Federal Court Reiterates Broad Duty to Defend in Additional Insured Cases
April 22, 2024 —
Craig Rokuson - Traub LiebermanIn the recent case of
Travelers Indem. Co. of Am. v. Accredited Sur. & Cas. Co., No. 21-CV-7189 (FB) (JRC), 2024 U.S. Dist. LEXIS 44634 (E.D.N.Y. Mar. 13, 2024), the Federal District Court for the Eastern District of New York had occasion to consider an additional insured tender on behalf of a prime contractor, Archstone, to a subcontractor, Topline, who was named as a direct defendant in a New York labor law case. Even though Topline’s carrier put forth evidence that Topline was not negligent, the court held, under New York’s broad duty to defend, that Topline’s carrier owed a duty to defend the prime contractor.
Initially, the court was satisfied that a purchase order, signed only by Topline and not Archstone, was binding on Topline. That purchase order specified that Topline agreed to name Archstone as an additional insured.
With respect to the duty to defend, the court found that it was enough that the underlying plaintiff alleged that all defendants, including Topline, were negligent in permitting a ladder that plaintiff was on to remain in a defective condition and in failing to foresee the existence of a hazard from the condition of the subject ladder.
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Craig Rokuson, Traub LiebermanMr. Rokuson may be contacted at
crokuson@tlsslaw.com
Fifth Circuit Decision on Number of Occurrences Underscores Need to Carefully Tailor Your Insurance Program
December 19, 2018 —
Michael S. Levine & Daniel Hentschel - Hunton Insurance Recovery BlogThe Fifth Circuit in Evanston Insurance Co. v. Mid-Continent Casualty Co. recently held that multiple collisions caused by the same insured driver over a span of 10 minutes constitute a single occurrence subject to a $1 million limit in the insured’s primary policy with Mid-Continent. The holding reversed a lower court’s ruling that Mid-Continent is liable for an additional sum the excess insurer, Evanston, paid to resolve all of the claims arising from the collisions. At issue, a fundamental question about causation and coverage under commercial liability insurance.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Daniel Hentschel, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Hentschel may be contacted at dhentschel@HuntonAK.com
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In All Fairness: Illinois Appellate Court Finds That Arbitration Clause in a Residential Construction Contract Was Unconscionable and Unenforceable
August 22, 2022 —
Gus Sara - The Subrogation StrategistIn Bain v. Airoom, LLC, No. 1-21-001, 2022 Ill. App. LEXIS 241, the Appellate Court of Illinois (Appellate Court) considered whether the lower court erred in enforcing an arbitration clause in a construction contract between the parties and, as a result, dismissing the plaintiff’s lawsuit. The Appellate Court found that even if the arbitration clause was enforceable, the appropriate action would have been for the court to stay the lawsuit, as opposed to dismissing the case entirely. The Appellate Court then considered the language of the arbitration clause and found that several provisions were substantively unconscionable, which rendered the entire arbitration clause unenforceable. The Appellate Court reversed the lower court’s decision compelling arbitration and reinstated the plaintiff’s complaint.
In 2018, the plaintiff, Ms. Bain, a disabled senior citizen, hired the defendant, Airoom, LLC (Airoom), to renovate her home. Airoom provided its “Cash Sales Contract,” which included a binding arbitration clause. The clause required that any dispute arising or relating to the contract be resolved by binding arbitration through the American Arbitration Association (AAA), using the Construction Industry Arbitration Rules and Mediation Procedures (Construction Industry Rules).
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
Colorado Rejects Bill to Shorten Statute of Repose
May 07, 2015 —
Jesse Howard Witt – Acerbic WittThe House State, Veterans, and Military Affairs committee voted today to postpone Senate Bill 15-091 indefinitely, effectively killing the bill for the 2015 session.
As originally drafted, the bill would have given Colorado the shortest statute of repose in the United States. Senate amendments softened the impact of the bill somewhat, but it still would have reduced the amount of time that the owners of single-family homes would have to discover construction defects. Proponents argued that this was necessary because Colorado’s harsh weather conditions make it difficult for construction to last longer than five years. Opponents countered that construction defect laws only provide relief when a builder has violated a code or standard, which is unrelated to the expected lifespan of a product.
One of the Representatives noted that states like Alaska have much harsher weather patterns yet allow homeowners to bring claims up to ten years after construction is complete. Another questioned whether the bill would do anything to encourage affordable housing, a topic that has generated substantial media attention in recent months.
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Jesse Howard Witt, Acerbic WittMr. Witt welcomes comments at www.wittlawfirm.net
Evacuations in Santa Barbara County as more Mudslides are Predicted
March 14, 2018 —
Dave Suggs – CDJ StaffAlene Tchekmedyian’s LA times article “Storm triggers evacuations in Santa Barbara County: 'Don't be fooled into thinking that this can’t happen again',” warns of the deadly potential of mudslides following the devastation that occurred in January that caused 21 fatalities and damaged homes in Montecito.
Debris flow could be triggered by rainfall rates predicted to exceed half and inch per hour. In some areas as much as seven-tenths of an inch of rain per hour are possible because of a chance of thunderstorms.
Mandatory evacuations began Monday to protect residents from the fast-moving storm that is predicted to be worse than January’s. Santa Barbara county officials asked that people help spread the word of the evacuation to everyone in their community. They also created an interactive map to help residents determine their risk level.
Matilija Canyon and North Fork in Ventura County are under voluntary evacuation orders. Areas at the highest risk include Thomas, Sherpa, and Whittier burn areas. Residents can find shelter at the Goleta Valley Community Center at 5679 Hollister Avenue.
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Speeding up Infrastructure Projects with the Cloud
July 28, 2018 —
Aarni Heiskanen - AEC BusinessInfrakit, a cloud service developed by a Finnish startup company, is accelerating infrastructure projects both in Finland and, increasingly, abroad. Automatic transfer of information among parties involved in a project saves time, reduces paperwork, and facilitates the work of land surveyors. In addition to excavators, rock drills can now also be viewed on the map.
The CEO and founder of DSC Finland, the supplier of Infrakit, is Teemu Kivimäki. He states that despite the name of the company changing over the years, its principles have stayed the same. Kivimäki describes the functions of the service: “The digital site plans are added to Infrakit, and they can then be viewed on a map and in a 3D view with a browser. When the working machines are also linked to the service, the user can see if the work has been executed according to plan.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Cuba: Construction Boom Potential for U.S. Construction Companies and Equipment Manufacturers?
June 30, 2016 —
Sanjo Shatley, Esq. – Florida Construction Law UpdateOn July 20, 2015, diplomatic relations were officially restored between the U.S. and Cuba. Since that date, a number of significant political events have taken place. First, the U.S. reopened its embassy in Cuba on August 14, 2015. Next, on January 26, 2016, offices of the U.S. Departments of the Treasury and Commerce announced new amendments to the Cuban Assets Control Regulations and Export Administration Regulations. These amendments removed “existing restrictions on payment and financing terms for authorized exports and reexports to Cuba of items other than agricultural items or commodities,” and established “a case-by-case licensing policy for exports and reexports of items to meet the needs of the Cuban people, including those made to Cuban state-owned enterprises.”[1] Additionally, these amendments “further facilitate travel to Cuba for authorized purposes by allowing blocked space, code-sharing, and leasing arrangements with Cuban airlines, authorizing additional travel-related and other transactions directly incident to the temporary sojourn of aircraft and vessels, and authorizing additional transactions related to professional meetings and other events, disaster preparedness and response projects, and information and informational materials, including transactions incident to professional media or artist productions in Cuba.”[2] Finally, on March 21, 2016, President Barack Obama was the first sitting U.S. President to visit Cuba since the 1959 revolution, in which Fidel Castro overthrew Fulgencio Batista. This revolution ultimately led to the U.S. severing diplomatic relations in 1961 and President John F. Kennedy imposing a trade embargo between the U.S. and Cuba, which remains in effect today.
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Sanjo Shatley, Esq., Cole, Scott & Kissane, P.A.Mr. Shatley may be contacted at
sanjo.shatley@csklegal.com
Contractor’s Claim for Interest on Subcontractor’s Defective Work Claim Gains Mixed Results
April 27, 2020 —
John J. Gazzola, Associate, Pepper Hamilton LLP - ConsensusDocsThis case concerns calculation of a damages award to a general contractor, Skanska USA Building, Inc., on its claim for breach of contract against its masonry subcontractor, J.D. Long Masonry, Inc., arising from Long’s faulty construction of a masonry façade at a medical research facility in Baltimore. When the façade collapsed and Long failed to repair it, Skanska hired a replacement subcontractor, C.A. Lindman, to remediate Long’s defective work and filed suit against Long to recover the resulting damages. After the court granted Skanska’s motion for summary judgment as to liability, Skanska moved for summary judgment on the issue of damages, relying on the indemnification provision of the subcontract to seek compensatory damages, pre- and post-judgment interest, and litigation fees. In the subcontract, Long agreed to indemnify and hold Skanska harmless from all claims, losses, costs and expenses, including attorneys’ fees, arising before or after completion of Long’s work, caused by, arising out of, resulting from, or occurring in connection with Long’s performance of the work or breach of the subcontract.
The court first applied the terms of this provision to award Skanska compensatory damages, holding that Skanska was, as a matter of law, entitled to recover the amount of the Lindman subcontract and general conditions incurred to supervise remediation of Long’s work. The court, however, denied Skanska’s claim for pre-judgment interest on the entirety of these damages. Skanska asserted that it was entitled to pre-judgment interest on the full award, calculated from the date on which it first paid Lindman. The court disagreed, explaining that, under Maryland law, a claimant is entitled to an award of pre-judgment interest as of right only when the amount due is certain, definite and liquidated by a specific date prior to judgment. The court reasoned that, because much of the Lindman subcontract value was composed of later-executed change orders, an award of pre-judgment interest could not be uniformly calculated back to the date of Skanska’s first payment to Lindman. And moreover, because Skanska continued to withhold sums due to Lindman pending resolution of certain issues, awarding Skanska pre-judgment interest on amounts it had not yet paid would result in a “windfall” to Skanska because there was no “use of income” loss to be compensated.
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John J. Gazzola, Pepper Hamilton LLPMr. Gazzola may be contacted at
gazzolaj@pepperlaw.com
