Court Orders House to be Demolished or Relocated
April 26, 2011 —
Beverley BevenFlorezCDJ STAFFDecision Affirmed in Central Arkansas Foundation Homes, LLC v. Rebecca Choate
The Arkansas Court of Appeals affirmed the decision by the trial court in Central Arkansas Foundation Homes, LLC v. Rebecca Choate. In the trial case, Central Arkansas Foundation Homes (CAFH) sought payment for a home built for Choate, while Choate alleged that the builders committed multiple construction defects including using the wrong foundation materials and positioning the house in the wrong direction.
After the house was built, CAFH contacted Choate regarding payment, however, Choate alleged that the finished product did not match the contract. “ After CAFH completed construction, it obtained permanent home financing for Choate and tried to contact her to close the transaction. Choate did not respond until October 2005, when she sent CAFH a list of alleged construction defects, including that the house was facing in the wrong direction; that it was not built on a slab; and that the fireplace, garbage disposal, driveway, and storage area were missing. CAFH replied to Choate in writing, telling her that she had until January 6, 2006, to close on the house or CAFH would sell it. The correspondence enclosed worksheets showing that the amount Choate would owe at closing exceeded $94,000, which included interest that had accrued on the as-yet unpaid construction loan.”
Initially, the court found in favor of CAFH. “On April 18, 2007, Choate’s attorney withdrew from representing her. Soon thereafter, CAFH’s attorney asked the court to set a final hearing on the case. The attorney purportedly sent Choate a letter by regular mail on May 15, 2007, advising her that the case was set for trial on July 9, 2007. Choate, however, did not appear. CAFH did appear, and its general manager, John Oldner, testified to events leading up to the case and the amount of damages claimed. According to Oldner, the interest on the construction loan had accrued to the point that CAFH now sought $104,965.88 from Choate. The court found in favor of CAFH and entered judgment for that amount, plus attorney fees, on July 18, 2007. The court ruled that CAFH could sell the house and either remit any excess to Choate or look to Choate for the deficiency if the sales price did not cover the judgment.”
However, Choate successfully argued that she did not receive notice of the trial. A new trial was ordered, and the outcome was quite different. “On June 6, 2008, the circuit court entered judgment for Choate, ruling that the house was not in substantial compliance with the parties’ contract and that the contract should be rescinded. The court found that the house suffered from numerous construction defects, that the contract contemplated a slab rather than a concrete-pier foundation, and that CAFH ignored Choate’s complaints that the house was facing the wrong way. The judgment directed CAFH to hold Choate harmless on the construction loan, to deed Choate’s two acres back to her, and to remove the house from Choate’s property.”
The Court of Appeals “found that Choate would be unjustly enriched by retaining the benefit of the septic systems and utility lines that CAFH installed on her land. The court therefore awarded $5340 to CAFH as a quantum-meruit recovery for the value of that work. CAFH contends that the award is not sufficient, but we see no clear error.” In the end, the Court of Appeals provided this reason for declining to reverse the trial court’s decision: “The court in this case apparently concluded that the house constructed by CAFH was so fundamentally at odds with Choate’s contractual expectations that she was not unjustly enriched and should simply be, as nearly as possible, returned to the status quo ante. Accordingly, the court ordered the house removed from her property and permitted CAFH to either relocate the house or salvage the house’s materials and unused appliances. We decline to reverse the court’s weighing of the equities in this manner.”
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Sureties and Bond Producers May Be Liable For a Contractor’s False Claims Act Violations
October 19, 2017 —
Michael C. Zisa & Susan Elliott – Peckar & Abramson, P.C.Two recent decisions from the United States District Court for the District of Columbia and the United States Court of Federal Claims highlight that sureties and bond producers are not immune to the potentially severe consequences of the False Claims Act (“FCA”) and related federal fraud statutes. In each case, the Court determined that sureties and bond producers can face potential liability under these fraud statutes for direct and indirect submission of false claims to the federal government.
Reprinted courtesy of
Michael C. Zisa, Peckar & Abramson, P.C. and
Susan Elliott, Peckar & Abramson, P.C.
Mr. Zisa may be contacted at mzicherman@pecklaw.com
Ms. Elliott may be contacted at selliott@pecklaw.com
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Construction Company Head Pleads Guilty to Insurance and Tax Fraud
December 20, 2012 —
CDJ STAFFThe former head of Orients Construction Company and of Melrose Construciton Company, Herlindo Garcia-Merlos, has entered a guilty plea to charges that the gave false informoation to his insurer, New Jersey Manufacturers Insurance Group, for more than three years in order to lower his workers compensation payments. Mr. Garcia-Merlos was able to underpay by more than $315,000 as a result of this deception.
Mr. Garcia-Merlos additionally failed to file tax returns for his companies and underreported his wages on his own tax returns. The State of New Jersey is seeking an eight-year prison term and restitution of more than $400,000.
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Construction Case Alert: Appellate Court Confirms Engineer’s Duty to Defend Developer Arises Upon Tender of Indemnity Claim
January 27, 2010 —
Steven M. CvitanovicIn the recent case of UDC-Universal Development, L.P. v. CH2M Hill, 2010 Cal.App.LEXIS 47 (filed January 15, 2010), the Sixth District Court of Appeal provided a stunning illustration of the far-reaching effects of the California Supreme Court’s holding in Crawford v. Weather Shield Manufacturing Inc. (2008) 44 Cal.4th 541. In Crawford, the Court held the duty to defend under an indemnity agreement arose upon the mere tender of defense of a claim covered by the indemnity.
In the UDC case, CH2M Hill provided engineering and environmental planning services to developer UDC on a project that ultimately wound up in a construction defect lawsuit by the homeowners association ( HOA ). UDC tendered its defense to CH2M Hill, the tender was rejected, and UDC filed a cross-complaint for negligence, breach of contract and indemnity against CH2M Hill and others. After the HOA’s construction defect claims were settled, UDC proceeded to trial against CH2M Hill. The jury found in favor of CH2M Hill on the claims for negligence and breach of contract. At the request of the parties prior to trial, the trial court ruled on the application of the indemnity agreement in light of Crawford and, in so doing, found that the defense obligation arose upon the tender and that CH2M Hill breached that duty despite the jury finding in favor of CH2M Hill.
The Court of Appeal affirmed, noting that the defense obligation arose as soon as the defense was tendered and did not depend on the outcome of the litigation, and that the HOA’s general description of the defects along with an allegation that Doe engineers were negligent triggered the duty to defend.
Although this case did not expand the crushing impact of Crawford’s holding, it is
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Want More Transit (and Federal Funding)? Build Housing That Supports It
January 08, 2024 —
M. Nolan Gray - BloombergAfter
decades of planning (and $2.1 billion spent), Los Angeles’ newest light rail line opened in October 2022. Joined by geeky rail obsessives and chaperoned children, I rode the K Line on opening day. A blend of underground, elevated and at-grade track, it’s a route only a politician could love. Stations were lavished with public art, and when the train wasn’t stuck in traffic, it glided through the sprawl.
Yet one year later, it is Los Angeles’ least-used line, averaging
just over 2,000 riders on an average weekday this fall.
It isn’t hard to see why: The line begins at a vacant patch in Crenshaw and ends in a low-slung industrial park about six miles away, lined by strip malls the entire way. Walk one block east or west from any given station, and you’ll find yourself amid single-story postwar bungalows on 7,500-square-foot lots — all illegal to redevelop into apartments, thanks to local zoning. The Hyde Park Station deposits riders into a cluster of gas stations and drive-thru fast-food joints.
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M. Nolan Gray, Bloomberg
New Jersey’s Independent Contractor Rule
January 07, 2015 —
Christopher G. Hill – Construction Law MusingsFor this week’s Guest Post Friday here at Musings, we welcome back Bennet Susser. Bennet is a founding member and shareholder of the New Jersey law firm, Jardim, Meisner & Susser, P.C. He has over 25 years’ experience in representing clients in all types of complex (and not so complex) litigation, including those involving construction actions. His Construction Law Practice Group has deep experience in the representation of property owners, developers, homeowners, design professionals, materials manufacturers, contractors and subcontractors in connection with construction of high-rise and other residential developments, condominium conversions of older rental properties, commercial property, mixed-use projects, and governmental buildings. Issues handled include: construction defects and deficiencies related to residential and commercial construction, including roofing defects, water intrusion, and structural life safety; construction delays; liens; hurricane recovery and rebuilding; insurance coverage disputes, including negotiation and resolution of insurance claims related to rebuilding; mold and mildew claims; and construction contracts and related documents, including loan documentation.
Construction litigation often seeks to foist the culpable conduct of contractors and subcontractors upon an owner or developer of commercial or residential real property. Sometimes, such conduct is warranted, especially when the owner/developer has a significant role in the manner in which the construction project work is to be conducted. However, there are times when the general contractor is the party calling the shots. Why should an owner/developer be charged with the conduct of other independent contractors over whom no control was exercised? Under certain circumstances, such party may be insulated from liability based on the “independent contractor rule.” Put another way, general contractors’ and subcontractors’ status as independent contractors do not impute liability to an owner/developer for their alleged wrongful conduct under the principles of respondeat superior and vicarious liability.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Dealing with Abandoned Property After Foreclosure
April 10, 2019 —
Bremer Whyte Brown & O'Meara LLPCalifornia landlords must follow very specific steps before disposing of property that is clearly abandoned, left on real estate which has been the subject of court proceedings such as eviction or foreclosure, or otherwise left behind. Following the statutory procedures relating to abandoned property protects landlords from potential liability for an improper “conversion.”
Former tenants/owners and others “reasonably believed” to be owners of the apparently abandoned personal property must be given proper written notice of the right to reclaim the abandoned property. The tenant is presumed to be the owner of any “records” remaining on the property. The California Code of Civil Procedure provides a template for such notice. The notice to be provided to former tenants/owners must be in “substantially” the same form provided in the California Code of Civil Procedure and must contain the following information:
- A description of the abandoned property in a manner reasonably adequate to permit the owner of the property to identify it;
- The location where the tenant can claim the property;
- The time frame that the tenant has to claim the property. The date specified in the notice shall be a date not less than fifteen (15) days after the notice is personally delivered or, if mailed, not less than eighteen (18) days after the notice is deposited in the mail;
- A statement that reasonable storage costs will be charged to the tenant/owner and the tenant/owner must pay those costs before claiming the property; and
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Attorneys' Fees Awarded as Part of "Damages Because of Property Damage"
October 07, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe federal district court for the district of Hawaii found that an arbitrator's award of attorneys' fees was part of the "damages because of property damage" and covered under a CGL policy. Ass'n of Apt. Owners of the Moorings v. Dongbu Ins. Co., 2016 U.S. Dist. LEXIS 110283 (Aug. 18, 2016 D. Haw).
The Moorings AOAO was the named insured under the policy issued by Dongbu. Jo-Anne and Brent Braden, owners of a residential unit at the Moorings, filed a demand for arbitration against the AOAO. The Bradens alleged that the AOAO had failed to repair and maintain their lanai roof, which caused water damage to their unit. The arbitrator awarded the Bradens $6,103.49 in special damages, which was the amount they paid to repair their roof and interior damage. The arbitrator also awarded $85,644.30 in attorneys' fees and $8,515.91 in costs to the Bradens.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
