FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Broker Not Liable for Failure to Reveal Insurer's Insolvency After Policy Issued

March 28, 2012 — Tred R. Eyerly - Insurance Law Hawaii

Faced with an issue of first impression in California, the Court of Appeals held that a broker was not liable for failing to reveal the insurer's insolvency occurring after issuance of the policy. Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Ins. Serv. West, Inc., 2012 Cal. App. LEXIS 232 (Cal. Ct. App. Feb. 28, 2012).



The developer for a construction project in downtown San Diego retained Aon as its broker to secure coverage. Aon procured a general liability policy for the project with Legion Indemnity Company. Legion was solvent when it issued the policy.



The developer hired Pacific Rim (“PacRim”) as one of several subcontractors on the project. The parties entered into a contract in which the developer agreed to provide PacRim with liability insurance through an Owner Controlled Insurance Program (“OCIP”). Aon was not a party to the contract and PacRim was never its client. PacRim, however, enrolled in the OCIP by contacting Aon and providing all necessary paperwork.

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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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Insurer Must Pay for Matching Siding of Insured's Buildings

December 02, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The Seventh Circuit found that the insurer was obligated to pay for siding of a building that was not damaged by hail so that it matched the replaced damaged portions of the siding. Windridge of Naperville Condominium Association v. Philadelphia Indem. Ins. Co., 2019 U.S. App. 23607 (7th Cir. Aug. 7, 2019). A hail and wind storm damaged buildings owned by Windridge. The storm physically damaged the aluminum siding on the buildings' sought and west sides. Philadelphia Indemnity, Windridge's insurer, contended that it was only required to replace the siding on those sides. Windridge argued that replacement siding that matched the undamaged north and east elevations was no longer available, so Philadelphia had to replace the siding on all four sides of the buildings to that all of the siding matched. Windridge sued and moved for summary judgment. The district court ruled that matching was required. The only sensible result was to treat the damage as having occurred to the building's siding as a whole. The policy was a replacement-cost policy. Philadelphia promised to "pay for direct physical 'loss' to 'Covered Property' caused by or resulting from" the storm, with the amount of loss being "the cost to replace the lost or damaged property with other property . . . of comparable material and quality . . . and . . . used for the same purpose." The loss payment provision offered four different measures for loss, leaving Philadelphia free to choose the least expensive: (1) pay the value of the lost or damaged property; (2) pay the cost of repairing or replacing the lost or damaged property; (3) take all or any part of the property at an agreed or appraised value; or (4) repair, rebuild or replace the property with other property of like kind and quality. 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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Employees Versus Independent Contractors

February 23, 2017 — Chadd Reynolds – Autry, Hanrahan, Hall & Cook, LLP
Are the workers you employ on the job site considered employees or independent contractors? This is an important distinction that contractors and subcontractors must understand for many purposes, including federal taxes. The classification of your workers can affect their federal income, social security, and Medicare taxes, and the type of benefits they can receive. When determining whether workers should be classified as employees or independent contractors, courts generally look at three key factors: behavioral control, financial control, and the relationship of the parties. Behavior Control Behavior control concerns the business’s right to direct or control how the worker does its work. A worker is likely to be considered an employee when the business maintains behavior control. Such control can be exercised by giving instructions. This would include instructions on how, when, or where to do the work, what tools or equipment to use, who to hire to help with the work, or where to purchase the supplies to be used. Behavioral control can also occur through training. If the business provides training to tell the worker to do the work in a certain manner then the worker is more likely to be an employee. Read the court decision
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Reprinted courtesy of Chadd Reynolds, Autry, Hanrahan, Hall & Cook, LLP
Mr. Reynolds may be contacted at reynolds@ahclaw.com

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Naughty or Nice. Contractor Receives Two Lumps of Coal in Administrative Dispute

January 21, 2019 — Garret Murai - California Construction Law Blog
So, how were your holidays? Hopefully you were good and didn’t receive a lump of coal from Santa. For one contractor, 2018, wasn’t such a good year. And as its name, Black Diamond, suggests, it did indeed receive a black diamond from the courts. Actually, two of them. Contractors’ State License Board v. Superior Court (Black Diamond No. 1) In Contractors’ State License Board v. Superior Court, Court of Appeals for the First District, Case No. 1154476 (October 11, 2018), the Contractors State License Board (“CSLB”) brought disciplinary proceedings against Black Diamond Electric, Inc. (“Black Diamond”), a C-10 Electrical Contractor, for violating: (1) Labor Code section 108.2, which requires individuals performing work as electricians to be certified; and (2) Labor Code section 108.4, which permits uncertified persons seeking on-the-job experience to perform electrical work so long as they are under the direct supervision of a certified electrician. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen
Mr. Murai may be contacted at gmurai@wendel.com

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Home Building Up in Kansas City

November 20, 2013 — CDJ STAFF
It’s been a good year for home builders in Kansas City, Missouri. In fact, it’s the best year since 2007. The total number of home permits issued through October exceeds the number issued in 2012 by 164, having reached 3,463. Sara Corless, executive vice president of the Builders Association, focused more on the growth, though she noted that some builders were hoping the year’s total would exceed 4,000, which she described as “a psychological victory at a minimum.” The Kansas City metropolitan area lead the state in the number of building permits issued. Read the court decision
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State Farm Too Quick To Deny Coverage, Court Rules

July 22, 2011 — CDJ STAFF

On July 13, 2011, Judge Sarah S. Vance of the US District Court issued a rule in the case of Travelers Cas. & Surety Co. of Am. v. Univ. Facilities, Inc. (E.D. La., 2011). In this case, Stanley Smith Drywall was contracted by Capstone Building Corporation to “perform undisclosed work at the facility believed to involve the installation of drywall.” The project involved the design and construction of student residences for the Southeastern Louisiana University in Hammond, Louisiana. In May, 2009, University Facilities, Inc. (UFI) sued Capstone Development Corporation and Capstone On-Campus Management.



State Farm insured Stanley Smith Drywall and they sought a declaration that they have no duty: “(1) to insure Stanley Smith or CBC, or (2) to defend or indemnify any party against UFI's claims in the pending arbitration.” State Farm contends “(1) there is no "occurrence" to trigger coverage under the policy; (2) only breach of contract claims are asserted; (3) there is no property damage alleged; and (4) various coverage limitations and exclusions apply to prevent coverage.’



The court concluded that “whether State Farm has a duty to defend in the arbitration must be determined by considering the claims asserted in the arbitration.” However, the arbitration claims were not made part of the record. There, “, the Court cannot determine as a matter of law State Farm's duty to defend on the present record.” The same was true of State Farm’s duty to indemnify. “Stanley Smith and CBC assert that State Farm's motion for summary judgment was filed before any discovery was conducted in the arbitration proceeding or in this case. The Court finds that State Farm has failed to develop the record sufficiently to establish that there is no genuine issue of material fact as to its duty to indemnify Stanley Smith or CBC in the arbitration.’



The court denied State Farm’s motion for a summary judgment on its duty to defend and indemnify.



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California Supreme Court to Examine Arbitration Provisions in Several Upcoming Cases

December 09, 2011 — CDJ STAFF

Glen C. Hansen, writing on Abbott & Kinderman’s Land Use Law Blog looks at several cases pending before the California Supreme Court which ask if a developer can insist on arbitration of construction defect claims, based on provision in the CC&Rs. Currently, there is a split of opinions in the California appeals courts on the issue.

Four of the cases are in California’s Fourth Appellate District. In the earliest case, Villa Milano Homeowners Association v. Il Davorge, from 2000, the court concluded that the arbitration clause was sufficient to require that construction defect claims undergo arbitration. However, the Fourth Appellate District Court concluded in three later cases that the arbitration clauses did not allow the developer to compel arbitration. In two cases, argued in 2008 and 2010, the court concluded that to do otherwise would deprive the homeowners of their right to a jury trial. In the most recent case, Villa Vicenza Homeowners Association v. Nobel Court Development, the court decided that the CC&Rs did not create contractual rights for the developer.

The Second Appellate District Court came to a similar decision in Promenade at Playa Vista Homeowners Association v. Western Pacific Housing, Inc. In their decision, the court noted that CC&Rs could be enforced by homeowners and homeowners associations, but not developers.

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Water Seepage, Ensuing Mold Damage Covered by Homeowner's Policy

August 13, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The appellate court reversed the trial court's determination that the policy covered only mold damage, but not damage caused by water seepage. Henderson v. Georgia Farm Bureau Mut. Ins. Co., 2014 Ga. App. LEXIS 539 (Ga. Ct. App. July 16, 2014). The homeowner's policy covered losses caused by constant seepage or leakage of water or the presence of condensation or moisture over a period of time. The insureds also paid for additional coverage for "ensuing mold . . . caused by or resulting from" one of the covered risks, including water seepage. Ms. Henderson discovered a puddle of water in her kitchen and contacted Georgia Farm Bureau. The insurer's contractor tore out a section of the floor, but found no other problems of water seepage. Later, the Hendersons removed another part of the floor and discovered standing water and black mold underneath. The Hendersons had to vacate their house for one year. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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