the job that the insured was hired to do. For some time, courts have recognized that there is a public policy against allowing construction companies to get paid to perform faulty workmanship, and then to force their insurers to be the financers for the repair and replacement costs. Such courts issued landmark decisions precluding insurance coverage for construction defects in these situations. This trend against allowing insurance coverage for the repair of faulty workmanship was alive and well in 2012. However, in 2013, court decisions focused more on the hyper-technical interpretation of policy wording and strayed from those public policy considerations upon which previous decisions relied. This 2013 trend was seen in three areas of construction defect insurance decisions in particular: 1. Decisions addressing whether an insured’s faulty workmanship can be considered a covered “occurrence.” 2. Even when faulty workmanship may not be an “occurrence” as it relates to the insured’s work, some decisions found that the same faulty workmanship to one part of the insured’s project could be an “occurrence” if it caused damage to other non-defective parts of the insured’s project. 3. Decisions addressing whether a policy’s exclusion for damage to the particular part of property on which the insured was working can be applied as intended to prevent coverage for the repair and replacement costs resulting from the insured’s faulty work. The 2013 decisions in each of these areas are addressed in the three sections below. The overall trend to be derived from these cases is that courts have gotten away from analyzing the common sense public policy considerations behind earlier precedent and have instead seized on the technical application of policy wording to allow insureds to shift more of their business risk and increase insurers’ overall exposure. I. IS FAULTY WORKMANSHIP AN “OCCURRENCE”? SEVERAL MORE STATES SAY YES. In 2013, while the Supreme Court of Alabama adhered to the idea that an insured cannot obtain insurance to pay the cost of repairing its own work, the highest courts in West Virginia and North Dakota went the opposite direction, even overturning their own recent precedent to make the insurance company responsible for bearing the cost to repair and replace its insured’s faulty work. In order to transfer the risk of faulty construction from builder to insurer, these courts ruled that, if the defective construction was not expected or intended by the insured, then the “occurrence” requirement of the policy’s insuring agreement is satisfied. Of course, the practical failing of these rulings is that it gives construction companies a “double recovery”: they get paid once by the consumer to build the project, and then the cost of repairing the project gets paid by insurance. This very economic disincentive was at the heart of the early legal trend precluding coverage for such construction defects; a trend that is now slowly being reversed with almost no discussion of the economic and business havoc that will result. A. Cherrington v. Erie Ins. Prop. & Cas. Co., 231 W. Va. 470, 745 S.E.2d 508 (March 27, 2013) The Supreme Court of West Virginia overturned previous precedent to find that defective workmanship causing the need to repair the construction itself constitutes an “occurrence” under a CGL policy. In Cherrington, a homeowner sued a builder for the costs to repair defects in a newly-constructed residence. There was no damage alleged to anything but the project itself. The builder’s insurer denied coverage arguing, among other reasons, allegations of defective construction do not constitute an “occurrence.” The insurer’s position was grounded in several West Virginia Supreme Court decisions that found that poor workmanship, standing alone, does not constitute an occurrence. Webster Cnty. Solid Waste Auth. v. Brackenrich & Associates, Inc., 217 W. Va. 304, 617 S.E.2d 851 (2005); Corder v. William W. Smith Excavating Co., 210 W. Va. 110, 556 S.E.2d 77 (2001); Erie Ins. Prop. & Cas. Co. v. Pioneer Home Improvement, Inc., 206 W. Va. 506, 526 S.E.2d 28 (1999). In an about-face, the West Virginia Supreme Court overruled its prior decisions and found that faulty workmanship can constitute an occurrence if it was not intended or expected by the insured. The court observed that a majority of other jurisdictions found that faulty workmanship is covered by a CGL policy, either in judicial decisions or by legislative amendments to state insurance codes. On this point, we note that on November 25, 2013 a bill was introduced before the New Jersey Assembly that would require CGL policies issued to construction professionals to define “occurrence” so as to include claims for faulty workmanship. The court reasoned that, by defining occurrence, in part, as “an accident,” the policy must be interpreted to provide coverage for damages or injuries that were not deliberately or intentionally caused by the insured. The court also noted that the policy contained an exclusion property damage to “your work” (exclusion l.), which implies that damage to the insured’s work must be within the policy’s basic insuring agreement, or there would not have been the need for the exclusion. Thus, the court reasoned that a finding that faulty workmanship is not an occurrence would be inconsistent with the “your work” exception. Therefore, the court expressly overruled its prior decisions and found that the builder’s insurer had a duty to defend. B. K & L Homes, Inc. v. Am. Family Mut. Ins. Co., 2013 ND 57, 829 N.W.2d 724 (April 5, 2013) The Supreme Court of North Dakota changed course and held that faulty workmanship may constitute an “occurrence” so long as the faulty work and the resulting damage was not anticipated, intended, or expected. Homeowners sued the insured homebuilder alleging that their house suffered damage because of substantial shifting caused by improper footings and inadequately compacted soil under the footings and foundation that had been constructed by a subcontractor of the insured. The main issue before the North Dakota Supreme Court was whether inadvertent faulty workmanship constitutes an accidental “occurrence” potentially covered under the CGL policy. The court examined the drafting history of the standard ISO CGL form and surveyed cases nationwide. The court concluded that faulty workmanship may constitute an “occurrence” if the faulty work was “unexpected” and not intended by the insured, and the property damage was not anticipated or intentional, so that neither the cause nor the harm was anticipated, intended, or expected. In reaching its conclusion, the North Dakota Supreme Court specifically rejected its own prior decision in ACUITY v. Burd & Smith Constr., Inc., 721 N.W.2d 33, 2006 ND 187 (N.D. 2006), which held that faulty or defective workmanship, standing alone, is not an accidental “occurrence.” The court explained that the prior decision incorrectly drew a distinction between faulty workmanship that damages the insured’s work or product and faulty workmanship that damages a third party’s work or property. The court found that there is nothing in the definition of “occurrence” that supports the notion that faulty workmanship that damages the own work of the insured contractor is not an “occurrence.” The North Dakota Supreme Court’s change in approach, like the decision of the West Virginia Supreme Court in Cherrington, is marked by a narrow focus on whether the faulty work was purposeful, without regard to the broader concepts that insurance coverage is not meant to satisfy the insured’s contractual business obligations. C. Capstone Building Corp. v. American Motorists Insurance Co., 308 Conn. 760, 67 A.3d 961 (June 11, 2013) The Supreme Court of Connecticut found as a matter of first impression that defective workmanship causing defects in the insured’s own project can constitute an “occurrence.” The insureds, a general contractor and project developer, settled construction defect claims against them brought by the University of Connecticut involving the allegedly negligent construction of a dormitory building. The settlement was for repairs necessary to correct the insured’s own work and not for any other incidental property damage. After the settlement, the insured sought coverage for the settlement amount from the insurer that had issued an Owner Controlled Insurance Program policy for the dormitory project. In a matter of first impression in Connecticut, the Supreme Court of Connecticut held that defective workmanship necessitating repairs can indeed constitute an insured “occurrence,” reasoning that, because the negligent work was unintentional from the point of view of the insured, such negligent work may constitute an accident or occurrence. Similar to the approach in Cherrington and K & L Homes, the court reasoned that insurance policies are designed to cover foreseeable risks, and that a deliberate act of constructing a project, when performed negligently, does indeed constitute a covered accidental “occurrence” if the effect is not intended or expected. D. Taylor Morrison Servs., Inc. v. HDI-Gerling Am. Ins. Co., 746 S.E.2d 587 (Ga., July 12, 2013) The Supreme Court of Georgia ruled that an “occurrence” does not require damage to the property or work of someone other than the insured. A class of 400 homeowners in California sued the insured homebuilder for negligently constructing the foundation of their homes, resulting in damage to the homes due to the cracked and buckling foundations. The homebuilder’s insurer defended the class action and filed a declaratory judgment action in Georgia federal court, arguing that the claims against the insured did not allege an “occurrence” because the damages at issue were simply the repairs to the insured’s faulty work. The Eleventh Circuit certified the question of whether Georgia law requires there to be damage to property other than the insured’s own work for an “occurrence” to exist under a CGL policy. The Supreme Court of Georgia found that negligent construction which damages only the insured’s own work can indeed constitute an accidental “occurrence.” Like the recent decisions discussed above, the court observed that the term “accident” meant an unexpected or unintended event, and, therefore, the identity of the person whose interests were damaged is irrelevant. However, in a lengthy series of footnotes, the court further observed in dicta that defectively constructed property cannot be said to be physically injured by the work that brought it into existence. However, the court did not attempt to define the precise line of demarcation between defective and non-defective work when both are a part of the same project. E. Owners Ins. Co. v. Jim Carr Homebuilder, LLC, 1120764, 2013 WL 5298575 (Ala., Sept. 20, 2013) The Supreme Court of Alabama confirmed that faulty workmanship, standing alone, does not constitute an “occurrence.” The insured homebuilder sought coverage for an adverse arbitration award wherein it was determined that the insured had defectively constructed a home resulting in damages due to water infiltration, causing “significant mental anguish” to the homeowner. The insurer defended the insured in the arbitration, but denied indemnity coverage for the award. The Supreme Court of Alabama agreed with the insurer, finding that, because the insured was hired to build the entire house, any property damage or bodily injury (mental anguish) that resulted from the insured’s faulty workmanship was not caused by an “occurrence.” The court indicated only damage to something other than the insured’s own work (which was not present in this case) can be considered damage caused by an “occurrence.” The implication of this case is that either property damage or bodily injury that results from faulty workmanship is not caused by an “occurrence,” although the court did not expressly discuss this issue it its holding. II. AN INSURED’S FAULTY WORKMANSHIP TO ONE PART OF A PROJECT MAY BE AN “OCCURRENCE” IF IT CAUSES DAMAGE TO OTHER NON-DEFECTIVE PARTS OF THE INSURED’S PROJECT. Even in jurisdictions where the costs to repair faulty workmanship is typically not an “occurrence,” courts do recognize that, if the same faulty workmanship of the insured damages another part of the insured’s project which was not otherwise defective, then this does qualify as an occurrence. See French v. Assurance Co. of Am., 448 F.3d 693, 706 (4th Cir. 2006) (holding that a CGL policy does not provide coverage to correct defective workmanship but that the policy provides coverage for the cost to remedy property damage to the contractor's otherwise non-defective work-product). Examining the issue of how to treat one part of the insured’s project that was damaged by a different, defective part of the same insured’s project, the Sixth Circuit, predicting Kentucky law, found in 2013 that the insured subcontract’s faulty workmanship that damages otherwise non-defective part of the project is not an “occurrence” if the damage was of the type the insured was hired to prevent or control. However, the Colorado U.S. District Court went the opposite direction in ruling that the insured’s faulty workmanship to one part of the project that damages other non-defective parts of the same project does indeed qualify as an occurrence. A. Liberty Mutual Fire Ins. Co. v. Kay & Kay Contracting, LLC, Case No. 12-5791 (C.A.6 (Ky.) Nov. 19, 2013) The Sixth Circuit Court of Appeals predicted that, under Kentucky law, faulty workmanship that results in damage to other parts of a project is not an “occurrence” if the kind of damage that results is what the insured was hired to control or prevent. The insured, a foundation subcontractor, performed site preparation and constructed a building pad for a Wal-Mart store. After the store was built, cracks in the building’s walls were noticed. Wal-Mart alleged that the fill under one corner of the building had settled, resulting in the structural problems. Wal-Mart demanded that the general contractor remedy the problem, who in turn demanded the same from the insured. The insured subcontractor sought coverage from its CGL carrier, which denied coverage and filed a declaratory judgment action based, in part, on basis that there was no “occurrence” because there was only faulty workmanship in need of repair. The court observed that under Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69, 73 (Ky. 2010) the faulty construction of the building pad (the insured’s own work) was not an “occurrence.” However, the court observed that the claimed damage included more than just the building pad. The court noted that the Kentucky Supreme Court had not decided the issue of whether damage to parts of a construction project other than the insured’s faulty work constitutes an “occurrence.” The court reasoned that even if the Kentucky Supreme Court would determine that collateral damage to property other than the insured’s work is an “occurrence,” it would not adopt a version of such a rule that would apply when the damage at issue was the obviously and foreseeable consequence of the insured’s faulty work. The court observed that in Cincinnati, the Kentucky Supreme Court emphasized the significance of the insured’s control over the work in analyzing the whether an “occurrence” took place. Specifically, in Cincinnati, the Kentucky Supreme Court opined that events that are within the control of the insured are not truly accidental or fortuitous. The court reasoned that the alleged damage to the Wal-Mart was due solely to the soil settlement—work that was within the insured’s control. The entire reason the insured was hired was to prevent the soil from settling in a manner that would cause damage to the structure. Thus, the court predicted that the Kentucky Supreme Court would not find that an “occurrence” takes place when the damage to a project that is allegedly caused by the defective workmanship of a subcontractor hired to control against that very damage from happening. Therefore, the court ordered that summary judgment be granted in favor of the insurer. We also note that an opinion earlier this year, McBride v. ACUITY, 510 Fed.Appx. 451, 2013 WL 69358 (C.A.6 (Ky.) Jan. 7, 2013), The Sixth Circuit Court of Appeals predicted that, under Kentucky law, the insured’s faulty workmanship to any parts (including non-defective parts) of the insured’s own project does not qualify as an “occurrence.” B. Mt. Hawley Ins. Co. v. Creek Side at Parker Homeowners Ass’n, Inc., 2013 WL 104795 (D. Colo. Jan. 8, 2013) Colorado U.S. District Court found faulty workmanship of a subcontractor potentially qualified as an “occurrence” where the subcontractor’s faulty workmanship caused damage to other, non-faulty parts of the project. A homeowners association sued the developer/builder of a residential development project seeking damages allegedly caused by construction defects. The homeowners association alleged that the developer/builder’s subcontractors performed defective work that caused consequential damage to other, non-faulty parts of the project. The district court found that the underlying lawsuit alleged an “occurrence.” Citing Greystone Constr., Inc. v. Nat’l Fire & Mar. Ins. Co., 661 F.3d 1272 (10th Cir. 2011) (Colo. law), the district court explained that “[f]aulty workmanship can constitute an occurrence that triggers coverage under a CGL policy if … the damage was to non-defective portions of the contractor’s or subcontractor’s work.” The district court also found that at least some of the alleged property damage was to non-defective portions of its or its subcontractors’ work on the same project. Accordingly, the district court held that there was at least a genuine issue of material fact as to whether there had been an “occurrence.” III. EXCLUSION FOR DAMAGES TO PART OF PROPERTY ON WHICH INSURED IS WORKING. One frequently discussed exclusion with regard to coverage for construction defect claims, is the exclusion for property damage to that part of real property on which the insured or any subcontractors are performing operations. This exclusion (along with several other “business risk” exclusions) embodies the notion that the cost of repairing or replacing the consequences of shoddy workmanship or paying for the fulfillment of a contractual commitment is not covered. In standard general liability forms, this provision appears as exclusion j(5) and states that the insurance does not apply to property damage to: "That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations." In 2013, the South Carolina Supreme Court held that the exclusion applies if the insured’s subcontractor is still performing operations—even though the insured’s own operations are complete. However, in a different case, the U.S. District Court in Massachusetts held that exclusion j(5) only applies if there is a sufficient connection between the scope of the insured’s work and the damaged property. Finally, the South Dakota Supreme Court confirmed that the exclusion applies to damage while the insured’s subcontractor is working, but does not bar coverage to construction materials not yet incorporated into a project. These cases illustrate the varied applicability and interpretation of exclusion j(5) reached by different courts. A. Bennett & Bennett Const., Inc. v. Auto Owners Ins. Co., 405 S.C. 1, 747 S.E.2d 426 (2013) The Supreme Court of South Carolina found that exclusion j(5) applies if the property damage takes place while the insured’s subcontractor’s operations are ongoing. A general contractor hired a masonry subcontractor to construct a brick wall. After completion of the wall, the general contractor observed mortar and slurry dried on the face of the wall and instructed the subcontractor to correct the appearance of the wall. The subcontractor hired a power washing company to clean the bricks, which resulted in discoloration and removal of the decorative finish on the bricks. The general contractor was forced to replace the damaged wall on its own, after which the general contractor sued and obtained a default judgment against the subcontractor. The general contractor then sued the subcontractor’s insurer in a declaratory judgment action. The insurer relied in part on exclusion j(5) to deny coverage, arguing that there was no coverage for the damage to the wall because it was damage “to that part of the real property on which the insured was performing operations.” The general contractor argued that the exclusion did not apply because the damage took place after the insured’s operations (the construction of the brick wall) were over. The court held that whether the brick wall installation (work performed by the insured itself) was completed was irrelevant to the applicability of exclusion j(5) because the insured’s operations for the purposes of the exclusion include work performed by any of the insured’s subcontractors. That is, the exclusion barred coverage so long as the power washing company hired by the insured was still performing operations on the insured’s behalf at the time the damage took place. Because the damage occurred during the insured’s operations, exclusion j(5) barred coverage for the damage to the bricks. B. Gen. Cas. Co. of Wisconsin v. Five Star Bldg. Corp., CIV.A. 11-30254-DJC, 2013 WL 5297095 (D. Mass. Sept. 19, 2013) U.S. District Court for the District of Massachusetts determined that exclusion j(5) only applies to damage to “that particular part of real property” that was within the scope of the insured’s work, and not other portions of the overall structure. An insurer filed a declaratory judgment action against its insured relating to a claim for damages at a university science center that arose from the insured’s work in upgrading the center’s HVAC system. The insured’s work included puncturing the weather membrane in the roof and installing temporary patches at the puncture sites until the new HVAC system was complete. Heavy rain caused some of the patches to fail and water to enter the building. The insurer agreed to pay for the damage caused to the interior of the center, but refused to pay for damage to the roof, in part based on exclusion j(5), arguing that the entire roof was the “particular part” of the building on which the insured was performing operations. The court rejected the insurer’s argument, reasoning that puncturing the roof was incidental to the ventilation system upgrade. The court noted that the roof accounted for only a small part of the total work on the project and that there was an insufficient nexus between the scope of the insured’s HVAC work and the damage to the roof. Unfortunately, the court seemed to ignore the fact that the temporary roof patches which failed were clearly part of the insured’s work and, presumably, a necessary part of the HVAC upgrade. Nevertheless, the court concluded that exclusion j(5) was not a bar to coverage for the damage to the roof as well as the rest of the structure damaged by water intrusion. C. Swenson v. Auto Owners Ins. Co., 2013 S.D. 38, 831 N.W.2d 402 (May 15, 2013) The South Dakota Supreme Court found that building material yet to be installed at a project is not “real property” and exclusion j(5) did not apply. Finally, in a 2013 decision of the South Dakota Supreme Court, the court held that a “your work” exclusion in a homebuilder’s policy did not bar coverage for damage to building materials that were negligently left exposed to the elements because the materials were not installed and, therefore, not yet “real property.” However, the court applied the exclusion to completed parts of the structure damaged because they were left open to rain and snow. Consistent with the decision in Bennett (part A. above), the court observed that the exclusion applies because the insured or its subcontractor(s) were actively performing the construction work when the damage took place. As the entire structure (a new home) was the insured’s work, the court was not faced with the issue in Five Star (part B. above). CONCLUSION There is a single insurance issue at the heart of most construction defect coverage disputes: when construction work is performed negligently, is the resulting defect simply part of the business risk that the insured must pay to repair, or is the resulting defect true damage to a third party’s property that may be insured under a general liability policy? During 2013, legal rulings in different states continue to demonstrate the evolution of the answer to this question. An increasing number of states appear to be ignoring the economic reality surrounding insured’s responsibility for its faulty workmanship. In these states, courts focused on the term “accident” to find coverage for the repair and replacement costs arising from defective construction claims. Furthermore, even in cases where the insured’s faulty workmanship itself does not constitute an “occurrence,” some courts are creating an exception where the insured’s negligence on one part of the project caused damage to a different non-faulty part of the same insured’s project. The legal landscape for construction defect claims appears to be shifting rapidly and posing new challenges to insurers and claims professionals, who are faced with an increasing number of lawsuits and claims alleging faulty workmanship. Perhaps 2014 may bring a renewed legal focus on the public policy and intent behind the construction defect insurance provisions, and thereby shift the risk of correcting faulty construction away from insurers and back onto the insured parties that contracted for, controlled and were compensated for the work itself. FOOTNOTES: 1. Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788 (N.J. 1979) (finding that a liability policy “does not cover an accident of faulty workmanship but rather faulty workmanship which causes an accident”); Bor-Son Bldg. Corp. v. Employers Commercial Union Ins. Co. of Am., 323 N.W.2d 58 (Minn. 1982) (reasoning that CGL is meant to cover tort liability for damage to others, and not for the insured’s contractual liability for economic loss because the insured’s work is less than that for which the damaged person bargained); Monticello Ins. Co. v. Wil-Freds Const., Inc., 277 Ill. App. 3d 697, 661 N.E.2d 451 (Ill.App.Ct. 1996) (construction defects that are the natural and ordinary consequences of faulty workmanship are not an “occurrence” unless there has been damage to third party property.) 2. Amerisure Mut. Ins. Co. v. Auchter Co., 673 F.3d 1294 (11th Cir. 2012); Nautilus Ins. Co. v. JDL Dev., IX, LLC, 10 C 3435, 2012 WL 1156917 (N.D. Ill. Apr. 4, 2012), appeal dismissed (June 12, 2012); Aquatectonics, Inc. v. Hartford Cas. Ins. Co., 10-CV-2935 DRH ARL, 2012 WL 1020313 (E.D.N.Y. Mar. 26, 2012) 3. See Colorado Revised Statutes Section 13-20-808, effective May 21, 2010 (requires courts to presume that work resulting in property damage, including to the work itself, is accidental and an “occurrence”); Arkansas Code Annotated Section 23-79-155, effective July 27, 2011 (requires general liability policies to have a definition of “occurrence” that includes property damage or bodily injury resulting from faulty workmanship); South Carolina Code Annotated Section 38-61-70, effective May 17, 2011 (mandates that property damage resulting from faulty workmanship meeting the policy’s definition of “occurrence”); Hawaii Revised Statutes Section 431:1-217, effective June 3, 2011 (after a 2010 Hawaii appellate court ruling holding that construction defect claims do not constitute an occurrence, this statute was effectuated which requires courts to apply case law that was in effect at the time a policy was placed—such that pre-2010 policies may cover construction defects whereas post-2010 policies may not.) You may contact Mr. Husmann at jhusmann@batescarey.com. Mr. Fleischer can be contacted at afleischer@batescarey.com Read the court decision
    Read the full story...
    Reprinted courtesy of

    In Texas, a General Contractor May be Liable in Tort to a Third-Party Lessee for Property Damage Caused by a Subcontractor’s Work

    February 16, 2016 —
    In Zbranek Custom Homes, Ltd. v. Joe Allbaugh, et al., No. 03-14-00131-CV, 2015 WL 9436630 (Tex.App.-Austin Dec. 23, 2015), the Court of Appeals of Texas, Austin, considered the circumstances under which a general contractor can be held liable for injuries to a non-contracting party’s property. The court held that, because the general contractor, Zbranek Custom Homes, Ltd. (Zbranek), exercised control over the construction of the fireplace at issue, Zbranek owed a duty of care to the first lessees of the home that Zbranek built. In Zbranek, Bella Cima Developments, L.P. (Bella Cima) hired Zbranek to act as the general contractor for the construction of a home. As the general contractor, Zbranek engaged various subcontractors to perform different aspects of the construction, including the framing, stucco and masonry work for an outdoor fireplace. Read the court decision
    Read the full story...
    Reprinted courtesy of Michael L. DeBona, White and Williams LLP
    Mr. DeBona may be contacted at debonam@whiteandwilliams.com

    Federal District Court Continues to Find Construction Defects do Not Arise From An Occurrence

    May 10, 2012 —

    Coverage for construction defects continues to be hotly contested in Hawaii state and federal courts. In a recent decision, Judge Mollway felt bound to follow the Ninth Circuit’s decision in Burlington Ins. Co. v. Oceanic Design & Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004), where the court found construction defect claims arise from breach of contract, not from an occurrence. Judge Mollway’s most recent decision on the issue is Illinois Nat. Ins. Co. v. Nordic PCL Constr., Inc., 2012 U.S. Dist. LEXIS 58464 (D. Haw. April 26, 2012).

    Nordic constructed a grocery store for Safeway. In addition to the grocery store, Nordic built a 165-space rooftop parking deck, retail shops and related improvements. After opening for business in 2007, Safeway experienced significant leaks. Safeway demanded that Nordic repair the parking deck. Nordic sent the demand letter to the insurer, who agreed to appoint counsel subject to a reservation of rights.

    Safeway filed suit against Nordic in state court alleging, among other things, breach of contract and negligence. The insurer provided Nordic with a defense, but Nordic hired independent counsel.

    The insurer filed for declaratory relief in federal district court.

    Read the full story…

    Read the court decision
    Read the full story...
    Reprinted courtesy of

    Legislation Update: S-865 Public-Private Partnerships in New Jersey Passed by Both Houses-Awaiting Governor’s Signature

    July 02, 2018 —
    New Jersey is finally close to being among the many states with broad authority to develop or improve public projects through a Public-Private Partnership (P3) delivery method. This contracting model has stimulated growth and improvements in other States and led to the delivery of projects that may not otherwise have happened. Senate Bill 865 (“S-865”), after undergoing some last-minute amendments in a frenzied legislature dealing with budget and other critical issues, has passed in both houses of the Legislature and is waiting for Governor Murphy’s signature, which is expected shortly. The law will be effective 180 days from formal enactment. The administrative framework is now in place to make Public-Private Partnerships a reality in New Jersey. Reprinted courtesy of Steven M. Charney, Peckar & Abramson, P.C. and Charles F. Kenny, Peckar & Abramson, P.C. Mr. Charney may be contacted at scharney@pecklaw.com Mr. Kenny may be contacted at ckenny@pecklaw.com Read the court decision
    Read the full story...
    Reprinted courtesy of

    Couple Gets $79,000 on $10 Million Construction Defect Claim

    September 24, 2013 —
    A Florida couple who sought more than $10 million in damages in a construction defect suit, has received a jury verdict of only $79,000. Leo and Kathryn Vecellio bought the 25,000 square-foot home in 2008, after which they discovered water intrusion issues. They sued both the builder and couple from whom they had bought the house. Although the Vecellios spent more than $11 million to repair their home, the jury concluded that the builder did not know about the construction defects. The jury did determine that the builder, Dan E. Swanson, did either lie about or conceal certain facts about the construction. He was ordered to pay the $79,000 in damages to the Vecellios. Lawyers for the defendants argued that the leaks were not from the original construction of the home, but were instead caused by the renovations made by the Vecellios. The Vecellios are pursuing whether they are entitled to money from home warranties. “There will be more evidence to be considered. I’m determined to see this through,” said Leo Vecellio. Read the court decision
    Read the full story...
    Reprinted courtesy of