Fairfield Connecticut Building Expert Directory

SEC Approves New Securitization Risk Retention Rule with Broad Exception for Qualified Residential Mortgages

November 26, 2014 — Neil P. Casey & Lori S. Smith – White and Williams LLP
The Securities and Exchange Commission (SEC) and five other federal agencies recently approved a joint rule (the “Risk Retention Rule”) mandating that sponsors of certain types of securitizations retain a minimum level of credit risk exposure in those transactions and prohibiting such sponsors from transferring or hedging against that retained credit risk.[i]The final Risk Retention Rule will be effective one year after its publication in the Federal Register for securitizations of residential mortgages, and two years after publication for securitizations of all other asset types. The SEC vote was 3-2, with sharp dissents from Commissioners Gallagher and Piwowar concluding that the adopting agencies had missed a prime opportunity to rein in risky mortgage lending practices that had precipitated the 2008 financial crisis. Background Following the meltdown of the securitization markets in 2007 (particularly subprime residential mortgage-backed securities), and the resulting global financial crisis, the Dodd-Frank Act mandated that the U.S. federal banking, securities and housing agencies adopt and implement rules to require sponsors of most new securitizations to retain not less than five percent of the credit risk of any assets that the securitizer, through the issuance of an asset-backed security, transfers, sells or conveys to a third party. It was thought that requiring securitization sponsors to keep “skin in the game” would align the interests of the sponsors with the interests of investors and thereby incentivize the sponsors to ensure the quality of the assets underlying the securitization through appropriate due diligence and underwriting procedures when selecting assets for securitization. Although the Dodd-Frank Act explicitly exempted securitizations of certain types of mortgage loans called “qualified residential mortgages” (or “QRMs”) from this risk retention requirement, it invited the rulemaking agencies to define that key term, provided that their definition could be no broader than the definition of “qualified mortgage”adopted by the Consumer Financial Protection Bureau (CFPB) pursuant to the Truth in Lending Act.[ii] In considering how to define QRM, the rulemaking agencies were directed by the Dodd-Frank Act to take into consideration “underwriting and product features that historical loan performance data indicate result in a lower risk of default.”[iii] Reprinted courtesy of Neil P. Casey, White and Williams LLP and Lori S. Smith, White and Williams LLP Mr. Casey may be contacted at caseyn@whiteandwilliams.com; Ms. Smith may be contacted at smithl@whiteandwilliams.com Read the court decision
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Power & Energy - Emerging Insurance Coverage Cases of Interest

November 30, 2020 — David G. Jordan & Tiffany Casanova - Saxe Doernberger & Vita, P.C.
The Power & Energy sector faces a multitude of risks that impact output and profitability, requiring sound risk management and robust insurance programs. As of recent, like most industries, there have been significant challenges facing the industry in light of COVID-19. These issues, including decreased product demand as well as supply- side issues, have been well documented. However, other issues continue to impact Power & Energy providers, with significant insurance coverage implications that are worthy of note. Below is a summary of three open cases of interest, where declaratory relief has been sought by energy providers’ insurance carriers, seeking an avoidance of coverage. 1. Fracking Dispute and “Intentional Acts” In the Texas case of The James River Insurance Co. v. Clearpoint Chemicals LLC et al., No. 4:20-cv-0076 (N.D.Tex), James River Insurance Company (“James River”) is asking a federal district court to declare that it does not owe defense or indemnity to its insured for acts it defines as both intentional and/or malicious acts. Reprinted courtesy of David G. Jordan, Saxe Doernberger & Vita, P.C. and Tiffany Casanova, Saxe Doernberger & Vita, P.C. Mr. Jordan may be contacted at DJordan@sdvlaw.com Ms. Casanova may be contacted at TCasanova@sdvlaw.com Read the court decision
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Accident/Occurrence Requirement Does not Preclude Coverage for Vicarious Liability or Negligent Supervision

June 06, 2018 — Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel, LLP
In Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc. (No. S236765, filed 6/4/18) (L&M), the California Supreme Court ruled that the liability insurance requirement that injury be caused by an “occurrence,” defined as an “accident,” does not preclude coverage of an employer’s independent tort liability for injury deliberately caused by its employee. In L&M, Liberty insured a construction company that contracted to manage a construction project at a middle school in San Bernardino, California. A 13-year-old student subsequently sued the company in state court, alleging that she had been sexually molested by a company employee, Hecht. Among others, she alleged a cause of action for negligent hiring, retention and supervision of the employee. The construction company tendered to Liberty, which defended the employer under a reservation of rights while seeking declaratory relief in federal court. The district court granted summary judgment for Liberty, ruling that the injury was not caused by an “occurrence.” On appeal, the 9th Circuit Court of Appeals certified the question to the California Supreme Court as a matter of state law. 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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A Trio of Environmental Decisions from the Fourth Circuit

August 28, 2018 — Anthony B. Cavender - Gravel2Gavel
Within the past few weeks, the U.S. Court of Appeals for the Fourth Circuit has issued some very significant rulings regarding the construction of new natural gas pipelines. These cases are Berkley, et al. v. Mountain Valley Pipeline, LLC, decided July 25; Sierra Club, Inc., et al., v. U.S. Forest Service, The Wilderness Society, et al., v. U.S. Forest Service, and Sierra Club, Inc. et al. v. U.S. Department of the Interior, decided July 27, 2018; and Sierra Club v. U.S. Department of the Interior and Defenders of Wildlife, et al., v. U.S. Department of the Interior, decided August 6, 2018. The first two cases involve the Mountain Valley Pipeline, and the last case involves the Atlantic Coast Pipeline. 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

Florida Appellate Court Holds Four-Year Statute of Limitations Applicable Irrespective of Contractor Licensure

June 22, 2016 — Clay Whittaker – Florida Construction Law Update
In Brock v. Garner Window & Door Sales, Inc.,[1] Florida’s Fifth District Court of Appeal rejected a novel attempt to circumvent Florida’s well-established four-year statute of limitations for all actions founded on the construction of an improvement to real property. Plaintiff filed a lawsuit alleging breach of contract as a result of water intrusion damage following the installation of windows.[2] It was undisputed that Plaintiff commenced the litigation more than four years following the discovery of the allegedly latent defect in the window installation.[3] Plaintiff’s counsel argued that the window contractor could not rely on the four-year statute of limitations because the window subcontractor was not a licensed contractor and, therefore, the five-year statute of limitations for actions founded on written contracts should apply. Read the court decision
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Reprinted courtesy of Clay Whittaker, Cole, Scott, & Kissane, P.A.
Mr. Whittaker may be contacted at clay.whittaker@csklegal.com

Excessive Corrosion Cause of Ohio State Fair Ride Accident

August 10, 2017 — David Suggs – Bert L. Howe & Associates, Inc.
The manufacturer of the Fire Ball ride at the Ohio State Fair claims that excessive corrosion “led to the accident that killed a teenager and injured seven others…in July.” According to a statement by KMG International, reported by ABC News, “Corrosion on the interior of the support beam reduced the beam's thickness, which led to the accident at the fair.” Furthermore, “The company said it conducted an investigation into the incident, which included a visit to the scene and a review of video footage of the incident. The company also conducted a metallurgical inspection of the ride.” A U.S. Consumer Product Safety Commission (CPSC) spokesperson said “it is aware of 22 deaths associated with amusement attractions since 2010, including Wednesday's incident, but excluding water park and work-related fatalities.” Read the court decision
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Affirmed: Nationwide Acted in Bad Faith by Failing to Settle Within Limits

July 19, 2017 — Bethany Barrese – Saxe Doernberger & Vita, P.C.
The Eleventh Circuit recently affirmed that Nationwide acted in bad faith by refusing to settle a claim against its insured for the policy limits, exposing the policyholder to an excess verdict.1 The case arose out of a 2005 automobile accident where Seung Park, who was insured by Nationwide, struck and killed another driver, Stacey Camacho. Shortly after the accident, Ms. Camacho’s estate issued a time-limited demand for the full limits of the policy Nationwide issued to Mr. Park, $100,000, to settle the case. After the deadline to respond to the demand expired, Nationwide rejected the demand and made a counteroffer. A settlement could not be reached and a wrongful death suit was filed against Mr. Park, resulting in a massive jury verdict of $5.83 million. Following the jury verdict, Mr. Park assigned his rights against Nationwide to Ms. Camacho’s estate, which then filed claims for negligence and bad faith failure to settle against Nationwide. The case was tried to a jury, which found in favor of the estate. Read the court decision
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Reprinted courtesy of Bethany Barrese, Saxe Doernberger & Vita, P.C.
Ms. Barrese may be contacted at blb@sdvlaw.com

When is Mediation Appropriate for Your Construction Case?

May 07, 2015 — Christopher G. Hill – Construction Law Musings
Here at Construction Law Musings, I have often discussed mediation as a good alternative to the expense and headaches of litigation. What I have discussed less often are the circumstances in which it is most appropriate to consider or even push for mediation. The obvious and clearest time that mediation must be used is where the contract requires it. Many construction contracts, including those from the AIA (when the parties check the appropriate box) require mediation as a prerequisite to arbitration or litigation. As is almost always the case in Virginia, this clause will be enforced. In short, if your construction contract has such a clause, and despite my reservations about “mandatory mediation,” you need to at least go through the process before moving forward with your construction claim. The more interesting case is where no such clause exists and the parties reach an impasse, sometimes prior to litigation and often after the filing of a construction complaint or demand for arbitration. What questions should you as a construction attorney be asking both to and about your construction clients before attempting mediation? Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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