Case Updates Archive

Last month, the Texas Supreme Court heard oral arguments in what many expect to be an important case for employers in Glassdoor, et al v. Andra Group, LP. The case concerns several disgruntled employees who had apparently aired grievances on the popular career website, Glassdoor.com. Glassdoor provides a platform for users to publicly and anonymously post reviews and information such as salary, work hours, and corporate culture of their employers for the benefit of current jobseekers.

On Monday, May 21, 2018, the Supreme Court issued a decision every private employer will be ecstatic to understand and implement into their practice. The majority opinion, authored by Justice Neil Gorsuch, held employers: (1) may rely upon clauses in their employment contracts requiring employees to arbitrate their disputes individually; and (2) may require employees to waive the right to resolve those disputes through joint legal proceedings.

In California, personal injury plaintiffs may recover the lesser of the (1) amount incurred for medical services, or (2) reasonable market value of those services. Plaintiffs with medical insurance may not offer into evidence the full billed amount since it represents a misleadingly inflated number given the realities of modern medical practices in which the amount initially billed is typically more than the amount ultimately paid, especially when insurance is involved. While truly uninsured plaintiffs may offer the amount billed as one indication of what the reasonable market value might be, insured plaintiffs could not do so even if they did not benefit from any discounted rate negotiated by their insurers. (Ochoa v. Dorado (2014) 228 Cal.App.4th 120, 135-36.)

Convincing subcontractors' insurers to defend a general contractor as an additional insured on a general liability insurance policy is often an uphill battle, and insurers frequently point to extrinsic evidence collected in their investigations into the matter as their reason for declining to defend. PIH Beaverton LLC v. Red Shield Ins. Co., stands to be a game-changer in this regard, strengthening the "four corners" rule and its effect on determinations concerning the timing of alleged property damage.

Builders have been waiting more than two years for the decision on the fiercely contested issue of whether or not the Right to Repair Act cuts off a homeowner's right to assert common law causes of action against a builder relating to alleged construction defects. This morning, the Supreme Court resolved that question in favor of the builders. The import of this decision is huge for those developing residential real estate in California as set out below.

The answer to this certified question (from the 11th Circuit to the Florida Supreme Court, Altman vs. Crum & Forster ("C&F"), SC16-1420) directly impacts Florida construction defect lawsuits and the cost of insurance. If a 558 notice (a mandatory pre-suit notice requirement in Florida expressly designed to provide a voluntary opportunity to resolve a construction defect claim "through confidential settlement negotiations without resort to further legal process") is not a "suit" triggering a defense, then those in the construction industry (builders, contractors, design professionals, etc.) might decline the pre-suit alternative dispute resolution process.

In Johnson v. Open Door Community Health Centers, decided on September 11, 2017, the California Court of Appeal held that the Medical Injury Compensation Reform Act's ("MICRA") (Code Civ. Proc., § 340.5) one-year statute of limitations for professional negligence applies only when the injury's legal cause relates to the "rendering of professional services," and not to ordinary negligence claims. This decision limits the reach of MICRA's one-year statute of limitations to injuries caused by a breach of a duty owed exclusively to the patient during the rendering of professional services, rather than the public at large.

In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, decided on June 19, 2017, the United States Supreme Court, in a majority opinion joined by eight justices and delivered by Justice Samuel Alito, reversed the California Supreme Court's decision to allow the state to exercise specific personal jurisdiction over defendant, Bristol-Myer Squib Co., in a mass tort action for injuries allegedly caused by their blood thinning drug, Plavix, to entertain the non-California residents' claims. As Justice Sotomayor notes in her dissent, this decision highly limits the ability of plaintiffs to consolidate their tort actions against a corporate defendant. As such, the Court effectively limits the reach of personal jurisdiction over a defendant in any state court in which the plaintiff's injury did not "arise out of or relate to" the defendant's contacts with that state.

The Americans with Disabilities Act, which was first enacted in 1990 (long before the Internet, smart phones, and social media ruled our world), recently joined us on the fast-paced trek into the digital age. The Southern District of Florida has put a new twist on traditional notions of ADA “accessibility” by ruling that Winn-Dixie's failure to make its website accessible to visually impaired users violates the right to accessibility contained in Title III of the Act. In Juan Carlos Gil v. Winn-Dixie, 2017 WL 2547242 (S.D. Fla. 2017), long-time Winn-Dixie patron, Juan Carlos Gil, a legally blind individual, brought suit against the grocer after finding that his commonly used screen reader software was not compatible with Winn-Dixie's website. Mr. Gil wanted to use the website to order his prescriptions online, as well as have access to digital coupons.

In a recent Appellate Court case, the Court held that a plaintiff/appellant's doctor's note, with no affidavit or testimony properly authenticating it, violates Rule 1:6-6 and cannot be relied upon to establish a disability under the New Jersey Law Against Discrimination (LAD). Furthermore, such evidence cannot be used to defeat summary judgment. The case is significant, as it raises the bar for a plaintiff's level of proof in disability discrimination cases. It also affirms a plaintiff's obligation to communicate his or her disability to an employer, as well as the duty to request a specific accommodation in order to make a successful failure-to-accommodate claim.

Executive decision makers typically rely on reports from managers, as well as their own observations and judgments, in making employment decisions. Based on the Baker court's ruling, decision makers should clearly document the reasons for their employment decisions, making it clear that the decision is not based on any discriminatory animus and is not in retaliation for an employee's protected act in order to avoid claims of personal liability against the decision maker.

In McCarrell v. Hoffman-La Roche, Inc., 2017 WL 344449 (Jan. 24, 2017), the New Jersey Supreme Court held that the New Jersey statute of limitations applied to a products liability claim brought by Andrew McCarrell, an Alabama resident, against, Hoffmann-La Roche, Inc. and Roche Laboratories, Inc., two New Jersey pharmaceutical companies. Under the New Jersey statute of limitations, the suit was timely, but under the Alabama statute, the claim was barred. Because Mr. McCarrell's complaint was timely, the New Jersey Supreme Court reversed the Appellate Division's dismissal of the action and reinstated the jury's verdict of $25,159,530.

The Colorado Supreme Court in In Re Goodman v. Heritage Builders, No. 16SA193, 2017 CO 13, --P.3d--, 2017 WL 778227 (Colo. 2017), held that third-party claims in construction defect cases are timely so long as the first-party claims are not time-barred and the third-party claims are brought either during the first-party litigation or within 90 days of judgment or settlement, regardless of whether the original statute of limitations or statute of repose on the original claim has expired. In other words, general contractors now have the ability to bring third-party claims against subcontractors without worrying about the two-year statute of limitations or the six-year statute of repose, and subcontractors arguably no longer have statute of limitations or statute of repose defenses in third-party actions.

In the continuing development of law in the interpretation of the California Right to Repair Act (California Civil Code sections 895, et seq (“SB 800”), the Fourth District Court of Appeal held on February 10, 2017, that a homebuilder must acknowledge a homeowner's notice of claim within the 14 day period provided in the statute, even if the Notice of Claim is insufficient under California Civil Code section 910. If the builder fails to provide a written response within this time, the homeowner is released from the requirements of the Act and can proceed directly to litigation.

Each year at this time, we look back at the cases, studies and other developments which have impacted mold personal injury litigation over the last twelve months. After more than a decade and a half of legal battles over which personal injuries can be attributed to mold exposure, the parties liable for those injuries, and the extent to which mold is a health risk, controversies remain.

This case is important to all participants in residential construction defect litigation as it outlines the burden of proof against a material supplier for violations of the residential construction standards within the SB 800 Right to Repair Act (Civil Code § 895, et seq.) Therefore, while the case specifically dealt with a direct claim by a homeowner association against a material supplier, the same burden of proof would be required for a cross-complaint brought by a developer or a subcontractor against the supplier. This ruling will make it more difficult to pursue claims against material suppliers by requiring a showing that the violation was caused by the material supplier's negligent act or omission or breach of contract.

This decision clearly recognizes that homeowners cannot abrogate a builder's right to repair their home simply by omitting a cause of action for violation of the Act. The court recognized that a builder has the absolute right to repair. This ruling furthers the right of builders throughout the state to repair homes to avoid litigation. There is no question that homeowners must first give notice of any defect related claims to the builder, and must afford the builder a reasonable opportunity to remedy the defects before they can file suit.

Last week, the California Supreme Court announced a decision that could modify the way big brokerage real estate firms handle business. In a case of first impression, the Court held that a brokerage company who represents both the buyer and the seller in a real estate transaction owes a fiduciary duty to both parties, even if different agents represent the parties. It is well settled law that an agent who represents both the buyer and the seller owes a fiduciary duty to both parties. In Horiike v. Coldwell Banker, however, the Court extended the fiduciary duty to brokerage companies.

Effective August 10, 2016, Colorado began enforcing C.R.S. §24-34-402.3: the Pregnant Worker’s Fairness Act. Under this Act, Colorado employers must provide a reasonable accommodation to employees who are pregnant, or who are recovering from childbirth. Notably, the Pregnant Worker's Fairness act applies to all employers, even those with only one employee, unlike the ADA which only applies to businesses with 15 or more employees.

The New Jersey Supreme Court, in an unpublished opinion, upheld a $2.5 million award to two brothers, including a combined $1.4 million in emotional distress damages, in an alleged race-based Law Against Discrimination (LAD) case. The holding is significant, as it confirms New Jersey's long-standing rule that courts must exercise remittitur, the power to reduce a jury's award, with great restraint, and that a jury's award is given deference, particularly because the jurors were attentive throughout trial, understood their charge, and carefully apportioned damages. Further, the decision rejected two methods previously used by the trial courts in deciding remittitur motions: the comparative analysis method, and the "feel for the case" standard, affirmed in He v. Miller, 207 N.J. 230 (2011).

The answer to this certified question could profoundly impact the number of construction defect lawsuits filed in Florida, as well as the availability and price of CGL insurance for contractors. If a 558 notice is not a suit triggering a duty to defend, those in the construction industry might decline meaningful participation in the 558 process, and instead invite litigation in order to secure their insurer's contribution. On the other hand, imposing a duty on insurers to defend during the Chapter 558 process would necessarily involve a significant outlay of attorney's fees and costs, potentially driving up premiums in the process.

On August 4, 2016, New Jersey's highest court affirmed a ruling that consequential damages resulting from a subcontractor’s faulty work constituted “property damage” caused by an “occurrence” under the property developer/general contractor’s commercial general liability policies pursuant to ISO's 1986 standard commercial general liability ("CGL") form. Cypress Point Condo. Ass'n, Inc. v. Adria Towers, L.L.C., No. 076348, 2016 WL 4131662 (N.J. Aug. 4, 2016). The Supreme Court's decision in Cypress is significant to carriers and policyholders alike, as New Jersey has joined the current majority of states holding that construction defects causing consequential damages give rise to an “occurrence” and “property damage” under the 1986 ISO CGL policy.

Indemnity clauses are a standard provision in nearly all consumer and commercial contracts. How the courts interpret the language of an indemnity clause will either substantially limit or broaden a party's liability and exposure. This case is important to anyone who is drafting indemnification provisions in a contract and demonstrates how important every word in an indemnity provision is when claims eventually arise.

On November 18, 2015, the Nevada Supreme Court issued two unpublished opinions regarding the enforceability of arbitration provisions in builder purchase agreements. These decisions contain several key holdings that clarify and/or expand upon existing law. Unfortunately, the opinions were unpublished and, pursuant to existing Nevada rules, cannot be cited as legal authority. However, these opinions provide insight as to how the Court would rule if these issues arise in the future.

The Washington State Court of Appeals held on August 10, 2015, that a termination for convenience provision in a private construction contract is enforceable where there is adequate consideration in the form of partial performance of the contract and payment for such work.

This case is important to builders in the State of Arizona because it effectively eliminates any claim that a subsequent homeowner may bring for negligence. Before this case, subsequent homeowners arguably had more rights than original homeowners for construction defects because the economic loss doctrine prevents original homeowners from suing for construction defects sounding in negligence absent personal injury or property damage, and the Statute of Repose is not applicable to tort causes of action. This case, coupled with the recent changes to Arizona’s Purchaser Dwelling Act, underscore a trend of making it more difficult for the plaintiff bar to successfully prosecute a claim for construction defect against the homebuilder.

Hospitals may not escape liability for its emergency room physicians and other independent contractor practitioners, despite giving notice of independent contractor status through admission papers, signage in emergency room, and insignia on clothing.

Starting January 1, architects and engineers will enjoy a shorter exposure period to tort claims arising from large commercial projects. Oregon Senate Bill No. 46 amends ORS 12.135, shortening the repose period for claims against architects and engineers from ten years to six years on large commercial structures, effective January 1, 2014.

This case recognizes and reinforces the burden plaintiffs must meet when claiming negligence in a slip-and-fall case.  

Every year at this time we look back at the cases, studies and other developments which have impacted mold personal injury litigation over the last twelve months. It has now been more than twelve years since the Ballard case in Texas first focused the media's attention on mold as the subject of civil litigation. The $32 million dollar jury verdict in that case, based on injuries allegedly caused by a commonly occurring organism, was striking. But like much of what is reported regarding mold claims, the truth was in the details. Ballard was an insurance bad faith case against the plaintiffs' homeowners' insurance carrier, not a traditional third party injury lawsuit. Less than two years after the $32 million dollar verdict was reached, a Texas appeals court cut it to $4 million.

Each year at this time we look back at the cases, studies and other developments which have impacted mold personal injury litigation over the last twelve months. After more than a decade of legal battles over which personal injuries can be attributed to mold exposure, and the type of evidence required to prove causation, Courts still struggle with these issues. This update highlights a key 2014 decision by New York’s Court of Appeals regarding the evidence necessary to prove causation, related decisions by other appellate courts which take contrary positions and a discussion of so-called “home brew” medical tests that are often the starting point for mold personal injury claims. Finally, we analyze how mold fits in with another litigation trend, the filing of so-called “habitability” lawsuits.

This case demonstrates that a builder can protect itself from all future claims under the Right to Repair Act for latent construction defects by negotiating a waiver of unknown claims (Civil Code 1542) in return for a cash settlement. As the Belasco court stated, plaintiff “and his attorney could have rejected the agreement to the extent it included a waiver of unknown claims, and their failure to do so in the face of express language referencing section 1542 establishes [plaintiff's] willful acceptance of the waiver.” Thus, after the settlement, plaintiff assumed the risk of unknown construction defects in his home.

Division Two of the Washington Court of Appeals offers vague direction regarding the requirement that a nexus exist between construction services provided after substantial completion and a construction defect claim, when determining whether the claim is stale.

On July 24, 2014, the Colorado Court of Appeals ruled in the matter of Minturn v. Definitive Renovations, upholding the trial court’s entry of Summary Judgment in favor of Wood, Smith, Henning & Berman’s client, Definitive Renovations.

This case expands the scope of design professionals' liability under California common law. The Supreme Court of California has held that, where a design professional plays a primary role in the design and construction of a project, a design professional may be held liable to ultimate purchasers even if the professionals lack privity with those third parties. A homebuyer or third party may now bring claims against such a principal design professional for negligence under common law tort theories and potentially for violations of the construction standards set forth in SB 800. On a larger scale, businesses should take note that the Supreme Court's action in this matter is representative of the growing trend in California to sideline privity as a requirement in negligence based actions.

Contractors and their counsel should take note of these two decisions, as they will affect the duration of contractors' exposure to construction defect claims under Oregon's statute of repose. In the absence of written acceptance, the ten year limitations period of Oregon Revised Statute ("ORS") 12.135 begins to run on the date on which the contractee accepts construction as "fully complete" as opposed to accepting the construction as "sufficiently complete for its intended use or occupancy."

In response to Colorado's lack of new owner-occupied, multi-family housing (i.e. condominiums) being built, it appears legislation will be introduced that, if passed into law, may affect not only how condominiums are developed, but may affect the entire landscape of construction defect litigation.

On February 11, 2014, the California Court of Appeal issued its decision in Prakashpalan v. Engstrom, Lipscomb and Lack, holding that two homeowners could sue their former attorneys for alleged mishandling of funds received from settlement of claims involving the 1994 earthquake. Significantly, the court held that despite the fact the alleged fraudulent conduct by the law firm occurred 16 years earlier, the statute of limitations does not bar late-discovered fraud claims.

On February 19, 2014, the California Court of Appeal, Second Appellate District, Division Three issued its opinion in Burch v. Superior Court, supporting the much criticized decision of the Fourth Appellate District, Division Three (Orange County) in the case of Liberty Mutual Insurance Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98, holding that the Right to Repair Act (California Civil Code § 895 et seq.) is not the exclusive remedy and does not limit or preclude common law claims for damages for construction defects that have caused property damage.

The most recent session of Colorado's general Assembly began on January 8, 2014. This is a highlight of the bills that have been introduced so far which we thought would be of interest to our construction clients

The Ninth Circuit Court of Appeals vacated a $9.3 million asbestos verdict, holding that the US District Court for the Western District of Washington erred in admitting expert testimony without undergoing a Daubert hearing and without making the necessary findings of relevancy and reliability under Federal Rule of Evidence 702.  It also held that a reviewing court can properly make findings related to expert testimony admissibility if it "decides the record is sufficient to determine whether expert testimony is relevant and reliable…"

On January 30, 2014, the Colorado Court of Appeals issued its decision in Taylor Morrison of Colorado, Inc. f/k/a Morrison Homes of Colorado, Inc. v. Bemas Construction, Inc. and Terracon Consultants, Inc.  The key issue in this opinion was whether the limitation of liability clause in the contract between Morrison Homes and Terracon was unenforceable pursuant to Colorado's Homeowner Protection Act of 2007 (the "HPA").