Failure to Timely File Suit in Federal Court for Flood Loss is Fatal
June 29, 2017 —
Tred R. Eyerly - Insurance Law HawaiiAlthough the insureds timely filed their suit for denial of flood benefits in state court, the Fourth Circuit found the lawsuit against the Insurer was untimely because it was not filed in federal district court. Woodson v. Allstate Ins. Co., 2017 U. S. App. LEXIS 7862 (4th Cir. May 3 , 2917).
Hurricane Irene struck the insureds' house in August 27, 2011. Their property was flooded and for several hours, subjected to wave action, allegedly causing further damage to the home. The insureds contacted Allstate, who retained Rimkus Consulting Group, Inc. to inspect the property. Rimkus found that, other than a substantial loss of soil washed away around the supporting portion of the house, there was no damage to the structure of the house. Rimkus recommended reimbursement of $1200 for the washed out soil.
The insureds retained House Engineering, P.C., which submitted a report describing substantial damage caused by the hurricane, including movement to the pilings that caused the house to no longer be level. The insureds claimed $228,822 in damages.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Safe Commercial Asbestos-Removal Practices
April 18, 2023 —
Emily Newton - Construction ExecutiveContractors must proceed with caution to safely remove asbestos and protect employees and commercial buildings. Only contractors licensed by the Environmental Protection Agency (EPA) in abatement should dispose of it, because the best asbestos-removal practices require high degrees of care and safety.
Asbestos is a stealthy material, quickly becoming airborne and contaminating other areas of the building and humans. No matter a contractor's tenure in the field, it's vital to remember the top practices in the industry as people learn more about elusive, toxic asbestos-containing materials (ACMs).
Wait for Technician and Inspector Feedback
It’s important to find out if a jobsite contains asbestos. Proceed with caution if the structure was built before the 1990s. The removal process shouldn't start immediately if a business suspects asbestos and reaches out to a company. Inspectors scope the situation and grab samples for lab testing to determine how abaters should handle the case. They will need to know every potential hiding place for the asbestos, analyzing everything from caulking to wiring for asbestos coatings and other variants of the substance. This may take time, but commercial contractors must wait until they receive this information before proceeding.
Reprinted courtesy of
Emily Newton, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Contractor Liable for Soils Settlement in Construction Defect Suit
February 10, 2012 —
CDJ STAFFThe California Court of Appeals ruled on January 9 in Burrow v. JTL Dev. Corp., a construction defect case in which houses suffered damage due to improperly compacted soil, upholding the decision of the lower court.
Turf Construction entered into a deal with JTL to develop a parcel they acquired. A third firm, Griffin Homes, withdrew from the agreement “when a geotechnical and soils engineering firm reported significant problems with soil stability on 14 of the lots.” Turf Construction then took over compacting and grading the lots. Turf “had never compacted or graded a residential tract before.” Robert Taylor, the owner of Turf, “testified he knew there was a significant problem with unstable soils.”
After homes were built, the plaintiffs bought homes on the site. Shortly thereafter, the homes suffered damage from soil settlement “and the damage progressively worsened.” They separately filed complaints which the court consolidated.
During trial, the plaintiff’s expert said that there had been an inch and a half in both homes and three to five inches in the backyard and pool areas. “He also testified that there would be four to eight inches of future settlement in the next fifteen to twenty years.” The expert for Turf and JTL “testified that soil consolidation was complete and there would be no further settlement.”
Turf and JTL objected to projections made by the plaintiffs’ soil expert, William LaChappelle. Further, they called into question whether it was permissible for him to rely on work by a non-testifying expert, Mark Russell. The court upheld this noting that LaChappelle “said that they arrived at the opinion together, through a cycle of ‘back and forth’ and peer review, and that the opinion that the soil would settle four to eight inches in fifteen to twenty years was his own.”
Turf and JTL contended that the court relied on speculative damage. The appeals court disagreed, stating that the lower court based its award “on evidence of reasonably certain damage.”
Turf also that it was not strictly liable, since it did not own or sell the properties. The court wrote that they “disagree because Turf’s grading activities rendered it strictly liable as a manufacturer of the lots.” The court concluded that “Turf is strictly liable as a manufacturer of the lots.”
Judge Coffee upheld the decision of the lower court with Judges Yegan and Perren concurring.
Read the court’s decision…
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Reminder: Your MLA Notice Must Have Your License Number
November 26, 2014 —
Christopher G. Hill – Construction Law MusingsRemember a couple of years ago when the Virginia mechanic’s lien rules changed to require inclusion of a claimant’s contractor’s license number (where a license is required)? If not, then this is a reminder of that particular wrinkle in the strictly interpreted mechanic’s lien statute. This requirement applies to all mechanic’s lien memoranda and, like all parts of this crazy statute, will invalidate a lien if not met. Well, another change to the statute happened with a bit less fanfare.
The change back in 2013 that came along with the license number requirement for a lien memorandum is a change in the mechanic’s lien agent notice requirement that applies to residential construction. The basic requirement, namely that those performing residential construction must notify any mechanic’s lien agent (“MLA”) listed on a building permit within 30 days of starting work that they are on the job and could file a lien, has not changed. What the amendments to the lien statutes in 2013 added was a requirement that the notice, like a lien memorandum, must include the contractor’s or subcontractor’s license number.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Changes to Pennsylvania Mechanic’s Lien Code
July 13, 2017 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday here at Musings, we welcome Jim Fullerton. Jim is the President of the law firm of Fullerton & Knowles, P.C., which has attorneys licensed in Virginia, Maryland, Pennsylvania, and the District of Columbia, is a Martindale Hubbell Peer Rated Lawyer AV® Preeminent.™ The firm represents owners, lenders, design professionals, suppliers, subcontractors, general contractors and other members of the real estate and construction industries, filing mechanic’s liens, surety bond and other construction claims across all of the states in the Mid Atlantic region. He also represents creditors in bankruptcy issues nationwide, particularly defense of bankruptcy preference claims; advises owners and lenders in real estate lending and acquisition transactions; on all real estate and construction law issues; contract formation and disputes.
The firm’s Construction Law Survival Manual is well known and widely used by participants in the construction process. The 550 page manual provides valuable information about construction contract litigation, mechanic’s liens, payment bond claims, bankruptcy and credit management and contains over 30 commonly used contract forms. All of this information and recent construction law issues are constantly updated on the firm’s website.
There are two changes to the Pennsylvania Mechanic’s Lien Code that became effective September 2014. First, residential properties built by an owner for their own residence will now have a defense of payment to subcontractor mechanic’s liens. This protects homeowners from mechanic’s liens if they have paid their general contractors in full. Second, construction loan open end mortgages will have priority over mechanic’s liens, as long as at least sixty per cent (60%) of the loan proceeds are used for construction costs. This change was pushed by Pennsylvania lenders in response to a recent court case.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Quick Note: Third-Party Can Bring Common Law Bad Faith Claim
July 01, 2019 —
David Adelstein - Florida Construction Legal UpdatesA third-party claimant may bring a common law bad faith claim against a defendant’s liability insurer. Mccullough v. Royal Caribbean Cruises, 2019 WL 2076192, *2 (S.D.Fla. 2019). “A bad faith claim may be brought by a third party absent an assignment from the [defendant] insured.” Id. This can only be done in the third-party bad faith context with the argument that the insurer’s “bad faith” conduct resulted in a judgment against the defendant-insured in excess of the policy limits. However, in any third-party bad faith claim (and, really, bad faith claim in general), coverage must first be determined under the policy.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Colorado Supreme Court Issues Decisions on Statute of Limitations for Statutory Bad Faith Claims and the Implied Waiver of Attorney-Client Privilege
July 11, 2018 —
Jennifer Arnett-Roehrich - Gordon & Rees Insurance Coverage Law BlogThe Colorado Supreme Court has been busy the past two weeks, issuing a couple rulings that should be of interest to the insurance industry:
Statute of Limitations for Bad Faith Statute: In Rooftop Restoration, Inc. v. American Family Mutual Insurance Co., 2018 CO 44 (May 29, 2018), the Colorado Supreme Court held that the one-year statute of limitations that applies to penalties, does not apply to claims brought under C.R.S. 10-3-1116, Colorado’s statutory cause of action for unreasonable delay or denial of benefits. Section 10-3-1116 provides that a first-party claimant whose claim for payment of benefits has been unreasonably delayed or denied may seek to recover attorney fees, costs, and two times the covered benefit, in addition to the covered benefit. A separate Colorado statute, CRS 13-80-103(1)(d) provides a one-year statute of limitations for “any penalty or forfeiture of any penal statutes.” To arrive at the conclusion that the double damages available under section 10-3-1116 is not a penalty, the Court looked at yet another statutory provision, governing accrual of causes of action for penalties, which provides that a penalty cause of action accrues when “the determination of overpayment or delinquency . . . is no longer subject to appeal.” The Court stated that because a cause of action under 10-3-1116 “never leads to a determination of overpayment or delinquency . . . the claim would never accrue, and the statute of limitations would be rendered meaningless.” Para. 15. Presumably, the default two-year statute of limitations, provided by CRS 13-80-102(1)(i), will now be found to apply to causes of action seeking damages for undue delay or denial of insurance benefits.
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Jennifer Arnett-Roehrich, Gordon & Rees Scully MansukhaniMs. Arnett-Roehrich may be contacted at
jarnett-roehrich@grsm.com
Florida District Court Finds That “Unrelated” Design Errors Sufficient to Trigger “Related Claims” Provision in Architects & Engineers Policy
March 02, 2020 —
Jason Taylor - Traub LiebermanMost professional liability polices include some form of a “related claims” provision that generally provides where two or more claims or wrongful acts are causally or logically related, they will be deemed to constitute a single claim. Importantly, these provisions typically provide that those “claims” are then deemed to have been “first made” at the time the first claim or act was committed for purposes of the policy’s claims-made and reporting requirements. Understandably, these provisions provide insurers and insureds with some clarity over the number and timing of claims that could involve multiple errors or omissions, and potentially aggregate all related claims or acts into a single policy period. While reasonable in principle, application of such provisions, especially involving large scale design and construction projects, is not always so easy.
Nova Southeastern University, Inc. v. Continental Cas. Co., 18-cv-61842 (S.D. Fla. Dec. 27, 2019), involved such an insurance coverage dispute with a design project gone wrong. DeRose Design Consultants, Inc. (“DeRose”) was hired as a structural engineer to design “ice tanks” to store and chill water for an energy efficient air conditioning facility constructed on the campus of Nova Southeastern University (“NSU”). An early water test on one of the tanks determined the walls of the ice tank deflected, leaked, and cracked when the tank was filled with water. DeRose later discovered that the problems with the ice tank were caused by a structural design error.
The first errors were discovered in early 2009, and reported under DeRose’s professional liability policy with Evanston. DeRose then created a remedial design to repair the tanks, which involved strengthening repairs. Additional leaking and an early indication of corrosion involving the Remedial Design arose as early as October 25, 2009. Several field investigation reports were prepared in 2011 and 2012 confirming these issues with the Remedial Design. A third report in February 2012, however, identified a new error involving the concrete slab under the ice tanks also designed by DeRose. The third report concluded that the concreate slab was overstressed and could not handle the loads of the ice tanks. The report also concluded, however, that the design defects in the concrete slab were “unrelated” to the original design defect of the ice tank walls or Remedial Design.
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
