Insureds' Experts Insufficient to Survive Insurer's Motion for Summary Judgment
October 17, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe magistrate recommended that insurer's motion for summary judgment be granted due to the insureds' expert's inability to present genuine issues of material fact. Walker v. Century Sur. Co., 2023 U.S. Dist. LEXIS 142408 (E.D. Texas July 17, 2023).
The insureds' property sustained damage from Hurricane Laura. Colonial Claims inspected the property for Century and reported that a portion of the roof was damaged by the hurricane. Century paid insureds $2,212,34. Van Fisher, an engineer with Envista Forensics, then inspected the interior of the property on Century's behalf. Fisher reported that there was some covered interior damage caused by a leak from a storm-created opening in the roof. However, Fisher further reported that there was other interior damage caused by existing water leaks not attributed to the hurricane and thus not covered by the policy. Century then paid the insureds an additional $485.05 based on Fisher's inspection.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
California’s Wildfire Dilemma: Put Houses or Forests First?
November 29, 2021 —
Jim Hinch - BloombergAs record-breaking fires blacken millions of acres in California and elsewhere in the West this year, politicians are mostly sticking to a standard script in response. President Joe Biden’s proposed budget this year includes a $500 million boost to what the White House calls “forest management” and other efforts to reduce wildfire risk. In July, California lawmakers approved $1.5 billion in similar prevention spending.
The funds are in addition to the $2 billion the federal government spends each year fighting fires — a figure twice what it was 10 years ago and roughly five times more than in the 1980s and 1990s. A study last year found that in 2018, wildfires in California caused $148.5 billion in economic damage, including $46 billion outside the state.
Roughly one in three American houses is now in what forest scientists call the wildland-urban interface, where growing cities, remote workers, second-home buyers and commuters priced out of other housing markets are often pushing into fire-prone regions. A 2017 study found that 900,000 homes in the Western U.S. worth a combined $237 billion were “at high risk for fire damage.”
Read the court decisionRead the full story...Reprinted courtesy of
Jim Hinch, Bloomberg
Housing Prices Up through Most of Country
December 20, 2012 —
CDJ STAFFHome prices in October were up more than six percent compared with prices in October 2011. The LA Times noted that some of the strongest gains were in California and Arizona. The Phoenix metropolitan area saw a 24.5% rise in home prices. In California, Riverside and Los Angeles were just above the national average, at 7.3% and 6.4%, contributing to the state’s overall nine percent increase.
The news wasn’t good throughout the entire country, as five states did not see any price increases. Mark Fleming, the chief economist at CoreLogic, a research firm in Irvine, California said that “the housing recovery that started earlier in 2012 continues to gain momentum.
Read the court decisionRead the full story...Reprinted courtesy of
Contract Change # 10: Differing Site Conditions (law note)
March 28, 2018 —
Melissa Dewey Brumback - Construction Law in North CarolinaPreviously, the A201 required a Contractor to provide notice to the Owner and Architect within 21 days after discovery of unforeseen site conditions. This notification is required prior to the conditions being disturbed, so as to allow the Design Team the ability to evaluate the site and determine the compensability of any such differing conditions.
Read the court decisionRead the full story...Reprinted courtesy of
Melissa Dewey Brumback, Construction Law in North Carolina
Not If, But When: Newly Enacted Virginia Legislation Bans “Pay-If-Paid” Clauses In Construction Contracts
August 22, 2022 —
Joseph A. Figueroa & Thomas E. Minnis - ConsensusDocsRecently passed legislation in Virginia is likely to dramatically change contractual relationships between prime contractors and subcontractors in the Commonwealth. Abrogating well-established common-law principles set forth by the Supreme Court of Virginia, on April 27, 2022, the Virginia General Assembly, after receiving input from Virginia Governor Glenn Youngkin, passed Senate Bill 550 banning “pay-if-paid” clauses in public and private construction contracts. Contractors performing work in Virginia should take note of the new law, which goes into effect next year and will apply to any contracts executed after January 1, 2023.
The History Of Pay-if-Paid Clauses In Virginia
Broadly speaking, “pay-if-paid” clauses are a commonly used tool by prime contractors on construction projects to shift the risk to subcontractors in the event that the owner does not pay the prime contractor for work. Such clauses usually include language creating an express condition precedent to the subcontractor’s right to be paid for work under a subcontract, stating that the prime contractor shall be under no obligation to pay the subcontractor for work unless and until the prime contractor first receives payment for that work by the project owner. The “pay-if-paid” clause also has a less extreme cousin, the “pay-when-paid” clause, which merely delays the time in which the prime contractor is obligated to pay the subcontractor to the time in which the prime contractor is paid by the owner. It does not, however, extinguish the prime contractor’s ultimate obligation to pay the subcontractor.
Reprinted courtesy of
Joseph A. Figueroa, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) and
Thomas E. Minnis, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)
Mr. Figueroa may be contacted at jfigueroa@watttieder.com
Read the court decisionRead the full story...Reprinted courtesy of
Revisiting the CMO; Are We Overusing the Mediation Privilege?
November 19, 2021 —
Michael T. Kennedy Jr. - BERDING|WEILOne of the most common features in construction defect cases is the Case Management Order (“CMO”) or Pre-Trial Order (“PTO”) to govern pre-trial and mediation procedures. CMOs and PTOs arose in the days when the HOA would sue the developer, the developer would cross-complaint against the subcontractors, and each defendant and cross-defendant might have 2 or 3 insurance carriers defending, each of whom may retain their own panel counsel. In a large case there may have been 20 parties and 30 defense attorneys. In order to avoid the cost and chaos of all of those parties propounding their own discovery, and in order to prepare these cases for mediation well before trial and the associated costs, it became standard practice in California to include provisions in the CMO to stay all discovery until just before trial.
Plaintiff would provide a Defect List or Statement of Claims and the parties experts would meet and exchange information as part of the mediation process. All of the information exchanged would be subject to mediation privileges and inadmissible at trial. The benefit of this practice was that the parties (and carriers) would avoid the cost of formal discovery and allow the experts to discuss compromised scopes of repair to help settle the case while being able to take a more aggressive position at trial. The disadvantages are that each party uses its privileged initial expert reports to stake out negotiating positions more extreme than what they would put on at trial, with each side losing credibility with the other in assessing the value of the case, and for those cases that did not settle, the parties would be faced with having to do all of the depositions and discovery in the last 60 days, or delaying trial, or both.
Over the last 10 or 15 years with the advent of wrap-up insurance policies, these cases now usually involve 2 sides instead of 20; only the HOA and the developer remain in the case. However, old habits die hard, and the standard CMO/PTO hasn’t evolved with other aspects of these cases. The practice of staying all discovery and exchanging information only under mediation privileges remains, and as a result insurance carriers don’t receive the admissible evidence that they need to determine coverage and evaluate the real settlement value of the case until just before trial. On the plaintiff’s side, if most of the experts’ work is done under the guise of mediation privilege, those costs may not be recoverable. Outside the context of mediation, costs incurred in investigation of the defects and preparation of a scope and cost of repair are recoverable.
This reflexive claim of mediation privilege over all information exchanged during the case has outlived its usefulness. The CMO can and should remain to regulate formal discovery and to help the parties prepare for mediation, but regulated discovery should be opened early in the case. In California, the SB800 process already provides for the exchange of admissible information during the prelitigation right to repair process. Continuing that exchange during the early litigation allows the parties to continue to prepare for mediation, but waiving privileges had advantages for both sides.
A senior claims manager once commented that Plaintiff’s mediation-protected Statement of Claims “might as well be a stack of blank paper” for all of its usefulness to the carrier in assessing the value of the case. If the Plaintiff and it expects are free to inflate their claims early in the case without having to worry about every supporting those claims in front of a jury, they have little or no credibility. And if those claims are inflated or not “real,” not only can the carrier not properly assess the verdict range and settlement value of the case, but it may also be hampered in making a coverage determination. Simply put, if the exchange of real information through formal discovery is put off until just before trial, the defense cannot be ready to settle until then. Worse, the cost of defense goes through the roof in the last 60 days before trial as the lawyers’ scramble to take all of the depositions and to all of the other work that had been stayed for the previous year or two.
The Plaintiff is faced with the same question of credibility of defense experts where they are free to take a “low ball” negotiating position without having to support that position through cross-examination in front of the jury. Just as the carrier behind the defense attorney needs the Plaintiff’s “real” evidence to assess the claim, so does the HIOA Board of Directors behind the Plaintiff’s counsel. Additionally, in California as in most states, the cost of experts’ preparation for mediation may not be recoverable as costs or damages, but investigation of the defects and preparation of the scope and cost of repair is recoverable.
The biggest challenge is resolving construction defect claims for both sides is how to resolve these cases quickly while keeping costs under control. Practices that worked 20 years ago are no longer applicable with changes in insurance, and in light of some of the bad habits that arise when all of the information exchanged was confidential.
The CMO/PTO process can still be useful to regulate the discovery and mediation schedule given the volume of documents and other information to be exchanged but exchanging “real” information in a form that may come into evidence at trial should foster earlier resolution, resulting in cost savings for the parties. The CMO can provide for the parties to respond to controlled discovery, and the exchange of expert reports and potentially depositions can and should be done earlier in the case, well before the eve of trial. The parties can then assess the true value of each case and prepare for more substantive mediation without waiting until they are on the figurative courthouse steps.
Construction defect cases have a pattern, and it is tempting for busy lawyers to just put each case through the same algorithms that they have used for years. However, these cases have evolved and those of us handling these cases need to reevaluate our approach to these cases. Taking aggressive negotiating positions that no longer have any credibility with the other side has become counterproductive, and the exchange of real evidence earlier in the case would better serve our clients and carriers.
BERDING|WEIL is the largest and most experienced construction defect and common interest development law firm in California. For more information, please visit https://www.berding-weil.com
Read the court decisionRead the full story...Reprinted courtesy of
Michael T. Kennedy Jr., BERDING|WEILMr. Kennedy may be contacted at
mkennedy@berdingweil.com
Congratulations Bryan Stofferahn, August Hotchkin, and Eileen Gaisford on Their Promotion to Partner!
April 19, 2021 —
Bremer Whyte Brown & O’MearaBryan Stofferahn has been with BWB&O’s Oakland office since 2016 and has been practicing law since 2002. Mr. Stofferahn focuses his practice on insurance defense matters and was lead counsel on the Millennium Tower construction defect case in San Francisco, which was the largest construction defect action in the country.
Outside of work, Bryan is passionate about traveling the world with his wife Claire and has finished in last place in two separate chili cook-offs (pre-COVID, of course).
August Hotchkin has been with BWB&O since 2013 and helped open the Reno office located in Northern Nevada in 2016. He is duly licensed in both Nevada and California, handling various legal matters, especially complex litigation, throughout Northern Nevada and Northern California.
Mr. Hotchkin has taken several cases to trial, including a successful defense verdict on a wrongful death matter. He has also argued countless dispositive motions as well as having cases heard at the Appellate level.
During his free time, Mr. Hotchkin enjoys golfing, snowboarding, and spending time with his family and friends, especially up at Lake Tahoe.
Eileen Gaisford has been with BWB&O’s Woodland Hill’s office for almost a decade and is licensed to practice law in California.
Read the court decisionRead the full story...Reprinted courtesy of
Bremer Whyte Brown & O'Meara LLP
Massachusetts High Court: Attorney's Fee Award Under Consumer Protection Act Not Covered by General Liability Insurance Policy
September 19, 2022 —
Jeffrey J. Vita & David G. Jordan - Saxe Doernberger & Vita, P.C.In the case of
Vermont Mutual Insurance Co. v. Poirier, 189 N.E.3d 306 (Mass. 2022), Massachusetts’ Supreme Judicial Court concluded that an award of attorney's fees pursuant to
Chapter 93A (Massachusetts’ Consumer Protection Act) is not covered under an insured’s general liability insurance policy. Applying Massachusetts law, the Court found that a statutory award of attorney’s fees stemming from a bodily injury claim is not reasonably considered “damages because of bodily injury” or “costs taxed against the insured” so as to trigger general liability coverage.
Facts of the Case
A Servpro company (owned by Mr. and Mrs. Poirier) was hired to clean up a basement after a sewage spill. The owners of the home were injured by fumes from chemicals used in the cleanup and accordingly brought suit against the Poiriers and their Servpro business. In the lawsuit, the homeowners alleged negligence, breach of contract, and also a Chapter 93A claim, asserting breach of warranty of merchantability and warranty of fitness for a particular purpose. Prior to trial, the plaintiffs waived the negligence and breach of contract claims and sought a bench trial on the Chapter 93A claims alone.
Reprinted courtesy of
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and
David G. Jordan, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at JVita@sdvlaw.com
Mr. Jordan may be contacted at DJordan@sdvlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
