CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Insurance Law Client Alert: California FAIR Plan Limited to Coverage Provided by Statutory Fire Insurance Policy

February 07, 2014 — Valerie A. Moore and Chris Kendrick - Haight Brown & Bonesteel, LLP
In St. Cyr v. California Fair Plan Association (No. B243159, filed 1/31/14), a California appeals court held that the state's high risk property insurance plan is not obligated to provide any greater coverage than that mandated for the state's statutory fire insurance policy. The plaintiff-policyholders lived in high fire risk areas and were insured under the California FAIR Plan, which provides property insurance to the otherwise uninsurable. Following loss of their homes and other property in wildfires, the policyholders were paid the full amount of their policy limits, but contended that they were entitled to additional payments. Specifically, the policyholders alleged that the FAIR plan provided less protection than statutorily mandated by Insurance Code sections 10090 through 10100.2, which spells out the "Basic Property Insurance Inspection and Placement Plan" of the FAIR program. The policyholders contended that FAIR was required to issue a policy not only in accordance with the standard form fire insurance policy set forth in Insurance Code section 2071, but also the "'Basic Property Insurance' written in the normal market . . . known as the 'HO-3'," referring to the copywrited homeowners policy form promulgated by the Insurance Services Office (ISO). Reprinted Courtesy of Valerie A. Moore, Haight Brown & Bonesteel, LLP and Chris Kendrick, Haight Brown & Bonesteel, LLP Ms. Moore may be contacted at vmoore@hbblaw.com and Mr. Kendrick may be contacted at ckendrick@hbblaw.com. Read the court decision
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Repair Cost Exceeding Actual Cash Value Does Not Establish “Total Loss” Under Fire Insurance Policy

June 05, 2017 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In California FAIR Plan Assn. v. Garnes (No. A143190, filed 5/26/17), a California appeals court ruled that “total loss” under Insurance Code section 2051 refers to physical damage or loss, not the economic fact that the cost of repair exceeds the actual cash value of a home. Thus, where the home is not physically destroyed, the insured is entitled to the actual cost of repair, minus depreciation, even if that amount exceeds the fair market value of the home. In Garnes, the insured had a fire policy issued by the California FAIR Plan with limits of $425,000. It was agreed that the assessed value of the insured home was only $75,000. The insured suffered a kitchen fire with estimated repair costs of $320,000. The FAIR Plan declared the home a total loss because the cost of repair exceeded the home’s value, and offered to pay the actual cash value as provided by Insurance Code section 2051(b)(1). Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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Prefabrication Contract Considerations

March 08, 2021 — David Adelstein - Florida Construction Legal Updates
Prefabrication (also referred to as modular construction in instances), is a form of offsite construction where certain construction activities occur at an offsite manufacturing facility or location. Construction components or units are preassembled (prefabricated) at this offsite location prior to being delivered to the project site and then integrated into the project. When preparing a prefabrication contract (including a prefabrication subcontract), there are a number of complex considerations that need to be weighed, and these considerations are bullet-pointed below. The purpose of these bullet-points is to give you considerations to discuss and vet when preparing, negotiating, and agreeing to a prefabrication contract or subcontract. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Determining Duty to Defend in Wisconsin Does Not Include Extrinsic Evidence

September 22, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The policyholder's attempt to extend the duty to defend analysis beyond the complaint's allegations and the four-corners of the policy failed before the Wisconsin Supreme Court. Water Well Solutions Service Group Inc. v. Consolidated Ins. Co., 2016 Wisc. LEXIS 163 (Wis. Sup. Ct. June 30, 2016). 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

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Proposed Legislation for Losses from COVID-19 and Limitations on the Retroactive Impairment of Contracts

July 27, 2020 — Shaia Araghi - Newmeyer Dillion
The COVID-19 pandemic has caused most businesses to temporarily close and, as a result, sustain significant losses. Various states are contemplating the passage of legislation to require carriers to cover claims arising from COVID-19, but case law regarding the constitutionality of such legislation is conflicting. Depending on the facts surrounding retroactive legislation, states may be able to pass an enforceable law leading to coverage. Pennsylvania’s Proposed Legislation for Business Interruption Losses Pennsylvania is one of many states that has proposed legislation to override language in business interruption policies and require coverage from insurance carriers. Pennsylvania House Bill 2372 proposes that any insurance policy that covers loss or property damage, including loss of use and business interruption, must cover the policyholder’s losses from the COVID-19 pandemic.1 It applies to insureds with fewer than 100 employees.2 To enhance its chances to pass constitutional challenges, the House Bill also provides for potential relief and reimbursement through the state’s commissioner.3 Pennsylvania Senate Bill 1127 is broader than House Bill 2372 and most bills proposed in other states and would require indemnification for nearly all insureds.4 The Senate Bill makes important legislative findings and notes that insurance is a regulated industry.5 It essentially provides that an insurance policy insuring against a loss relating to property damage, including business interruption, shall be construed to cover loss or property damage due to COVID-19 or due to a civil authority order resulting from COVID-19.1 The proposed bill redefines “property damage” to include: (1) the presence of a person positively identified as having been infected with COVID-19; (2) the presence of at least one person positively identified as having been infected with COVID-19 in the same municipality where the property is located; or (3) the presence of COVID-19 having otherwise been detected in Pennsylvania. Read the court decision
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Reprinted courtesy of Shaia Araghi, Newmeyer Dillion
Ms. Araghi may be contacted at shaia.araghi@ndlf.com

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JAMS Announces Updated Construction Rules

June 21, 2021 — JAMS
Irvine, Calif. – JAMS, the largest private provider of alternative dispute resolution (ADR) services worldwide, is pleased to announce it has revised and updated its Construction Arbitration Rules & Procedures and Expedited Construction Arbitration Rules & Procedures, effective June 1. These Rules were updated to reflect the latest developments and trends in construction arbitration. In response to the transition to virtual and hybrid proceedings, Rule 22 makes explicit the arbitrator’s full authority to conduct the hearing in person, virtually or in a combined form, as well as with participants in more than one geographic location. To support access to case documents throughout the proceedings, Rule 8 aligns electronic filing and service with the functionality of JAMS Access, a centralized, secure online case management platform. Additional rules were created or revised to clarify and strengthen the authority of the arbitrator. Key changes include allowing an arbitrator to withhold approval of any intended change in party representation that could compromise the proceedings or the final award, to set a hearing without consulting a party that he or she reasonably believes will not participate and to permit a party to file a motion for summary disposition of a claim if the arbitrator believes that party has demonstrated the motion is likely to succeed. About JAMS – Local Solutions. Global Reach. Founded in 1979, JAMS is the largest private provider of alternative dispute resolution services worldwide. JAMS successfully resolves and manages business and legal disputes by providing efficient, cost-effective and impartial ways to overcome barriers at any stage of conflict. JAMS offers customized in-person, virtual and hybrid resolution services locally and globally through a combination of industry-specific experience, first-class client service, the latest technology and highly trained mediators and arbitrators. Read the court decision
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Reprinted courtesy of JAMS

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Arbitration Provisions Are Challenging To Circumvent

May 13, 2019 — David Adelstein - Florida Construction Legal Updates
Arbitration provisions are enforceable and they are becoming more challenging to circumvent, especially if one of the parties to the arbitration agreement wants to arbitrate a dispute versus litigate a dispute. Remember this when agreeing to an arbitration provision as the forum for dispute resolution in your contract. There is not a one-size-fits-all model when it comes to arbitration provisions and how they are drafted. But, there is a very strong public policy in favor of honoring a contractual arbitration provision because this is what the parties agreed to as the forum to resolve their disputes. By way of example, in Austin Commercial, L.P. v. L.M.C.C. Specialty Contractors, Inc., 44 Fla.L.Weekly D925a (Fla. 2d DCA 2019), a subcontractor and prime contactor entered into a consultant agreement that contained the following arbitration provision:

Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be subject to the dispute resolution procedures, if any, set out in the Prime Contract between [Prime Contractor] and the [Owner]. Should the Prime Contract contain no specific requirement for the resolution of disputes or should the [Owner] not be involved in the dispute, any such controversy or claim shall be resolved by arbitration pursuant to the Construction Industry Rules of the American Arbitration Association then prevailing, and judgment upon the award by the Arbitrator(s) shall be entered in any Court having jurisdiction thereof.

The prime contract between the owner and prime contractor did not require arbitration. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Florida trigger

August 04, 2011 — CDCoverage.com

In Mid-Continent Casualty Co. v. Siena Home Corp., No. 5:08-CV-385-Oc-10GJK (M.D. Fla. July 8, 2011), insured residential real estate developer Siena was sued by homeowners seeking damages for moisture penetration property damage resulting from exterior wall construction defects. Siena’s CGL insurer Mid-Continent filed suit seeking a declaratory judgment of no duty to defend or indemnify in part on the basis that the alleged “property damage” did not manifest during the Mid-Continent policy period.



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Reprinted courtesy of CDCoverage.com

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