Construction Defect Archives

NJ CONSTRUCTION LIEN BARRED BY BANKRUPTCY AUTOMATIC STAY

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Jul 26, 2017.

In a recent opinion, the Third Circuit Court of Appeals held that the automatic stay of claims against a bankrupt contractor barred the filing of an electrical supplier’s NJ construction lien against the project real estate. The decision points out how differences between state lien statutes can affect the rights of lien claimants where a bankruptcy has been filed. In In Re Linear Electric Company, Inc., a prime electrical contractor filed a bankruptcy petition.  After the petition had been filed, two electrical suppliers to the bankrupt contractor filed New Jersey Construction Liens against real estate which had been improved with the electrical material supplied by the two lien claimants.  The bankrupt contractor moved to dismiss the liens as having been filed in violation of the automatic stay of claims imposed when a bankruptcy is filed, even though the lien claims were asserted against real property owned by the project owner, not directly against the bankrupt contractor. The Court held that the liens violated the automatic stay. It reasoned that even though the liens were asserted against real estate owned by a non-bankrupt party, under the New Jersey Lien statute, the liens functioned as a claim against the accounts receivable of the bankrupt electrical contractor in that if the liens were paid, the project owner would not have to pay the bankrupt contractor.  This would be to because, under the New Jersey Lien statute, construction liens are assessable only up to the amount of a “Lien Fund”, consisting of all unpaid […]

Current Code: Upgrade Required?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Apr 13, 2017.

When an existing building is damaged and needs repair, the question often arises as to whether the building must be upgraded to the current code standards.  This article explores and explains the code sections dealing with this issue:  http://www.structuremag.org/wp-content/uploads/2017/01/C-CodesStand-Martin-Feb17-1.pdf

Pennsylvania Supreme Court Overturns Conway v. Cutler

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Aug 20, 2014.

In a prior post on November 19, 2012, I reported that the Superior Court of Pennsylvania held that the implied warranty of habitability extended to subsequent purchasers of residential properties. The Superior Court based its opinion on the foundation of public policy considerations flowing from the unequal bargaining power between developers/builders and residential home buyers.In its August 18, 2014, ruling, the Pennsylvania Supreme Court reversed that decision on the primary ground that public policy decisions are best left to the legislature.

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Remember Manslaughter Next Time You Want to Cut a Corner In Design or Construction

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Mar 11, 2013.

We have all seen projects where a design principle is bent a little or a construction technique is altered slightly for the sake of speed or cost. Often times, the attitude is “no harm, no foul”. But consider the other side of the situation and ask yourself what happens when there is harm. A recent case in Southern California is worth noting in that regard.

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BUILDER BEWARE: The Superior Court’s Holding in Conway v. Cutler Group

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Nov 19, 2012.

The doctrine of caveat emptor – or buyer beware – has long been a guiding principal in the law. The Pennsylvania Superior Court recently decided a case that marks a significant change in that approach though. In Conway v. Cutler Group, 2012 Pa.Super. 242, the Superior Court held that a builder can be liable to subsequent home buyers beyond the initial purchaser for breach of the implied warranty of habitability.

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Third-Party Code Inspector Can Be Liable to Homeowner for Negligence

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Oct 31, 2012.

In the case of Baker v. Reese Bros. (decided October 19, 2012), the Commonwealth Court of Pennsylvania upheld a decision by the Court of Common Pleas of Somerset County to not apply the Economic Loss Doctrine to bar the homeowner’s claim for negligence against a third-party code inspector.

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Pennsylvania Contractor Held Personally Liable for Defective Construction

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on May 17, 2012.

In a very recent case, the Pennsylvania Superior Court has held that a residential construction contractor who personally guaranteed that defective work would be corrected could be held personally responsible for the cost of repairs required to correct defective construction. The case, Bennett, et al. v. A.P. Masterpiece Homes offers an object lesson to contractors on how not to communicate with their customers.

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