Happy New Year from CDJ
January 04, 2018 —
Laura Parsons – CDJ StaffThe CDJ staff has compiled a “Top 10” list of the articles published in 2017. These articles were the “most read” by our audience last year. These most read stories range from contemplating construction industry conundrums to a surprising increase of new home construction nationwide.
As we kick off our first publication of 2018 we are excited to continue to bring you interesting and relevant content. We hope that you will continue to rely on CDJ for an insightful weekly summary of what is happening in the construction defect industry.
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Georgia Federal Court Says Fact Questions Exist As To Whether Nitrogen Is An “Irritant” or “Contaminant” As Used in Pollution Exclusion
May 20, 2019 —
Lawrence J. Bracken II, Michael S. Levine & Alexander D. Russo - Hunton Andrews KurthThe Southern District of Georgia recently ruled that Evanston Insurance Company is not entitled to summary judgment on whether its policies’ pollution exclusion bars coverage for the release of nitrogen into a warehouse. The case stems from an incident at Xytex Tissue Services, LLC’s warehouse, where Xytex stored biological material at low temperatures. Xytex used an on-site “liquid nitrogen delivery system” to keep the material properly cooled. This system releases liquid nitrogen, which would vaporize into nitrogen gas and cool the biological material. On February 5, 2017, a Xytex employee, Deputy Greg Meagher, entered the warehouse to investigate activated motion detectors and burglar alarms. Deputy Meagher was overcome by nitrogen gas and died as a result. Following Deputy Meagher’s death, his heirs filed suit against Xytex and other defendants. Evanston denied coverage based on the pollution exclusion in its policy. Evanston then brought a declaratory judgment action to confirm its coverage position.
In denying Evanston’s summary judgment motion, the Southern District of Georgia reasoned that the type of injury sustained is essential in analyzing whether the pollution exclusion applies. Specifically, Xytex argued, and the court agreed, that the underlying lawsuit alleged that the bodily injury was caused by a lack of oxygen, not exposure to nitrogen. The court also distinguished prior decisions, explaining that injury caused by a lack of oxygen is not a contamination or irritation of the body in the same way as injury resulting from exposure to carbon monoxide or lead. The court also found that Xytex “reasonably expected that liability related to a nitrogen leak would be insured.”
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Lawrence J. Bracken II,
Michael S. Levine and
Alexander D. Russo
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Russo may be contacted at arusso@HuntonAK.com
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Quick Note: Unenforceable Language in Arbitration Provision
November 06, 2018 —
David Adelstein - Florida Construction Legal UpdatesAlthough arbitration is a dispute resolution provision provided for in a contract, the scope of judicial review of an arbitrator’s award is still governed by law. There are limited circumstances in which an arbitrator’s award can be challenged under the law. One of those circumstances is not because a party believes that an arbitrator applied the incorrect law.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Appraiser Declarations Inadmissible When Offered to Challenge the Merits of an Appraisal Award
March 14, 2018 —
Valerie Moore and Christopher Kendrick - Publications & InsightsIn
Khorsand v. Liberty Mutual Fire Ins. Co. (No. B280273, filed 2/27/18), a California appeals court affirmed an appraisal award favorable to a homeowners insurer, ruling that it was improper to admit as evidence in opposition to a petition to confirm the award a declaration from the policyholders’ appraiser, except for the limited purpose of showing improprieties in the appraisal, bias, partiality or other improper conduct.
The homeowners had a pipe leak and submitted a claim. The insurer responded to an estimate from the owners’ adjuster by retaining an expert and paying an undisputed amount that was significantly less. Eleven months later the owners had upper deck damage and submitted another claim. Relying on the same expert, the insurer paid another undisputed amount significantly less than the owner’s estimate. The owners requested appraisal but the insurer denied the request, contending that the dispute was over coverage and outside the scope of appraisal.
The owners’ petition for appraisal was granted, with the court ordering separate listing of items the insurer disputed regarding coverage or causation. The appraisal panel issued an award stating that total damage was $132,293, of which $96,530 was contested by the insurer. The insurer filed a petition to confirm the award, which was granted despite the fact that the owners’ appraiser had refused to sign it.
Reprinted courtesy of
Valerie Moore, Haight Brown & Bonesteel LLP and
Christopher Kendrick, Haight Brown & Bonesteel LLP
Ms. Moore may be contacted at vmoore@hbblaw.com
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
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Stadium Intended for the 2010 World Cup Still Not Ready
June 18, 2014 —
Beverley BevenFlorez-CDJ STAFFFour years after the HM Pitje Stadium in Pretoria, South Africa was expected to open, the stadium, which was meant to be used during the 2010 World Cup, remains closed. IOL News reported that upgrades began in 2006, “[b]ut since then there have been delays and problems with construction which may see the stands having to be rebuilt.” One of the defects that prevented the stadium from being used for the World Cup was that the slope of the main pavilion was too steep.
City of Tshwane spokesman Selby Bokaba told IOL News: “Upgrading of the stadium will take approximately two calendar years, with the completion date reliant on the approval and budget availability.”
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To Catch a Thief
March 06, 2023 —
Christopher Durso - Construction ExecutiveTony Rader calls it “peeling back the onion”—the slow, methodical process of uncovering the full extent of an embezzlement scam that eventually totaled more than $1 million. What National Roofing Partners (NRP) first discovered was bad enough. The Coppell, Texas–headquartered company, which oversees a nationwide network of nearly 250 commercial roofing contractors, learned in 2018 that a South Texas firm called Statewide Texas Roofing was billing clients for work on behalf of NRP and pocketing all the money. It turned out to be a scheme masterminded by NRP’s then-president, who created Statewide, staffed the company with his kids and used phony work orders to steal hundreds of thousands of dollars in client fees from NRP. He’d been president for six years and with the company since it was created in 2007. It was a huge betrayal—and still just the tip of the iceberg.
“Initially, we thought it was only half a million [dollars] or so,” says Tony Rader, NRP’s chief operating officer. “But I’ll never forget, [Chief Executive Officer] Steve [Little] and I were talking over a bourbon one night, and that’s when I told him, ‘I’ve seen this once before, and this is like an onion. You’ve only peeled off the outer layers. We’re going to be finding stuff for a year, and it’s just going to get bigger and bigger and bigger.’ He said, ‘You think?’ And I said, ‘Oh, I’m pretty sure.’” Rader was all too correct. Working with a third-party forensic accountant, NRP found that not only were its then-chief financial officer and several other employees involved in the scheme, but the president had also abused his corporate credit card, racking up personal charges going back to 2013—on luxury vacations, expensive dinners, clothes, jewelry, even his daughter’s destination wedding in Jamaica. The final tally on his scams: $1.4 million.
Reprinted courtesy of
Christopher Durso, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Traub Lieberman Attorneys Win Motion for Judgment on the Pleadings In Favor of Insurer
June 26, 2023 —
Jeremy S. Macklin & Danielle K. Kegley - Traub LiebermanTraub Lieberman Partner Jeremy Macklin and Associate Danielle Kegley obtained judgment on the pleadings in favor of Admiral Insurance Company (“Admiral”), in a matter brought before the Chancery Division of the Circuit Court of Cook County, Illinois. In the underlying case, an injured employee sued various companies, and their agents, for injuries he sustained on a construction project. The insureds, one of the defendant companies and its employee, sought coverage for the underlying lawsuit under a professional liability policy issued to that company by Admiral. The policy at issue provided coverage for the company and its employees, for negligent acts or omissions committed in the rendering of “professional services,” defined as services “involving specialized training and skill while in the pursuit of” mechanical and process engineering.
After initially defending the insureds, Admiral filed a declaratory judgment action asking the Court to declare that the company has no duty to defend or indemnify the insureds in the underlying lawsuit and to allow Admiral to immediately withdraw its defense of the insureds. Admiral argued there is no coverage under the professional liability policy, as the underlying lawsuit does not contain allegations that the underlying plaintiff’s injuries arose from the rendering of or failure to render “professional services.” The insureds argued that since they were hired as mechanical and process engineers for the project, that any lawsuits against them must necessarily arise from their “professional services.” Further, the insureds asked the Court to disregard the express allegations in the underlying lawsuit concerning their role on the project as a general contractor.
Reprinted courtesy of
Jeremy S. Macklin, Traub Lieberman and
Danielle K. Kegley, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com
Ms. Kegley may be contacted at dkegley@tlsslaw.com
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Insured’s Bad Faith Insurance Claim Evaporates Before its Eyes
August 03, 2020 —
Garret Murai - California Construction Law BlogSometimes it’s right there before your eyes. Then, poof, it’s gone. This was the experience of one insured, who brought a bad faith insurance denial claim against his insurer thinking that the facts were in his favor, only to discover they were not.
The 501 E .51st Street Case
The Water Main Break and AGI’s Report
The owner of a 10-unit apartment building built in 1963, 501 East 51st Street, Long Beach-10 LLC (just rolls off the tongue doesn’t it?), filed a bad faith action against its insurer Kookmin Best Insurance Co., Ltd., after it denied 501 East’s insurance tender following a water main break that caused the building’s foundation to subside.
The water main break occurred sometimes between December 31, 2015 and January 2, 2016 next to the southwest side of the building. 501 East tendered its insurance claim to Kookmin on March 8, 2016, and in April 2016, presented a report prepared by American Geotechnical, Inc. (“AGI”) concerning damage to the building. According to the report prepared by AGI, AGI conducted a “limited geotechnical investigation” to “evaluate site conditions relating to the reported building distress following a waterline breach near the south end of the building.” The scope of AGI’s investigation was limited to “observation, photo documentation of the site conditions, [and[ floor-level survey of the interior of the first level units.” AGI’s investigation did not involve any subsurface investigation or soil testing.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
