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DIRECTORY AND CAPABILITIES

Insurers Subrogating in Arkansas Must Expend Energy to Prove That Their Insureds Have Been Made Whole

August 06, 2019 — Michael J. Ciamaichelo - The Subrogation Strategist
Arkansas employs the “made whole” doctrine, which requires an insured to be fully compensated for damages (i.e., to be “made whole”) before the insurer is entitled to recover in subrogation.[1] As the Riley court established, an insurer cannot unilaterally determine that its insured has been made whole (in order to establish a right of subrogation). Rather, in Arkansas, an insurer must establish that the insured has been made whole in one of two ways. First, the insurer and insured can reach an agreement that the insured has been made whole. Second, if the insurer and insured disagree on the issue, the insurer can ask a court to make a legal determination that the insured has been made whole.[2] If an insured has been made whole, the insurer is the real party in interest and must file the subrogation action in its own name.[3] However, when both the insured and an insurer have claims against the same tortfeasor (i.e., when there are both uninsured damages and subrogation damages), the insured is the real party in interest.[4] In EMC Ins. Cos. v. Entergy Ark., Inc., 2019 U.S. App. LEXIS 14251 (8th Cir. May 14, 2019), EMC Insurance Companies (EMC) filed a subrogation action in the District Court for the Western District of Arkansas alleging that its insureds’ home was damaged by a fire caused by an electric company’s equipment. EMC never obtained an agreement from the insureds or a judicial determination that its insureds had been made whole. In addition, EMC did not allege in the complaint that its insureds had been made whole and did not present any evidence or testimony at trial that its insureds had been made whole. After EMC presented its case-in-chief, the District Court ruled that EMC lacked standing to pursue its subrogation claim because “EMC failed to obtain a legal determination that its insureds had been made whole . . . prior to initiating this subrogation action.” Thus, the District Court granted Entergy Ark., Inc.’s motion for judgment as a matter of law and EMC appealed the decision. Read the court decision
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Reprinted courtesy of Michael J. Ciamaichelo, White and Williams LLP
Mr. Ciamaichelo may be contacted at ciamaichelom@whiteandwilliams.com

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Follow Up on Continental Western v. Shay Construction

March 28, 2012 — Brady Iandiorio, Higgins, Hopkins, McLain & Roswell, LLC

Writing in Construction Law Colorado, Brady Iandiorio revisits the case Continental Western v. Shay Construction. He promises to continue to follow cases dealing with Colorado HB 10-1394.



Recently the Court ruled on two Motions to Reconsider filed by Defendants Milender White and Shay Construction.



Procedurally, the Motions to Reconsider were ruled on by the Honorable William J. Martinez, because the day after the motions were filed the action was reassigned to Judge Martinez. In the short analysis of the Motion to Reconsider, the court leaned on Judge Walker D. Miller’s ruling on the summary judgment and his analysis of the (j)(5) and (j)(6) exclusions.



As a quick refresher regarding the grant of summary judgment, Judge Miller agreed with Continental Western’s argument that the asserted claims were excluded under the “damage to property” exclusion. The policy’s exclusions state: “(j) Damage to Property . . . (5) that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations; or (6) that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” Judge Miller found that both exclusions (j)(5) and (6) applied to both Shay’s allegedly defective work.

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Reprinted courtesy of Brady Iandiorio of Higgins, Hopkins, McClain & Roswell, LLC. Mr. Iandiorio can be contacted at iandiorio@hhmrlaw.com.

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Axa Unveils Plans to Transform ‘Stump’ Into London Skyscraper

June 17, 2015 — Patrick Gower – Bloomberg
Plans for a skyscraper at 22 Bishopsgate in the City of London go on show for the first time today before developers Axa Real Estate and Lipton Rogers seek planning approval. Axa bought the site in February, three years after work halted on the tower during the financial crisis. The plot became known as “the stump” because only the foundations, basements and the lift core up to level nine were built. Read the court decision
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Reprinted courtesy of Patrick Gower, Bloomberg

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Netflix Plans $900M Facility At Former New Jersey Army Base

January 23, 2023 — The Associated Press (Wayne Parry) - Bloomberg
(AP) -- Netflix said Wednesday it plans to build a state-of-the-art production facility at a former Army base at the Jersey Shore that will cost more than $900 million, and create thousands of jobs. The subscription video streaming company will pay $55 million for a 292-acre site on the former Fort Monmouth military base in Eatontown and Oceanport. The California-based company plans an additional $848 million worth of investments in 12 sound stages and for other uses related to the film industry. “We’re thrilled to continue and expand our significant investment in New Jersey and North America,” said Ted Sarandos, the company's co-CEO and chief content officer. “We believe a Netflix studio can boost the local and state economy with thousands of new jobs and billions in economic output, while sparking a vibrant production ecosystem in New Jersey.” Read the court decision
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Reprinted courtesy of Bloomberg

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Illinois Court Addresses Rip-And-Tear Coverage And Existence Of An “Occurrence” In Defective Product Suit

September 04, 2018 — Brian Bassett - TLSS Insurance Law Blog
In Lexington Ins. Co. v. Chi. Flameproof & Wood Specialties Corp., 2018 U.S. Dist. LEXIS 135871, 2018 WL 3819109 (N.D. Ill. Aug. 10, 2018), the U.S. District Court for the Northern District of Illinois found that rip-and-tear costs could qualify as covered “property damage,” but the court rejected coverage for claims that the insured intentionally sold a noncompliant product as the suit did not allege an “occurrence.” Lexington Insurance Company (“Lexington”) issued a CGL policy to Chicago Flameproof & Wood Specialties Corp. (“Flameproof”). During the policy period, a third party ordered fire-retardant-treated lumber from Flameproof for construction in Minnesota. Flameproof instead sent materials that were not tested, certified, or labeled as compliant. The third party installed the materials, discovered the non-compliance, and then removed the materials. Removing the materials allegedly damaged other portions of the building on the project. The third party then sued Flameproof, alleging costs associated with replacing the lumber as well as property damage to the other materials from the removal of the lumber. Flameproof tendered the claim to Lexington seeking a defense. Lexington filed a declaratory action in the Northern District of Illinois. Read the court decision
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Reprinted courtesy of Brian Bassett, Traub Lieberman Strauss & Shrewsberry LLP
Mr. Bassett may be contacted at bbassett@tlsslaw.com

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Couple Gets $79,000 on $10 Million Construction Defect Claim

September 24, 2013 — CDJ STAFF
A Florida couple who sought more than $10 million in damages in a construction defect suit, has received a jury verdict of only $79,000. Leo and Kathryn Vecellio bought the 25,000 square-foot home in 2008, after which they discovered water intrusion issues. They sued both the builder and couple from whom they had bought the house. Although the Vecellios spent more than $11 million to repair their home, the jury concluded that the builder did not know about the construction defects. The jury did determine that the builder, Dan E. Swanson, did either lie about or conceal certain facts about the construction. He was ordered to pay the $79,000 in damages to the Vecellios. Lawyers for the defendants argued that the leaks were not from the original construction of the home, but were instead caused by the renovations made by the Vecellios. The Vecellios are pursuing whether they are entitled to money from home warranties. “There will be more evidence to be considered. I’m determined to see this through,” said Leo Vecellio. Read the court decision
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Balcony Collapses Killing Six People

June 17, 2015 — Beverley BevenFlorez-CDJ STAFF
Six college students died from injuries that occurred when a balcony collapsed at a downtown apartment complex in Berkeley, California, according to Berkeleyside. The city of Berkeley ordered a structural inspection of the remaining balconies at Library Gardens, and to immediately remove the failed balcony. The following day Berkeleyside reported that the city ordered the Library Gardens’ owners to remove another balcony after “[i]nspectors determined that the third-floor balcony ‘was structurally unsafe and presented a collapse hazard endangering public safety.’” Berkeley’s mayor, Tom Bates, stated that “investigators believe the wood wasn’t sealed properly at the time of construction and was damaged by moisture as a result,” the Wall Street Journal reported. Read the full story, 6/16/15 Berkeleyside article... Read the full story, 6/17/15 Berkeleyside article... Read the full story, Wall Street Journal... Read the court decision
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Indiana Federal Court Holds No Coverage for $50M Default Judgment for Lack of Timely Notice of Class Action

August 26, 2019 — Anthony L. Miscioscia and Timothy A. Carroll - White and Williams LLP
In Greene v. Kenneth R. Will, a CGL insurer recently prevailed in a declaratory judgment action arising from an underlying class action alleging pollution and nuisance claims against the insured, VIM Recycling LLC, an Indiana-based waste-recycling facility.[1] “[T]his case has some whiskers on it,” the Indiana federal district court recounted in its exhaustive decision granting the insurer relief. The court relieved the insurer of indemnifying a $50 million default judgment against the insured, which, the court observed, “proved to be a bad neighbor” and “nuisance in both the legal and colloquial sense.” The court held that the insured failed to provide timely notice of the class action. “The judgment against the [insured] came about when a group of nearby homeowners decided that they had had enough of VIM’s polluting behavior and brought this class action to recover damages for environmental violations, nuisance and negligence based on the impact of the waste facility on their homes and property,” the court explained. Eventually, the court entered a default judgment against the insured for $50,568,750, plus an award of $273,339.85 in attorney’s fees. Because the insured was “judgment-proof,” the class action plaintiffs “aligned” with the insured “hoping to collect on their monumental judgment” from the insured’s CGL insurer. Within a few weeks’ time, the class action plaintiffs sued the insurer seeking a declaration of coverage for the default judgment against the insured. Reprinted courtesy of Anthony L. Miscioscia, White and Williams LLP and Timothy A. Carroll, White and Williams LLP Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com Mr. Carroll may be contacted at carrollt@whiteandwilliams.com Read the court decision
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