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)).)
Given the lack of affordable housing, especially in major cities like San Francisco, landlords should not be surprised to find changes in occupancy in their rental units without their consent. Landlords might inadvertently change the status of those occupants to “tenants” and unwittingly confer tenant rights on those occupants.
A June 6, 2018 California Appeals Court decision in Von Becelaere Ventures, LLC v. James Zenovic (24 Cal.App.5th 243) held a contractor waives the right to arbitrate a “construction dispute under the terms of the contract by failing to request a stay of a mechanic’s lien pending the outcome of arbitration.” In that case, Von Beccelaere Ventures, LLC (“VBV”) entered into a contract with James Zenovic Construction (“Zenovic”) for construction of a single-family home located in Laguna Beach, California. The construction contract contained an arbitration agreement which stated, “If any dispute arises concerning this Contract or the interpretation thereof, or concerning construction of the Improvements, or the Limited Warranty, customer service, defects, damages, or obligations therewith (a ‘Construction Dispute’), such Construction Dispute will be settled by binding arbitration.”
In a recent decision entitled MP Nexlevel of California, Inc. v. CVIN LLC (2018 WL 3358395), the Ninth Circuit Court of Appeals took a pro-contractor stance on the issue of the scope of contractor licensing. The matter arose from a dispute over the scope of a California specialty contractor’s license. The issue was whether the subcontractor’s performance of certain work was outside the scope of its license constituting a breach of contract and, thus, resulting in the contractor not being entitled to payment for its work (Cal. Bus. & Prof. Code § 7031(a)).
If you have traveled to Seattle in the last few years, you may have noticed the number of cranes. Other than the large number of buildings under construction for Amazon and other technology companies, many of the buildings seen under construction are multi-unit, high-rise apartments. A decade or more ago, one would have expected many of these to be condominium buildings. However, between then and now, Washington went through a period of heavy construction litigation involving many condominium projects. The Washington Condominium Act, which was meant to ensure quality buildings, caused an increase in construction defect litigation and, correspondingly, the cost to build condominiums. So, today, developers avoid condominiums and instead build apartments, which are not subject to the Act. Developers may see this as a way to wait out condominium defect litigation and then convert the apartments to condominiums down the road. However, the waiting game may not foreclose condominium defect litigation.
Builders have long awaited a decision on the hot button topic of whether or not homeowners may assert common law causes of action such as negligence and strict liability against builders in relation to construction defects. This past January, the California Supreme Court held the “Right to Repair Act” is the exclusive remedy for construction defect claims. The Court also held that all claims seeking recovery for defect damages are subject to the Right to Repair Act’s pre-litigation procedures, regardless of the allegations present in the pleadings. The decision is a landmark one for builders, general contractors, and developers.
In the recent case of Delgadillo v. Television Center, Inc., (2018) 20 Cal.App.5th 1078, the California Court of Appeal, Second District recently examined and refined the Privette doctrine. Starting with Privette v. Superior Court (1993) 5 Cal.4th 689, the Courts have explained the limitations of a homeowner’s liability for work performed on the premises by the employee of a contractor. The Privette Doctrine generally holds property owners and general contractors are not liable for injuries to employees of independent subcontractors absent an affirmative act or omission causing injury.