SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

When an Insurer Proceeds as Subrogee, Defendants Should Not Assert Counterclaims Against the Insured/Subrogor

June 14, 2021 — Gus Sara - The Subrogation Strategist
In a subrogation action, one party is substituted to the rights and remedies of another with respect to a lawful claim. The substituted party (the subrogee) is legally able to pursue any right or seek any remedy that would be available to the subrogor regarding that claim. But can a defendant in a subrogation action assert any claim against the subrogee that it would have against the subrogor? In Federated Mut. Inc. Co. v. Kosciusko County, No. 3:20-CV-960, 2021 U.S. Dist. Lexis 88735, the United States District Court for the Northern District of Indiana considered whether a defendant could assert counterclaims against the insureds/subrogors in an action filed in the name of their subrogee. The court held that since the insurerds/subrogors were not a party to the action and the defendant could assert the substance of its counterclaim as a defense, the defendant could not file counterclaims against the insureds/subrogors in the insurer’s subrogation action. Kosciusko County arose from a motor vehicle accident involving a semi-tractor trailer owned by Bellman Oil Company, Inc. (Bellman) and B & B Transport, Inc. (B & B). The accident occurred on a highway in Kosciusko County in October of 2019. The accident caused the semi-tractor trailer containing ethanol fuel to roll over four times and burst into flames. Federated Mutual Insurance Company (FMIC) insured Bellman and B & B for the semi-tractor trailer and issued payments as a result of the accident. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Agrihoods: The Best of Both Worlds

July 23, 2014 — Beverley BevenFlorez-CDJ STAFF
Smithsonian Magazine reported on a new U.S. trend of blending farms and housing developments: The concept is called Development Supported Agriculture (DSA), or more commonly known as “Agrihoods.” In a DSA, “consumers pledge money or resources to support a farm operation, and in turn, receive a share of what it produces, but take the concept one step further by integrating the farm within residential developments.” Residents receive similar perks of being a part of a home owner association such as supported pools, tennis courts, and playgrounds through their contribution to the farm. The first DSA, Prairie Crossing, was built in Grayslake, Illinois to preserve land while adding about 350 residential homes. Willowsford, a new DSA being built in Ashburn Virginia, will have over 2,000 homes. Willowsford’s developers have preserved 2,000 acres, with 300 acres of farmland. The development will be broken into four villages, and each will have its own farm. Part of the popularity of DSAs is that they may “require less of an investment than other green space communities—for instance, communities planned around golf courses,” according to Smithsonian Magazine. “What does it cost to leave the open space alone in the first place? Almost nothing,” said Ed McMahon, the Charles E. Fraser chair on sustainable development and environmental policy at the Urban Land Institute, as quoted by Smithsonian Magazine. “A light bulb went off in the mind of savvy developers who said, ‘Jeez, I can build a golf course development without the golf course.’ So that led to designing communities around other green-space amenities such as a farm.” Read the court decision
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HOA Has No Claim to Extend Statute of Limitations in Construction Defect Case

October 28, 2011 — CDJ STAFF

The California Court of Appeals ruled on September 20, 2011 in the case of Arundel Homeowners Association v. Arundel Green Partners, a construction defect case involving a condominium conversion in San Francisco. Eight years after the Notice of Completion was filed, the homeowners association filed a lawsuit alleging a number of construction defects, including “defective cabinets, waterproofing membranes, wall-cladding, plumbing, electrical wiring, roofing (including slope, drainage and flashings), fire-rated ceilings, and chimney flues.” Three years of settlement negotiations followed.

Negotiations ended in the eleventh year with the homeowners association filing a lawsuit. Arundel Green argued that the suit should be thrown out as California’s ten-year statute of limitations had passed. The court granted judgment to Arundel Green.

The homeowners then filed for a new trial and to amend its complaint, arguing that the statute of limitations should not apply due to the doctrine of equitable estoppel as Arundel Green’s actions had lead them to believe the issues could be solved without a lawsuit. “The HOA claimed that it was not until after the statute of limitations ran that the HOA realized Arundel Green would not keep its promises; and after this realization, the HOA promptly brought its lawsuit.” The trial court denied the homeowners association’s motions, which the homeowners association appealed.

In reviewing the case, the Appeals Court compared Arundel to an earlier California Supreme Court case, Lantzy. (The homeowners also cited Lantzy as the basis of their appeal.) In Lantzy, the California Supreme Court set up a four-part test as to whether estoppel could be applied. The court applied these tests and found, as was the case in Lantzy, that there were no grounds for estoppel.

In Arundel, the court noted that “there are simply no allegations that Arundel Green made any affirmative statement or promise that would lull the HOA into a reasonable belief that its claims would be resolved without filing a lawsuit.” The court also cited Lesko v. Superior Court which included a recommendation that the plaintiffs “send a stipulation?Ķextending time.” This did not happen and the court upheld the dismissal.

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Ex-Corps Worker Pleads Guilty to Bribery on Afghan Contract

July 26, 2017 — Tom Ichniowski - Engineering News-Record
A former Army Corps of Engineers contracting official has pleaded guilty to a federal charge that he took $320,000 in bribes from a contractor in exchange for help on a U.S. road contract in Afghanistan, the Dept. of Justice says. Read the court decision
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Reprinted courtesy of Tom Ichniowski, ENR
Mr. Ichniowski may be contacted at ichniowskit@enr.com

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Counsel Investigating Coverage Can be Sued for Invasion of Privacy

January 28, 2019 — Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel LLP
In Strawn v. Morris, Polich & Purdy (No. A150562, filed 1/4/19), a California appeals court held that policyholders could state a claim for invasion of privacy against an insurer’s coverage counsel and law firm, where the counsel had disseminated inadvertently produced tax returns to forensic accountants while evaluating coverage. In Strawn, a couple’s home was destroyed by fire and the husband was prosecuted for arson, but the criminal case was dropped. Notwithstanding, their insurance claim was denied on the ground that the husband intentionally set the fire and fraudulently concealed his actions. In addition to the insurance company, the insureds also named the carrier’s coverage counsel and his firm in the ensuing bad faith lawsuit, alleging causes of action for elder financial abuse and invasion of privacy. 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 Read the court decision
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Time is of the Essence, Even When the Contract Doesn’t Say So

January 11, 2021 — Christopher G. Hill - Construction Law Musings
Welcome to 2021! As often happens here at Construction Law Musings, the year starts with a few posts on notable construction law cases that dropped in the past year or so. Not only does this review hopefully help you keep up, but helps me keep up with the latest developments (one of the reasons why I keep blogging). The first of these cases is Appalachian Power Co. v. Wagman Heavy Civil, Inc. out of the Western District of Virginia federal court. In this case, Wagman Heavy Civil, Inc. (“Wagman”) and the Virginia Department of Transportation (“VDOT”) contracted for the design and construction of a highway interchange project (the “Project”). Wagman and the Appalachian Power Company (“APCO”) entered into a written contract (the “Written Contract”) for APCO to remove and relocate its utility structures (the “Work”) in order to facilitate construction for the Project. 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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More Money Down Adds to U.S. First-Time Buyer Blues: Economy

August 20, 2014 — Michelle Jamrisko and Alexis Leondis – Bloomberg
The challenges facing prospective buyers of the least expensive homes in the U.S. are getting harder to overcome. Already beset by stagnant wages, growing student debt and competition from investors who are snapping up listings, those looking to purchase moderately priced houses must also provide more cash up front. The median down payment for the cheapest 25 percent of properties sold in 2013 was $9,480 compared with $6,037 in 2007, the last year of the previous economic expansion, according to data from 25 of the largest metro areas compiled by brokerage firm Redfin Corp. The higher bar is a symptom of still-tight credit that is crowding out first-time buyers even as interest rates remain near historical lows. Younger adults, who would normally be making initial forays into real estate, are among those most affected, weakening the foundations of the housing market and limiting its contribution to economic growth. Ms. Jamrisko may be contacted at mjamrisko@bloomberg.net; Ms. Leondis may be contacted at aleondis@bloomberg.net Read the court decision
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Reprinted courtesy of Michelle Jamrisko and Alexis Leondis, Bloomberg

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Clean Water Act Cases: Of Irrigation and Navigability

January 06, 2020 — Anthony B. Cavender - Gravel2Gavel
The federal courts have recently decided two significant Clean Water Act (CWA) cases: State of Georgia, et al. v. Wheeler, where the US District Court for the Southern District of Georgia held that the 2015 rulemaking proceeding of EPA and the U.S. Army Corps of Engineers redefining the term “Waters of the United States” in the CWA violated the Act as well as the Administrative Procedure Act; and the Ninth Circuit’s decision in Pacific Coast Federation of Fishermen’s Associations, et al. v. Glaser, where the appeals court ruled that the lower court erroneously interpreted a CWA NPDES permitting exception involving agricultural return flows. An Absence of Navigability: State of Georgia, et al. v. Wheeler Decided on August 21, 2019, the district court, one of the few courts to grapple with the rule’s compliance with the CWA and the Administrative Procedure Act (APA), held that the agencies’ redefinition of the terms “Interstate Waters,” “Tributaries” and “Adjacent Waters” violated the CWA by reading “navigability” out of the new definitions, or by failing to adhere to the Supreme Court’s rulings in the 2005 case of Rapanos v. United States, in particular Justice Kennedy’s concurrence regarding the application of the “significant nexus” in case-by-case adjudications as to whether a particular body of water was covered by the Act. Moreover, some provisions of the rule conflicted with the APA because they were not a logical outgrowth of the rules proposed by the agencies in 2014, and on which they solicited comments, and other determinations were not supported by a reasonable explanation. In addition, without a clear statement from Congress that it supported the rule’s effect of increasing the nature and extent of enhanced federal jurisdiction over waters subject to the CWA, the court was loathe to approve the rule. Accordingly, the rule was remanded to the agencies for additional review consistent with this decision. This decision is of particular importance as it may well be the first case to subject this new EPA rule—the linchpin of much of EPA’s regulation under the CWA—to extended review. (Other courts have only been asked to enjoin the rule, which involves a different type of review.) Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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