Seattle Washington Building Expert Directory

Court’s Ruling on SB800 “Surprising to Some”

October 16, 2013 — CDJ STAFF
Describing it as “surprising to many in the residential home building industry,” Jay Drake of Reuben, Junius & Rose LLP has a piece discussing the recent California Court of Appeals decision that SB800 is not a homeowner’s only remedy for construction defects. The court found, according to Mr. Drake that “the primary purpose of the Act was to provide a property owner with remedies for repair of construction defects before the defects caused actual damages.” In the case before the court, the construction defects had already lead to further damages. Mr. Drake notes that the legislative history of SB800 puts the bill in response to an earlier California court case in which the courts determined that without actual damage to property, a homeowner could not file a construction defect lawsuit. The court concluded that SB800 was not intended to limit the homeowner’s rights after a construction defect situation has lead to damage. Read the court decision
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Differing Site Conditions Produce Differing Challenges

February 18, 2019 — Sarah E. Carson - Smith Currie
The saying “The best laid plans of mice and men often go awry” can too often apply in the construction industry. A contractor may receive a description of site conditions that is ultimately found flawed or misleading. The costs associated with addressing these surprise conditions often fall on the contractor to pay. The following article details proactive steps to avoid costly obstacles that may cause a project’s success to go awry. What are Differing Site Conditions? There are generally two recognized types of differing site conditions. The first, often referred to as a “Type I Changed Condition,” exists when a specification in the conditions indicated in the contract documents varies from what is represented. The second category, generally referred to as a “Type II Changed Condition,” is a variance so unusual in its nature that it materially differs from conditions ordinarily encountered in performing the type of work called for in the geographic area where the project is located. Read the court decision
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Reprinted courtesy of Sarah E. Carson, Smith Currie
Ms. Carson may be contacted at secarson@smithcurrie.com

The Privette Doctrine, the Hooker Exception, and an Attack at a Construction Site

July 05, 2023 — Garret Murai - California Construction Law Blog
You don’t often hear about workers being attacked by ne’er-do-wells on a construction project. But, as they say, shite happens . . . Construction contracts often address health and safety issues, as well as site security to protect the improvement, materials, equipment and tools, as well as to protect the public from getting hit by say a large crane with a demolition ball, but site security to protect the workers from thugs, not so much. This is exactly what happened to a construction worker in Degala v. John Stewart Company (2023) 88 Cal.App.5th 158 who was jumped and injured by three hoodlums who attacked him while he was working at a job site. The injured worker, an employee of a subcontractor, was covered by workers’ compensation insurance, but also brought claims against the general contractor and project owner for negligence and premises liability and they, in turn, argued they were immune from liability under the Privette doctrine. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

The Clock is Ticking: Construction Delays and Liquidated Damages

September 18, 2023 — Tiffany Harrod - ConsensusDocs
With the on-going shortage of construction workers in the industry and other factors ranging from weather to procurement problems, the threat of project delay is real. When a contract contains a liquidated damages clause for assessing project delays, real financial consequences for contractors can result. Courts have long allowed parties to apportion contractual risks as they deem appropriate especially in the commercial context where the parties are considered to be sophisticated even if their bargaining power is not equal. Liquidated damage provisions such as those for delay that are found in construction contracts are not unusual but they must be crafted in such a way as to be enforceable and not violate public policy. A liquidated damage clause in a construction contract is a customary way for the parties to deal with the possibility of delay in the completion of a project and the potential losses flowing from the delay.[1] In their most basic form, the party in breach, which is more often than not the contractor, is obligated to pay the non-breaching party, usually the project owner, some fixed sum of money for the period that exceeds the designated completion date that was agreed upon in advance and memorialized in the contract. (It is after all no secret that these provisions are primarily for the owner’s benefit.) The non-breaching party is then compensated for losses associated with the delay without the time and expense of having to prove in either a civil suit or an arbitration proceeding what the actual damages are. This option is particularly attractive to project owners because the liquidated damages assessment can simply be withheld from payments owed to the contractor once the agreed-upon completion date has been passed. Read the court decision
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Reprinted courtesy of Tiffany Harrod, Peckar & Abramson
Ms. Harrod may be contacted at tharrod@pecklaw.com

No Duty To Defend Additional Insured When Bodily Injury Not Caused by Insured

July 26, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The court found there was no duty to defend a suit for bodily injury against the additional insured where the injury was not caused by the insured. Consigli Constr. Co. v. Travelers Indem. Co., 2017 U.S. Dist. LEXIS 95339 (D. Mass. June 21, 2017). Consigli was the general contractor for a renovation project at a high school. Among the subcontractors was American Environmental, Inc., who was responsible for demolishing concrete floors within the existing structures, and Costa Brothers, who did the masonry work. Wellington M. Ely was an employee of Costa Brothers and worked as a mason on the project. Costa Brothers had a CGL policy with Travelers. As a subcontractor, Costa Brothers agreed to name Consigli as an additional insured on its policy. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Contract’s Definition of “Substantial Completion” Does Not Apply to Third Party for Purposes of SOL, Holds Court of Appeal

June 15, 2020 — Garret Murai - California Construction Law Blog
Those of you in the construction industry know that the two primary statutes of limitation are the 4-year year statute of limitations for patent defects and 10-year statute of limitations for latent defects. Both statutes begin to run on “substantial completion.” In Hensel Phelps Construction Co. v. Superior Court of San Diego, Case No. D076264 (January 22, 2020), the 4th District Court of Appeal examined whether the term “substantial completion,” as used in Civil Code section 941, which applies to residential construction, can be defined by the parties’ contract and applied to third-parties. The Hensel Phelps Case Hensel Phelps Construction Co. entered into a prime construction contract with the owner and developer of a mixed-use project in San Diego. Hensel Phelps was the general contractor on the project. The project included a residential condominium tower which would eventually be managed and maintained by Smart Corner Owners Association. Smart Corners was not a party to the contract. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

California Appellate Court Holds “Minimal Causal Connection” Satisfies Causation Requirement in All Risk Policies

July 20, 2020 — Scott P. DeVries & Michael S. Levine - Hunton Andrews Kurth
On May 26, 2020, a California Court of Appeals (4th District) issued its decision in Mosley et al. v. Pacific Specialty Ins. Co. The case arose in the context of a marijuana-growing tenant who rerouted a home’s electrical system and caused an electrical fire. The issue was whether the homeowner’s policy covered the loss. The trial court granted the insurer’s motion for summary judgment and, in a divided decision, the Court of Appeals reversed in part. The policy excluded losses “resulting from any manufacturing, production or operation, engaged in … the growing of plants.” The parties agreed that the fire resulted from the rewiring of the electrical system, but disagreed on “whether that means the damage” “result[ed] from” “the growing of plants.” The Court held that “resulting from” “broadly links a factual situation with the event creating liability, and connotes only a minimal causal connection or incidental relationship.” In doing so, it equated the terms “results from” and “arising from.” Concluding that a “common sense” approach was to be used, it found a “minimal causal connection” to be present. This expansive standard could be beneficial to policyholders in arguing the causal connection between COVID-19 and ensuing business interruption losses; specifically, that the pandemic, a covered event, is the underlying and proximate cause of the insureds’ physical loss and/or damage and the insured’s resulting business interruption loss, and that intervening events, whether they be orders of civil authority, prevention of ingress/egress or otherwise, would not sever the chain of causation. Reprinted courtesy of Scott P. DeVries, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth Mr. DeVries may be contacted at sdevries@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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Contractor’s Coverage For Additional Insured Established by Unilateral Contract

November 18, 2011 — Tred R. Eyerly - Insurance Law Hawaii

The contractor was covered as an additional insured under the subcontractor’s policy even though the parties had never actually signed an agreement to add the contractor to the policy. Evanston Ins. Co. v. Westchester Surplus Lines Ins. Co., 2011 U.S. App. LEXIS 20081 (9th Cir. Oct. 3, 2011).

The policies held by Bellevue Master, the general contractor, required it to be an additional insured under any subcontractor’s liability policy. Northwest Tower Crane Services was a subcontractor. Bellevue Master LLC, faxed a message that Northwest could continue to be a subcontractor on the project if it complied with Bellevue Master’s insurance requirements. Northwest contacted its insurance broker and requested an insurance certificate be issued to Bellevue Master so that it would be an additional insured under Northwest’s policy.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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