Four Decades of Defects:

A History of Construction Defect Claims & What the Next Decade Can Expect

Thomas E. Miller, Esq.; Richard A. Tinnelly, Esq.; J.D. Turner, Esq.; and Kevin Franklin

Moderator: Rachel M. Miller, Esq.

Thomas E. MillerFounding Partner & CEO of The Miller Law Firm

Thomas E. Miller has been a distinguished construction defect attorney for over 38 years. During his first eight years of practice he represented developers and their insurance companies. Since 1981, Miller has exclusively represented homeowners and associations in construction defects claims. A nationally recognized expert and pioneer in his field, he has recovered over $550 million for his association clients. Miller is AV rated (highest possible rating in both legal quality and ethical standards) by Martindale-Hubbell and has been voted by his peers a "Super Lawyer" from 2008 through 2012.

DISTINCTIONS Mr. Miller is the co-author of the definitive consumer handbook

on the subject, "Home and Condo Defects: A Consumer Guide to Faulty Construction." He is also the co-author of the only legal textbook and treatise on the subject, "Handling Construction Defect Claims: Western States” (3rd Edition, 1999). In 2012, the consumer guide will be published in its second edition, and the legal treatise will be published in its fourth edition.

The Miller Law Firm has been a member of CAI for over 25 years and members of its firm have served on the board of directors of the Coachella Valley, Greater Inland Empire and Los Angeles chapters of CAI.

Richard A. TinnellyFounder & Senior Shareholder of Tinnelly Law

Group

Since Mr. Tinnelly's admission to the California State Bar in 1985, he has devoted his entire legal career to the representation of HOAs. Mr. Tinnelly received his Bachelor of Science of Laws in 1982 and thereafter his Juris Doctorate from Western State University College of Law in 1984. He received his undergraduate education at the State University of New York at Stoneybrook, St. John's University.

DISTINCTIONS Mr. Tinnelly is recognized as one of the industry's most experienced and

well-respected attorneys. He is currently serving as general counsel for some of Southern California's largest and most prestigious HOAs. He has represented hundreds of HOAs in matters relating to the interpretation and enforcement of governing documents, contracts, governmental negotiations and major reconstruction projects. He has also successfully litigated many significant, precedent-setting cases on behalf of his clients.

Mr. Tinnelly remains very active in the community association industry and is devoted to advancing its professional standards. He is a frequent lecturer on matters relating to HOA affairs and community association management. He is a founding member of the California Association of Community Managers (CACM) and has served as its Southern California legislative legal counsel. Mr. Tinnelly has maintained membership in the Community Associations Institute (CAI), Orange County Chapter, since 1985 and has served as both a member of its Board of Directors and Committee Chairmen. He is also a member of CAI's San Diego and Coachella Valley Chapters.

J.D. TurnerPartner at Lorber, Greenfield & Polito, LLP

Ms. Turner joined the firm in 1996 and practices in the area of civil litigation with an emphasis in construction litigation, managed care, and personal injury. Her prior career in managed healthcare gives her special expertise in this field, and she has successfully resolved numerous cases on behalf of developers and general contractors. Her knowledge of alternative dispute resolution has helped many of her clients avoid litigation.

A 1992 California Western School of Law graduate, Ms. Turner is admitted to practice in California, Arizona, and Nevada.

She is also admitted to practice before the United States District Court, District of Nevada; and the United States District Court, Central District of California.

MEMBERSHIPSSan Diego Bar AssociationSan Bernadino Bar AssociationSan Diego Defense Lawyers

Kevin FranklinPresident of Orange Coast Building Services

With 30 years of experience in single and multi family residential construction, Kevin leads the team responsible for superior quality construction from LA to San Diego. As President, Kevin oversees the daily operations of Orange Coast Building Services, Inc., one of the leading general construction and consulting firms in Southern California.

DISTINCTIONSKevin is an active member of AIA, NRCA,

CACM, CAI and the Orange County Chapterof the Building Industry Association. Heis recognized throughout the industry forhis commitment to quality and use of costeffective construction alternatives.

Where We’ve Been & How Far We’ve Come

Construction Defect Verdicts & Settlements

Since 1981, The Miller Law Firm has recovered over $550 million for associations and homeowners in the Western States. Lorber, Greenfield, Polito & Pengilly have defended several thousand claims asserted against the construction industry, totaling well in excess of several billion dollars.

How much do you estimate consumers have been awarded for shoddy construction in the last four decades?

What is the average recovery for an association?

Has the frequency of claims asserted against builders changed and why?

Will recoveries continue to be awarded in this range?

The Product

A History of the Types of Developments:-1980’s: Condo and Townhome Associations-1990’s: Single Family Product-Since 2000: Urban Infill, Mixed Use and Highrise

How has construction and development changed over the years?

Will high density condo and mixed use construction continue or will developers return to the single family product?

The Defects

What kinds of defects have continued through the decades?

What kinds of products have we seen fail?

What new product may be of concern to the industry? Eg. Green Products and LEED Certification

The Developer

1970’s & 80’s: From local, community builders to national corporations.

1990’s-2000’s: Publically Traded Corporations

Since 2000:LPs, LLCs, JVs

How have real estate development entities structured themselves to avoid or to minimize exposure to construction defect lawsuits and claims?

Insurance Coverage

How has Insurance Coverage changed?

How will the Insurance Industry respond to future claims, including pre-litigation claims, Wrap Policies, and “OCIPs” or Owner Controlled Insurance Programs?

Prelitigation Resolution

In the late 1990s, the building lobby introduced Prelitigation legislation in several states. California, Arizona, Nevada, and approximately 32 states have Prelitigation Processes.

In California those are referred to as:-The Calderon Process, enacted in 2001(Civ. Code Section 1375)And-The SB 800 Process or Title 7 Requirements, enacted

in 2003 (Civ. Code Section 895 et seq)

What was the evolution of the Prelitigation Resolution Process and where will this go?

Plaintiff Representation

What is the role of General Counsel in a Construction Defect Action?

How has the role evolved?

What should the selection criteria include for Construction Defect Litigation Counsel?