FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

On Rehearing, Fifth Circuit Finds Contractual-Liability Exclusion Does Not Apply

November 26, 2014 — Tred R. Eyerly – Insurance Law Hawaii
On rehearing, the Fifth Circuit determined that the contractual-liability exclusion did not apply to bar coverage for damage caused by the insured contractor to the home it constructed. Crownover v. Mid-Continent Cas. Co., 2014 U.S. App. LEXIS 20727 (5th Cir. Oct. 29, 2014).The court withdrew its prior opinion, summarized here. Arrow Development, Inc. contracted with the Crownovers to construct a home. The contract had a warranty-to-repair clause, which, in paragraph 23.1, provided that Arrow would "promptly correct work . . . failing to confirm to the requirements of the Contract Documents." After the Crownovers moved in, cracks began to appear in the walls and foundation of the home. Additional problems with the heating, ventilation, and air conditioning ("HVAC") caused leaking in the exterior lines and air ducts inside the home. To compensate for defects in the HVAC system, the system's mechanical units ran almost continuously in order to heat or cool the home. Because they were overburdened, the mechanical units had to be replaced. The Crownovers paid several hundred thousand dollars to fix the problems with the foundation and HVAC system. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Three Key Takeaways from Recent Hotel Website ADA Litigation

April 26, 2021 — Shane Singh & Grace Mehta - Lewis Brisbois
Despite the COVID-19 pandemic and its chill on the hospitality industry, ADA-related digital lawsuits increased by approximately 23% in 2020. Many of these lawsuits are filed against hotels. The complaints allege that a hotel’s online reservation system failed to provide enough detail for individuals with disabilities to decide if the hotel meets their accessibility needs. These plaintiffs will often claim that it is insufficient to describe an aspect of a hotel or room as “accessible” because the term is an opinion or conclusion. Plaintiffs argue that a hotel’s reservation system must report specific information, such as the dimensions of space under accessible desks and sinks, the slopes of surfaces, doorway clearance, and numerous other technical requirements under the ADA. Many hotels are fighting back, arguing that the detail provided is sufficient and in compliance with the ADA. So far this year, in February 2021, two judges in the U.S. District Court for the Central District of California, Judge Percy Anderson and Judge Cormac Carney, agreed with the defendants, dismissing three cases with prejudice. Reprinted courtesy of Shane Singh, Lewis Brisbois and Grace Mehta, Lewis Brisbois Mr. Singh may be contacted at Shane.Singh@lewisbrisbois.com Ms. Mehta may be contacted at Grace.Mehta@lewisbrisbois.com Read the court decision
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Home Buyer May Be Third Party Beneficiary of Property Policy

July 19, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The Oklahoma Supreme Court reversed the trial court's grant of summary judgment to the insurer, finding that the purchaser may have third party beneficiary rights under the seller's property policy. Hensley v. State Farm Fire & Cas. Co., 2017 Okla. LEXIS 59 (June 20, 2017). In May 2000, Hensley sold his property and a mobile home located thereon to Douglas using a contract for deed. The contract for deed required Douglas to keep the premises insured, and the monthly payments made by Douglas to Hensley included the premiums. Hensley had a policy with State Farm on the property. Hensley continued to make the premium payments and the policy continued to be renewed. Further, State Farm was informed of the change in the property's status. Read the court decision
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Reprinted courtesy of Tred R. Eyerly - Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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#12 CDJ Topic: Am. Home Assur. Co. v. SMG Stone Co., 2015 U.S. Dist. LEXIS 75910 (N. D. Cal. June 11, 2015)

December 30, 2015 — Beverley BevenFlorez-CDJ STAFF
In his article, “Remediation Work Caused by Installation of Defective Tiles Not Covered,” attorney Tred R. Eyerly analyzed the Am. Home Assur. Co. case that involved a dispute between a developer and a subcontractor over fractured tiles: “On cross-motions for summary judgment, the court first found that the fracturing of the stone floor tiles caused by the subcontractor's defective installation was the result of an 'occurrence.' There was no evidence that the subcontractor knew that its tile installation work was defective before the tiles fractured. Instead, the fracturing was an unexpected consequence of the defective installation.” Everly continues, “But there was no ‘property damage.’ For the subcontractor to prevail, the defective installation work had to be considered separate and distinct from the physical manifestation of the defective work. Under California law, coverage resulted from construction defects that involved physical injuries to other parts of the construction project.” Everly concludes, “Because there was no genuine issues of material fact as to the potential for coverage, there was no duty to defend.” Read the full story... Read the court decision
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Depreciating Labor Costs May be Factor in Actual Cash Value

April 20, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The Minnesota Supreme Court considered a certified question from the the U.S. District Court regarding consideration of depreciating labor costs in determining the actual cash value of a loss. Wilcox v. State Farm Fire & Cas. Co., 2016 Min. LEXIS 50 (Minn. Feb. 10, 2016). The insureds' home was damaged by hail. State Farm provided a written estimate that calculated the actual cash value of the loss. To estimate the actual cash value of the damaged property, State Farm first calculated the replacement costs of individual items, such as roof flashing, siding, fascia, gutters, and window screens. Next, State Farm subtracted the pre-loss depreciation of some, but not all, individual items. For example, State Farm depreciated the cost of removing and replacing certain materials, such as siding. State Farm did not depreciate the cost of the new siding separately from the cost of the labor required to install the new siding on the home. Instead, State Farm calculated the removal and replacement of the siding as a single cost, then depreciated the removal-and-replacement cost as a whole. The cost of labor to repair or replace the damaged property was referred to by the court as "embedded labor costs." Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Home Prices Up in Metro Regions

October 30, 2013 — CDJ STAFF
Housing prices in the largest metro regions beat expectations, rising 12.8% in August as compared to a year before. Analysts were expecting weaker increases; instead these have been the fastest increases in seven years. The metropolitan area with the largest increase was Las Vegas, where houses increased in price by 29.2%. Three California regions — San Francisco, Los Angeles, and San Diego — also saw increases of greater than 20%. Read the court decision
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Liability Coverage For Construction Claims May Turn On Narrow Factual Distinctions

March 25, 2024 — Scott S. Thomas - Payne & Fears
In a recent trial court decision, a Montana federal court reminds us how fragile insurance coverage can be for construction-related insurance claims. Specifically, this case illustrates how seemingly small factual nuances can make or break coverage. The case turned on the application of policy provisions familiar to all who deal with these kinds of cases. (See Nautilus Ins. Co. v. Farrens, No. CV 22-193-M-DWM, 2024 WL 885109 (D. Mont. Mar. 1, 2024)) First, the court rebuffed the insurer’s argument that damage resulting from defective workmanship (in this case, the flawed design and installation of an elaborate floating-floor pool system) is not “caused by an occurrence.” The court correctly applied the test followed by most states: if either act causing injury is unintentional or the resulting injury is unexpected or unintended, the “occurrence” requirement is met. Fortunately, the court distinguished sloppy language from earlier Montana federal court decisions suggesting otherwise. Read the court decision
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Reprinted courtesy of Scott S. Thomas, Payne & Fears
Mr. Thomas may be contacted at sst@paynefears.com

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#3 CDJ Topic: Underwriters of Interest Subscribing to Policy No. A15274001 v. ProBuilders Specialty Ins. Co., Case No. D066615

December 30, 2015 — Beverley BevenFlorez-CDJ STAFF
Michael R. Vellado and Nicole R. Kardassakis of Lewis Brisbois Bisgaard & Smith LLP analyzed the appeals case that “reversed the trial court’s entry of summary judgment in favor of ProBuilders Specialty Insurance Company (“ProBuilders”) and held that the ‘other insurance’ clause in the ProBuilders policy did not relieve it of its duty to participate in the defense of its insured, Pacific Trades Construction & Development, Inc. ('Pacific Trades')." Read the full story... Another discussion of the ProBuilders appeal ruling occurred on the California Construction Law Blog, written by Yas Omidi of Wendel Rosen Black & Dean LLP. Omidi explained the appeal’s court decision: “In reversing the trial court’s decision, the appellate court characterized ProBuilder’s ‘other insurance’ clause as an ‘escape clause’—i.e., a clause that attempts to have coverage, paid for with the insured’s premiums, evaporate in the presence of other insurance.” Furthermore, she noted that “California public policy disfavors such clauses.” Read the full story... Read the court decision
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