Seattle Washington Building Expert Directory

Windstorm Exclusion Found Ambiguous

September 10, 2018 — Tred R. Eyerly - Insurance Law Hawaii
The Second Circuit reversed the District Court's issuance of summary judgment to the insurer because a windstorm exclusion was deemed ambiguous. 7001 East 71st Street, LLC v. Continental Cas. Co., 2018 U.S. App. LEXIS 17334 (2nd Cir. June 26, 2018). A windstorm during Hurricane Sandy caused the roof of 7001 East 71st Street LLC (7001) to tear, allowing rainwater to seep in and damage 7001's "Covered Equipment" as defined by the policy. Continental denied coverage based upon the windstorm exclusion and the district court granted summary judgment to Continental. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Economic Loss Not Property Damage

November 04, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The Fifth Circuit agreed with the district court that the insured subcontractor's economic losses did not amount to covered property damage. Greenwich Ins. Co. v. Capsco Industries, Inc., 2019 U.S. App. LEXIS 23949 (5th Cir. Aug 12, 2019). Capsco Industries, Inc. was a subcontractor on the construction of a casino. Capsco subcontracted with Ground Control to install water, sewage, and storm-drain lines. Ground Control was terminated from the project by the general contractor for alleged safety violations and failed drug tests of its employees. Ground Control sued in state court against multiple parties, including Capsco, seeking payment for work on the project. The claims were dismissed on summary judgment because neither party had obtained the required certificates of responsibility from the state, making the parties' contract void. The Mississippi Supreme Court agreed the contract was void, but reversed and remanded for further proceedings based solely on theories of unjust enrichment and quantum meruit. While the state case was on remand, Capsco's liability insurers, Greenwich Insurance Company and Indian Harbor Insurance Company, filed a compliant for declaratory judgment in federal district court seeking a declaration that they did not owe a defense or indemnity to Capsco. The defendants were Ground Control, Capsco, the general contractor, and the casino owner. The latter two parties were dismissed. Ground Control counterclaimed for coverage of its claims against Capsco. The district court stayed proceedings until the state court litigation ended. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

NY Construction Safety Firm Falsely Certified Workers, Says Manhattan DA

March 25, 2024 — Johanna Knapschaefer - Engineering News-Record
A New York-based construction safety firm and 25 individuals were indicted Feb. 28 for allegedly operating a bogus safety training school, Manhattan District Attorney Alvin Bragg's office says. The firm, Valor Security & Investigations is also linked to “endangering the life” of Ivan Frias, who fell to his death from the 15th floor of a New York City construction site in 2022. Reprinted courtesy of Johanna Knapschaefer, Engineering News-Record Ms. Knapschaefer may be contacted at knapj@enr.com Read the full story... Read the court decision
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Construction Contracts Need Amending Post COVID-19 Shutdowns

October 19, 2020 — Richard P. Higgins - Construction Executive
No one could have expected the coronavirus pandemic in the beginning of 2020. True, there were rumblings about a sickness in China that was highly contagious and infecting many people. Death tolls began rising as the world watched in disbelieve. After all, this is 2020. This is not supposed to happen. We should have been able to control the spread of the virus, but we could not. COVID-19 quickly spread throughout the world causing havoc and economic despair. While some sectors of the construction industry are not as impacted as others, contractors industry-wide need to consider how COVID-19 will impact their contractual obligations. Depending on what happens and what the government decides to do to stop the spread of the coronavirus, project delays, supply chain distributions, lost productivity and work stoppages may continue for months. All of this will impact the contracts that contractors have with owners. Contractors may not be able to preform according to the terms of the contract through no fault of their own. Owners may no longer qualify for the financing needed to pay for the project. FORCE MAJEURE According to Investopedia, “force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations.” Reprinted courtesy of Richard P. Higgins, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Higgins may be contacted at Richard.Higgins@MCC-CPAs.com

Subcontractor’s Claim against City Barred by City’s Compliance with Georgia Payment Bond Statute

March 29, 2017 — Chadd Reynolds – Autry, Hanrahan, Hall & Cook, LLP
In a recent Georgia Court of Appeals case, the Court was tasked with determining whether the City of Atlanta’s compliance with the Georgia Payment Bond Statutes barred a subcontractor from recovery against it after the general contractor failed to pay and the surety became insolvent. Squared Plumbing Co., LLC (J. Squared), was a subcontractor on a project to clean up sewage spills in approximately 100 dwellings for the City of Atlanta. As required by the contract executed with the City, the general contractor, Scott and Sons Holdings, LLC (Scott and Sons), obtained a $200,000 payment bond from its surety, First Seaford Surety, Inc. (First Seaford). J. Squared sought to collect on the payment bond when Scott and Sons failed to pay J. Squared for the work it performed on the project. However, First Seaford became insolvent. J. Squared subsequently filed a claim against Scott and Sons and the City to recover $140,000 for its work on the project. Read the court decision
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Reprinted courtesy of Chadd Reynolds, Autry, Hanrahan, Hall & Cook, LLP
Mr. Reynolds may be contacted at reynolds@ahclaw.com

DHS Awards Contracts for Border Wall Prototypes

September 20, 2017 — Engineering News-Record
The Dept. of Homeland Security has awarded eight contracts to companies to develop prototypes for the Trump administration’s proposed wall along sections of the nearly 2,000-mile U.S.-Mexico border. The contracts are divided evenly between concrete and nonconcrete options. DHS’s Customs and Border Protection agency didn’t specify what sort of materials would be used in the nonconcrete barriers. Read the court decision
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Reprinted courtesy of Engineering News-Record
ENR staff may be contacted at ENR.com@bnpmedia.com

Fungi, Wet Rot, Dry Rot and "Virus": One of These Things is Not Like the Other

November 02, 2020 — Hugh D. Hughes - Saxe Doernberger & Vita
The Hartford’s so-called virus exclusion in its commercial property forms is getting a workout, and policyholders now have an argument that may help their cases move past the pleadings stage. A U.S. District Court in Florida has deemed the exclusion ambiguous and denied an insurer’s motion to dismiss.1 The exclusion applies to “presence, growth, proliferation, spread, or any activity of ’fungi’, wet rot, dry rot, bacteria or virus.”2 The Court held that the parties did not necessarily intend to exclude a pandemic. In Urogynecology, the plaintiff sought coverage for the loss of the usefulness and functionality of its business location due to the Florida Governor’s shutdown order. The policy contained a 'fungi', wet rot, dry rot, bacteria, or virus” exclusion.3 The carrier moved to dismiss, and the plaintiff argued that the exclusion only applied if COVID-19 was present on-site, which was not the case. The Court addressed none of the issues regarding direct physical loss and instead decided the motion on the fungi exclusion. The Court held the exclusion ambiguous because the exclusion of virus “does not logically align with the grouping of the virus exclusion with other pollutants such that the Policy necessarily anticipated and intended to deny coverage for these kinds of business losses.”5 In addition, the Court stated that pollution case law was not on point because “none of the cases dealt with the unique circumstances of the effect COVID-19 has had on our society – a distinction this Court considers significant.” Read the court decision
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Reprinted courtesy of Hugh D. Hughes, Saxe Doernberger & Vita
Mr. Hughes may be contacted at hdh@sdvlaw.com

The Sounds of Silence: Pennsylvania’s Sutton Rule

January 29, 2024 — William L. Doerler - The Subrogation Strategist
In Westminster Am. Ins. Co. a/s/o Androulla M. Toffalli v. Bond, No. 538 EDA 2023, 2023 Pa. Super. LEXIS 626, 2023 PA Super 272, the Superior Court of Pennsylvania (Appellate Court) recently discussed the impact of silence on the Sutton Rule with respect to the landlord, Androulla M. Toffalli (Landlord), securing insurance. After holding that the tenant, Amy S. Bond (Bond) t/a Blondie’s Salon – who leased both commercial and residential space in the building pursuant to written leases – was not an implied “co-insured” on Landlord’s insurance policy, the Appellate Court reversed the decision of the trial court. In this case, Bond rented the ground floor of a property located in Monroe County pursuant to a written commercial lease (Commercial Lease) and operated Blondie’s salon out of the leased location. In addition, Bond rented and lived in a second-floor apartment pursuant to a residential lease (Residential Lease). Both leases required the tenants (Tenants) to obtain insurance for personal items. The leases, however, did not require Landlord to obtain fire insurance for the property. Read the court decision
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Reprinted courtesy of William L. Doerler, White and Williams LLP
Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com

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