Recent court decisions have signaled the courts’ proclivity to prefer arbitration over full-fledged litigation when provisions in construction contracts are called into question. While the courts recognize a party’s constitutional right to a jury trial, the courts also lean strongly towards resolving disputes via arbitration as a matter of public policy, especially if a construction contract carves out arbitration as an alternative to litigation. Continue reading
Earlier this summer, in Gables & Villas at River Oaks Homeowners Ass’n v. Castlewood Builders LLC, 2018 UT 28, the Supreme Court of Utah addressed the question of whether the plaintiff’s construction defects claims against the general contractor for a construction project were timely-filed, or barred by the statute of repose. In Utah, the statute of repose requires that an action be “commenced within six years of the date of completion.” The plaintiff alleged that its 2014 amended complaint naming the general contractor as a defendant was timely-commenced because, before the date on which Utah’s statute of repose ran, a defendant filed a motion to amend its third-party complaint to name the general contractor as a defendant, and the defendant subsequently assigned its claims to the plaintiff. The plaintiff argued that the filing of its 2014 amended complaint related back[1] to the date of its original complaint. The Supreme Court disagreed, holding that an action is “commenced” by filing a complaint and that a motion for leave to amend does not count as “commencing” an action. Continue reading
In a recent decision, Great Northern Ins. Co. v. Honeywell Int’l, Inc., 2018 Minn. LEXIS 236, the Supreme Court of Minnesota addressed two important legal questions: (1) did the “machinery and equipment” exception to Minnesota’s statute of repose for improvements to real property allow the plaintiff to bring claims against the manufacturer of a component part used in a home’s heat-recovery ventilator; and (2) did the defendant have a post-sale duty to warn the plaintiff? In answering the first question, the court clarified the meaning of the term “machinery” as used in Minnesota’s statute of repose. In answering the second question, the court adopted a test to apply to determine the circumstances under which a defendant in a product’s chain of distribution has a post-sale duty to warn. Continue reading
Under 28 U.S.C. § 1367(a), a plaintiff may bring strictly state-based claims in federal district court if they are related to a claim over which the district court has original jurisdiction. This is more commonly known as Supplemental Jurisdiction. One major issue that has arisen when such jurisdiction is asserted is whether or not the applicable state-specific statute of limitations is tolled under 28 U.S.C. § 1367(d) upon the filing of the federal action. Recently, the Supreme Court addressed this very issue in Artis v. District of Columbia, 138 S.Ct. 594 (2018). Continue reading
On January 23, 2018, the Northern District of Indiana issued a decision that clarifies what constitutes spoliation of evidence under Indiana law. In Arcelormittal Ind. Harbor LLC v. Amex Nooter, LLC, 2018 U.S. Dist. LEXIS 10141 (N.D. Ind.), the defendant filed a motion for sanctions, alleging that the plaintiff intentionally spoliated critical evidence. The defendant sought dismissal of the action, asserting that the plaintiff intentionally discarded and lost important physical evidence within hours of a fire that occurred while the defendant’s employees were performing work at its facility. The decision underscores the importance of taking immediate action to properly identify and secure potentially material evidence in order to satisfy one’s duty to preserve pre-suit evidence and avoid any spoliation defenses and associated sanctions. Continue reading
There has been a growing trend among states to enact statutes that impose specific notice requirements when bringing claims against construction professionals. These notice requirements may apply to the subrogated carrier bringing a claim against a construction professional for certain types of damages. Failure to comply with the notice requirements can result in a dismissal of the subrogation action. Accordingly, caution must be exercised when notifying construction professionals of certain claims, and not just claims for construction defects.
Many subrogation specialists are aware of the potential issues posed by the Sutton Doctrine. Decided by the Oklahoma Court of Appeals in 1975, Sutton v. Jondahl, 532 P.2d 478 (Okla. App. 1975), holds that, absent an express agreement to the contrary, a tenant is presumed to be a co-insured under the landlord’s fire insurance policy. Because subrogation is forbidden against one’s own insured, the Sutton Doctrine can bar landlord/tenant subrogation actions. West Virginia, like many states, however, has adopted its own approach to landlord/tenant subrogation.