Construction Defect Disputes: Know Your Measure of Damages!!!!!
January 21, 2025 —
David Adelstein - Florida Construction Legal UpdatesRemember this: know your measure of damages in a construction defect dispute. If you don’t, as shown below, the outcome can be unforgiving. The measure of damages is one of your most important elements of proof. You are filing suit for damages; thus, knowing what you can reasonably recovery is paramount.
In a recent dispute, Bandklayder Development, LLC v. Sabga, 50 Fla.L.Weekly D91e (Fla. 3d DCA 2025), a residential developer sold a single-family house while it was under construction in an as-is purchase agreement. Post-closing, the purchasers claimed defects and served a Florida Statutes Chapter 558 notice of construction defects letter. The purchaser subsequently initiated a construction defect lawsuit. During the nonjury trial, the purchaser’s expert testified that the purchasers suffered damages approximating $323,000 calculated as of January 19, 2022 (which was the date of the expert’s report). The expert further testified that the cost to finish the incomplete/defective work increased by 35% at the date of the May 2023 trial. However, the expert never testified as to the amount of damages as of the date of the contractual breach, which at the latest, would have been in April 2018 when the notice of construction defects letter was sent (or, at its earliest, June 2017 when closing occurred). At trial, the judge entered judgment for the purchasers in the amount of about $425,0000. This was reversed on appeal with judgment to be entered in favor of the developer. Why? Because the purchasers employed the wrong measure of damages and the only thing that prevented them from introducing the right measure of damages was within their control. Harsh outcome for not applying the correct measure of damages!
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Real Case, Real Lessons: Understanding Builders’ Risk Insurance Limits
August 12, 2024 —
David McLain - Higgins, Hopkins, McLain & Roswell, LLCIn the recent case of 5333 Mattress King LLC v. Hanover Insurance Company, the United States District Court for the District of Colorado provided significant insights into the limits of builders’ risk insurance policies. Mattress King LLC, a warehouse owner, faced a substantial loss when a subcontractor drove a crane over and damaged the warehouse’s concrete floor slab during construction. Despite having a builders’ risk insurance policy with Hanover Insurance Company, coverage was denied, leading to litigation.
Applicable Policy Provisions
The policy in question was a Commercial Marine/Commercial Lines Builders’ Risk insurance policy. Builders’ risk insurance is designed to cover direct physical loss to covered property during construction unless the loss is excluded or limited by the policy. Key exclusions of the policy at issue included losses caused by faulty, inadequate, or defective:
- Planning, zoning, surveying, or development
- Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, or compaction
- Materials used in construction or renovation
- Maintenance of the covered property
Read the full story...Reprinted courtesy of
David McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
ASCE Statement on House Passage of the Water Resources Development Act of 2024
August 05, 2024 —
Marsia Geldert-Murphey, P.E., President of the American Society of Civil EngineersWASHINGTON — The American Society of Civil Engineers (ASCE) commends the House of Representatives for passing H.R. 8812, the bipartisan Water Resources Development Act (WRDA) for 2024. The House WRDA 2024 bill will help improve America's ports and inland waterways, enhance flood risk management and storm risk reduction programs, and prioritize ecosystem restoration. While we urge the Senate to swiftly vote on its version of WRDA, we are encouraged that our nation's critical water resources infrastructure remains a congressional priority.
The House version of WRDA includes several key provisions to enhance the safety of America's dams and levees, which each received a 'D' on the 2021 Report Card for America's Infrastructure, as well as provisions to modernize the nation's inland waterways system, which received a 'D+' in the 2021 Report Card. This includes one of ASCE's top legislative priorities for this year, the reauthorization of the National Dam Safety Program through 2028. But beyond the reauthorization, this bill reduces restrictions on the amount of funds states can receive in National Dam Safety Program State Assistance Grants; improves access to the High Hazard Potential Dam Rehabilitation Grant Program; and requires the incorporation of low-head dams into the National Inventory of Dams. Each of these provisions are critical to ensuring the long-term safety of our nation's dams and ASCE applauds the House for their inclusion. Furthermore, ASCE was pleased to see that the House legislation extends the National Levee Safety Program through 2033, which will help support the establishment of state levee safety programs, develop and publish national guidelines for levee safety, and enhance flood protection nationwide.
While these measures are not included in the Senate version of WRDA, we encourage lawmakers to ensure they are included in a final conference version of the bill.
We thank the House of Representatives for moving forward WRDA 2024 and strongly encourage the Senate to pass its version so that Congress can keep this vital water resources legislation on a biennial schedule and ensure our nation's dams, levees, ports, and inland waterways can support the American economy and protect public safety.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 160,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
Toolbox Talk Series Recap - The New Science of Jury Trial Advocacy
December 31, 2024 —
Douglas J. Mackin - The Dispute ResolverIn the November 21, 2024 edition of Division 1's Toolbox Talk Series,
John Jerry Glas discussed how construction lawyers should adjust their trial strategies in response to shifts in juror attitudes. Glas believes that jurors have changed in the last twenty years, with modern jurors being more reluctant than ever to be seen as a lawyer’s puppet. Instead, they simply want a lawyer to help them organize and wade through evidence without spinning it and without spoon-feeding it. Essentially, Glas believes that lawyers achieve better jury trial results if they acknowledge the paradigm shift in jury psychology and reinvent themselves in response by influencing jury deliberations without directly telling a jury what to do. Glas refers to this as the “Waiter Pivot” and recently published a
book on the topic.
Throughout his presentation, Glas discussed how construction lawyers can embrace the Waiter Pivot throughout a jury trial:
- Voir Dire: Lawyers make their first impressions on a jury during voir dire. As such, lawyers should avoid questions that make jurors feel judged or stereotyped. Instead, give the jurors credit and make use of the opportunity to begin framing their case. For example, Glas once repeated the word “specifications” or “specs” in every question during voir dire where his product liability case turned on whether or not the product deviated from specifications.
Read the full story...Reprinted courtesy of
Douglas J. Mackin, Cozen O’ConnorMr. Mackin may be contacted at
dmackin@cozen.com
Supreme Court Opens Door for Challenges to Older Federal Regulations
August 05, 2024 —
Jane C. Luxton - Lewis BrisboisWashington, D.C. (July 1, 2024) – On July 1, 2024, the U.S. Supreme Court issued another end-of-term major decision limiting the scope of federal agency actions in Corner Post, Inc. v. Board of Governors of the Federal Reserve System. Adding to the tectonic shift in the regulatory landscape created by the Court’s June 27 and 28 rulings constraining the role of administrative law judges and overturning longstanding “Chevron deference” by courts to federal agency expertise, the decision in Corner Post establishes a newly expanded time frame for affected entities to challenge final agency action. Instead of confirming that final agency action is subject to a default six-year statute of limitations, the Court held that under the Administrative Procedure Act (APA), the time limit for appeal begins to run when a plaintiff is injured by the agency's action, not when the action becomes final. This decision has important implications for businesses and others affected by federal regulations.
The case arose when Corner Post, a truck stop and convenience store in North Dakota that opened in 2018, challenged a 2011 Federal Reserve Board regulation (Regulation II) that set maximum interchange fees for debit card transactions. Corner Post filed suit in 2021, arguing that Regulation II allowed higher fees than permitted by statute. The lower courts dismissed the suit as time-barred under 28 U.S.C. § 2401(a), which effectively requires APA claims to be filed "within six years after the right of action first accrues."
Read the full story...Reprinted courtesy of
Jane C. Luxton, Lewis BrisboisMs. Luxton may be contacted at
Jane.Luxton@lewisbrisbois.com
Massachusetts Appellate Court Confirms Construction Defects are Not Covered Under Commercial General Liability Policies
January 21, 2025 —
Bill Wilson - Construction Law ZoneIn a case of first impression in Massachusetts, Lessard v. R.C. Havens & Sons, Inc., 104 Mass. App. Ct. 572 (2024), the Appellate Court confirmed that construction defects, without more, do not constitute property damage within the meaning of a commercial general liability policy (CGL).
In Lessard, the homeowners filed suit against an insured homebuilder for construction defects in their home. After the homeowners won a jury verdict, the homebuilder’s insurer intervened and sought a declaratory judgment that it owed no duty to indemnify the homebuilder under its CGL policy. The superior court entered a declaratory judgment in favor of the insurer, and the homeowners appealed.
Read the full story...Reprinted courtesy of
Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
A Game of Texas Hold’em: How Texas Stopped Wage Increases for Salaried Exempt Employees Nationwide
December 03, 2024 —
Matthew DeVries - Best Practices Construction LawConstruction contractors often have to deal with classification of employees, particularly those who work in the home office. Today’s guest post by
Alexandra Shulman and
Leah Lively addresses a recent court decision affecting the wage protection of employees under the the Fair Labor Standards Act (FLSA).
On November 15, 2024, a federal court in Texas vacated a U.S. Department of Labor (DOL) rule (the “2024 Rule”) that increased the minimum salary threshold for employees classified as exempt from overtime and minimum wage protections under the FLSA. The Texas court’s decision nullifies the 2024 Rule nationwide, effective immediately.
Read the full story...Reprinted courtesy of
Matthew DeVries, BuchalterMr. DeVries may be contacted at
mdevries@buchalter.com
Colorado Court of Appeals’ Ruling Highlights Dangers of Excessive Public Works Claims
August 26, 2024 —
David M. McLain – Colorado Construction LitigationIn the case of Ralph L. Wadsworth Construction Company, LLC v. Regional Rail Partners (2024 COA 78), the Colorado Court of Appeals reviewed a complex contract dispute related to the design and construction of a transit rail line. The project, commissioned by the Regional Transportation District (“RTD”), involved a collaboration between Regional Rail Partners and Ralph L. Wadsworth Construction Company (“Wadsworth”) to build the North Metro Rail Line between Denver Union Station and Thornton.
Key Facts:
- Contracts and Payments: Regional Rail Partners contracted with Wadsworth to perform specific construction tasks with a total contract value of $60,210,783. By the time of the trial, Regional Rail had paid almost $58 million of this amount.
- Disputes and Delays: The project faced numerous delays and disputes, leading to Wadsworth claiming significant financial damages attributed to these disruptions. In April 2018, Wadsworth’s expert estimated that Regional Rail owed them $12,408,496.60.
Read the full story...Reprinted courtesy of
David McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com