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DIRECTORY AND CAPABILITIES

Insurance Company’s Reservation of Rights Letter Negates its Interest in the Litigation

November 12, 2019 — Frank Ingham - Colorado Construction Litigation
The Colorado Court of Appeals held that an insurance company, which issues a reservation of rights letter to its insured, loses its interest in the litigation, pursuant to C.R.C.P. 24(a)(2), when the insured settles the claims and assigns the bad faith action against the insurance company to the plaintiff. Bolt Factory Lofts Owners Association, Inc. v. Auto-Owners Insurance Company, 2019WL 3483901(Colo. App. 2019). In a 2016 lawsuit in Denver District Court, 2016CV3360, the Bolt Factory Loft Owners Association, Inc. (“Association”) asserted construction defect claims against six contractors. Two of those contractors then asserted claims against other subcontractors, including Sierra Glass Co., Inc. (“Sierra Glass”). After multiple settlements, the only remaining claims were those the Association, as assignee of the two contractors, asserted against Sierra Glass. Auto-Owners Insurance Company (“AOIC”) issued policies to Sierra Glass and defended it under a reservation of rights. The policy afforded AOIC the right to defend Sierra Glass, and it required Sierra Glass to cooperate in the defense of the legal action. The Association presented a settlement demand of $1.9 million to Sierra Glass, which AOIC refused to pay. To protect itself from an excess judgment that AOIC might not have paid, Sierra Glass entered into an agreement with the Association whereby Sierra Glass would refrain from offering a defense at trial and assign its bad faith claim against AOIC to the Association in exchange for the Association’s promise that it would not pursue recovery against Sierra Glass of any judgment entered against it at trial. Such agreements, known as Bashor or Nunn Agreements, are allowed in Colorado. Nunn v. Mid-Century Insurance Co., 244 P.3d 116 (Colo. 2010). Therefore, Sierra Glass was entitled to protect itself in the face of AOIC’s potential denial of coverage and refusal to settle. Bolt Factory Lofts, at ¶ 15. Read the court decision
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Reprinted courtesy of Frank Ingham, Higgins, Hopkins, McLain & Roswell, LLC
Mr. Ingham may be contacted at ingham@hhmrlaw.com

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Toolbox Talk Series Recap – Arbitration Motion Practice

August 07, 2023 — Michael Zehner - The Dispute Resolver
In the June 22, 2023 edition of the Toolbox Talk Series, Adrian Bastianelli, Peckar & Abramson, P.C., and Brian Cashmere, Williams Mullen, moderated by Jennifer Millender of the American Arbitration Association (“AAA”), discussed motion practice in arbitration. Specifically, they offered advice on how to choose the right issue for a motion, how to get approval for a motion, how to write the motion, and how to get the arbitrator to grant it. They also discussed the pros and cons of motion writing in arbitration settings. 1. How to choose the “right issue” for a motion in arbitration The panel discussed what type of issues can, or should, be brought up in a motion in arbitration. Cashmere stated that a clear and concise issue is best for this type of review. For example, statute of limitations, notice, or contract interpretation issues may make great summary judgment or partial summary judgment motions. Essentially, an issue that the arbitrator may resolve via primarily a question of law is more likely to succeed. Bastianelli warned against submitting just any “available” motion, as the practice may turn the arbitrator against you. Both panelists mentioned the need to consider strategy before filing a motion—ask, “how will filing this motion help or hurt reachingArbi final resolution.” Cashmere noted that sometimes the threat of bringing the issue to a hearing can put pressure on the adverse party in a way that is favorable to your client’s goals; possibly even more so than actually submitting the issue. Read the court decision
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Reprinted courtesy of Michael Zehner, BBG Construction Law
Mr. Zehner may be contacted at mzehner@bbglaw.com

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Traub Lieberman Partner Lisa M. Rolle Obtains Pre-Answer Motion to Dismiss in Favor of Defendant

August 16, 2021 — Lisa M. Rolle - Traub Lieberman
Traub Lieberman Partner Lisa M. Rolle obtained a motion to dismiss in favor of an international hotel chain. In the case brought before the U.S. District Court, Southern District of New York, the Plaintiff sustained a slip and fall injury in a Portuguese hotel (“Hotel”), which was allegedly caused by violations of building codes and New York and Portuguese negligence laws. The Plaintiff notes that the Hotel utilized the branding affiliated with the international hotel chain, and the named corporate entities are subsidiaries of the parent company of the international hotel chain. Further, Plaintiff alleged that the named corporate entities “owned, operated, maintained, and controlled” the Hotel where the accident occurred, as the international hotel had previously acquired the entity which owned the spa branding utilized. In moving for pre-answer dismissal, Traub Lieberman acknowledged purchase of the managing agent of the Hotel, which became a subsidiary of their operations. However, Traub Lieberman asserted that the international hotel chain had not owned, operated, maintained, or managed the Hotel. Under New York law, parent corporations cannot be held liable for the actions of their subsidiaries, except in cases that support piercing the corporate veil. Traub Lieberman argued that the motion should be granted as a parent company cannot be held liable for acts committed by its subsidiary and further claimed that the parent company has never owned or operated the Hotel. Read the court decision
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Reprinted courtesy of Lisa M. Rolle, Traub Lieberman
Ms. Rolle may be contacted at lrolle@tlsslaw.com

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Attorneys' Fee Clauses are Engraved Invitations to Sue

April 19, 2021 — David M. McLain – Colorado Construction Litigation
As we start another trip around the sun, hopefully you are in the process of updating your form contracts, including purchase and sale agreements and express written warranties. Because the law and litigation landscape continually changes, it is a good practice to periodically update the forms you use in order to give yourself a fighting chance if and when the plaintiffs' attorneys come knocking on your door. As you engage in this process, I hope that you will take a critical look at whether your contracts include a prevailing party attorneys' fees clause and, if so, whether you should leave it in there. In Colorado, parties are entitled to recover attorneys' fees only if provided for by statute or by contract. Historically, plaintiffs' attorneys relied on two statutes, the Colorado Consumer Protection Act and Colorado's Statutory Interest statute, to recover attorneys’ fees in construction defect cases. In 2003, the Colorado legislature capped treble damages and attorneys' fees under the Colorado Consumer Protection Act at $250,000, effectively restricting plaintiffs' attorneys from relying on the CCPA to recoup their attorneys' fees, especially in large cases. In 2008, the Colorado Supreme Court issued its decision in Goodyear v. Holmes, stating that plaintiffs can only claim prejudgment interest under Colorado's Statutory Interest statute, in cases where they have already spent money on repairs, not when they are suing for an estimate of what repairs will cost in the future. Without either the CCPA or the prejudgment interest statute to recover attorneys' fees, plaintiffs' attorneys most often now rely on the prevailing party attorney fee clause in contracts between the owner and builder, or in the declaration of covenants, conditions and restrictions in situations where a claim is prosecuted by an HOA. Read the court decision
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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell
Mr. McLain may be contacted at mclain@hhmrlaw.com

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Musings: Moving or Going into a New Service Area, There is More to It Than Just…

July 16, 2023 — Christopher G. Hill - Construction Law Musings
For this week’s Guest Post Friday here at Construction Law Musings, we would like to welcome back (again) Sean Lintow Sr. (@The_HTRC) Sean has over 20 years in the construction and project management fields. As many know he pulled up stakes and moved to the State of Illinois almost a year ago where he still focuses on the “green” / energy efficiency markets by helping builders & trade professionals to improve their methods not only locally but nationally. Currently he is RESNET Rater, AEE CEA (Certified Energy Auditor), ENERGY STAR partner & verifier, EPA Indoor airPLUS verifier, Level 2 Infrared Thermographer, Volunteer Energy Rater for Habitat for Humanity, and Builders Challenge Partner & Verifier. I would like to thank Chris for inviting me back as a guest poster. One item that struck a bell with me lately was his recent post for contractors considering work in another state is to check that states contractor licensing laws. Part of me was just saying – ahh if it were just that simple… With that in mind, here are some additional thoughts of mine along with advice picked up and given to others considering a move to greener pastures in another state, another town or maybe even taking that sweet little project outside of your current area that seems too good to pass up. Licensing: Yep this is a no-brainer – but unfortunately, as I pointed out in a 2012 piece it isn’t always that simple as in some cases the state may not require licensing and instead leave it to the towns which can be real fun to figure out. How long will it take to obtain? Ahh, but what about other licenses that a township may require? Working on a pre-78 house – is the state a self-managed one or is your current EPA certificate and training good enough? (Living in a self-managed state but working on an Indian Reservation? Well you will need to be EPA certified) Does the area require a specialty Storm Water Certificate or??? Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Texas LGI Homes Goes After First-Time Homeowners

May 13, 2014 — Beverley BevenFlorez-CDJ STAFF
According to Big Builder, while many consumers have “gone to rentals…as the homeownership rate fell,” that hasn’t stopped Texas-based builder LGI Homes from marketing to the entry-level buyer: “We do not believe that we’re becoming a renter society,” Eric Lipar, LGI CEO told Big Builder. “We believe there is a need and a desire for homeownership.” “The real growth will be powered by an aggressive sales and marketing operation that aims to pull renters out of their apartments (or single-family rentals) and into LGI homes,” reported Big Builder. “So far this pitch has worked in Texas (Dallas, Houston, San Antonio, and Austin), in addition to Phoenix and Tampa, Fla.” Read the court decision
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Contractors Battle Bitter Winters at $11.8B Site C Hydro Project in Canada

October 30, 2023 — Jonathan Keller & Scott Blair - Engineering News-Record
Half the year spent in bone-aching cold. Soils frozen hard as concrete. Mountains of snow. A seemingly unending flow of machinery, workforce and earthen material to and from the site. A temporary city to house thousands of workers for nearly a decade. Wildfires encroaching dangerously close. Working under the ever-watchful eyes of regulators, stakeholders and environmentalists. Reprinted courtesy of Jonathan Keller, Engineering News-Record and Scott Blair, Engineering News-Record Mr. Keller may be contacted at kellerj@enr.com Mr. Blair may be contacted at blairs@enr.com Read the full story... Read the court decision
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Hurricane Ian: Florida Expedites Road Work as Damage Comes Into Focus

October 10, 2022 — Derek Lacey - Engineering News-Record
Hurricane Ian’s devastation is coming into view days after the storm decimated southwest Florida. Work is underway to rebuild much of the state’s electrical, transportation and other infrastructure, with certain emergency road repairs expedited and restoration of power prioritized after the storm's devastation left millions in the dark and washed out roadways serving as the only access to barrier islands such as Sanibel Island and Pine Island. Reprinted courtesy of Derek Lacey, Engineering News-Record Mr. Lacey may be contacted at laceyd@enr.com Read the full story... Read the court decision
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