Insurer Not Entitled to Summary Judgment on Construction Defect, Bad Faith Claims
October 07, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court denied the insurer's motion for summary judgment seeking to establish there was no coverage for construction defect claims and for bad faith. Country Mut. Ins. Co. v. AAA Constr. LLC, 2019 U.S. Dist. LEXIS 115935 (W.D. Okla. July 12, 2019).
Jeffrey and Tammy Shaver entered two contracts with AAA Construction for the construction of a garage and of a barn on their property. After construction was completed, the Shavers sued AAA Construction for building the garage over two high-pressure gas pipelines and the utility easements associated with them. They alleged AAA Construction was negligent for constructing over a working utility line. AAA Construction's insurer, Country Mutual Insurance Company (CMIC) denied coverage because the alleged faulty workmanship of AAA Construction did not constitute an "occurrence" under the policy.
CMIC sued AAA Construction for a declaratory judgment that it had no duty to defend or indemnify. CMIC moved for summary judgment.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Insurers Get “Floored” by Court of Appeals Regarding the Presumptive Measure of Damages in Consent Judgments
May 13, 2014 —
Mark Scheer and Brent Williams-Ruth – Scheer & Zehnder LLPCASE: Miller v. Kenny, 68594-5-I, 2014 WL 1672946 (Wash. Ct. App. Apr. 28, 2014).
Snapshot Synopsis: $21 million bad faith consent judgment verdict upheld. $4.15 million underlying stipulated consent judgment was the “floor,” and additional damages allowed.
ISSUES:
1. Can a jury award damages for an insurer’s bad faith in excess of the amount of the stipulated covenant judgment? YES
2. Can a trial court admit evidence of insurance liability reserves in a bad faith action? YES
3. *Note: Other evidentiary and procedural issues were addressed by the court in its decision but not analyzed in this summary*
FACTS: This appeal arose out of an automobile accident on August 23, 2000. Patrick Kenny was driving a 1994 Volkswagen Passat owned by one of the passengers, when he rear-ended a cement truck. The accident severely injured his three passengers: Ryan Miller, Ashley Bethards, and Cassandra Peterson. Kenny was covered for liability under the insurance policy issued to Peterson's parents by Safeco Insurance Company. Safeco defended Kenny without a reservation of rights.
Reprinted courtesy of
Mark Scheer, Scheer & Zehnder LLP and
Brent Williams-Ruth, Scheer & Zehnder LLP
Mr. Scheer may be contacted at mscheer@scheerlaw.com; Mr. Williams-Ruth may be contacted at bwilliamsruth@scheerlaw.com
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Liability Policy’s Arbitration Endorsement Applies to Third Party Beneficiaries, Including Additional Insureds
May 11, 2020 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (No. C082841; filed 12/31/19, ord. pub. 1/28/20), a California appeals court held that a binding arbitration clause in an insurance policy extends to a third party, such as an additional insured.
In Philadelphia v. SMG, Philadelphia issued a general liability policy to a youth organization, Future Farmers of America (FFA), that had contracted to use the Fresno Convention Center for its annual convention. The contract required FFA to obtain liability insurance and to name the property manager, SMG, and the City of Fresno, as additional insureds. Philadelphia issued FFA a commercial lines CGL policy with an endorsement affording coverage to “managers, landlords, or lessors of premises” for “liability arising out of the ownership, maintenance or use of that part of the premises leased or rented” to the named insured. It also covered “any person or organization where required by a written contract executed prior to the occurrence” but only for liability arising from the named insured’s negligence.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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The Contract Disputes Act: What Every Federal Government Contractor Should Know
February 07, 2018 —
Sarah K. Carpenter – Smith Currie BlogClaims on construction projects are unpleasant, but sometimes unavoidable. Contract with the federal government and you are by statute and by contract required to resolve any and all disputes under the Contract Disputes Act. So what is the Contract Disputes Act? This article sets forth basic information all federal government contractors should know when faced with the necessity of making or defending a claim on a federal project.
What Is the Contract Disputes Act?
The Contract Disputes Act of 1978 (CDA or Act) was enacted by Congress to implement a comprehensive statutory scheme for the resolution of government contract claims. The CDA provides a framework for asserting and handling claims by either the government or a contractor. All disputes under the CDA must be submitted to either the U.S Court of Federal Claims or to an administrative board of contract appeals. The vast majority of board cases are handled by either the Armed Services Board of Contract Appeals or the Civilian Board of Contract Appeals. The ASBCA is generally responsible for deciding appeals from decisions of contracting officers in the Department of Defense, the Department of the Army, the Department of the Navy, NASA, and when specified, the CIA. The CBCA hears disputes from all other executive agencies except the United States Postal Service (USPS), the Postal Rate Commission, and the Tennessee Valley Authority.
The USPS is served by the Postal Service BCA. In addition, the Government Accountability Office Contract Appeals Board handles contract disputes arising in the legislative branch, and the Office of Dispute Resolution for Acquisition handles contract disputes and bid protests arising out of Federal Aviation Administration procurements.
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Sarah K. Carpenter, Smith Currie
Study Finds Construction Cranes Vulnerable to Hacking
May 20, 2019 —
Jeff Rubenstone - Engineering News-RecordWhen securing a jobsite against malicious hackers, most go to protect computer files, and few look up and worry about the tower cranes. But many cranes—whether tower, mobile or industrial—can be remotely run via radio wireless controllers, a useful feature for when operators need a clearer view of the load from the ground. Unfortunately, these wireless signals are vulnerable to hijacking, according to a study released earlier this year by security research firm Trend Micro. It found that the radio signals these crane controllers use are not encrypted over the air in any way, and can be easily intercepted and spoofed using off-the-shelf equipment and a basic knowledge of electronics and radio engineering.
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Jeff Rubenstone, ENRMr. Rubenstone may be contacted at
rubenstonej@enr.com
New WOTUS Rule
November 13, 2023 —
David R. Cook Jr. - Autry, Hall & Cook, LLPThe U.S. Army Corps of Engineers amended the regulation to conform the definition of “waters of the United States” to conform to the Supreme Court’s ruling in
Sackett v. Environmental Protection Agency. See the prior blog post about the Supreme Court’s ruling:
Sackett v. Environmental Protection Agency – Construction and Utility Law | Atlanta | AHC Law
Federal Register :: Revised Definition of “Waters of the United States”; Conforming
Reprinted courtesy of
David R. Cook Jr., Autry, Hall & Cook, LLP
Mr. Cook may be contacted at cook@ahclaw.com
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Be Careful with Mechanic’s Lien Waivers
June 09, 2016 —
Christopher G. Hill – Construction Law MusingsMechanic’s liens are near and dear to my heart here at
Construction Law Musings. These powerful tools can and should be properly used to help you, as a construction professional, get paid for your good work. Of course, the correct steps toward perfecting one of these liens must be followed, including being sure to
meet the stringent lien deadlines. I’ve discussed
the steps for filing such a lien and the various pitfalls relating to the
very picky statutory requirements for recording an enforceable memorandum of lien in Virginia.
One important area that I have not discussed as thoroughly as these basic requirements (and an area of which I have been
reminded by my pals at the Construction Payment Blog) is the area of mechanic’s lien waivers. While the Virginia General Assembly has
ended the days of pre-payment contractual waiver of mechanic’s lien rights for subcontractors and suppliers, mechanic’s lien waivers that waive rights either simultaneous with or after receipt of progress and final payments are still valid and used on a regular basis.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Road to Record $199 Million Award Began With Hunch on Guardrails
June 17, 2015 —
Patrick G. Lee – BloombergIt started with a hunch about malfunctioning highway guardrails. It led to the biggest known whistle-blower award in U.S. history.
Joshua Harman, a Virginian with two small highway safety companies, made a discovery in late 2011 that perhaps only a guardrail maker could: A big competitor had changed the dimensions of its roadside safety device by as much as an inch here and there, he said, without telling federal regulators.
As designed, Trinity Industries Inc.’s ET-Plus system was meant to turn the end of a guardrail into a de facto shock absorber. The altered units, as Harman saw it, were locking up when hit, spearing cars and their occupants.
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Patrick G. Lee, Bloomberg