Tesla’s Solar Roof Pricing Is Cheap Enough to Catch Fire
May 10, 2017 —
Tom Randall - BloombergTesla Inc. has begun taking orders for its remarkable solar roof tiles to be delivered by summer at a price point that could be transformative for the U.S. solar market.
Tesla will begin with production of two of the four styles of solar tile unveiled in October: a smooth glass and a textured glass version. The Tuscan and French slate tiles will be available by the end of this year. Roofing a 2,000 square-foot home in New York state—with 40 percent coverage of active solar tiles and battery backup for night-time use—would cost about $50,000 after federal tax credits and generate $64,000 in energy over 30 years, according to Tesla.
The warranty is for the lifetime of your house.
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Tom Randall, Bloomberg
Fannie Mae Says Millennials Are Finally Leaving Their Parents' Basements
December 17, 2015 —
Julie Verhage – BloombergParents, rejoice. Your offspring may finally be moving out of the family basement.
A new report (PDF) from Fannie Mae, the U.S. government-backed mortgage company, suggests that the millennial generation is getting a move on.
"According to the ACS [Census Bureau’s American Community Survey], the number of homeowners aged 25-34 fell by more than 250,000 in each year between 2007 and 2012, but has declined by less than 100,000 annually since then," Fannie Mae said. "In fact, the decline between 2013 and 2014 was statistically insignificant, the first indication of stability in the number of young homeowners since the onset of the Great Recession." So while the number of homeowners in that age range is still on the decline, the trend looks poised for a reversal, and Fannie Mae said it won't take much to see positive growth in millennial homeownership in the near future.
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Julie Verhage, Bloomberg
What if the "Your Work" Exclusion is Inapplicable? ISO Classification and Construction Defect Claims.
February 14, 2023 —
David Humphreys - Carson Law Group, PLLCThis article was first published by the National Association of Home Builders (NAHB) on their NAHBNow blog
One of the risks faced by a residential builder is that, following completion of construction, the homeowner may assert a claim against the builder for damage to the home caused by an alleged construction defect. One of the ways a builder manages the risk of such construction defect claims is by purchasing commercial general liability (“CGL”) insurance.
A builder’s CGL policy covers those sums the builder is legally obligated to pay as damages because of bodily injury or property damage caused by an “occurrence,” that is, damage that is accidental rather than being expected or intended by the builder, so long as the claim does not fall within any of the policy’s several “exclusions” from coverage.
When faced with a construction defect lawsuit, our builder clients are often surprised—and dismayed—when their CGL insurer denies coverage and refuses to defend the builder. However, builders shouldn’t take their insurer’s denial of coverage at face value. This article discusses a new argument we recently discovered that has been a game-changer for our builder clients who were denied coverage in construction defect cases.
Whether coverage exists always depends on the specific language of the particular CGL policy, and courts generally construe exclusions against insurers. This allows experienced coverage attorneys to, at times, successfully challenge declinations of coverage and, at a minimum, convince insurers to pay for the builder’s defense.
A typical CGL policy provides products-completed operations coverage, which is sought by businesses that face potential liability arising out of the products that they have sold or operations that they have completed. Products-completed operations coverage allows builders to obtain many years of coverage for a completed project. Over the years, insurers have added to their policies modifications and exclusions that limit their exposure for claims that fall under that coverage.
Exclusion (l) or the “your work” exclusion, will often exclude coverage for a latent defect claim against the builder. A standard “your work” exclusion provides:
This insurance does not apply to: . . . “[p]roperty damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard.”
This “your work” and similar exclusions are designed to limit coverage for business risks that are within the contractor’s own control; e.g., a claim that the contractor caused damage to the contractor’s own work. These exclusions apply both to ongoing and completed projects, which can leave a builder unprotected from lawsuits for years after a project is completed.
However, builders who are classified on the declarations page with Code 91580 Contractors— Executive Supervisors or Executive Superintendents, may not be subject to the “your work” exclusion. 91580 is a common classification assigned to builders during insurance underwriting. This classification falls into what is referred to as “dagger class” or “plus sign class,” which indicates that Products and/or Completed Operations coverage is
included as part of and not separate from the Premises/Operations coverage (emphasis added).
It has been noted that dagger” and “plus sign” classifications create confusion because of the seeming contradiction between policy wording and coverage rules.* The CGL policy seems to expressly exclude products and/or completed operations losses for “dagger” or “plus sign” classes. In the definitions section we find the following:
“Products-completed operations hazard”: . . .b. Does not Include “bodily Injury” or “property damage” arising out of:. . . (3) Products or operations for which the classification, listed In the Declarations or in a policy schedule, states that products- completed operations are subject to the General Aggregate Limit.”
This apparent exclusionary language, however, must be read in conjunction with the Insurance Services Office’s (ISO) Rule 25.F.1.:
Rule 25. CLASSIFICATIONS
F. Symbols
1. Plus Sign
A plus sign when shown in the Premium Base column under General Liability insurance in the Classification Table - means that coverage for Products and/or Completed Operations is included in the Premises/Operations coverage at no additional premium charge. When this situation applies, the classification described in the policy schedule or Declarations must state that:
“Products-completed operations are subject to the General Aggregate Limit” to provide Products and/or Completed Operations coverage(s).
When read together then, the exclusionary wording in the policy definition removes any product or operation loss subject to the “dagger” or “plus sign” classification from the definition of Products Completed Operations Hazard. Under the dagger or plus sign classification of Rule 25, coverage for products and/or operations is included in the premises operations coverage. Consequently, a loss can no longer be defined as a product completed loss, and as a result it is no longer subject to the “your work” exclusion.
Recall that the standard “your work” exclusion quoted above excludes coverage for “property damage” to “your work” “arising out of it or any part of it
and included in the “products-completed operations hazard”.” Here, we emphasize “and” because the “your work” exclusion applies only to property damage that is also included in the “products-completed operations hazard.” Since property damage claims arising under “plus sign” classifications are expressly excluded from the “products-completed operations hazard” (they are included in the premises/operations coverage) the “your work” exclusion simply does not apply. This means that, if your CGL insurer denies your construction defect claim based on the “your work” exclusion, do what the title of this article suggests: Check your ISO classification! If 91580 “Executive Supervisors or Executive Superintendents” is listed on your Declarations page, you may be in luck.
This new ISO classification-based coverage argument will likely also apply to other exclusions and endorsements that CGL insurers routinely rely on in denying coverage in construction defect cases. We recently successfully challenged a coverage denial based on the following “prior work” exclusionary endorsement:
”This insurance does not apply to ‘your products’ or ‘your work’ completed prior to” a certain date listed in the endorsement. . .
“Specifically, this insurance does not apply to. . . “property damage”. . . included in the ‘products-completed operations hazard’ and arising out of. . . ‘your work’ performed by or on behalf of you prior to the date shown above.”
Again, this endorsement incorporates the “products-completed operations hazard,” which allowed us to successfully argue that the exclusion was inapplicable to a builder classified as a 91580 “Executive Supervisor or Executive Superintendent.”
To our knowledge, this new ISO classification-based coverage argument has not yet been addressed by a court. Our recent successes with it have concluded with favorable settlements for our clients. Accordingly, for now, the ISO classification-based argument is a powerful new tool to challenge denials of coverage in construction defect cases where the builder is classified under 91580 “Executive Supervisors or Executive Superintendents.”
David Humphreys is a Partner at Carson Law Group, PLLC, and has been representing construction contractors, subcontractors, and owners for more than two decades in Mississippi and throughout the Southeast.
*See “Dagger” or Plus Symbol Classes: What They Mean, Chris Boggs - Virtual University | “Dagger” or Plus Symbol Classes: What They Mean) (independentagent.com)
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Breach of Fiduciary Duty Claim Against Insurer Survives Motion to Dismiss
June 10, 2015 —
Tred R. Eyerly – Insurance Law HawaiiWhile some of their claims were dismissed, plaintiffs' breach of fiduciary duty survived the insurer's motion to dismiss. Senft v. Fireman's Fund Ins. Co., 2015 U.S. Dist. LEXIS 61870 (D. N.J. May 12, 2015).
Plaintiffs' waterfront home was insured by Fireman's Fund. Plaintiffs alleged that the broker represented that the policy would provide (1) coverage in the event of a hurricane,(2) the "highest level of protection" offered by Fireman's Fund, and (3) "exceptional" services in the event of a catastrophe. The policy included a 2% hurricane deductible because of the home's proximity to the ocean.
Hurricane Sandy badly damaged plaintiffs' home. Plaintiffs alleged that the winds from Sandy battered their home long before the storm surge reached the structure.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Revamp to Nationwide Permits Impacting Oil and Gas Pipeline, Utility and Telecom Line Work
March 29, 2021 —
Alex P. Prochaska, Jones Walker LLP - ConsensusDocsTo avoid delay costs and penalties, contractors involved in pipeline and utilities construction maintenance, repair and removal need to understand how the 43 year old Nationwide Permit (NWP) regime has changed specific to the NWP 12 and what is now required for compliance. This change is important for contractors who construct, maintain, or repair pipelines that cross or impact waters of the United States, including wetlands. NWPs are a useful tool to streamline construction of a pipeline project, but it is important for contractors to know when certain terms and conditions still apply to the particular NWP and those that have been eliminated.
On January 13, 2021, the United States Army Corps of Engineers (the Corps) published a final rule that reissued and modified twelve existing NWPs and issued four new NWPs that will take effect on March 15, 2021.1 The remaining 40 NWPs that were not reissued or modified under this rule will continue under the general conditions and definitions of the January 6, 2017 final rule.
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Alex P. Prochaska, Jones Walker LLPMr. Prochaska may be contacted at
aprochaska@joneswalker.com
Termination of Construction Contracts
November 30, 2020 —
Stuart Rosen - Construction ExecutiveLately, in view of the COVID-19 pandemic, there is a heightened concern that some construction projects will not proceed as planned. Therefore, it is important to review each party’s right to terminate a construction contract and to examine some of the resulting consequences.
While the parties to a construction contract can, as always, agree to other mutually acceptable terms and provisions, in broad terms, a typical construction contract includes four triggering events that can lead to termination.
First, an owner can terminate a construction contract if the contractor defaults and thereafter fails to cure such default, which may include, without limitation, the failure to remediate deficient work, the failure to meet the construction schedule, the failure to pay subcontractors and the failure to comply with applicable law. A contractor must be mindful of the fact that in the case of such termination by the owner for cause, the vast majority of construction contracts provide that the contractor will not be entitled to receive any further payment for work performed by the contractor until the work is finished.
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Stuart Rosen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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srosen@proskauer.com
Some Insurers Dismissed, Others Are Not in Claims for Faulty Workmanship
February 18, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe insured Developer survived a motion to dismiss by one of several carriers who were asked to defend against claims for faulty workmanship. East 111 Assoc. LLC v. RLI Ins. Co., 2019 N.Y. Misc. LEXIS 5331 (Oct. 4, 2019).
Developers sponsored a residential condominium project and sold all units. The owners subsequently sought damages for $881,450 for alleged design and construction defects, and asserting causes of action for, among other things, breach of contract, specific performance and negligence. The underlying action settled for $350,000. Developers sought coverage from its insurers.
The Developers sued the carriers for a declaratory judgment that they were entitled to a defense. Developers had a CGL policy issued by Mt. Hawley. Developers were also additional insureds in policies issued to subcontractors by James River, Admiral and Selective. The insurers moved to dismiss.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Slump in U.S. Housing Starts Led by Multifamily: Economy
September 24, 2014 —
Jeanna Smialek – BloombergHousing starts slumped in August from the highest level in almost seven years, reflecting a setback in multifamily projects that are at the forefront of the rebound in U.S. real estate.
Beginning home construction fell 14.4 percent, the most since April 2013, to a 956,000 annualized rate following July’s revised 1.12 million pace that was the strongest since November 2007, the Commerce Department said today in Washington. Work on apartments and condominiums, which tends to be volatile, dropped 31.7 percent after jumping 44.9 percent in July.
As more Americans decide that homeownership isn’t for them because wage growth is slow and qualifying for mortgages remains difficult, builders have focused on putting up more rental units, which means the industry will see bigger swings month to month. The average number of multifamily units started over the past 12 months was the most since 2006.
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Jeanna Smialek, BloombergMs. Smialek may be contacted at
jsmialek1@bloomberg.net
