2017 Colorado Construction Defect Recap: Colorado Legislature and Judiciary Make Favorable Advances for Development Community
January 24, 2018 —
Kaitlin Marsh-Blake – Gordon & Rees Construction Law Blog Last March, the Colorado General Assembly introduced House Bill 17-1279 concerning the requirement that a unit owners’ association obtain approval through a vote of unit owners before filing a construction defect action. The bill, passed in May, requires a home owners’ association to first notify all unit owners and the developer or builder of a potential construction defect action, call a meeting where both the HOA and developer or builder have an opportunity to present arguments and potentially remedy the defect, and obtain a majority vote of approval from the unit owners to pursue a lawsuit before bringing a construction defect action against a developer or builder. The bill amends C.R.S. § 38-33.3-303.5, which previously only required substantial compliance with the above-mentioned actions. Moreover, the previous version of C.R.S. § 38-33.3-303.5 did not require the HOA to perform these actions prior to a suit being filed. HB 17-1279 also removed the provision of C.R.S. § 38-33.3-303.5 that made it only applicable to buildings of five or more units.
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Kaitlin Marsh-Blake, Gordon & ReesMs. Marsh-Blake may be contacted at
kmarsh-blake@grsm.com
Assignment of Insured's Policy Ineffective
April 06, 2016 —
Tred R. Eyerly – Insurance Law HawaiiAn assignment of policy rights made before the policy was issued was ineffective. W. Alliance Bank v. Nat'l Union Fire Ins. Co., 2016 U.S. Dist. LEXIS 19936 (N.D. Cal. Feb. 18, 2016).
The bank issued a loan to Sorrento Networks, Inc. in 2011. As collateral, Sorrento gave the bank a continuing security interest in all of Sorrento's personal property, including its inventory, commercial tort claims and insurance proceeds. The loan agreement authorized the back to act on Sorrento's behalf in collecting any money owed to Sorrento and prosecuting any claims that Sorrento might have.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Court Grants Motion to Dismiss Negligence Claim Against Flood Insurer
December 22, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer successfully moved to dismiss the insured's negligence claim and demand for jury trial, leaving only the insured's breach of insurance contract claim under the National Flood Insurance Program (NFIP). La Mirage Homeowners Association Inc. v. Wright National Flood Ins. Co., 2019 U.S. Dist. LEXIS 147667 (S.D. Tex. Aug 29, 2019).
Hurricane Harvey damaged three of insured homeowner's association condominium's buildings. Wright National Flood Insurance Company was the insurer pursuant to the NFIP when the hurricane damaged the insured's property. The insured alleged that Wright breached the policy by underpaying on the flood loss claims and by not initiating the appraisal the insured demanded. The insured sought recovery for negligence, consequential damage, statutory penalties, attorney's fees and pre-and-post judgment interest.
Wright moved to dismiss the extra-contractual claims and to strike the jury demand.
The NFIP's regulations allowed homeowners to purchase policies either directly from FEMA or from private insurers that functioned as Write Your Own (WYO) providers and fiscal agents of the United States. The Fifth Circuit had previously held that state law tort claims arising from claims handling by a WYO were preempted under federal law. The court, therefore, was faced with the issue of whether the insured's claims of negligence, attorney's fees, statutory penalties, and interest were policy-handling claims which were preempted by federal law.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Tenth Circuit Finds Insurer Must Defend Unintentional Faulty Workmanship
December 09, 2011 —
Tred R. Eyerly - Insurance Law HawaiiApplying Colorado law, the Tenth Circuit found a duty to defend construction defect claims where the faulty workmanship was unintentional. Greystone Const. Inc. v. National Fire & Marine Ins. Co., 2011 U.S. App. LEXIS 22053 (10th Cir. Nov. 1, 2011). A prior post [here] discussed the Tenth Circuit’s certified question to the Colorado Supreme Court in this matter, a request that was rejected by the Colorado court.
In two underlying cases, Greystone was sued by the homeowner for damage caused to the foundation by soil expansion. In both cases, the actual construction was performed by subcontractors. Further, in neither case was the damage intended or anticipated. Nevertheless, National Union refused to defend, contending property damage resulting from faulty construction was not an occurrence.
Relying on a Colorado Court of Appeals case, General Security Indemn. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), the district court granted summary judgment to National Union.
On appeal, the Tenth Circuit first considered whether Colorado legislation enacted to overturn General Security could be applied retroactively. The statute, section 13-20-808, provided courts "shall presume that the work of a construction professional that results in property damage, including damage to the work itself or other work, is an accident unless the property damage is intended and expected by the insured."
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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The "Dark Overlord" Strikes The Practice Of Law: What Law Firms Can Do To Protect Themselves
April 17, 2019 —
Ivo G. Danielle – Newmeyer & DillionCybersecurity breaches involving law firms are on the rise with each passing year. Law firms are prime targets for cyber criminals seeking confidential and sensitive information because of the various types of legal work that law firms normally handle for their clients. Whether it be mergers and acquisitions, the use of intellectual property, purchase agreements, bankruptcy or even litigation involving divorce, law firms are a rich depository for highly confidential and sensitive information. As a result, law firms must employ comprehensive security measures to protect themselves from security breaches or risk being on the losing end of a costly malpractice claim, and suffer severe reputational harm.
Law Firms Continue To Be Targeted By Cybercriminals
According to the American Bar Association ("ABA") 2018 Legal Technology Survey Report, 23% of the law firms who participated in the survey reported that their law firm experienced a data breach. Although this may be just a 1% increase from the 22% who reported a breach in 2017, it is important to understand that this is an increase of 8% from the stable percentages reported from 2013 through 2016.1 The 2018 survey report also revealed that security breaches fluctuated with firm size – 14% for solo law firms, 24% for firms employing 2-9 attorneys, approximately 24% for firms with 10-49 attorneys, 42% for firms with 50-99 attorneys, and approximately 31% for those firms employing 100 or more attorneys.
Latest Law Firm Security Breaches
The notorious criminal group called "The Dark Overlord" has a history of committing data breaches of high profile companies such as Gorilla Glue, Netflix, Larson Studios, multiple healthcare companies, and Little Red Door Cancer Agency. Their goal is simple – steal sensitive information and then extort payment from the victims by threatening to release the sensitive information to the public.
On December 31, 2018, this cybercriminal group announced to the world that they had acquired 18,000 documents containing highly sensitive legal information related to insurance based litigation connected to the 9/11 tragedy. The stolen information was the attorney/client property of Lloyd's of London, Silverstein Properties, and Hiscox Syndicates, Ltd. In its announcement, The Dark Overlord boasted that they were in possession of client sensitive information, such as: "emails; retainer agreements; non-disclosure agreements; settlements, litigation strategies; liability analysis; defense formation; collection of expert witness testimonies; communication with government officials in countries all over the world; voice mails; dealings with the FBI, USDOJ, DOD, confidential communications, and so much more."
Subsequent to the data breach, The Dark Overlord announced to the public that they designed a compensation plan that would allow for public crowd-funding for its organization to permit the public to view the stolen information in exchange for bitcoin payment. The more public funding it receives, the more stolen sensitive information will be unlocked and released to the public. It is estimated that this cybercriminal group already distributed information to the public on two separate occasions during the month of January 2019.
High profile cybersecurity breaches of law firms is nothing new – for example, the infamous Panama Papers breach, where cybercriminals leaked 11.5 million documents exposing the shadowy business of setting up offshore corporations as tax shelters for businesses, celebrities, and politicians - and the infamous Petya Malware attack which resulted in a digital lockdown of one of the world's largest law firms, DLA Piper. However, despite the infrequency of publicized cyber-attacks of law firms by the media, the FBI has recently announced that law firms should expect an increase in security attacks by cybercriminals because law firms are now viewed as "one-stop shops" for cybercriminals. Therefore, in order to combat the inevitable increase in cyber-attacks, law firms must get prepared.
How Law Firms Can Protect Themselves
All law firms will agree that the most serious consequence of a security breach for their firm would be the unauthorized access to sensitive client data. The American Bar Association's Model Rules of Professional Conduct, specifically Rules 1.1 and 1.62 and related Comments, require an attorney to take competent and reasonable measures to safeguard information relating to their clients. This duty to "safeguard' information imposes a significant challenge to firms when using technology in connection with protecting client information because most law firms are not savvy with technology and lack proper cyber security training.
In order for a law firm to protect itself from security breaches and inadvertently violate its duty of safeguarding a client's sensitive information, it is important to take the following actions:
- Start by taking an inventory and risk assessment of the firm to determine what needs to be protected – the inventory should include both technology and data;
- Develop, implement and maintain an appropriate cybersecurity program that complies with applicable ethical and legal obligations;
- Ensure the cybersecurity program addresses people, policies and procedures, and technology. The cybersecurity program must designate an individual or a group to be in charge and coordinate security;
- Develop an incident response plan scaled to the size of the firm;
- Continually train staff and attorneys to identify and understand potential cybersecurity threats;
- Consider implementing a third-party assessment of firm's cybersecurity program and policies;
- Purchase cyber liability for insurance which not only covers first party losses to law firms (like lost productivity, data restoration, and legal expenses) but also liability protection to third parties;
- Implement authentication and access controls for network, computers and mobile devices used by the firm's staff and attorneys;
- Consider the use of full-drive encryption for computers and mobile devices;
- Have staff and attorneys avoid and/or limit the use of public WiFi when working remotely; and
- Create a disaster recovery plan to backup all data in the event of a cyber-attack or natural catastrophe.
Continually reviewing, implementing, training and updating a firm's cybersecurity program and protocols will help safeguard sensitive and confidential client information and/or data. No law firm wants to be the next data breach headline – so take the necessary steps to avoid a potential disaster.
1 Past ABA Legal Technology Surveys reported 14% in 2016, 15% in 2015, 14% in 2014 and 15% in 2013.
2 On November 1, 2018, California adopted ethics rules patterned after the ABA Model Rules of Professional Conduct.
Ivo Daniele is a seasoned associate in Newmeyer & Dillion's Walnut Creek office. His practice includes representing private and public companies with both their transactional and litigation needs. You can reach Ivo at ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business law, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
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Wheaton to Require Sprinklers in New Homes
November 06, 2013 —
CDJ STAFFThe town of Wheaton, Illinois is considering a change to its building codes, based on the recommendations made in the 2012 building code, released by the International Code Council. Eighty-two towns in Illinois already require new homes to have fire sprinklers. Wheaton did not adopt any changes from the 2006 or 2009 building code; they are currently using the standards of the 2003 edition.
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“Genuine” Issue of “Material” Fact and Summary Judgments
December 18, 2022 —
David Adelstein - Florida Construction Legal UpdatesThis is short article on summary judgments. A motion for summary judgment, as you may already know, is a procedural vehicle to try to dispose of issues or claims in a lawsuit, either partially or fully. The objective is that the moving party claims that there is no genuine issue of material fact and that they are entitled to a judgment (partially or finally) as a matter of law. See Florida Rule of Civil Procedure 1.510. In May of 2021, Florida adopted the federal summary judgment standard which theoretically means trial courts should grant more summary judgments, not less, based on the more rigorous standard.
There have been many articles that discuss Florida’s new summary judgment standard including how the standard used to be versus how it is supposed to be now that it is modeled after the federal standard. That isn’t the point of this posting. (Here is an article published in the Florida Bar Journal that provides a primer on summary judgments in case you are interested.)
The point of this posting is to understand the words “genuine” and “material” as underlined above when moving for or defending against a summary judgment. These words have important meaning in the context of motions for summary judgment. In other words, what is a genuine issue of material fact? This is a question that should not be overlooked because these are the facts you want to focus on and frame your arguments on when moving for or defending against a summary judgment. Notably, these are also the facts you want to introduce and emphasize at trial.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
With Vice President's Tie-Breaker, US Senate Approves Far-Reaching Climate Bill
August 29, 2022 —
Pam McFarland & Debra K. Rubin - Engineering News-RecordWith Vice President Kamala Harris casting the decisive vote, the U.S. Senate passed 51-50 an economic package on Aug. 7 that authorizes $369 billion to address climate change. The bill now moves to the U.S. House of Representatives, which is expected to pass the bill later this week, and then to the White House for President Joe Biden's signature.
Reprinted courtesy of
Pam McFarland, Engineering News-Record and
Debra K. Rubin, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com
Ms. Rubin may be contacted at rubind@enr.com
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