Vertical vs. Horizontal Exhaustion – California Supreme Court Issues Ruling Favorable to Policyholders
May 11, 2020 —
Alan Packer & James Hultz - Newmeyer DillionFor years, when faced with damage or injury spanning several policy periods, excess general liability insurers have argued that all potentially applicable underlying policies must be exhausted before the excess drops down to provide coverage (“horizontal exhaustion”). Insureds, on the other hand, insist that they are entitled to immediately access an excess policy for any given policy year, if that year’s underlying policy has exhausted (“vertical exhaustion”). Vertical exhaustion not only enables insureds to directly tap into the excess insurance for which they paid substantial premiums, but also enables the insured to moderate risk given that different lower level policies might (1) be needed for other claims, (2) have larger self-insured retentions, or (3) have other less favorable coverage provisions. Allowing an insured to proceed via vertical exhaustion would also eliminate the heavy administrative and logistical burden that could result from having to pursue and exhaust all underlying coverage on multi-year claims.
In Montrose Chemical Corp. v. Superior Court, 2020 WL 1671560 (April 6, 2020), the California Supreme Court has come down in favor of policyholders and vertical exhaustion. The Montrose case involved contamination that allegedly occurred between 1947 and 1982 and different liability insurance towers (comprised of primary and excess layers) for each year. The insured, Montrose, maintained a tower of insurance coverage, year by year, and faced claims asserting damage that spanned several decades. Montrose sought coverage from excess insurers under a vertical exhaustion approach. Not surprisingly, Montrose’s excess insurers insisted that horizontal exclusion was required and that Montrose was required to exhausted all other policies with lower attachment points in every single involved policy period. The California Supreme Court ruled in Montrose’s favor, holding that the insured may insist upon full coverage from an excess insurer once the layer directly below it has exhausted. The Court reasoned that the burden of spreading the loss among insurers is one that is appropriately borne by insurers, not insureds.
Reprinted courtesy of
Alan H. Packer, Newmeyer Dillion and
James S. Hultz, Newmeyer Dillion
Mr. Packer may be contacted at alan.packer@ndlf.com
Mr. Hultz may be contacted at james.hultz@ndlf.com
Read the court decisionRead the full story...Reprinted courtesy of
California Contractors – You Should Know That Section 7141.5 May Be Your Golden Ticket
February 18, 2020 —
Amy L. Pierce, Mark A. Oertel & John Lubitz - Lewis Brisbois Bisgaard & Smith LLPUnder California’s Contractors’ State License Law, Cal. Bus. & Prof. Code §§ 7000 et seq., all contractors’ and subcontractors’ licenses expire two years from the last day of the month in which the license issued, or two years from the date on which the renewed license last expired. The Contractors State License Board (CSLB) sends licensees a renewal application 60 to 90 days prior to the date the license is set to expire.
Most contractors have various controls in place to make sure that the renewal application is timely filed and the required fee paid. Even so, we are only human and mistakes are made, and a renewal application filing deadline can be missed for a variety of reasons, e.g., the licensee’s mailing address has not been updated on the CSLB’s records, the individual responsible for filing the license renewal is out on leave, there has been a death in the family or a serious health issue, etc. Quoting Robert Burns, even “[t]he best-laid schemes of mice and men go oft awry” (To a Mouse, 1786).
General contractors should be cognizant of both their and their subcontractors’ license renewal obligations and deadlines.
If a licensee missed timely filing its renewal application, Business & Professions Code Section 7141.5may provide some relief. Section 7141.5 provides that the Registrar of Contractors,
“may grant the retroactive renewal of a license if the licensee requests the retroactive renewal in a petition to the registrar, files an application for renewal on a form prescribed by the registrar, and pays the appropriate renewal fee and delinquency fee prescribed by this chapter. This section shall only apply for a period not to exceed 90 days from the due date and only upon a showing by the contractor that the failure to renew was due to circumstances beyond the control of the licensee.”
Reprinted courtesy of Lewis Brisbois Bisgaard & Smith LLP attorneys
Amy Pierce,
Mark Oertel and
John Lubitz
Ms. Pierce may be contacted at Amy.Pierce@lewisbrisbois.com
Mr. Oertel may be contacted at Mark.Oertel@lewisbrisbois.com
Mr. Lubitz may be contacted at John.Lubitz@lewisbrisbois.com
Read the court decisionRead the full story...Reprinted courtesy of
Difference Between a Novation And A Modification to a Contract
May 10, 2022 —
David Adelstein - Florida Construction Legal UpdatesIn contract law, there are two doctrines that have similarities but are indeed different. These doctrines are known as novation and modification. There are times you may want to make arguments relative to these doctrines because they are important for your theory of the dispute. Thus, you want to make sure you understand them so you can properly plead and prove the required elements to substantiate the basis of the theories. Understanding the elements will help you understand the evidence you will need to best prove your factual theories.
A novation is essentially substituting a new contract for an old contract.
“‘A novation is a mutual agreement between the parties for the discharge of a valid existing obligation by the substitution of a new valid obligation.’” Thompson v. Jared Kane Co., Inc., 872 So.2d 356, 361 (Fla. 2d DCA 2004) (citation omitted). To prove a novation, a party must prove four elements: “(1) the existence of a previously valid contract; (2) the agreement of the parties to cancel the first contract; (3) the agreement of the parties that the second contract replace the first; and (4) the validity of the second contract.” Id. at 61. Whether the parties consented to the substitute contract can be implied from the factual circumstances. Id.
Parties are more familiar with a modification because it is not uncommon that parties may agree to modify contractual terms. The contract remains in effect but certain terms or obligations are modified. For example, a change order to a contract is a modification.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Kushner Company Files Suit Against Jersey City Over Delays to Planned Towers
July 10, 2018 —
Associated Press - Engineering News-RecordJERSEY CITY, N.J. (AP) — Jared Kushner's family company has filed a lawsuit against a New Jersey city, saying it forced the delay of a major twin-tower project due to "political animus" toward President Donald Trump.
Read the court decisionRead the full story...Reprinted courtesy of
Engineering News-RecordENR staff may be contacted at
ENR.com@bnpmedia.com
New York’s Highest Court Gives Insurers “an Incentive to Defend”
November 20, 2013 —
CDJ STAFFThe New York Court of Appeals, that state’s highest court, has ruled that when an insurer disclaims duty to defend, “if the disclaimer is found bad, the insurance company must indemnify its insured for the resulting judgment, even if policy exclusions would have otherwise negated the duty to indemnify.” The insurer who makes a failed claim that there was no duty to defend cannot thereafter claim exclusions.
This recent New York decision is discussed by Allen R. Wolff and Eric R. Reed of Anderson Kill in their Policyholder Advisor. They note that the decision “confirms that the estoppel rule applies in New York , as it does in at least four other states.”
But this may not be the last word. American Guarantee made a motion for reargument, which the court granted. The case will return to the court in January 2014. They note that “if paying defense costs is the only consequence an insurance company faces for breaching its duty to defend the insured, an insurance company has a financial incentive to ‘kick the can down the road.’”
Read the court decisionRead the full story...Reprinted courtesy of
ADA Lawsuits Spur Renovation Work in Fresno Area
November 06, 2013 —
CDJ STAFFThe El Gallo restaurant in Clovis, California has completed more than $45,000 worth of accessibility upgrades, ranging from installing signs for handicap parking to an $8,000 wheelchair-accessible ramp. The restaurant closed in 2010 when they were sued over alleged Americans with Disabilities Act (ADA) violations.
But the El Gallo was only the first Fresno-area business hit with an accessibility lawsuit. And others wanted to avoid getting sued at all. Donald Bremseth, an architect working in Clovis, said that designing modifications to older buildings to bring them into compliance with the ADA has kept him busy, designing dozens of projects in the area.
Daniel Zoldak, vice president of Lars Anderson & Associates, noted at on one inspection, he saw about 50 ADA violations, and with the fines at least $2,000 per violation, $10,000 or $20,000 of renovations doesn’t look so bad. That’s under the new law, which also allows a business 30 days to get into compliance. Under the old law, the minimum fine was $4,000.
Read the court decisionRead the full story...Reprinted courtesy of
How to Protect the High-Tech Home
March 19, 2015 —
Beverley BevenFlorez-CDJ STAFFRemodeling explained how the new high-tech home gadgets can be vulnerable to “digital or actual break-ins” without the right security in place. Though it isn’t clear how often home hacking is occurring.
"I haven't heard of any major hackers breaking into many houses at one time, and the likelihood that someone will try to break into your house by unlocking your door instead of smashing the window is probably low," Tim McInerney, director of product marketing for Savant told Remodeling. "But as devices get more popular and clear winners start to emerge, you may see more and more of those kinds of attacks. When there's a million of one type of connected thermostat out there, that creates more chances for hackers to test the connections and catch someone off-guard."
Remodeling includes tips on making your home more secure, including changing the default device password, creating multiple networks, and consider hard-coding the hardware address.
Read the court decisionRead the full story...Reprinted courtesy of
Traub Lieberman Partner Greg Pennington and Associate Kevin Sullivan Win Summary Judgment Dismissing Homeowner’s Claim that Presented an Issue of First Impression in New Jersey
December 02, 2019 —
Gregory S. Pennington & Kevin Sullivan - Traub LiebermanOn July 12, 2019, Traub Lieberman Straus & Shrewsberry LLP’s Gregory S. Pennington and Kevin Sullivan secured summary judgment dismissing a homeowner’s claim for damaged flooring. The claim at issue arose from the homeowners’ attempt to discard their refrigerator. In the process of removing the refrigerator, the homeowners scratched their kitchen and dining room floors. The homeowners made a claim under their homeowners policy for the cost to repair and replace the damaged flooring. Their homeowners’ insurer denied their claim based on a policy exclusion barring coverage for damage consisting of or caused by marring and scratching. When their insurer denied coverage, the homeowners filed suit in the New Jersey Superior Court, Law Division in Bergen County. The case presented the issue of first impression in New Jersey of whether a homeowner’s self-inflicted, but accidental damaging of its own floors was barred by the homeowner’s policy’s marring or scratching exclusion. Greg and Kevin successfully argued that the exclusion applied to bar coverage.
Reprinted courtesy of
Gregory S. Pennington, Traub Lieberman and
Kevin Sullivan, Traub Lieberman
Mr. Pennington may be contacted at gpennington@tlsslaw.com
Mr. Sullivan may be contacted at ksullivan@tlsslaw.com
Read the court decisionRead the full story...Reprinted courtesy of
