Hawaii Supreme Court Tackles "Other Insurance" Issues
February 25, 2014 —
Tred Eyerly – Insurance Law HawaiiResponding to four certified questions from the Ninth Circuit, the Hawaii Supreme Court addressed various issues raised by competing "other insurance" provisions in two CGL policies. Nautilus Ins. Co. v. Lexington Ins. Co., 2014 Haw. LEXIS 59 (Haw. Feb. 13, 2014).
Coverage for a development on Maui was at issue. The developer, VP & PK (ML) LLC, was insured by Lexington. The other insurance provision in Lexington's policy provided it was excess over "any other primary insurance available to you covering liability for damages arising out of the premises . . . for which you have been added as an additional insured."
Kila Kila Construction was one of VP & PK's subcontractors. Kika Kila was not an additional insured under Lexington's policy. Kila Kila had its own CGL policy with Nautilus. The Nautilus other insurance clause stated the insurance was excess over "any other primary insurance available to you covering liability arising out of the premises or operations for which you ahve been added as an additional insured." An endorsement added VP & PK as an additional insured, but only for liability arising out of Kila Kila's negligence.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Michigan Supreme Court Concludes No Statute of Repose on Breach of Contract
July 19, 2011 —
CDJ STAFFJudge Marilyn Kelly of the Michigan Supreme Court has remanded the case of Miller-Davis Co. v. Ahrens Constr. Inc. (Mich., 2011) to the Court of Appeals, after determining that the court had improperly applied the statute of repose. She reversed their judgment, pending a new trial.
Ahrens Construction was a subcontractor, hired by Miller-Davis to build and install a natatorium room at a YMCA camp in Kalamazoo, Michigan. After its installation, the YMCA discovered a severe condensation problem, causing moisture to “rain” from the roof. The architect, testifying for Miller-Davis, alleged that the problems were due to improper installation by Ahrens. Ahrens claimed that the condensation problem was due to a design error.
When the roof was removed and reconstructed, the moisture problem ended. Ahrens argued that the alleged defects were caused by the removal. Further, in trial Ahrens raised the issue of the statute of repose. The court found in favor of Miller-Davis and did not address the statute of repose.
The Court of Appeals reversed the trial court, determining that the statute of repose had barred the suit. This rendered the other issues moot.
The Michigan Supreme concluded that the issue at hand was “a suit for breach of contract,” and that the Michigan statute of repose is limited to tort actions. They remanded the case to the Court of Appeals to address the issues that had been mooted by the application of the statute of repose.
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Wage Theft Investigations and Citations in the Construction Industry
October 11, 2017 —
Evelin Y. Bailey - California Construction Law BlogThis month we share some cautionary tales for employers in the construction industry. During the past several months the California Labor Commissioner has cited or filed suit against several construction companies. In one investigation, a general contractor was held equally responsible for wages owed by a subcontractor to its employees. The lesson learned from these stories is that now more than ever it is important to have in place proper wage and hour practices and to conduct periodic audits of those practices, including those of your lower tiered contractors, preferably by experienced legal counsel.
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Evelin Y. Bailey, California Construction Law Blog
Wisconsin Court Applies the Economic Loss Doctrine to Bar Negligence Claims for Purely Economic Losses
August 17, 2020 —
Rahul Gogineni - The Subrogation StrategistIn Mech. Inc. v. Venture Elec. Contrs., Inc., No. 2018AP2380, 2020 Wisc. App. LEXIS 170, the Court of Appeals of Wisconsin, District Two, considered whether a party may bring a negligence claim for purely economic damages. In upholding the lower court, the appellate court found that a party is barred by the Economic Loss Doctrine from bringing a negligence claim for purely economic damages.
Both parties involved in this action were subcontractors on a building project at the Great Lakes Research Facility for the University of Wisconsin-Milwaukee. As a result of Venture Electrical Contractors, Inc. (Venture) not paying for requested work, Mechanical, Inc. (Mechanical) sued Venture for $11,961.31. Venture, in turn, countersued in negligence for $1.1 million for costs incurred due to delays and untimely performance. Mechanical sought dismissal of the negligence claim based upon the Economic Loss Doctrine. Finding that the Economic Loss Doctrine applies to purely economic losses, the trial court dismissed Venture’s negligence claim. Venture appealed to the Court of Appeals of Wisconsin.
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Rahul Gogineni, White and Williams LLPMr. Gogineni may be contacted at
goginenir@whiteandwilliams.com
No Coverage for Installation of Defective Steel Framing
June 26, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe California Court of Appeal affirmed the trial court's holding that the insurer had no duty to defend claims arising out of the insureds' installation of defective steel framing in an apartment building. Regional Steel Corp. v. Liberty Surplus Ins. Corp., No. B245961(Cal. Ct. App. May 16, 2014) [decision here].
Regional Steel was a subcontractor for providing reinforced steel to the columns, walls, and floors of an apartment building under construction. Regional used 90 degree and 135 degree seismic hooks as approved by the general contractor, JSM Construction, Inc. The City building inspector issued a correction notice, however, requiring the exclusive use of the 135 degree hooks. Levels one through three had defective tie hooks and required repair. JSM refused to pay Regional's invoices and withheld $545,000. JSM had to make repairs that required opening up numerous locations in the concrete walls, welding reinforcements to the steel placed by Regional, and otherwise strengthening the inadequate installation.
Regional sued JSM for the withheld payment. JSM cross-claimed, asserting breach of contract and breach of express and implied warranties.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Suing a Local Government in Land Use Cases – Part 1 – Substantive Due Process
February 16, 2017 —
Wally Zimolong – Supplemental ConditionsBecause of my personal political persuasions (pro-freedom) and success in litigating cases against the government and other media about those cases businesses frequently approach me about bringing claims against local governments and agencies for interfering with their Constitutional rights. Actions by local government agencies that could give rise to a Constitutional violation include: treating a developer’s project differently than a similar project, revoking a previously issued zoning or building permit, disqualifying a contractor from bidding on a government contract, retaliating against a business owner for speaking out against the local agency or one of its members, or unnecessarily delaying the issuance of a permit. The Constitutional rights most typically implicated in these cases are those guaranteed by the 5th and 14th Amendments to the United States Constitution. However, the 1st Amendment is also frequently implicated.
Suing a local government agency for violating your Constitutional rights is not easy. However, the federal statute under which the cases are brought, 42 U.S.C. Section 1983, provides for the award of a successful plaintiff’s attorneys fees. This is true even if the Judge or jury awards a mere $1 is damages. Moreover, sometimes there can be a strategic value in the litigation.
This is the first in a series of blog posts exploring claims available to businesses harassed by local government agencies and officials and the challenges inherent in successfully bringing those claims. We will start with a claim for a substantive due process violation.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
HOA Has No Claim to Extend Statute of Limitations in Construction Defect Case
October 28, 2011 —
CDJ STAFFThe 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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Triple Points to the English Court of Appeal for Clarifying the Law on LDs
July 01, 2019 —
Vincent C. Zabielski & Julia Kalinina Belcher - Gravel2GavelCan an employer recover liquidated damages (LDs) from a contractor if the contract terminates before the contractor completes the work?
Surprisingly, heretofore, English law provided no clear answer to this seemingly straightforward question, and inconsistent case law over the past century has left a trail of confusion. Given the widespread use of English law in international construction contracts, this uncertainty had gone on far too long.
The good news is that drafters of construction contracts throughout the world can now have a well-deserved good night’s sleep courtesy of the English Court of Appeal’s March 2019 decision in Triple Point Technology, Inc. v PTT Public Company Ltd [2019] EWCA Civ 230.
The Triple Point case concerned the delayed supply by Triple Point (the “Contractor”) of a new software system to employer PTT. The contract provided for payments upon achievement of milestones, however order forms incorporated into the contract set out the calendar dates on which fixed amounts were payable by PTT, resulting in an apparently contradictory requirements on when payment was due. Triple Point achieved completion (149 days late) of a portion of the work milestones, and were paid for that work. Triple Point then sought payment for the work which was not yet completed, relying on the calendar dates in the order forms rather than achievement of milestone payments. Things got progressively worse as PTT refused payment, Triple Point suspended the work for PTT’s failure to pay, PTT terminated the contract and then appointed a new contractor to complete the work.
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Vincent C. Zabielski, Pillsbury and
Julia Kalinina Belcher, Pillsbury
Mr. Zabielski may be contacted at vincent.zabielski@pillsburylaw.com
Ms. Belcher may be contacted at julia.belcher@pillsburylaw.com
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