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Construction
Defect Seminar Largest Of Its' Kind A sea of suits. Attorneys from four Western states gathered for an annual event that has grown into the largest such conclave of it's kind – and a telling reminder of how far the pursuit of construction defect litigation has come in the last ten years. West Coast Casualty's Construction Defect Seminar was held May 13 and 14 in Anaheim, California. Attorneys, judges, insurers, claims managers, and construction "experts" shared insights about the state of construction in the West – with one fact plainly in evidence: Wherever there's construction, there will be construction litigation. |
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The seminar was so large that the entire convention space
of the Disneyland Hotel was overrun by conventioneers. The seminar space was the
entire hall, with giant video screens set up to display speakers to those who
otherwise would strain to see a pinpoint of talking head. More than 1400
attendees were reported, with a series of panel discussions on topics that
highlight the current state of construction litigation in Nevada, California,
Arizona and Colorado.
Spotlight On Nevada Nevada's situation received special attention with a panel discussion that included members of the Clark County Eighth Judicial District Court. Judges Nancy Saitta, Michael Cherry, and Alan Earl handle construction defect cases in Southern Nevada, and spoke about class certification issues and the effects of a Nevada Supreme Court decision will have on the issue. Olsen V. Richard was decided May 12, and brings negligence and tort actions back into construction litigation. The Calloway V. City of Reno decision declared that houses are not "products," and barred claims under strict products liability. Homeowners sought relief under breach of contract. Charles Litt, an attorney with Feinberg, Grant, Mayfield, Kaneda and Litt, said the decision really didn't change anything and may help clarify certain situations. "I don't see things as being tremendously different," Litt said. "By having negligence as the cause of action, it helps preserve the contractor's coverage." The judges agreed that guidelines for opt in/opt out and extrapolation are needed to further streamline the process. Long Range Solutions Nevada Insurance Commissioner Alice Molasky-Arman and Cliff King of the Nevada Division of Insurance were at the conference to address Nevada's efforts to "finding long range solutions" to the litigation ills suffered by the construction industry. Molasky-Arman said that over a 10 year period, the population of Nevada increased 66 percent, with home ownership rising almost 70 percent. The Commissioner said that there are a number of web sites offering misinformation to consumers about construction defect issues. In 2001, Molasky-Arman created the Construction Liability Task Force in 2002 to seek answers to growing questions about the availability and affordability of general liability insurance for construction risks. The Task Force made recommendations, many of which were adopted and passed as part of SB 241. Molasky-Arman also released results from a survey conducted by the Nevada Surplus Lines Association of 305 contractors in Nevada. 42 percent reported still having trouble obtaining affordable coverage; 73 percent said price was a major barrier to getting coverage; 13 percent had been named in a construction defect lawsuit, and 50 percent were aware of SB 241. It was further noted that many contractors have noticed a positive change in being able to get a quote – although the pricing was prohibitive to accepting coverage. Legislative Seminar Focused On Right To Repair California, Nevada and Arizona have all passed "right to repair" legislation, yet litigation over construction defects has yet to subside. Attorney William A. Nebeker, a construction defense attorney with the law firm Koeller, Nebeker, Carlson and Haluck, said that construction litigation in Arizona is still in its infancy. He likened current Arizona litigation as being like Nevada 10 years ago. Arizona is experiencing explosive growth, according to Nebeker. "Basically, you'll have homes all the way (from Phoenix) to Tucson eventually," he said. Arizona's "Fix it Law" was passed in 2002, and sets out to define what needs to be done and allows the builder time to fix those problems. Prior to the statute, there were no provisions for expert witness fees. Now there are. Class certification and extrapolation are the big issues facing Arizona lawmakers in the near future. Nebeker said that Arizona now has a panel of three judges to hear construction defect cases, and that subcontractors in the state are pushing for a bill that would disallow "additional insured provisions" from being required under a subcontract. Nevada Law Joe Kaneda, of Feinberg, Grant, Mayfield, Kaneda and Litt, went over Nevada's SB 241 and how it affected Chapter 40. Kaneda predicted a "wait and see" approach to legislation during the 2005 session. Extrapolation and a revamping of corporate dissolution statutes are on the agenda for Nevada lawmakers in 1005, according to Kaneda. Current law allows a corporation to dissolve and become immune from any and all lawsuits after a two year period. The plaintiff's bar is planning legislation to lengthen that time frame for construction firms. |
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