Construction Law Watch

What’s behind the insurance curtain: Oregon levels the playing field

Posted in Construction Defect, Discovery Rule, Insurance Coverage, Oregon Supreme Court, Uncategorized

With the sanctity of any time-honored tradition, insurers resist discovery of their claim file with the ritualistic incantation that it is protected from discovery because it was prepared in anticipation of litigation, and therefore qualifies as work product.  To support this argument, oftentimes insurers outsource the adjustment of the claim (a normal business activity) to outside attorneys, and then refuse to provide the attorney’s file, or communications with the insurer and the attorney, on the basis that those documents are protected by the attorney-client privilege. Courts across the county have been increasingly dismissive of these arguments, holding that an insurer cannot cloak its claim file with privilege simply by paying a lawyer to do what is otherwise an everyday claim handling activity for the insurer.  Oregon finally has a chance to weigh in on this issue and level the playing field for insureds.  Read more on The Policyholder Report blog.

Management of Reconstruction Projects—Tips for Owners and Associations

Posted in Community Associations, Construction Contracts, Construction Defect, Construction Defect Repairs, Construction Management, Homeowners Association, Risk Management

After having successfully recovered, borrowed, or assessed funds for the repair of damaged buildings, an owner, property manager, or homeowners association (I’ll use the term “Owner” in this piece for brevity) must shift gears, and determine how most wisely to spend those funds.  The Owner may not have experience with significant construction projects, and likely must rely on outside expertise for management of reconstruction.

  1. Continuation with Forensic Consultants

If the Owner engaged a forensic analyst to study the damage, continuing a relationship with that analyst through the construction project usually makes sense. The analyst can be hired to continue assistance in a number of capacities: convert its recommended repairs to formal construction drawings, review and administer construction through completion, or provide peer review and comment on the work of others. The Owner should confirm with the analyst up front whether it has that capacity and expertise to perform these functions, and meet with the personnel at the firm who would be assigned such duties. Continue Reading

Federal Court in Florida Refuses to Let Excess Insurer Escape $23M Claim Where Deficient Work Caused Damage to Project Itself

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

Please check out my latest post on the Policyholder Report blog regarding a recent Florida decision  – another win for policyholders.  Here is an excerpt:

Last week, a federal district court in Florida reaffirmed the black-letter law in Florida that claims against a general contractor for damage to the completed project resulting from the defective work of a subcontractor constitutes “property damage” under a Commercial General Liability, or “CGL,” policy. The order also clarifies how “other insurance” clauses are construed when insurers offer competing arguments about who has to pay first — a common dispute in multiparty, multipolicy cases.

In Pavarini Construction Co. v. ACE American Ins. Co. (Feb. 25, 2015), Pavarini, the insured, was the general contractor for a 63-floor, mixed-use condominium tower. As is customary in projects of this size, Pavarini hired several subcontractors to perform the work. The steel subcontractor’s deficient work at issue in this case involved missing and misplaced reinforcing steel in the concrete masonry unit. This deficient work caused excess movement in the building, resulting in damage to exterior stucco, water intrusion in the penthouse enclosure, and cracking in the concrete columns, beams, and shear walls.  Read more.

Nuisance on the Block

Posted in CC&Rs, Community Associations, HOA, Nuisance

This article was previously published in WSCAI’s newsletter.

Neighbors will never cease finding ways to bother each other and to be bothered. The eternal struggle for community associations is determining when this bothersome behavior rises to the level of a violation of the Association’s rules and/or governing documents, which the board must enforce, and when the Association should let the neighbors handle it among themselves.

Most governing documents include a provision that says something like: “No owners shall engage in noxious or offensive activities, or do anything which may become an annoyance or a nuisance, or in any way interfere with the quiet enjoyment of other owners.” Words like “offensive,” “annoyance,” and “nuisance” are hard to define and can be dependent on the person perceiving the behavior. Regardless of the specific words of your Association’s provision, the goal is to limit the activity of one owner, which negatively impacts another owner. Accordingly, many Associations have resolutions or rules specifically addressing smoking, pets, and noise, which are the biggest areas of “nuisance” for most Associations. Continue Reading

Mockeries and Latent Breaches: Reflections on Oregon’s Discovery Rule

Posted in Breach of Contract, Construction Claims, Construction Contracts, Construction Defect, Discovery Rule, Oregon Supreme Court

Statutes of limitation cut off rights to bring a lawsuit after a designated time period, regardless of the strength of your case or how much you’ve been injured. The length of these time periods can vary by the type of claim being brought, and the starting date can vary also. The “discovery rule” – which delays the starting point for periods of limitation until the injured party discovers the cause of action – has the greatest potential impact on this starting date. Oregon law has been unstable regarding application of the discovery rule to claims for breach of contract. Although we appear to be reaching a point of greater certainty on this issue, more refinement may yet be required.

Oregon’s Discovery Rule Generally

Discovery rules in Oregon arise Continue Reading

Construction Defect Litigation: Owners’ Rights and Risk Management Strategies

Posted in Construction Management, Events, Owner's Rights

Molly Washington Speaks at Oregon Chapter CMAA Event

5:30 PM – 7:30 PM
Portland, Oregon

Molly A. Washington, an associate in Ball Janik’s Litigation, Construction Defect, and Insurance Recovery practices, will speak to the Construction Management Association of America’s Oregon chapter about the state of construction defect law in Oregon and ways that owners’ representatives can ensure the owners’ rights are being protected, including risk management strategies, key contract provisions, and inspection recommendations.

Registration Ends on February 10, 2015

Click here to register

“Top 10 Rules of Risk Management” at the Home Builders Association of Metro Portland

Posted in Ball Janik News, Building Managers, Construction Claims, Construction Contracts, Events, Risk Management

Jacob Zahniser Presents “Top 10 Rules of Risk Management” and Serves on Legal Panel

Home Builders Association of Metro Portland | Contractor Business Management Series – Session I

9:00 AM – 3:00 PM
Lake Oswego, Oregon

The all-new Contractor Business Management Series consists of three sessions focused on core areas of business management to help sharpen your skills. Whether you’re thinking of starting a business or are a newer owner and manager these courses will improve your knowledge and refresh your memory. The Contractor Business Management Series is specifically tailored for the construction industry and is perfect for builders, remodelers and subcontractors who own, manage, or hope to own in the future.

Topics included in this course:

Top 10 Rules of Risk Management – Jacob Zahniser, Ball Janik LLP

Understand how your day-to-day business practices can help you avoid litigation
Learn how to work with your business partners, vendors, and subcontractors to set expectations
Understand how to identify and mitigate risks early in your projects

Click here to register

Continue Reading

Unwritten Rules: Oregon Could Learn How Implied Warranties are Done from Iowa.

Posted in Implied Warranties, Warranties

Oregon’s case law regarding implied home warranties have long floated derelict, lacking the clarity needed for effective consumer protection and simultaneously subjecting developers to uncertain liability.  Now 40 years since Oregon’s adoption of implied warranties, recent decisions from other states focus our attention on the lack of evolution and refinement here in Oregon.

Warranties and Implied Warranties Generally

The term “warranty” describes a right of correction or repair associated with the purchase of a specific item.  Warranties are typically written, describing the scope of the protection, the time period, and the logistics of making a claim.  Common examples are folded-paper inserts found in consumer purchases such as toasters and televisions, the language of which is remarkable for uselessness and indecipherability.  However, most consumers do not realize that the law provides warranties not found in any fine print: so-called “implied warranties.”  Implied warranties for consumer goods are found within the Uniform Commercial Code (“UCC”) adopted throughout the United States.  These UCC implied warranties are almost perfectly uniform in language and interpretation, which makes them fairly predictable for both consumers and manufacturers.

Home Warranties Specifically

Implied warranties in home purchases are far less uniform and less predictable.  Continue Reading

Don’t Let Your Construction Project Go Up in Smoke – What the Passing of Measure 91 Means for Employers in Oregon

Posted in Marijuana and the job site
Light a Joint

This article appeared online (Dec. 11, 2014) and in print (Dec. 3, 2014) in Cascade Business News, written by Ball Janik LLP attorneys Peter Hicks and Jacob Zahniser.

In Washington, and soon-to-be Oregon since the passage of Measure 91, construction workers and employees may legally possess and use marijuana. What does that mean for the job site?

Although construction workers and employees may now legally possess and use marijuana, nothing under Washington or Oregon law permits any worker or employee to possess or use marijuana while he or she is on the job.

Considering substance use is recognized as prevalent among construction workers, employers such as general contractors, developers and owners should take necessary and appropriate steps to prevent employees from operating dangerous and complex machinery, performing construction work, and otherwise completing construction-related tasks while under the influence of marijuana.  Read more here.

Oregon Court of Appeals holds cutoff time for negligent construction claims could be six years from discovery of a claim.

Posted in Architect, Construction Claims, Construction Defect, Construction Dispute, Oregon Construction Cases, Oregon Court of Appeals, Statute of Limitations, Statute of Repose

We spend a lot of effort on this blog talking about the time deadlines for property owners to sue contractors and design professionals for negligence.  There are two reasons for this:  first, the law on this is rapidly evolving in Oregon.  Second, it is of the utmost importance to contractors, design professionals, and property owners because there are very few absolute defenses to a claim for negligent construction besides the timing of claims.  Also, since many property owners rightfully loathe to dive into a lawsuit, they may delay filing until absolutely necessary.

The news keeps coming.  At the end of October, the Oregon Court of Appeals decided Riverview Condominium Association v. Cypress Ventures, Inc., et al., Case No A150586 (October 29, 2014).  There, the defendants developed testimony and documents evidencing that various types of water leaks had been affecting the property for several years.  The case discusses the “statute of repose” (the drop-dead deadline date for bringing any claims) as well as the “statute of limitations” (the time limit on bringing various claims). Continue Reading