Anti-Concurrent Causation Clause Bars Coverage for Pool Damage
February 23, 2016 —
Tred R. Eyerly – Insurance Law HawaiiRelying upon the policy's anti-concurrent causation clause, the Illinois Court of Appeals affirmed the trial court's ruling that there was no coverage for a pool that popped out of the ground. Bozek v. Erie Ins. Group, 2015 Ill. App. LEXIS 940 (Ill. Ct. App. Dec. 17, 2015).
Following a rainstorm, the insureds reported damage to the swimming pool to Erie. An investigation determined that the heavy rain saturated soils around the pool. This created a significant uplift hydrostatic pressure. The weight of the water in the pool typically prevented the uplift forces, but the pool had been emptied to clean debris making it susceptible to uplift. The pool had a pressure relief valve to prevent uplift, but it was not working properly.
As a result, the pool was damaged to the point that it had to be replaced in its entirety. The heaving of the pool also damaged the concrete slab around the pool, which also had to be replaced.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
The World’s Largest 3D-Printed Neighborhood Is Here
March 20, 2023 —
Todd Woody - BloombergAmid the tech boom-fueled sprawl in Austin, Texas, Wolf Ranch at first appears to be another colorfully named but architecturally unimaginative suburban subdivision. Until, that is, you turn a corner and stumble across giant robots building homes resembling waves frozen in concrete.
This 100-house addition to the 2,500 homes planned for Wolf Ranch is called “the Genesis Collection,” and as the world’s largest 3D-printed community, it is indeed sui generis. A collaboration between Lennar Corp., the US’s second-biggest home builder, and 3D-printing startup Icon, Genesis represents perhaps the most significant innovation in residential construction in decades. If it can scale, 3D-printed construction promises to deliver energy-efficient homes that can be built faster and more affordably, in novel designs and with minimal waste. The concrete structures are also more resilient to increasingly intense climate-driven hurricanes, wildfires and heat waves.
“I think we'll look back and say this was a pretty pivotal moment in the history of construction,” says Jason Ballard, Icon’s cowboy hat-wearing co-founder and chief executive officer. “I do think 3D printing and robotic construction are necessary to end the global housing crisis.”
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Todd Woody, Bloomberg
Toolbox Talk Series Recap – Arbitration Motion Practice
August 07, 2023 —
Michael Zehner - The Dispute ResolverIn the June 22, 2023 edition of the Toolbox Talk Series,
Adrian Bastianelli, Peckar & Abramson, P.C., and
Brian Cashmere, Williams Mullen, moderated by Jennifer Millender of the American Arbitration Association (“AAA”), discussed motion practice in arbitration. Specifically, they offered advice on how to choose the right issue for a motion, how to get approval for a motion, how to write the motion, and how to get the arbitrator to grant it. They also discussed the pros and cons of motion writing in arbitration settings.
1. How to choose the “right issue” for a motion in arbitration
The panel discussed what type of issues can, or should, be brought up in a motion in arbitration. Cashmere stated that a clear and concise issue is best for this type of review. For example, statute of limitations, notice, or contract interpretation issues may make great summary judgment or partial summary judgment motions. Essentially, an issue that the arbitrator may resolve via primarily a question of law is more likely to succeed. Bastianelli warned against submitting just any “available” motion, as the practice may turn the arbitrator against you. Both panelists mentioned the need to consider strategy before filing a motion—ask, “how will filing this motion help or hurt reachingArbi final resolution.” Cashmere noted that sometimes the threat of bringing the issue to a hearing can put pressure on the adverse party in a way that is favorable to your client’s goals; possibly even more so than actually submitting the issue.
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Michael Zehner, BBG Construction LawMr. Zehner may be contacted at
mzehner@bbglaw.com
Design Professionals Owe a Duty of Care to Homeowners
July 09, 2014 —
Stephen A. Sunseri - Gatzke Dillon & Ballance LLPToday, the California Supreme Court, in Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (Jul. 3, 2014, S208173) __Cal.4th__ [2014 WL 2988058], held that architects owe a duty of care to future homeowners of residential buildings, particularly if they act as principal architects on a project, and are not subordinate to any other design professional. Until now, design professionals were rarely held liable, if at all, for third-party claims for design deficiencies.
In Beacon, architectural and engineering firms provided sole design services for The Beacon residential condominium project, a 595 unit project located in San Francisco. The condominiums were initially leased after construction, but were eventually sold to individual owners. The design firms claimed their role was limited to only providing design recommendations to the project's owner, who ultimately controlled and directed which design elements to construct. Not long after completion of the project, the homeowners' association sued the design firms (among others) for construction defects and damages related to alleged water infiltration, inadequate fire separations, structural cracks, and other purported safety hazards. The claims included allegations under SB 800 (the "Right to Repair Act," Civil Code §895, et seq.) and common law negligence theories.
The design firms demurred to the complaint, which the trial court sustained. On appeal, however, the Court of Appeal reversed the trial court's ruling, concluding that the design firms owed a duty of care to third parties. The Supreme Court affirmed.
Historically, liability for deficient goods and services hinged on whether there is a contractual relationship between a buyer and seller. However, the Supreme Court recognized that in certain circumstances a contractual relationship is not required. In its ruling, the Supreme Court relied on fifty year old precedent, Biankanja v. Irving (1958) 49 Cal.2d 647. In Biankanja, the California Supreme Court outlined several factors to determine whether a duty of care is owed to non-contracting third parties. Although Biankanja analyzes many factors, emphasis was placed placed on whether a purported harm was foreseeable by a defendant's conduct and how close of a connection there is between that conduct and an injury.
Here, the Court recognized that even though the design firms did not actually build the project, they did conduct weekly inspections, monitored contractor compliance, altered design elements when issues arose, and advised the owners of any nonconforming work. In applying the Biankanja factors to these circumstances, the Supreme Court determined the homeowners were intended beneficiaries of the design work and the design firms' primary role in the project bore a close connection to the alleged injuries. As a result, the Supreme Court held that the allegations in the complaint were sufficient and, if proven, establishes the defendants owed a duty of care to the homeowners' association.
Interestingly, the Supreme Court sidestepped the issue of whether SB 800 was intended to exclusively capture design defects in its scope, even though the Court indicated it may. Nevertheless, the Supreme Court's ruling is significant. The case will affect how design professionals allocate risk on future residential projects, perhaps by raising design prices or insuring around the liability exposure. The likely outcome, however, is that design professionals are now targets in construction defect lawsuits.
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Stephen A. Sunseri, Gatzke Dillon & Ballance LLPMr. Sunseri may be contacted at
ssunseri@gdandb.com
North Dakota Supreme Court Clarifies Breadth of Contractual Liability Coverage
October 30, 2018 —
Michael S. Levine & Latosha M. Ellis - Hunton Insurance Recovery BlogNorth Dakota’s highest court delivered a blow to Mid-Continent Casualty Company in Borsheim Builders Supply, Inc. v. Manger Insurance Co., ruling that a contract between a policyholder and general contractor fit the insured contract exception of contractual liability.
Commercial General Liability (“CGL”) policies generally exclude an insured’s contractual assumption of another party’s liability. The exclusion typically contains an exception for what is known as an “insured contract.” However, many policyholders and insurance claims personnel often miss the significance of the insured contract exception. This was the case in Borsheim.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com
Badly Constructed Masonry Walls Not an Occurrence in Arkansas Law
May 10, 2012 —
CDJ STAFFThe US District Court for Maryland has granted a summary judgment in the case Konover Construction Corp. v. ATC Associates to Massachusetts Bay Insurance Company and denied a request for dismissal from ACT. Konover (KBE) was contracted by Wal-Mart to build a Wal-Mart store and a Sam’s Club in Port Covington, Maryland. Superus, Inc. was hired by KBE to build the masonry walls. Superus purchased a policy from Massachusetts Bay Insurance which named KBE as an additional insured. Wal-Mart hired ATC Associates to independently test and inspect the concrete structural steel, and masonry.
After the building was in use, a large crack appeared which was attributed a latent construction defect. Other cracks were discovered. Upon investigation, it was discovered that there were “voids or foam in the concrete block surrounding the reinforcing steel that should have been filled with grout,” and in some cases, “reinforcing steel was missing or not installed in accordance with the specifications.” KBE paid for the repair and remediation and Wal-Mart assigned all rights and interests against ATC to KBE.
KBE filed suit against ATC. ATC called for dismissal on the grounds that Wal-Mart had no claims as the problems had been remediated. Wal-Mart then provided KBE with additional agreements to give them enforceable rights against ATC and Superus. KBE filed a fourteen claims against ATC, Superus, and Massachusetts Bay. In the current case, Massachusetts Bay sought summary judgment and ATC sought dismissal of all claims against it.
Massachusetts Bay claims that they need not indemnify Superus, as “there is no evidence adequate to establish that Superus’ defective work caused any collateral and/or resulting damage that was not subject to an Impaired Property exclusion, and that, in any event, no damage occurred during the policy period.”
As Wal-Mart is headquarted in Arkansas, certain contracts were under Arkansas law. Under the Arkansas courts, “defective workmanship, standing alone and resulting in damages only to the work product itself, is not an ‘occurrence.’” The court determined that collateral or resultant damage would be covered. The court found that “it is clear under Arkansas law, and the parties appear to agree, that Massachusetts Bay is not obligated to indemnify KBE for any repairs to the masonry walls themselves, including any cracks or gaps in the walls.” The court also found that “there is no evidence adequate to prove that any allegedly resultant property damage was caused by Superus’ faulty construction of the walls.” The court also noted that “if the building code violation and structural integrity problem were ‘property damage,’ insurance coverage would be barred by the Impaired Property Exclusion.” Based on these findings, the court concluded that Massachusetts Bay is entitled to summary judgment.
While the court dismissed the case against Massachusetts Bay, the court declined ATC’s motion to dismiss. The court noted that ACT’s alleged negligence in conducting inspections “created only a risk of economic loss for KBE.” Although hired by Wal-Mart, ATC “transmitted its daily testing and inspection reports of the Wal-Mart and Sam’s Club projects directly to KBE.” The court found that “KBE has made a plausible claim.”
ATC also claimed that KBE contributed to the negligence due to the negligence of its subcontractor. The court concluded that it was plausible that “ATC will not be able to carry its burden of proving KBE was contributorily negligent.” The court was less sanguine about KBE’s fraud claim, but though it “may not now appear likely to have merit, it is above the ‘plausibility’ line.”
In conclusion, KBE may not continue its case against Massachusetts Bay. However, the judge allowed the other proceedings to continue.
Read the court’s decision…
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Energy Efficiency Ratings Aren’t Actually Predicting Energy Efficiency
February 07, 2022 —
Ryan Hesketh - BloombergThere’s a secret dogging British buildings with some of the most coveted environmental ratings: On paper they’re green, but scratch the surface and they’re red hot. Buildings that have received the highest rating in the U.K. — an A Energy Performance Certificate — use more energy than some of their peers rated C, D, E or even F.
This disparity between how buildings are designed and what their actual emissions are is widespread in the U.K., according to recent findings from the Better Buildings Partnership, which analyzed 2020 self-reported energy data provided for more than 1,100 commercial properties.
It found that commercial buildings regularly use more energy than their sterling eco-friendly labels would suggest. In fact, the analysis finds, the ratings are so far off that the median energy intensity for all B-rated buildings is higher than for C-rated buildings.
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Ryan Hesketh, Bloomberg
NLRB Broadens the Joint Employer Standard
September 17, 2015 —
Craig Martin – Construction Contractor AdvisorPerhaps in anticipation of Labor Day, the National Labor Relations Board issued its ruling in Browning-Ferris Indus. of Cal. d/b/a BFI Newby Island Recyclery, establishing an easier standard for unions to prove that a joint employer relationship exists. This will make it easier for unions to make the upstream company, like a parent company, liable for unfair labor practices, even if the upstream company had no direct involvement.
Some Background
BFI runs a recycling plant and contracts with Leadpoint to provide workers to sort garbage in the recycling plant. The staffing agreement specifically stated that Leadpoint was the sole employer of the personnel it supplied and Leadpoint handled supervision of the employees, not BFI.
Leadpoint’s employees sought to unionize and an election was held. The union filed a petition seeking a determination that Leadpoint and BFI were a joint employers.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
