Category Archives: Construction Defects

Broken Bricks

Wisconsin Supreme Court Holds that Subrogation Waiver Does Not Violate Statute Prohibiting Limitation on Tort Liability in Construction Contracts


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In Rural Mut. Ins. Co. v. Lester Bldgs., LLC 2019 WI 70, 2019 Wisc. LEXIS 272, the Supreme Court of Wisconsin considered whether a subrogation waiver clause in a construction contract between the defendant and the plaintiff’s insured violated Wisconsin statute § 895.447, which prohibits limitations of tort liability in construction contracts. The Supreme Court affirmed the lower court’s decision that the waiver clause did not violate the statute because it merely shifted the responsibility for the payment of damages to the defendant’s insurance company. The waiver clause did not limit or eliminate the defendant’s tort liability. This case establishes that while
§ 895.447 prohibits construction contracts from limiting tort liability, a subrogation waiver clause that merely shifts responsibility for the payment of damages from a tortfeasor to an insurer does not violate the statute and, thus, is enforceable. Continue reading

This entry was posted in Construction Defects, Subrogation, Waiver of Subrogation, Wisconsin and tagged , , , , .
Community

Arizona Purchaser Dwelling Actions Are Subject to a New Construction


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Arizona recently amended its Purchaser Dwelling Action statute to, among other things, involve all contractors in the process, establish the parties’ burdens of proof, add an attorney fees provision, establish procedural requirements and limit a subcontractor’s indemnity exposure. The governor signed the bill—2019 Ariz. SB 1271—on April 10, 2019, and the changes go into effect and apply, retroactively “to from and after June 30, 2019.” The following discussion details some of the changes to the law. Continue reading

This entry was posted in Arizona, Construction Defects, Right to Repair Act and tagged , , , , .
Construction Defect

Texas Court of Appeals Strictly Enforces Certificate of Merit Requirements for Claims Against Professionals


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In Texas, an action against a licensed/registered professional arising from the provision of professional services requires the plaintiff to file a “Certificate of Merit” (COM), which is an affidavit from a third-party professional setting forth the theory of liability against the professional. Tex. Civ. Prac. & Rem. Code § 150.002. The COM must be filed contemporaneously with the complaint, unless the following two conditions, contained within Section 150.002(c), are both satisfied. First, the action must be filed within ten days of the expiration of the statute of limitations or repose. Second, the plaintiff must specifically allege in its initial petition against the professional that there is insufficient time to obtain a COM before the statute of limitations or repose expires. In such cases, a court will grant the plaintiff a 30-day extension to file a COM and the plaintiff may obtain further extensions from the court for “good cause.” If a plaintiff fails to comply with the COM requirement, Section 150.002(e) requires the court to dismiss the complaint and the dismissal “may be with prejudice.” Continue reading

This entry was posted in Construction Defects, Texas and tagged , , , .
Construction Defect

Rhode Island Examines a Property Owner’s Intended Beneficiary Status and the Economic Loss Doctrine in the Context of a Construction Contract


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In Hexagon Holdings Inc. v. Carlisle Syntec, Inc. No. 2017-175-Appeal, 2019 R.I. Lexis 14 (January 17, 2019), the Supreme Court of Rhode Island, discussing claims associated with allegedly defective construction, addressed issues involving intended beneficiaries to contracts and the application of the economic loss doctrine. The court held that, based on the evidence presented, the building owner, Hexagon Holdings, Inc. (Hexagon) was not an intended third-party beneficiary of the subcontract between the general contractor (A/Z Corporation) and the subcontractor, defendant McKenna Roofing and Construction, Inc. (McKenna). In addition, the court held that, in the context of this commercial construction contract, the economic loss doctrine applied and barred Hexagon’s negligence claims against McKenna. Continue reading

This entry was posted in Construction Defects, Contracts, Economic Loss Rule, Rhode Island, Warranty-Implied and tagged , .
Time

New Hampshire’s Statute of Repose for Improvements to Real Property Does Not Apply to Product Manufacturers


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In United Services Automobile Association v. Broan-Nutone, LLC, No. 218-2017-CV-01113,[1] the Superior Court of Rockingham County, New Hampshire recently considered whether the eight-year statute of repose for improvements to real property applied to the manufacturer of a ceiling ventilation fan that was installed in the property during its original construction. The court held that New Hampshire’s statute of repose did not apply to the manufacturer because it was not involved in incorporating its product into the property. Continue reading

This entry was posted in Construction Defects, New Hampshire, Statute of Limitations-Repose and tagged , .
Time

South Carolina Clarifies the Accrual Date for Its Statute of Repose


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In Lawrence v. General Panel Corp., 2019 S.C. LEXIS 1, No. 27856 (S.C. Jan. 1, 2019), the Supreme Court of South Carolina answered a certified question related to South Carolina’s statute of repose, S.C. Code § 15-3-640,[1] to wit, whether the date of “substantial completion of the improvement” is always measured from the date on which the certificate of occupancy is issued. The court held that a 2005 amendment to § 15-3-640 did not change South Carolina law with respect to the date of substantial completion. Thus, under the revised version of § 15-3-640, “the statute of repose begins to run at the latest on the date of the certificate of occupancy, even if there is ongoing work on any particular part of the project.” A brief review of prior case law may assist with understanding the court’s ruling in Lawrence. Continue reading

This entry was posted in Construction Defects, South Carolina, Statute of Limitations-Repose and tagged , .
Construction Defect

Ohio Rejects the Majority Trend and Finds No Liability Coverage for a Subcontractor’s Faulty Work


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In Ohio N. Univ. v. Charles Constr. Servs., 2018 Ohio LEXIS 2375 (No. 2017-0514, October 9, 2018), the Supreme Court of Ohio was recently called upon to determine if a general contractor’s Commercial General Liability (CGL) insurance policy provided coverage for defective work completed by its subcontractor. Rejecting the majority trend, the court held that, because the subcontractor’s faulty work was not an “occurrence” caused by an accident – i.e. a fortuitous event – within the meaning of the contractor’s CGL policy, the insurer did not have to defend or indemnify the contractor with respect to the plaintiff’s claims. Continue reading

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Construction Defect

Florida’s Fourth District Appeals Court Clarifies What Actions Satisfy Florida’s Construction Defect Statute of Repose


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In Gindel v. Centex Homes, 2018 Fla.App. LEXIS 13019, Florida’s Fourth District Court of Appeal recently concluded that the date on which the plaintiffs provided a pre-suit notice in compliance with §558.004 of Florida’s construction defect Right-to-Cure statute, Fla. Stat. §§ 558.001 to 558.005, et. seq., is the date on which the plaintiff commenced a “civil action or proceeding,” i.e. an “action,” within the meaning of Florida’s construction defect statute of repose, Florida Statue § 95.11(3)(c). Thus, reversing the decision of the trial court, the Fourth District held that the plaintiffs timely-filed their construction defect action against the defendants. Continue reading

This entry was posted in Construction Defects, Florida, Right to Repair Act, Statute of Limitations-Repose and tagged , , .
Supreme Court

Courts Favor Arbitration in Two Recent Construction Dispute Cases


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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

This entry was posted in AIA Contracts, Arbitration, Construction Defects, Maryland, North Carolina and tagged , , , .
Water Loss

Supreme Court of Idaho Rules That Substantial Compliance With the Notice and Opportunity to Repair Act Suffices to Bring Suit


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In Davison v. Debest Plumbing, Inc., 416 P.3d 943 (Ida. 2018), the Supreme Court of Idaho addressed the issue of whether plaintiffs who provided actual notice of a defective condition, but not written notice as stated in the Notice and Opportunity to Repair Act (NORA), Idaho Code §§ 6-2501 to 6-2504, et. seq., substantially complied with the act and if the plaintiffs’ notice was sufficient to bring suit. Section 6-2503 of the NORA states that, “[p]rior to commencing an action against a construction professional for a construction defect, the claimant shall serve written notice of claim on the construction professional. The notice of claim shall state that the claimant asserts a construction defect claim against the construction professional and shall describe the claim in reasonable detail sufficient to determine the general nature of the defect.” Any action not complying with this requirement should be dismissed without prejudice. The court held that the defendant’s actual notice of the defect was sufficient to satisfy the objectives of the NORA and, thus, the plaintiffs’ action complied with the NORA. Continue reading

This entry was posted in Construction Defects, Idaho, Right to Repair Act and tagged , .