Noteworthy Construction Defect Cases for 1st Qtr 2014
April 30, 2014 —
Beverley BevenFlorez-CDJ STAFFJohn A. Husmann and Jocelyn F. Cornbleet of BatesCareyLLP analyzed several noteworthy construction defect cases that have already occurred in 2014, as published in Law360. The cases involved “the ‘occurrence’ requirement, contractual liability exclusion and ‘other insurance’ clauses.” Husmann and Cornbleet summarized Owners Insurance Co. v Jim Carr Homebuilder LLC (Alabama), Pennsylvania National Mutual Casualty Insurance Co. v. Snider (also Alabama), Woodward LLC v. Acceptance Indemnification Insurance Co. (Mississippi), and others.
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Certificates as Evidence of Additional Insured Coverage Are All the Rage, But You Deserve Better
August 30, 2021 —
Joseph L. Cohen, W. Mason & Sean Milani-nia - ConsensusDocsConsider the following scenario: the construction project is ready to proceed. The deal is done. The agreements have all been carefully crafted, with detailed provisions on insurance dedicated to reducing risk. Those provisions require the downstream trade contractors to furnish certificates of insurance listing the owner and prime contractor as additional insureds on the downstream contractor’s policies of insurance. A provision in the prime contract further requires the prime contractor to provide the owner with a certificate of insurance showing the owner as an additional insured on the prime contractor’s policies. At the ceremonial ground-breaking and right before work commences, the downstream contractors deliver their insurance certificates to the prime contractor and the prime contractor delivers its certificate plus the downstream certificates to the owner. From there, each insurance certificate will begin its final destination to the project file (either electronic or physical) where, with any luck, it will serve the regular stint before being discarded after the project’s successful conclusion. Otherwise, it will be retrieved under much stress and heavy scrutiny. The acceptance of insurance certificates is often viewed as standard industry practice, but should it be?
The answer is a resounding “no.” There are many form development and construction agreements in circulation that deem insurance certificates to be acceptable evidence of insurance. But, a certificate of insurance should not be relied upon because it does not mean that insurance has been placed. You deserve real evidence that the requisite additional insured coverage is in place (in the form of a policy endorsement), and here is why.
Reprinted courtesy of
Joseph L. Cohen, Fox Rothschild,
W. Mason, Fox Rothschild and
Sean Milani-nia, Fox Rothschild
Mr. Cohen may be contacted at jlcohen@foxrothschild.com
Mr. Mason may be contacted at wmason@foxrothschild.com
Mr. Milani-nia may be contacted at smilani@foxrothschild.com
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Real Estate & Construction News Roundup (3/6/24) – Steep Drop in Commercial Real Estate Investment, Autonomous Robots Being Developed for Construction Projects, and Treasury Department Proposes Regulation for Real Estate Professionals
April 08, 2024 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, major league sports franchises turn to real estate to increase their value, the Associated Builders and Contractors releases a guide on artificial intelligence, New York City helps landlords convert empty office space into housing, and more!
- The Treasury Department proposed a regulation that would require real estate professionals to report information to the agency about all-cash sales of residential real estate to legal entities, trusts and shell companies. (Fatima Hussein, AP)
- For decades, major league teams depended on ticket sales, concessions and TV deals to generate revenue, but team owners in recent years have turned to real estate development to bring in extra cash and drive up the values of their franchises. (Nathaniel Meyersohn, CNN)
- The U.S. commercial real estate market saw a steep drop in investment last year, with the market plummeting by more than 50% to the lowest level since 2012 and CBRE noting a 91% year-over-year drop in direct real estate company investments. (Yuheng Zhan, Business Insider)
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Pillsbury's Construction & Real Estate Law Team
Statute of Limitations Bars Lender’s Subsequent Action to Quiet Title Against Junior Lienholder Mistakenly Omitted from Initial Judicial Foreclosure Action
October 19, 2020 —
Lyndsey Torp - Snell & Wilmer Real Estate Litigation BlogA recently issued opinion by the Court of Appeal, Fifth Appellate District tells a cautionary tale regarding a lender’s failure to name a junior lienholder in its initial judicial foreclosure action.
In Cathleen Robin v. Al Crowell, — Cal.Rptr.3d —-, 2020 WL 5951506, plaintiffs sued defendant, a junior lienholder, for quiet title, having failed to name him in the initial judicial foreclosure action. Defendant raised the statute of limitations defense, but the trial court found in favor of plaintiffs. The court of appeal reversed, holding that the 60-year statute of limitations which the trial court applied only applied to a nonjudicial trustee’s sale, and the trial court could not exercise the trustee’s power of sale after the expiration of the statute of limitations on a judicial action to foreclose.
In 2006, plaintiffs loaned Steve and Marta Weinstein (the “Weinsteins”) $450,000, secured by a deed of trust on one parcel of the Weinstein’s property. In 2007, the Weinsteins and defendant Al Crowell (“Crowell”) recorded a second deed of trust on the property, securing a promissory note executed by the Weinsteins in 2004.
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Lyndsey Torp, Snell & WilmerMs. Torp may be contacted at
ltorp@swlaw.com
Hydrogen—A Key Element in the EU’s Green Planning
December 07, 2020 —
Matthew Oresman & Henrietta Worthington - Gravel2Gavel Construction & Real Estate Law BlogGettyImages-1150744671-300x225Hydrogen is gaining global recognition for its potential as a key player in the energy transition. Investors and businesses are exploring opportunities across multiple sectors, including energy, manufacturing, transport and finance. According to a report by Bloomberg, the current pipeline for global hydrogen projects is worth an estimated $90 billion. The EU is not going to be left behind, with a focal point of its Green Deal being on hydrogen.
The EU’s executive branch (the European Commission or EC) has confirmed its commitment to increasing hydrogen projects across the bloc, with a priority on green hydrogen. Its Hydrogen Strategy, released in March, states that hydrogen is “essential to support the EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement the Paris Agreement while working towards zero pollution.”
The EU’s executive branch (the European Commission or EC) has confirmed its commitment to increasing hydrogen projects across the bloc, with a priority on green hydrogen. Its Hydrogen Strategy, released in March, states that hydrogen is “essential to support the EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement the Paris Agreement while working towards zero pollution.”
Reprinted courtesy of
Matthew Oresman, Pillsbury and
Henrietta Worthington, Pillsbury
Mr. Oresman may be contacted at matthew.oresman@pillsburylaw.com
Ms. Worthington may be contacted at henrietta.worthington@pillsburylaw.com
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No Duty to Defend Construction Defect Claims under Kentucky Law
March 25, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court determined that the insurer was not obligated to defend construction defect claims under Kentucky law. Westfield Ins. Co. v. Kentuckiana Commercial Concrete, LLC, 2023 U.S. Dist. LEXIS 222674 (W.D. Ky. Dec. 14, 2023).
HRB, the owner of an apartment complex, filed an arbitration demand against the general contractor, Doster Commercial Construction, for allegedly doing faulty concrete work in the construction of the apartments. Doster added its concrete subcontrator Kentuckiana Commercial Concrete - and 16 other subcontractors - to the arbitration. Kentuckiana tendered the claim to its insurer, Westfield. Wesfield defended. Doster claimed it was an additional insured under the Westfield policy and also sought coverage. Westfield refused the defend Doster. Westfield argued there was no "occurrence."
Westfield then sued both Doster and Kentuckiana in federal court, seeking a declaration that it had no duty to defend either. Westfield moved for a judgment on the pleadings.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Insurer Has Duty to Defend Despite Construction Defects
January 06, 2012 —
CDJ STAFFIn a case the judge attributed to “shoddy masonry work,” the US District Court of Illinois has rendered a decision in AMCO Insurance Company v. Northern Heritage Builders. Northern Heritage built a home in Chicago for Michael McGrath (who joined Northern Heritage as a defendant). According to the decision, “seven months after he moved into the house, McGrath noticed water coming in the house and warped millwork.” This was attributed to porous block, installed by the mason with Northern Heritage’s knowledge.
McGrath sued National Heritage for both the damage to his house and its contents. The court rejected his claim for the contents. For the damages to his house, he was awarded $601,570.50 in damages. He also sued his homeowner’s insurance carrier for damages not covered in his suit against National Heritage. There he was awarded $1,130,680.16.
AMCO informed National Heritage that it had neither duty to defend nor duty to indemnify. The judge considered whether AMCO had a duty to defend. Under Illinois law, “damage to a construction project resulting from construction defects is not an ‘accident’ or ‘occurrence’ because it represents the natural and ordinary consequence of faulty construction.” However, it is noted that while if the defects lead only to damage to the project itself, there is no occurrence, “if the building owner asserts damages to other property besides the construction itself, there is an ‘occurrence’ and ‘property damage.’” The judge further noted that were construction defects an occurrence, “shoddy work” would be rewarded by double pay, once by the homeowner and a second time by the insurer. Judge Kendall concluded that as McGrath had alleged damage to the contents of his house, AMCO had a duty to defend National Heritage.
She then looked at the issue of whether AMCO had a duty to indemnify. Should they pay the $601,570.50? Judge Kendall noted that “the duty to indemnify is narrower than the duty to defend.” The key point here was that once McGrath’s insurance carrier covered him for the damage to the contents of his house, “AMCO’s duty to defend ended.” Once McGrath “only sought damages for the natural consequences of faulty workmanship” there was no occurrence, hence nothing for AMCO to cover.
Judge Kendall granted a summary dismissal of AMCO’s claim that they had no duty to defend while upholding their claim that they had no duty to indemnify.
Read the court’s decision…
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Planned Everglades Reservoir at Center of Spat Between Fla.'s Gov.-Elect, Water Management District
January 02, 2019 —
Miami Herald - Engineering News-RecordDec. 11 -- Florida's incoming governor stopped short of demanding South Florida water managers step down over a contentious land deal with sugar farmers, saying he would instead await a recommendation from his transition team. That doesn't mean their days may not be numbered.
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Engineering News-RecordENR may be contacted at
ENR.com@bnpmedia.com
