SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Differing Site Conditions: What to Expect from the Court When You Encounter the Unexpected

September 05, 2022 — Margarita Kutsin - Ahlers Cressman & Sleight
[1]Seattle Tunnel Partners (“STP”), a joint venture of Dragados USA and Tutor Perini, entered into a $1.4 billion contract with the Washington State Department of Transportation (“WSDOT”) to replace the Highway 99 viaduct. In December 2013, a tunnel boring machine (“TBM”) bearing the moniker “Bertha,” then the largest TBM ever built, measuring 425 feet long and 57 feet in diameter, struck an underground pipe. Shortly after the impact, Bertha overheated and eventually could no longer make forward progress. A massive repair effort ensued causing a 2.5-year delay in reaching substantial completion. WSDOT sued STP for the delay, seeking liquidated damages of $57 million. In response, STP argued its delay was excusable because it was caused by Bertha’s impact with the pipe, and the steel well casing was a Differing Site Condition (DSC) undisclosed in the contract documents. STP asserted counterclaims against WSDOT, alleging breach of contract and seeking $300 million in damages. Ultimately, a jury found that the steel well casing on the pipe was not a DSC, foreclosing STP’s excusable delay defense and counterclaims, and resulting in a $57 million verdict, plus interest, in favor of WSDOT. Read the court decision
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Reprinted courtesy of Margarita Kutsin, Ahlers Cressman & Sleight
Ms. Kutsin may be contacted at margarita.kutsin@acslawyers.com

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Travelers’ 3rd Circ. Win Curbs Insurers’ Asbestos Exposure

November 21, 2017 — Gregory D. Podolak - Saxe Doernberger & Vita, P.C.
Originally published by CDJ on May 3, 2017 In breaking news this week, LAW360.com posted that the Third Circuit ruled Friday that “a common exclusion found in a Travelers policy bars coverage for claims arising out of asbestos in any form, limiting insurers’ potential exposure to asbestos injury claims by precluding policyholders from arguing that the exclusionary language is ambiguous and doesn’t extend to products containing the carcinogen.” In its detailed analysis of the decision, LAW360 turned to Greg Podolak for his analysis. Gregory D. Podolak, managing partner of Saxe Doernberger & Vita PC’s Southeast office, said the ruling is a cautionary tale that should galvanize policyholders and their insurance brokers to take a closer look at policies to delete or curtail broad “arising out of” language in exclusions. Otherwise, insureds could find themselves without any coverage for claims even remotely related to a certain product, he said. Read the court decision
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Reprinted courtesy of Gregory D. Podolak, Saxe Doernberger & Vita, P.C.
Mr. Podolak may be contacted at gdp@sdvlaw.com

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Appraisal Goes Forward Even Though Insurer Has Yet to Determine Coverage on Additional Claims

December 11, 2023 — Tred R. Eyerly - Insurance Law Hawaii
The trial court's order granting the insured's motion to stay litigation and compel an appraisal was affirmed even though the insurer had not determined coverage on the insured's additional claims.Heritage Prop. & Cas. Ins. Co. v. Wellington Place HOA, 2023 Fla. App. LEXIS 6405 (Fla. Ct. App. Sept. 13, 2023). The insured homeowner's association reported roof damage to its insurer, Heritage, after Hurrican Irma struck. Heritage agreed the damage was covered, but issued no payment because the amount of loss was less than the deductible. The insured hired its own adjuster. The insured requested an extension of the policy's two year time limit to complete repairs because the claim was still in dispute and the insurer had not yet paid sufficient funds to allow necessary repairs. Heritage sent a revised estimate and asked the insured to send its adjuster's estimate in order to address any disputes. The insured submitted its adjuster's estimate of more than $6 million, including, for the first time, the cost to replace all the windows and sliding glass doors. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.

February 10, 2012 — CDJ STAFF

Safety Control and EMC appealed the judgment in Colorado Casualty Insurance Company versus Safety Control Company, Inc., et al. (Ariz. App., 2012). The Superior Court in Maricopa County addressed “the validity and effect of a Damron agreement a contractor and its excess insurer entered into that assigned their rights to sue the primary insurer.” Judge Johnsen stated, “We hold the agreement is enforceable but remand for a determination of whether the stipulated judgment falls within the primary insurer’s policy.”



The Opinion provides some facts and procedural history regarding the claim. “The Arizona Department of Transportation (“ADOT”) hired DBA Construction Company (“DBA”) to perform a road-improvement project on the Loop 101 freeway. Safety Control Company, Inc. was one of DBA’s subcontractors. As required by the subcontract, Safety Control purchased from Employer’s Mutual Casualty Company (“EMC”) a certificate of insurance identifying DBA as an additional insured on a policy providing primary coverage for liability arising out of Safety Control’s work.”



A collision occurred on site, injuring Hugo Roman. Roman then sued ADT and DBA for damages. “Colorado Casualty tendered DBA’s defense to the subcontractors, including Safety Control. Safety Control and EMC rejected the tender. Roman eventually settled his claims against DBA and ADOT. DBA and ADOT stipulated with Roman for entry of judgment of $750,000; Roman received $75,000 from DBA (paid by Colorado Casualty) and $20,000 from ADOT, and agreed not to execute on the stipulated judgment. Finally, DBA, ADOT and Colorado Casualty assigned to Roman their rights against the subcontractors and other insurers.”



Colorado Casualty attempted to recover what “it had paid to defend DBA and ADOT and settle with Roman. However, Roman intervened, and argued that “Colorado Casualty had assigned its subrogation rights to him as part of the settlement agreement.” The suit was not dismissed, but the Superior Court allowed Roman to intervene. “Roman then filed a counterclaim against Colorado Casualty and a cross-claim against the subcontractors.”



All claims were settled against all of the defendants except Safety Control and EMC. “The superior court ruled on summary judgment that EMC breached a duty to defend DBA and that as a result, ‘DBA was entitled to settle with Roman without EMC’s consent as long as the settlement was not collusive or fraudulent.’ After more briefing, the court held the stipulated judgment was neither collusive nor procured by fraud and that EMC therefore was liable to Roman on the stipulated judgment and for his attorney’s fees. The court also held Safety Control breached its subcontract with DBA by failing to procure completed-operations insurance coverage and would be liable for damages to the extent that EMC did not satisfy what remained (after the other settlements) of the stipulated judgment and awards of attorney’s fees.” Safety Control and EMC appealed the judgment.



Four reasons were given for the decision of the ruling. First, “the disagreement between Roman and Colorado Casualty does not preclude them from pursuing their claims against EMC and Safety Control.” Second, “the settlement agreement is not otherwise invalid.” Third, “issues of fact remain about whether the judgment falls within the EMC policy.” Finally, “Safety Control breached the subcontract by failing to procure ‘Completed Operations’ coverage for DBA.”



In conclusion, the Superior Court affirmed in part, reversed in part, and remanded . “Although, as stated above, we have affirmed several rulings of the superior court, we reverse the judgment against EMC and remand for further proceedings consistent with this Opinion to determine whether the stipulated judgment was a liability that arose out of Safety Control’s operations. In addition, we affirm the superior court’s declaratory judgment against Safety Control but remand so that the court may clarify the circumstances under which Safety Control may be liable for damages and may conduct whatever further proceedings it deems appropriate to ascertain the amount of those damages. We decline all parties’ requests for attorney’s fees pursuant to A.R.S. § 12-341.01 without prejudice to a request for fees incurred in this appeal to be filed by the prevailing party on remand before the superior court.”

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No Coverage for Negligent Misrepresentation without Allegations of “Bodily Injury” or “Property Damage”

February 10, 2012 — Tred R. Eyerly - Insurance Law Hawaii

Jeff City Industries was the general contractor for a sewer system improvement project in Branson, Missouri. Bituminous Cas. Corp. v. United HRB Gen. Contractors, Inc., 2011 U.S. Dist. LEXIS 145666 (W.D. Mo. Dec. 19, 2011). Branson sued Jeff City, alleging breach of the construction contract for the project. The claims included improperly bedded sewer piping, improper aligning portions of trenching for the sewer piping, improper service line connections to the sewer piping, etc.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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Non-compliance With Endorsement Means No Indemnity Coverage

January 15, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The insured's failure to verify that subcontractors had CGL policies and to provide a contract stating that the subcontractors would indemnify the insured as required by the policy's endorsement meant there was no coverage for the insured. Cincinnati Spec. Underwriters Ins. Co. v. Milionis Constr., Inc., 2018 U.S. Dist. LEXIS 199658 (E.D. Wash. Nov. 26, 2018). The homeowners filed suit against Milionis, the general contractor for construction of a home. The underlying suit alleged that Milionis breached the parties' agreement by leaving the home unfinished. Cincinnati defended Milionis under a reservation of rights. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Insurer Motion to Intervene in Underlying Case Denied

August 10, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The Colorado Supreme Court determined that the insurer defending under a reservation of rights could not intervene in the underlying case after the insured assigned its rights to any bad faith claim against the insurer. Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass'n, Inc., 2021 Colo. LEXIS 365 (Colo. May 24, 2021). Bolt Factory initiated a construction defects lawsuit against various contractors. Several defendants filed third-party complaints against subcontractors, including Sierra Glass Company. Auto-Owners agreed to defend its insured, Sierra Glass, under a reservation of rights. Auto-Owners declined to settle with Bolt Factory for $1.9 million, within policy limits. Sierra Glass then retains independent counsel and entered into a settlement with Bolt Factory. The settlement allowed Sierra Glass to assign its bad faith claims to Bolt Factory in exchange for the right to pursue the insurer for payment of the excess judgment rather than Sierra Glass. Instead of entering into a stipulated judgment, Bolt Factory and Sierra Glass proceeded to an abbreviated trial. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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No Duty to Defend Under Renter's Policy

May 03, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The court agreed that the insurer had no potential liability under a policy where the insured allegedly concealed facts and made misrepresentations regarding the condition of the property it sold. State Farm Fire & Cas. Co. v. TFG Enterprises, LLC, 2021 Neb. LEXIS 27 (Neb. Feb. 19, 2021). TFG sold a house to Jeffrey Barkhurst. Thereafter, Barkhurst filed suit alleging that TFG failed to disclose and actively concealed several defects, including water intrusion, the presence of mold, substandard repairs and structural issues. State Farm agreed to TFG defend under a reservation of rights. State Farm then filed a declaratory judgment action to determine its obligations under the policy. State Farm relied upon various exclusions in the rental policy issued to TFG. The exclusions provided there would be no liability coverage for "property damage to property owned by an insured"; "property damage to property rented to, occupied or used by or in the care of the insured"; or "property damage to premises the insured sells. . . if the property damage arises out of these premises." Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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