Case Updates Archive

A new mass tort faces America's residential builders, their underwriters and others with an interest in the construction industry: Personal injury claims resulting from chronic exposure to the alleged off-gassing of sulfur compounds from imported Chinese drywall. This issue has now been the subject of numerous features on network television and articles in newspapers.

Architects and engineers must be aware when entering agreements to perform design work that a variety of potential claims may be asserted against them. These may be attributed to alleged design flaws, budget overruns, on-site accidents or even building collapse. With the economic down-turn, problems of delay claims and cost over-runs and claims of construction defects and consequential damages are increasing dramatically.

Two recent decisions from the California Court of Appeal have created uncertainty regarding the defenses that defendants can rely on in asbestos and other toxic tort cases. In the most recent case, O'Neil v. Crane Co., Case No. B208225 (September 18, 2009), the Court of Appeal reversed the granting of a motion for non-suit in an asbestos-wrongful death case. Decedent Patrick O'Neil died of mesothelioma in 2005. His wife and children sued the manufacturers of pumps and valves that were installed on an aircraft carrier on which O'Neil had served as a Naval officer in the 1960s. Following the close of plaintiffs' evidence, the trial court granted the manufacturer's motion for non-suit.

It is well accepted within the medical community that mesothelioma is primarily caused by exposure to asbestos. Asbestos is a natural mineral made popular by its toughness, flexibility, and resilience to heat. Asbestos can be woven into most products and was typically found in brake pads, transit pipes and panels, plaster, insulation and a variety of other products.

It is well accepted within the medical community that mesothelioma is primarily caused by exposure to asbestos.2 Asbestos is a natural mineral made popular by its toughness, flexibility, and resilience to heat. Asbestos can be woven into most products and was typically found in brake pads, transit pipes and panels, plaster, insulation and a variety of other products.

In cases governed by Colorado's Construction ("CDARA"), subrogation claims arising from construction defects accrue and the two year statute of limitations for such claims begins to run when the physical manifestation of the defect appears, even though the cause of the defect is not known at that time, and even though the insurer may not have paid the claim until much later. See CRS §13-80-104.

SB 972, which applies to all contracts entered into on or after January 1, 2011, provides refuge from burdensome liability to California construction design professionals entering into contracts with public agencies.

The situation is commonplace: Plaintiffs in a toxic tort case name a score of manufacturers as defendants and list 34 chemical products in their
complaint. Although specific products are identified, the balance of the allegations are vague, describing the injuries as resulting from exposure to "organic solvents . . . and other toxic chemicals." Despite the limited facts in the com‐plaint, plaintiffs seek to recover on causes of action for strict liability, fraudulent concealment and breach of warranty.

In an action brought by an independent contractor against the general contractor for personal injuries sustained on a jobsite, the California Court of Appeal found a triable issue of fact as to whether the general contractor may be directly liable to the independent contractor on the theory that the general contractor retained control over safety conditions at the jobsite and that control affirmatively contributed to the independent contractor's injuries.

On February 28, 2011, the Colorado Supreme Court issued a decision in the case of Ferrellgas, Inc. v. Ellen Yeiser which helped define the law in a number of areas. First, the case holds that the law of subrogation trumps the collateral source rule in determining if a defendant will get an offset for a subrogation settlement.

The California Fifth Appellate District Court of Appeal recently handed down a decision which significantly impacts a home builder's right to repair construction defects. 

The provision in a commercial general liability insurance policy requiring the insurer to "defend the insured against any 'suit' seeking. . .damages" includes the duty to defend the insured in proceedings under the Calderon Act (California Civil Code § 1375, et seq.)

Under the peculiar risk doctrine, a general contractor cannot be held vicariously liable for job site injuries suffered by an independent contractor, even if the independent contractor is not an employee and so is not entitled to receive workers compensation benefits for the injuries.

In a stop notice claimant who has relied upon seemingly correct lender information provided by an owner and/or general contractor is not required to provide proof of checking the county records (i.e., building permit and recorded deed of trust) in order to prove that when it served the preliminary 20-day notice on the wrong lender it held a good faith belief that the "reputed" construction lender was the actual construction lender.

On December 18, 2009, in Suarez v. Pacific Northstar Mechanical, Inc., the California Court of Appeals created a duty mandating employers at multi-employer construction sites to report hazards at the site to which its employees have been exposed. The duty applies to all hazards at the site whether or not the employer installed, worked on or was otherwise responsible for the condition. Under California law, an employer who breaches such a duty is liable in tort.

The California Court of Appeal's decision on December 2, 2009 in Tarrant Bell Property, LLC v. The Superior Court of Alameda County and Spanish Ranch I, L.P. v. The Superior Court of Alameda County gives the trial court discretion in determining whether to enforce a judicial reference provision in the agreements between the owners of a mobile home park and the residents. The court specifically noted that this breadth of discretion did not exist where the agreement required arbitration.

A decision issued on November 24, 2009 by the Second District of the California Court of Appeal may substantially aid defendants seeking to challenge allegations of injury due to secondary exposure to chemicals and other toxic substances. It may also assist defendants in defending all toxic tort claims filed in California.

As we do at the beginning of each year, we are forwarding our 2009 annual mold litigation update. These updates have chronicled the rise and fall of mold litigation during the last decade.

This recent California Court of Appeals decision held that though the statute of limitations generally begins at the date of completion, developers may have a safe haven by completing construction projects but maintaining possession of properties until the market improves. The court rejected the plaintiff homeowner's argument that because the developer continued to own the home for a 16-month period before sale, the 10-year statute was tolled.