Brown Paint Doesn’t Cover Up Construction Defects
April 25, 2012 —
CDJ STAFFIn a decision that describes the case as illustrating “the perils that real estate brokers and their agents assume when acting as a dual listing agent to both the buyers and sellers of the same house,” the California Court of Appeals has issued a decision in William L. Lyon & Associates v. The Superior Court of Placer County. Lyon & Associates sought summary judgment to dismiss the claims of the Henleys who bought a home in a transaction where a Lyon agent represented both sides.
The prior owners of the home, the Costas, had used a Lyon agent in purchasing their home. When they later sought to sell it, that agent “became aware of some of the house’s defects and problems.” In response, the Costas sought the help of another agent, Connie Gidal, also of Lyons & Associates. Photos taken in the presence of Ms. Gidal show defects of the paint and stucco. The Costas also took the step of painting the house dark brown. During the sale process, “rain caused many of the painted-over defects to reappear.” The Costas “purchased more dark brown paint and covered up the newly visible damage prior to inspection by the Henleys.”
With the damage concealed, the Henleys bought the home in May 2006. The agreement with Lyons & Associates noted that “a dual agent is obligated to disclose known facts materially affecting the value or desirability of the property to both parties.” Escrow closed on May 9, 2006. The contract with the broker included a two-year limit on the time to bring legal action.
The Henleys moved in during June 2006, and “began to discover construction defects that had been concealed by the Costas.” In addition to the painted-over stucco problems, the Henleys found that the Costas had “installed quartzite stone overlays on the backyard steps in a manner that caused water intrusion on the house’s stucco walls.”
In May 2009, the Henleys sued the Costas, Ron McKim Construction, Lyons & Associates, and Ms. Gidal. Their complaint alleged that Lyons & Associates had committed breach of contact, negligence, fraud, breach of fiduciary duty, and negligent nondisclosure in connection with the construction defects. The Costas named Lyons in a cross complaint. Lyons moved for summary judgments on the grounds that the two-year statute of limitations had expired before the complaint and cross-complaint were filed. Both the Henleys and the Costas opposed this claim. The court denied the motion and Lyons appealed.
The appeals court upheld the denial, noting that the both California Supreme Court decision and later action by the legislature compels real estate brokers and salespersons “to conduct a reasonably competent and diligent visual inspection of the property offered for sale.” The court noted that under California law, brokers have responsibilities to both sellers and buyers. The section of law cited by Lyons applies to seller’s agents. The court rejected the contention by Lyons that they were “cooperating brokers.” The Henleys were “not constrained by the two-year statute of limitations.”
Lyons contended that even if California’s statute did not apply, there was a contractual limit of two years. The court also rejected this, agreeing with the Henleys that “the two-year limitation period must be extended by the discovery rule.”
The court noted that “Lyon & Associates may not reap the benefit of a shortened contractual limitation period when its own alleged malfeasance contributed to the delay in the discovery of the buyer’s injury.” The court found that the Henleys could proceed with their breach of contract claim, because, “when a breach of contract is committed in secret, such as the intentional nondisclosure of a real estate broker regarding a previously visible construction defect, the contractual limitations period is properly held subject to the discovery rule.” The court felt that the interpretation favored by the California Association of Realtors would “halve the applicable statute of limitations period.”
In addition to rejecting Lyon request for summary judgment on the claims made by the Henleys, the court also rejected the request of summary judgment on the claims made by the Costas, concluding that neither claim is time-barred. Costs were awarded to both the Henleys and Costas.
Read the court’s decision…
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Construction Firm Sues Town over Claims of Building Code Violations
November 06, 2013 —
CDJ STAFFParadigm Development and Construction LLC has sued Bristol Township, Pennsylvania over the allegation that town building officials colluded with their clients to issue building code violations after Paradigm prepared to sue the clients. John and Patricia Conard hired Paradigm to construct an addition to their home. During the process, the work went through nine inspections before Paradigm stopped work over a payment dispute.
Some months later, Bristol Township issued a notice that Paradigm had 37 violations of the building code. Paradigm alleges that the source was a set of photographs provided by the Conards to the building officials. The lawsuit states that Paradigm “was not notified of any construction deficiencies at the Conard property, and was not provided with an opportunity to discuss, defend or refute the allegations of the Municipal Defendants that Plaintiff has violated the Bristol Building code.”
The violation notice was withdrawn a few months later.
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Emotional Distress Damages Not Distinct from “Annoyance and Discomfort” Damages in Case Arising from 2007 California Wildfires
February 16, 2017 —
Kirsten Lee Price & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Hensley v. San Diego Gas & Elec. Co., (No. D070259, filed 1/31/17), the California Court of Appeal for the Fourth Appellate District held that emotional distress damages are available on claims for trespass and nuisance as part of “annoyance and discomfort” damages.
In Hensley, plaintiffs sustained fire damage to their home and property during the 2007 California wildfires. The Hensleys were forced to evacuate as the fires advanced. Although their home was not completely destroyed, it sustained significant damage and they were not able to return home permanently for nearly two months. Thereafter, the Hensleys filed suit against San Diego Gas and Electric Company (“SDG&E”) asserting causes of action for trespass and nuisance, among others. Mr. Hensley, who had suffered from Crohn’s disease since 1991, further claimed that as a result of the stress from the fire, he experienced a substantial increase in his symptoms and his treating physician opined that “beyond a measure of reasonable medical certainty... the stress created by the 2007 San Diego fires caused an increase of [Mr. Hensley’s] disease activity, necessitating frequent visits, numerous therapies, and at least two surgeries since the incident.” SDGE moved, in limine, to exclude evidence of Mr. Hensley’s asserted emotional distress damages arguing he was not legally entitled to recover them under theories of trespass and nuisance. The trial court agreed and excluded all evidence of such damages.
Reprinted courtesy of
Kirsten Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Construction Contract Language and Insurance Coverage Must Be Consistent
July 30, 2015 —
Craig Martin – Construction Contract AdvisorHow often do you review both the additional insured language in the contract and the insurance policy provided by a subcontractor? My guess is, unless the project has gone off the rails, NEVER. Well, perhaps you should to make absolutely sure the extent of the subcontractor’s insurance obligations and whether those obligations are being fulfilled.
This point was recently addressed in a recent DRI article analyzing the Deepwater Horizon/BP lawsuit. My partner, Anne Marie O’Brien, also blogged on this a few months ago.
As you will recall, Transocean’s Deepwater Horizon oil-drilling rig exploded, killing 11 workers, and polluted the Gulf of Mexico. BP demanded that Transocean’s insurer pay for the loss. Transocean’s insurer said no, and the litigation ensued, in state court, federal court, and the Texas Supreme Court. It was quite an odyssey of litigation.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Construction Executives Should Be Dusting Off Employee Handbooks
January 03, 2022 —
Adam E. Richards & Andrew Zelman - Construction ExecutiveFor most businesses—large and small—the importance of maintaining and updating an employee handbook that sets forth a uniform set of company policies cannot be understated. The construction industry, which is seemingly plagued by a never-ending labor shortage, necessitating construction executives having to grapple with pandemic-related workplace issues and challenges, is not exempt from the benefits of a thorough, well-formed handbook.
The employee handbook should be a window into the soul of a business. Even though annual updates are appropriate, they seldom occur. To say a lot has happened over the last few years barely begins to scratch the surface. Particularly, during the COVID-19 pandemic, construction executives and human resources professionals within construction-related businesses throughout the country have been forced to evaluate business models, values and cultures in furtherance of deciding where and how to evolve.
Once those decisions are made, the employee handbook is deserving of time and attention. Reflecting the evolution of your construction business is only part of the overall plan; however, demonstrating compliance with new laws is equally important.
Reprinted courtesy of
Adam E. Richards & Andrew Zelman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Federal Court Finds Occurrence for Faulty Workmanship Under Virginia Law
July 31, 2013 —
Tred Eyerly, Insurance Law HawaiiThe Federal District Court in Virginia found that allegations of faulty workmanship could arise from an occurrence. Nautilus Ins. Co. v. Strongwell Corp., 2013 U.S. Dist. LEXIS 79163 (W. D. Va. June 4, 2013).
Strongwell supplied certain fiberglass reinforced plastic materials to a subcontractor of Black & Veatch for a construction project at power plant. Black & Veatch subsequently sued Strongwell, claiming that numerous defects in Strongwell's materials and work were discovered after the project was completed. The complaint further alleged that as a result of the defects, there was widespread property damage to portions of the power plant.
Nautilus defended under a reservation of rights. Nautilus also filed suit for a declaratory judgment that to establish it had no duty to defend or indemnify Strongwell. Strongwell moved to dismiss the complaint insofar as it requested a declaration that there was no duty to defend. Strongwell also filed a motion to stay the coverage action until the underlying case was completed.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Statute of Limitations Bars Lender’s Subsequent Action to Quiet Title Against Junior Lienholder Mistakenly Omitted from Initial Judicial Foreclosure Action
October 19, 2020 —
Lyndsey Torp - Snell & Wilmer Real Estate Litigation BlogA recently issued opinion by the Court of Appeal, Fifth Appellate District tells a cautionary tale regarding a lender’s failure to name a junior lienholder in its initial judicial foreclosure action.
In Cathleen Robin v. Al Crowell, — Cal.Rptr.3d —-, 2020 WL 5951506, plaintiffs sued defendant, a junior lienholder, for quiet title, having failed to name him in the initial judicial foreclosure action. Defendant raised the statute of limitations defense, but the trial court found in favor of plaintiffs. The court of appeal reversed, holding that the 60-year statute of limitations which the trial court applied only applied to a nonjudicial trustee’s sale, and the trial court could not exercise the trustee’s power of sale after the expiration of the statute of limitations on a judicial action to foreclose.
In 2006, plaintiffs loaned Steve and Marta Weinstein (the “Weinsteins”) $450,000, secured by a deed of trust on one parcel of the Weinstein’s property. In 2007, the Weinsteins and defendant Al Crowell (“Crowell”) recorded a second deed of trust on the property, securing a promissory note executed by the Weinsteins in 2004.
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Lyndsey Torp, Snell & WilmerMs. Torp may be contacted at
ltorp@swlaw.com
New Survey Reveals Present-Day Risks of Asbestos Exposure in America - 38% in High-Risk Jobs, 47% Vulnerable through Second-Hand Exposure
April 08, 2024 —
The Law Offices of Justinian C. Lane, Esq. - PLLCAUSTIN, April 04, 2024 (GLOBE NEWSWIRE) -- A recent nationwide survey conducted on the risks of asbestos in America revealed that 38% of respondents have worked in high-risk industries where asbestos was present, while 47% have experienced indirect exposure through family members employed in these high-risk environments. The survey results reflect the fact that, despite the
EPA's recent ban on ongoing uses of chrysotile asbestos, the threat of exposure still looms large in the US, underscoring the urgent need for continued vigilance and action to safeguard public health.
Compounding the concern is the revelation that only 8% of Americans undergo regular testing. These findings, released today, underscore the urgent necessity for Asbestos Cancer Risk Awareness and routine testing. They emphasize the crucial importance of proactive measures to mitigate the pervasive risks associated with asbestos exposure in the United States.
The study was conducted by Researchscape on behalf of
The Law Offices of Justinian C. Lane, Esq. - PLLC, a leading firm advocating for testing and compensation for individuals exposed to asbestos on the job and their families who are at risk due to second-hand exposure.
According to the survey, 86% of respondents have never undergone any testing for asbestos exposure, while a mere 8% are tested regularly. The lack of testing is particularly concerning among the Gen X demographic who could be at risk due to secondhand exposure from a family member who worked with asbestos when it was still prevalent, with 92% reporting no testing, highlighting the potential risks associated with secondhand exposure.
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