New Executive Order: Revitalizing Our Nation’s Commitment to Environmental Justice for All
May 08, 2023 —
Anthony B. Cavender - Gravel2GavelThe White House has released the text of the President’s new Executive Order strengthening the Federal Government’s commitment to taking new actions to enhance and promote environmental justice. The Order was published in the Federal Register on April 26, 2023 at 88 FR 25251. President Clinton’s pioneering 1994 Executive Order remains effective, but the Federal Government must, as part of a whole-of-government approach to environmental justice, “build upon and strengthen its commitment to deliver environmental justice to all communities across America.”
Unlike that Order, this Order defines “environmental justice.” For purposes of this new Order, “environmental justice” takes into account all adverse human health and environmental effects and hazards, including those related to climate change, the cumulative impacts of environmental and other burdens, and the legacy of racism or other structural or systematic barriers, and ensures equitable access to a healthy, sustainable and resilient environment in which to live, play, work, learn, worship and engage in cultural and subsistence practices.
“Federal activity” is now broadly defined as “any agency rulemaking, guidance, policy, program, practice or action that affects or has the potential to affect human health and the environment, including any agency action related to climate change.” This Order references the seven previous Executive Orders devoted to climate change, clean energy and the Inflation Reduction Act.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
There is No Claims File Privilege in Florida, Despite What Insurers Want You to Think
June 17, 2024 —
Susana Arce & Stephanie A. Giagnorio - Saxe Doernberger & Vita, P.C.As Florida insurers continue their attempts to narrow protections for policyholders, it is imperative - now more than ever - that insureds be well-informed and know their rights. Most recently, in Florida, insurers are attempting to weaponize the death of Senate Bill 1726 and House Bill 1287 to limit the documents disclosed to policyholders. Specifically, the proposed bill, which required insurers to disclose their claims file to policyholders, hoped to thwart insurers from utilizing “claims file privilege” to obstruct justice for policyholders and help level the playing field. The goal of the proposed bill was to promote transparency of the claim adjustment process and undercut insurers’ attempts to dodge discovery of relevant and necessary information during litigation, forcing the insurers to fully and honestly justify their basis for withholding coverage . Unfortunately for policyholders, on March 8, 2024, the proposed legislation was not passed by the Insurance and Banking Subcommittee.
While insurers want you to believe this is a significant victory and a free pass to continue withholding documents under a “claims file privilege,” this is not the case. The proposed bill merely codified current Florida law – simply put, the “claims file privilege” never existed, and still does not.
Reprinted courtesy of
Susana Arce, Saxe Doernberger & Vita, P.C. and
Stephanie A. Giagnorio, Saxe Doernberger & Vita, P.C.
Ms. Arce may be contacted at SArce@sdvlaw.com
Ms. Giagnorio may be contacted at SGiagnorio@sdvlaw.com
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Should I Stay or Should I Go? The Supreme Court Says “Stay”
June 10, 2024 —
Brendan J. Witry - The Dispute ResolverIn the construction industry, arbitration is a frequently agreed-upon and utilized dispute resolution method. The Federal Arbitration Act (the “FAA”), 9 U.S.C. 1, et seq., provides the underpinning and framework for how courts should handle litigation in connection with arbitration agreements. Where a party asserts that a claim brought in court should be subject to arbitration, Section 3 of the FAA provides that the action should be stayed. However, some courts have entertained a party’s request to dismiss a suit where the claim is subject to an arbitration agreement, creating a circuit split in the federal appeals courts. In
Smith v. Spizzirri, 2024 WL 2193872, issued on May 16, 2024, the Supreme Court held that, absent some other defect (such as the lack of personal or subject matter jurisdiction), Section 3 of the FAA requires a court which finds a claim is subject to an arbitration must stay the lawsuit during the arbitration proceedings rather than dismissing the action.[1] In so doing, the Court addressed a question that for years it left unanswered.
While most Circuits held, prior to Smith, that Section 3 requires a court to stay the litigation pending an arbitral award; the First, Fifth, Eighth, and Ninth Circuits each held that a court could dismiss an action in lieu of staying.
In Smith, both parties acknowledged the underlying claims were arbitrable, but when the district court compelled arbitration, the court dismissed the action rather than staying the court proceedings. The Ninth Circuit (relying on its prior precedent) affirmed, with two judges noting that the Ninth Circuit’s approach was incorrect. The Supreme Court granted certiorari and reversed.
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Brendan J. Witry, Laurie & Brennan LLPMr. Witry may be contacted at
bwitry@lauriebrennan.com
Haight’s 2020 San Diego Super Lawyers and Rising Stars
July 06, 2020 —
Haight Brown & Bonesteel LLPHaight congratulates partners
Michael Parme and
Arezoo Jamshidi who were selected to the 2020 San Diego Super Lawyers Rising Stars list.
Each year no more than 2.5% of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.
Haight Brown & Bonesteel LLP
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Were Condos a Bad Idea?
June 13, 2022 —
Tyler P. Berding - Berding & Weil LLPIntroduction
Condominiums are a nice idea, but their execution has been less than perfect. Long before the fatal Berkeley, California balcony failure in 2015 or the 2021 Champlain Towers South collapse that killed 98 people in Surfside, Florida, we suspected that all was not right with the basic condo concept. Years ago, there were already signs this "cooperative" housing model was anything but. Whether due to owner apathy, internal disputes, or failure to fund future repairs, sustaining these projects for the long-term has been difficult, leaving their future in doubt. Can this be fixed, or is the concept inherently flawed?
Every enterprise has an organizational "model" to run the business. For-profit corporations obtain revenue from the sale of products or services. The revenue of non-profit condominium corporations are the assessments paid by the owners of the individual units. While these assessments are “mandatory” in the sense they must be paid, they are also “voluntary” since the amount is left to the board of directors to determine. Condos are cheaper to buy, but the sales price may not reflect the real cost of ownership. They are "cooperative" because costs and space are shared, but internal disputes and funding shortfalls operate to shorten the life of these buildings in ways few owners understand.
Internal Disputes
Why is condominium life frequently not “cooperative?” Disputes. Disputes between condominium owners and their associations; among board members; and between individual owners and their neighbors. There are arguments over the right to put a flag on the balcony. There are arguments over swimming pool hours. The right to paint their front door some color other than everyone else's. The right to be free of noise, smoke, or view-blocking plants. And sometimes, the claimed right not to pay assessments needed to maintain the project—all notwithstanding the governing documents to the contrary. The right to use one's property as the owner sees fit is a concept imported from the single-family home experience but not replicated in condominiums where common ownership requires rules to avoid chaos.
But a condominium association's most important concern should not be the color of someone's front door or when they can swim but sustaining the building and keeping owners safe. Maybe we care someone has painted their front door bright green, but should that concern have priority over finding rot that may cause a balcony to collapse with someone on it? Resolving conflicts and enforcing the governing documents have a reasonable success rate. Still, the effort required to do that often distracts the board from more critical issues—damage that can sink the ship. Directors can waste a lot of time re-arranging the deck chairs on the Titanic when, if they look closely, the iceberg is coming.
Maintenance Lacks Priority
Why can't we enforce the rules and do what’s necessary to sustain the building and keep occupants safe? Unfortunately, juggling both behavioral and sustainability issues has proven difficult for many volunteer boards of directors. Rule disputes are always in their face, crowding their agenda, while the damage that could lead to structural failure often remains unknown. Also, enforcing—or resisting—rules can involve a clash of egos that keep those matters front and center. Or, and I suspect this is a primary culprit, the cost of adequate inspections, maintenance, and repair is so high that boards cannot overcome owner resistance to that expense.
While boards and management must sustain the project and protect people, raising the funds to do that is another matter. Directors must leap hurdles to increase regular assessments. Imposing large, unexpected, special assessments for major repairs can be political suicide. Unfortunately, few owners realize how deadly serious proper maintenance is until there is a Berkeley or a Surfside, and everyone is stunned by the loss of life and property. While those are extreme cases of faulty construction, inadequate maintenance, natural causes, or all the above, they will not be the last. We know that because experts have seen precursors to those same conditions in other projects.
Our concern for sustainability arises from examining newer projects during construction defect litigation when forensic experts open walls to inspect waterproofing and structural components. It also comes from helping our clients with the re-construction of older buildings and dealing with many years or decades of neglect for which little or no reserves have been allocated.
The economic impact of repairing long-term damage is huge. Rot lying hidden within walls slowly damages the structural framing. Moisture seeping into balcony supports weakens them sometimes to the point of collapse. The cost to repair this damage is frequently out of reach of most condominium associations. In newer projects, when experts find problems early, claims are possible. The Berkeley balcony failure occurred in an eight-year-old building[1], and there was recourse available from the builder. But with older projects, it is often difficult to hold anyone responsible other than the owners themselves.
Is The Condo Model Flawed?
Suppose this is true—and our experience representing condominium projects for over forty years tells us it is—then we are not dealing only with the inexperience of some volunteer directors but rather with a flawed organization model. Board members want to succeed but are constrained by an income stream that depends almost entirely on the will of the individual owners—essentially voluntary funding.
Under most state laws, funding for condominium operations and maintenance is not mandatory[2], and relies instead on the willingness of the directors to assess owners for whatever is needed, and on the willingness of owners to accept the board’s decisions. When a board of directors can set assessments at whatever level is politically comfortable, without adequate consideration, or even knowledge, of long-term maintenance needs, systemic underfunding can result[3]. What the members want are the lowest assessments possible, and directors often accede to those demands. When these factors conspire to underfund maintenance, they will drastically shorten the service life of a building. They also make it potentially unsafe.
Commercial buildings incentivize their owners for good maintenance with increased rents and market value. That incentive is not relevant to a condominium owner because the accumulating deficit is rarely understood at the time of sale and not reflected in the unit’s sales price. With a single-family home, deferred maintenance is more easily identified and is reflected in the purchase price. But condo home inspections are usually confined to the interior of a unit, and do not assess the overall condition of the entire building or project or review any deficit in the funding needed to attend to deficiencies. Thus, market value is not affected by reality.
In most states that require that reserves be maintained for future maintenance and repairs, the statutes require nothing other than cursory surface inspections. Damage beneath the skin of a building is not investigated, and no reserves are recommended for what is not known. California recently enacted legislation that will require condominium associations inspect specific elevated structures for safety, including intrusive testing where indicated. But no other state requires this level of inspection, and few even require a reserve study to determine how much money to save for the obvious problems, never mind those no one knows about[4].
This situation leads to unfair consequences for those owners who find themselves unlucky enough to own a unit when the damage and deficits are finally realized. Damage discovered, say, in year 35 didn’t just happen in year 35. That deterioration likely began earlier in the building's life and lay hidden for decades. It is costly to repair when it finally becomes obvious or dangerous. No prior owner, those who owned and sold their units years ago, will pay any part of the cost of the eventual rehabilitation of that building due to past lack of adequate inspections and years of artificially low assessments. Instead, the present owners will be handed the entire tab for the shortfall from several decades of deferred maintenance or hidden damage—the last people standing when the music stops.
Can this trend be reversed? As condominium buildings age and deterioration continues, the funding deficit increases dramatically. But to reverse that trend and reduce the deficit, someone must know it exists and be willing to address it. That requires more robust inspections early in the building's life and potentially higher assessments to stay even with any decay.
Conclusion
It would not be wrong to blame this on the failure of the basic condominium model. Volunteers rarely have sufficient training or expertise to oversee complex infrastructure maintenance, especially without mandatory funding to pay for it. The model also does not insist that board members have a talent for resolving conflicts. While condominium boards can leverage fines or legal action to enforce the rules, that lacks finesse and can create greater antagonism—a distraction from the more critical job of raising funds to inspect and maintain the building.
Unit owner-managed, voluntarily funded, multi-million-dollar condominium projects were probably a bad idea from the beginning. But sadly, it is way too late to reverse course on the millions of such projects built in the past sixty years. Many are already reaching the end of their service lives, with no plan to deal with that. Robust inspection standards on new and existing projects and enforceable minimum funding for maintenance and repairs should be considered by state legislatures. But whatever the approach, the present system is not staying even with the deterioration of many buildings, and that is just not safe anymore.
- The collapse of the balcony in Berkeley occurred on an apartment building. But the construction of that building is similar or identical to the construction of most multi-story wood-frame condominiums.
- Boards of directors are empowered by statute or contract to assess members for operation and maintenance costs. However, there are few statutes that set minimum funding or otherwise require boards to exercise that authority.
- Even in states that require reserve studies, the physical inspections are inadequate to uncover some of the costliest damage. California’s reserve study statute—Civil Code Section 5550—only requires inspection of those components that are visible and accessible, leaving damage within walls and other structural components undiscovered and funding for the eventual repairs, unaddressed.
- In May 2022, in response to the Champlain Towers South collapse, Florida enacted mandatory structural inspections for buildings 30 years and older, repeating every 10 years thereafter. The law also includes mandatory reserve funding for structural components.
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Tyler P. Berding, Berding & Weil LLPMr. Berding may be contacted at
tberding@berdingweil.com
Virginia Civil Engineers Give the State's Infrastructure a "C" Grade
December 13, 2022 —
American Society of Civil Engineers (ASCE)VIRGINIA BEACH, Va. — The Virginia Section of the American Society of Civil Engineers (ASCE) released the 2022 Report Card for Virginia's Infrastructure today, with 11 categories of infrastructure receiving an overall grade of a 'C'. That means Virginia's infrastructure is in mediocre condition and requires attention. Virginia is a step ahead of the national average of 'C-' given in the 2021 Report Card for America's Infrastructure. Nine of the 11 categories ranked higher than the national grades, as only rail ('C-' compared to the national 'B' grade) and wastewater (tied with the national grade of 'D+') ranked the same or lower, a testament to the state's prioritization of its built environment. Virginia has implemented ambitious plans to improve each of its infrastructure systems and additional resources from the state level and the bipartisan infrastructure law will help these efforts. Civil engineers graded bridges (B), dams (C+), drinking water (C+), public parks (C), rail (C-), roads (C-), schools (C-), solid waste (B-), stormwater (C-), transit (C-), and wastewater (D+).
Virginia's transportation sector has performed better than the national average. Roughly 3% of the state's bridges are in poor condition – less than half the national average of 7.5% -- and the percentage of roads in 'good' condition rose from 48% in 2018 to 51% in 2022. Virginia is also a regional leader in transit services with connection to the Washington, D.C. Metro system and with 41 transit systems across the state, some of which have already surpassed pre-pandemic ridership levels. However, wastewater systems, despite making progress by reducing sewage overflows, face more than $6 billion in needs over 20 years and will need significantly more resources to improve systems and protect water quality for communities and the natural environment.
The Report Card was created as a public service to citizens and policymakers to inform them of the infrastructure needs in their state. Civil engineers used their expertise and school report card-style letter grades to condense complicated data into an easy-to-understand analysis of Virginia's infrastructure network. ASCE State and Regional Infrastructure Report Cards are modeled after the national Infrastructure Report Card, which gave America's infrastructure an overall grade of 'C-' in 2021.
To view the report card and all five categories, visit https://infrastructurereportcard.org/state-item/Virginia/.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Security on Large Construction Projects. The Payment Remedy You Probably Never Heard of
May 07, 2015 —
Garret Murai – California Construction Law BlogCalifornia has a number of statutory payment remedies available on construction projects. Some, such as the mechanics lien, are relatively well known and often utilized. Others, such as the stop payment notice, are somewhat less so.
However, there’s one statutory payment remedy you may not have heard of at all.
And that is, security requirements for large projects.
What is security for large projects?
Security is required on certain large construction projects to guarantee the payment by owners to direct contractors, and applies if either:
1.
Fee Interest and Contract of Greater Than $5 million: The owner contracting for a work of improvement holds a
fee interest in the property being improved and enters into a construction contract for the improvement of the property greater than
$5 million; or
2.
Less Than Fee Interest, Including Leasehold Interest, and Contract of Greater Than $1 million: The owner contracting for a work of improvement holds less than a fee interest (including a
leasehold interest) in the property being improved and enters into a construction contract for the improvement of the property greater than
$1 million.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Coverage Denied Where Occurrence Takes Place Outside Coverage Territory
December 11, 2018 —
Tred R. Eyerly - Insurance Law HawaiiThe court held there was no coverage for construction defect claims that occurred outside the coverage territory. Foremost Signature Ins. Co. v. Silverboys, 2018 U.S. Dist. LEXIS 154524 (S.D. Fla. Sept. 11, 2018).
Solo Design, LLC, a Miami-based design company, entered into a contract with Silverboys, LLC (Owner) to provide interior design services in conjunction with the renovation of the Owner's vacation home in the Bahamas. Solo retained Whittingham, a Bahamian architect, as a subcontractor to serve as project manager.
Owner sued Solo, Whittingham and others in Florida for breach of contract, fraud, conversion and negligence when the project did not go as planned. The underlying complaint alleged intentional misconduct, lying about qualifications and the progress of the project, submitting false invoices, requesting money for services that were not performed, etc. Owner alleged that the damages included: (a) the cost to repair substandard work; (b) loss of use of the home due to delay; and (c) overcharges for furnishings, contract fees, and expenses. The underlying complaint set forth only a few instances of physical injury to the home, including mold on the ceiling in the master shower, faulty millwork on the children's playroom bookshelf, and a defective front door and resysta facade.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
