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No Coverage Under Ensuing Loss Provision

September 09, 2011 — Tred R. Eyerly - Insurance Law Hawaii

The cost of removing and replacing cracked flanges to prevent future leakage was not covered as an ensuing loss under a builder’s risk policy in RK Mechanical, Inc. v. Travelers Prop. Casualty Co. of Am., 2011 U.S. Dist. LEXIS 83958 (D. Colo. Aug. 1, 2011).

The insured, RK Mechanical Inc., was a subcontractor hired to install plumbing for a residential construction project. RK was an additional insured on the general contractor’s policy with Travelers. RK installed approximately 170 CPVC flanges on the project. Subsequently, two of the flanges cracked, allowing water to overflow and causing water damage to the project. Travelers was notified of the flange failure and resulting water damage.

RK subsequently removed and replaced the two cracked flanges and began water remediation. Travelers paid for the cost of the water damage due to the cracked flanges.

RK then examined all of the flanges installed in the project and discovered many were cracked and/or showed signs of potential failure. RK removed and replaced the cracked flanges. RK tendered a claim and demand for indemnity to Travelers for these repair costs. Travelers denied the claim. RK then sued for breach of contract and declaratory relief. The parties filed cross motions for summary judgment.

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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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Soldiers Turn Brickies as U.K. Homebuilders Seek Workers

May 20, 2015 — Neil Callanan – Bloomberg
After 21 years in the British Army that included tours of duty in Afghanistan and Iraq, Ross Wilson was offered a buyout. Britain’s shortage of construction workers allowed him to trade desert sand for muddy building sites in the north of England. Wilson, 38, is working as an apprentice bricklayer for homebuilder Persimmon Plc, which will train more than 300 former soldiers this year because of the country’s shortage of skilled workers. The government formed after next month’s national election will have to urgently address the lack of new homes, according to the Royal Institution of Chartered Surveyors. Persimmon’s Combat to Construction program is the latest effort by the industry to increase output as the shortage sends asking prices to record highs. Read the court decision
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Partner Jonathan R. Harwood Obtained Summary Judgment in a Coverage Action Arising out of a Claim for Personal Injury

December 22, 2019 — Jonathan R. Harwood - Traub Lieberman Perspectives
On August 16, 2019, Traub Lieberman partner obtained summary judgment in a declaratory judgment action involving a claim for coverage for a personal injury action involving injuries suffered on a construction site. The plaintiff in the underlying action was performing excavation in a basement of a building in Manhattan so the owner could install a pool. During the course of the excavation plaintiff fell 13 feet from a plank, into the excavated pit, suffering serious injuries. Traub Lieberman’s client issued a CGL policy to the building owner and the insured sought coverage for the suit under that policy. The insurer denied coverage based on an endorsement to the policy that stated the insured could only contract directly with a specified general contractor. The plaintiff was an employee of a subcontractor and the insurer believed the insured had contracted directly with that unapproved subcontractor. The insured denied it had done, contending the subcontractor had been hired by the general contractor identified in the endorsement. Reprinted courtesy of Jonathan R. Harwood, Traub Lieberman Mr. Harwood may be contacted at jharwood@tlsslaw.com Read the full story... Read the court decision
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Federal District Court Addresses Material Misrepresentation in First Party Property Damage Claim

August 26, 2024 — James M. Eastham - Traub Lieberman
In Pittsfield Dev. LLC v. Travelers Indem. Co., 2024 U.S. Dist. LEXIS 117530 (N.D. Ill. July 3, 2024), the United States District Court for the Northern District of Illinois addressed an alleged material misrepresentation by an insured during the course of the adjustment of a water loss claim at an insured property. Subsequent to a pipe burst event which caused damage to a number of the floors in the insured building, the insured submitted a claim to Travelers and also submitted, with the assistance of a retained public adjuster, a damage estimate of the damages at the property. Included within the estimate submitted by the insured was a line item for "Lead Paint & Asbestos Removal" with a corresponding dollar amount of $1,140,000. It was this line item which formed the basis of Travelers' claim of misrepresentation. At his deposition, the public adjuster testified that the $1,140,000 figure was an oral estimate received over the phone from an asbestos remediation company. Travelers disputed the testimony and contended that no such estimate was ever provided. For support, Travelers pointed to deposition testimony from a remediation company employee that while rough estimates were occasionally given verbally, the largest over the phone estimate she could recall was in the $20,000-$25,000 range. It was also disputed that the company would ever provide an oral quote of that magnitude sight unseen, especially since the largest project the remediation company had ever completed was less than $250,000. Read the court decision
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Reprinted courtesy of James M. Eastham, Traub Lieberman
Mr. Eastham may be contacted at jeastham@tlsslaw.com

French President Vows to Rebuild Fire-Collapsed Notre Dame Roof and Iconic Spire

June 03, 2019 — Scott Blair & Peter Reina - Engineering News-Record
Two British masonry experts familiar with centuries-old stone structures voiced concern that the catastrophic fire that collapsed the roof and spire of Notre Dame on April 15 could also have damaged stonework of the iconic Paris cathedral that may affect its stability. Reprinted courtesy of Scott Blair, ENR and Peter Reina, ENR Mr. Blair may be contacted at blairs@enr.com Mr. Reina may be contacted at reina@btinternet.com Read the court decision
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Ninth Circuit Holds Efficient Proximate Cause Doctrine Applies Beyond All-Risk Policies

April 20, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The Ninth Circuit held that the efficient proximate cause doctrine is not limited to all-risk policies. Olin Corp. v. Continental Cas. Co., 2016 U.S. App. LEXIS 4905 (9th Cir. March 17, 2016). Olin operated a plant that produced industrial chemicals. Continental issued a policy covering the plant's boilers and machinery. In late 2008, the machinery was damaged. Continental denied coverage for damage to Olin's diaphragm cells, which were tanks containing metal cathodes covered by asbestos diaphragms. Continental argued that the damage to the cells was not covered because it was not caused by an "accident." The jury returned a verdict in favor of Olin. 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

San Francisco Sues Over Sinking Millennium Tower

November 17, 2016 — Beverley BevenFlorez-CDJ STAFF
Dennis Herrera, San Francisco’s city attorney, filed a lawsuit against the developer of the Millennium Tower, “for failing to inform buyers that it was sinking ‘much faster than expected,’” reported the New York Times. Mission Street Development sold more than 400 units in the skyscraper. “They went ahead and sold condominiums for a handsome profit without telling the buyers about the situation,” Mr. Herrera told the New York Times. “This is every homeowner’s worst nightmare.” The spokesman for the development, P.J. Johnson, stated that “the allegations by the city attorney had ‘no merit,’ and that the “building had sunk within ‘predicted, safe ranges’ during the entire sales process,” according to the New York Times. Furthermore, Johnson asserted that the problem derived from the nearby railroad station removing water from the ground, which “had caused the building to ‘settle beyond the 12 inches it was predicted to settle.’” Read the court decision
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Federal Lawsuit Accuses MOX Contractors of Fraud

March 04, 2019 — Scott Judy - Engineering News-Record
A subcontractor employee working on the now-canceled MOX project in South Carolina used football tickets, automobile tires, barbecue grills and other gifts to persuade employees of CB&I AREVA MOX Services and other vendors to help approve thousands of fraudulent invoices cumulatively valued at more than $6.4 million, according to a Dept. of Justice lawsuit filed Feb. 14 that names both companies as defendants. The controversial project at the Savannah River Site in Aiken, S.C., originally scheduled for completion in 2016, was canceled in January after cost and schedule estimates increased significantly. Read the court decision
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Reprinted courtesy of Scott Judy, ENR
Mr. Judy may be contacted at judys@enr.com

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