Posts Tagged ‘Florida’

Around the Web in Construction Law – May 13, 2010

For some time in 2009, the Construction Law Monitor published an “Around The Web” post each Friday, highlighting some of the top construction law updates around the web that week.   We’ve fallen off the wagon a bit in recent months, but we’re doing our best to bringing the feature back.

A lot of the Around The Web material will come from my personal Google Reader Shared Items Feed. You can subscribe to its RSS directly.

Here’s what we’ve been following ( and talking about) for the past few weeks:

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Great Avvo Legal Guide Available With Information on Florida Lien Laws

Florida attorney Neal Ian Sklar just this week published a really informative Legal Guide about Florida Construction Liens over at the lawyer rating website, Avvo.com.

The guide starts out by identifying the “dual purpose” of Florida’s construction lien statutes. While the author is speaking about Florida law only, the “dual purpose” breakdown is really applicable across the country.

What is this dual purpose?

Well, on the one hand, lien statutes are crafted to protect contractors, subcontractors, suppliers and design professional’s right to get paid for work put into a project. The law, in other words, doesn’t want a property owner to benefit from the improvements to property without paying the folks who put the time and materials therein.

You may be thinking “of course.”

The other purpose is a bit more hidden in the statutes. That purpose is to protect property owners from having their property improperly or unreasonably encumbered.

To balance these two purposes, lien laws across the country can sometimes feel schizophrenic.

Neal’s legal guide over on Avvo discusses the Florida lien laws in this context, and he does a good job of explaining how the two purposes are served by the Florida statutes.

While lien laws vary from state-to-state, understanding the “dual purposes” of these statutes provides contractors, subcontractors, suppliers and others a big picture understanding of how these statutes work…which, although each state’s laws are different, gives them a good grasp on the general rules they’ll need to follow to successfully use the laws.

And when a state’s specific requirements are needed…consult a great legal guide like Neal’s.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.

Posted in:     Around The Web, Filing Requirements, From The Experts  /  Tags: , , , , ,   /   Leave a comment

Making Money Off Chinese Drywall – Know the Legal Risks and Contact Counsel

Once the Chinese Drywall story began dominating news in the construction industry, attorneys, contractors, scientist and inspection outfits naturally looked to cash in on the crisis.

The rush to capitalize on the new demand for drywall inspections and replacement lead Florida’s Palm Beach Post to headline one of its articles on the topic “There’s gold in them there walls.”

While filling a void for services in demand is good, and profitable, those rushing to the aid of Chinese Drywall victims should analysis the legal risk of their new ventures to ensure they aren’t over-exposed and one-day facing expensive litigation and claims.

Here’s a breakdown of some of the legal risk associated with these new ventures.

No Puffing

puffing n. the exaggeration of the good points of a product, a business, real property, and the prospects for future rise in value, profits and growth. Since a certain amount of “puffing” can be expected of any salesman, it cannot be the basis of a lawsuit for fraud or breach of contract unless the exaggeration exceeds the reality. However, if the puffery includes outright lies or has no basis in fact (“Sears Roebuck is building next door to your store site”) a legal action for rescission of the contract or for fraud against the seller is possible.

The Florida Attorney General has already issued a consumer alert for scam artists trying to capitalize on Chinese Drywall problems, and other state’s are likely to follow suit with similar warnings.

While your business may not be a scam, the AG warnings and news reports on related scams will heighten the concern of your customers…and may make your customers over-sensitive to unfulfilled promises of your product or service.

Your company may eventually be exonerated from a complaint to the Attorney General’s office, but it will be subjected to the complaint, incur expense, and possibly find itself with negative press.

To avoid these legal troubles, tell things like it is with your produce and service, and try to avoid “puffing.”   It would also help to have an attorney go through your promotional materials and ensure that you are not misrepresenting your company’s services.

Know the Unknown

Here is a fact:  it’s impossible to know the unknown.   So, why are we suggesting that you do know the unknown?   Because we’re suggesting that you simply know that the unknown is there.

And with Chinese Drywall…there is a lot of unknowns.

Anyone setting up a business to remedy, repair, inspect or investigation Chinese Drywall should realize that experts just aren’t yet sure of what causes Chinese Drywall, or how to find it and properly replace it.

If your company purports to repair Chinese Drywall problems, be cautious that a coating may or may not do the trick, that the drywall may or may not need total replacement, and that other building elements may be affected.   With the homeowner’s health and integrity of the property at possible risk, incorrect moves can expose you or your company to substantial damages.

Knowing the unknown involves two steps:

- Take inventory of the unknowns associated with your concept; and

- Legally protect yourself with disclaimers, good contracting and clear communication.

Consult Legal Counsel

Since scam artist have increased consumer sensitivity, the legal risks are high and the unknowns are plenty, it’s worth discussing your business plans with counsel.

Through advice and help with contracting, an attorney competent in construction law can help protect your company against liability risks it proceeds to provide services to a new and unpredictable customer.

Learn about good general contracting practices at our firms general construction law blog, the Construction Law Monitor here.

Also, Wolfe Law Group would be happy to review your company’s business model to advise you of its inherent risks, and to help craft a contract that can communicate the risks to the consumer and best protect your business from liability.  Contact us to learn more.

This post originally appeared on Wolfe Law Group’s topic-specific Chinese Drywall Blog.
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Homeowner Sues Their Homeowners Insurer for Chinese Drywall Defects

On the Chinese Drywall Blog, we’ve talked about class action suits, individual suits against builders and suppliers, suits by builders against its suppliers, and other similar actions.

However, in Florida, one couple seeks to hold another party liable for their Chinese Drywall damages:  their own homeowners insurer.

The claim makes a great deal of sense, and it adds to the mystery of who will eventually be responsible for the Chinese Drywall damages.

The suit was brought in a Florida U.S. District Court, and is captioned Baker v. American Home Assurance Company, Inc., Middle District of Florida, No. 09-cv-188-FtM-99DNF.  (read here)

According to the complaint, the homeowners made a claim in December 2008 related to damages caused by Chinese Drywall.  The complaint describes the cause of the damage as coming from “drywall…emitting gases which have damaged the Subject Property and the contents therein.”

After inspection and testing, the insurer denied the claim for “contamination.”     The Baker complaint argues that the damages were not caused by “contaminants” as defined by the policy.

The policy at the center of the Baker action defines “contaminates” as follows:

An impurity resulting from the mixture of or contact with a foreign substance.

According to the complaint, there was not ‘mixture or contact with a foreign substantance,’ and therefore, the pollution exclusion would not apply.

The Baker exclusion is far less detailed then some of the other pollution exclusions found in Commercial General Liability policies…and therefore, may be interpreted differently.

If pollution exclusions in homeowners policies are generally less complex than GCL policies, it may be prudent for homeowners to make timely claims against their homeowner policies if they are faced with Chinese Drywall damages.

It’s too early to predict exactly who will be responsible for damages associated with Chinese Drywall, especially since so many parties are involved.   To rely simply on one remedy (i.e. a class action) is probably an irresponsible choice for homeowners faced with significant damages.

We’re likely to see a flood of suits in the coming months against builders, home insurers, suppliers and other responsible parties.   Home insurance policies will likely file subrogation claims against builders, suppliers and other parties as well.

We’ll monitor the Baker suit as it proceeds.  Stay tuned.

Posted in:     Insurance  /  Tags: , , ,   /   1 Comment

What’s In the Drywall?

There is so much talk about tainted drywall, and homebuilders are getting pretty familiar with the problems caused by Chinese Drywall.   Over the past few weeks, however, there has been very little information about what is exactly wrong with Chinese Drywall.

Finally, there is some news about this issue coming out of Florida (who, of course, has been monitoring the problem the longest).

Last week, Florida released the findings of its drywall investigation conducted by Unified Engineering, a private lab.  Lori Streit, a principal scientist with Unified, had this to say in a letter about the findings:

There is a distinct difference in drywall that was manufactured in the United States and those that were manufactured in China.  The Chinese samples contained traces of strontium sulfide inclusions and more organic material than the GridMarx sample (United States). However, it is not yet known if either contributed to the odor.

While the findings are only a “first step” in what could be a months-long investigation, according to Florida state toxicologist Dr. David Krause, the preliminary findings did at least appear to contradict assertions that waste products from coal-fired power plants were to blame.

More is certainly to come on this topic, but at least folks are now not in complete darkness.

Posted in:     Chinese Drywall  /  Tags: , , ,   /   4 Comments