Timely Written Notice to Insurer and Cooperating with Insurer
June 21, 2017 —
David Adelstein - Florida Construction Legal UpdatesI harp on notifying a liability insurer in writing once a claim is asserted against you. As soon as possible. I harp on this because as an insured you want to remove any doubt or argument that the insurer was prejudiced due to a lack of timely notice.
In a recent opinion, Zurich American Insurance Co. v. European Tile and Floors, Inc., 2017 WL 2427172 (M.D.Fla. 2017), the insurer moved for summary judgment in a coverage action arguing that its insured failed to provide it timely written notice. Specifically, the insurer argued that the insured violated the clause in the liability policy that states:
2. Duties in the Event of Occurrence, Offense, Claim or Suit
b. If a claim is made or “suit” is brought against any insured, you must:
- Immediately record the specifics of the claim or “suit” and the date received; and
- Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or “suit” as soon as practicable.
c. You and any other insured must:
- Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or “suit”;
- Authorize us to obtain records and other information;
- Cooperate with us in the investigation, settlement or defense of the claim or “suit”; and
- Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
California Supreme Court Finds that the Notice-Prejudice Rule Applicable to Insurance is a Fundamental Public Policy of the State
October 14, 2019 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Pitzer College v. Indian Harbor Ins. Co. (No. S239510, filed 8/29/19), the California Supreme Court held that California’s notice-prejudice rule is a fundamental public policy in the insurance context, supporting the application of California law under a choice of laws analysis. In addition, the Court held that the rule generally applies to consent (aka “no voluntary payments”) provisions in first party insurance policies but not to consent provisions in third party liability policies.
Pitzer College discovered soils contamination while building a new dormitory. Under pressure to complete construction before the start of the school year, Pitzer proceeded to remediate the soils, incurring $2 million in expense. Pitzer submitted a claim to Indian Harbor, which provided Pitzer insurance covering legal and remediation expenses resulting from pollution conditions discovered during the policy period.
The policy contained a notice provision requiring Pitzer to provide oral or written notice of any pollution condition to Indian Harbor and, in the event of oral notice, to “furnish … a written report as soon as practicable.” In addition, a consent provision required Pitzer to obtain Indian Harbor’s written consent before incurring expenses, making payments, assuming obligations, and/or commencing remediation due to a pollution condition. The consent provision had an emergency exception for costs incurred “on an emergency basis where any delay … would cause injury to persons or damage to property or increase significantly the cost of responding to any [pollution condition],” in which case Pitzer was required to notify Indian Harbor “immediately thereafter.” Lastly, a choice of law provision stated that New York law governed all matters arising under the policy.
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
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The Sky is Falling! – Or is it? Impacting Lives through Addressing the Fear of Environmental Liabilities
March 30, 2016 —
John Van Vlear and Karl Foster – Newmeyer & Dillion, LLPSix months ago, a couple anxiously relayed to N&D lawyers how the sky was falling – with environmental liabilities at the center of their seemingly real Chicken Little fears. The couple owned two properties in a central California town, one being a former gas station which an oil company had abandoned alleging the lease was void given partial eminent domain actions. Before interviewing us, the couple had spent in excess of $100,000 in legal fees with another law firm trying to force the oil company to take responsibility for potential environmental impacts under the disputed lease.
Reprinted courtesy of
John Van Vlear, Newmeyer & Dillion, LLP and
Karl Foster, Newmeyer & Dillion, LLP
Mr. Van Vlear may be contacted at john.vanvlear@ndlf.com.
Mr. Foster may be contacted at karl.foster@ndlf.com
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Court Finds That SIR Requirements are Not Incorporated into High Level Excess Policies and That Excess Insurers’ Payment of Defense Costs is Not Conditioned on Actual Liability
April 22, 2019 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Deere & Co. v. Allstate Ins. Co. (No. A145170, filed 2/25/19), a California appeals court held that the insured was not required to pay additional self-insured retentions (SIRs) in order to trigger higher level excess coverage because the retained limits applicable to the first layer of coverage did not also apply to the higher-layer excess policies.
In Deere, the insured was sued for injuries from alleged exposure to asbestos-containing assemblies used in Deere machines. In a declaratory relief action against its umbrella and excess insurers, the case was tried on: (1) whether the higher-layer excess policies were triggered once the first-layer excess policy limits, which were subject to an SIR paid by Deere, had been exhausted; and (2) whether the insurers’ indemnity obligation extended to Deere’s defense costs incurred in asbestos claims that had been dismissed. The trial court found in favor of the insurers, concluding that the retained limits in the first layer of coverage also applied to the higher-layer excess, which was not triggered until Deere paid additional SIRs. The court also concluded that the insurers were not obligated to pay defense costs when underlying cases were dismissed without payment to a claimant either by judgment or settlement.
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
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Trump’s Infrastructure Weak
June 21, 2017 —
Garret Murai - California Construction Law BlogThis past week was President Trump’s “Infrastructure Week.” A week dedicated, according to the White House’s official blog, “to addressing America’s crumbling infrastructure” and to try to build support for the President’s campaign promise to invest “at least” $1 trillion on improving the nation’s infrastructure.
For the construction industry it was going to be an exciting week. Not only because it could mean new opportunities for the industry but from a policy perspective our nation’s infrastructure, which recently received a grade of D+ from the American Society of Engineers, is in dire need of investment.
But Infrastructure Week ended up being more like Infrastructure Weak. No infrastructure bills were signed or introduced, no executive orders were issued, and no new departments or commissions were created, although at the end of the week President Trump promised to form a “council” and “office” to review the environmental permitting process.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Hawaii Court of Appeals Affirms Broker's Liability for Failure to Renew Coverage
July 16, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe Hawaii Intermediate Court of Appeals affirmed the jury's finding that the broker was liable for failing to secure coverage for the insureds' home. Certain Underwriters at Lloyd's London v. Vreeken, 2014 Haw. App. LEXIS 322 (Haw. Ct. App. June 30, 2014).
Based upon their dealings with the broker, the insureds thought they had coverage for their home from March 3, 2004 to March 3, 2005 and from May 9, 2005 to May 8, 2006. The house was elevated nine feet above the ground for structural renovation, but collapsed on May 23, 2005. The original policy had lapsed on March 3, 2005. The second policy was voided because the application prepared by the broker stated there was no renovation work underway on the property.
The insureds sued. The jury found the broker and its agent liable for general, special and punitive damages. An appeal was filed. The ICA largely affirmed after addressing the many points raised on appeal.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Construction Law Client Alert: California Is One Step Closer to Prohibiting Type I Indemnity Agreements In Private Commercial Projects
June 15, 2011 —
Haight Brown & Bonesteel, LLPOn June 1, 2011 by majority vote, the California Senate passed Senate Bill 474, which would amend Civil Code section 2782, and add Civil Code section 2782.05. The passage of this new law is a critical development for real estate developers, general contractors and subcontractors because it will affect how these projects are insured and how disputes are resolved.
Civil Code section 2782 was amended in 2007 to prohibit Type I indemnity agreements for residential projects only. Since 2007, various trade associations and labor unions have lobbied to expand those very same restrictions to other projects. These new provisions apply to contracts, entered into after January 1, 2013, that are not for residential projects, and that are not executed by a public entity. The revisions provide that any provision in a contract purporting to indemnify, hold harmless, and defend another for their negligence or other fault is against public policy and void. These provisions cannot be waived.
A provision in a contract requiring additional insured coverage is also void and unenforceable to the extent it would be prohibited under the new law. Moreover, the new law does not apply to wrap-up insurance policies or programs, or a cause of action for breach of contract or warranty that exists independently of the indemnity obligation.
The practical impact of this new law is that greater participation in wrap-up insurance programs will likely result. While many wrap-up programs suffer from problems such as insufficient limits, and disputes about funding the self-insured retention, the incentive for the developer or general contractor to utilize wrap-up insurance will be greater than ever before because they will no longer be able to spread the risk of the litigation to the trades and the trade carriers.
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Reprinted courtesy of Steve Cvitanovic of Haight Brown & Bonesteel, LLP.
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Utah Supreme Court Allows Citizens to Block Real Estate Development Project by Voter Referendum
June 10, 2019 —
Sean M. Mosman & Mark O. Morris - Snell & Wilmer Under ConstructionThe Utah Supreme Court recently decided Baker v. Carlson, 2018 UT 59, which considered a developer’s ongoing effort to build a mixed-use, part-residential and part-commercial development on the site of the long-defunct Cottonwood Mall located in Holladay, Utah. On November 28, 2018, the Supreme Court affirmed the Third District Court’s ruling that a voter referendum to block the development was valid. This ruling calls into question the certainty of investment-backed real estate decisions in Utah and thus could carry negative implications for the Utah construction and real estate development communities.
The Cottonwood Mall opened in the early 1960s, and for several decades was a popular regional shopping destination. But the mall fell on financial hard times in the mid-1990s, and since 2007 the 57-acre lot has sat vacant. Around that time, the owner of the lot made plans to redevelop it, and asked Holladay City to rezone the site to permit mixed uses. In response, the City rezoned the lot as Regional/Mixed-Use (R/M-U). The City also created a process to control the development of an R/M-U zone, requiring prospective builders to first submit a site development master plan—which sets forth guidelines for the overall development and design of the site—to the City for approval. After the City approves a master plan, the developer must enter into a development agreement with the City, giving the developer certain rights and addressing other development-related issues.
Reprinted courtesy of
Sean M. Mosman, Snell & Wilmer and
Mark O. Morris, Snell & Wilmer
Mr. Mosman may be contacted at smosman@swlaw.com
Mr. Morris may be contacted at mmorris@swlaw.com
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