Construction | Chapman Glucksman - Publications

$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed To Prove Supplier’s Negligence Or Breach Of Contract Caused A SB800 Violation

May 25 2017

By: Jon A. Turigliatto and Chelsea L. Zwart
May 25, 2017

The Fourth District California Court of Appeal published its decision, Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, holding that claims against a material supplier under SB800 (Civil Code §895, et. seq.) require proof that the SB800 violation was caused by the supplier’s negligence or breach of contract.

In this case, Acqua Vista Homeowners Association (“the HOA”) sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development. The HOA’s complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building. At trial, the HOA presented evidence that the pipes supplied by MWI contained manufacturing defects, that they leaked, and that the leaks had caused damage to various parts of the condominium development. The jury returned a special verdict against MWI, and the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury’s finding that MWI was 92% responsible for the HOA’s damages.

Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy

Dec 08 2016

By: Richard H. Glucksman and Ravi R. Mehta
December 8, 2016

I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016

The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”). In Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (Civil Code §896). The Court answered this question affirmatively.

The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects. Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act. The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act. Elliott appealed. The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.

UPDATE – McMillin Albany LLC v. Superior Court

Sep 30 2016

By: Richard H Glucksman and David A. Napper September 30, 2016

The matter has been fully briefed and the construction industry is one step closer to receiving the California Supreme Court’s highly anticipated decision regarding McMillin Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132. The Supreme Court will address the split of authority presented by the Fifth Appellate District Court’s holding in McMillin Albany, which outright rejected the Fourth Appellate District Court’s holding in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98. The issue is whether the Right to Repair Act (SB800) is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2013. Oral argument is still pending, and CGDRB will continue to closely monitor the progress of this case. Stay tuned.

Complex Civil Litigation Program and its Expansion to San Bernardino County

Sep 30 2016

By: Richard H. Glucksman and David A. Napper
September 30, 2016

Complex Civil Litigation Programs have been utilized in California for over fifteen (15) years. Complex cases require more intensive judicial management, and include claims such as construction defects, mass torts, class actions, antitrust, securities claims, and toxic torts. The Presiding Judge in a department dedicated to managing highly complex cases is tasked with providing exceptional and individualized judicial management, expedited resolution of complex issues, and cost and resource efficiencies.

The creation of the department is the result of increased levels of funding received by the Court. With its creation of a Complex Civil Court system, San Bernardino joins numerous other counties throughout California – including, but not limited to: Alameda, Contra Costa, Los Angeles, Orange, Riverside, San Francisco, and Santa Clara – which already handle complex civil matters. San Bernardino Superior Court is the most recent Court to implement a Complex Litigation Department, effective September 6, 2016.

Viability of Contractor’s Express Indemnity Claims are Not Dependent on Allegations In Underlying Third Party Actions

Sep 30 2016

By: Chelsea L. Zwart
September 30, 2016

On August 16, 2016, the First District California Court of Appeal held in Aluma Systems Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2 Cal.App. 5th 620 that a general contractor’s demurrer to a subcontractor’s indemnity claim was erroneously sustained because (1) the allegations of underlying third-party lawsuits were not determinative of liability and (2) the subcontractor’s underlying claim for a worker’s compensation offset did not obviate the subcontractor’s indemnity claim.

Distinguishing License Bonds From Insurance: The Contours of California Contractor License Bonds

Sep 30 2016

By: Ravi R. Mehta
September 30, 2016

A commonly overlooked potential for recovery when a claim arises is the license bond. Distinct from insurance, a license bond is intended to respond to liability related to a contractor’s violation of Contractors State License law. It is mandatory for all California contractors to procure a license bond, or alternatively to place a cash deposit with the Contractors State License Board (“CSLB”). The license bond requirement is currently $15,000.00. However, in the event of license suspension or revocation, the CSLB may require a separate disciplinary bond in an amount between $15,000.00 and $150,000.00. The types of claims to which a license bond may be subject, as well as the types of persons who are eligible to submit a claim against a license bond, are limited. However, if a claimant’s circumstances fit within the confines of the following limitations, a license bond claim may be better suited to provide redress as compared to an insurance claim. The following list contains the most common types of allowable license bond claims.

Don’t Fall Into the Hole: Potential Exposures for Construction Owners

Jun 09 2016

By: Grace A. Nguyen
Published by AmWINS – Download Article
June 9, 2016

As always with construction projects, it is important that owners of new developments understand insurance coverage to ensure that there is adequate insurance to address any potential risks during and after the construction of the project. While most owners maintain commercial general liability policies or rely on project-specific policies, these policies may not fully protect the owner against any and all risks that they may face during and after construction. This article addresses two unique areas in which owners should take special note to ensure that they are covered for these particular risks: third party action over claims and products-completed operations coverage.

Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal

May 10 2016

By: Ravi R. Mehta and Katherine J. Flores
May 10, 2016

In general, insurers are permitted to limit the risks they assume through provisions within the policy terms. For example, many policies attempt to preclude coverage in instances where another insurance policy providing for defense is available to the insured. California courts generally disfavor these types of “other insurance” or “escape” clauses based on public policy concerns. In two recent decisions, the California Court of Appeal found such clauses unenforceable.

In Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance, Co. (2015) 241 Cal.App.4th 721, Plaintiff, Underwriters of Interest Subscribing to Policy Number A15274001 (“Underwriters”), insured Pacific Trades Construction & Development, Inc. (“Pacific Trades”). Additionally, ProBuilders Specialty Insurance Company (“ProBuilders”) insured Pacific Trades.

California Complex Civil Litigation Superior Court Panels

Nov 24 2015

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
November 24, 2014
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The Complex Civil Litigation Program is relatively new as it has only existed in California since 2000. Complex divisions dedicate courtrooms solely for litigation of complex civil cases that require exceptional judicial management including construction defects, antitrust, securities, toxic torts, mass torts, and class actions. Complex civil courtrooms help the trial court operate in a more efficient, expeditious, and effective manner. A complex court reduces costs for litigants by streamlining motion practice and expeditiously resolving discovery disputes.

Extra Extra

Sep 08 2015

All Claims for Construction Defects in Residential Construction Sold on or after January 1, 2003 are Subject to Requirements and Procedures of the Right to Repair Act (SB 800)

McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App. 5 Dist.)

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 8, 2015
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In a particularly dramatic and noteworthy fashion and breaking with the Fourth Appellate District and rejecting the holding in Liberty Mut. Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, the Fifth District Court of Appeal held that the California Legislature intended that all claims arising out of defects in new residential construction sold on or after January 1, 2003 are subject to the standards and requirements of the Right to Repair Act, commonly referred to as SB800, including specifically the requirement that notice be provided to the builder prior to filing a lawsuit. Thus, SB 800 is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2003.

Category - Construction

All Claims for Construction Defects in Residential Construction Sold on or after January 1, 2003 are Subject to Requirements and Procedures of the Right to Repair Act (SB 800)

McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App. 5 Dist.)