The Year 2010 In Review: Design And Construction Defects Litigation

by Sheppard Mullin Richter & Hampton LLP
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This article is the first in a series summarizing construction law developments for 2010.

1. Centex Homes v. Financial Pacific Life Insurance Co., 2010 U.S. Dist. LEXIS 1995 (E.D. Cal. 2010)

After settling numerous homeowners' construction defect claims – and more than ten years after the homes were substantially completed – a home developer brought suit against one of the concrete fabrication subcontractors for the development seeking indemnity for amounts paid to the homeowners, as well as for damages for breach of the subcontractor's duties to procure specific insurance and to defend the developer against the homeowners' claims. The subcontractor brought a motion for summary adjudication on the ground the developer's claims were barred by the ten year statute of repose contained in Code of Civil Procedure Section 337.15.....

2. UDC – Universal Development v. CH2M Hill, 181 Cal. App. 4th 10 (6th Dist. Jan. 2010)

Indemnification clauses in construction agreements often state that one party to the agreement – the "indemnitor" – will defend and indemnify the other party from particular types of claims. Of course, having a contract right to a defense is not the same as actually receiving a defense. Any indemnitor attempting to avoid paying for defense costs can simply deny the tender of defense with the hope that when the underlying claim is resolved the defense obligations will be forgotten. In the past, when parties entitled to a defense – the "indemnitees" – had long memories and pressed to recover defense costs, indemnitors attempted to justify denying the tender by claiming their defense obligations coincided with their indemnity obligations and neither arose until a final determination was made that the underlying claim was one for which indemnity was owed....

3. Great Lakes Construction, Inc. v. Jim Burman, et al., 186 Cal. App. 4th 1347 (3d Dist. July 2010)

After a homeowner posted unfavorable comments about two contractors on the internet, the contractors sued the homeowner for libel. The contractors' complaint prompted a predictable series of pleadings, starting with the homeowner's cross-complaint for breach of contract and negligence against the contractors and designers for substandard work, followed by the contractors' cross-complaint against one of its subcontractors for breach of contract and indemnity....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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