Apple is currently demolishing buildings once occupied by Hewlett-Packard to make way for their Apple 2 campus. Security guards noticed a break-in in late November and called the police. After a police dog cornered the man, police found copper piping and wires that had been ripped from the walls of the old building. He was treated for a dog bite, then released on $11,000 bail.

The Apple 2 campus is a major a major construction project in Cupertino. The project is expected to be complete in 2016 and will have about 3.7 million square feet, space for about 12,000 employees.

Edward Salanga, a partner at Quarles & Brady with a practice that includes representing lenders and contractors in property and construction-related disputes, including construction defect claims, has been named the Litigation & Dispute Resolution Group Chair in the firm’s Phoenix office.

Earlier this month a Multnomah County (Portland) Oregon jury awarded Smith Freed & Eberhard's contractor client a defense verdict after a 3 week construction defect trial.

This was Oregon's first condominium conversion case to go to jury verdict.The project was a 10 story building originally constructed in 1965, but converted to condominiums within 10 years of the lawsuit. Claims involving defects in condominium conversions have been the latest trend of lawsuits in the Portland metropolitan area.

The plaintiff was the Washington Park Homeowners Association which had sued the developers, mechanical contractor, roofer, window manufacturer and Smith Freed & Eberhard's client, the contractor who painted the building exterior and installed replacement windows.

One defendant got out on summary judgment, but all the other defendants settled with plaintiff before trial. Smith Freed & Eberhard's clients defense at trial was lack of causation. According to trial attorneys Jack Levy and Kathrin Dragich who interviewed the jurors after the verdict, the jury agreed with the lack of causation argument. The building had damage, which trial attorneys Jack Levy and Kathrin Dragich argued could be repaired on a limited basis.

One of the newsworthy aspect of this verdict is that the jury did not buy the plaintiff's expert's opinion relating to plaintiffs scope of repairs, nor did they believe that the construction repair bids were reasonable. Plaintiff expert's scope included a couple of approaches, both involving the removal and replacement of all siding and windows. Estimates ranged from $3.4 to $4.6 million, all of which was targeted at the Smith Freed & Eberhard client.

The jurors appeared to clearly see this approach as overreaching and as a betterment to the project. Smith Freed & Eberhard's theme was that normal people, dealing with issues in their own lives, make targeted repairs to defined problems. Normal people don't tear down the house when a few windows leak.

Following many years of debate over Nevada’s NRS Chapter 40, a bill passed in the middle of the 1990s as a process to resolve construction defect related disputes before litigation commenced between homeowners and builders of residential construction, the fight to change this law again has surfaced.

Many parties who are involved in construction defect claims in Nevada claim that Chapter 40 carries with it to many entitlements, making it to costly to build houses in Nevada, some say Chapter 40 is fine how it is.

But no matter whose side is being heard, one thing remains clear and that is a fierce dispute over the way the future of Nevada’s Chapter 40 will resolves homeowners’ claims of construction defects will be a hot issue before the Nevada legislature.

This past Wednesday a full hearing was held before a legislative committee which pit builders and subcontractors against attorneys for homeowners.

Builders and subcontractors say the bill, drafted with guidance from a special subcommittee led by state Sen. Terry Care, D-Las Vegas, is welcome relief. They say the current system is flooded with alleged bogus claims and exorbitant legal fees and often impedes home repairs. If passed, some say the legislation would tilt the system significantly toward builders and subcontractors, and plaintiff attorneys say it goes too far, imposing severe curbs on the rights of homeowners.

On the other hand, builders claim they are obligated to pay the homeowners’ costs of bringing lawsuits, provided homeowners agree to reasonable settlements. Builders and subcontractors say built-in attorney and expert fees create perverse incentives to bring Chapter 40 actions against them.

Subcontractors also claim that they are often innocent bystanders in construction defect claims and litigation in Nevada. For instance, window installers claim they are brought into lawsuits which are related to leaky roofs or defective drywall. Roofers and drywallers claim they are brought into cases with leaky windows. Subcontractors claim that they are only brought into suits by builders who wish to spread the cost, expense and exposure of the defective construction allegations amongst all parties who participated in the building of the home. Subcontractors’ claim their own insurance companies often advise them to settle, as it remains cheaper to settle rather than allow litigation costs to skyrocket.

The proposed legislation, Senate Bill 349,

http://www.leg.state.nv.us/75th2009/Reports/history.cfm?ID=967 would more narrowly define a construction defect. To qualify as defective, a home would have to present “unreasonable risk of injury to a person or property.” Alternately, it would have to meet all of the following criteria: violate building codes, cause damage to the property and be built in a manner not “good and workmanlike” according to industry standards. Currently, just one of those criteria, including violating a building code, needs to exist to mark a home as defective and qualify it for the Chapter 40 process. The legislation would also eliminate a provision in the law that allows plaintiffs to collect “reasonable attorney’s fees.”

Homeowner lawyers claim the bill would leave homeowners, thousands of whom bought substandard houses during the building boom in Nevada, defenseless against builders, their insurance companies and builders lawyers. Homeowner counsel allege that current law necessarily requires nothing more than code violation to qualify as a construction defect.

The committee also heard legislation that would shorten the time a homeowner has to bring civil action against a builder. Senate Bill 337

http://www.leg.state.nv.us/75th2009/Reports/history.cfm?ID=930 is a revision to the Statutes of Repose and reduces the time action may be commenced from 10 years to 6 years.

The legislative battle over construction defects is expected to continue until the session’s scheduled end two months from now.

In American Home Assurance Co. v. BFC Construction Corp.,. No. 4323 (N.Y. App. Div. Feb. 22, 2011), the named insured tendered its defense of the underlying lawsuit to its insurer. An additional insured was also named as a defendant in the lawsuit.

Insurance News Net and a variety of legal publications reported today that a construction litigation team of six partners, two counsel and seven associates will be joining Pillsbury in its Los Angeles, San Francisco, Washington, DC and New York offices. The group comprising 15 individuals have reportedly left the Howrey firm, and are joining the construction practice group at Pillsbury Winthrop Shaw Pittman LLP. Pillsbury Firm Chair Jim Rishwain, commented that “We are enthusiastic to have this team of market-leading professionals join Pillsbury, as these attorneys are remarkable for their breadth of litigation and arbitration experience combined with an unsurpassed focus on construction and infrastructure. Under John Heisse's leadership, as former co-head of Howrey's Construction Litigation group, the team received the 2010 Award for Excellence in Construction by Chambers USA,” According to press releases and the Pillsbury website, the team comprises a marquee group of litigators with an emphasis on resolving disputes for general construction and engineering, real estate and infrastructure projects and securing insurance coverage for those matters. The partners joining Pillsbury are John R. Heisse (San Francisco), David T. Dekker (DC), Robert B. Thum (Los Angeles), Jeffrey Gans (DC), Melissa Lesmes (DC), and Michael McNamara (DC). Heisse will reportedly serve as a leader of Pillsbury s Firmwide Construction Litigation team. In addition, the team will also include two counsel in Los Angeles, five associates in DC, one associate in San Francisco and one associate in New York. Other Howrey partners have joined Pillsbury in the recent past, specifically San Francisco IP litigation partner Duane Mathiowetz joined the firm on February 12, 2011.

In a series of articles scheduled for publication this week, the LA Times reports on a number of construction defect, planning, and project management issues. According to the article, “Oversight and quality control problems have plagued the district's $5.7-billion, voter-approved bond program to rebuild its nine campuses.”The authors of the piece reportedly interviewed more than 200 people, visited construction sites at all nine colleges and examined thousands of documents obtained through the California Public Records Act. “Inspectors, architects and project managers began finding serious construction defects early on and grew increasingly frustrated as deadlines came and went and the complex ultimately opened with many of the problems uncorrected.”Read Full Story

“New York used to be known as a well-built city, but the last construction boom had so many problems, it’s really like being in Florida,” assistant New York State Attorney General Marissa Piesman said last night at a forum for frustrated co-op and condo owners.Piesman is reportedly very familiar with construction defect issues confronting owners and builders concerned with city’s construction boom of the recent past. According to an article written by Teri Karush Rogers, and published in Brick Underground NY (www.brickunderground.com) Piesman discussed the increasing difficulties in addressing complaints. “It used to be that a phone call from the Attorney General’s office would be sufficient but in the last two years since the economy tanked, it’s been hard to get sponsors to be responsive,” she noted.In light of a mounting number of construction defect complaints the office of the Attorney General reportedly favors mediation over litigation.“We’re more likely to get involved when there’s a systemic problem across a whole building rather than a problem affecting one individual,“ said Piesman.  The rise in the city’s construction defect claims includes established developers as well as smaller players drawn to the city’s recent real estate boom.In a recent New York Times article real estate attorney Steven D. Sladkus said, “During the real estate boom, everyone had to be in the development business. It was like playing Lotto you had to be in it to win it. I had a case, for example, where a small building in Williamsburg, Brooklyn, was put up and people paid top dollar for not-so-fantastic apartments. The developer was a baker.” When asked if the complaints mainly involved inexperienced developers, he also noted, that “We’re dealing with some larger developers, too.”

Honolulu, Hawaii (Vocus/PRWEB) February 21, 2011 Previously a name partner at Roeca Louie & Hiraoka, Mr. Louie is a trial lawyer and has been in practice for the past 33 years. His areas of practice include personal injury defense, construction defect litigation and commercial litigation. While at Roeca Louie & Hiraoka, Mr. Louie was selected for inclusion in the 2011 Best Lawyers in America and was named a Hawaii Super Lawyer from 2008 to the present. Mr. Louie attended Occidental College (A.B. 1973 cum laude) and Boalt Hall School of Law (University of California 1977). “I couldn t be happier that Mr. Louie s accepted this critical position of State Attorney General,” said Governor Abercrombie. “He is well versed in many areas of law and will be a tireless advocate for the interests of the people of Hawaii. He is the kind of person we need on our team as we address the challenges facing our communities.” Read Full Story

Leflet v. Redwood Fire and Casualty Insurance Company, 600 Ariz. Adv. Rep. 6 (App. Div I, January 20, 2011) (J. Swan)IMPERMISSIBLE FOR INSURED AND INSURER TO ENTER MORRIS AGREEMENT THAT ELIMINATES PRIMARY INSURER’S OBLIGATION TO PAY POLICY LIMITS AND INSTEAD PASSES LIABILITY TO PAY TO EXCESS CARRIERHomeowner, insureds brought class action for construction defects. All relevant insurers including the insurer of the subcontractors issued reservations of right. The subcontractor’s insurer was obligated under its policy to also insure the general contractor. Ultimately the homeowners entered into a settlement agreement with the contractor and its primary insurer which included a stipulated judgment of $8.475 million. The agreement further attempted to absolve the primary insurer of any obligation to pay more than $375,000 and instead attempted to pass all responsibility to pay subcontractors and their insurers. Finally, the contractor and its insurer assigned all their rights against the subcontractors and their insurers to the class action plaintiff homeowners. Notably the subcontractors and their insurers had no notice of the agreement until it was finalized and approved by the court. The subcontractors ultimately settled under their exposure in the agreement and their carrier intervened during the reasonableness hearing of this Morris agreement. The trial court then ruled that the failure to give the sub’s insurer notice of the agreement constituted a breach of the cooperation clause and voided the agreement. The insurer was awarded attorneys’ fees and costs.The Arizona Court of Appeals affirmed. “Unlike the insured in Morris, Hancock did not act simply to protect itself from an insurer’s refusal to extend unconditional coverage. Instead, it acted as an agent of an insurer that sought to limit its own liability. As parties to the agreement, the Direct Insurers’ interests were aligned with — not opposed to — those of their insured.” Further, the primary carrier shared none of the risks that the insured had and which form the grounds for a Morris agreement; the primary carrier does not have the risk of being personally exposed to an excess judgment or risk receiving nothing if the cooperation clause is deemed breached. “Because Morris agreements are fraught with risk of abuse, a settlement that mimics Morris in form but does not find support in the legal and economic realities that gave rise to that decision is both unenforceable and offensive to the policy’s cooperation clause.”Read the full story...Reprinted courtesy of Ted Schmidt, Burt Kinerk, Dev Sethi and Matt Schmidt of Kinerk, Schmidt & Sethi, PLLC.

Repairs to Dolphin Towers may cost up to $10 million, and any move home is still far off.SARASOTA - Repairing cracked and corroded concrete in Dolphin Tower will cost $5 million to $10 million, an overdue engineer’s report is expected to conclude.Completion could take years because the work would not occur until after a potential lawsuit between the 117-unit tower and Great American Insurance, the building’s property carrier, is concluded.If that timetable holds, the tower’s residents -- many of whom are elderly -- will have to wait until 2013 or beyond to return to the 15-story building at 101 S. Gulfstream Ave.“People there have been told to make other plans for 2011, at the least,” said Alan Tannenbaum, a Sarasota attorney representing the building’s homeowner’s association.At a recent meeting, residents also were told demolishing Dolphin Tower has been considered, but at this juncture, it continues to make economic sense to try fixing the 37-year-old building.“We’re confident that the building still can be repaired,” Tannenbaum said. “It will be more expensive and extensive and take longer than originally anticipated, but we still think it can be repaired.”Shortly after the building was evacuated in late June, it was estimated that repairs would take three months and cost roughly $1 million.Read Full Story...Reprinted courtesy of Kevin McQuaid, Herald Tribune (Sarasota, Florida). Mr. McQuaid can be contacted at kevin.mcquaid@heraldtribune.com.