Read the court decision
Read the full story...
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team
Finding Plaintiff Intentionally Spoliated Evidence, the Northern District of Indiana Imposes Sanction
March 14, 2018 — Shannon M. Warren – The Subrogation Strategist
On January 23, 2018, the Northern District of Indiana issued a decision that clarifies what constitutes spoliation of evidence under Indiana law. In Arcelormittal Ind. Harbor LLC v. Amex Nooter, LLC, 2018 U.S. Dist. LEXIS 10141 (N.D. Ind.), the defendant filed a motion for sanctions, alleging that the plaintiff intentionally spoliated critical evidence. The defendant sought dismissal of the action, asserting that the plaintiff intentionally discarded and lost important physical evidence within hours of a fire that occurred while the defendant’s employees were performing work at its facility. The decision underscores the importance of taking immediate action to properly identify and secure potentially material evidence in order to satisfy ones duty to preserve pre-suit evidence and avoid any spoliation defenses and associated sanctions.
In Arcelormittal, the court initially considered whether to apply state or federal law when analyzing a litigant’s duty to preserve pre-suit evidence and determine if that party committed spoliation. Since the case was brought in federal court based on diversity jurisdiction, the court held that Indiana state law governed the spoliation analysis.
As noted by the court, under Indiana state law, “the intentional destruction, mutilation, altercation, or concealment of evidence” is considered to be spoliation. Thus, under Indiana law, a party who knew or should have known that litigation was imminent “may not lose, destroy or suppress material facts or evidence.” The plaintiff argued that Indiana law requires a showing of improper purpose or bad faith to establish that a litigant spoliated evidence. The Arcelormittal court rejected the plaintiff’s argument.
Read the court decision
Read the full story...
Reprinted courtesy of Shannon M. Warren, White and Williams LLP
Ms. Warren may be contacted at warrens@whiteandwilliams.com
The "Dark Overlord" Strikes The Practice Of Law: What Law Firms Can Do To Protect Themselves
April 17, 2019 — Ivo G. Danielle – Newmeyer & Dillion
Cybersecurity breaches involving law firms are on the rise with each passing year. Law firms are prime targets for cyber criminals seeking confidential and sensitive information because of the various types of legal work that law firms normally handle for their clients. Whether it be mergers and acquisitions, the use of intellectual property, purchase agreements, bankruptcy or even litigation involving divorce, law firms are a rich depository for highly confidential and sensitive information. As a result, law firms must employ comprehensive security measures to protect themselves from security breaches or risk being on the losing end of a costly malpractice claim, and suffer severe reputational harm.
Law Firms Continue To Be Targeted By Cybercriminals
According to the American Bar Association ("ABA") 2018 Legal Technology Survey Report, 23% of the law firms who participated in the survey reported that their law firm experienced a data breach. Although this may be just a 1% increase from the 22% who reported a breach in 2017, it is important to understand that this is an increase of 8% from the stable percentages reported from 2013 through 2016.1 The 2018 survey report also revealed that security breaches fluctuated with firm size – 14% for solo law firms, 24% for firms employing 2-9 attorneys, approximately 24% for firms with 10-49 attorneys, 42% for firms with 50-99 attorneys, and approximately 31% for those firms employing 100 or more attorneys.
Latest Law Firm Security Breaches
The notorious criminal group called "The Dark Overlord" has a history of committing data breaches of high profile companies such as Gorilla Glue, Netflix, Larson Studios, multiple healthcare companies, and Little Red Door Cancer Agency. Their goal is simple – steal sensitive information and then extort payment from the victims by threatening to release the sensitive information to the public.
On December 31, 2018, this cybercriminal group announced to the world that they had acquired 18,000 documents containing highly sensitive legal information related to insurance based litigation connected to the 9/11 tragedy. The stolen information was the attorney/client property of Lloyd's of London, Silverstein Properties, and Hiscox Syndicates, Ltd. In its announcement, The Dark Overlord boasted that they were in possession of client sensitive information, such as: "emails; retainer agreements; non-disclosure agreements; settlements, litigation strategies; liability analysis; defense formation; collection of expert witness testimonies; communication with government officials in countries all over the world; voice mails; dealings with the FBI, USDOJ, DOD, confidential communications, and so much more."
Subsequent to the data breach, The Dark Overlord announced to the public that they designed a compensation plan that would allow for public crowd-funding for its organization to permit the public to view the stolen information in exchange for bitcoin payment. The more public funding it receives, the more stolen sensitive information will be unlocked and released to the public. It is estimated that this cybercriminal group already distributed information to the public on two separate occasions during the month of January 2019.
High profile cybersecurity breaches of law firms is nothing new – for example, the infamous Panama Papers breach, where cybercriminals leaked 11.5 million documents exposing the shadowy business of setting up offshore corporations as tax shelters for businesses, celebrities, and politicians - and the infamous Petya Malware attack which resulted in a digital lockdown of one of the world's largest law firms, DLA Piper. However, despite the infrequency of publicized cyber-attacks of law firms by the media, the FBI has recently announced that law firms should expect an increase in security attacks by cybercriminals because law firms are now viewed as "one-stop shops" for cybercriminals. Therefore, in order to combat the inevitable increase in cyber-attacks, law firms must get prepared.
How Law Firms Can Protect Themselves
All law firms will agree that the most serious consequence of a security breach for their firm would be the unauthorized access to sensitive client data. The American Bar Association's Model Rules of Professional Conduct, specifically Rules 1.1 and 1.62 and related Comments, require an attorney to take competent and reasonable measures to safeguard information relating to their clients. This duty to "safeguard' information imposes a significant challenge to firms when using technology in connection with protecting client information because most law firms are not savvy with technology and lack proper cyber security training.
In order for a law firm to protect itself from security breaches and inadvertently violate its duty of safeguarding a client's sensitive information, it is important to take the following actions:
- Start by taking an inventory and risk assessment of the firm to determine what needs to be protected – the inventory should include both technology and data;
- Develop, implement and maintain an appropriate cybersecurity program that complies with applicable ethical and legal obligations;
- Ensure the cybersecurity program addresses people, policies and procedures, and technology. The cybersecurity program must designate an individual or a group to be in charge and coordinate security;
- Develop an incident response plan scaled to the size of the firm;
- Continually train staff and attorneys to identify and understand potential cybersecurity threats;
- Consider implementing a third-party assessment of firm's cybersecurity program and policies;
- Purchase cyber liability for insurance which not only covers first party losses to law firms (like lost productivity, data restoration, and legal expenses) but also liability protection to third parties;
- Implement authentication and access controls for network, computers and mobile devices used by the firm's staff and attorneys;
- Consider the use of full-drive encryption for computers and mobile devices;
- Have staff and attorneys avoid and/or limit the use of public WiFi when working remotely; and
- Create a disaster recovery plan to backup all data in the event of a cyber-attack or natural catastrophe.
Continually reviewing, implementing, training and updating a firm's cybersecurity program and protocols will help safeguard sensitive and confidential client information and/or data. No law firm wants to be the next data breach headline – so take the necessary steps to avoid a potential disaster.
1 Past ABA Legal Technology Surveys reported 14% in 2016, 15% in 2015, 14% in 2014 and 15% in 2013.
2 On November 1, 2018, California adopted ethics rules patterned after the ABA Model Rules of Professional Conduct.
Ivo Daniele is a seasoned associate in Newmeyer & Dillion's Walnut Creek office. His practice includes representing private and public companies with both their transactional and litigation needs. You can reach Ivo at ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business law, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
Read the court decision
Read the full story...
Reprinted courtesy of
Court Orders House to be Demolished or Relocated
April 26, 2011 — Beverley BevenFlorezCDJ STAFF
Decision Affirmed in Central Arkansas Foundation Homes, LLC v. Rebecca Choate
The Arkansas Court of Appeals affirmed the decision by the trial court in Central Arkansas Foundation Homes, LLC v. Rebecca Choate. In the trial case, Central Arkansas Foundation Homes (CAFH) sought payment for a home built for Choate, while Choate alleged that the builders committed multiple construction defects including using the wrong foundation materials and positioning the house in the wrong direction.
After the house was built, CAFH contacted Choate regarding payment, however, Choate alleged that the finished product did not match the contract. “ After CAFH completed construction, it obtained permanent home financing for Choate and tried to contact her to close the transaction. Choate did not respond until October 2005, when she sent CAFH a list of alleged construction defects, including that the house was facing in the wrong direction; that it was not built on a slab; and that the fireplace, garbage disposal, driveway, and storage area were missing. CAFH replied to Choate in writing, telling her that she had until January 6, 2006, to close on the house or CAFH would sell it. The correspondence enclosed worksheets showing that the amount Choate would owe at closing exceeded $94,000, which included interest that had accrued on the as-yet unpaid construction loan.”
Initially, the court found in favor of CAFH. “On April 18, 2007, Choate’s attorney withdrew from representing her. Soon thereafter, CAFH’s attorney asked the court to set a final hearing on the case. The attorney purportedly sent Choate a letter by regular mail on May 15, 2007, advising her that the case was set for trial on July 9, 2007. Choate, however, did not appear. CAFH did appear, and its general manager, John Oldner, testified to events leading up to the case and the amount of damages claimed. According to Oldner, the interest on the construction loan had accrued to the point that CAFH now sought $104,965.88 from Choate. The court found in favor of CAFH and entered judgment for that amount, plus attorney fees, on July 18, 2007. The court ruled that CAFH could sell the house and either remit any excess to Choate or look to Choate for the deficiency if the sales price did not cover the judgment.”
However, Choate successfully argued that she did not receive notice of the trial. A new trial was ordered, and the outcome was quite different. “On June 6, 2008, the circuit court entered judgment for Choate, ruling that the house was not in substantial compliance with the parties’ contract and that the contract should be rescinded. The court found that the house suffered from numerous construction defects, that the contract contemplated a slab rather than a concrete-pier foundation, and that CAFH ignored Choate’s complaints that the house was facing the wrong way. The judgment directed CAFH to hold Choate harmless on the construction loan, to deed Choate’s two acres back to her, and to remove the house from Choate’s property.”
The Court of Appeals “found that Choate would be unjustly enriched by retaining the benefit of the septic systems and utility lines that CAFH installed on her land. The court therefore awarded $5340 to CAFH as a quantum-meruit recovery for the value of that work. CAFH contends that the award is not sufficient, but we see no clear error.” In the end, the Court of Appeals provided this reason for declining to reverse the trial court’s decision: “The court in this case apparently concluded that the house constructed by CAFH was so fundamentally at odds with Choate’s contractual expectations that she was not unjustly enriched and should simply be, as nearly as possible, returned to the status quo ante. Accordingly, the court ordered the house removed from her property and permitted CAFH to either relocate the house or salvage the house’s materials and unused appliances. We decline to reverse the court’s weighing of the equities in this manner.”
Read the court’s decision…
Read the court decision
Read the full story...
Reprinted courtesy of
BHA has a Nice Swing Benefits the Wounded Warrior Project
May 20, 2015 — Beverley BevenFlorez-CDJ STAFF
Bert L. Howe & Associates (BHA) would like to congratulate the winners of the BHA Has a Nice Swing golf game for charity at the 2015 West Coast Casualty Construction Defect Seminar. With the help of the participants, BHA was able to raise $1925 to benefit the Wounded Warrior Project. BHA would also like to congratulate the raffle winners. Prizes included a DJI Phantom 2 Vision+ Drone and Dodger baseball tickets.
The Wounded Warrior Project’s purpose is to raise awareness and enlist the public’s aid for the needs of injured service members; to help injured service members aid and assist each other; and to provide unique, direct programs and services to meet the needs of injured service members.
Learn more about the Wounded Warrior Project...
Read the court decision
Read the full story...
Reprinted courtesy of
Ohio Court of Appeals: Absolute Pollution Exclusion Bars Coverage For Workplace Coal-Tar Pitch Exposure Claims
January 24, 2018 — White and Williams LLP
On December 28, 2017, the Ohio Court of Appeals (Eighth District) held in GrafTech International, Ltd., et al. v. Pacific Employers Ins. Co., et al., No. 105258 that coverage for alleged injurious exposures to coal tar pitch was barred by a liability insurance policy’s absolute pollution exclusion. Applying Ohio law, the court concluded that Pacific Employers had no duty to defend GrafTech or pay defense costs in connection with claims by dozens of workers at Alcoa smelting plants that they were exposed to hazardous substances in GrafTech products supplied to Alcoa as early as 1942. Read the court decision
Read the full story...
Reprinted courtesy of White and Williams
No Jail Time for Disbarred Construction Defect Lawyer
May 10, 2013 — CDJ STAFF
The New Mexico Supreme Court decided that a lawyer who defrauded clients will not be spending any time in jail, although they did disbar him in February. Bradley R. Sims brought a cashier’s check for $10,000 to repay his former client. Casa Bandera had hired Sims to sue over construction defects at apartment buildings it owned in Las Cruces, New Mexico. The court had found that Sims did not file the lawsuit but that created documents to convince his clients that he had.
Sims initially intended to repay Casa Bandera through monies owed him by Sundland Park, New Mexico. When that did not arrive at the court, Sims borrowed the money. He has yet to comply with a court order to turn over his client lists so that the disciplinary board can determine if he owes money to any other clients.
Read the court decision
Read the full story...
Reprinted courtesy of
White House Proposal Returns to 1978 NEPA Review Procedures
November 15, 2021 — Karen C. Bennett - Lewis Brisbois
Washington, D.C. (October 15, 2021) - The Council on Environmental Quality (CEQ) has requested comments, by November 22, 2021, on proposed revisions to the National Environmental Policy Act (NEPA) regulations. The proposal is Phase I in a two-phased approach that will eventually undo a final rule, effective September 2020, that updated NEPA regulations to reflect decades of agency experience and caselaw interpreting the 1969 Act.
Phase I proposes to reinstitute 1978 definitions for key terms used to determine the scope of review and the range of alternatives required when undertaking any major federal action. Phase II is expected to be an extensive rewrite of the 2020 regulations to incorporate climate change and environmental justice objectives. Businesses with projects, now or in the future, that require federal authorizations will need to pay close attention to these regulatory revisions.
The 2020 update rule intended to scale back the time and cost of producing NEPA analyses by focusing agency resources on evaluating effects that are within the agency’s ability to control and studying only those alternatives that would meet the project purpose. CEQ’s proposal eliminates these efficiencies. Read the court decision
Read the full story...
Reprinted courtesy of Karen Bennett, Lewis Brisbois
Ms. Bennett may be contacted at Karen.Bennett@lewisbrisbois.com
