Construction Law Watch

A Condominium Conundrum: When does the one-year limitations period to challenge the validity of an amendment to a condominium declaration not apply? When the amendment is invalid.

Posted in Condo Conversion, Condominium, Ridpath Hotel, Statute of Limitations

Division III of the Washington Court of Appeals published an opinion two days ago interpreting, for the first time, RCW 64.34.264(2), the one-year statute of limitations for challenges to the validity of an amendment to a condominium’s declaration. In Club Envy of Spokane, LLC, et al v. The Ridpath Tower Condo. Assoc. et al., No.31913-0-III, the Court held the one-year limitations period does not apply when the amendment is “void from its inception.” In other words, when the amendment was improperly passed under the Condominium Act, the one-year limitations period to challenge the amendment’s validity does not apply.

The Unique Facts of Club Envy

The facts in Club Envy are rather unique. In February 2008, the Ridpath Tower Condominium was created and the Association formed. Continue Reading

And Then There Were Two: The Oregon Ct. of Appeals Finds There Are Two Possible Statutes of Repose for Negligent Construction Claims

Posted in Construction Claims, Construction Contracts, Construction Defect, Construction Defect Repairs, Construction Dispute, Consumer Protection, Oregon Construction Cases, Oregon Court of Appeals, Statute of Limitations, Statute of Repose, Substantial Completion

The Oregon Court of Appeals recently issued a surprising decision regarding the ultimate timeline to file a construction defect claim involving a “spec home.” (A “spec home” is a house which a builder or developer constructs not for a specific owner but on speculation that the home will sell to the general public upon completion.)  In Shell v The Schollander Companies, Inc. (September 24, 2014), the Court of Appeals decided that ORS 12.115, as opposed to ORS 12.135, supplies the appropriate ten-year statute of repose for an owner seeking a negligent construction claim where the owner does not have a traditional “construction contract” with the builder.  The plaintiff in Shell was the original owner of the home.  She purchased the property midway through construction from the original developer/builder using a real estate sales agreement to complete the transaction. Continue Reading

Oregon Court of Appeals Case Decided Yesterday: Policyholder Wins

Posted in Insurance Coverage, Oregon Court of Appeals

Be sure to check out Dwain Clifford’s post on The Policyholder Report:  Oregon Court of Appeals Rejects Insurer’s Heads-I-Win, Tails-I-Win Policy Interpretation.

The Oregon Court of Appeals yesterday issued an opinion confirming that Oregon law remains faithful to the bedrock principle in coverage disputes that ambiguities in a policy must be resolved in favor of the insured.

In Patton v. Mutual of Enumclaw Ins. Co. (Oct. 8, 2014), an insured seeking coverage under his homeowner’s policy found himself between a rock and hard place, at least under the insurer’s erroneous attempt to link two unconnected policy provisions to deny coverage.  Read it here.

Broad and Ineffective “Reservation of Rights” Letter has Big Consequences

Posted in ROR letter

Insurers issue reservation of rights letters (“ROR Letters”) to contractors all the time. Typically, a contractor is sued, reports the claim, and one of the first responses from its insurer is an ROR Letter. They are generally long and regurgitate what seems like the entire policy without actually informing the contractor which provisions may actually matter in light of the allegations in the complaint.

The $5 Million ROR Letter

At least one court has held that ROR Letters that fit within this category can have big consequences that benefit insureds put in this unfair position. In Advantage Builders & Exteriors, Inc. v. Mid-Continent Cas. Co. (Mo. 2012), Continue Reading

It’s a bird, it’s a plane, it’s … a construction drone. Government regulations are still catching up to elusive flying machines.

Posted in UAVs
Drone picture

Unmanned aerial vehicles (UAVs), commonly called drones, are frequently in the news and gaining popularity on the jobsite.  Architects, engineers and contractors are exploring ways to easily document and map building construction progress and quality control with the ease of monitoring by UAVs.  Despite their rising popularity, the laws and regulations surrounding the use of UAVs remain unsettled.  While on the cusp of this exciting technology, architects, engineers and contractors ought to coordinate closely with other project participants, and their own insurance companies, before deploying and using UAVs in a project.  It is an open question whether any use of a UAV is legal, or free from risk, while the responsible government agencies sort out the regulations and jurisdictional issues. Continue Reading

New AIA Design-Build Agreement: The Waiting Game

Posted in AIA Contract Forms, Construction Contracts, Uncategorized

Formal design-build agreements are used by property owners in circumstances where a single firm is hired that will be responsible for both designing and constructing a project. Sometimes projects fall into this category by default.  For example, a contract that simply states the contractor will install a bill of materials, without reference to plans, is in fact a design-build agreement—but may leave unclear who is responsible for the actual design of the construction.  This can lead to numerous problems down the road.  Fortunately, the American Institute of Architects (AIA) publishes a commonly-used form for design-build agreement forms, the AIA A141. This AIA form may be worthy of consideration when choosing among starting points for a design-build project – but I recommend proceeding with caution.

The AIA recently published a 2014 update to the 2004 A141 form, and the 2004 form will no longer be available for use after 2015.  The 2014 updated form includes a variety of modifications.  Some clarify 2004 provisions, some simplify the form, and some change the risks and responsibilities of the parties.

Of particular note is that the 2014 form includes a key structural change from the 2004 from.  Continue Reading

The debate continues: do construction defects present a single or multiple “occurrence” for insurance coverage purposes?

Posted in Construction Claims, Construction Defect, Construction Defect Repairs, Insurance Coverage

Our colleagues at The Policyholder Report  note on a recent decision of whether construction defects present a single or multiple “occurrence” for insurance coverage purposes. In Chartis Specialty Ins. Co. v. Am. Contractors Ins. Co. (Aug. 12, 2014), Judge King of the federal district court in Oregon ruled that allegations of “deficiently managed construction” constituted a single occurrence for coverage purposes. Whether defective construction, development, administration and management give rise to one or more “occurrences” has profound consequences for both insurers and their insureds with regard to policy limits in play and deductibles/self-insurance retention amounts.  Read it here.

Oregon courts struggle with the scope of consumer protection under the Unlawful Trade Practices Act

Posted in Condominium, Construction Claims, Consumer Protection, Unlawful Trade Practices Act, UTPA

It is an all too familiar scenario: A condominium association (“COA”) sues a manufacturer of allegedly defective products used in the construction of the condominium. The COA alleges, among other claims, an Unlawful Trade Practices Act (“UTPA”) claim. The manufacturer–defendant seeks to dismiss the UTPA claim, arguing the UTPA, as a consumer protection statute, does not apply because neither the COA nor its members are “consumers” of the defective product, which was manufactured by the defendant, distributed by a third–party, and installed by a contractor. According to the manufacturer–defendant, this is a commercial transaction outside the UTPA. The COA argues its members are “consumers” because they purchased their units containing the defective product. Whether the UTPA requires plaintiffs to have some transactional relationship with the defendant to qualify as a “consumer” is currently unsettled in Oregon. Continue Reading

Oregon Policyholders Get Big Win in Decision Today

Posted in Construction Claims, Construction Defect, Construction Defect Repairs, Construction Dispute, Insurance Coverage, Oregon Construction Cases, Oregon Court of Appeals

Today the Oregon Court of Appeals handed down a lengthy opinion upholding a money judgment awarded in favor of a judgment creditor in its garnishment action against American Family Insurance Company.  Read about it and get the decision on Ball Janik’s Policyholder Report.

3 Open Questions About Construction Claims and Oregon Law

Posted in Construction Dispute, Contract Clause, Oregon Construction Cases, Oregon Court of Appeals, Oregon Supreme Court, Statute of Limitations, Statute of Repose

Leave it to Oregon. We proudly possess some of the most confusing statutes of limitation and repose anywhere, especially as they relate to construction claims. We always have interesting questions that linger unanswered for years or even decades before finding resolution by case law or statute. Even when we get answers, those answers always seem to raise more questions. Three current questions warrant brief discussion.

1.      What is the statute of limitations for negligent injury to real property?  Continue Reading