Insurers Must Defend Allegations of Faulty Workmanship
June 20, 2022 —
Tred R. Eyerly - Insurance Law HawaiiGranting the insured's motion for partial judgment on the pleadings, the court determined the insurers had a duty to defend. Suez Treatment Solutions, Inc. v. Ace Am. Ins. Co. & Liberty Mut. Fire Ins. Co., 2022 U.S. Dist. LEXIS 59044 (S. D. N. Y. March 30, 2022).
Suez Treatment Solutions, Inc. held policies from Chubb and Liberty Mutual Fire Insurance Company to cover its operations in connection with the development of a pollution treatment system in North Carolina. When the project ultimately failed, an underlying action sought damages from Suez, alleging breach of contract, negligence, and fraud. Suez filed this case seeking a declaratory judgment that Chubb and Liberty were each obligated to defend and indemnify Suez in the underlying case.
The City of High Point hired Suez to upgrade the facilities at its wastewater treatment plant staring in 2021. Because mercury levels were too high in emissions from sewage-sludge incinerators, Suez began working on the installation of a Mercury Removal System. After installation, a leak occurred in a component known as the heat exchanger. The leak caused the system to shut down and weeks-long repairs began.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Benefit of the Coblentz Agreement and Consent Judgment
August 26, 2024 —
David Adelstein - Florida Construction Legal UpdatesIf you are not familiar with the concept of what is commonly known as a Coblentz agreement relative to an insurance coverage dispute, review these prior postings (
here and
here and
here). This is a good-to-know agreement if you are a claimant and need to consider an avenue of collection if the insured’s carrier denies coverage out of the gate (meaning the carrier has denied both the duty to defend and the duty to indemnify).
A recent Eleventh Circuit Court of Appeals opinion demonstrates the Coblentz agreement concept. In Barrs v. Auto-Owners Ins. Co., 2024 WL 3673089 (11th Cir. 2024), an owner asserted a construction defect claim against its contractor. The owner hired the contractor to deconstruct a building and the contractor hired a demolition subcontractor. The owner noticed work was not being performed and materials (e.g., lumber) were missing; the demolition subcontractor had stolen materials. The subcontractor was terminated, and the owner claimed the contractor’s negligence allowed the theft and delayed his project. The contractor’s commercial general liability (CGL) insurer notified the insured-contractor that coverage did not exist and refused to defend the contractor. The owner sued the contractor under various theories of liability. The owner and contractor entered into a settlement agreement (i.e., the Coblentz agreement) where the contractor “admitted liability in the amount of $557,500.00….A consent judgment was entered against [the contractor] that closely tracked the settlement agreement but did not indicate which portion of the damages award was attributed to which claims. The agreement also assigned [owner] and all of [the contractor’s] rights to claim coverage and to recover available funds under [the contractor’s CGL policy].”
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Construction Firm Sues City and Engineers over Reservoir Project
October 28, 2011 —
CDJ STAFFThe city of Fremont, Ohio and Arcadis have been sued by Trucco Construction. Trucco had been hired by the city to build a reservoir designed by Arcadis, the News-Messenger reports. Peter Welin, attorney for Trucco, said that he found “startling evidence of the company’s negligence” when he deposed Arcadis engineers. “This project could never be built the way they bid it.”
Their suit alleges that Arcadis and the city were aware that the site was not conducive to construction and also that Arcadis failed to be a neutral party in discussions between Trucco and the city regarding compensation.
Sam Wamper, an attorney for Fremont, said he was going to file a motion which would include “quite an interesting story,” but declined to elaborate.
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French Laundry Spices Up COVID-19 Business Interruption Debate
April 20, 2020 —
Jeffrey J. Vita & Melanie A. McDonald - Saxe Doernberger & VitaOn March 26, 2020, Michelin-rated Napa Valley restaurants, French Laundry and Bouchon Bistro, and their celebrity chef, Thomas Keller, filed the second known
coronavirus-related declaratory judgment (DJ) lawsuit by a restaurant. The restaurants filed their DJ against Hartford Fire Insurance Company just seven days after Napa County issued a Shelter at Home Order.1 Chef Keller’s suit comes on the heels of the first such suit by a restaurant seeking to recover business income losses, filed by iconic New Orleans French Quarter restaurant Oceana Grill2 on March 17, just four days after the Louisiana governor issued an order prohibiting gatherings of more than 250 people.
As local governments seek to protect their citizens and prevent an onslaught of cases in area hospitals, they are issuing various “stay home,” “shelter at home,” and similar orders to force social distancing and to help flatten the curve of the growth in COVID-19 cases. Restaurants nationwide are especially hard hit by these orders, as many of these orders contain size limitations on gatherings, which have required that restaurants and bars limit capacity (as in the March 13th Louisiana order). Other such orders require non-essential businesses to “cease all activities in the County” (as in the Napa County Shelter at Home order). The Napa County order does not exempt restaurants as “essential businesses,” except when providing food for take-out or delivery. Other orders, still, directly address restaurants and require them to cease allowing public consumption of food and beverages (as in the subsequent, March 17th Louisiana order).
Reprinted courtesy of
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and
Melanie A. McDonald, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. McDonald may be contacted at mam@sdvlaw.com
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Wilke Fleury Welcomes New Civil Litigation Attorney
January 18, 2021 —
Wilke Fleury LLPIslam Ahmad represents clients on a broad range of civil ligation matters, with a focus on construction, real estate, and commercial disputes. He has represented all sides of construction and real estate cases, including owners, buyers, developers, and general contractors. He possesses superb legal research and writing skills that ensure no stone is left unturned that may improve the chances of victory for his clients.
Islam Ahmad has a sophisticated working background and a wealth of experience that make him ideal for taking on clients’ challenging cases and resolving them in their best interest. His intuition makes him versatile and capable of dealing with a wide range of issues. Islam is also capable of incorporating business performance factors into his legal advice by drawing from his prior experience as a business consultant. This comprehensive approach allows him and his clients to develop sound risk management strategies and business plans.
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Wilke Fleury LLP
Lewis Brisbois Promotes 35 to Partnership
March 15, 2021 —
Lewis BrisboisLewis Brisbois is proud to announce the promotion of 35 of its associates to partner. With these promotions, Lewis Brisbois’ total partnership comes to 933 across its 53 offices. The diverse class of newly promoted attorneys includes 15 women, which brings the total percentage of female partners at Lewis Brisbois to 33%.
Los Angeles Managing Partner Jana I. Lubert expressed her excitement about the recent promotions, stating, “On behalf of the Management Committee, I congratulate these outstanding attorneys on their achievement. They have demonstrated an exceptional level of dedication to Lewis Brisbois and to our clients, especially during this difficult past year. I am particularly proud of the diversity that exists across this group.”
Similarly, San Bernardino and Chief Diversity Partner Rima M. Badawiya shared her enthusiasm over the diversity of the new partners, explaining, “This group of exceptional attorneys, who have been promoted based upon their extraordinary performance, represents the diversity that exists throughout Lewis Brisbois and our commitment to advancing those who achieve at the highest level.”
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Lewis Brisbois
Licensing Mistakes That Can Continue to Haunt You
November 28, 2022 —
Alexa Stephenson & Rick Seely - Kahana FeldToday there are nearly 290,000 contractors licensed in California. This number continues to grow as California law requires businesses or individuals who alter any road or structure to be licensed contractors if the total cost of the project is $500 or more (including labor and materials). Complaints about improper and defective work performed by contractors are constantly filed with the California Contractors State License Board (“CSLB”) and any violations by those contractors could result in a license suspension. A contractor whose license is suspended by the CSLB or otherwise becomes unlicensed jeopardizes a contractor’s livelihood, compromises current insurance policies, and curtails an ability to obtain future insurance coverage. Moreover, being unlicensed could force a contractor to disgorge all money received on a project per California Business & Professions Code § 7031. What can contractors do to stay vigilant and avoid these scary outcomes? Stay tuned for a few suggestions.
1. Stay Qualified
Contractors must make sure the correct person and/or entity is holding the contractor’s license. Contractors can obtain licenses as a sole owner, partnership, corporation, joint venture, or limited liability company. For any form of the business entity, one individual must act as qualifier to meet the CLSB license requirements. This qualifying individual must have the knowledge, experience, and skills to manage the daily activities of a construction business (including field supervision) or be represented by someone else with at least four years of experience within the past ten years as an unsupervised journeyperson, foreperson, supervising employee, or contractor in the trade being applied for.
Reprinted courtesy of
Alexa Stephenson, Kahana Feld and
Rick Seely, Kahana Feld
Ms. Stephenson may be contacted at astephenson@kahanafeld.com
Mr. Seely may be contacted at rseely@kahanafeld.com
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Seattle Independent Contractor Ordinance – Pitfalls for Unwary Construction Professionals
October 09, 2023 —
Travis Colburn - Ahlers Cressman & SleightChapter 14.34 of the Seattle Municipal Code is a relatively new ordinance that can affect the parties to a construction contract for work performed within the City of Seattle’s city limits. The Independent Contractor Protection Ordinance (“ICPO”) was enacted to provide self-employed persons, or entities composed of not more than one person, regardless of corporate form, recourse for timely payment for work performed. The ICPO applies to contracts of $600[i] or more between an independent contractor and a hiring entity where the work, in whole or in part, is known to be performed within the City of Seattle’s city limits.[ii] The ICPO cannot be waived by parties to a contract.[iii]
Historically, the primary legal recourse for non-payment or late payment for work performed under a contract involves an expensive breach of contract action, and one reason the ICPO was enacted was to give greater protection to a growing number of Washington independent contractors who report problems with timely and accurate payment.
The ICPO affects “hiring entities” or any individual, partnership, association, corporation, business trust, or any entity, person or group of persons, or a successor thereof, that hires independent contractors to provide services within the scope of a hiring entity’s business or commercial activities. In the construction context, most general contractors, subcontractors, design professionals, and design consultants should be aware of this ordinance, as well as certain owners[iv] and development-side entities.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
