A Video Explaining Insurance for Construction Defects Regarding Structural Failures
See the full video at and at https://youtu.be/9892NYGGvSI
- carpentry; or
Defects related to site preparation can be caused by any of the following:
- building on expansive soil or other defective soils incapable of properly supporting structures;
- building on contaminated soils;
- lack of a slab-on-grade foundation when the soils are acidic and can cause the deterioration of concrete; or
- building on improperly compacted soils, which can cause interior distress to cabinets and countertops, make doors difficult to open and cause structures to settle and cracking in stucco, drywall, plaster interior walls, windows, tile floors, concrete flatwork, slabs, and garage flooring.
In Texas, when a completed home developed problems with a shifting foundation, a suit was filed alleging violations of the Texas Deceptive Trade Practices Act (DTPA) and negligence. On the first day of trial, the plaintiff settled with one defendant and proceeded against another. The District Court granted a directed verdict on the claim that there was a violation of the DTPA with a breach of an implied warranty of good-and-workmanlike performance. Only the plaintiff’s negligence claim was submitted to the jury, which found no negligence on defendant’s part. The district court rendered a take-nothing judgment. [Codner v. Arellano, 40 S.W.3d 666 (Tex.App. Dist.3 2001). See also Parmely v. Hildebrand, S.D. 83, 630 N.W.2d 509 (2001), where the seller was found to have made adequate disclosures about expansive soils at time of sale and was not liable for soil expansion damages.]
The Ninth Circuit, dealing with the right to insurance for damages caused by expansive soil, found that under California law, a latent defect exclusion applies to third party negligence that is discoverable only through subsequent intensive expert investigation. Because there is no evidence that the contractor’s negligence in this case was discoverable, short of an in-depth expert inspection after-the-fact, the Ninth Circuit concluded that State Farm was entitled to summary judgment on its exclusion for latent defects. [Winans v. State Farm Fire and Casualty Co., 968 F.2d 884 (9th Cir. 1992).]
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
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