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Construction Law Authority / Construction Defects

Becker & Poliakoff Wins Multi-Million Dollar Jury Verdict In Landmark Construction Case

Jury Finds Subsidiary of National Developer Hovnanian Enterprises Inc. Liable for Breach of Contract and Violation of the New Jersey Consumer Fraud Act MORRISTOWN, NJ & FORT LAUDERDALE, Fla. – June 5, 2017 – Becker & Poliakoff secured a landmark $9 million-plus jury verdict Thursday against a subsidiary of Hovnanian Enterprises, Inc. (NYSE: HOV). The award includes punitive (treble) damages for violation of the New Jersey Consumer Fraud Act and also entitles the plaintiff to recover attorneys’ fees, costs and prejudgment interest. The jury found that Hovnanian Enterprises used the subsidiary as an instrument to commit a fraud or injustice on purchasers of condominium units. The ultimate recovery against all parties, including the project architect and geotechnical engineer, could exceed $20 million. After a six-week trial in New Jersey Superior Court (Docket No. HUD-L-2560-13), the jury agreed that Hovnanian, after learning that the condominium building was being improperly constructed with plywood flooring...

Multifamily Construction Defect Claims (Part 2)

In this 2 part blog post I wanted to touch on some basics of the typical “multifamily” construction defect case. Whether the project is a condominium, apartment, assisted living facility or hotel they share many of the same issues.  There are six primary considerations in bringing these claims but each of those has many subparts which depend on specific facts of the project.  Considerations 1 to 3 are here. The fourth consideration is the type of recovery available.  Generally the cost of repairing the defective condition is the damage that can be recovered.  In the event that such repair would be economically wasteful courts may consider diminution of value to be a valid damage.  In addition, depending on the type of property there may also be lost rents, lost profits claims for the time that the property was not able to be used for its intended purpose or for partial loss...

Multifamily Construction Defect Claims (Part 1)

In this 2 part blog post I wanted to touch on some basics of the typical “multifamily” construction defect case. Whether the project is a condominium, apartment, assisted living facility or hotel they share many of the same issues.  There are six primary considerations in bringing these claims but each of those has many subparts which depend on specific facts of the project. The first consideration is who is the true owner and is that entity able to recover for the defective construction.  Is there a condominium association or building owner? Maybe it is the hotel or facility operator that is the aggrieved party or is the developer of the building?  Knowing who has the rights to make the defect claims is a critical first step. The second consideration is to determine against whom any claims may be asserted.  Is there a claim against the developer of real property who designed, built...

2015 Chapter 558 Legislative changes

As previously noted, House Bill 87 modified some of the requirements of Chapter 558, Florida Statutes.  The statute was recently signed by Governor Rick Scott and the changes will take effect Oct. 1. The original intent of Chapter 558, enacted in 2003, was to require compliance with a mandatory pre-suit process before claims for construction defects could be brought in court.  Originally the claims subject to Chapter 558 were limited to residential defect claims but now include all residential and commercial project claims for defects.  All public projects are also included except for projects involving the Florida Department of Transportation.  In my experience the pre-suit process does not resolve many claims and add barriers and costs to owners and end-users.  A cynic might believe that the statute is working as intended. Chapter 558 requires written notice from the claimant to the construction or design professionals believed to be responsible for defects or...

New Case: Cypress Fairway v. Bergeron Construction (Statute of Repose)

Interesting opinion issued last week by the Florida's Fifth District Court of Appeal on the statute of repose.  The opinion can be found here.  It is not yet final. The Cypress Fairway Condominium was a conversion condominium.  The suit was brought by the Association "individually" and also as assignee of claims by the general contractor.  Suit was filed against parties involved in the original construction and also the conversion. Suit was filed on February 2, 2011. There is no reference to when the certificate of occupancy was issued.  Rather, the last non-settling defendant argued that the statute of repose period began when application for final payment was made on January 31, 2001, which was they argued was the completion date of construction.  The Association argued that the repose period did not begin until February 2, 2001, when final payment was actually made.  The trial court granted summary judgment to the defendant on...

2015 Florida Construction Legislation Update

The regular Florida legislative session is almost concluded.  The House adjourned on Tuesday and the Senate is in session until Friday.  A special session to address the state budget is expected but not yet set.  I previously addressed two construction related bills being considered this year: HB 87/SB418 related to construction defects, as noted here, and HB 501/SB 1158 related to shortening the statute of repose from 10 years to 7 years, as noted here. The Chapter 558 bill, HB 87, was amended to address many of the concerns raised in my prior blog post.  The amended bill passed the House on a vote of 112 to 0. The House bill was substituted for the “companion” Senate bill, SB 418, and passed 35-4.  The bill will be sent to the Governor for his consideration. The Governor will have 7 days to veto, sign or allow the bill to become law without...

HB 501 Passes Civil Justice Subcommittee

HB 501 to reduce the statute of repose in construction cases was heard by the House Civil Justice subcommittee.  There was an amendment to the bill to allow any claims that are currently over 7 years, but less than 10 years, to have until July 1, 2016, to file suit.  This “savings clause” is similar to the one used in 2006 when the statute of repose was then reduced from 15 years to 10 years.  The bill passed the subcommittee on a vote by 8-6.  For those interested in watching the hearing you can do so here beginning at the 7:18 mark.  Special recognition to Ronald Woods, P.E. of Woods Engineering and Tom Miller, P.E. of Structural Engineering and Inspections, Inc. for appearing and speaking out against the bill....

Proposed Legislation Will Hurt Owners by Shortening Timeframe to Bring Claims

In addition to the proposed legislation to substantially change Chapter 558, link here, the Legislature is considering other legislation that will materially impact owners and taxpayers.  HB501 proposes to reduce the time owners have to pursue construction defect claims from 10 after completion to 7 years after completion.  Specifically, the proposed legislation reduces the time frame within which a claim can be brought for latent defects (a defect you did not know about or had no reason to know about) in the design, planning or construction of improvements to real property from the current 10 years to 7 years.  This reduction of time to pursue claims apply to claims where the building code was violated.  Why should Florida provide less protection to owners when historically, and now again, the biggest building booms have been occurring in Florida.  Even the AIA Form Agreements, not always owner friendly, provide for a 10 year...

Proposed Legislation to change Chapter 558

The Legislature will be considering legislation this year to change Chapter 558, Florida Statutes.  Chapter 558 is  required process for any party seeking to pursue claims for construction defects.  The original goal of Chapter 558 was to provide an opportunity to settle defect claims without litigation or arbitration, and not to create another source of dispute or litigation.  This bill is contrary to that original intent. The proposed bill would create new rights and defeats any realistic hope to amicably resolve claims as more fully explained below.  These changes, if enacted, will negatively impact all owners of construction improvements including hospitals, doctor's offices, school buildings, condominiums, single family homes and commercial buildings.  The proposed legislation can be found here and the specific problems are noted below. Lines 66-76: Requiring the notice to specify the location of each alleged defect is impossible relative to any structure of any size.  To require a claimant...

The Anatomy of a Water Leak

For those of us who live or work in a condominium, it is easy to lose sight of all of the infrastructure that operates behind the scenes to make a condominium a home.  When that infrastructure fails, it can be inconvenient, or it can easily be disastrous in the case of a water leak.  While the damage from a water leak can be immense, there are ways to avoid or at least reduce the impact from them, if you are proactive before and after they occur, and know your rights and responsibilities.   Taking steps like establishing inspection, maintenance and replacement schedules, and installing water leak detection systems, air conditioner pan alarms and remote sensors wired to master valve shut-offs can prevent problems from becoming a disaster.  In the event of a water leak, condominium associations should take advantage of their right to access units to protect common elements and other units,...