First Circuit Rules Excess Insurer Must Provide Coverage for Fuel Spill
January 18, 2021 —
Syed S. Ahmad & Adriana A. Perez - Hunton Andrews KurthThe First Circuit recently held that a “Special Hazard and Fluids Limitation Endorsement” was ambiguous and therefore there was excess coverage for a fuel spill that occurred after a tanker-truck overturned.
In Performance Trans. Inc. v. General Star Indem. Co., the First Circuit reversed the District Court’s grant of summary judgment in favor of General Star Indemnity Company. The District Court held that the excess policy General Star issued to Performance Trans. Inc. precluded coverage for a spill that resulted in the leaking of thousands of gallons of fuel. The District Court relied on the existence of a total pollution exclusion to bar coverage and held that the policy’s Special Hazards and Fluids Limitation Endorsement could not create an ambiguity that would afford coverage.
Reprinted courtesy of
Syed S. Ahmad, Hunton Andrews Kurth and
Adriana A. Perez, Hunton Andrews Kurth
Mr. Ahmad may be contacted at sahmad@HuntonAK.com
Ms. Perez may be contacted at pereza@HuntonAK.com
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Apartment Construction Increasing in Colorado while Condo Construction Remains Slow
March 12, 2014 —
Beverley BevenFlorez-CDJ STAFFDennis Huspeni writing for the Denver Business Journal reported that Colorado is having a surge of new apartment construction, but very little condominium building. According to Huspeni, “some business leaders and government officials worry that Colorado’s construction defect laws” are the reason for the lack of condominium construction.
Huspeni in the Denver Business Journal alleged that there is a large “liability risk for builders, developers and subcontractors” because current state laws “make it easier for homeowners’ associations to file large, class-action lawsuits against builders for construction problems associated with new condominiums.”
Huspeni spoke with John Batug, senior vice president and regional manager of Wells Fargo’s community banking real estate group, who stated that condo development usually occurs at the same rate as apartment development. Batug alleged that construction defect litigation “seems to have pushed that component of the market out.”
A bill that is supposed to “jump-start” the “condominium construction sector will be introduced this session, but its sponsor said he remains unsure what types of legal reform will be a part of it,” reported Ed Sealover in the Denver Business Journal.
Lakewood Mayor Bob Murphy told Sealover that “city and business leaders would like to see two particular changes in the law: 1.They want to require a super-majority of condo owners to have to agree to legal action before any lawsuit is filed — instead of just needing two of them to move forward. 2.They want a requirement to attempt some sort of alternative dispute resolution before a suit can be filed.”
However, not everyone is in favor of the proposed suggestions. Jonathan Harris, vice president of The Point Homeowners Association, told Sealover that the “bill that the Metro Mayors Caucus wants ignores the fact that arbitration can be an expensive process for property owners.”
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Owner’s Slander of Title Claim Against Contractor Recording Four Separate Mechanics Liens Fails Under the Anti-SLAPP Statute
February 01, 2021 —
Garret Murai - California Construction Law BlogMost mechanics lien actions follow a pretty standard process:
- A mechanics lien claimant, either a contractor subcontractor, material supplier, or laborer, performs work but is not paid;
- Mechanics lien claimant records a mechanics lien on the property in which work was performed; and
- Within 90 days thereafter files suit to foreclose on the mechanics lien.
Sometimes, either before or after a mechanics lien claimant files suit, the owner will record a mechanics lien release bond, in which case mechanics lien claimant files suit against the release bond.
But what if a mechanics lien claimant records a mechanics lien, the owner records a mechanics lien release bond, and the mechanics lien claimant records three different but identical mechanics liens thereafter? Is this even legal?
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
The Burden of Betterment
February 23, 2017 —
Ryan M. Charlson, Esq. - Florida Construction Law NewsThe concept of betterment has long been used by defendants in cases involving defective design or construction to limit the damages awarded to a plaintiff.[1] The theory behind betterment is that: “if in [the] course of making repairs [an] owner adopts a more expensive design, recovery should be limited to what would have been the reasonable cost of repair according to original design.”[2] Betterment is often raised as an affirmative defense, requiring a defendant to prove that the plaintiff has received a good or service that is superior to that for which the plaintiff originally contracted. A recent South Florida case seems, at first blush, to suggest the burden of establishing the value of betterments may fall to the plaintiff, although a closer reading indicates the decision is likely to have limited applicability.
In Magnum Construction Management Corp. v. The City of Miami Beach, the Third District Court of Appeal was asked to review the damages award to the City for construction defects associated with the redesign and improvement of a park.[3] The completed project contained landscaping deficiencies, along with other “minor defects” in the playground’s construction.[4] After a unilateral audit, and without providing the contractor its contractually required opportunity to cure the defects, the City “removed, redesigned, and replaced the playground in its entirety.”[5] It did so despite no recommendation by the City’s own expert to perform such work.[6] During the bench trial, the “only measure of damages provided by the City was the costs associated with the planning, permitting, and construction of a park that is fundamentally different from the one it contracted with [the contractor] to build.”[7]
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Ryan M. Charlson, Cole, Scott & Kissane, P.A.Mr. Charlson may be contacted at
ryan.charlson@csklegal.com
U.S. Supreme Court Limits the Powers of the Nation’s Bankruptcy Courts
June 11, 2014 —
Earl Forte – White and Williams LLPOn June 9, 2014, the Supreme Court of the United States issued its much-awaited decision in Executive Benefits Insurance Agency v. Arkison, Chapter 7 Trustee of Estate of Bellingham Insurance Agency, Inc., Case No. 12-1200, in which the court confirmed that the power of the nation’s bankruptcy courts to hear and decide cases involving state-created private rights in which the bankruptcy proof of claim process has not been directly invoked, is severely limited by Article III of the Constitution of the United States.
The decision in Executive Benefits, while providing some clarity to practitioners and the public following the Court’s June 2011 decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), nevertheless will make a substantial portion of bankruptcy litigation matters more cumbersome and potentially more expensive to guide through the bankruptcy system. Clients and practitioners are best advised to hire knowledgeable counsel to help navigate the more complex procedural waters created by this decision.
Although the Court in Executive Benefits did resolve a pending procedural question that had dogged practitioners since Stern was decided in 2011, the Court’s decision in Executive Benefits now makes it abundantly clear that many disputes that were previously heard and decided in the nation’s bankruptcy courts can no longer be decided there and must be submitted to the district courts for full de novo review and entry of a final judgment or order. It is difficult to see how this decision will not make bankruptcy litigation more cumbersome and expensive by adding an additional layer of judicial involvement to many matters, notably to fraudulent transfer and other avoidance “claw back” actions that historically have been decided in the bankruptcy courts and used famously in Madoff and other cases as an efficient device for creating value for creditors.
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Earl Forte, White and Williams LLPMr. Forte may be contacted at
fortee@whiteandwilliams.com
Water Drainage Case Lacks Standing
March 28, 2012 —
CDJ STAFFThe Texas Court of Appeals has ruled in the case La Tierra de Simmons Familia Ltd. V. Main Event Entertainment, LP. The trial court had found for Main Event. On appeal, the court threw out some of the grounds on which the trial court had reached its decision.
The case involved two commercial lots in northwest Austin, Texas. The uphill tract (Phase III of the Anderson Arbor development) diverts its runoff onto the lower tract (the “Ballard tract”). The owners of the Ballard tract claim that “the drainage system was designed or constructed in a manner that has damaged and continues to damage the Ballard tract.”
Both tracts have undergone changes of ownership since the construction of the drainage system in 2004. At the time the drainage system was constructed, the parcel was owned by Sears Roebuck and Co. Sears later sold the property. Main Event Entertainment is the current tenant. Likewise, the Ballard tract was previously owned by the Ballard Estate which sold the property to La Tierra on an “as is” basis in 2007.
After La Tierra bought the Ballard tract, La Tierra’s engineer “witnessed and videotaped what he described as ‘flooding’ on the Ballard tract caused by storm water discharge from the Anderson Arbor drainage system during a rainfall event.” La Tierra determined that an adequate drainage system would cost about $204,000. Development plans were put on hold.
La Tierra sued Main Event and various other parties associated with the uphill tract, seeking “actual damages for (1) decrease and loss in rental income due to delay in obtaining the development permit, (2) interest on carrying costs during that time period, (3) the cost to build a water conveyance system on the Ballard tract, (4) engineering fees incurred to redesign the water conveyance system, (5) unspecified out-of-pocket real estate expenses, and (6) property devaluation occasioned by the need to construct an expensive water conveyance system.” The trial court never reached these claims, ruling instead that La Tierra lacked standing, that its claims were barred under the statute of limitations, and that there was no evidence of damage.
La Tierra appealed, arguing that “(1) the summary-judgment evidence does not conclusively establish that property damage claims accrued or were discovered prior to September 11, 2007, which is within the limitations period and was after La Tierra purchased the property; (2) even if the property was damaged before La Tierra acquired ownership of the Ballard tract, standing exists based on the assignments of interest from the Ballard Estate heirs, and the discovery rule tolls limitations until the injury was discovered on September 11, 2007; (3) limitations does not bar La Tierra's request for injunctive relief; (4) La Tierra's water code claim against Main Event and M.E.E.P. is viable based on their control over the drainage system, which makes them necessary and indispensable parties for injunctive relief; (5) La Tierra presented more than a scintilla of evidence to raise a fact issue on damages, causation, and other essential elements of its causes of action; and (6) the trial court abused its discretion when it sustained the defendants' objections to La Tierra's summary-judgment evidence.”
The appeals court concluded that La Tierra’s second claim was irrelevant to standing, as La Tierra “obtained assignments from the Ballard Estate heirs ? nearly one year after the lawsuit was initially filed.” Nor did the court accept their first point. The water system had been operating unaltered since January, 2004, with monthly maintenance and inspection to maintain its designed operation. Further, a feasibility report La Tierra received stated that “over sixteen acres drain into those ponds, and thus onto this site.” The court noted that “the underlying facts giving rise to a cause of action were known before La Tierra acquired ownership of the Ballard tract.”
The court concluded that the drainage issue is a permanent injury, but that it “accrued before La Tierra acquired an ownership interest in the property.” As La Tierra has standing, the appeals court ruled that it was improper for the trial court to rule on the issues. The appeals court dismissed the questions of whether the case was barred under the statute of limitation and also the question of whether or not La Tierra had damages.
As the issue of standing would not allow La Tierra to bring the suit, the appeals court found for the defendants, dismissing the case for this single reason, and otherwise affirming the ruling of the lower court.
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FAA Plans Final Regulation on Commercial Drone Use by Mid-2016
June 17, 2015 —
Rachel Adams-Heard and Alan Levin – BloombergThe Federal Aviation Administration intends to issue final regulations for operating small commercial drones by the middle of 2016, a top administrator told a U.S. House committee Wednesday.
“The rule will be in place within the year,” FAA Deputy Administrator Michael Whitaker said at the House Oversight Committee hearing. He said, “hopefully before June 17, 2016.”
While the FAA has previously said it was seeking to complete the rule as swiftly as possible, Whitaker’s comments in answering lawmakers’ questions are the most specific yet about timing.
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Rachel Adams-Heard, Bloomberg and
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Employee or Independent Contractor? New Administrator’s Interpretation Issued by Department of Labor Provides Guidance
August 04, 2015 —
Tanya Salgado – White and Williams LLPThe question of whether a worker should be classified as an independent contractor or an employee is fraught with confusion and misunderstanding for many businesses. Compounding the problem is the fact that there are a number of different tests used to determine employee status, which vary by jurisdiction and by the particular law in question. For example, the Internal Revenue Service uses the common law rules which focus on the degree of control and independence exercised by the worker. In contrast, the United States Department of Labor uses the “economic realities” test which focuses on whether the worker is economically dependent on the employer.
In an effort to help combat the confusion over proper worker classification, the United States Department of Labor (DOL) has issued a new Administrator’s Interpretation that provides a detailed explanation of the test used by the DOL to determine if a worker has been misclassified as an independent contractor. The DOL enforces the Fair Labor Standards Act (FLSA), which mandates that employees (but not independent contractors) be paid minimum wage and overtime. When a business misclassifies non-exempt workers as independent contractors, and those workers are not paid the minimum hourly wage for their labor, or are not paid overtime when they work more than 40 hours in a workweek, this violates the FLSA.
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Tanya Salgado, White and Williams LLPMs. Salgado may be contacted at
salgadot@whiteandwilliams.com
