Public Adjuster Cannot Serve As Disinterested Appraiser
April 18, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe Florida Supreme Court found that the president of a public adjusting firm, which was to be compensated on a contingency basis for its adjusting services, could not subsequently serve as a "disinterested" appraiser pursuant to the policy language. Parrish v. State Farm Fla. Ins. Co., 2023 Fl. LEXIS 261 (Feb. 9, 2023).
Jon Parrish was insured under a policy issued by State Farm Florida Insurance Company. When his home was damaged by Hurricane Irma in September 2017, he filed a claim and hired Keys Claims Consultants, Inc. (KCC) to provide public adjusting services. Mr. Parrish agreed to pay KCC a contingency fee equal to ten percent of whatever amount he eventually recovered from State Farm.
There was disagreement between State Farm's estimate of the loss and that of KCC. Mr. Parrish demanded that the appraisal process set forth in the policy be implemented. Mr. Parrish informed State Farm that George Keys, the president of KCC, would serve as Mr. Parrish's appraiser.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
CGL Policy Covering Attorney’s Fees in Property Damage Claims
December 11, 2018 —
David Adelstein - Florida Construction Legal UpdatesDoes a CGL policy cover attorney’s fees and costs in property damages claims, to the extent there is a contractual or statutory basis to recover attorney’s fees? Naturally, you need to review the policies and this is not a clear-cut issue, but there is law to argue under.
A case I have argued in support of CGL policies providing for coverage for attorney’s fees as a component of property damage claims when there is a contractual or statutory basis is Assurance Co. of America v. Lucas Waterproofing Co., Inc., 581 F.Supp.2d 1201 (S.D.Fla. 2008). In this case, the following applied:
- The policy provided coverage for “those sums that the insured becomes legally obligated to pay as damages of… ‘property damage’….
- Property damage was defined as “physical injury to tangible property, including all resulting loss of use of that property.”
- The term damage, in of itself, was not defined in the policy.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
More Details Emerge in Fatal Charlotte, NC, Scaffold Collapse
January 17, 2023 —
Derek Lacey & Jim Parsons - Engineering News-RecordDetails have emerged in the Jan. 2 scaffold collapse at an under-construction apartment high-rise in Charlotte, N.C. that killed three workers and injured two. A work suspension continues during an investigation led by the North Carolina Dept. of Labor's Occupational Safety and Health Division.
Reprinted courtesy of
Derek Lacey, Engineering News-Record and
Jim Parsons, Engineering News-Record
Mr. Lacey may be contacted at laceyd@enr.com
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Rebuilding the West: Construction Considerations After the Smoke Clears
December 21, 2020 —
Richard Glucksman & Ravi Mehta – Chapman Glucksman Dean & RoebWildfires have always been a part of life in the western United States, but, in recent years, the frequency and size of wildfires have become staggering. Oregon, Washington, and—in particular—California face drier conditions, making wildfire season longer and more intense.
In these states, among others, prescribed burns (designed to reduce wildfire ignition sources and spreading potential) have been limited or cancelled altogether as the air pollution emitted by these burns may worsen the impact of COVID-19, a respiratory illness in its essence, as noted recently by
Science magazine. These circumstances, further compounded by the severe shortage of housing, have created a “perfect storm” in California, which has seen new and denser construction deeper within wildfire-prone areas, prompting a number of key legislative proposals that will impact the rebuilding process after the smoke clears.
The infamous 2018 Camp Fire in northern California made international headlines for decimating the town of Paradise. While the cause of the Camp Fire was determined to be faulty electrical transmission equipment, unusually dry conditions allowed the fire to spread to just over 150,000 acres, and the fire took 17 days to contain.
Then, five of the 20 largest wildfires in California history occurred during the 2020 wildfire season, according to the California Department of Forestry and Fire Protection (Cal Fire). The Camp Fire was eclipsed by the August 2020 Complex Fire, which is the largest wildfire ever recorded in the state, growing to just over one million acres in size until it was finally contained on Nov. 15.
Legislative Response
The Camp Fire and other 2018 wildfires displaced hundreds of thousands of people from their homes throughout California. The unprecedented scale of both the 2018 and the 2020 wildfire seasons in California has spurred legislators in Sacramento to draft a number of important bills that will undoubtedly impact rebuilding efforts.
California AB 38 was prompted by the 2018 California wildfire season and was signed into law by Gov. Gavin Newsom in October 2019. It requires the state fire marshal, the Office of Emergency Services, and Cal Fire to work together to develop and administer a comprehensive wildfire mitigation program, including "cost-effective structure hardening and retrofitting to create fire-resistant homes, businesses, and public buildings."
Unfortunately, the well-intentioned program has yet to be funded, and may be relying on federal hazard funds from the Federal Emergency Management Agency at a future date. In light of the crippling economic impact of the COVID-19 pandemic, federal funding is likely the only viable source for this important item of legislation.
California SB 182 would enact new building regulations in high fire-risk areas (as determined by the state fire marshal), including new standards for fire-resistive construction, evacuation routes, defensible space, and available water and firefighting resources. It would also prohibit municipalities from approving new construction in high fire-risk areas unless wildfire reduction standards are satisfied. In effect, the bill would discourage new construction in high fire-risk areas.
After passing through both legislative houses, Newsom vetoed the bill, citing its negative impact on the state's strained supply of affordable housing. However, the bill is likely to be revisited in the 2020-2021 legislative session.
California AB 1516 is a comprehensive bill that would:
- Create new defensible-space requirements for both new and existing construction in high fire-risk areas.
- Create a grant-assistance program for fire-prevention education, inspections, and technical assistance.
- Direct Cal Fire to develop vegetation management recommendations to minimize flammability.
Additionally, the bill would allow insurers providing course of construction coverage for a project to request, from the owner, municipal certification that the structure to be built complies with existing and new building standards. Newsom vetoed this bill, cautioning that a "one size fits all" approach to wildfire management may not be appropriate, given that each individual community's needs differ.
California AB 2380 focuses on the development of standards and regulations for a relatively new and growing phenomenon: the rising use of private firefighting personnel, particularly by wealthy homeowners. Several prominent and well-known carriers offer homeowners-insurance policies that provide for private firefighting personnel, as well as preventative services (wildfire hazard inspections and clearing defensible space), and expected post-incident services (clean up and removal of fire retardant and similar substances).
AB 2380 was signed into law by Newsom at the tail end of the 2018 wildfire season, and it now requires Cal Fire, the governor's Office of Emergency Services, and the board of directors of the FIRESCOPE Program (designed to coordinate firefighting resources among different agencies) to develop standards and regulations for privately contracted fire fighters.
Housing Shortage and New Construction
These legislative efforts are underscored by the worsening housing crisis, which has both strained existing supply and increasingly pushed new construction into areas known as the Wildland Urban Interface (WUI).
WUI areas are designated as either "interface" or "intermix:” Interface WUI areas have little to no wildland vegetation, but are near large wildlands. By contrast, in intermix WUI areas, structures are mixed with wildland vegetation.
A recent study by the U.S. Forest Service found that, as expected, WUI areas are the hardest hit by wildfires. However, the study also found that, contrary to popular belief, wildfires cause greater damage in interface WUI areas than intermix WUI areas- in other words, wildfire damage is greatest where there is little to no wildland vegetation. The study concludes that wildfires in WUI areas are fueled more by human-made fuels as opposed to natural vegetation. These human-made fuels include building materials and landscaping.
It may not come as a surprise that a growing body of scientific literature has ascribed more severe and frequent wildfires to climate change. However, what may be less appreciated is the profound impact of building in the WUI. By 2050, an estimated one million new homes are projected to be built in California WUI areas.
In light of this, as well as the recognition that wildfire risk is determined, in large part, by construction standards and the fire resistivity of materials as opposed to natural vegetation, California has developed a special building code for WUI areas: Chapter 7A of the California Building Code- Materials and Construction Methods for Exterior Wildfire Exposure. California is one of the few states to have a unique building code for WUI areas, and, in light of the recent wildfires, California officials are developing stricter WUI building standards.
The constituents of State Sen. Bill Dodd in Napa County and surrounding areas have faced some of the state's most devastating wildfires. Dodd is at the forefront of significant fire-related legislation, and was responsible for the passage of the Insurance Adjuster Act of 2019, which sets regulations for insurance-claim adjusting in emergencies.
Dodd also spearheaded the passage of SB 190, which was enacted in late 2019. The law requires, among other things, the state fire marshal to develop suitable materials and products for building in WUI areas with respect to exterior wall siding and sheathing, exterior windows, doors and skylights, vents, decking, treated lumber and ignition-resistant materials, and roofing materials. The state fire marshal's office found that roofing material is among the most important factors in a structure's fire resistivity, and slate, metal, and tile roofs have the highest fire resistance rating of "A:”
As of July 1, 2021, wood-shake roofs will no longer be allowed by the California Fire Code. The state fire marshal also cites non-combustible siding as an important building element.
Wildfire-Resistant Construction
A recent study prepared by Headwaters Economics and commissioned by the U.S. Forest Service, WR Foundation, and Insurance Institute for Business & Home Safety analyzed cost differentials between traditional construction and wildfire-resistive construction as they relate to the four most fire-critical assemblies of a structure: roofs, exterior walls (including windows and doors), decks, and landscaping. Wildfire-resistant roofing, vents, fascia, and gutters were estimated to cost about 27 percent more than traditional components. However, the wildfire-resistant roofing materials feature lower maintenance requirements and longer lifespans.
Wildfire-resistant exterior walls were estimated to cost 25 percent less than traditional components, due in large part to the substitution of true wood siding with fiber cement siding.
Wildfire-resistant decking involves the use of composite boards, foil-faced bitumen tape on support joists, and the creation of non-combustible space beneath decking. This type of construction was estimated to cost approximately 19 percent more than traditional decking construction. Wildfire-resistant landscaping has the most significant cost difference as compared to traditional landscaping construction, with the former costing about double the latter. Landscaping fabric can minimize the growth of weeds and thus reduce fire hazard, as does the use of rocks instead of mulch.
While certain components of fire-resistant construction may have increased costs, the benefits far outweigh these increases: longer life cycles and less maintenance of the components, and, most importantly, greatly increased fire resistivity of the structure itself and thus its life cycle.
As construction in WUI areas is expected to grow substantially in the coming years, so too are fire-resistive construction standards and material requirements. These standards and requirements are part and parcel of a more comprehensive and deliberate set of land use planning, vegetation management, and emergency-response regulations and policies that California will develop by necessity to meet the growing demand for housing in WUI areas, and also to rein in the staggering costs of wildfire suppression. Thus, construction in WUI areas, and, to a lesser degree, in non WUI areas, will be subject to more exacting standards in the years to come.
As the science of wildfire prevention and suppression advances, so too will the technological innovations that will allow for safer, longer-lasting and ecologically sensitive construction. As in many other fields, California is expected to emerge as a leader in wildfire resistant building and material requirements, and will undoubtedly play a key role in shaping fire policy throughout the United States.
Richard Glucksman is a partner, and Ravi Mehta is senior counsel, at Chapman Glucksman Dean & Roeb. rglucksman@cgdrlaw.com; rmehta@cgdrlaw.com
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Earthquake Hits Mid-Atlantic Region; No Immediate Damage Reports
November 30, 2017 —
The Associated Press (Randall Chase) - BloombergDover, Del. (AP) -- An earthquake has jolted the Mid-Atlantic region of the East Coast, but there are no immediate reports of damage or injuries.
The U.S. Geological Survey says the 4.1 magnitude quake struck just after 4:45 p.m. Thursday, and was centered about 6 miles (10 kilometers) east-northeast of Dover, Delaware. It was felt as far away as Baltimore.
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The Associated Press (Randall Chase), Bloomberg
U.S. Government Bans Use of Mandatory Arbitration Agreements between Nursing Homes and Residents, Effective November 28, 2016
November 17, 2016 —
Jeffrey M. Daitz & Joseph Vento – Peckar & Abramson, P.C.On September 28, 2016, the Centers for Medicare and Medicaid Services (“CMS”), which is part of the U.S. Department of Health and Human Services, issued a new rule that bans federal funding to any nursing home that requires its residents to enter mandatory pre-dispute arbitration agreements upon admission. The rule prevents nursing homes from forcing residents to submit any disputes concerning care, payment for services, etc., to mandatory binding arbitration rather than to a court.
Mandatory arbitration agreements are frequently used in many types of industries and have been for decades. However, recent eff orts by several consumer advocate groups have sought to curtail the use of mandatory arbitration clauses in industries where the individuals who executed such agreements have little to no bargaining power. According to these groups, nursing home residents are potentially more vulnerable than most to being unwittingly bound by such agreements because of the nature of the admissions process. The new rule is set to take effect on November 28, 2016, and will only apply to agreements entered into after that date.
Reprinted courtesy of
Jeffrey M. Daitz, Peckar & Abramson, P.C. and
Joseph Vento, Peckar & Abramson, P.C.
Mr. Daitz may be contacted at jdaitz@pecklaw.com
Mr. Vento may be contacted at jvento@pecklaw.com
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The Privilege Is All Mine: California Appellate Court Finds Law Firm Holds Attorney Work Product Privilege Applicable to Documents Created by Formerly Employed Attorney
June 29, 2017 —
David W. Evans & Stephen J. Squillario – Haight Brown & Bonesteel LLPIn Tucker Ellis LLP v. Superior Court (A148956 – Filed 6/21/2017), the First Appellate District held that (1) the holder of the attorney work product privilege is the employer law firm rather than the former employee attorney who created the privileged documents while a firm employee, and (2) as a result, the firm did not owe a duty to obtain the former attorney’s permission before disclosing the subject documents to third parties.
In Tucker Ellis LLP, the attorney, while still employed by Tucker Ellis, exchanged a series of e-mails with a consultant retained by the firm to assist in asbestos litigation for a client. The firm also entered into an agreement with the consultant to summarize scientific studies on the causes of mesothelioma in a published review article. After the attorney departed the firm, Tucker Ellis was served with a subpoena in connection with a matter pending in Kentucky for the production of communications with the consultant regarding the article. In response, Tucker Ellis, in relevant part, produced the work product e-mails authored by the former attorney. The e-mails eventually ended up on the Internet and reached over 50 asbestos plaintiffs’ attorneys, resulting in the attorney’s termination from his new firm. After Tucker Ellis ignored the attorney’s “claw-back” letter, he filed suit against the firm for negligence, among other causes of action. The trial court granted the former attorney’s motion for summary adjudication on the issue of duty, reasoning that the firm owed the attorney a legal duty to prevent the disclosure of the work product. Tucker Ellis filed a petition for a writ of mandate with the Court of Appeal challenging the trial court’s decision on the duty issue.
Reprinted courtesy of
David W. Evans, Haight Brown & Bonesteel LLP and
Stephen J. Squillario, Haight Brown & Bonesteel LLP
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Squillario may be contacted at ssquillario@hbblaw.com
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Gilroy Homeowners Sue over Leaky Homes
February 10, 2012 —
CDJ STAFFTwo years into a lawsuit against Shapell Homes, the builder of a subdivision called Eagle Ridge in Gilroy, California, homeowners have joined or left the lawsuit. About fifty homeowners are still in the suit, which contends that construction defects have lead to water intrusion in their homes. The lawyer for the homeowners contends that more than a hundred homes have construction defects.
One homeowner said that soon after he joined the suit, Sharpell sent workers to his home who repaired problems to his satisfaction. “They came in within two weeks and fixed everything,” said Frank Lowry. Another homeowner, Wilson Haddow, said that he was “quite happy” after Shapell repaired problems.
Others weren’t quite so happy. Greg Yancey said that problems had “been a nightmare” and that “it just doesn’t feel like home.” He said that his “house is possessed,” with problems that include walls that bow out and a balcony that drips rainwater to the front door. His home is currently worth far less than the $700,000 he paid in 2007.
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