Policy's One Year Suit Limitation Does Not Apply to Challenging the Insurer's Claims Handling
October 07, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe California Supreme Court held that the policy's suit limitation of one year, consistent with the statute requiring suit be file within twelve months after a loss, did not apply to claims alleging violation of the state's unfair competition law (UCL). Rosenberg-Wohl v. State Farm Fire and Cas. Co., 2024 Cal. LEXIS 3806 (Cal. July 18, 2024).
Plaintiff held a homeowners policy issued by State Farm that provided coverage for all risks except those specifically excluded under the policy. The suit limitation provision provided, "Suit Against Us. No action shall be brought unless there has been compliance with the policy provision.The action must be started within one year after the date of loss or damage."
On two occasions in late 2018 or early 2019, plaintiff's neighbor stumble and fell as she descended a staircase at plaintiff's residence. Plaintiff discovered that the pitch of the stairs had changed, and replacement of the stairs was required to fix the issue. She contacted State Farm on or around April 23, 2019. On August 9, 2019, plaintiff submitted a claim to State Farm, seeking reimbursement for what she paid to repair the staircase. State Farm denied the claim, advising there was no coverage and identifying several exclusions as potentially applicable.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Toolbox Talk Series Recap - Guided Choice Mediation
November 05, 2024 —
Douglas J. Mackin - The Dispute ResolverIn the September 26, 2024 edition of Division 1's Toolbox Talk Series,
Clifford Shapiro presented on Guided Choice Mediation (“GCM”) and how it can lead to better outcomes in construction disputes.
GCM is an approach to mediation that focuses on early and efficient dispute resolution, which prominent mediators created as a public interest project.
Shapiro described his particular variant of GCM based on his experience while acknowledging that other Guided Choice Mediators’ processes may differ from his in various ways. Shapiro’s brand of GCM focuses on ensuring that parties have reasonable expectations and appropriate settlement authority prior to arriving at a mediation. Some of the strategies to help accomplish these noble goals are (i) early mediator engagement, (ii) mediator facilitation of information exchange, (iii) mediator involvement with insurance issues (particularly important in construction defect cases, especially those with multiple defendants), (iii) pre-mediation ex parte meetings, and (iv) mediator participation in risk analysis. These strategies are not typical in the more traditional/historic approach to mediation in which mediation is scheduled based on a scheduling order, mediation statements are sent to the mediator roughly a week before the scheduled mediation (and sometimes not even shared with anyone other than the mediator), and the parties speak with the mediator for the first time on the day of the mediation.
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Douglas J. Mackin, Cozen O’ConnorMr. Mackin may be contacted at
dmackin@cozen.com
Pennsylvania Federal Court Finds No Coverage For Hacking Claim Under E&O Policy
July 25, 2022 —
Celestine Montague & Paul A. Briganti - White and Williams LLPOn June 9, 2022, the U.S. District Court for the Eastern District of Pennsylvania held, on summary judgment, that an insured was not entitled to coverage under a Professional Errors and Omissions (E&O) policy for loss allegedly resulting from a hacking incident. See Construction Fin. Admin. Servs., Inc. v. Federal Ins. Co., No. 19-0020, 2022 U.S. Dist. LEXIS 103042 (E.D. Pa. June 9, 2022). Applying North Carolina and Pennsylvania law, the court reasoned that: (1) coverage was barred by the policy’s unauthorized computer access, or “breach,” exclusions; and (2) the insured violated a condition in the policy that required the insurer’s consent to settlements and the violation prejudiced the insurer.
The insured, Construction Financial Administration Services, Inc. (CFAS), was a third-party fund administrator for construction contractors. In April 2018, the CFAS received email requests from what it believed to be one of its clients, SWF Constructors (SWF), to disburse $1.3 million from an SWF account to a foreign company. CFAS authorized the payments, despite not having received a copy of any executed agreement between SWF and the foreign company. After the funds were disbursed, SWF advised that it had not authorized or requested the payments to the foreign company. In response, CFAS placed approximately $1.2 million of recovered and borrowed funds into the SWF disbursement account. SWF then sent a letter advising CFAS that the requests from the foreign company did not include documentation required under the contract between SWF and CFAS. It was later determined that the emails had been initiated by a fraudster who had gained unauthorized access to the sender’s email account.
Reprinted courtesy of
Celestine Montague, White and Williams LLP and
Paul A. Briganti, White and Williams LLP
Ms. Montague may be contacted at montaguec@whiteandwilliams.com
Mr. Briganti may be contacted at brigantip@whiteandwilliams.com
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BHA Sponsors 28th Annual Construction Law Conference in San Antonio, TX
January 07, 2015 —
Beverley BevenFlorez-CDJ STAFFBert L. Howe & Associates, Inc. is proud to be joining with the State Bar of Texas, Construction Law Section, as a sponsor and exhibitor at the 28th Annual Construction Law Conference to be held March 5-6, 2015 at the San Antonio Marriott Rivercenter.
With offices in San Antonio and Houston, Bert L. Howe & Associates, Inc. (BHA) offers the experience of over 20 years of service to carriers, defense counsel, and insurance professionals as designated experts in over 5,000 cases. BHA’s staff encompasses a broad range of licensed and credentialed experts in the areas of general contracting and specialty trades, as well as architects, and both civil and structural engineers, and has provided services on behalf of developers, general contractors and sub-contractors.
BHA’s experience covers the full range of construction defect litigation, including single and multi-family residential (including high-rise), institutional (schools, hospitals and government buildings), commercial, and industrial claims. BHA specializes in coverage, exposure, and delay claim analysis as well.
Download the seminar brochure and register for the event...
For more information on Bert L. Howe & Associates, Inc., you may contact Don MacGregor at dmac@berthowe.com or 210.441.8375.
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Connecticut Court Clarifies a Limit on Payment Bond Claims for Public Projects
May 15, 2023 —
Bill Wilson - Construction Law ZoneIn All Seasons Landscaping, Inc. v. Travelers Casualty & Surety Co., No. DBD-CV21-6039074-S, 2022 WL 1135703 (Conn. Super. Ct. April 4, 2022) the plaintiff, a subcontractor on a state project, commenced a lawsuit against the surety who issued a payment bond on the project two years after the subcontractor last performed any original contract work on the project. The defendant surety moved to dismiss the action based on the one-year statute of limitation in Connecticut General Statute § 49-42. The plaintiff countered that it complied with that deadline because it also performed warranty inspection work after the contract was completed and within the limitation period in section 49-42. The issue of whether warranty work or minor corrective work can extend the limitations period in section 49-42 had not previously been addressed by a Connecticut court.
Section 49-42(b) governs the limitation period on payment bond claims on public projects. It provides in relevant part that “no … suit may be commenced after the expiration of one year after the last date that materials were supplied or any work was performed by the claimant.” Section 49-42 provides no guidance on what “materials were supplied or any work was performed” by the claimant means, nor is there any direct appellate-level authority in Connecticut on this issue. What is clear under well-established law in Connecticut is that the time limit within which suit on a payment bond must be commenced under Section 49-42 is not only a statute of limitation but a jurisdictional requirement establishing a condition precedent to maintenance of the action and such limit is strictly enforced. If a plaintiff cannot prove its suit was initiated within this time constraint, the matter will be dismissed by the court as untimely.
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
Florida “Property Damage” caused by an “Occurrence” and “Your Work” Exclusion
July 23, 2014 —
Scott Patterson - CD CoverageIn J.B.D. Construction, Inc. v. Mid-Continent Casualty Co., * Fed.Appx. *, 2014 WL 3377690 (11th Cir. 2014), claimant property owner Sun City contracted with insured general contractor J.B.D. for the construction of a fitness center. The fitness center was to be physically connected to an existing Sun City building. J.B.D. utilized subcontractors for some of the work. Shortly after completion, leaks developed in the fitness center’s roof, windows and doors which J.B.D. attempted to fix. After Sun City refused to make the final contract payment, J.B.D. sued Sun City for contract amounts owed. Sun City counterclaimed for the construction defects, alleged damage to the fitness center and other property. J.B.D. tendered defense of the counterclaim to its CGL insurer Mid-Continent. After Mid-Continent failed to agree to defend, J.B.D. settled with Sun City, paying Sun City $182K. Following several demands from J.B.D. for reimbursement of defense costs and the settlement amount, Mid-Continent tendered the defense costs minus a deductible. J.B.D. then sued Mid-Continent for breach of duties to defend and indemnify. On cross motions for summary judgment, the federal district trial court entered judgment for Mid-Continent, finding no duties to defend or indemnify. On appeal, the Eleventh Circuit reversed on the duty to defend while affirming on the duty to indemnify. Applying Florida law, the court first held that the defective work, including the defective installation of the fitness center’s windows, doors, and roof, did not constitute “property damage.” Thus, the costs to repair or replace the defective work did not constitute damages because of “property damage.” The court next held that, while damage to other portions of the fitness center would constitute “property damage” caused by an “occurrence,” all such “property damage” fell within the “your work” exclusion.
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Scott Patterson, CD Coverage
Texas and Georgia Are Paying the Price for Sprawl
March 15, 2021 —
Conor Sen - BloombergCities in the Sun Belt South have been needing a more modern development model for a while. That's created tensions, both economically and politically, that have only accelerated during the past year's pandemic. My colleague Noah Smith wrote a column about this specific to Texas, but it's broader than any one state and it's useful to think about how we got to this point and why these issues are relevant in 2021 in a way they weren't a generation ago.
There's an institutional reluctance to pivot away from the Sun Belt model defined by low taxes and cheap land because of how successful it was for key constituencies for decades. Coming out of World War II, there was a scramble nationwide to build more housing in response to soldiers coming home from war and pent-up demand for family formation.
The combination of the automobile as the nation's now-dominant form of transportation and the passage of the Federal Highway Act of 1956 made building out the suburbs of less-populated southern states an irresistible growth model for politicians and economic development interests alike. If it required tax breaks and fewer regulations to lure jobs and people from northern states to accelerate the process, so be it.
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Conor Sen, BloombergMr. Sen may be contacted at
csen9@bloomberg.net
Construction Litigation Roundup: “The Jury Is Still Out”
October 30, 2023 —
Daniel Lund III - Lexology“The Seventh Amendment guarantees the right to a trial by jury for a legal claim in a civil action.” So, isn’t the law, well, the law?
Well, perhaps.
Some axioms to remember in contracting are that parties are typically able to agree in a contract to anything that is lawful, and that all such lawful agreements essentially become the “law” between the parties. It is on these principles that courts issue jurisprudence which becomes binding on future litigants – for example, concerning waiver of any right to trial by jury.
Hence, when a second-tier subcontractor on a federal project sought a jury for a lawsuit it had against a general contractor’s sureties, the sub was successfully rebuffed by the sureties based upon a waiver to trial by jury contained in the relevant subcontract. The court noted various matters to be considered in connection with the generally enforceable jury waiver – including the conspicuousness of the waiver (and, therefore, whether the subcontractor “knowingly” agreed to the waiver), as well as the relative bargaining power of the parties to the agreement (here, the sub was self-proclaimed to be a “leader in the construction contracting field”) – and affirmed the legality of the waiver.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
