Failure to Comply with Sprinkler Endorsement Bars Coverage for Fire Damage
July 31, 2013 —
Tred Eyerly, Insurance Law HawaiiDespite its application stating otherwise, the insured's failure to install a sprinkler system in its building barred coverage for extensive damage caused by fire.American Way Cellular, Inc. v. Travelers Prop. Cas. Co. of Am., 2013 Cal. App. LEXIS 425 (Cal. Ct. App. May 30, 2013).
American Way contacted a broker, A&J, regarding liability and property coverage. A&J sent American Way an application for a policy with Travelers. The application indicated American Way had a sprinkler system and fire detectors in its building.
Travelers issued a policy with a Protective Safeguards Endorsement For Sprinkler Locations and Restaurants. The endorsement stated that as a condition of the insurance, the insured was required to maintain a sprinkler system. An exclusions section said the insurer would not pay for loss caused by fire if there was no sprinkler system.
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Meet Some Key Players in 2020 Environmental Litigation
May 04, 2020 —
Ellen M. Gilmer - BloombergU.S. courts are set to take up critical environmental law issues in 2020, with pipeline approvals, wildlife protections, and climate change all on the docket for the new year.
Judges will weigh the Trump administration’s deregulatory efforts, the impacts of the president’s promised border wall, and just how far states can go to address climate change.
Leading the legal battles are lawyers from private practice, environmental organizations, local governments, and the Justice Department. Here are some of the players in environmental law in 2020.
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Ellen M. Gilmer, BloombergMs. Gilmer may be contacted at
egilmer@bloombergenvironment.com
When a Request for Equitable Adjustment Should Be Treated as a Claim Under the Contract Disputes Act
August 29, 2022 —
David Adelstein - Florida Construction Legal UpdatesIn federal contracting, contractors are sometimes torn about submitting a request for equitable adjustment (known as an “REA” under 48 C.F.R. 252.243-7002) or submitting a formal claim under the Contract Disputes Act (41 U.S.C. s. 7103), the latter requiring a final decision by the contracting officer and starts the clock with respect to interest and preserving rights. It is also sometimes not easy for the contracting officer receiving an REA to determine whether the REA is actually a claim under the Contract Disputes Act requiring more immediate action. This recent take by the United States Court of Appeals for the Federal Circuit hits the nail on the head:
We recognize that contracting officers will sometimes face the difficult challenge of determining whether a request for equitable adjustment is also a claim. Contractors must choose between submitting a claim—which starts the interest clock but requires the contracting officer to issue a final decision within 60 days—and submitting a mere request for equitable adjustment—which does not start the interest clock but gives the contractor more time to negotiate a settlement and possibly avoid hefty legal fees. The overlap between these two types of documents might create room for gamesmanship. For example, a contractor could submit a document that is a claim—starting the interest clock—but appears to be a mere request for equitable adjustment—causing the contracting officer to not issue a final decision within the 60-day deadline and allowing interest to accrue for months or years. But the government has tools to address this challenge: The contracting officer can communicate to the contractor that she is going to treat the document as a claim and issue a final decision within 60 days. Or the government can explicitly require the contractor to propose settlement terms and attempt to settle disputes before submitting a claim to the contracting officer for a final decision.
Zafer Construction Company v. U.S., 2022 WL 2793596, *5 (Fed.Cir. 2022).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
The Administrative Procedure Act and the Evolution of Environmental Law
September 19, 2022 —
Anthony B. Cavender - Gravel2GavelEnacted in 1946, the Administrative Procedure Act (APA) has provided a lasting framework for federal agency rulemaking and adjudication, as well as establishing the power of the federal courts to exercise judicial review over these actions of the federal bureaucracy. The APA is codified at 5 U.S.C. §§ 551–559, and §§ 701-706. There have been very few amendments made to the APA over these years, which indicates that Congress is reasonably satisfied with its administration and implementation.
What follows is an overview of how the APA has been used by the courts to resolve disputes involving the federal agencies, with particular attention being paid to the development of environmental law and practice. While there have been very few amendments to the statute, the courts have been free to enlarge upon the sometimes-opaque text of the APA to, in effect, change the law, even in an era when “textual fidelity” to the language of the statute is the prevalent approach.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Are Construction Defect Laws Inhibiting the Development of Attached Ownership Housing in Colorado?
October 29, 2014 —
James M. Mulligan, Esq. – Snell & Wilmer, LLPThis article responds to the article published in the September 18, 2014 issue of the Construction Defect Journal. It provides a different perspective to this issue, based on the author's experience with these matters during the past decade of attention to this specific challenge.
During recent years, there has been much discussion about the lack of attached ownership housing construction in Colorado. The main culprit, according to several sources within the community, seems to be our state's construction defect laws.
Since 2001, there has been a periodic series of legislative fixes to our construction defect laws that saw the pendulum swing back and forth between the interests of the consuming public who purchase the homes and certain protections of the developers and homebuilders from excessive and unnecessary litigation. Some say that the current state of the law is more onerous than necessary on the developers and homebuilders and it is artificially inhibiting the development of multifamily ownership housing in a time of high demand and low supply.
A recent opinion article in the September 29th, 2014 issue of the Denver Post stated, in part:
"No one is suggesting that developers escape liability for construction defects or that homeowners be denied the right to sue. But under the state's current defect laws, the scales have tilted too far in favor of litigation as the default tool for resolving disputes. And this appears to be the biggest reason for the collapse in the number of new multifamily [ownership] dwellings in recent years."
Rather than the typical conflict between the plaintiffs’ bar (representing the homebuyer) and the homebuilding industry that has produced the "back-and-forth" nature of our construction defect laws in the past, this 2014 legislative session found new constituents and a different perspective on the issue. A broad ranging coalition that included the Metro Mayors Caucus, major segments of the affordable housing community, and the general business community came together to address what their research showed as an astonishing lack of construction of ownership attached housing. There was a continuing boom going on in the development of multifamily "rental" housing, but an even more unusual deficit in multifamily "ownership" housing. Research apparently showed that, although about 20% + of construction of attached housing was in the ownership format throughout the Rocky Mountain West, Colorado was only producing about 2%. Interviews conducted by the research group that was retained by this coalition revealed that the development and homebuilding community were not willing to commence construction of ownership attached housing because of the continuing threat of litigation available under current interpretations of our state's construction defect laws. Lenders were also reluctant to provide financing for such projects faced with the apparent real threat of litigation that could shut down their projects and materially impact their loan viability and the value of the loan's collateral. Moreover, insurance premiums to cover such claims were so high, and many times unavailable, as to make such projects unfeasible.
This lack of available multifamily ownership housing was creating an ever-increasing concern over the resulting imbalance of housing options in and around the metro area, where the urban character of the metro region would need such ownership options in the attached housing format in order to address the more dense character of the urban setting. This imbalance of ownership attached housing was thwarting the advancement of "community" in the context of creating opportunities for all options of housing so important for a community balance. This included ownership options in this format that address the need for the younger professionals entering the workforce, newly forming households, seniors desiring to scale down their housing size and location, as well as the segment of the market who have limited means and need to address the affordability of homeownership. This was being most clearly felt along the FasTracks lines where attached ownership housing was an important element in originally advancing the TOD communities that are expected to be developed around these transit stops.
Rather than engage the battle of creating more contention in the various aspect of construction defect legislation per se, this coalition attempted to temper their approach and address specific issues that seemed to advance protection of the consuming homeowner while, at the same time, advocating a method of dispute resolution encouraged in the state's laws regarding such issues.
Normally, attached ownership housing is developed under our state laws governing the creation of Common Interest Communities ("CIC's"), including those communities where there are units that are attached and contain common elements. These CIC's will be encumbered by certain recorded documents (normally referred to as "Declarations") that structure the "community" within which the units are located and set up certain rules and restrictions that are intended to respect the common interests of the unit owners within that community. There is also a Homeowners Association ("HOA") organized for the common interest community that is charged with the management of the common elements and the enforcement of the rule and regulations governing the community.
The coalition chose to address their concerns through a bill including a couple of changes in the state laws governing CIC's, which would provide further protection to the homeowner and advance alternative dispute resolution as an expedient approach to resolving disputes should they arise. Those changes included:
1. Majority Owner Vote Re: Litigation -Rather than allowing two owners plus a vote of the HOA Board to determine whether or not to file litigation alleging construction defects in a CIC, the proposed change would require a simple majority vote of the unit owners who are members in the respective HOA where the alleged defect occurred. This approach addressed the increasing concern of unit owners whose homes are unmarketable and not financeable during the course of any such litigation.
This does not prevent an aggrieved owner from pursuing claims regarding that person's own unit, it just requires a majority of the owners to vote for litigation that affects the entire CIC in such litigation. This approach also included a provision for advance notice to the owners of such pending litigation accompanied by several disclosures regarding the potential litigation and its potential impact on the respective owner. This approach to protecting the rights of homeowners in a CIC seemed to be in line with everyone's interests, while not preventing an individual consumer/unit owner to advance its own claims.
2. Alternative Dispute Resolution -This proposal clarified the stated intent of the CIC statutes that advances alternative dispute resolution by providing that any mandatory arbitration provisions that are already contained in the Declaration that encumbers the respective unit in a CIC shall not be changed or deleted without the permission of the Declarant (e.g.; the developer of the CIC). This provision was to affirm a provision that the purchasing unit owner was aware of at the time of purchase and that it follows the spirit and intent of the state statutes governing such CIC's.
Notwithstanding the curative nature of these proposals, the legislation did not address the issue because a legislative maneuver was employed that did not allow for its consideration during the waning days of the session.
More recently, one of Colorado's municipalities, the home rule city of Lakewood, passed a local ordinance addressing this issue in a similar fashion, with a few more definitive suggestions regarding how to alleviate the lopsided nature of our current state of law. Without going into detail at this time with that specific ordinance, or the issue of its ability to address matters of a state-wide concern at the local level, the point is that several of Colorado's local communities, frustrated with the inability of the state legislature to deal with the issue are, at the very least, sending a signal that something must be done and, if the state is unwilling to lead on this matter, local communities will have to act.
This issue has not receded into the back room, and we will see a continuing crusade from an updated coalition to address these reasonable modifications to our state laws that will at least provide some protections to the CIC homeowner regarding unwanted litigation and some relief to the homebuilding industry from excessive litigation.
James M. Mulligan is a partner in the Denver office of Snell & Wilmer, LLP, a full-service commercial law firm located in nine cities throughout the Western United States and in Mexico. The firm’s website is http://www.swlaw.com.
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No Coverage for Foundation Collapse
November 08, 2017 —
Tred R. Eyerly - Insurance Law HawaiiCoverage for the collapse of a foundation was not covered under the contractor's builder's risk policy. Taja Investments LLC v. Peerless Ins. Co., 2017 U.S. App. LEXIS 19855 (4th Cir. Oct. 11, 2017).
Taja Construction LLC was renovating a row house owned by Taja Investments LLC when the east wall of the property collapsed. Taja submitted a claim for repair costs in the amount of $400,000. Peerless denied coverage because the collapse was caused by Taja's failure to support the building's foundation properly while excavating the basement. The policy excluded coverage for defects in construction or workmanship. The claim was also denied under the earth movement exclusion.
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Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Ohio School Board and Contractor Meet to Discuss Alleged Defects
July 30, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to Insurance News, The Greeneview School Board will be meeting with contractor Sfaffco Construction Inc. to discuss findings in a 122-page report produced by “Mays Consulting & Evaluation Services Inc. that outlines numerous alleged construction defects in the roofing system.”
"It's really the first time we have everybody together to discuss the deficiencies," said Isaac Seevers, the Greeneview Local Schools superintendent told Insurance News.
The school board estimates that the alleged problems will take up to $3.5 million to fix.
Meanwhile, Staffco has hired their own consultant. "The report from Mays is one sided," Staffco President Jon Stafford said according to Insurance News. "We take issue with some of the findings in there."
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FIFA May Reduce World Cup Stadiums in Russia on Economic Concern
July 16, 2014 —
Tariq Panja – BloombergFIFA may reduce the number of stadiums used to host the 2018 World Cup in Russia on concern that their economic viability after the monthlong event ends.
FIFA President Sepp Blatter said a day after Germany’s 1-0 win over Argentina in the final that a delegation from soccer’s governing body will meet Russian tournament organizers in September to discuss plans for the next edition.
Blatter gave a mark of 9.25 out of 10 to an “exceptional” Brazil World Cup, which cost $11 billion to stage. The tournament is a difficult challenge for organizers, Blatter said, illustrated by construction delays at almost all of the 12 arenas used for the 64 games in Brazil.
“The World Cup has taken such a dimension that the organization is hard work for the organizing country and also for FIFA,” Blatter told reporters at Rio de Janeiro’s Maracana stadium, where Germany claimed a fourth title and became the first European country to win the tournament in South America.
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Tariq Panja, BloombergMr. Panja may be contacted at
tpanja@bloomberg.net
