Real Estate, Land Use and Environmental Law Blog - Up-to-date information on Real Estate, Land Use and Environmental Law

Landale-Cameron Court, Inc. v. Ahonen (Oct. 10, 2007, B190309 [2^nd Dist., Div. 2]), ___ Cal. App. 4th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions

By Thomas B. Snyder and Andriana Ledesma

In Landale?Cameron, the homeowner's association of a condominium complex ("HOA"), discovered various water leaks to the building and subsequently sued the builder-developers Arnold and Helen Kaufman ("Kaufman") and Petri Ahonen dba Riteway Decking and Flooring ("Riteway") for negligence and contract causes of action.  Riteway moved for summary judgment on the grounds that the complaint was barred because it was filed after the expiration of the three-year statute of limitations for actions involving injury to real property under California Code of Civil Procedure Section 338.

Shepard v. Edward Mackay Enterprises, Inc., et al., --- Cal. Rptr. 3d ---, No. C052564, 2007 WL 853456 (Cal. Ct. App. Mar. 22, 2007)

While Section 1298.7 of the California Code of Civil Procedure generally allows homebuyers to pursue defect litigation in court regardless of an agreement to arbitrate, the Third District Court of Appeal recently ruled the Federal Arbitration Act preempts California law and binds homebuyers to arbitration provisions when the transaction involves interstate commerce.  Because homes built in California today likely incorporate at least some construction materials originating outside the state and therefore implicate interstate commerce, the court's ruling may effectively preclude homebuyers from relying on this section of the Code of Civil Procedure to avoid arbitration.

Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4^th

By Thomas B. Snyder

In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD").  It subcontracted the electrical work to Titan Electric on both projects.  Partway through performance, Titan began to struggle with its payroll obligations and Kemp agreed to informally advance payments to Titan to assist in completing the work.  When problems continued, Kemp stopped the advance payments and Titan was unable to meet its payroll.  Kemp then retained another electrical subcontractor who completed the work.  Simultaneously, Kemp requested that the LAUSD approve Titan's substitution as the listed subcontractor under Public Contracts Code Section 4107, arguing that Titan was failing and refusing to perform its work and/or delaying or disrupting the progress of the work.  The LAUSD hearing officer agreed that Titan had been disrupting and delaying the work and therefore determined that Kemp had the statutory right to substitute Titan.

Barton Properties, Inc. v. Superior Gunite Corp., California Court of Appeal, Second Appellate District (not officially published)

In an unpublished decision, Barton Properties, Inc. v. Superior Gunite Corp, the Second Appellate District of the California Court of Appeal has held that a "continued performance" clause in a construction contract was rendered unenforceable by the owner's material breach of contract. The clause at issue provided that in the event of the dispute between the parties, the contractor would

Michael v. Denbeste Transportation, Inc. California Court of Appeal, Second Appellate District

By Robert T. Sturgeon

Defendant Denbeste Transportation, Inc. hired plaintiffDavid Michael as an independent contractor to haul hazardous waste from a construction site. Michael was injured when he fell from his truck while attempting to roll a tarp over the top of the trailer to cover the load. Michael sued various parties for his injuries, including Denbeste; Chemical Waste Management, Inc. ("CWM"), the party that had hired Denbeste; Aman Environmental Construction, Inc. ("Aman"), the general contractor on the project and the party who had hired CWM; and Secor International, Inc. ("Secor"), a consultant to the project owner. Michael alleged the defendants owed him a duty of care under the peculiar risk doctrine, which provides that a party who hires a contractor to perform inherently dangerous activities can be held vicariously liable for tort damages when the contractor's negligence causes injury to others. Michael alleged the defendants had breached their duty by not providing fall protection while he was covering the load.

Greystone Homes, Inc. v. Cake37 Cal. Rptr. 3d 183 (2005)

By Matthew W. Holder

The California Court of Appeal recently affirmed a 2004 Supreme Court decision that impacts when prevailing wages need to be paid on projects where the contract was signed before January 1, 2001. At issue in Greystone Homes, Inc. v. Cake, 37 Cal. Rptr. 3d 183 (2005), was whether a 134-unit housing development project constituted a "public work," and thus required the payment of prevailing wages. The awarding body for the project was the Pleasant Hill Redevelopment Agency (the "Agency"). The Agency had contributed three forms of public funds to the project:

1. it had conveyed one parcel of property (out of 29 total parcels used) to the developer for use in the project
2. it paid a $200,000 "Traffic Impact Mitigation Fee" to the developer, and
3. it reimbursed the developer for upwards of $2.5 million in land acquisition costs. The total estimated cost of the project was $31.3 million.

McCrary Construction Company v. Metal Deck Specialists, Inc., California Court of Appeal, First Appellate District, November 14, 2004

By Robert T. Sturgeon

In McCrary, a general contractor sought indemnity from two of its subcontractors for damages arising from the death of a construction worker who fell through a hole in the metal roof of the project. One subcontractor, Metal Deck Specialists, Inc., was responsible for installing the metal deck system on the roof, and had cut the hole in the roof and left it uncovered. The other subcontractor, Horizon Sheet Metal Co., covered the hole with plywood at the request of the general contractor, but failed to secure the plywood to the metal decking. The accident occurred when the worker lifted the plywood up, and not realizing there was hole beneath it, stepped into the hole and fell to his death.

BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc.
119 Cal. App. 4th 848 (4th Dist. Jun. 21, 2004)

A school district contracted with an architect for construction of a high school and contracted with two general contractors for the same project. The District filed claims for breach of contract and professional negligence against the architect, who filed a cross-complaint against both general contractors. The architect sought equitable indemnity for the contractors' alleged failure to perform work in a timely manner, thus delaying the project and causing the architect damages.

The trial court sustained the contractors' demurrers without leave to amend and the Court of Appeal affirmed, finding that there is no basis for equitable indemnity where no action sounding in tort is alleged. The doctrine of equitable indemnity is "based on a duty owed to the underlying plaintiff." Here, where designer's allegations flowed only from contractors' alleged breach of contract, the designer's claims were "an improper attempt to recast a breach of contract cause of action as a tort claim."