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Construction Law Authority / Posts tagged "litigation"

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 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...

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...

Matthew Meyers Joins Becker & Poliakoff to Expand Construction Litigation Practice in Morristown, NJ Office

MORRISTOWN, NJ, September 3, 2014 -- Becker & Poliakoff has expanded its construction litigation practice in New Jersey with the addition of attorney Matthew Meyers to its Morristown office. Mr. Meyers specializes in commercial litigation, with an emphasis on complex construction defects and real estate disputes. In such cases, he has recovered nearly $50 million in claims on behalf of New Jersey condominium associations in the last five years, including the successful settlement of a contentious waterfront controversy in Northern New Jersey. Mr. Meyers has been recognized numerous times by Thompson Reuters' SuperLawyers, which lists lawyers who have achieved a high degree of professional achievement. He was honored in the 2012, 2013 and 2014 editions with "Top Lawyers in New Jersey" in the area of construction litigation. He also frequently lectures on construction defect litigation issues to various organizations, including the New Jersey Institute for Continuing Legal Education, the Associations of Owners and...

Florida courts’ application of the “new” economic loss rule since Tiara Condominium Ass’n, Inc. v. Marsh & McLennan, Cos., Inc.

The Florida Supreme Court’s March 7, 2013 decision in Tiara Condominium Ass'n, Inc. v. Marsh & McLennan, Cos., Inc., 110 So. 3d 399 (Fla. 2013), limited application of the economic loss rule [a judicially created doctrine that sets forth the circumstances under which a tort claim is prohibited if the only damages suffered are economic losses] to product liability matters. So, how have Florida courts analyzed the application of the economic loss rule since this March 7, 2013 decision? In short, Florida courts appear to be allowing non-contractual claims, such as fraud, negligence, negligent misrepresentation, and breach of fiduciary duty to proceed, notwithstanding the existence of a contractual relationship. F.D.I.C. v. Floridian Title Group Inc., 2013 WL 5237362 (S.D.Fla. Sept. 17, 2013).(denying a defendant’s motion to dismiss breach of fiduciary duty and negligence claims based upon the economic loss rule and rejecting an argument that these claims were in reality inextricably intertwined...

Consequential Damages in Green Construction Lawsuits

By Mark J. Stempler

A primary concern in any lawsuit involving green construction is damages.  One party will claim it has been harmed and will typically demand money or specific performance.   There are different types of damages that can be sought including actual damages, future damages, punitive damages, and consequential damages.  That last category raises some unique issues in a green building lawsuit.
 
Consequential damages are typically defined in Florida as those that do not necessarily, but may directly or indirectly, result from the injury for which compensation is sought.  Consequential damages can include items like loss of use, lost profits, loss of rental income, etc.  These are all issues in the green building context too, but determining the value of these damages may be more difficult to define.  For example, suppose an owner is seeking green building certification for an apartment complex.  If the contractor or other professional responsible for attaining such certification does not get the certification, the owner may be entitled to consequential damages for lost rent for the units.  But, the owner could encounter difficulties in proving the amount of damages.  The owner likely believes that green buildings command higher rents than non-green buildings, but that is not guaranteed.  The burden will be on the owner to prove what that added value would have been.  Or, if the failure to achieve the green certification cause the owner to miss related tax credits or grants, the owner may have a claim for those values.  It will, of course, depend on what representations were made in the contract.  In fact, the loss of tax credits was the issue in one of the first reported green construction lawsuits.  In that case, which eventually settled, the contract contained a waiver of consequential damages.  Another potential scenario is when the project does not deliver the energy cost savings promised to the owner, or promised by an owner to a tenant for example.  Those lost savings may also provide a basis for a consequential damages claim.  These examples illustrate the need for clear and specific language in a construction contract regarding each parties’ representations, expectations and responsibilities.

Florida adopts the Daubert standard for admissibility of expert testimony

Experts can play an integral role in construction disputes. At times construction litigation becomes a battle of the experts. Consequently, it is important to use an expert(s) that is not only well versed in his or her field, but an expert who is also able to provide admissible expert opinions in litigation. With the passage of House Bill 7015, effective July 1, 2013 and amendment of Florida Statute § 90.702 (Testimony by Experts), Florida has abolished the former Frye standard for the admissibility of expert testimony. See, Frye v. United States, 293 F. 1013 (D.C.Cir.1923), adopted by the Florida Supreme Court in Bundy v. State, 471 So.2d 9 (Fla.1985). The prior version of Florida Statute § 90.702 provided that: 90.702 Testimony by experts.—If scientific, technical, or other specialized knowledge will assist the trier of fact in understanding the evidence or in determining a fact in issue, a witness qualified as an expert by...