Real Estate Developers and New Responsibilities
01.24.2020
By: Safran Staff
Real Estate Developers may have a duty to “sequence and manage construction” when developing communities.
On Wednesday, January 7, 2020, the North Carolina Court of Appeals rendered an opinion in the case of Copeland v. Amward Homes of N.C., Inc., 2020 WL 63910, at *1 (N.C. Ct. App. 2020). By way of brief summary, Judge Richard Dietz wrote, “a dump truck was left unattended, with its engine running and without wheel chocks, at a home construction site up a hill” from the Plaintiff’s home. Subsequently, the dump truck rolled away, leading to the death of a young boy. In the opinion, Judge Dietz highlighted two important facts: the community in which this occurred is described as (1) “hilly terrain” and (2) was not mass graded.
The Plaintiffs sued the real estate developers Crescent Communities, LLC and Crescent Hillsborough, LLC (“Crescent”). In the lower court, the trial court granted Crescent’s motion for summary judgment affirming the general rule that a residential developer has no duty to supervise the contractor. On appeal, the Court rejected the Plaintiff’s arguments that Crescent had a duty inspect or monitor the construction site and that Crescent had a duty to take precautions against negligent construction work. On the other hand, the Court did find that a question of fact exists as to whether Crescent had a duty to sequence construction or conduct mass grading.
In Judge Dietz’s well-reasoned opinion, he found that there is a risk of roll-away accidents during construction on steep terrain. With this in mind, the development can be constructed in the order that the developer chooses. Therefore a question of fact exists as to whether “developers of large projects on hilly terrain have a duty to sequence and manage construction to limit the risk that bystanders downhill might be harmed by foreseeable roll-away accidents.”
Despite the ruling, Judge Dietz did acknowledge that the opinion only takes up the question of Duty in a negligence claim. Thus there may be more issues as to causation as the opinion notes, “this case screams of negligence—by the dump truck driver, by the company that operated the dump truck, perhaps even by the general contractor responsible for supervising the operation.”
The ruling by Judge Dietz breaks from the general rule that Real Estate developers do not have a duty to supervise contractors. Therefore, for new and existing developers, this will be an important case to keep an eye on in 2020.
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