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CONSTRUCTION DEFECT NEWS
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Does the economic loss doctrine bar the plaintiff’s negligence claims against the defendant roofer for damages resulting from the collapse of a roof?

Wisconsin Court of Appeals Holds Economic Loss Doctrine Applies to Damage to Other Property If It Was a Foreseeable Result of Disappointed Contractual Expectations

Tuesday, January 15, 2019 — Gus Sara - The Subrogation Strategist

In Kmart Corp. v. Herzog Roofing, Inc., 2018 Wisc. App. Lexis 842, the Court of Appeals of Wisconsin considered whether the economic loss doctrine barred the plaintiff’s negligence claims against the defendant roofer for damages resulting from the collapse of a roof. The Court of Appeals held that, while some of the plaintiff’s property damages were unrelated to the scope of the contract, the economic loss doctrine still applied to those damages because they were a foreseeable result of the defendant’s breach of the contract. This case establishes that in Wisconsin, the economic loss doctrine bars tort claims for damage to property unrelated to the contract if those damages were a reasonably foreseeable risk of disappointed expectations of the contract.

Reprinted courtesy of Gus Sara, White and Williams LLP

Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Businesswoman holding up arms in an X

Kohler Co. clarifies that, with one very narrow exception, class action lawsuits cannot be brought under the Right to Repair Act.

Class Actions Under California’s Right to Repair Act. Nope. Well . . . Nope.

Tuesday, January 15, 2019 — Garret Murai - California Construction Law Blog

It’s the holidays. A time when family and friends, and even neighbors, gather together.

And nothing brings neighbors closer together than class action residential construction defect litigation.

In Kohler Co. v. Superior Court, Case No. B288935 (November 14, 2018), the Second District Court of Appeal addressed whether neighbors can bring class action lawsuits under the Right to Repair Act. For those who are regular readers of the California Construction Law Blog you’re familiar with the Right to Repair Act codified at Civil Code sections 895 et seq.

Reprinted courtesy of Garret Murai, Wendel Rosen

Mr. Murai may be contacted at gmurai@wendel.com

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Flames against black background

A construction company and a logging firm have agreed to pay $9 million for damages resulting from a 2012 wildfire.

Construction Firm Settles Suit Over 2012 Calif. Wildfire

Tuesday, January 15, 2019 — Associated Press - Engineering News-Record

SACRAMENTO, Calif. (AP) — Officials say a construction company and a logging firm have collectively agreed to pay $9 million for damages resulting from a 2012 wildfire that burned more than 1,600 acres of national forest land in Northern California.
The U.S. Attorney's office in Sacramento says Monday that the agreement settles a lawsuit brought by the federal government against Kernen Construction and Bundy & Sons Logging.

Reprinted courtesy of Engineering News-Record

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

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Five Innovations Powering the Construction Equipment of the Future

January 15, 2019 — Allen Schaeffer - Construction Executive

When it comes to the latest trends and innovation in construction, drones, big data, smart and connected jobsites, virtual reality and artificial intelligence get most of the headlines. These technologies appear to hold great promise to enhance and further enable the interface of man and machine to work faster, smarter, safer and more efficiently.

However, innovation in construction also is taking on new forms as it relates to efficiency and environmental sensibility in the design and operation of machines and equipment. For the last decade, machine design and manufacturing revolved substantially around achieving progressively more stringent emissions standards. Due to their unmatched combination of power, efficiency, performance, reliability and durability, diesel engines are the primary power source in the overwhelming majority of construction equipment.

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

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Forest Fire Constitutes One Occurrence

January 15, 2019 — Tred R. Eyerly - Insurance Law Hawaii

The Wisconsin Supreme Court determined that a fire damaging several properties arose from one occurrence. Secura Ins. v. Lyme St. Croix Forest Company, LLC., 2018 Wis. LEXIS 579 Oct. 30, 2018).

A fire broke out on forest land owned by Lyme St. Croix Forest Company. Known as the "Germann Road Fire," it burned 7, 442 acres over three days. Real and personal property belonging to many individuals and businesses were damaged. The fire allegedly began while equipment owned by Ray Duerr Logging, LLC was being repaired. Flames quickly spread from dry grass to a pile of recently felled trees and spread to the surrounding forest.

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

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Viewpoint: Recruiting Efforts Alone Won’t Solve the Skilled Trade Shortage

January 15, 2019 — Debbie Burkett - Engineering News-Record

Aggressive recruiting tactics have become commonplace in response to skilled trade shortages, and even small organizations and specialty contractors are hiring dedicated recruiters to get bodies through the door and into the field at a frantic pace.

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

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Legal Aspects of Construction Contracts

January 15, 2019 — Beverley BevenFlorez - CDJ STAFF

This two-day course focuses exclusively on the legal environment and the legal aspects of contracting for construction projects. At the conclusion of this event, attendees will be able to:

  • Identify and describe construction-specific legal provisions,
  • List various contracts likely to be a part of any construction project,
  • Explain and apply contract clauses specific to construction,
  • List potential risk to organization and agencies and propose mitigation, and
  • Navigate construction contracts to ensure your company/organization's interests are served.

July 10th-11th, 2019
Texas LBJ School
2315 Red River Street
Austin, TX 78712

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The Second Circuit vacated the district court's judgment and remanded for further proceedings.

Anti-Concurrent Causation Clause Preserves Possibility of Coverage

Tuesday, January 15, 2019 — Tred R. Eyerly - Insurance Law Hawaii

The policy's anti-concurrent causation clause preserved the possibility of coverage when the insurer's motion for summary judgment to disclaim its indemnity obligation for damage caused by Hurricane Sandy was overturned by the Second Circuit. Madelaine Chocolate Novelties, Inc. v. Great Northern Ins. Co., 2018 U.S. App. LEXIS 29821 (Oct. 23, 2018 2nd Cir. )

In 2012, Madelaine Chocolate suffered significant damage to its business due to storm surges created by Hurricane Sandy. Madelaine Chocolate had an "all-risk" policy issued by Great Northern. Madelaine Chocolate filed a claim for property damage of approximately $40 million and business income loss and extra operation expenses of $13.5 million. Great Northern denied most of the claim, reasoning that the storm surge damage was excluded under the policy.

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

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

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An insurer may not file its own action to assert claims solely as a subrogee of a suspended corporation, where the corporation could not otherwise assert the claims on its own behalf.

Insurer Prohibited from Bringing Separate Contribution Action in Subrogation to Rights of Suspended Insured

Tuesday, January 15, 2019 — Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel LLP

In Travelers Property Casualty Co. of Amer. v. Engel Insulation, Inc. (No. C085753, filed 11/30/18), a California appeals court held that an insurer may not file its own action to assert claims solely as a subrogee of a suspended corporation, where the corporation could not otherwise assert the claims on its own behalf.

In Engel, a homeowners association filed a construction defect action against the developer, Westlake. Travelers defended Westlake as an additional insured on the policy of a subcontractor. After the case settled, Travelers brought a subrogation action against another subcontractor for contribution to the defense costs. However, Westlake had its corporate status suspended for failure to pay taxes, and the subcontractor moved for judgment on the pleadings, which was granted.

Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com


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Legal books on bookcase

The Vinci case arises out of the $210 million Brightwater Project contract to bore tunnels.

Spearin Doctrine: Alive, Well and Thriving on its 100th Birthday

Tuesday, January 15, 2019 — John P. Ahlers - Ahlers Cressman & Sleight PLLC

On December 9, 2018, United States v. Spearin, [1] a landmark construction law case, will be 100 years old. The Spearin “doctrine”[2] provides that the owner impliedly warrants the information, plans and specifications which an owner provides to a general contractor. The contractor will not be liable to the owner for loss or damage which results from insufficiencies or defects in such information, plans and specifications.

Some construction lawyers questioned whether the Spearin doctrine was still viable in Washington after the Washington Court of Appeals decided the recent case of King County v. Vinci Constr. Grand Projets.[3] Some concerned contractor industry groups even considered a “statutory fix” in the wake of the Court of Appeals Vinci decision. It is our opinion that the facts in the Vinci case are distinguishable and the Spearin doctrine is alive and thriving in Washington.

Reprinted courtesy of John P. Ahlers, Ahlers Cressman & Sleight PLLC

Mr. Ahlers may be contacted at john.ahlers@acslawyers.com

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Businessman and woman standing back to back

Tred R. Eyerly analyzes Cincinnati Spec. Underwriters Ins. Co. v. Milionis Constr., Inc.

Non-compliance With Endorsement Means No Indemnity Coverage

Tuesday, January 15, 2019 — Tred R. Eyerly - Insurance Law Hawaii

The insured's failure to verify that subcontractors had CGL policies and to provide a contract stating that the subcontractors would indemnify the insured as required by the policy's endorsement meant there was no coverage for the insured. Cincinnati Spec. Underwriters Ins. Co. v. Milionis Constr., Inc., 2018 U.S. Dist. LEXIS 199658 (E.D. Wash. Nov. 26, 2018).

The homeowners filed suit against Milionis, the general contractor for construction of a home. The underlying suit alleged that Milionis breached the parties' agreement by leaving the home unfinished. Cincinnati defended Milionis under a reservation of rights.

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

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

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Legislative building

Garret Murai summarizes updates to California construction law.

2019 California Construction Law Update

Tuesday, January 15, 2019 — Garret Murai - California Construction Law Blog

The California State Legislature introduced 2,637 bills during the second year fo the 2017-2018 Legislative Session. Of these, 1,016 were signed into law.

It was last official bill signing for Governor Jerry Brown who ends not only his second term as Governor but a colorful political career spanning nearly 50 years during which he has dated pop stars, practiced Zen meditation, kicked it with radical ex-nuns and an Apollo astronaut and, at 80, has sparred regularly with President Trump on issues ranging from climate change to immigration to net neutrality.

For those in the construction industry it wasn’t quite as exciting, unless of course you count SCR 120, which officially makes April “California Safe Digging Month.” Hooray!

Each of the bills discussed below took effect on January 1, 2018, except as otherwise stated.

Building Codes
SB 721 – Requires the inspection of exterior elevated elements, including balconies, decks, porches, stairways, walkways, and elevated entry structures, of multifamily buildings with three or more dwelling units by an architect, engineer or contractor with a Class A, B or C-5 license by January 1, 2025 and by January 1st every six years thereafter. Elements posing an immediate threat to the safety of occupants, or which prevent occupant access or emergency repairs, are required to be repaired immediately. Elements not posing an immediate threat to the safety of occupants, or which do not prevent occupant access or emergency repairs, are required to be repaired within 180 days.

Reprinted courtesy of Garret Murai, Wendel Rosen

Mr. Murai may be contacted at gmurai@wendel.com

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Ocean wave crashing

The parties to a construction contract should never agree to an amount of liquidated damages without first attempting to forecast and calculate actual, potential damages.

Liquidated Damages: A Dangerous Afterthought

Tuesday, January 15, 2019 — Trevor B. Potter - Construction Executive

Owners and contractors frequently treat liquidated damages provisions as an afterthought, but they deserve to be treated as a key deal term. If a contractor breaches a contract by failing to complete the work in a timely manner, the remedy is typically an agreed upon amount or rate of liquidated damages.

Liquidated damages provisions seldom get more than a cursory, “back of the napkin” analysis, or worse, parties will simply plug in a number. This practice is dangerous because liquidated damages typically represent the owner’s sole remedy for delay and, more importantly, they are subject to attack and possible invalidation if certain legal standards are not met. The parties to a construction contract should never agree to an amount of liquidated damages without first attempting to forecast and calculate actual, potential damages.

Reprinted courtesy of Trevor B. Potter, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.


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California Wildfires: Escaping Paradise

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CONSTRUCTION DEFECT NEWS
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Demonstrators demand the resignation of Pedro Chavarry in Lima on Jan. 3.

Outcry Over Peru’s Vast Graft Probe Prompts Top Lawyer to Quit

Tuesday, January 15, 2019 — John Quigley - Bloomberg

Peru’s Attorney General Pedro Chavarry quit his post amid allegations he sought to sabotage a plea deal with a major construction company and derail the country’s biggest corruption probe.

The board of supreme prosecutors accepted his resignation Tuesday and appointed Zoraida Avalos as his replacement, according to a post on the account of the attorney general’s office. Chavarry will continue to sit on the five-member board.

Reprinted courtesy of John Quigley, Bloomberg
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Drone hovering in front of building and man standing at rail

The flight was made on Nov. 8 as part of three days of test flights.

60-Mile-Long Drone Inspection Flight Points to the Future

Tuesday, January 15, 2019 — Tom Sawyer - Engineering News-Record

Black & Veatch announced in December the successful conclusion of a 60-mile-log, non-stop, proof-of-concept drone-based inspection flight conducted by a remote pilot in a command center miles away in rural Illinois.

Reprinted courtesy of Tom Sawyer, ENR

Mr. Sawyer may be contacted at sawyert@enr.com

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Gold stars on white background

The newly elected partners and promoted counsel represent the wide array of practices, including commercial and general litigation, corporate and securities, insurance coverage, product liability, subrogation and tax.

White and Williams Announces Lawyer Promotions

Tuesday, January 15, 2019 — White and Williams LLP

White and Williams is pleased to announce the election of Siobhan Cole, Matthew Ferrie, Joshua Galante, Rochelle Gumapac, Geoffrey Sasso and Benjamin Staherski to the partnership. The firm has also promoted Brandon Arber, Adam Berardi, Kevin Koscil and Greg Steinberg from associate to counsel.

The newly elected partners and promoted counsel represent the wide array of practices that White and Williams offers its clients, including commercial and general litigation, corporate and securities, insurance coverage, product liability, subrogation and tax. These accomplished lawyers have earned this advancement based on their contributions to the firm and their practices.

“We are delighted to elect these six lawyers to the partnership and promote four exceptional associates to counsel. The group demonstrates the breadth of services and the deep bench that we offer to our clients at White and Williams," said Patti Santelle, Managing Partner of the firm. “The contributions of this talented group have enhanced the growth and reputation of our firm and reflect our deep commitment to our clients. We look forward to their continued success.”

Reprinted courtesy of White and Williams LLP
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Gold stars on blue background

Renata Hoddinott, Sarah Marsey and Annette Mijianovic were promoted to Partner in January 2019.

2019 Promotions - New Partners at Haight

Tuesday, January 15, 2019 — Haight Brown & Bonesteel LLP

Haight proudly announces the promotion of Renata Hoddinott, Sarah Marsey and Annette Mijianovic to Partner in January 2019.
Renata and Sarah joined Haight’s San Francisco office in 2016. Renata relocated from a litigation firm in the Los Angeles area. She focuses her practice on professional liability, general liability, risk management & insurance law and transportation law.

Before coming to Haight, Sarah was with a respected trial firm in Anchorage, Alaska. She handles a variety of complex matters in appellate law, food safety, construction law and general liability.

Annette has been with Haight’s Los Angeles office for almost 12 years. Annette joined the firm as a summer clerk in 2007 and has continued to build her practice handling cases related to commercial litigation, products liability and transportation law.

Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys Renata L. Hoddinott, Sarah A. Marsey and Annette F. Mijanovic
Ms. Hoddinott may be contacted at rhoddinott@hbblaw.com
Ms. Marsey may be contacted at smarsey@hbblaw.com
Ms. Mijanovic may be contacted at amijanovic@hbblaw.com



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