Partners Jeremy S. Macklin and Mark F. Wolfe Secure Seventh Circuit Win for Insurer Client in Late Notice Dispute
November 12, 2019 —
Jeremy S. Macklin & Mark F. Wolfe - Traub Lieberman PerspectivesIn a written decision dated August 12, 2019, authored by Chief Judge Diane P. Wood, the U.S. Court of Appeals for the Seventh Circuit ruled in favor of Traub Lieberman’s insurer client, affirming the District Court’s grant of summary judgment in the insurer’s favor. Partners, Jeremy S. Macklin and Mark F. Wolfe, represented the insurer client in the District Court and before the Seventh Circuit. Macklin argued the case before the Seventh Circuit on behalf of the insurer on May 28, 2019.
The insurer client issued an excess liability policy to Deerfield Construction, a telecommunications construction company, which incorporated the notice requirements of the primary liability insurance policy issued by American States Insurance Company. The insured’s employee was involved in an automobile accident in 2008, during the effective dates of the excess liability policy. A lawsuit arising from the accident was filed and served in 2009. While Deerfield Construction, through its retained insurance intermediary, provided immediate notice of the accident and lawsuit to the primary liability insurer, the insurer client did not receive notice of either the accident or the lawsuit from any source until December 2014, approximately six weeks before trial.
Following a $2.3 million judgment, the insurer client filed a complaint for declaratory judgment seeking a finding that Deerfield Construction materially breached the excess liability policy by not providing reasonable notice of the accident or the lawsuit, as required by the policy. The District Court found that the notice given to the insurer client was unreasonable as a matter of law. The District Court rejected Deerfield Construction’s argument that an insurance broker involved in the purchase of the excess liability policy, Arthur J. Gallagher, was the insurer client’s apparent agent for purposes of accepting notice. The District Court also rejected Deerfield Construction’s argument that the insurer client’s acts of requesting discovery, reviewing trial reports, and participating in settlement discussions raised equitable estoppel concerns.
Reprinted courtesy of
Jeremy S. Macklin, Traub Lieberman and
Mark F. Wolfe, Traub Lieberman
Mr. Macklin may be contacted at jmacklin@tlsslaw.com
Mr. Wolfe may be contacted at mwolfe@tlsslaw.com
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Road Project to Improve Access to Peru's Machu Picchu Site
June 04, 2024 —
C.J. Schexnayder - Engineering News-RecordReaching the Incan citadel of Machu Picchu is historically famous for its difficulty. The site’s remote location was a factor in the Spanish conquistadors overlooking it as they swept Peru for its riches. Archaeologist and politician Hiram Bingham had been seeking another “lost” Incan city when he happened across it in 1911.
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C.J. Schexnayder, Engineering News-Record
Mr. Schexnayder may be contacted at schexnayderc@enr.com
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Chinese Demand Rush for Australia Homes to Stay, Ausin Says
August 06, 2014 —
Nichola Saminather – BloombergAusin Group (Finance) Pty, which offers property and mortgage broking in Australia to Chinese buyers, expects to sell two-thirds more homes and to double the amount of loans it arranges as demand from the mainland surges.
The company forecasts A$1.5 billion ($1.4 billion) in sales of new residential properties in the year ending June 30, compared with A$900 million over the previous 12 months, Sydney-based Managing Director Joseph Zaja said in an interview yesterday. The value of mortgages the closely held company arranges through Australian banks is expected to climb to A$500 million in the 2015 calendar year, he said.
Ausin is benefiting from surging demand from China, where the housing market is faltering. Chinese purchasers overtook Americans to become the biggest buyers of real estate in Australia in the 12 months through June 2013, plowing A$5.9 billion into commercial and residential property, a 42 percent increase from the previous 12 months.
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Nichola Saminather, BloombergMs. Saminather may be contacted at
nsaminather1@bloomberg.net
Five Issues to Consider in Government Contracting (Or Any Contracting!)
September 02, 2024 —
David Adelstein - Florida Construction Legal UpdatesThe appeal of Appeals of – Konecranes Nuclear Equipment & Services, LLC, ASBCA 62797, 2024 WL 2698011 (May 7, 2024) raises interesting, but important, issues that should be considered. In this case, the government (in a supply contract) procured four portal cranes from the claimant. After an initial test of one of the cranes failed, the government refused to accept delivery even after the issue was addressed by the claimant. The government did not accept the manner in which the claimant addressed the issue and would only accept cranes if the claimant employed “an unnecessary alternative solution [that] caused further delay and increased [claimant’s] costs.” On appeal, it was determined the government’s decision to delay delivery based on its demand for the alternative solution was not justified, i.e., constituted a breach of contract. Below are five issues of consideration in government contracting, or, for that matter, any contracting.
Issue #1- Patently Ambiguous Specifications
The government argued that the specifications were patently ambiguous and because the claimant failed to inquire regarding the ambiguous specifications prior to performance, its interpretation of the ambiguous specifications should govern. The contractor countered that the specifications were unambiguous and it met the specifications.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Vallagio v. Metropolitan Homes: Colorado Supreme Court Upholds Declarant Consent Provision to Amend Arbitration Out of Declarations
June 15, 2017 —
Jean Meyer - Colorado Construction LitigationOn June 5, 2017, the Colorado Supreme Court announced the Vallagio at Inverness Residential Con. Ass’n v. Metro. Homes, Inc., No. 15SC508, 2017 CO 69 (Colo. June 5, 2017) decision. In short, the Colorado Supreme Court upheld the validity of declarant “consent-to-amend” provisions and expressly held that claims under the Colorado Consumer Protection Act are arbitrable.
By way of background, the Vallagio at Inverness Residential Condominiums were developed by Metro Inverness, LLC, (“Declarant”) which also served as the declarant for its homeowners association. Metropolitan Homes was Metro Inverness’ manager and the general contractor on the project. Greg Krause and Peter Kudla served as declarant-appointed members of the Association’s board during the period of declarant control.
When it set up the Association, the Declarant included within the Association’s declaration a mandatory arbitration provision specifically for construction defect claims. This provision stated that it “shall not ever be amended without the written consent of Declarant and without regard to whether Declarant owns any portion of the Real Estate at the time of the amendment.”
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
The Basics of Subcontractor Defaults – Key Considerations
February 15, 2021 —
Gerard J. Onorata - Peckar & Abramson, P.C.The success of general contractors in completing a construction project is often dependent upon the performance of their subcontractors. General contractors have frequently said exactly this. Traditionally, the key subcontractors on a project are the electrical, plumbing, HVAC and structural steel subs. Due to the fundamental nature of the work performed by these trades, the risk of defaulting and terminating one or more of them is likely to have a substantial impact on the project, more so than with the trade contractors that perform their work after a building is made weather tight (i.e., drywall, tile, painting).
Most general contractors have, over a period of years, established longstanding relationships with certain subcontractors that they have come to depend upon. The risk of having to default and terminate one of these subs is minimal. Nevertheless, there will inevitably arise occasions when even a once reliable subcontractor fails to perform and it becomes necessary to invoke the remedies of default and termination. Areas ripe for controversy with subcontractors that often can lead to default and termination often involve disputes over change orders and the scope of work, the installation of defective work and the back-charges that ensue therefrom, and, to a lesser extent, conflicts that arise from ambiguous plans and specifications and the extra work and delays caused by the discovery of unforeseen site conditions.
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Gerard J. Onorata, Peckar & Abramson, P.C.Mr. Onorata may be contacted at
gonorata@pecklaw.com
'Perfect Storm' Caused Fractures at San Francisco Transit Hub
January 08, 2019 —
Nadine M. Post - Engineering News-RecordThe underlying causes of the trouble at San Francisco’s 4.5-block-long Salesforce Transit Center are coming into focus. A combination of low fracture toughness deep inside thick steel plates, cracks present as a consequence of normal steel fabrication and stress levels from loads, which are a function of design, apparently caused brittle fractures in the bottom flanges of the center's twin built-up plate girders that span 80 ft across Fremont Street.
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Nadine M. Post, ENRMs. Post may be contacted at
postn@enr.com
Checking the Status of your Contractor License During Contract Work is a Necessity: The Expanded “Substantial Compliance” under B&P 7031 is Here
June 05, 2017 —
Ivo G. Daniele – Newmeyer & Dillion LLP News AlertIt is paramount that a contractor diligently maintains its license prior to and during the performance of any contract work. Failure to do so could result in barring a contractor from receiving payment and/or disgorgement of profits received under the construction contract.
California Business and Professions Code section 7031 is part of the Contractors State License Law (Business & Prof. section 700 et seq.), and is both feared and loathed by all contractors performing work in the state of California. This draconian statute is known as the “Shield” and was enacted over 70 years ago for the singular purpose to bar all actions by contractors seeking compensation for unlicensed contract work – even precluding a contractor from enforcing his or her mechanic’s lien rights. However, a contractor could potentially avoid the harshness of B&P 7031 by establishing that he or she had substantially complied with the appropriate licensing requirements.
SUBSTANTIAL COMPLIANCE WITH LICENSE REQUIREMENTS PRIOR TO 2017 AMENDMENT
The substantial compliance exception is found in section B&P 7031(e), which authorizes the court to determine that there has been substantial compliance with licensure requirements, if the contractor has shown at an evidentiary hearing that he or she engaged in the unlicensed work had:
- Been duly licensed as a contractor in this state prior to the performance of the act or contract;
- Acted reasonably and in good faith to maintain the license;
- Did not know or reasonably should not have known that he or she was not licensed when he or she performed the work; and
- Acted promptly and in good faith to reinstate the license once it learned the license had lapsed.
Although not impossible, satisfying all four requirements of the exception was challenging for the contractor, specifically, requirement # (3) – the lack of knowledge that he or she was unlicensed during performance of work.
SUBSTANTIAL COMPLIANCE POST 2017
Fortunately, Governor Brown heard the collective cry for relief and signed Assembly Bill 1793 (“AB 1793”) into law. The new bill revises the criteria for the court to determine if a contractor is in substantial compliance with the licensing requirements by deleting requirement # (3) in its entirety and modestly amending requirement # (4) to require the contractor to act promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure.
As a result, the substantial compliance exception under B&P 7031(e) reads as follows:
(e) The judicial doctrine of substantial compliance shall not apply under this section where the person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor
(1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure.
This new legislation has tempered the burden of proof born by the contractor in establishing substantial compliance, although be it minor in its modification, the fact of the matter remains the same – be diligent in maintaining your license during all phases of contract work.
Ivo Daniele is a seasoned associate in the Walnut Creek office focusing his practice on commercial transactions and business and construction litigation. For questions regarding California Business and Professions Code section 7031, please feel free to contact Ivo Daniele at (925) 988-3222 or ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For more than 30 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, employment, real estate, construction and insurance law, 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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