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SB326 will hold homeowners’ associations accountable for the safety of their decks.

Deck Police - The New Mandate for HOA's Takes Safety to the Next Level

Monday, November 18, 2019 — Joseph Ferrentino – Newmeyer Dillion

A recent California law will hold homeowners’ associations accountable for the safety of their decks. SB326 now mandates all homeowners' associations to have decks inspected at least once every nine years by an architect or structural engineer to determine whether the decks are safe and waterproof. This law (Civil Code section 5551) follows SB721 which was passed in 2018 and requires a similar inspection every six years for other multifamily dwelling units. Failure to comply can result in paying the enforcement costs of local building agencies.

DETAILS ON THE MANDATE:

More specifically, the 2019 law requires inspections of wood “decks, balconies, stairways, and their railings” more than six feet off of the ground and designed for human use. Additionally, the engineer or architect must (1) certify that he or she has inspected for safety and waterproofing, and (2) certify the remaining useful life of the system. Further, the inspector must inspect a random sample of enough units to provide 95% confidence that “the results are reflective of the whole.” In other words, in addition to the inspector, the association will have to hire a statistician.

The nine-year timetable for inspection is no coincidence. After all, the statute of limitations for construction defects is ten years. In fact, associations are required to give notice to their members before filing a suit against a builder. However, under the new law, the association can delay giving notice to its members “if the association has reason to believe that the statute of limitations will expire.” Also, recent case law held that builders could add requirements to CC&R’s to limit a board’s authority to file lawsuits – i.e. adding a supermajority vote by members. Under SB326, any such provisions are now void. Hence, “supermajority” voting provisions are now invalid.

IMPACT ON CONSTRUCTION LITIGATION

These recent laws are clearly a reaction to the tragic collapse of an apartment balcony in Berkley in 2015 that resulted in the death of six college students. While it is imperative that decks be structurally safe, the requirements of SB326 will fuel more construction defect litigation.

Joseph Ferrentino is a Partner in Newmeyer Dillion's Newport Beach office. With 25 years of experience, Joe guides clients through construction law issues, among other areas. For more information on how Joe can help, contact him at joe.ferrentino@ndlf.com

ABOUT NEWMEYER DILLION
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that align with the business objectives of clients in diverse industries. With over 70 attorneys working as an integrated team to represent clients in all aspects of business, employment, real estate, privacy & data security and insurance law, Newmeyer Dillion delivers tailored legal services to propel clients’ business growth. 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 Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com



Businessman with cape flying

Tred R. Eyerly analyzes Am Empire Surplus Lines Ins. Co. v. Burlington Ins. Co.

Insurer Must Defend Additional Insured Though Its Insured is a Non-Party

Monday, November 18, 2019 — Tred R. Eyerly - Insurance Law Hawaii

The plaintiff insurer's motion for partial summary judgment seeking an order that defendant insurer was obligated to defend a non-party as an additional insured was granted. Am Empire Surplus Lines Ins. Co. v. Burlington Ins. Co., 2019 N. Y. Misc. LEXIS 4145 (N. Y. Sup. Ct. July 25, 2019).

Quality Building Construction, LLC was the contractor hired to work on exterior facade of a building owned by Central Park West Corporation. The underlying complaint alleged that Quality caused plastic spacers and pedestals used for the penthouse terrace to fall down the roof drain riser. A clog and rainwater backup resulted in water damage to apartment 8A. The resulting damage was allegedly due to the clogged roof drain riser.

Quality subcontracted the work to Mega State, Inc. The subcontract required Mega to indemnify and hold Quality harmless against claims in connection with Mega's work, as well as name Quality as an additional insured on a primary, non-contributory bases under Mega's CGL policy. Burlington issued a policy to Mega naming Quality as an additional insured. American Empire issued a CGL policy to Quality.

Quality was sued in the underlying action, but Mega was not. American Empire tendered a demand for coverage to Mega and Burlington, relying on the agreement between Quality and Mega. Burlington responded that Mega was not liable for the alleged damages. American Empire sued Burlington. Subsequently, Burlington accepted the tender to defend Quality in the underlying action, and reserved rights as to whether Burlington's policy was primary and on the question of indemnification. American Empire agreed to withdraw its suit if Burlington would modify its reservation of rights. Burlington refused.

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Beach with focus on water grasses

The case Lehrfield v. Liberty Mutual Fire Insurance Company is discussed.

TLSS Partner Burks Smith and Associate Katie Keller Win Summary Judgment on Late Reported Water Seepage Case in South Florida

Monday, November 18, 2019 — Burks A. Smith, III & Kathryn Keller - Traub Lieberman

On July 9, 2019, Traub Lieberman Straus & Shrewsberry LLP Partner, Burks A. Smith, III and Associate, Kathryn A. Keller, secured Summary Judgment on behalf of a major homeowners’ insurer in a breach of contract action in the United States District Court for the Southern District of Florida. See Lehrfield v. Liberty Mutual Fire Insurance Company, 2019 WL2994270 (S.D. Fla. 2019). The underlying claim involved a water loss at the Plaintiffs’ residence allegedly resulting in $91,147.32 worth of damage to their home. The claim was reported eight (8) months after the alleged date of loss, and during the inspection, the adjuster observed rot, decay, mold, and warping wood, prompting the carrier to deny the claim based on the Seepage Endorsement. The Plaintiffs filed a breach of contract action alleging that the insurer breached the Policy by denying the claim.

Mr. Smith and Ms. Keller argued that Plaintiffs’ Policy with the insurer imposes a duty on the Plaintiffs to comply with the Duties After Loss conditions of the Policy, including the requirement to provide prompt notice of the loss and show the damaged property. As mentioned above, the Plaintiffs provided notice of the claim eight (8) months late, and performed various repairs prior to notifying the insurer of the claim. After the close of discovery, Mr. Smith and Ms. Keller filed a Motion for Summary Judgment on behalf of the insurer based on the late reporting, and further argued that the Plaintiffs had the burden of proving direct physical loss to property within the first 13 days of the loss, given the recent decision of Hicks v. American Integrity Insurance Company of Florida, 241 So.3d 925 (Fla. 3d DCA 1018). In Florida, when an insured fails to comply with their Duties After Loss, a presumption of prejudice to the insurer arises. Bankers Ins. Co. v. Macias, 475 So. 2d 1216, 1218 (Fla. 1985)). In order to recover, the Plaintiffs bear the burden of overcoming the presumption, and must prove that no prejudice existed. Id. Mr. Smith and Ms. Keller’s comprehensive arguments successfully proved to the Court that the Plaintiffs’ failure to timely report the claim prejudiced the insurer by prohibiting the insurer from being able to independently validate the loss, or distinguish between multiple causes of loss. Mr. Smith and Ms. Keller further argued that Plaintiffs did not meet their burden to prove that the insurer was not prejudiced by the Plaintiffs’ failure to comply with the Duties After Loss provision of the Policy. The Motion cited numerous cases and extensive analysis supporting the insurer’s position.

Reprinted courtesy of Burks A. Smith, III, Traub Lieberman and Kathryn Keller, Traub Lieberman
Mr. Smith, may be contacted at bsmith@tlsslaw.com
Ms. Keller may be contacted at kkeller@tlsslaw.com


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The Fundamentals of the Construction Industry Are Strong, but Lingering Workforce Concerns Need Industry-Wide Action

November 18, 2019 — Diane Earll - Construction Executive

The fundamentals of the commercial construction industry are strong and industry leaders are largely optimistic about the future of the sector, according to the latest USG Corporation + U.S. Chamber of Commerce Commercial Construction Index (CCI). Contractors report a healthy pipeline of new business and more than 50% expect to hire more people in the next six months.

But behind the headline numbers, one of the most persistent challenges in the construction industry is first recruiting, then training and retaining, skilled workers. Like manufacturing and other trade industries, the construction sector is grappling with an aging workforce, as well as a gender and skilled labor gap, which is causing builders to turn down work, submit higher bid levels and struggle to meet deadlines.

Reprinted courtesy of Diane Earll, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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Will California Law Permit Insurance Coverage for Civil Penalties Assessed Under the California Consumer Privacy Act?

November 12, 2019 — Andrew Lipton - White and Williams LLP

One of the most often discussed (and debated) aspects of the soon-to-be effective California Consumer Privacy Act (CCPA) is that the CCPA provides for statutorily assessed civil penalties against any violators, up to $7,500 per violation per consumer. With many businesses seeking to transfer the risk of third-party actions that might be brought against them pursuant to the CCPA (especially to cyber and privacy liability insurance), an issue to consider is whether an insurance policy would provide indemnity coverage for civil penalties assessed under the CCPA when applicable state law prohibits such coverage.

Mr. Lipton may be contacted at liptona@whiteandwilliams.com

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Two Techniques to Connect the Next Generation to the Trades

November 18, 2019 — Jeremiah Hayes - Construction Executive

There is a mountain of research and discussion around the differences in generational value sets, work ethic and motivational drivers. Where this intersects with skilled trade work, there is a diminishing reservoir of the talent and passion that will build the next generation of schools, hospitals, courthouses and other traditional infrastructure.

In short, more people are leaving the trades than coming in. But, far worse (and rarely discussed) is the internal poverty this will bring to the reservoir of character, creativity and true satisfaction that companies will need foster if they are to endure in the decades to come. The mass migration from physical jobs to intellectual ones—while largely a positive trend—carries some damaging side effects to individuals and corporations if not intentionally managed at the organizational level.

Reprinted courtesy of Jeremiah Hayes, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

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Webinar Replay: Conducting and Evaluating Environmental Due Diligence for Real Estate Transactions

November 12, 2019 — Beverley BevenFlorez – CDJ Staff

The California Lawyers Association presents a webinar that “will review the environmental laws’ liability scheme, programs such as the California Land Reuse and Revitalization Act (CLRRA) and Prospective Purchasers Agreements that can help shield purchasers from environmental liabilities, the necessary components of a properly prepared Phase I and its shortfalls, and also discuss considerations for sellers of contaminated properties.”

December 4th, 2019
Webinar

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Construction managers and consultants working on construction projects have an increased risk of exposure.

The Expansion of Potential Liability of Construction Managers and Consultants

Monday, November 18, 2019 — Scott D. Cessar - Construction Executive

Over the last decade or so, there has been far more judicial willingness to adopt legal theories that result in an increased risk of exposure to construction managers and consultants working on construction projects. This has resulted in a greater likelihood of lawsuits being filed that name construction managers and consultants as defendants and a greater likelihood of those lawsuits surviving efforts to have the lawsuits dismissed prior to trial. The consequence of more claims has led to increased costs for legal expenses, settlements and uncompensated personnel time devoted to the defense of the claims.

This expansion of potential liability may be broken into two sets:

  1. claims for pure economic loss not arising from property damage or personal injury by parties not in a contractual relationship with a construction manager or consultant; and
  2. claims for property damage or personal injury by a party not in a contractual relationship with a construction manager or consultant.

The first set concerns claims by a contractor against a construction manager or consultant that its breach of duties owed to the owner on a project and/or its provision of incomplete or inaccurate information on a project, which it knew, or should have reasonably anticipated, would be relied on by the contractor, resulted in damages to the contractor.

Reprinted courtesy of Scott D. Cessar, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Cessar may be contacted at scessar@eckertseamans.com

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Clock

Airbnb and VRBO are two of the most popular companies facilitating short-term rental availability.

Short-Term Rental Legislation & Litigation On the Way!

Monday, November 18, 2019 — Patrick J. Paul - Snell & Wilmer Real Estate Litigation Blog

The advent of the shared economy in the real estate context has provided homeowners and investors alike with expanded opportunities to generate revenue from the use of their real estate. Airbnb and VRBO are two of the most popular companies facilitating short-term rental availability. The rapid growth in this shared real estate economy has served as a disruptor of sorts to the traditional hotel and hospitality industry, causing that industry to revisit its own models in order to better compete.

The popularity of short-term rental use, however, has created a whole new set of problems about which property owners, state and local governments, renters, and those impacted by the explosion of short-term rentals should be aware. Among other things, without more, most traditional homeowners’ policies will not cover the insured property’s use for commercial purposes – a problem similar to the early rideshare providers.

Full and part-time resident owners who previously enjoyed a greater certainty with respect to their neighbors are today frustrated by the revolving door of vacationers, revelers, wedding attendees and similar nontraditional uses of neighborhood residential property.

Reprinted courtesy of Patrick J. Paul, Snell & Wilmer

Mr. Paul may be contacted at ppaul@swlaw.com

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How 3D Text with question mark

Engage an expert or be in a position to competently testify as to your damages caused by another party’s breach of contract.

Guessing as to your Construction Damages is Not the Best Approach

Monday, November 18, 2019 — David Adelstein - Florida Construction Legal Updates

Arbitrarily guessing as to your construction damages is NOT the best approach. Sure, experts can be costly. No doubt about it. Having an expert versus guessing as to your construction damages caused by another party’s breach of contract is a no brainer. Engage an expert or, at a minimum, be in a position to competently testify as to your damages caused by another party’s breach of contract. Otherwise, the guessing is not going to get you very far as a concrete subcontractor found out in Patrick Concrete Constructors, Inc. v. Layne Christensen Co., 2018 WL 6528485 (W.D. New York 2018) where the subcontractor could not competently support its delay-related damages or change orders and, equally important, could not support that the damages were proximately caused by the general contractor’s breach of the subcontract.

In this case, the concrete subcontractor entered into a subcontract to perform concrete work for a public project. The project was delayed and the general contractor was required to pay liquidated damages to the owner. Not surprisingly, the subcontractor disputed liability for delays and sued the general contractor for all of its delay-related damages “in the form of labor and materials escalation, loss of productivity, procurement and impact costs, field and home office overhead, idle equipment, inability to take on other work, lost profits, and interest.” Patrick Concrete Constructors, 2018 WL at *1.

The general contractor moved for summary judgment as to the plaintiff’s delay-related damages – the subcontractor’s damages were nothing but guesses and the subcontractor could not prove the general contractor was the cause of the subcontractor’s damages.

Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.

Mr. Adelstein may be contacted at dma@kirwinnorris.com

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CONSTRUCTION DEFECT NEWS
Two coworkers punching another coworker

The Board strengthened employer rights in their workplaces.

NLRB Hits Unions with One-Two Punch the Week Before Labor Day

Monday, November 18, 2019 — John Baker & Robert Pettigrew - White and Williams LLP

The National Labor Relations Board (the Board) continues to modify the way employers, unions and employees view and relate to each other in the workplace. In two decisions right before Labor Day, the Board strengthened employer rights in their workplaces, while at the same time making life for their union counterparts more difficult.

On August 23, 2019, the Board revisited the issue of whether an employer must grant access to the off-duty employees of an onsite contractor so they can engage in Section 7 activities on the employer’s property. In general, Section 7 activities consist of employees acting together to improve their pay and working conditions, which constitute fundamental rights under the National Labor Relations Act (the Act). In Bexar County Performing Arts Center Foundation d/b/a Tobin Center, the San Antonio-based performing arts center, the Tobin Center, owned the Center as well as grounds that abutted the famed San Antonio River Walk. The Tobin Center housed three resident companies, one of which was the Ballet San Antonio with whom it had a licensor-licensee agreement.

In addition to plays, movies and other productions, the Tobin Center hosted the San Antonio Symphony (the Symphony) to perform for 22 weeks of the year. The Ballet San Antonio also occasionally utilized the Symphony for live musical performances at its ballets. When, however, the Ballet San Antonio decided to use recorded music for a particular production, off-duty employees of the Symphony protested by leafletting the public on the Tobin Center property. The leaflets advised the public of this decision and urged that they “DEMAND LIVE MUSIC!” Their protests were not directed at the property owner, who denied them access to its property.

Reprinted courtesy of John Baker, White and Williams LLP and Robert Pettigrew, White and Williams LLP
Mr. Baker may be contacted at bakerj@whiteandwilliams.com
Mr. Pettigrew may be contacted at pettigrewr@whiteandwilliams.com


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Businessman holding contract

Until a subcontract is executed and the terms made plain, perform at your own risk.

A Teaming Agreement is Still a Contract (or, Be Careful with Agreements to Agree)

Monday, November 18, 2019 — Christopher G. Hill - Construction Law Musings

I have discussed teaming agreements in this past here at Construction Law Musings. These agreements are most typically where one of two entities meets a contracting requirement but may not have the capacity to fulfill a contract on its own so brings in another entity to assist. However, these agreements are contracts and are treated as such here in Virginia with all of the law of contracts behind them.

One illustrative case occurred here in Virginia and was decided by the Virginia Supreme Court. That case is CGI Fed. Inc. v. FCi Fed. Inc. While this is not strictly a “construction” case, it helps lay out some of the pitfalls of teaming agreements in general.

In this case, the parties entered into a fairly typical small business (FCI) Big Business (CGI) teaming arrangement for the processing of visas for the State Department. The parties negotiated the workshare percentage (read payment percentage) should FCI get the work and the teaming agreement set out a framework for the negotiation of a subcontract between FCI, the proposed general contractor, and CGI, the proposed subcontractor. After a while working together, FCI submitted a proposal to the State Department and as part of the negotiations of this proposal, the work percentage for CGI was lowered in exchange for some management positions for CGI relative to the work by amendment to the original teaming agreement. However, one day later FCI submitted a proposal to the State Department that not only didn’t include the management positions, but further lowered CGI’s workshare.

Reprinted courtesy of The Law Office of Christopher G. Hill

Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Illustration of green house with leaves coming out of chimney

“We need to rethink the way we make buildings."

World Green Building Council Calls for Net-Zero Embodied Carbon in Buildings by 2050

Monday, November 18, 2019 — Nadine M. Post - Engineering News-Record

The World Green Building Council’s latest maneuver in its war against greenhouse gas emissions is a rallying cry for embodied-carbon reduction in buildings that involves global collaboration, communication, education, innovation and regulation. WGBC’s ambitious aim is to get to net-zero EC in all new construction and renovations by 2050.

Reprinted courtesy of Nadine M. Post, Engineering News-Record

Ms. Post may be contacted at postn@enr.com

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Inside a 5.5M Floating Mansion in Miami | On The Market | Architectural Digest

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CONSTRUCTION DEFECT NEWS
Woman holding arm up to show off muscle

Construction and materials shares are up in Europe.

One Sector Is Building Strength Amid Slow Growth

Monday, November 18, 2019 — Michael Msika - Bloomberg

If you had to guess which stocks are posting top gains given this year’s gloomy economic outlook, you might be surprised by the answer.

Construction and material shares, despite most macro indicators pointing to slowing global growth, are now leading the pack in Europe. The sector’s up 32% already this year, knocking food-and-drinks stocks off the pedestal, and there appear few signs of the rally stopping anytime soon.

Reprinted courtesy of Michael Msika, Bloomberg
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City skyline lit up at night

“A 2-foot-high stack of change order requests was waiting while the developer couldn't be found.”

How A Contractor Saved The Day On A Troubled Florida Condo Project

Monday, November 18, 2019 — John Zander - Engineering News-Record

Enough isn’t said about general contractors on rocky, out-of-control projects who take the lead in solving problems they didn’t create. That’s what I found troubleshooting projects for a Chicago bank. A good example is a $200-million Florida apartment complex being built in 2007, when labor was as tight as it is now and in some places even tighter.

Reprinted courtesy of John Zander, Engineering News-Record

ENR may be contacted at ENR.com@bnpmedia.com

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Eyes

The final report of RASTI is now available in English.

A Vision and Strategy for the Adoption of Open International Standards

Monday, November 18, 2019 — Aarni Heiskanen - AEC Business

The final report of RASTI is now available in English. The project outlined a national vision and strategy for the adoption of open international standards in the real estate and construction industries. The Finnish version includes several appendices.

One of the frameworks that RASTI devised was a built environment life-cycle process map. It is derived from the model of Antti Autio of the Ministry of the Environment.

The map presents the processes of the four “lanes”: the customer’s/users value creation processes, public sector processes, information work, and production. Ideally, data and information flow across the processes, using open standards.

Reprinted courtesy of Aarni Heiskanen, AEC Business

Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Two construction workers looking at plans

Multiple factors compound the need for better transparency across the workforce.

Safety, Compliance and Productivity on the Jobsite

Monday, November 18, 2019 — Matthew Ramage - Construction Executive

With any project, managing a large contingency of workers—all with varying levels of security clearance—can be a logistical headache.

On the majority of construction sites, managers lack the resources to quickly and accurately identify all onsite personnel and ensure the right labor, equipment and materials are in the right place at the right time. Equally important, construction managers need to know if worker certifications are current and only allow access to authorized areas.

Multiple factors compound the need for better transparency across the workforce, including:

  • Safety. Construction work is inherently dangerous. In 2017, nearly 1,000 fatalities occurred on construction sites. This means that the industry accounted for more than 20% of private sector fatalities across all industries.
  • Regulatory. The Federal government has a heightened awareness of jobsite dangers and is targeting companies that are not making every effort to maximize the workers’ safety.
  • Security. Sites in urban environments require round-the-clock protection from urban explorers, thieves and the general public.
  • Employee wage disputes. Lawsuits and disputes over wages and hourly employment are increasing.
  • Reduced productivity. It can be difficult to measure and track productivity in construction.

Reprinted courtesy of Matthew Ramage, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.



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Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

Builders Standard of Care Expert Witness and Consulting General Contractor area area area

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