Construction Defects

News & Analysis as of

U.S. District Court in Pennsylvania Dismisses Owner’s Claim Against Performance Bond Surety – Repeated Instances of Poor...

Milton Reg’l Sewer Auth. v. Travelers Casualty & Surety Co., 2014 U.S. Dist. LEXIS 155419 (M.D. Pa. Nov. 3, 2014) - The United States District Court for the Middle District of Pennsylvania ruled that multiple...more

Ninth Circuit Enforces Waiver of Subrogation Clause in Design/Build Agreement Against Post-Construction Property Insurer

Travelers Indem. Co. v. Crown Corr, Inc., 2014 U.S. App. LEXIS 21101 (9th Cir. 2014) - This action arose out of the construction of the University of Phoenix Stadium (the “Stadium”), home of the Arizona Cardinals. ...more

New False Claims Act Whistleblower Trends Revealed in Recent Verdict: What Can We Learn?

On October 20, 2014 in a case brought by a whistleblower under the False Claims Act (“FCA”), a federal jury handed down a $175 million verdict in favor of the plaintiff. While the outcome was newsworthy because of its size...more

Finding Insurance Coverage for Consumer Products Class Action Complaints

Consumer class action claims are a familiar tool for addressing dissatisfaction with a defective product. Given that one of the goals of a consumer class action claim is to recover damages for the claimants, triggering...more

Hawaii Finds Unilateral Arbitrator-Selection Provision Fundamentally Unfair

The Supreme Court of Hawai’i concluded last week that it is fundamentally unfair to allow one party to an arbitration agreement to unilaterally select the arbitral forum. Nishimura v. Gentry Homes, Ltd., __ P.3d__, 2014 WL...more

Fifth Circuit Addresses Contractual Liability Exclusion

In its recent decision in Crownover v. Mid-Continent Cas. Co., 2014 U.S. App. LEXIS 20737 (5th Cir. October 29, 2014), the United States Court of Appeals for the Fifth Circuit withdrew its prior ruling and held that the...more

More “Texas Justice” For Policyholder On Contractual Liability Exclusion

On October 29, the Fifth Circuit reversed itself for the second time this year in a case involving the interpretation of a contractual liability exclusion in a CGL policy. This recent decision by the Fifth Circuit in...more

New York Court Revisits Architect’s Duty Under Contract and Tort Principles

Issues of privity and whether claims sound in breach of contract or negligence are common in construction defect cases involving architects and New York is no exception. Indeed, New York courts have long wrestled with...more

Nevada Supreme Court Clarifies Right to Construction Defect Remedies Involving Residential Units with Previously Occupied Spaces

In Oxbow Constr., LLC v. Eight Judicial Dist. Ct., 2014 Nev. LEXIS 109, 130 Nev. Adv. Rep. 86 (Nev. Oct. 16, 2014), the Nevada Supreme Court considered issues regarding class-action certification and the availability of...more

Appellate Court Notes

- SC18975 - Connecticut Ins. Guaranty Assn. v. Drown - SC18975 Concurrence - Connecticut Ins. Guaranty Assn. v. Drown - SC18975 Dissent - Connecticut Ins. Guaranty Assn. v. Drown This started as a medical...more

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

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