Social Distancing and the Impact on Service of Process Amid the COVID-19 Pandemic
April 13, 2020 —
Robert Devine, James Burger & Susan Zingone - White and WilliamsService of process usually requires person-to-person contact and is an essential part of civil procedure. It notifies the defendant of the legal proceedings against him/her and establishes jurisdiction. “Process” refers to the documents that must be served on a defendant. If service of process is not performed pursuant to the governing rules of civil procedure, a lawsuit cannot proceed.
Service of Process in NJ and PA
Personal service is required to be the first attempted means of service in New Jersey. If personal service is not successful, then service may be made by mailing a copy of the process via registered or certified mail with return receipt requested to the defendant’s usual place of abode or business/place of employment, or to an authorized agent. The party attempting to serve the defendant by mail can choose to mail the process by regular mail as well, and if the defendant refuses to accept or claim the registered or certified copy, and the regular mail copy is not returned, then service is considered effectuated.
Pennsylvania allows for a defendant to be served via personal service by handing a copy to the defendant or by delivering a copy to an adult family household member at the defendant’s residence. Pennsylvania also permits service of process by mail. Process can be served by mail requiring a signature of the defendant. If the mail is unclaimed, alternative service must be attempted.
Reprinted courtesy of White and Williams attorneys
Robert Devine,
James Burger and
Susan Zingone
Mr. Devine may be contacted at deviner@whiteandwilliams.com
Mr. Burger may be contacted at burgerj@whiteandwilliams.com
Ms. Zingone may be contacted at zingones@whiteandwilliams.com
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Back Posting with Thoughts on Lien Waivers
May 20, 2015 —
Christopher G. Hill – Construction Law MusingsAfter a week of being unable to post due to the rigors of my solo construction practice, I’m back on the blogging train. For those of you that missed my new musings this past week, I hope that you had a chance to look through some of the past Guest Post Friday posts for some good stuff to read.
During the course of my busy week last week, a question came up regarding the mechanic’s lien waivers that commercial construction companies routinely execute as part of the payment process. The waiver forms vary, but each essentially states that in exchange for payment the payee, whether a subcontractor or supplier (or even general contractor) waives its future rights to record a mechanic’s lien for the work that is covered by the payment received. Most if not all of these forms further require a certification that the funds paid will either be used to pay suppliers or that suppliers have already been paid. This general description is not the reason for this post.
As is always the case in the Commonwealth of Virginia where the contract is king and a court is unlikely to reinterpret any written contractual document, the devil is in how that waiver is worded. Some waivers are worded in such a way that they essentially require a payee to certify receipt of the funds prior to payment being received. These same forms require the same pre-payment certification that all suppliers and subcontractors of the payee have already been paid. In short they require a payee to both place complete trust in the payor that the check will be paid and that the check will not bounce while in many cases (often with an unstated “wink and nod”) claiming payment was already made when all know the likelihood is that it has not.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Coverage Established for Property Damage Caused by Added Product
April 28, 2014 —
Tred R. Eyerly – Insurance Law HawaiiApplying Minnesota law, the federal district court determined the supplier of contaminated dried milk had coverage. The Netherlands Ins. Co. v. Main Street Ingredients, LLC, 2014 WL 1012793 (8th Cir. March 18, 2014).
In 2007, Plainview Milk Products sold dried milk to Main Street Ingredients, LLC, who then sold the dried milk to Malt-O-Meal. The dried milk was used by Malt-O-Meal in its instant oatmeal products.
In June 2009, the FDA found Salmonella bacteria at Plainview's plant. The FDA also observed thirteen instances of insanitary conditions in the plant. Plainview issued a product recall notice announcing a "voluntary recall" of dried milk, stating its dried milk had "the potential to be contaminated with Salmonella."
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
The Metaphysics of When an Accident is an “Accident” (or Not) Under Your Insurance Policy
August 02, 2017 —
Garret Murai - California Construction Law BlogAs an undergrad, I remember taking an introductory philosophy class. When we came to the chapter on metaphysics our professor asked what makes an apple an apple? “We have a specific name for it, presumably, to distinguish it from other things,” she said. “But what makes an apple an apple?”
From there we went into a rabbit hole. With some students describing an apple by its colors, shape, size, smell and that it grows on trees and others trying to distinguish an apple from other things, which in turn led to further discussions such as why we believe apples come in red, green and yellow, whether an apple is still an apple if a person was colorblind, etc. In the end, we were questioning whether we were even in existence and sitting in a university classroom.
Insurance can be a bit like that sometimes. When is an accident an accident? If you engage in an intentional act that results in an unintended consequence, is it an accident? In Navigators Specialty Insurance Company v. Moorefield Construction, Inc. (December 27, 2016) 6 Cal.App.5th 1258, the Court of Appeals for the Fourth District, while not answering the question of the nature of existence, did shed some light on when an accident is an accident.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Ruling Closes the Loop on Restrictive Additional Insured Endorsement – Reasonable Expectations of Insured Builder Prevails Over Intent of Insurer
July 31, 2019 —
Theodore L. Senet, Esq., Jason M. Adams, Esq. and Clayton Calvin - Gibbs GiddenOn June 5, 2019, the Court of Appeal in
McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company, 35 Cal. App. 5th 1042 (Cal. Ct. App. 2019) issued an important opinion on the scope of additional insured insurance coverage for developers and general contractors in California. Specifically, the “care, custody and control” (“CCC”) exclusion will be read to only exclude coverage for additional insureds who exercised exclusive control over the damaged property. Thus, general contractors who share control of the property with their subcontractors, as is typical on most projects, will not be denied coverage under this exclusion.
I. Facts & Procedural History
McMillin Homes Construction, Inc. was a Southern California developer and general contractor. In 2014, homeowners sued McMillin for roofing defects in a case called
Galvan v. McMillin Auburn Lane II, LLC. Pursuant to a subcontract, the roofer, Martin Roofing Company, Inc., provided McMillin with additional insured coverage under Martin’s general liability insurance policy. The insurer, National Fire and Marine Insurance Company, covered McMillin under an ISO Form CG 20 09 03 97 Additional Insured (“AI”) endorsement. After McMillin tendered its defense of the Galvan lawsuit under the AI endorsement, National Fire declined to provide McMillin with a defense to the homeowners’ lawsuit, relying on a CCC exclusion contained in the AI endorsement for property in the care, custody or control of the additional insured. McMillin then sued National Fire for breach of the policy, bad faith and declaratory relief in
McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Company.
In
McMillin Homes, the trial court found the CCC exclusion in the AI endorsement applied and held in favor of the insurer, National Fire. The trial court found the exclusion for damage to property in McMillin’s “care, custody, or control” precluded coverage for the roofing defect claims, as well as any duty on the part of the insurer to defend the home builder, McMillin. McMillin filed an appeal from the trial court’s ruling.
II. Case Holding
The Court of Appeal reversed to hold in favor of McMillin, interpreting the CCC exclusion narrowly and finding a duty on the part of the insurer to defend the general contractor pursuant to the AI endorsement on the roofer’s insurance policy. It held that for the CCC exclusion to attach, it would require the general contractor’s exclusive control over the damaged property, but here, the general contractor shared control with the roofer. The Court of Appeal noted that where there is ambiguity as to whether a duty to defend exists, the court favors the reasonable belief of the insured over the intent of the insurer. Here, that reasonable belief was that the coverage applied and the exclusion was narrow.
The Court of Appeal relied upon
Home Indemnity Co. v. Leo L. Davis, Inc., 79 Cal. App. 3d 863 (Ct. App. 1978) (“Davis”), as a judicial interpretation of the CCC exclusion. That case synthesized a string of case law into a single conclusion: that courts may hold the exclusion inapplicable where the insured’s control is not exclusive. In the opinion in McMillin Homes, coverage turned upon whether control was exclusive: “[t]he exclusion is inapplicable where the facts at best suggest shared control.” The Court of Appeal stated the “need for painstaking evaluation of the specific facts of each case. Here, McMillin coordinated the project’s scheduling, but Martin furnished the materials and labor and oversaw the work; they therefore shared control.
Even if the rule in Davis did not apply and the exclusion was found to be ambiguous, the court stated that “control” requires a higher threshold than merely acting as a general contractor. Liability policies are presumed to include defense duties and exclusions must be “conspicuous, plain, and clear.” Furthermore, because “construction defect litigation is typically complex and expensive, a key motivation [for the endorsement] is to offset the cost of defending lawsuits where the general contractor’s liability is claimed to be derivative.” This is especially true because the duty to defend is triggered by a mere potential of coverage. Under the insurer’s construction of the exclusion, coverage would be so restrictive under the AI endorsement that it was nearly worthless to the additional insured.
III. Reasonable Expectation of the Insured Prevails over the Intent of the Insurer
Like most commercial general liability policies, National Fire’s policy excluded coverage for property damage Martin was contractually obliged to pay, with an exception for “insured contracts.” Typically, “insured contracts” include prospective indemnification agreements for third party claims. The National Fire policy contained a form CG 21 39 Contractual Liability Limitation endorsement, which deleted indemnity agreements from the definition of “insured contracts” to effectively preclude coverage for the indemnity provision between McMillin and Martin. National Fire argued that this endorsement demonstrated its intent to exclude coverage to McMillin for the homeowners’ defect lawsuit. The Court of Appeal stated that the insurer’s intent is not controlling and that the insureds reasonable expectation under the AI endorsement would control. As a result of its ruling, the Court also dealt a significant blow to the argument that the CG 21 39 endorsement is effective as a total bar to additional insured coverage for all construction defect claims.
IV. Conclusion
The decision is good news for developers and general contractors who rely on subcontractors to provide additional insured coverage. Unless the general contractor exercises exclusive control over a given project, the CCC exclusion in the CG 20 09 03 97 additional insured endorsement may not preclude the duty to defend. Demonstrating that a general contractor exercised exclusive control over the project would be extremely difficult to show under normal project circumstances because the any subcontractor participation appears to eliminate the general contractor’s exclusive control.
The case also highlights the need for construction professionals to regularly review their insurance programs with their risk management team (lawyers, brokers, and risk managers). As is often the case, a basic insurance policy review at the outset of the McMillin project could likely have avoided the entire dispute. For owners and general contractors, CG 20 10 (ongoing operations) and CG 20 37 (completed operations) additional insured forms are preferable to the CG 20 09 form at issue in the McMillin case because they do not contain the CCC exclusion. The CG 20 10 and 20 37 forms are readily available in the marketplace and are commonly added to most policies upon request. Had those forms been added, AI coverage likely would have been extended to McMillin without the need for litigation. Similarly, carriers will routinely delete the CG 21 39 Contractual Liability Limitation endorsement upon request. Deletion of the CG 21 39 would have circumvented National Fire’s second argument in its entirety.
Additionally, insurance policies, endorsements, and exclusions are subject to revision and are not always issued on standard forms. As a result, it is incumbent upon developers, contractors, and subcontractors to specify the precise overage requirements for construction projects and to review all endorsements, certificates, and policies carefully. Due to the difficulty in monitoring compliance with insurance requirements, project owners and general contractors are finding that it is better to insure projects under project specific wrap-up insurance programs which eliminate many of the issues pertaining to additional insured coverage. Wrap-up programs vary greatly as to their terms and conditions, so however a project is insured, insurance requirements and evidence of coverage should be carefully reviewed by experienced and qualified risk managers, brokers, and legal counsel to assure that projects and parties are sufficiently covered.
Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms. The authors can be reached at tsenet@gibbsgiden.com (Theodore Senet); jadams@gibbsgiden.com (Jason Adams) and ccalvin@gibbsgiden.com (Clayton Calvin). Read the court decisionRead the full story...Reprinted courtesy of
Health Care Construction Requires Compassion, Attention to Detail and Flexibility
July 01, 2019 —
Coker Barton - Construction ExecutiveWhen it comes to renovating and expanding hospitals, there is one principle that everyone can agree on: patients, family and hospital staff must be placed at the forefront of every stage of the job, ultimately dictating the project’s timeline. For a health care project to be a success, a general contractor needs to have industry-specific experience, must emphasize communication and scheduling and—most importantly—have a passion for the industry.
Capably and safely work in a health care environment
Health care requires a level of detail and understanding of the industry that is not found in other construction sectors. Builders must focus on infection control and interim life safety measures to protect patients, visitors and staff. There is accountability involved that goes beyond completing a project right on schedule.
For example, the expansion of The Studer Family Children’s Hospital at Sacred Heart in Pensacola, Fla., included a new 175,000-square-foot tower in addition to building out space above the Neonatal Intensive Care Unit. Anytime the contractor is building next to or over patients, especially those who are most vulnerable, it is on alert. It sets up containment areas, which help maintain the negative pressure in the construction area by pulling air in versus blowing dirty air out, as well as keep dust and other contaminants inside the construction area. There is no room for mistakes, which is why these techniques require more training and experience to properly execute.
Reprinted courtesy of
Coker Barton, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Former Superintendent Sentenced in Rhode Island Tainted Fill Case
July 05, 2023 —
James Leggate - Engineering News-RecordA federal judge sentenced a contractor’s former superintendent June 20 for misleading officials about the source of fill and quality of contaminated fill used on the $410 million Route 6/10 interchange project in Rhode Island.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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No Duty to Defend Faulty Workmanship Under Hawaii Law, but All is not Lost for Insured Contractor
June 06, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court found no duty to defend claims of faulty workmanship under certain policies issued to the insured contractor, but rejected arguments made by the Insurers regarding various provisions of the general liability and excess policies. St. Paul Fire & Marine Ins. Co. v. Bodell Consr. Co., 2022 U.S. Dist. LEXZIS 79379 (D. Haw. May 2, 2022). (Note- our office represents the insured contractor).
In 2003, Bodell was hired by developer Sunstone Realty Partners L LLC to be the general contractor for construction work on a condominium project, "Ali`i Cove." The project consisted of approximately 37 buildings and one recreation center that were constructed over the course of four years. On August 14, 2015, the AOAO of Ali`i Cove sued Sunstone, alleging that Sunstone developed, built, and sold condominium nits using embedded straps that did not meet building codes, instead of bolting house frames to their foundations. The AOAO filed a second amended complaint alleging numerous additional defects which were referenced in an expert report. These included additional alleged construction defects such as site conditions, structural issues, building envelope, roofing, general architecture, mechanical, plumbing and electrical. In all, the report purported to find approximately 281 instances of faulty workmanship.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
