Tag: Defects

Oregon Court of Appeals Broadens “Four Corners” Rule in Construction Defect Insurance Coverage Cases

In a recent Oregon Court of Appeals decision, the court likely eased the burden for contractors seeking a defense under insurance policies in which they have been named as an additional insured. In my latest article for the Daily of Journal of Commerce, I examine the decision, which expands upon a 2016 Oregon Supreme Court … Continue Reading

Under California’s Right to Repair Act, Ignore Deadlines at Your Own Peril

In a very recent decision, the Fourth District Court of Appeal in Blanchette v. Superior Court affirmed the plain language of the Home Builder’s Right to Repair Act, holding that even a facially insufficient notice of defect triggers the obligation of a builder to respond within 14 days.  The statute, Civil Code section 895 et. … Continue Reading

One Unanticipated Cost of Being an Owner-Builder in California: Liability for Retained Control over Safety

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

Oregon Court of Appeals’ Decision: Contractor Cannot Terminate Its Subcontractor To Offset Costs

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

Multi-Family Sellers Beware: Don’t “Alienate” Your Project from Insurance Coverage for Construction Defects

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

Bah Humbug: California Supreme Court Won’t Hear Dispute Arising From Overbroad SB800 Decision

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 Vexing Date of Substantial Completion: Oregon Supreme Court to Consider Two Cases Addressing When Statutes of Limitation and Ultimate Repose Begin to Run

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

Beware the Economic Loss Trap in Construction Disputes

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

Sophisticated Parties? You May Shorten Both the Start and Length of the Statute of Limitations in CA Commercial Construction Contracts

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 Contract Means What It Says: Construction Manager Awarded Equitable Fee Increase in Idaho

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

Statutory Limitation Periods Can Be Reduced Contractually Under Nevada Law

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

The Increasing Importance of Performance Bonds

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

Oregon Supreme Court Hears Abraham Appeal

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

CPSC Recommends Removal and Replacement of Chinese Drywall

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

But I already paid for that! So you have a mechanic’s lien; now what? (Part 2)

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

But I already paid for that! So you have a mechanic’s lien; now what? (Part 1)

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

Chinese Drywall Investigation One of Largest in CPSC History

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

Negligence Claims Take Another Twist in Oregon

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

Oregon Statute Regarding Defective Design and Construction Claims Pending Governor Action

Oregon HB 2434, passed by the House of Representatives on May 4, 2009 and by the Senate on June 22, 2009, is currently awaiting the Governor’s approval or veto. The bill would reduce from 10 years to six years the maximum time period during which an owner of a "large commercial building" could assert claims … Continue Reading

Chinese Drywall Reported In Oregon: How You Can Protect Yourself.

The Portland Business Journal  recently stated that Chinese drywall has been reported in Oregon. In addition, late last week the United States Consumer Product Safety Commission (“CPSC”) issued a status report on its investigation into the imported drywall. This report states that 5,503,694 sheets of Chinese drywall were imported into the United States during 2006, so … Continue Reading

New WA Supreme Court Opinion has several Construction law implications

On June 18, 2009 the Washington Supreme Court issued its decision in Cambridge Townhomes, et al. v. Pacific Star Roofing, Inc., et al., 81003-6. The decision touches on several issues of interest to the construction industry in Washington. In particular, the Court clarified the law about when a corporation may be held liable as a … Continue Reading

Chinese drywall claims now certified as a class action

Our Sean Gay recently blogged here and here about recent complaints out of Florida and elsewhere concerning defective Chinese-manufactured drywall that emits noxious sulfur gas and has been linked to problems with electrical and air conditioning systems. The latest news is that several such claims have recently been consolidated into a single federal class action … Continue Reading

Oregon House Bill 2434 Threatens to Cut Off Large Commercial and High Rise Residential Defect Claims

All large commercial property owners and developers should be aware of a substantial risk that Oregon’s statute of repose for construction and design defect claims may be shortened from 10 years to 6 years if HB 2434 (available here) passes. Though similar bills were unsuccessful in years past, this year the sponsors have carved out … Continue Reading

Chinese Drywall Defects a Growing Concern

Since we first blogged about Chinese drywall, homeowners in at least 19 states, including Washington and California, have reported problems associated with defective drywall. Late last year, U.S. Consumer Product Safety Commission (CPSC) began receiving complaints about damage to homes constructed with drywall manufactured in China. The drywall reportedly contains elevated sulfur levels, which have … Continue Reading
LexBlog