The Privette Doctrine arises from a 1993 California Supreme Court case entitled Privette v. Superior Court (1993)5 Cal.4th 689, which provides that a higher-tiered party such as an owner or general contractor is not liable for injuries sustained by employees of a lower-tiered party such as a subcontractor on a construction project. There are, however, a number of exceptions to the Privette Doctrine. One of these exceptions is known as the “retained control doctrine.”
In the recent case of Travelers Property Casualty Co. v. Engel Insulation Inc. (2018 WL 6259032; November 30, 2018), The Third District Court of Appeal ruled a Complainant in Intervention could not maintain an affirmative action against subcontractors to recover attorneys’ fees and costs incurred in defending its suspended insured in an underlying action.
Contractors and material suppliers are entitled to foreclose on a mechanic’s lien if they comply with the preliminary notice (“prelien”) requirements. California Civil Code sections 8200 and 8204 require notice to the owner, direct contractor and construction lender, if any, not later than 20 days after the contractor or material supplier has first furnished work on the work of improvement. If the contractor or material supplier fails to do this, they are not precluded from giving preliminary notice, but their claim is limited to the value of work and materials provided within 20 days prior to the service of the preliminary notice and any time thereafter.
As part of the long-term response to the June 2015 collapse of an apartment building balcony in Berkeley, California which killed six young people, California Governor Jerry Brown signed into a law Senate Bill 1465, which requires contractors, subcontractors and insurers to report most settlements reached in construction defect cases. This new law took effect on January 1, 2019 and should be on the radar of California general contractors, subcontractors and their insurers.
In October 2018, the Court of Appeals for the Fourth District of California Court unanimously held the “loss of use” of tangible property need not be a loss of all possible uses of the property to constitute property damage; loss of a particular use can be sufficient to trigger coverage. Further, the court held the use of economic loss calculations as an appropriate measure of property damage. Thee Sombrero v. Scottsdale Insurance Company, 239 Cal. Rptr. 3d 416 (Cal. Ct. App. 2018). It noted the correct principle is not that economic losses do not constitute property damage by definition; rather, losses which are exclusively economic, without any accompanying physical damages or loss of use of tangible property, do not constitute property damage. Accordingly, the Sombrero court ruled in favor of coverage extending to economic losses resulting from a loss of use of property for a particular purpose.
How often during construction defect litigation does it appear the contractor is certain they did the work in a workmanlike manner? How often do we hear from the contractor or subcontractor there is no way they caused the defect to arise? Recently, a building envelope professional was adamant his envelope design was so redundant, there is no way the envelope would allow water to intrude into the building. After multiple openings were made, it became clear that the self-adhered flashing and sealant used in the system were incompatible. This issue had never arisen in the past. From all indication, it appeared either the self-adhered flashing or the sealant may have been defective when manufactured. This construction defect case now becomes a product defect matter as well. But, is it too late to bring a cause of action against the products’ manufacturers?
When considering hiring a public, or independent, adjuster for work in Washington, the claims person must begin the process of vetting possible candidates and documenting their reason behind their choice. Based on two recent Washington court rulings, one state court case and one federal district court case, the actions of the public adjuster may be imputed to the claims person under certain circumstances. The number of proponents of bad faith claims is growing and their ability to sue additional parties is reaching farther.
Often times, after a settlement in a construction defect litigation or case involving real property, such as a fall at a public park, defendants would run out to get their good faith settlement (“GFS”) determination as a matter of course. While a GFS determination protects a litigant from equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault, it has no impact on claims not based on those theories—namely claims for equitable subrogation.
On May 5, 2014, George Sutherland sustained injuries when, while working as a crane operator, his crane became unstable and fell over. Sutherland brought an action almost exactly two years later, on May 3, 2016. His complaint alleged a cause of action for negligence against defendant Curtis Engineering Corporation. Curtis Engineering Co. provided engineering services to Sutherland’s project and at the worksite where Sutherland’s crane tipped over. When filing his complaint, Sutherland failed to include the certificate of merit required by California Code of Civil Procedure section 411.35(a) and (b), a prerequisite to bringing an action against architects, engineers and many other types of professionals in California.
In the recent case of William Jae Kim, et al. v. Toyota Motor Corporation, et al. (2018 WL 4057248), the California Supreme Court affirmed the Second Appellate District Court of Appeal decision which previously affirmed the trial court judgment after a jury found for defendant in a product liability case. Plaintiffs claimed the pickup truck was defective because its standard configuration did not include a particular safety feature, known as vehicle stability control (“VSC”), that they claimed would have prevented the accident. Thus, at issue was whether evidence of industry custom and practice may be introduced in a strict products liability action.
Have you ever been walking along a sidewalk and taken a fall? Maybe the sidewalk was uneven and cracked. Maybe the sidewalk was lifted and you failed to notice it before you fell. Thousands of people slip and fall on damaged, uneven, or broken sidewalks each year. Some of those people sue. Sometimes, people will sue the adjacent property owner, and other times, people will sue the City where the sidewalk is located. Sometimes, people will sue both. One may wonder, who is responsible when some falls and is injured on a damaged sidewalk. Thus, the issue is whether property owners can be held liable or whether the city where the sidewalk is located can be held liable, and in some instances, whether both can in fact be held liable.
In March, 2018, the California Court of Appeal decided an interesting issue with regarding defective designs on public property in Rodriguez v. Department of Transportation, Case No. F074027 (March 27, 2018). The Court had to decide whether a public entity could avoid liability through the affirmative defense of design immunity. In a nutshell, the Court rejected plaintiff’s assertion that a public official’s approval of a design does not constitute an exercise of discretionary authority under Government Code section 830.6 when there is a failure to consider a safety measure that would have prevented the plaintiff’s injury. In other words, a government entity is not required to consider all safety measures as long as the approved design is found to be reasonable. This rather complicated decision requires further factual analysis to fully understand. Read on.
Can an owner lose their home simply because they do not pay their homeowner’s association (“HOA”) dues? The answer is: yes. It is only fair, after all. However, it is not as simple as it sounds. There are legal and technical hoops in place, and HOAs are mandated to comply with these hoops or be subject to attorney-driven lawsuits where attorneys’ fees can exceed the cost of the technical violation(s).
When a general contractor subcontracts work in California, it is standard practice that payment is made by the general contractor to the subcontractor on a monthly basis. The contractor is allowed to withhold a certain amount of the payment due as a retention in order to ensure that the subcontractor continues to uphold their end of the bargain at the expected level of quality. The payment of these retention funds is dictated by Civil Code § 8800 et. seq, and in particular § 8814 subdivision (a) which mandates that the payment of the retention must be made by the direct contractor to the subcontractor within ten days of the direct contractor receiving all or part of the retention payment. Failure to make the payment can result in two financial penalties for the direct contractor: a two percent penalty per month of the amount withheld as well as any fees resulting from the litigation brought by the subcontractor to collect the funds. Subdivision (c) allows for one general circumstance when the retention payment may be withheld, stating “If a good faith dispute exists between the direct contractor and a subcontractor, the direct contractor may withhold from the retention to the subcontractor an amount not in excess of 150 percent of the estimated value of the disputed amount.” (See Cal. Civ. Code, § 8814, subd. (c) (Section 8814(c)).)