Does “Faulty Workmanship” Constitute An Occurrence Under Your CGL Policy?
January 08, 2024 —
David Adelstein - Florida Construction Legal UpdatesThere is nothing more scintillating than an insurance coverage dispute, right? Well, some folks would agree with this sentiment. Others would spit out their morning coffee in disagreement. Regardless of where you fall in the spectrum, they are always important because maintaining insurance is a NECESSARY part of business, particularly in the construction industry. The ideal is to have insurance that covers risks you are assuming in the performance of your work.
Sometimes, insurance coverage disputes provide valuable insight, even in disputes outside of Florida. Recently, the Western District of Kentucky in Westfield Insurance Co. v. Kentuckiana Commercial Concrete, LLC, 2023 WL 8650791 (W.D.KY 2023), involved such a dispute. While different than how Florida would treat the same issue, it’s still noteworthy because it sheds light into how other jurisdictions determine whether “faulty workmanship” constitutes an “occurrence” under a commercial general liability (CGL) policy.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
EPA and the Corps of Engineers Repeal the 2015 “Waters of the United States” Rule
January 13, 2020 —
Anthony B. Cavender - Gravel2GavelThe pre-publication version of the final rule to be promulgated by EPA and the U.S. Army Corps of Engineers (ACOE) to repeal the 2015 redefinition of the Clean Water Act’s term “Waters of the United States” which is the linchpin of these agencies’ regulatory power under the CWA, was made available on September 12, 2019. The rule should be published in the Federal Register in the next few weeks, and it will be effective 60 days thereafter. Many challenges are expected to be filed in the federal courts.
The 2015 rule was very controversial, and petitions challenging the rule were filed in many federal district courts, several courts of appeal, and finally in the Supreme Court (see NAM v. Department of Defense), which held that all initial challenges must be filed in the federal district courts. The upshot of these challenges is that, at this time, the 2015 rule has been enjoined in more than half the states while the other states are bound by the 2015 rule, a situation which is frustrating for everyone.
In addition to repealing the 2015 rule, the agencies also restored the pre-2015 definition had had been in place since 1986. As a result, the pre-2015 definition of waters of the U.S. will again govern the application of the following rules: (a) the ACOE’s definition of “waters of the U.S.” at 33 CFR Section 328.3; (b) EPA’s general Oil Discharge rule at 40 CFR Section 110; (c) the SPCC rules at 40 CFR Part 112; (d) EPA’s designation of hazardous substances at 40 CFR Part 116; (e) EPA’s hazardous substance reportable quantity rule at 40 CFR Part 117; (f) the NPDES permitting rules at 40 CFR Part 122; (g) the guidelines for dredged or fill disposal sites at 40 CFR Part 230; (g) Exempt activities not requiring a CWA 404 permit (guidelines for 404 disposal sites at 40 CFR Part 232); (h) the National Contingency Plan rules at 40 CFR Part 300; (i) the designation of reportable quantities of hazardous substances at 40 CFR Part 302; and (j) EPA’s Effluent Guidelines standards at 40 CFR Part 401.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
2018 Legislative Changes Affecting the Construction Industry
June 06, 2018 —
Melinda S. Gentile - Peckar & AbramsonThe 2018 Florida Legislative Session recently concluded and a number of important construction-related House Bills (HB) and Senate Bills (SB) were presented during the Session. Florida Governor Rick Scott has 15 days to act on the legislation once each Bill has passed the House and Senate. Bills signed by the Governor go into effect on July 1, 2018, unless indicated otherwise. These Bills may impact General Contractors and Construction Managers in a number of ways, not the least of which is the period of time that a cause of action may be initiated for the design, planning or construction of an improvement.
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Melinda Gentile, Peckar & AbramsonMs. Gentile may be contacted at
mgentile@pecklaw.com
Rhode Island District Court Dismisses Plaintiff’s Case for Spoliation Due to Potential Unfair Prejudice to Defendant
September 04, 2018 —
Lian Skaf - The Subrogation StrategistIn Amica Mutual Ins. Co. v. BrassCraft Mfg., Co., 2018 U.S. Dist. LEXIS 88986 (D.R.I. May 29, 2018), the United States District Court for the District of Rhode Island addressed the question of whether the defendant was so unfairly prejudiced by the subrogating insurer’s spoliation of evidence that dismissal of the plaintiff’s case was the appropriate Rule 37(b)(2)(a)(i)-(vi) sanction. The court, focusing on the potential for undue prejudice to the defendant, granted the defendant’s motion to dismiss.
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Lian Skaf, White and Williams, LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Party Cannot Skirt Out of the Very Fraud It Perpetrates
January 09, 2023 —
David Adelstein - Florida Construction Legal UpdatesAn interesting case came out of Florida’s Fourth District Court of Appeal that touches upon two important points.
First, the
independent tort doctrine does not apply when there is not a contract between the parties.
Second, an officer cannot escape fraud simply by claiming his or her actions were done as an officer of the company when he or she actively participated in the fraud.
Both of these points are best explained by initially going into the facts of this case. As you will see, the Court’s rationale relates to the premise that a party should not be able to skirt out of the very fraud it perpetrates.
Factual Background
Costa Investors, LLC v. Liberty Grande, LLC, 48 Fla.L.Weekly D7b (Fla. 4th DCA 2022) involved the ultimate development and construction of four adjacent properties into the Costa Hollywood Hotel. The properties were purchased by a company called Liberty Grande. Its president / manager was also the president of Liberty Grande’s wholly owned subsidiary called Costa Hollywood Property. Liberty Grande transferred the properties to Costa Hollywood Property and the deed was signed by the president / manager.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Best Lawyers Recognizes Hundreds of Lewis Brisbois Attorneys, Honors Four Partners as ‘Lawyers of the Year’
September 19, 2022 —
Lewis Brisbois(August 18, 2022) - Best Lawyers has selected 149 Lewis Brisbois attorneys across 46 offices for inclusion in its list of 2023 Best Lawyers in America. It has also recognized four Lewis Brisbois partners on its "Lawyers of the Year" list: Chairman & Founding Partner Robert F. Lewis (Insurance Law); Portland Managing Partner Eric J. Neiman (Litigation - Health Care); Akron Managing Partner David Kern (Tax Law); and Roanoke Partner Paul C. Kuhnel (Medical Malpractice Law - Defendants).
Please join us in congratulating these four partners and the following attorneys on their Best Lawyers recognition.
- Nashville Partner Tara Aaron-Stelluto:
Copyright Law
- Pittsburgh Partner Andrew F. Adomitis:
Mass Tort Litigation / Class Actions - Defendants
- Fort Lauderdale Partner Vincent F. Alexander:
Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
- Miami Partner Seth Alhadeff:
Litigation - Insurance
- Seattle Partner Randy J. Aliment:
Commercial Litigation
- Phoenix Partner Dina Anagnopoulos:
Medical Malpractice Law - Defendants
- Madison County Partner Charles S. Anderson:
Mass Tort Litigation / Class Actions – Defendants
- Reno Managing Partner Jack G. Angaran:
Insurance Law, Litigation – Construction, Litigation - Real Estate
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Lewis Brisbois
Seller Cannot Compel Arbitration for Its Role in Construction Defect Case<
March 01, 2012 —
CDJ STAFFThe buyer of a leaky home in Venice, California cannot be compelled to arbitration with the seller in a construction defect lawsuit, according to a decision in Lindemann v. Hume, which was heard in the California Court of Appeals. Lindemann was the trustee of the Schlei Trust which bought the home and then sued the seller and the builder for construction defects.
The initial owner was the Hancock Park Trust, a real estate trust for Nicholas Cage. Richard Hume was the trustee. In 2002, Cage agreed to buy the home which was being built by the Lee Group. Cage transferred the agreement to the Hancock Park Trust. Hancock had Richard Nazarin, a general contractor, conduct a pre-closing walk through. They also engaged an inspector. Before escrow closed, the Lee Group agreed to provide a ten-year warranty “to remedy and repair any and all damage resulting from water infiltration, intrusion, or flooding due to the fact that the door on the second and third floors of the residence at the Property were not originally installed at least one-half inch (1/2”) to one inch (1”) above the adjacent outside patio tile/floor on each of the second and third floors.”
Cage moved in and experienced water intrusion and flooding. The Lee Group was unable to fix the problems. Hume listed the home for sale. The Kamienowiczs went as far as escrow before backing out of the purchase over concerns about water, after the seller’s agent disclosed “a problem with the drainage system that is currently being addressed by the Lee Group.”
The house was subsequently bought by the Schlei Trust. The purchase agreement included an arbitration clause which included an agreement that “any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration.” The warranty the Lee Group had given to Hancock was transferred to the Schlei trust and Mr. Schlei moved into the home in May 2003.
Lindemann enquired as to whether the work done would prevent future flooding. Nazarin sent Schlei a letter that said that measures had been taken “to prevent that situation from recurring.” In February, 2004, there was flooding and water intrusion. Lindemann filed a lawsuit against the Lee Group and then added the Hancock Park defendants.
The Hancock Park defendants invoked the arbitration clause, arguing that Lindemann’s claims “were only tangentially related to her construction defect causes of action against the Lee Group.” On June 9, 2010, the trial court rejected this claim, ruling that there was a possibility of conflicting rulings on common issues of law. “With respect to both the developer defendants and the seller defendants, the threshold issue is whether there was a problem with the construction of the property in the first instance. If there was no problem with the construction of the property, then there was nothing to fail to disclose.” Later in the ruling, the trial court noted that “the jury could find there was no construction defect on the property, while the arbitration finds there was a construction defect, the sellers knew about it, and the sellers failed to disclose it.” The appeals court noted that while Hancock Park had disclosed the drainage problems to the Kamienowiczs, no such disclosure was made to Sclei.
The appeals court described Hancock Park’s argument that there is no risk of inconsistent rulings as “without merit.” The appeals court said that the issue “is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered.” Further, the court noted that “the Hancock Park defendants and the Lee Group have filed cross-complaints for indemnification against each other, further increasing the risk of inconsistent rulings.”
The court found for Lindemann, awarding her costs.
Read the court’s decision…
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Stacking of Service Interruption and Contingent Business Interruption Coverages Permitted
December 10, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court found that stacking of interruption coverages was allowed based up the language of the policy. Lion Oil Co. v. Nat'l Union Fire Ins. Co., 2015 U.S. Dist. LEXIS 148261 (W.D. Ark. Nov. 2, 2015).
The insured's oil line was ruptured, causing an interruption of crude oil delivery service. The insured held policies issued by National Union.
The policies included multiple time element extensions. One extension related to Service Interruption which promised to insure against loss for:
Service Interruption: electrical, steam, gas, water, sewer, incoming or outgoing voice, data, or video, or an other utility or service transmission lines and related plants, substations and equipment situated on or outside of the premises.
Both parties agreed that the service interruption provision was unambiguous and that the court should give effect to the plain language of the policy.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
