From the Ashes: Reconstructing After the Maui Wildfire
November 27, 2023 —
Grace Calengor - Construction ExecutiveOn Tuesday, Aug. 8, a wildfire on the Hawaiian island of Maui ravaged the town of Lahaina, killing nearly 100 people and stranding thousands of survivors, many of whom remain displaced today. The loss of life makes this the deadliest American wildfire on record, while the material cost in property damage has been estimated at upwards of $5 billion.
The response to the disaster has involved firefighters and other emergency personnel—and also engineering and construction professionals. One of them is Tam Kim, director of operations for West Maui Construction Inc., a civil contractor on the island. Originally from Oregon, Kim fell in love with Hawaii when he visited on a surfing vacation; eventually he took his technology background and helped found a startup company on Maui in 2008. Eight years later, the startup relocated to Oahu, but Kim stayed on Maui to forge a different path, one that would lead him somewhere he never imagined.
Reprinted courtesy of
Grace Calengor, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Why You Make A Better Wall Than A Window: Why Policyholders Can Rest Assured That Insurers Should Pay Legal Bills for Claims with Potential Coverage
March 14, 2018 —
Alan Packer and Graham Mills - Newmeyer & Dillion, LLPUnfortunately, policyholders, such as manufacturers and contractors, routinely face the unnecessary challenge of how to access all of the insurance coverage which they have purchased. Frequently, the most pressing need is to get the insurance company to pay the legal bills when the policyholders have been sued. The recent Iowa federal district court opinion in
Pella Corporation v. Liberty Mutual Insurance Company should help a policyholder in a dispute to require its insurance company to pay those legal bills sooner rather than later by highlighting that the duty to defend arises from the potential for coverage, and the insurer may not force the policyholder to prove the damage to obtain a defense.
In
Pella, a window manufacturer purchased several years of insurance coverage from Liberty Mutual. Similar to many companies, Pella had many “layers” of insurance coverage in any given year. These layers collectively function like a tower. The general idea is that each layer provides a certain amount of coverage after the insurance policy below it had paid its money. The Liberty Mutual insurance policies provided excess coverage.
After the
Pella window manufacturer made and sold its windows, it was sued in numerous lawsuits alleging that its windows were defective and that those defective windows caused a wide variety of damage to the structures in which they were installed. The window manufacturer tendered those lawsuits to its insurance companies in its tower of coverage, asking that the insurance companies pay its legal bills incurred in its defense. As to Liberty Mutual, the window manufacturer argued that the Liberty Mutual insurance policies were triggered, and so obligated to reimburse it, if a window was installed during the years that those policies provided coverage or if there was a mere allegation that a window was installed during the years that those policies provided coverage. Liberty Mutual opposed, arguing that the date of installation of the windows was insufficient to trigger the policies, and that the manufacturer was required to demonstrate the date that damage actually occurred to trigger a defense.
The key issue before the
Pella Court in this decision was a simple one: which insurance policies, if any, issued by Liberty Mutual had an obligation to pay the window manufacturer’s legal bills? The answer to that question is critical and financially significant. Getting an insurance company to honor its obligations and start paying the legal bills as soon as possible is very important for a policyholder because of the cost of defending oneself in a lawsuit; often the key reason why an insurance policy is even purchased is to provide the policyholder with the right to call upon the insurance company’s financial resources to defend it should it be sued.
In a ruling that will be welcomed by policyholders, the
Pella Court held that Liberty Mutual’s multiple insurance policies were triggered, and so obligated to pay for the window manufacturer’s defense, if one of two events occurred during the years in which those insurance policies provided coverage: (1) a window was actually installed during a year when the insurance policy provided coverage or (2) the window was alleged to be installed in the year that the insurance policy provided coverage. The Court agreed with the policyholder that once the windows were installed, property damage was alleged and “may
potentially have occurred” from that point on, thus the policies on the risk from that point forward. The practical effect of this ruling meant that Liberty Mutual had to reimburse the window manufacturer for the defense fees and costs that it had paid.
While
Pella was decided under Iowa law, the principles upon which it relied are similar to those applied under California law. Importantly, both California and Iowa law hold that an insurance company must provide a defense in response to a claim that is, or could be, covered by the insurance policy. The mere potential that the claim might be covered is enough for the insurance company to be obligated to pay for policyholder’s legal fees and costs.
Establishing that an insurance company must pay legal fees and costs as soon as possible allows a policyholder to save its own money. Why should a policyholder pay legal bills when it purchased an insurance policy as protection to ensure that it did not have to pay those bills? The answer is that a policyholder should not and, under
Pella, the policyholder does not have to. Rather, the insurance company must start paying for that defense from a very early date. Pella confirms for policyholders the position that their insurance companies should pay legal bills earlier rather than later.
Alan Packer is a partner in the Walnut Creek office for Newmeyer & Dillion, LLP, representing homebuilders, property owners, and business clients on a broad range of legal matters, including risk management, insurance matters, wrap consultation and documentation, efforts to counter solicitation of homeowners, subcontract documentation, as well as complex litigation matters. Alan can be reached at alan.packer@ndlf.com.
Graham Mills is a partner in the Walnut Creek offce of Newmeyer & Dillion, LLP, representing clients in the area of complex insurance law with an emphasis on insurance recovery, construction litigation, real estate litigation, and business litigation. He regularly examines and analyzes a wide variety of insurance policies. Graham can be reached at graham.mills@ndlf.com.
ABOUT NEWMEYER & DILLION LLP
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review’s AV Preeminent® highest rating.
For additional information, call 949.854.7000 or visit www.ndlf.com.
Read the court decisionRead the full story...Reprinted courtesy of
Brazil's Detained Industry Captain Says No Plea Deals Coming
September 03, 2015 —
Sabrina Valle & Yasmine Batista – BloombergMarcelo Odebrecht, the most prominent executive who has been detained in Brazil’s largest corruption scandal, said he sees no reason to strike a plea bargain with authorities because he has nothing to reveal.
Odebrecht said in a congressional hearing Tuesday that he probably discussed with President Dilma Rousseff and her predecessor Luiz Inacio Lula da Silva the relationship between Odebrecht SA and Petrobras, the state-controlled oil producer at the center of the kickback investigation. It was a natural topic given the economic importance of his construction and engineering empire, he said. He declined to answer questions related to the criminal case, saying it is ongoing and he is unaware of the full extent of the accusations.
Reprinted courtesy of
Sabrina Valle, Bloomberg and
Yasmine Batista, Bloomberg Read the court decisionRead the full story...Reprinted courtesy of
Flooded Courtroom May be Due to Construction Defect
September 01, 2011 —
CDJ STAFFThe General Services Administration wouldn’t pin it on a construction defect, but a spokesperson said that a pipe that was misaligned during installation was the likely cause of a flood in the Thomas F. Eagleton US Courthouse on August 23. According to the St. Louis Dispatch, the burst pipe caused a 17-story waterfall in the courthouse, soaking ceilings and floors, and drenching the building’s contents.
The building was dedicated eleven years ago. During the nearly ten years before the building was complete, there were construction disputes and soil contamination issues.
Read the full story…
Read the court decisionRead the full story...Reprinted courtesy of
Colorado Senate Committee Approves Construction Defect Bill
March 19, 2015 —
Jesse Howard Witt – Acerbic WittLate last night, the Colorado Senate Business, Labor, and Technology Committee voted to refer
SB 15-177 to the committee of the whole. The vote followed nearly seven hours of testimony from those in favor of construction defect legislation and those opposed.
As I have
previously discussed, the bill sponsors have argued that their measure will encourage the construction of more affordable housing by giving builders de facto immunity for claims of defective workmanship and property damage in common interest communities. The bill achieves this by establishing difficult voting and disclosure requirements for homeowner associations and requiring costly, private arbitration of any disputes that can overcome the procedural hurdles. During the recent hearing, proponents echoed these statements and testified that insulating homebuilders from claims would lower home prices and rents by increasing the supply of cheaply-built condominiums.
Opponents questioned whether the bill contained any provisions that would actually help the affordable housing market. They also argued that it was improper for the legislature to shift the cost of fixing construction defects onto those homeowners who can least afford to pay for necessary repairs.
Read the court decisionRead the full story...Reprinted courtesy of
Jesse Howard Witt, The Witt Law FirmMr. Witt welcomes comments at www.acerbicwitt.com
"My Bad, I Thought It Was in Good Faith" is Not Good Enough - Contractor Ordered to Pay Prompt Payment Penalties
February 23, 2016 —
David A. Harris & Jesse M. Sullivan – Haight Brown & Bonesteel LLPRetention clauses are almost always included in California construction contracts and permit an Owner to withhold a portion of what is owed to the General Contractor as security to ensure the proper completion of the work. General Contractors pass the withholding of retention down to the subcontractors. Thus, if the subcontractor fails to complete its work, or fails to correct deficiencies, the Owner/General Contractor can use the retention to pay the costs of completing or correcting the subcontractor’s work.
The contractor must release any retention it receives from the owner within ten days unless a “good faith dispute exists between the direct contractor and the subcontractor.” (Civil Code section 8814.) Where there is a good faith dispute, the contractor “may withhold from the retention to the subcontractor an amount not in excess of 150 percent of the estimated value of the disputed amount.” (Civil Code section 8814(c).) If the contractor wrongfully withholds retention, it must not only pay the retention but must also pay the subcontractor “a penalty of 2 percent per month on the amount wrongfully withheld.” The contractor must also pay the subcontractor’s costs and reasonable attorney’s fees incurred in collecting the retention. (Civil Code section 8818.)
Reprinted courtesy of
David A. Harris, Haight Brown & Bonesteel LLP and
Jesse M. Sullivan, Haight Brown & Bonesteel LLP
Mr. Harris may be contacted at dharris@hbblaw.com
Mr. Sullivan may be contacted at jsullivan@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Supreme Court of New Jersey Reviews Statutes of Limitation and the Discovery Rule in Construction Defect Cases
July 18, 2018 —
David Suggs – Bert L. Howe & Associates, Inc.Robert Neff Jr. of Wilson Elser analyzed the recent case, Palisades at Fort Lee Condo. Ass’n v. 100 Old Palisade, LLC, 2017 N.J. Lexis 845, 169 A.3d 473 (Supreme Court of New Jersey, September 14, 2017), and states that this ruling “gives defendants the ability to defend against the assertion that the statute of limitations was tolled until the most recent owner (and plaintiff) discovered the cause of action.”
Neff concludes that a statute of limitations test needs to be conducted at the beginning of each case: “In Palisades, the motions to dismiss based on the statute of limitations were filed at the conclusion of all discovery. While an initial analysis might yield the conclusion that certain discovery will be needed to ascertain the appropriate accrual date (or dates, in the case of multiple defendants), counsel will then know what discovery to seek during the discovery period.”
Read the court decisionRead the full story...Reprinted courtesy of
Remodel Leaves Guitarist’s Home Leaky and Moldy
October 03, 2013 —
CDJ STAFFThe entertainment site TMZ reports that Eddie Van Halen is suing the contractor who remodeled his home. Mr. Van Halen claims that the contractor’s poor workmanship lead to water intrusion. According to the lawsuit, the roof and chimney leaked, and gutters and flashing were poorly installed. As a result, parts of the home suffered from mold damage. The lawsuit claims that Mr. Val Halen spent more than $1 million to repair his home after the remodel.
Read the court decisionRead the full story...Reprinted courtesy of
