The Evolution of Construction Defect Trends at West Coast Casualty Seminar
May 03, 2018 —
Don MacGregor - Bert L. Howe & Associates, Inc.Twenty-five years ago. 1993. On January 23rd, Bill Clinton was sworn in as the 42nd President of the United States. The average cost of a gallon of gasoline was $1.16, a movie ticket cost $4.00, and the average cost of a new home was $113,200.00.
1993 also marked the first of what would be a quarter century of annual seminars hosted by West Coast Casualty Service, and provided to the combined professionals within the construction defect community. As the seminar has grown both in attendance and prominence within this community under the watchful stewardship of David and Coral Stern, much has changed both with regard to the content of the seminar and the climate within which it was presented. A quick look at the topics addressed over the past 25 years of the Construction Defect Seminar provides one with a veritable history of construction defect litigation and insurance coverage trends across the United States and beyond.
While the first seminar was hosted in 1993, my first attendance didn’t occur until 1999, and the first time I was honored to be a panelist would have to wait until 2007. In the subsequent years, I’ve had the opportunity to sit on panels an additional three times, and each one I gained rare and valuable insights into the construction defect community, its willingness to challenge itself, and the amazing professionals we all have the distinct pleasure of working with every day (and whom we sometimes take too much for granted).
In the mid to late 90’s, topics at the seminar included such subjects as the Montrose Chemical Corp v. Superior Court decision (Montrose) regarding a carrier’s duty to defend and the subsequent Stonewall Insurance case that examined the duty to indemnify in the context of construction defect claims. The California Calderon Act of 1997, laying out the roadmap for HOA’s filing construction defect lawsuits was also a topic of discussion and debate within the West Coast “arena.”
The new millennium saw the landmark Aas v. William Lyon decision, which disallowed negligence claims for construction defects in the absence of actual resultant damage. This was followed by Presley Homes v. American States Insurance wherein the court ruled that a duty to defend applies where there is mere potential for coverage and the duty to defend applies to the entire action. Each of these bellwether decisions was addressed contemporaneously by panels at the West Coast seminar, contemporaneously bringing additional dialog to the CD community, from within the community.
2002 brought what has become the defining legislation in California regarding construction defect litigation and a builder’s right to repair. Senate Bill 800 (SB800), and its subsequent codification as Title 7, Part 2 of Division 2 of the California Civil Code, Sections 895 through 945.5 would become the defining framework for similar legislation across the United States. During the course of its drafting, movement through the legislature, and final adoption in January of 1993, many of the questions raised and debated in committees in Sacramento, had already been and were continuing to be addressed by panelists at the West Coast Seminar. How does SB800 work with Calderon? How does it affect the prior Aas decision? What now constitutes a defect, and what are timeframes established within the complex pre-litigation process? Open the pages of the 2002 – 2004 seminar invitations and you’ll see panels comprised of the finest members of the insurance law and coverage communities addressing those very questions (and more)!
As the first decade of the new century drew to a close, a brief review of the WCC invitations from that period suggests a trend towards programmatic analyses of key themes selected for the seminar. In 2008, my second opportunity as a guest speaker, topics included a review of the state of construction defect litigation in a post-SB 800 environment. Panelists offered retrospective insight into the state of right to repair statutes in multiple states, while others offered a glimpse at where the industry might be headed, as similar legislation was enacted across the country. As always, pertinent court decisions bearing on construction defect, both in California, and elsewhere were given unique perspective and additional clarity by multiple panels of gifted speakers. In 2009, claims and coverage were examined from multiple unique perspectives, including that of plaintiff, the policyholder, and the insurer. Wrap policies and the gaps in due to self-insured retention obligations were examined.
As we rapidly approach the end of the second decade of the 21st Century, West Coast Casualty’s Construction Defect Seminar continues to lead the construction defect community as the premier source for information and peer dialog on all matters relating to construction law, coverage, and emerging trends. In 2017, the Seminar tackled such broad subjects as the role of women in the construction industry, claims management, and risk management, challenges raised by wrap versus non-wrap litigation, and the emergent trend of apartment to condo conversions (and the attendant coverage challenges).
This month, beginning on May 16th at the Disneyland Resort, in Anaheim California, America’s largest Construction Defect event kicks off its 25th Anniversary celebration. As has been every year since 1993, the seminar invitation promises insurance, legal, and industry professionals an exciting and informative array of salient and timely panel topics, as well as a stellar faculty of gifted panelists. If this year’s seminar is anything like the past 25 years, this edition of West Coast Casualty’s Construction Defect Seminar will not only be informative and educational, but also a promise for another 25 years of peerless service to the construction defect community.
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Fed. Judge Blocks Release of Records on FIU Bridge Collapse, Citing NTSB Investigation
October 23, 2018 —
Miami Herald - Engineering News-RecordOct. 05 --A federal judge Friday blocked the release of documents that could shed light on why a busy road outside Miami was not shut down before a brand-new bridge developing severe cracks collapsed and killed six people.
Judge William Stafford said the National Transportation Safety Board , the federal agency investigating the Florida International University bridge disaster, "was exercising its valid federal regulatory authority" in keeping the documents confidential from the media.
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Engineering News-RecordENR may be contacted at
ENR.com@bnpmedia.com
Everyone’s Working From Home Due to the Coronavirus – Is There Insurance Coverage for a Data Breach?
May 18, 2020 —
Heather Whitehead & Jeff Dennis - Newmeyer DillionMost organizations are now requiring that their employees work from home (“WFH”) with the ongoing COVID-19 (commonly referred to as the Coronavirus) pandemic. These remote working arrangements provide new opportunities for hackers to infiltrate computer systems, and not surprisingly, attempted cyber attacks are on the rise. Given the rapid deployment of employees being forced to work from home, many employees are using their personal laptops, tablets and other devices to complete their work. The use of such personal devices increases the risk to network systems, including a potential breach or data loss.
However, in the event of a breach or other incident, there may be limitations in your cyber liability insurance policy based upon the type of hardware being used. Businesses need to be proactive to protect themselves from attacks by practicing vigilant cyber safety, and also reviewing their insurance policies in detail for coverage considerations prior to the occurrence of any cyber incident.
Reprinted courtesy of
Heather H. Whitehead, Newmeyer Dillion and
Jeffrey M. Dennis, Newmeyer Dillion
Ms. Whitehead may be contacted at heather.whitehead@ndlf.com
Mr. Dennis may be contacted at jeff.dennis@ndlf.com
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Insurer Incorrectly Relies Upon "Your Work" Exclusion to Deny Coverage
June 10, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe Eleventh Circuit reversed the district court's determination that there was no coverage based upon the policy's "your work" exclusion. Southern-Owners Ins. Co. v. Mac Contractors of Fla, LLC, 2019 U.S. App. LEXIS 10689 (11th Cir. April 11, 2019).
Mac Contractors contracted with the homeowners to custom build their home. After construction began, Mac left the site before completing the project and before the issuance of a certificate of occupancy. The homeowners sued, alleged damage to wood floors and the metal roof.
Southern-Owners originally agreed to defend under the CGL policy, but later withdrew the defense and filed this action for declaratory relief. The parties cross-filed motions for summary judgment. Southern-Owners argued that the "your work" exclusion applied to bar coverage. The "your work" exclusion barred coverage for "'property damage' to 'your work' arising out of it or any part of it and included in the 'products' completed operations hazard.'" The "products' completed operations hazard" included all "'property damage' occurring away from premises you own or rent and arising out of . . . 'your work' except . . . (1) products that are still in your physical possession; or (2) work that has not yet been completed or abandoned."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Determining Duty to Defend in Wisconsin Does Not Include Extrinsic Evidence
September 22, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe policyholder's attempt to extend the duty to defend analysis beyond the complaint's allegations and the four-corners of the policy failed before the Wisconsin Supreme Court. Water Well Solutions Service Group Inc. v. Consolidated Ins. Co., 2016 Wisc. LEXIS 163 (Wis. Sup. Ct. June 30, 2016).
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Comparative Breach of Contract – The New Benefit of the Bargain in Construction?
October 26, 2020 —
Steven Hoffman - Florida Construction Law NewsAsk most Florida Construction Law practitioners, and you will likely hear that liability may not be apportioned in “pure” breach of contract cases via the Comparative Fault Act, section 768.81, Florida Statutes (the “Act”). If a material breach is a “substantial factor” in causing damages, the breaching party must answer for all damages that were reasonably contemplated by the parties when they formed the contract. Claimants argue that matters of contract should be governed strictly by the agreement, and risk can be controlled by negotiated terms, including waivers and limitations. Defendants complain that construction projects are collaborative, multi-party affairs, and strict application of contract principles leads to harsh results for relatively minor comparative fault for the same or overlapping damages.
The notion of apportioning purely economic loss contract damages based on comparative fault is not new. Since April 2006, Florida has been a “pure” comparative fault jurisdiction with limited exceptions. Prior to the amendment, tort liability for non-economic damages was purely comparative, but liability for economic damages was typically a combination of joint and several liability with an additional exposure based on comparative fault.
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Steven Hoffman, Cole, Scott & KissaneMr. Hoffman may be contacted at
Steven.Hoffman@csklegal.com
When an Insurer Proceeds as Subrogee, Defendants Cannot Assert Contribution Claims Against the Insured
July 15, 2019 —
Shannon M. Warren - The Subrogation StrategistIn Farmers Mut. Ins. Co. of Mason County v. Stove Builder Int’l, 2019 U.S. Dist. Lexis 46993 (E.D. Ky.), the United States District Court for the Northern Division of the Eastern District of Kentucky, by adopting a Magistrate Judge’s report and recommendations, see Farmers Mut. Ins. Co. v. Stove Builder, Int’l, Inc., 2019 U.S. Dist. LEXIS 48103 (E.D. Ky. Feb. 11, 2019), considered whether to allow the defendants to file a third-party complaint against the plaintiff’s insureds-subrogors. Finding that the defendants could not pursue contribution claims against the plaintiff’s insureds-subrogors, the court denied the defendant’s motion to file a third-party complaint.
The underlying subrogation action involved allegations of strict liability, negligence and breach of warranty against a pellet heater manufacturer and the retailer who sold the heater. The claims arose from a fire allegedly originating from the heater, which spread to the insureds-subrogors’ home causing property damage, along with consequential damages. Pursuant to the applicable insurance policy, the insureds-subrogors’ insurer issued payments to its insureds-subrogors. Thereafter, the insurer filed suit against the heater manufacturer and retailer.
The defendants filed a motion for leave to file a third-party complaint against the plaintiff’s insureds-subrogors, seeking to assert a contribution claim. The defendants alleged that the insureds-subrogors failed to properly install and maintain the pellet heater. The defendants also sought a jury instruction that would permit the jury to apportion fault to the insureds-subrogors, resulting in a reduction of the plaintiff’s recovery. The court looked to federal procedural law, but Kentucky substantive law to decide the defendants’ motion.
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Shannon M. Warren, White and WilliamsMs. Warren may be contacted at
warrens@whiteandwilliams.com
Construction Companies Can Be Liable for “Secondary Exposure” of Asbestos to Household Members
October 26, 2017 —
Garret Murai - California Construction Law BlogThe history of asbestos regulation in the United States is complicated. Prior to the 1970s, asbestos-containing materials used in construction was widespread.
In 1971, when the U.S. Environmental Protection Agency issued an emissions standard for asbestos as part of the Clean Air Act. In 1972, the EPA extended this regulation to an occupational standard and, over the next decade, the EPA together with the U.S. Occupational Safety and Health Administration and the U.S. Consumer Product Safety Commission issued a wide array of regulations aimed at asbestos.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
