Insurer in Bad Faith Due to Adjuster's Failure to Keep Abreast of Case Law
June 13, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found that the insurer acted in bad faith when the claim was denied based on the adjuster's lack of knowledge of recent case law in Washington. Sec. Nat'l Ins. Co. v. Constr. Assocs. of Spokane, 2022 U.S. Dist. LEXIS 53533 (E.D. Wash. March 24, 2022).
Construction Associates of Spokane was a general contractor hired for a project at the Paulsen Building in Spokane. Construction Association hired a subcontractor, Merit Electric, for whom Mark Wilson worked. Wilson was seriously injured on August 20, 2016. He sued the Construction Associates along with other defendants three years later.
Construction Associates tendered to Merit Electric's broker, Alliant Insurance Services, Inc. Alliant forward the tender to Security National. The tender letter included a certificate of insurance issued by Alliant to Contractor Associates on September 3, 2019 and the subcontract with Merit. The subcontract required Merit to maintain CGL coverage with limits of $1 million. Further, the subcontractor was to issue certificate of insurance to the Contractor.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Florida Enacts Sweeping Tort Reform Legislation, Raising Barriers to Insurance Coverage Claims
April 18, 2023 —
Walter J. Andrews, Andrea DeField & Jae Lynn Huckaba - Hunton Insurance Recovery BlogAs discussed in a recent
client alert, on March 24, 2023, Florida Governor Ron DeSantis signed House Bill (HB) 837 into law, making it more difficult and costly for insurance policyholders of all sizes to sue insurers for bad faith by eliminating fee-shifting for most policyholders and requiring something “more than” negligence for bad faith claims.
HB 837’s Impact on Insurance Coverage Claims:
HB 837 is another in a series of reform legislation recently passed in Florida that significantly impacts policyholders’ ability to hold their insurers accountable for the wrongful failure to pay benefits due under the insurance contract. Recent efforts include last year’s repeal of the one-way fee-shifting statute for claims brought under residential and commercial property insurance policies. Previously, the fee-shifting statute allowed policyholders to recover attorneys’ fees from their insurers when the policyholder prevailed in a coverage action. HB 837 repeals
Section 627.428 of the Florida Statutes entirely, extending the repeal of the one-way fee-shifting statute to all types of insurance coverage disputes—not just those under residential and commercial property insurance policies.
Reprinted courtesy of
Walter J. Andrews, Hunton Andrews Kurth,
Andrea DeField, Hunton Andrews Kurth and
Jae Lynn Huckaba, Hunton Andrews Kurth
Mr. Andrews may be contacted at wandrews@HuntonAK.com
Ms. DeField may be contacted at adefield@HuntonAK.com
Ms. Huckaba may be contacted at jhuckaba@HuntonAK.com
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Depreciation of Labor in Calculating Actual Cash Value Against Public Policy
February 16, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe insurer's depreciation of labor in the calculation of actual cash value was found to be against Arkansas public policy. Shelter Mut. Ins. Co. v. Goodner, 2015 Ark. LEXIS 460 (Ark. Dec. 10, 2015).
Shelter Mutual's policy provided that it would pay the insured "the actual cash value of all the damaged parts of the covered property." "Actual cash value" was defined as "total restoration cost less depreciation." The policy explained, "When calculating depreciation, we will include the depreciation of the materials, the labor, and the tax attributable to each party which must be replaced to allow for replacement of the damaged part, whether or not that part is damaged."
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
High-Rise Condominium Construction Design Defects, A Maryland Construction Lawyer’s Perspective
July 15, 2015 —
Nicholas D. Cowie – Maryland Condo Construction Defect Law BlogThe increased migration from suburbs to metropolitan areas has accompanied an increase in high-rise construction, including the development of high-rise condominium buildings. The resulting metamorphosis of urban skylines, such as seen from Maryland’s Baltimore harbor, has also brought with it many complex construction law and construction litigation issues. Our law firm’s Maryland condominium construction law practice is increasingly called upon to resolve disputes involving high-rise condominium construction design defects between condominium associations, developers, contractors, builders, and design professionals arising out of the construction of high-rise buildings.
A condominium building is typically considered to be a high-rise when it is approximately seven or more stories above grade according to the National Fire Protection Association Life Safety Code, which defines a high-rise as being 75 feet (23 meters) measured from the lowest level accessible to fire department vehicles up to the floor level of the highest occupiable story. High-rise buildings may be residential (e.g., condominiums or multifamily apartment buildings), commercial (e.g., commercial office or retail space), or mixed-use structures. A mixed-use high-rise development might contain retail space, office space, a parking garage, apartments, and condominiums, each owned or maintained by separate entities and each sharing common expenses for the building.
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Nicholas D. Cowie, Cowie & Mott, P.A.Mr. Cowie may be contacted at
ndc@cowiemott.com
Keeping Detailed Records: The Best Defense to Constructive Eviction
October 24, 2023 —
Ben T. Welch & Ken Brown - Snell & WilmerInevitably, commercial property owners and managers will be faced with a claim by a tenant of constructive eviction. This article is intended to describe what constructive eviction is and to suggest what owners and managers can do to prepare for, and ward off, such claims.
Constructive eviction occurs where a tenant’s “right of possession and enjoyment” of the leasehold is disrupted by the landlord in a manner that renders the premises “unsuitable for the purposes intended.”i Put another way, it is interference that is so “substantial nature and so injurious as to deprive the tenant of the beneficial enjoyment of a part or the whole of the demised premises.”ii Although easy to describe in theory, constructive eviction can be devilishly difficult to determine in the real world. In litigation, determining when interference crosses over the line to constructive eviction is intensely fact-sensitive and resists sweeping generalizations.iii
For instance, Utah courts have held that tenants have been constructively evicted when they have been subjected to continual harassment or insults by the landlord or the landlord’s agent,iv prevented or impaired in their access to the leased premises during operating hours,v or when a landlord fails to provide an operable elevator (or other essential commercial amenities) necessary for a tenant’s business operations.vi By contrast, claims of “discomfort” or “inconvenience” have been rejected as a basis for constructive eviction.vii The same goes for claims that a landlord wrongfully served a three-day notice to pay or quit.viii
Generally, constructive eviction is an affirmative defense made in response to a landlord’s lawsuit for nonpayment of rent.ix It is not, as is commonly supposed, a basis for a tenant’s premature abandonment of the premises. In other words, the defense is raised after the tenant has vacated as a result of being effectively “evicted.”x Further, the defense requires the tenant to actually abandon the premises and do so within a “reasonable time” after the alleged interference.xi A tenant cannot stay in possession and simply refuse to pay rent on the basis of constructive eviction.xii
The key consideration in preparing for, and responding to, a claim of constructive eviction is keeping good records. A tenant claiming constructive evicting likely must prove that the issue was raised in a timely manner and, despite multiple entreaties, was never resolved.xiii As such, it is critical that landlords acknowledge tenant complaints as well as document in writing their efforts to ameliorate those complaints. While a landlord does not carry the burden of proof for constructive eviction, detailed documentation can thwart a tenant’s claim that a landlord has been inattentive or unwilling to address the tenant’s concerns.
Detailed records are also useful in disputes where a tenant claims substantial interference. “The whole point of constructive eviction is that the landlord basically drove the tenant out through the landlord’s action or inaction.”xiv As such, a landlord that is unable to document the steps taken in response to complaints will be grossly disadvantaged whereas the tenant, which had control and knowledge of the premises, will have a much easier time describing how the alleged interference deprived them of enjoying the premises.
Even with meticulous records, however, owners and managers may still face claims of construction eviction. In such instances, counsel should be retained to properly advise on compiling, preserving, and employing the evidence necessary to refute the tenant’s claims.
i Gray v. Oxford Worldwide Grp., Inc., 139 P.3d 267, 269 (Utah Ct. App. 2006).
ii Gray, 139 P.3d at 270 (citing Neslen, 254 P.2d at 850) (internal formatting omitted).
iii See Gray, 139 P.3d at 269–70 (citing Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847, 850 (Utah 1953)); Brugger v. Fonoti, 645 P.2d 647, 648 (Utah 1982).
iv See Gray, 139 P.3d at 270–71.
v Thirteenth & Washington Sts. Corp. v. Neslen, 254 P.2d 847 (Utah 1953).
vi See Richard Barton Enterprises, Inc. v. Tsern, 928 P.2d 368, 375, 378 (Utah 1996) (citing Union City Union Suit Co. v. Miller, 162 A.D.2d 101, 556 N.Y.S.2d 864 (1990)).
vii See Myrah v. Campbell, 163 P.3d 679, 682–84 (Utah Ct. App. 2007).
viii Barton v. MTB Enterprises, 889 P.2d 476, 477 (Utah Ct. App. 1995); see also Brugger, 645 P.2d at 648 (stating that the tenant’s complaints revolved around standard problems commonly associated with building maintenance and did not rise to the level of substantial interference); viv Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 898–900 (Utah 1989) (upholding trial court’s findings of fact concerning insufficiency of disruption so as to justify claim for constructive eviction).
ix See Kenyon v. Regan, 826 P.2d 140, 142 (Utah Ct. App. 1992).
x See Kenyon, 826 P.2d at 142.
xi See Kenyon, 826 P.2d at 142; see also Barton v. MTB Enterprises, Inc., 889 P.2d 476, 477 (Utah Ct. App. 1995); Brugger, 645 P.2d at 648.
xii See Kenyon, 826 P.2d at 142 (citing Fernandez v. Purdue, 518 P.2d 684, 686 (Utah 1974)).
xiii See Brugger, 645 P.2d at 648 (noting that while the tenant had raised legitimate issues concerning state of the premises, the landorld had taken steps to remedy the problems within a reasonable time) (citing 49 Am.Jur.2d, Landlord and Tenant, § 617).
xiv Barton, 889 P.2d at 477.
Reprinted courtesy of
Ben T. Welch, Snell & Wilmer and
Ken Brown, Snell & Wilmer
Mr. Welch may be contacted at bwelch@swlaw.com
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NJ Condo Construction Defect Case Dismissed over Statute of Limitations
June 11, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to an article by Matthew D. Stockwell of the firm Pillsbury Winthrop Shaw Pittman, LLP published in Lexology, “a trial court in Bergen County, New Jersey dismissed a condominium association's construction defect claims against several construction entities for failure to comply with the applicable statute of limitations.”
Stockwell stated that the “aftermath will be interesting to follow, because the trial court stripped away some of the protection that New Jersey's discovery rule affords to property owners who become aware of latent defects well after a project is substantially completed.”
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Point Taken: The UK Supreme Court Finally Confirms the General Law of Liquidated Damages (LDs)
April 04, 2022 —
Vincent C. Zabielski & Julia Kalinina Belcher - Gravel2Gavel Construction & Real Estate Law BlogIn a long-awaited decision which overturned the Court of Appeal’s ruling in the Triple Point Technology vs PTT Public Company case, the UK Supreme Court confirmed the general law of LDs, which is that—absent clear words to the contrary—they accrue up to the date of termination of a contract regardless of whether the contractor completes the work; after that, general damages are recoverable. This approach was held to reflect “commercial reality and the accepted function of liquidated damages.” Although the contract in question was not a construction contract, the decision is equally relevant in the construction sphere.
By way of reminder, Triple Point failed to complete the works under Phase 1 of a contract for the design, installation, maintenance and licencing of software. Despite agreeing a revised project plan, PTT gave notice to terminate.
Reprinted courtesy of
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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Construction Spending Drops in March
May 10, 2013 —
CDJ STAFFReuters reports that construction spending dropped by 1.7 percent in March, bringing it to the lowest level since August, more than wiping out February’s increase of 1.5 percent. Economists had predicted a mild gain of 0.7 percent. Spending fell due to a 4.1 percent drop in public construction projects, bringing it to its lowest in six and a half years.
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