Avoid the Headache – Submit the Sworn Proof of Loss to Property Insurer
October 12, 2020 —
David Adelstein - Florida Construction Legal UpdatesProperty insurance policies (first party insurance policies) contain post-loss obligations that an insured must (and should) comply with otherwise they risk forfeiting insurance coverage. One post-loss obligation is the insurer’s right to request the insured to submit a sworn proof of loss. Not complying with a post-loss obligation such as submitting a sworn proof of loss can lead to unnecessary headaches for the insured. Most of the times the headache can be avoided. Even with a sworn proof of loss, there is a way to disclaim the finality of damages and amounts included by couching information as estimates or by affirming that the final and complete loss is still unknown while you work with an adjuster to quantify the loss. The point is, ignoring the obligation altogether will result in a headache that you will have to deal with down the road because the property insurer will use it against you and is a headache that is easily avoidable. And, it will result in an added burden to you, as the insured, to demonstrate the failure to comply did not actually cause any prejudice to the insurer.
By way of example, in Prem v. Universal Property & Casualty Ins. Co., 45 Fla. L. Weekly D2044a (Fla. 3d DCA 2020), the insured notified their property insurer of a plumbing leak in the bathroom. The insurer requested for the insured to submit a sworn proof of loss per the terms of the insured’s property insurance policy. The insurer follow-up with its request for a sworn proof of loss on a few occasions. None was provided and the insured filed a lawsuit without ever furnishing a sworn proof of loss. The insurer moved for summary judgment due the insured’s failure to comply with the post-loss obligations, specifically by not submitting a sworn proof of loss, and the trial court granted the insurer’s motion. Even at the time of the summary judgment hearing, the insured still did not submit a sworn proof of loss.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
The American Rescue Plan Act: What Restaurants Need to Act on NOW
March 22, 2021 —
Michael Krueger - Newmeyer DillionThe American Rescue Plan Act (“Act”) was passed by the Senate over the weekend and passed by the House today. President Biden is set to sign the Act into law on Friday, March 12th. The Act has $1.9 Trillion in relief funds with $28.6 Billion set aside for the restaurant industry in the Restaurant Revitalization Fund (“Fund”). The Fund has apportioned funds into two funding groups; $5 Billion for restaurants with annual gross revenue under $500,000 and $23.6 Billion for restaurants over $500,000 in annual gross revenue.
Differences from the Paycheck Protection Program (“PPP”)
This is a grant program with no loan documents or forgiveness applications. Instead, each restaurant entity can apply for and receive up to $10M in grant funds through the Act. The amount a restaurant receives is based on the sum of the restaurant’s gross revenue in 2019 minus the gross revenue in 2020 minus PPP and EIDL money received. For example, Restaurant A made $7M gross revenue in 2019, made $3M gross revenue in 2020 and received $1M in PPP and EIDL combined. ($7M - $3M -$1M =$3M) The restaurant will receive $3M in grant funds directly from the SBA (as long as funds are available).
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Michael Krueger, Newmeyer DillionMr. Krueger may be contacted at
michael.krueger@ndlf.com
Recommencing Construction on a Project due to a Cessation or Abandonment
October 26, 2017 —
David Adelstein - Florida Construction Legal UpdatesThere are instances where the owner of a construction project terminates its general contractor prior to the completion of the project. There are instances where the owner suspends the work prior to the completion of the project, meaning there is a cessation in the construction. And, there are instances where the project is simply abandoned. I have been involved in all instances, and the owner’s reasons vary…from an owner claiming a termination for default, termination for convenience, or a suspension or abandonment due to the market or financial factors. Regardless of the owner’s reasoning, at some point—hopefully—the owner will want to resume or, more properly stated, recommence construction and complete the project.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
The Colorado Court of Appeals Rules that a Statutory Notice of Claim Triggers an Insurer’s Duty to Defend.
October 23, 2012 —
David M. McLain, Higgins, Hopkins, McLain & RoswellGene and Diane Melssen d/b/a Melssen Construction (“Melssen”) built a custom home for the Holleys, during which period of time Melssen retained a CGL insurance coverage from Auto Owners Insurance Company. Soon after completion of the house, the Holleys noticed cracks in the drywall and, eventually, large cracks developed in the exterior stucco and basement slab. Thereafter, the Holleys contacted Melssen, the structural engineer, an attorney, and Auto-Owners, which assigned a claims adjuster to investigate the claim.
In April 2008, the Holleys sent Melssen a statutory notice of claim pursuant to C.R.S. § 13-20-803.5 (“NOC”). In this NOC, the Holleys claimed approximately $300,000 in damages related to design and construction defects. The Holleys also provided a list of claimed damages and estimated repairs, accompanied by two reports from the Holleys’ consultant regarding the claimed design and construction defects. In June 2008, Melssen tendered the defense and indemnity of the claim to Auto-Owners. While Auto-Owners did not deny the claim at that time, it did not inspect the property or otherwise adjust the claim. Thereafter, in October 2008, Auto-Owners sent Melssen a letter denying coverage on the basis that the damage occurred outside of the applicable policy period.
Ultimately, Melssen settled the claims against it for $140,000.
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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell, LLC. Mr. McLain can be contacted at mclain@hhmrlaw.com
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Texas Supreme Court Holds Anadarko’s $100M Deepwater Horizon Defense Costs Are Not Subject To Joint Venture Liability Limits
February 27, 2019 —
Sergio F. Oehninger & Michael S. Levine - Hunton Andrews KurthReversing a Texas Court of Appeals decision that allowed Anadarko’s Lloyd’s of London excess insurers to escape coverage for more than $100 million in defense costs incurred in connection with claims from the Deepwater Horizon well blowout, the Supreme Court of Texas held that the insurers’ obligations to pay defense costs under an “energy package” liability policy are not capped by a joint venture coverage limit for “liability” insured. Anadarko Petroleum Corp. et al. v. Houston Casualty Co. et al., No. 16-1013 (Tex. Jan. 25, 2019).
While the Lloyd’s of London insurers had agreed to pay Anadarko $37.5 million for damages, they declined to cover $100 million-plus in defense fees, arguing that both Anadarko’s liability and defense expenses are subject to the $37.5 million joint venture limit for “liability” insured. Anadarko asserted that only amounts paid as damages to third parties are subject to that limit. Defense costs, however, are not amounts paid as damages to a third party and, thus, are not a “liability.” Those amounts, therefore, are not subject to the joint venture limit and are instead subject to the policy’s $150 million coverage limit.
Reprinted courtesy of
Sergio F. Oehninger, Hunton Andrews Kurth and
Michael S. Levine, Hunton Andrews Kurth
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
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Partner Jason Taylor and Senior Associate Danielle Kegley Successful in Appeal of Summary Disposition on Priority of Coverage Dispute in the Michigan Court of Appeals
December 11, 2023 —
Jason Taylor & Danielle K. Kegley - Traub LiebermanIn this appeal brought before the Michigan Court of Appeals, the appellate court ruled in favor of Traub Lieberman’s insurance carrier client (the “Carrier” or “Client”), affirming an award of summary disposition in favor of the Carrier in a coverage lawsuit. The coverage lawsuit involved a priority dispute between the Carrier and another insurer over which company’s policy had responsibility to cover the defense of their mutual insured, a heating and cooling contractor (the “Insured”) in an underlying lawsuit alleging carbon monoxide poisoning. The Carrier issued a contractor’s pollution liability policy and the other insurer issued a commercial general liability policy to the Insurer. Both the Carrier and the other insurer filed cross-motions for summary disposition in the trial court on the priority of coverage issue. The trial court granted the Client’s motion, holding that the CGL carrier was the primary insurer based on the language in the policies’ “other insurance” clauses. The trial court rejected the CGL carrier’s argument to apply the “total policy insuring intent” or “closest to the risk” tests—tests which Michigan courts have not adopted. Specifically, the court rejected the CGL carrier’s argument that the Client’s contractor’s pollution liability policy was more specifically tailored to the loss in the underlying lawsuit. The trial court also rejected CGL carrier’s alternative argument that the “other insurance” clauses in the policies were irreconcilable, requiring a pro rata allocation based on the respective limits of the policies.
Reprinted courtesy of
Jason Taylor, Traub Lieberman and
Danielle K. Kegley, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com
Ms. Kegley may be contacted at dkegley@tlsslaw.com
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Palm Beach Billionaires’ Fix for Sinking Megamansions: Build Bigger
June 14, 2021 —
Prashant Gopal & Amanda L. Gordon - BloombergThomas Peterffy became one of the world’s richest people by mastering risk on Wall Street. Building his Mediterranean-style mansion seven years ago on a vulnerable stretch of Florida’s Palm Beach Island was a matter of seeing the odds clearly once again. The consequences of climate change will play out over decades, and Peterffy is 76 years old.
“I don’t have a care about it at all,” he said over lunch at Mar-a-Lago earlier this year, just down the street from his home. The founder of Interactive Brokers Group has a fortune of more than $21 billion, according to the Bloomberg Billionaires Index.
“If something needs to be done to save it,” he added, “it’s not going to be my problem.”
The town of Palm Beach is busy adapting to the risks of a warming planet, even if there appear to be fewer worriers among the buyers and speculative builders on the island. Some of the lowest-lying properties in the U.S. are seeing the highest-flying prices. The real estate website Zillow estimates the value of Peterffy’s home at $52 million. This year a new nine-bedroom mansion with toes-in-the-sand views sold to financier Scott Shleifer for a record-breaking price in excess of $122 million.
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Prashant Gopal & Amanda L. Gordon, Bloomberg
Texas Supreme Court Cements Exception to “Eight-Corners” Rule Through Two Recent Rulings
March 06, 2022 —
Jeremy S. Macklin - Traub Lieberman Insurance Law BlogThe Texas “eight corners” rule precludes insurers from disclaiming a defense obligation based on facts not alleged in the underlying pleadings. Texas federal and appellate courts have been issuing rulings addressing exceptions to the eight corners rule and recently sought guidance from the Texas Supreme Court on whether Texas law recognizes such exceptions to the “eight corners” rule. The Texas Supreme Court has now spoken on the issue.
Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 65 Tex. Sup. Ct. J. 440 (2022).
In Monroe, David Jones contracted with 5D Drilling & Pump Services in the summer of 2014 to drill a 3,600-foot commercial irrigation well on his farmland. In 2016, Jones sued 5D for breach of contract and negligence relating to 5D’s drilling operations on Jones’s property. Jones’s pleading was silent as to when the damage flowing from 5D’s alleged acts of misconduct occurred. BITCO and Monroe stipulated that 5D’s drill struck a bore hole during 5D’s drilling operations in or around November 2014.
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Jeremy S. Macklin, Traub LiebermanMr. Macklin may be contacted at
jmacklin@tlsslaw.com
