FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Coverage Article - To Settle or Not To Settle?

September 20, 2017 — Tred R. Eyerly - Insurance Law Hawaii
My colleagues Rina Carmel, Karin Aldama and I authored an article entitled, "To Settle or Not to Settle? Bad-Faith Implications in Resolving Underlying Actions." The article appears in the current edition of Coverage, published by the Insurance Coverage Litigation Committee of the ABA. The article is here. The article addresses the obstacles faced when settling liability claims. The insurer and insured may have fundamental disagreements on whether to settle or how much to pay in settlement. Should the insured contribute to the settlement? Whether the insurer should seek from the policyholder, or the policyholder offers to make, a settlement contribution presents thorny issues, including whether such a contribution can convert an excess demand into a demand within limits—which, in turn, affects the standard for evaluating the insurer’s response to the third-party demand. On the other hand, the policy holder may not want to settle and set a bad precedent. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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New York Court of Appeals Finds a Proximate Cause Standard in Additional Insured Endorsements

June 15, 2017 — Geoffrey Miller - Saxe Doernberger & Vita, P.C.
In The Burlington Insurance Company v. NYC Transit Authority, et al., No. 2016-00096, the New York Court of Appeals issued a landmark decision with regard to the meaning of “caused, in whole or in part, by” in the additional insured context. In a split decision, the court rejected Burlington Insurance Company’s argument that the language implied a “negligence” standard, but held that coverage was provided to the additional insured only where the named insured’s acts or omissions were the proximate cause of the injury:

While we [the majority] agree with the dissent that interpreting the phrases differently does not compel the conclusion that the endorsement incorporates a negligence requirement, it does compel us to interpret ‘caused, in whole or in part’ to mean more than ‘but for’ causation. That interpretation, coupled with the endorsement’s application to acts or omissions that result in liability, supports our conclusion that proximate cause is required here.[1]

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Reprinted courtesy of Geoffrey Miller, Saxe Doernberger & Vita, P.C.
Mr. Miller may be contacted at gjm@sdvlaw.com

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The Relevance and Reasonableness of Destructive Testing

August 17, 2017 — David Adelstein - Florida Construction Legal Updates
Destructive testing is a routine investigatory procedure in construction defect disputes. The destructive testing is necessary to determine liability (causation), the extent of damage, and the repair protocol. Destructive testing is designed to answer numerous questions: Why did the building component fail? Was the building component constructed incorrectly? What is the magnitude of the damage caused by the failure? What specifically caused the damage? What is the most effective way to fix the failure and damage? There are different iterations to the same questions, but in many instances, destructive testing is necessary to answer these questions. Claimants sometimes prohibit destructive testing. Of course, destructive testing is intrusive. In many instances, it is very intrusive. But, this testing is a necessary evil. Without this testing, how can a defendant truly analyze their potential exposure and culpability? They need to be in a position to prepare a defense and figure out their liability. This does not mean destructive testing is warranted in every single construction defect dispute. That is not the case. However, to say it is never warranted is irrational. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at Dadelstein@gmail.com

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Contractors with Ties to Trustees Reaped Benefits from LA Community College Modernization Program

March 03, 2011 — Gale Holland, Michael Finnegan and Doug Smith, Los Angeles Times

In the latest installment of the “Billions To Spend” series of investigative reports focused on construction defects, management, and cost issues relevant to LACC’s Community College Modernization Projects, the LA Times examines the costs associated with the various layers of construction management and benefits that accrued to contractors with ties to LACC trustees.



The reporting by the Times is seemingly critical of the project’s utilization of “body shops” an industry term for companies that function as employers of record. The article segment published today cites a number of circumstances wherein their utilization appears to have escalated costs substantially.



“To gauge the cost of the staffing system, The Times reviewed thousands of pages of financial records from April 2007, when URS began managing the program, to July 2010. Reporters identified two dozen contractors serving as conduits for pay and benefits for employees they did not supervise.



At least 230 people were employed in this manner, at a total cost of about $40 million, the records show.



Approximately $18 million of the total was paid to the employees, according to the Times analysis. The remaining $22 million went to profit and overhead for contractors, the records indicate.



For employees on its own payroll, the district says that medical and other benefits increase compensation costs 40% above base salaries. So if the district had employed its construction staff directly, the total cost for the period studied would have been $25 million instead of $40 million, a savings of $15 million, The Times calculated.”



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A Bill for an Act Concerning Workers’ Compensation – 2014 Edition

January 13, 2014 — W. Berkeley Mann, Esq. - Higgins, Hopkins, McLain & Roswell, LLC
Workers’ compensation (“WC”) costs are a significant portion of the labor costs experienced by construction companies. These costs have typically risen over time due to the “experience modification factor.” This term means the amortized cost of past claims recovered through future premiums charged by an insurer to an employer. As a company’s claims go up in both number of claims and total expense of claims over time, the experience modifier increases as a multiplier of the base WC premium. As with other general medical costs, the question is not whether the cost of claims with a medical component will go up, but rather the rate at which they will increase from year to year. It is with these facts of life in mind that it is reported that the Colorado legislature will take up a bill concerning WC benefits in the 2014 session. This bill, if passed, will have the likely effect of dramatically increasing the cost of WC claims to the construction industry - along with all other Colorado employers. The draft bill has three distinct changes for the current law, each of which serves to change the delicate balance of rights and obligations of employers and employees under existing law. Read the court decision
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Reprinted courtesy of W. Berkeley Mann, Esq.
W. Berkeley Mann, Esq. can be contacted at mann@hhmrlaw.com

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Georgia Supreme Court Addresses Anti-Indemnity Statute

October 21, 2019 — David R. Cook - AHC Construction and Procurement Blog
In prior blog posts, we addressed Georgia’s anti-indemnity statute. One of the posts addressed the statute in the context of an electric utility easement near an airport. That case made its way to the Supreme Court Georgia, which provided some additional clarity to the statute. Milliken & Co. v. Georgia Power Co., — Ga. –, 829 S.E.2d 111 (2019). When a plane crashed and several passengers and crew died or were injured, their representatives sued several defendants, including a nearby plant owner, Milliken & Company (“Milliken”), based on claims that transmission lines on Milliken’s property were too close to the runways, were too high, and encroached on the airport easements. Milliken cross claimed against Georgia Power Company (“GPC”). Milliken’s claim was based on an easement it granted to GPC, which required GPC to indemnify it for any claims arising out of GPC’s construction or maintenance of the transmission lines. On appeal, the Supreme Court considered whether the clause was unenforceable under O.C.G.A. § 13-8-2(b). In general, “a party may contract away liability to the other party for the consequences of his own negligence without contravening public policy, except when such agreement it prohibited by statute.” Id. at 113 citing Lanier at McEver v. Planners & Eng’rs Collaborative, 284 Ga. 204, 205 (2008). As one such statute, O.C.G.A. § 13-8-2(b) applies when an indemnification provision (i) “relates in some way to a contract for construction, alteration, repair, or maintenance of certain property” and (ii) “promises to indemnify a party for damages arising from that own party’s sole negligence.” Id. at 114 (internal punctuation omitted). Read the court decision
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Reprinted courtesy of David R. Cook, Autry, Hall & Cook, LLP
Mr. Cook may be contacted at cook@ahclaw.com

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Construction Manager Has Defense As Additional Insured

September 03, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The court found that the construction manager was an additional insured under the contractor's policy. Turner Constr. Co. v. Navigators Ins. Co., 2015 N.Y. Misc. LEXIS 2704 (N.Y. Sup. Ct. July 23, 2015). The owner hired two contractors, Enclos Corp. and Five Star Electric Corp. In their separate contracts with the owner, each contractor agreed to procure a CGL policy naming the owner and a person identified as the construction manager as additional insureds. Travelers was Enclos's insurer, and Navigators Insurance Company was Five Star's insurer. Turner was hired to "provide pre-construction services and construction management services for the Project." Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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More Money Down Adds to U.S. First-Time Buyer Blues: Economy

August 20, 2014 — Michelle Jamrisko and Alexis Leondis – Bloomberg
The challenges facing prospective buyers of the least expensive homes in the U.S. are getting harder to overcome. Already beset by stagnant wages, growing student debt and competition from investors who are snapping up listings, those looking to purchase moderately priced houses must also provide more cash up front. The median down payment for the cheapest 25 percent of properties sold in 2013 was $9,480 compared with $6,037 in 2007, the last year of the previous economic expansion, according to data from 25 of the largest metro areas compiled by brokerage firm Redfin Corp. The higher bar is a symptom of still-tight credit that is crowding out first-time buyers even as interest rates remain near historical lows. Younger adults, who would normally be making initial forays into real estate, are among those most affected, weakening the foundations of the housing market and limiting its contribution to economic growth. Ms. Jamrisko may be contacted at mjamrisko@bloomberg.net; Ms. Leondis may be contacted at aleondis@bloomberg.net Read the court decision
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Reprinted courtesy of Michelle Jamrisko and Alexis Leondis, Bloomberg

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