In Conway Construction Company v. City of Puyallup, No. 80649-1-1 (May 4, 2020), the Washington Court of Appeals, Division 1, adopted Oregon’s Shelter Products, Inc. v. Steelwood Construction, Inc., precluding certain claims for defects in termination cases and limiting the justification for termination to those listed in the termination notice. It also held that Washington’s … Continue Reading
Many building developers utilize a single purpose entity limited liability company (an “LLC”) to purchase and develop property, such as an apartment complex, a subdivision, or a shopping center. Generally, an LLC’s debts, whether incurred or judicially imposed, belong only to the LLC, not to its members. However, an LLC’s individual member may be subject … Continue Reading
Many times I hear from people who want to “save money” and serve as their own “owner-builder” under the exemption to the California Contractor’s Licensing law, which generally requires that any “construction” work over $500 to be performed by a licensed California contractor in the absence of an exemption. (Bus. & Prof. Code section 7048). … Continue Reading
A common insurance question asked by our owner/developer clients when they discover that their completed project has defects is whether their own insurance will cover the cost to fix the defect or any damage from the defect. While trying hard not to sound like the proverbial lawyer, we often have to say “it depends.” What … Continue Reading
It’s been more than 20 years since the LEED standard was introduced, and green building has now become a significant percentage of new U.S. commercial real estate construction. The benefits of green building techniques and products have made LEED certification a hot commodity and changed the construction industry. But there are also risks involved if … Continue Reading
Oregon’s law on statutes of limitation and/or repose periods on construction claims is complex and ever-changing. A recent Oregon Supreme Court ruling has introduced yet another instance of differing time limits on construction defect claims. In my recent article for the Daily Journal of Commerce, I discuss Schell v. The Schollander Companies, Inc. and the … Continue Reading
In Shell v. Schollander Companies, Inc., the Oregon Supreme Court affirmed a line of appellate decisions distinguishing between defect claims arising out of construction performed for an owner and defect claims arising out of an owner’s purchase of an existing structure. In Schollander, the homeowner sought recovery for defects in the construction of a spec … Continue Reading
It will happen to almost every contractor at some point — an owner or project developer will try to sue you. Hopefully your insurer agrees you are covered, and you’ve dodged a bullet. But if your insurer tells you that you are not covered, things get sticky. One common strategy is for the parties to … Continue Reading
Subcontractor default is a construction project nightmare that can result in significant additional costs and delay completion of the project. But there are two chief options to protect against such risks — performance bonds and subcontractor default insurance. In my recent article for the Daily Journal of Commerce, I outline the unique characteristics of each … Continue Reading
In my recent article, "Contractor Not Entitled to Setoff Costs of Repairing Subcontractor’s Defective Work," I discuss the Oregon Court of Appeals’ decision that a contractor cannot terminate its subcontractor for convenience and setoff costs incurred in repairing the subcontractor’s defective work (affirming the trial court’s decision). Read the full article, here. "Contractor Not Entitled … Continue Reading
The apartment business is booming right now. Unfortunately, construction defects persist as well, particularly in garden-style and wood-framed construction. Most developers are savvy enough to maintain a good insurance program, but many do not understand (until too late) that the policies they bought may not cover the risk of construction defects. As an owner-developer, neither your property … Continue Reading
You may have recently heard that on December 11, 2013, the California Supreme Court denied the builder’s Petition for Review of the published decision in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC, 163 Cal. Rptr. 3d 600, Cal. App. 4th 98 (2013). For builders and contractors, this is very frustrating news and undermines the … Continue Reading
The Oregon Supreme Court will review two recent Court of Appeals decisions related to statutes of limitation and repose on construction projects. In the first case, Sunset Presbyterian Church v. Brockamp & Jaeger, Inc., the Oregon Supreme Court will address the following questions: (1) When the construction contract includes an accrual provision, is the statute … Continue Reading
The Oregon Court of Appeals recently applied the so-called “economic loss rule” to a construction dispute (Marton v. Ater Construction Co., 256 Or App 554, __ P3d __ (2013)). Among other issues, the court decided whether the prime contractor’s negligence claim against its subcontractor was barred under the economic loss rule. Under the court-made economic … Continue Reading
Can parties waive both the commencement and length of the statutory limitation periods for construction defect actions? Yes, answered the Fourth Appellate District, by allowing the parties to contractually preclude the application of the “delayed discovery” rule that normally triggers the commencement of the limitation time period and affirming case law permitting the shortening of … Continue Reading
A reminder from the Idaho Supreme Court for parties to a construction contract: the plain language of the parties’ contract governs the obligations between them in the absence of ambiguity. In City of Meridian v. Petra, Inc., No. 39006, 2013 WL 1286014 (Idaho Apr. 1, 2013), the Idaho Supreme Court reviewed a construction dispute between … Continue Reading
The Nevada Supreme Court has answered a question that developers and contractors have been asking for years: can the statutory limitation period for a construction defect action be shortened? The court answered in the affirmative but held that there must be no statute to the contrary and that the reduced limitation period must be reasonable … Continue Reading
There are now 25 states in the U.S. that hold that construction defects are not an “occurrence” and are therefore not covered under commercial general liability policies insuring contractors. Couple this troubling statistic with the ever increasing number of policy exclusions and limitations, and we begin to realize that in many situations the contractor’s insurance … Continue Reading
Last month the Oregon Supreme Court heard oral argument in Abraham v. T. Henry Construction, Inc., a residential construction defect case. Shortly after the Oregon Court of Appeals published its opinion in September 2009, Ahead of Schedule authors Eric Grasberger (“Negligence Claims Take Another Twist in Oregon” and Kip Childs (“Oregon Court of Appeals Provides Clarification … Continue Reading
Today the Consumer Product Safety Commission recommended removal of all sulfur-containing drywall from homes built with the problem drywall. The CPSC’s recommendation is contained in its Interim Remediation Guidance for Homes with Corrosion from Problem Drywall. In addition to the problem drywall, the CPSC recommends removal and replacement of all fire safety alarm systems, electrical components … Continue Reading
Four Practical Points for Avoiding and Responding to Construction Liens Step 1: Who’s healthy in 2010? Within the bounds of the Fair Credit and Reporting Act and any state obligations, it is imperative for both owners and general contractors to understand the financial fortitude of the parties doing the work. If you don’t obtain the … Continue Reading
Your project is coming along fine, despite the economy. You’ve weathered the squalls of bids, design changes, agency approval, and credit (mercifully), and now even construction completion is looking good. You can see the finish line through the haze on the horizon, and you’re fairly pleased with how you have pulled everything together with what … Continue Reading
The Consumer Product Safety Commission has spent more than $3.5 Million investigating sulfur-containing drywall in what has become one of the largest investigations in CPSC history, according to Scott Wolfson, spokesman for the CPSC. And the investigation is not done yet. During a press conference last week, the CPSC announced the release of more than 1,800 … Continue Reading
Just when you thought it was safe to go back into the water, the Oregon Court of Appeals strikes again with another iteration of the “economic loss doctrine” which defines when parties can sue each other in negligence for construction defects. In Abraham v. Henry (September 2, 2009) the Court held that parties to a … Continue Reading
