Another (Insurer) Bites The Dust: Virginia District Court Rejects Narrow Reading of Pollution Exclusion
September 10, 2018 —
Michael S. Levine & Latosha M. Ellis - Hunton Insurance Recovery BlogIn a victory for policyholders, and an honorable mention for Merriam-Webster’s Dictionary, a federal judge in Virginia ruled that the dispersal of concrete dust that damaged inventory stored in an aircraft part distributor’s warehouse was a pollutant, as defined by the policy, but that it also constituted “smoke” as that term was defined in the dictionary, thereby implicating an exception to the policy’s pollution exclusion. The Court then granted summary judgment for the policyholder, who had suffered a $3.2 million loss.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Latosha M. Ellis, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
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Insured's Complaint Against Flood Insurer Survives Motion to Dismiss
May 07, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe insurer's attempt to dismiss the insured's multi-count complaint for failure to provide full coverage for flood damage failed. Ragusa Corp. v. Standard Fire Ins. Co., 2014 U.S. Dist. LEXIS 40812 (D. Conn. March 27, 2014).
The insureds' house suffered significant damage due to flood associated with Hurricane Irene. The insureds submitted a claim. Standard Fire paid $35,216.75, well below what the insureds thought they were owed. The insureds returned the check and demanded what they believed was full payment. The insureds demanded an appraisal because the parties did not agree on the amount being paid under the policy, including disagreement about the amount owed for items that both sides agreed were covered under the policy. Standard Fire refused to participate in an appraisal.
The insureds ended up suing Standard Fire, alleging, among other things, breach of contract, negligent misrepresentation, and breach of the implied covenant of good faith and fair dealing.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Paul Tetzloff Elected As Newmeyer & Dillion Managing Partner
June 03, 2019 —
Newmeyer & Dillion LLPNewmeyer & Dillion LLP, a prominent business and real estate law firm, selected Paul Tetzloff as the firm's Managing Partner. His term began on January 1, 2019. A business litigator, Tetzloff will now oversee the firm's strategic plan and manage the firm's day-to-day business affairs.
"The Firm is incredibly fortunate to have Paul stepping into the role as Managing Partner. His energy, intelligence, leadership, and drive make him uniquely qualified to lead this Firm for years to come," said former Managing Partner Jeff Dennis. "I am excited to watch where the Firm is headed – we have such an amazing opportunity to continue to develop to even greater heights, and Paul will be a huge part of making that happen."
Active in his community, Tetzloff sits on the board for HomeAid Orange County and the Marine Raider Association.
Tetzloff is succeeding Dennis, who served in the role from 2012 to 2018. "Jeff was our managing partner for seven years and he did an outstanding job. We owe Jeff a debt of gratitude for his service," said Tetzloff of his predecessor. "I'm looking forward to continuing to build on the groundwork laid to help the firm reach new levels in the years to come."
Dennis' leadership allowed the firm to grow substantially under his tenure, including opening a Las Vegas, Nevada office and establishing thriving practice areas throughout various industries. Dennis will focus his energy on overseeing the firm's growing Privacy and Data Security practice.
Paul Tetzloff
paul.tetzloff@ndlf.com
Practice Areas
Business Litigation
Construction Litigation
Real Estate Litigation
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, privacy & data security and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
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Before Celebrating the Market Rebound, Builders Need to Read the Fine Print: New Changes in Construction Law Coming Out of the Recession
November 26, 2014 —
Alan H. Packer - Newmeyer & Dillion, LLPAs the homebuilding market continues to improve, many builders find themselves maneuvering familiar roads. That said, important new realities have taken hold since the market collapse. Navigating these changes requires extra thought for practical and legal reasons.
Using Old Designs “Off the Shelf”?
The adoption of the California Building Standards Code in 2010, with an updated schedule to go into effect January 1, may complicate the use of older designs. In addition, some builders are contemplating building on pads constructed five or more years ago, temporarily shelved until market conditions improved. Because of changes in both the applicable Code and due to possible changes in the underlying soils and drainage, these projects require additional scrutiny before starting construction.
Mechanic’s Lien Law Changes
Not too long ago, the California Legislature recently overhauled the entire mechanic’s lien law system in California. New forms, new statutory references, new rules and deadlines are all applicable to projects under construction now. Make sure your documents are up to date, as the use of older forms (particularly for liens, progress payments, and final payments) could create legal problems in the future.
Indemnity Law Changes
Since 2006, California lawmakers have passed four rounds of legislation aimed at limiting indemnity provisions in construction contracts. The laws are aimed at two aspects of indemnity law: “Type 1” indemnity provisions, and liability for the costs of defending a claim.
Type 1 Indemnity. California law previously permitted a builder to obtain “Type 1” indemnity from its subcontractors for all claims. Under a Type 1 provision, if a claim arose out of the trade’s work, the trade was fully responsible to defend and indemnify the builder – even if other trades or the Builder were partially at fault. Some cases even allowed, typically in a commercial context, the builder to obtain Type 1 indemnity even if the trade was not negligent, as long as the claim involved its work.
Defense Obligation. In 2008, California’s highest court issued an opinion in Crawford v. Weather Shield, evaluating an indemnity provision requiring trade (a window supplier/manufacturer) to defend the builder in claims involving allegations of damages arising out of the trade’s work. Because the trade had contractually agreed to defend the builder, the Court held it responsible for the builder’s defense costs -- even though, ultimately, the trade was found
not liable for the actual damages claimed.
Recent legislation after Crawford has dramatically shifted how indemnity provisions will be enforced. Builders may no longer obtain Type 1 indemnity for residential construction defect claims covered by SB800; instead, indemnity is limited to the extent a claim arises out of the trade’s work. Even more recent legislation applied these changes to claims arising out of commercial construction projects. The recent legislation allows the trades “options” on how to defend the builder, with an eye toward requiring that they pay only a “reasonably allocated” portion for the builder’s defense costs.
Smart builders are refining their contract documents to take into account these new limitations on indemnity provisions.
Insurance Market Changes
Due to uncertainties in subcontractor insurance and other factors, many builders have also converted their liability insurance from a “bring your own” model to “wrap-up” insurance, where the builder’s policy also covers their trades. Builders should carefully examine their subcontracts in light of this change as well.
Trade Partner Changes
On a practical level, many trade partners, particularly in the residential sector, have gone out of business or moved on to greener pastures. Builders need to find and negotiate contracts with new trade partners on the fly, and educate them on the builders’ procedures for payment and construction.
SB800 documentation
A decade ago, most builders updated their purchase documents and subcontracts for California’s “Right to Repair Law” (also known as SB800), which set forth functionality standards for construction defects in residential housing, and procedures for resolving claims prior to litigation. Builders ramping up to meet market demand should examine how they implemented SB800 changes in contract documents. Issues to consider:
- Whether to opt out of -- or back into -- statutory procedures.
- Whether to include arbitration or judicial reference provisions to control where claims are litigated after the SB800 process.
- Re-training personnel to preserve SB800 rights, including sign-offs on purchase documentation and recordation of key documents.
- Recent Court of Appeal decisions have complicated the SB800 landscape, potentially opening the door to “common law” tort claims in at least subrogation contexts. Strategic planning at the document stage may be a good way to mitigate this risk as the cases wind their way through the judicial process.
The continuing surge in building activity is a welcome sign for builders who have weathered the storm. Before taking too many steps, builders should consult with counsel, their designers, and their insurance advisors to take into account the new realities of this recovering housing market.
About the Author
Alan H. Packer is a partner in the expanding Walnut Creek, CA, office of the law firm of
Newmeyer & Dillion LLP whose specialties include real estate, insurance, and construction litigation. To reach Alan, call 925.988.3200 or email him at alan.packer@ndlf.com.
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Gain in Home Building Points to Sustained U.S. Growth
October 22, 2014 —
Michelle Jamrisko and Danielle Trubow – BloombergBuilders started work on more homes in September and American consumers this month were the most optimistic in seven years, signaling the U.S. economy will ride out a global slowdown.
Housing starts climbed 6.3 percent to a 1.02 million annualized rate from a 957,000 pace in August as multifamily and single-family projects advanced, the Commerce Department reported today in Washington. The Thomson Reuters/University of Michigan preliminary sentiment index for October increased to 86.4, the strongest since July 2007, another report showed.
Gains in residential construction will help underpin the economic expansion as the recent drop in mortgage rates lifts home sales and gives builders reason to take on more projects. Other figures showing factory production rebounded last month and claims for jobless benefits dropped last week to the lowest level in 14 years added to evidence the turbulence in global markets has yet to depress the world’s largest economy.
Ms. Jamrisko may be contacted at mjamrisko@bloomberg.net; Ms. Trubow may be contacted at dtrubow@bloomberg.net
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Michelle Jamrisko and Danielle Trubow, Bloomberg
New York High Court: “Issued or Delivered” Includes Policies Insuring Risks in New York
December 20, 2017 —
Bethany Barrese & Samantha Martino - Case Alert BlogOn November 20th, the New York Court of Appeals reinstated a case seeking more than six million dollars in damages against the insurers for DHL Worldwide Express Inc. (“DHL”), originating from a fatal head-on car crash between Claudia Carlson and a truck owned by MVP Delivery and Logistics Inc. (“MVP”), a DHL contractor. The truck, which bore DHL’s logo, was owned by MVP and driven by an MVP employee. The MVP employee was running an errand unrelated to his job at the time of the accident. Mrs. Carlson’s husband sued the employee, DHL, and MVP. The jury award of $20 million was reduced to $7.3 million by the Appellate Division. MVP’s insurer paid Mr. Carlson just over $1 million, and the employee assigned his rights to any other insurance coverage to Mr. Carlson
Mr. Carlson sued DHL and its insurers, seeking the balance of the outstanding judgment pursuant to New York Insurance Law § 3420. The defendants successfully moved to dismiss Mr. Carlson’s claims, which dismissal was affirmed by the Appellate Division on the basis that § 3420 did not apply since the policies in question were not “issued or delivered” in New York; they had been issued in New Jersey and delivered in Washington and Florida. The Court of Appeals was subsequently presented with two questions: (1) whether the DHL policies fell within the purview of Insurance Law § 3420 as policies “issued or delivered” in New York; and (2) whether MVP was an “insured” pursuant to the “hired auto” provisions of DHL’s policies.
Reprinted courtesy of
Bethany Barrese, Saxe Doernberger & Vita, P.C. and
Samantha Martino, Saxe Doernberger & Vita, P.C.
Ms. Barrese may be contacted at blb@sdvlaw.com
Ms. Martino may be contacted at smm@sdvlaw.com
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Architects Group Lowers U.S. Construction Forecast
July 30, 2014 —
Nadja Brandt – BloombergSpending on non-residential construction in the U.S. will be less than initially projected as state and local governments scale back investments in such properties as schools and health-care buildings, the American Institute of Architects said.
Total spending on commercial and institutional development probably will increase 4.9 percent this year, down from an earlier estimate of 5.8 percent, according to a semi-annual survey by the Washington-based group.
A slowdown in funding for institutional projects, which include education, health-care, religious and public-safety facilities, has been a drag on the recovery of the wider industry, according to Kermit Baker, the AIA’s chief economist. The group expects institutional-construction spending to fall 0.1 percent this year, compared with January’s projection for an increase of 3.4 percent, Baker said.
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Nadja Brandt, BloombergMs. Brandt may be contacted at
nbrandt@bloomberg.net
Mind The Appeal Or: A Lesson From Auto-Owners Insurance Co. V. Bolt Factory Lofts Owners Association, Inc. On Timing Insurance Bad Faith And Declaratory Judgment Insurance Claims Following A Nunn-Agreement
August 06, 2019 —
Jean Meyer - Colorado Construction LitigationOn May 30, 2019, Judge Richard Brooke Jackson of the United States District Court for the District of Colorado offered an insightful lesson to the parties in Auto-Owners Insurance Co. v. Bolt Factory Lofts Owners Association, Inc.[1] on the importance of ripeness in declaratory judgment insurance actions and bad faith counterclaims. The case arrived in front of Judge Jackson based on the following fact pattern.
A homeowner association (Bolt Factory Lofts Owners Association, Inc.) (“Association”) brought construction defect claims against a variety of prime contractors and those contractors subsequently brought third-party construction defect claims against subcontractors. One of the prime contractors assigned their claims against a subcontractor by the name Sierra Glass Co., Inc. (“Sierra”) to the Association and all the other claims between all the parties settled. On the eve of trial involving only the Association’s assigned claims against Sierra, the Association made a settlement demand on Sierra for $1.9 million. Sierra asked its insurance carrier, Auto-Owners Insurance, Co. (“AOIC”), which had been defending Sierra under a reservation of rights letter, to settle the case for that amount, but AOIC refused. This prompted Sierra to enter into a “Nunn-Agreement” with the Association whereby the case would proceed to trial, Sierra would refrain from offering a defense at trial, the Association would not pursue any recovery against Sierra for the judgment, and Sierra would assign any insurance bad faith claims it may have had against AOIC to the Association. (“Nunn-Agreement”)
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
