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CONSTRUCTION DEFECT NEWS

Colorado House Bill 1279 Stalls over 120-day Unit Owner Election Period

Thursday, April 20, 2017 — Luke Mecklenburg - Snell & Wilmer Real Estate Litigation Blog

With the session more than halfway through, the Colorado Legislature’s 2017 attempts at meaningful construction defect reform may fail again. This year, the Legislature did not attempt a single-bill construction defect overhaul like those that have failed over the last half-decade. Rather, it has sought to enact reforms on a piecemeal basis, with several smaller bills addressing specific issues that have been affecting condominium construction along Colorado’s booming Front Range.

This new approach appears to be headed towards much the same outcome as the failed efforts of the past. House Bill 1169 would have given developers a statutory right to repair before being sued by homeowners, and Senate Bill 156 would mandate arbitration or mediation. Both have been assigned to the House State, Veterans, and Military Affairs Committee (often viewed as the “bill-kill committee”), and have little chance of being resuscitated this session.

This was also the fate of House Bill 1279, but bipartisan support had many believing that it still had a chance of passing—at least until last week. House Bill 1279 would require an executive board of a homeowners association to satisfy several prerequisites before suing a developer or builder, namely to (1) notify all unit owners and the developer or builder against whom the lawsuit is being considered; (2) call an association meeting where the builder or developer could present relevant facts and arguments; and (3) get approval from the majority of the unit owners after providing detailed disclosures about the lawsuit, including the potential costs and benefits thereof.

Reprinted courtesy of Luke Mecklenburg, Snell & Wilmer

Mr. Mecklenburg may be contacted at lmecklenburg@swlaw.com

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Assignment of Construction Defect Claims Not Covered

Thursday, April 20, 2017 — Tred R. Eyerly - Insurance Law Hawaii

Assignment of insurance proceeds as part of a settlement against the subcontractor for faulty workmanship was not covered under the CGL policy in accordance with Illinois law. Allied Prop. & Cas. Ins Co v. Metro North Condominium Assoc., 2017 U.S. App. LEXIS 4107 (7th Cir. March 8, 2017).

Metro North Condominium Association hired a developer to build a condominium. The developer used CSC Glass to install the building's windows. CSC installed the windows defectively, causing the building to sustain significant water damage following a rain storm.

Metro North sued the developer, who turned out to be insolvent. Metro North amended its complaint to add a claim against CSC for breach of the implied warranty of habitability. Metro North eventually dismissed its lawsuit in exchange for an assignment of CSC's policy with Allied and payment of any right to $700,000 worth of insurance coverage. The settlement specified that it was not intended to compensate Metro North for the cost of repairing or replacing CSC's defectively installed windows, but rather for the damage to the remaining parts of Metro North's condominium.

Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii

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

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California Supreme Court Finds that When it Comes to Intentional Interference Claims, Public Works Projects are Just Different, Special Even

Thursday, April 20, 2017 — Garret Murai - California Construction Law Blog

Earlier, we reported on a California Court of Appeals decision – Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. – which held for the first time that a second-place bidder on a public works contract could sue a winning bidder who failed to pay its workers prevailing wages, under the business tort of intentional interference with prospective economic advantage.

Fast forward nearly two years, several amicus briefs, and “one doghouse”* later and the California Supreme Court has . . . reversed.

The Roy Allan Slurry Seal Case

To catch you up, or rather, refresh your recollection . . .

Between 2009 and 2012, American Asphalt South, Inc. was awarded 23 public works contracts totaling more than $14.6 million throughout Los Angeles, Orange, San Bernardino and San Diego counties. Two of the losing bidders on those projects – Roy Allan Slurry Seal, Inc. and Doug Martin Contracting, Inc. – sued American in each of these counties for intentional interference with prospective economic advantage as well as under the Unfair Practices Act (“UPA”) (Bus. & Prof. Code §§ 17000 et seq.) and the Unfair Competition Law (“UCL”) (Bus. & Prof. Code §17200).

Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP

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

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Survey: Workers Intentionally Take 'Calculated' Safety Risks

April 20, 2017 — Scott Van Voorhis - Engineering News-Record

A survey of construction workers across the country finds that, at least sometimes, more than half purposefully ignore their training to take "calculated risks" on the worksite.

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

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Insurance Customers Need to Get Used to Talking to Machines

April 20, 2017 — Oliver Suess - Bloomberg

Frustrated with automated answering machines before you finally get to speak with a customer service representative? When it comes to insurance, you’ll just as likely end up dealing with a robot as a human within three years, according to a survey by Accenture Plc.

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Homebuilder Sentiment in U.S. Cools From Almost 12-Year High

April 20, 2017 — Michelle Jamrisko - Bloomberg

Confidence among U.S. home builders cooled in April after jumping a month earlier to the highest level since mid-2005, according to data Monday from the National Association of Home Builders/Wells Fargo.

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Certificates of Insurance: What You Don’t Know Will Cost You

April 20, 2017 — Beverley BevenFlorez-CDJ STAFF

This free seminar for builders and developers only is presented by Mark Hunter of Summit Risk Management & Insurance and Lisa Dunn of Higgins, Hopkins, McLain & Roswell. Topics of discussion include Length of Exposure for Contractors in Colorado—Statute of Repose, Risk Transfer—How to More Effectively Bind the Subs Insurance Company, Insurance Exclusions—Could Eliminate Subs Coverage by 100%, and more.

April 25, 2017
Maggiano's Little Italy
7401 South Clinton Street
Englewood, CO 80112

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Florida Lien Law and Substantial Compliance vs. Strict Compliance

Thursday, April 20, 2017 — David Adelstein - Florida Construction Legal Updates

There are literally some (or, perhaps, many!) disputes that will make you say “hmm!” The “hmm” is a euphemism for “what is a party thinking?!?” The case of Trump Endeavor 12 LLC v. Fernich, Inc., 42 Fla. L.Weekly D830a (Fla. 3d DCA 2017) is one of these cases because a party (the owner) is banking its defense on a technical “all-or-nothing” argument pertaining to whether a lienor (a supplier) substantially complied with Florida’s Lien Law because a supplier’s Notice to Owner identified the wrong general contractor. This is a challenging argument because the owner has to prove how they were adversely affected / prejudiced by the lack of substantial compliance, which is not an easy burden.

This case concerns the Trump National Doral Miami project. The project consisted of a lodge project and a separate clubhouse project, both of which had different general contractors. On the lodge project, the general contractor hired a painter which, in turn, procured paint from a supplier (the lienor). The supplier visited the project and obtained the Notice of Commencement from the owner so that it could perfect its lien rights. The owner furnished the supplier the Notice of Commencement for the clubhouse project that had a different general contractor. Relying on this Notice of Commencement, the supplier served a Notice to Owner. The Notice to Owner was timely serviced however it identified the wrong contractor – it identified the general contractor for the clubhouse project instead of the lodge project. Although the supplier later learned there was a different general contractor on the lodge project, it did not remedy the issue by serving a Notice to Owner on the correct contractor. Indeed, the contractor for the lodge project learned of the Notice to Owner furnished by the supplier and that the supplier was furnishing paint to the painting subcontractor for purposes of that project.

Reprinted courtesy of David Adelstein, Florida Construction Legal Updates

Mr. Adelstein may be contacted at Dadelstein@gmail.com

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Dear Engineer: Has your insurer issued a “Reservation of Rights” letter? (law note)

Thursday, April 20, 2017 — Melissa Dewey Brumback - Construction Law in North Carolina

In my previous post, I made reference to getting a “Reservation of Rights” letter. I noted that the carrier may decide to defend you under a Reservation of Rights (i.e., hire your lawyer) but may not, necessarily, accept the responsibility for paying the claim. Does this mean that the insurance company has denied your claim, or will never pay? No.

Reservation of Rights (ROR) letters are sent for a variety of reasons- most notably, when some portion of the construction lawsuit against you is not covered under your E&O policy. The letter must state the reason(s) that the ROR is being issued.

With the ROR, the insurance company is telling you that it reserves the right to withdraw from your defense and/or deny payment of damages at a later date, depending upon how facts in the case develop. The notice is intended to let you know that there *may* be issues later, and to put you notice that you have the right to hire your own lawyer (at your own expense) to protect yourself from that future potential risk.

Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC

Ms. Brumback may be contacted at mbrumback@rl-law.com

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Make Your Business Great Again: Steven Cvitanovic Authors Construction Today Article

Thursday, April 20, 2017 — Steven M. Cvitanovic - Haight Brown & Bonesteel LLP

There is a lot of uncertainty regarding how President Trump’s immigration and trade policies will affect the construction industry. In his Construction Today article, Partner Steven Cvitanovic discusses how businesses can remain competitive and profitable during this period of uncertainty, including updating contract documents, recruiting and retaining employees, and increasing cybersecurity efforts.

“If you do not know when your contract documents were last updated, it’s probably been too long,” writes Cvitanovic. “Unlike wine, contract documents only get worse with age.” Cvitanovic advises teams to sit down together and review contracts to see if they still meet the firm’s needs.

Reprinted courtesy of Steven M. Cvitanovic, Haight Brown & Bonesteel LLP

Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com

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CONSTRUCTION DEFECT NEWS

Zoning Hearing Notice Addressed by Georgia Appeals Court

Thursday, April 20, 2017 — David R. Cook Jr. - Autry, Hanrahan, Hall & Cook, LLP

The Georgia Court of Appeals recently addressed the requisite notice of zoning proceedings that ultimately requested in a zoning decision. The key question was whether, after a properly noticed planning meeting, additional notice was required before the board’s formal vote that occurred three months later.

Reprinted courtesy of David R. Cook, Autry, Hanrahan, Hall & Cook, LLP

Mr. Cook may be contacted at cook@ahclaw.com

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Tax Increase Pumps $52 Billion Into California Construction

Thursday, April 20, 2017 — JT Long - Engineering News-Record

The first wave of new road projects could go out at the beginning of 2018 now that the California legislature has approved $52.4 billion over 10 years from a new 12-cent-per-gallon gasoline tax. SB-1 was approved late in the evening on April 6; by April 7, the California Dept. of Transportation was already working on a list of projects that could start construction by summer of 2018.

Reprinted courtesy of JT Long, ENR

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

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The Nightmare Scenario for Florida’s Coastal Homeowners

Thursday, April 20, 2017 — Christopher Flavelle - Bloomberg

On a predictably gorgeous South Florida afternoon, Coral Gables Mayor Jim Cason sat in his office overlooking the white-linen restaurants of this affluent seaside community and wondered when climate change would bring it all to an end. He figured it would involve a boat.

When Cason first started worrying about sea-level rise, he asked his staff to count not just how much coastline the city had (47 miles) or value of the property along that coast ($3.5 billion). He also told them to find out how many boats dock inland from the bridges that span the city’s canals (302). What matters, he guessed, will be the first time a mast fails to clear the bottom of one of those bridges because the water level had risen too far.

“These boats are going to be the canary in the mine,” said Cason, who became mayor in 2011 after retiring from the U.S. foreign service. “When the boats can’t go out, the property values go down.”

If property values start to fall, Cason said, banks could stop writing 30-year mortgages for coastal homes, shrinking the pool of able buyers and sending prices lower still. Those properties make up a quarter of the city’s tax base; if that revenue fell, the city would struggle to provide the services that make it such a desirable place to live, causing more sales and another drop in revenue.

Reprinted courtesy of Christopher Flavelle, Bloomberg
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Aerial Tour of Denver High-Rise Construction Site

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CONSTRUCTION DEFECT NEWS

“Professional Best Efforts” part 2– Reservation of Rights for Engineers who agree to “best” efforts? (law note)

Thursday, April 20, 2017 — Melissa Dewey Brumback - Construction Law in North Carolina

Recently, a reader reached out to me to ask about case examples of an engineer losing his insurance coverage because he agreed to a “heightened” or “best” standard of care. The reader stated that he was an insurance adviser who handled various construction professional coverages, and that in his experience it was very unusual to deny or limit damages because of a heightened standard of care.

This comment led me to an informal survey of several insurance brokers that I deal with, and the general consensus is that instead of outright denying a claim, most E&O insurers will issue a “reservation of rights” letter. What that means is that the insurance company will defend the claim (i.e., pay for your lawyer to defend you and your Firm), but with the understanding that they are (potentially) denying any liability for any adverse money judgment against you.

Inevitably, most such cases settle, but if they do not, the question then is whether the heightened duty created part of the damages. The insurer may ask to intervene in the lawsuit to ask the jury that question, in an effort to limit its share of the damages.

Reprinted courtesy of Melissa Dewey Brumback, Ragsdale Liggett PLLC

Ms. Brumback may be contacted at mbrumback@rl-law.com

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Safety Data: Noon Presents the Hour of Greatest Danger

Thursday, April 20, 2017 — Richard Korman - Engineering News-Record

Unlike previous research into construction fatalities, a new review of three years of Labor Dept. data found that most occur between 10 am and 3 pm, with a peak at noon.

Reprinted courtesy of Richard Korman, ENR

Mr. Korman may be contacted at kormanr@enr.com

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Tokyo's Skyline Set to See 45 New Skyscrapers by 2020 Olympics

Thursday, April 20, 2017 — Gareth Allan & Katsuyo Kuwako - Bloomberg

Tokyo’s skyline is set to welcome 45 new skyscrapers by the time city hosts the Olympics in 2020, as a surge of buildings planned in the early years of Abenomics near completion.

Japan’s capital will see nearly 50 percent more new high-rise space in the next three years than it did in the preceding three, Toyokazu Imazeki, chief analyst at office leasing and consulting firm Sanko Estate Co Ltd., said in an interview. He said the increase was fueled by the fiscal expansion and monetary easing under Abe’s economic program, launched after his election in late 2012.

“This marks the timing for completion of buildings planned from about 2013 when developers were expecting the economy to expand,” said Imazeki. The increase in building was supported not only by Abe’s expansionary policies but also Japan’s ultra-low interest rates, he said.

Reprinted courtesy of Gareth Allan, Bloomberg and Katsuyo Kuwako, Bloomberg



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Georgia Passes Solar CUVA Bill

Thursday, April 20, 2017 — David R. Cook Jr. - Autry, Hanrahan, Hall & Cook, LLP

Georgia House Bill 238 authorizes the withdrawal of property from a conservation use covenant for purposes of developing a solar generation plant. Before the law was passed, subject to certain limited exceptions, properties under a conservation use covenant generally could not be developed without breaching the covenant. The new law permits the removal of a portion of the property to be used for solar development without breaching the covenant for the rest of the property.

Reprinted courtesy of David R. Cook, Autry, Hanrahan, Hall & Cook, LLP

Mr. Cook may be contacted at cook@ahclaw.com

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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

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

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