FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Carrier Has Duty to Defend Claim for Active Malfunction of Product

October 19, 2020 — Tred R. Eyerly - Insurance Law Hawaii
Rejecting that the underlying claim was based solely on faulty workmanship, the Third Circuit held the insurer had a duty to defend allegations of a malfunctioning product. Nautilus Ins. Co. v. 200 Christina Street Partners LLC, 2020 U.S. App. LEXIS 22118 (3d Cir. July 16, 2020). The insureds were sued by homeowners in two separate suits alleging defects in the construction of their homes. Nautilus defended under a reservation of rights. Nautilus filed suit in District Court and moved for judgment on the pleadings. The District Court denied the motion, finding Nautilus had a duty to defend because the underlying claims sufficiently alleged product--related tort clams that could fall within the scope of coverage under the relevant policies. The Third Circuit affirmed. There was a distinction between a claim of faulty workmanship, for which the insurer did not have a duty to defend, and a claim of "active malfunction" of a product, for which an insurer did have such a duty. An active malfunction was sufficiently fortuitous as to constitute an "occurrence." 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

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Massachusetts Business Court Addresses Defense Cost Allocation and Non-Cumulation Provisions in Long-Tail Context

March 06, 2022 — Eric B. Hermanson & Austin D. Moody - White and Williams
A business court in Massachusetts has weighed in on two key issues affecting allocation of insurance coverage for long-tail liabilities in Massachusetts. Specifically, in Crosby Valve LLC et al. v. OneBeacon America Insurance Company, et al.,[1] involving asbestos bodily injury claims, Judge Kenneth Salinger of the Suffolk County Business Litigation Session addressed:

• whether defense costs in long-tail cases were subject to the same pro rata allocation scheme the Supreme Judicial Court (SJC) adopted to govern successively triggered insurers' indemnity obligations in Boston Gas Company v. Century Indemnity Company;[2] and
• whether “non-cumulation” provisions, like those addressed by the New York Court of Appeals in Matter of Viking Pump,[3] were consistent with this pro rata allocation methodology.

As to the first issue — i.e., allocation of defense costs — Judge Salinger declined to follow Boston Gas, and found the SJC’s holding in that case was limited to an insurers’ indemnity obligations. The SJC in Boston Gas had focused on the language of the policy insuring agreement, saying “[t]his policy applies to ... property damage ... which occurs anywhere during the policy period.” The SJC had also pointed to the policy definition of “occurrence” as “an accident, including injurious exposure to conditions, which results, during the policy period, in property damage neither expected nor intended from the standpoint of the insured.”[4] Reprinted courtesy of Eric B. Hermanson, White and Williams LLP and Austin D. Moody, White and Williams Mr. Hermanson may be contacted at hermansone@whiteandwilliams.com Mr. Moody may be contacted at moodya@whiteandwilliams.com Read the court decision
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Recession Graduates’ Six-Year Gap in Homeownership

October 15, 2014 — Beverley BevenFlorez-CDJ STAFF
According to Zillow Real Estate Research, “Five years after completing their degree, young adults who graduate into a recession still have a lower homeownership rate than peers graduating into normal economic times. But at six years this gap disappears.” Zillow’s research demonstrated “that graduating into a recession has a lasting adverse effect on young adults’ employment and earning, a phenomenon known as labor market ‘scarring.’” Furthermore, “Homeownership is closely tied to the labor market, particularly among young adults, and some preliminary evidence suggests that a similar ‘scarring’ effect occurs with respect to the homeownership rate among young adults who graduate into a weak economy.” Read the court decision
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UK Construction Output Rises Unexpectedly to Strongest Since May

March 27, 2023 — Lucy White - Bloomberg
UK construction industry output grew for the first time in two months in February, boosting hopes that the economy may avoid a prolonged recession. A rebound in commercial and civil engineering work helped to compensate for continued gloom in the housing market, where buying activity has been depressed by higher mortgage rates and the cost-of-living crisis. The closely-watched Construction Purchasing Managers’ Index from S&P Global and the Chartered Institute of Procurement and Supply jumped to 54.6 in February, up from 48.4 a month earlier and the highest since May 2022. It was the first time in three months that activity was above the crucial no-change level of 50. Economists had expected a decline. Read the court decision
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Reprinted courtesy of Lucy White, Bloomberg

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A Downside of Associational Standing - HOA's Claims Against Subcontractors Barred by Statute of Limitations

March 28, 2012 — Bret Cogdill, Colorado Construction Litigation

In multi-family construction defect litigation in Colorado, homeowners associations rely on associational standing to pursue claims affecting more than two units and to bring claims covering an entire development. This practice broadens an association’s case beyond what individual, aggrieved owners would otherwise bring on their own against a developer or builder-vendor. However, reliance on associational standing to combine homeowners’ defect claims into a single lawsuit has its drawbacks to homeowners.



A recent order in the case Villa Mirage Condominium Owners’ Association, Inc., v. Stetson 162, LLC, et al., in El Paso County District Court, presents an example. There, the HOA unsuccessfully sought a determination from the court that its claims against subcontractors were not barred by the statute of limitations. To do so, the HOAs attempted to apply the Colorado Common Interest Ownership Act (“CCIOA”), which governs the creation and operation of HOAs, and a statute intended to apply to persons under a legal disability.



Under CCIOA, during the period of “declarant control” the developer may appoint members to the association’s executive board until sufficient homeowners have moved into the development and taken seats on the board.

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Reprinted courtesy of Bret Cogdill of Higgins, Hopkins, McClain & Roswell, LLC. Mr. Cogdill can be contacted at cogdill@hhmrlaw.com.

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Chicago’s Bungalows Are Where the City Comes Together

March 06, 2022 — Zach Mortice - Bloomberg
In Chicago, there are plenty of reasons for South Side residents to keep Northsiders at arm’s length. This includes the North Side’s nonsensical lack of numbered streets, opposed baseball fandoms, and the outsized power of the city’s wealthier half — an imbalance that has created one of the most striking geographic divides between rich and poor, white and Black, in American urban life. But for Chicago historian and native Southsider Shermann “Dilla” Thomas, there’s a quick way for a Northsider to break through this legacy and offer at least one piece of common ground: Say that you live in a bungalow. “We have bungalows on the South Side too,” Thomas says. “If you’re good enough for a bungalow, then you’re cool with me.” All over the city, these humble houses are a remarkably consistent presence. It’s estimated that Chicago boasts 80,000 original bungalows — a third of the city’s single-family housing stock — located across a U-shaped band four to seven miles from the city center called the Bungalow Belt. In a city riven by inequality and resentment, bungalows are one of the few things that white, Black and Latino Chicagoans all love together. “The Chicago Bungalow is a unifying thing,” says Thomas. Read the court decision
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Reprinted courtesy of Zach Mortice, Bloomberg

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Court of Appeals Discusses Implied Duty of Good Faith and Fair Dealing in Public Works Contracting

August 17, 2017 — Lindsay K. Taft - Ahlers & Cressman PLLC
The implied duty of good faith and fair dealing is implied in every contract, including construction contracts. Generally speaking, this implied duty requires parties cooperate with one another so that they each obtain the full benefit of their contracted bargain. Recently, the Court of Appeals (Division II) in Nova Contracting, Inc. v. City of Olympia discussed this duty’s application to a public works contract. Read the court decision
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Reprinted courtesy of Lindsay K. Taft, Ahlers & Cressman PLLC
Ms. Taft may be contacted at ltaft@ac-lawyers.com

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Can a Receiver Prime and Strip Liens Against Real Property?

September 20, 2021 — Ben Reeves - Snell & Wilmer Real Estate Litigation Blog
Courts overseeing receivers generally enjoy broad discretion in directing and approving a receiver’s proposed actions. But does that authority extend to a receiver not only granting a super-priority lien ahead of existing liens, but also selling the real property free and clear of all liens? In County of Sonoma v. Quail, 56 Cal.App.5th 657 (Ct. App. 2020), the California Court of Appeals answered that question in the affirmative. Quail involved a 47,480 square-foot lot with two houses, a few garages, several outbuildings, and numerous trailers surrounded by a veritable junk yard. Despite many of these structures being uninhabitable, unsanitary, and dangerous, multiple families resided on the lot. Although Sonoma County (the “County”) ordered the owner to remediate the property several times, he failed and refused to do so. After several years of these violations going unabated, the County ultimately sought and obtained the appointment of a receiver over the real property. To obtain funds necessary to repair the property, the receiver asked the court for permission to borrow money through the issuance of a receivership certificate to be secured by a super-priority lien—i.e., a lien ahead of all other liens—against the real property. Although the trial court initially declined to prime existing liens, when the receiver could find no one to lend money (since the land lacked equity), the trial court relented and approved a super-priority lien despite the senior secured lender’s objection (the “lender”). Read the court decision
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Reprinted courtesy of Ben Reeves, Snell & Wilmer
Mr. Reeves may be contacted at breeves@swlaw.com

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