Construction Defects

News & Analysis as of

Regional Steel: the continuing effort to avoid the cost of correcting the insured’s work

Casualty insurers normally do not expect to pay the cost of their insureds simply doing a good job. Insurers typically view their contracts as assuming the risk of delineated consequences – damages – if the insured’s work...more

Lakewood Passes Construction Defect Action Reform

On October 13, 2014, Lakewood’s City Council passed Ordinance O-2014-21, which reforms the process for handling construction defect claims on condominium projects in the City of Lakewood. The ordinance has three primary...more

City of Lakewood Adopts Ordinance to Encourage Condominium Construction and Reduce Construction Defect Litigation

On Monday, October 13, 2014, the City of Lakewood became the first Colorado municipality to adopt legislation intended to encourage construction of “for sale” multifamily projects by mitigating the risks to developers and...more

No CGL Coverage for Faulty Workmanship Under Pennsylvania Law

In State Farm Fire & Casualty Co. v. McDermott, 2014 WL 5285335 (E.D. Pa. Oct. 15, 2014), a federal court recently held that an insurer has no duty to defend or indemnify its insured against an underlying construction defect...more

U.S. District Court of Hawaii Holds That Claims Arising From Contractors Failure To Provide Metal Framing and Installation of...

In State Farm Fire & Cas. Co. v. RK Wooten, 2014 U.S. Dist. LEXIS 146196 (D. Haw. Oct. 14, 2014), the U.S. District Court of Hawaii recently determined that State Farm Fire & Casualty Insurance Company (“State Farm”) had no...more

High Court Finds No Duty of Care From Builder to Owners Corporation

The High Court has held that a builder of a serviced apartment complex does not owe a duty of care in negligence for financial loss arising from defects in common property to an owner's corporation (Brookfield...more

California District Court Errs in Dismissing Insurer’s Equitable Reimbursement Claim without Leave to Amend

In the contentious matter of Travelers Indemnity Company of Connecticut, et al. v. Centex Homes, et al., 2014 U.S. Dist. LEXIS 115598 (E.D. Cal. 2014), the Eastern District of California recently reconsidered its July 30,...more

Construction Defect Claims Tackled By Lakewood

The impact of construction defect lawsuits on condominium development in Colorado has been a hot topic recently. Colorado law treats residential construction differently than non-residential construction. This increases the...more

Pennsylvania Supreme Court Determines Implied Warranty of Habitability Does Not Extend to Subsequent Purchasers

The Pennsylvania Supreme Court is now the latest state court to weigh in on the issue of whether a subsequent purchaser of a previously inhabited residence can recover contract damages from a builder or general contractor for...more

Massachusetts Supreme Court Holds Economic Loss Rule No Bar to Condo Trustees’ Claim for Damages to Common Areas Caused By...

Wyman v. Ayer Properties, LLC, 469 Mass. 64, 2014 Mass. LEXIS 524 (July 10, 2014) - The Massachusetts Supreme Court ruled that the economic loss rule, which bars recovery of tort damages from the negligent supplier of...more

Missouri Court of Appeals Affirms Award of Compensatory Damages Against Insurer Based Upon Bad Faith Failure to Settle and Overall...

The Missouri Court of Appeals recently affirmed an award of compensatory damages against an insurer based upon bad faith in Advantage Bldgs. & Exteriors, Inc. v. Mid-Continent Cas. Co., 2014 Mo. App. LEXIS 975 (Missouri Court...more

Construction Case Law Update - September #2 2014

FLORIDA FEDERAL CASES - - Contribution, Equitable Subrogation, and Breach of Contract – Insurer adequately alleged elements of contribution, equitable subrogation, and breach of contract claims in construction defect...more

Nevada Court Holds NRS Chapter 40 Does Not Require a Subcontractor to Provide Pre-Litigation Notice to a Supplier

Under Nevada Revised Statutes Annotated (NRS) Chapter 40, a general contractor is required to provide pre-litigation notice (followed by an opportunity to repair) to a subcontractor or supplier the general contractor believes...more

The Jury is Still Out On The Effectiveness Of The “Calderon Process”

The State of California implemented the “Calderon Process” almost two decades ago. The hope was this pre-litigation “mediation” process would lower the cost, and increase the likelihood of early settlement, of construction...more

Public Offering Statement Disclosure Limits Developer's Liability

A New Jersey judge earlier this year dismissed a construction defect complaint by a condominium association against the developer and contractor, finding that the lawsuit was filed outside the state’s six-year statute of...more

In California, Looks Really Do Matter: Visual Appearance and Internal Consistency of Policy Language Supports Application of...

In Yu v. Landmark American Ins. Co., 2014 WL 4162365 (Cal. Ct. App. Aug. 22, 2014)*, the California Court of Appeals relied on the visual appearance and internal consistency of an endorsement entitled “EXCLUSION – YOUR PRIOR...more

Did the 4th Circuit “Tarnish” Sustainable Construction in the CBF Case?

Christopher Hill, LEED AP discusses the ramifications of the 4th Circuit Court of Appeals' remand of the Chesapeake Bay Foundation "Parallam" case at Construction Law Musings....more

LITIGATION ALERT: Texas Supreme Court Limits the Application of the Economic Loss Rule

In Texas, the economic loss rule has been applied by courts to prevent a plaintiff from recovering purely economic losses in a negligence or strict liability action. In products liability cases, when a loss results from the...more

Pennsylvania Supreme Court Rules Only Original Purchasers May Recover Damages for Breach of the Builder’s Implied Warranty of...

The Pennsylvania Supreme Court ruled that a builder’s implied warranty of habitability extends only to the initial buyer of a home, and not to subsequent purchasers. In Conway v. The Cutler Group, Inc., the Court reversed an...more

"Construction Alert" Texas Supreme Court Confirms Owners May Bring Negligence Claim Directly Against Subcontractors

Several cases have held that a homeowner cannot sue a subcontractor for defective work because the homeowner’s contract is with the general contractor and not the subcontractor. Those cases left it to the general contractor...more

Texas Supreme Court Opinions and Orders (8/14 - Part 2)

In its weekly orders on Friday, August 22, 2014, the Supreme Court was busy. The Court issued 7 opinions, granted 4 petitions for review, and set 4 mandamus petitions for argument. Scott Stolley summarized 3 of the opinions,...more

Fifth Circuit Holding Breathes Life Back Into the Contractual Liability Exclusion

Liability insurance policies typically exclude coverage for obligations arising out of the insured’s “assumption of liability in a contract or agreement.” Earlier this year, the Texas Supreme Court took a narrow view of this...more

Architects and Design Professionals Can Be Held Liable for Defects Based On Third Party Claims

A homeowners association, on behalf of its members, sued a condominium developer and various other parties for construction design defects that allegedly made their homes unsafe and uninhabitable for a significant portion of...more

“California’s Right To Repair Act Is Not A Homeowner’s Exclusive Remedy When Construction Defects Cause Actual Property Damage.”

The California Court of Appeals recently issued two decisions holding that California’s Right to Repair Act (“SB 800”) is not the exclusive remedy for a homeowner seeking damages for construction defects that have also...more

Appellate Court Notes

SC19089 - Travelers Casualty & Surety Co. of America v. Netherlands Ins. Co. - Travelers brought a declaratory judgment action, claiming that the Netherlands Insurance Company had to participate in the defense costs of...more

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