Ohio Rejects the Majority Trend and Finds No Liability Coverage for a Subcontractor’s Faulty Work
December 11, 2018 —
Shannon M. Warren - The Subrogation StrategistIn Ohio N. Univ. v. Charles Constr. Servs., 2018 Ohio LEXIS 2375 (No. 2017-0514, October 9, 2018), the Supreme Court of Ohio was recently called upon to determine if a general contractor’s Commercial General Liability (CGL) insurance policy provided coverage for defective work completed by its subcontractor. Rejecting the majority trend, the court held that, because the subcontractor’s faulty work was not an “occurrence” caused by an accident – i.e. a fortuitous event – within the meaning of the contractor’s CGL policy, the insurer did not have to defend or indemnify the contractor with respect to the plaintiff’s claims.
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Shannon M. Warren, White and Williams LLPMs. Warren may be contacted at
warrens@whiteandwilliams.com
Wilke Fleury Celebrates the Addition of Two New Partners
February 18, 2019 —
Wilke FleuryWilke Fleury celebrates the addition of two new partners – Shannon Smith-Crowley and Daniel J. Foster – who complement the firm’s shifting generations of leadership. Shannon and Danny bring unique perspective and excellent capability to Wilke Fleury’s partnership effective January 1, 2019.
Shannon has been a registered lobbyist in California for 20 years. After a career in managed care, she started lobbying with the California Medical Association before founding her own firm, Partners In Advocacy to specialize in medical and reproductive health advocacy. At Wilke Fleury, her areas of practice include health care, women’s equity, life sciences, the biomedical industry, new family formation and emerging technologies in green energy. After a four year tenure with the firm, she has been elevated to the partnership.
Click here to read more about Shannon Smith-Crowley.
Daniel Foster’s litigation practice is composed of matters involving complex construction defect litigation, mechanics liens claims, stop notice actions and Miller Act claims. He represents clients before the Contractors State License Board and handles matters involving breach of warranty, the Song-Beverly Consumer Warranty Act, indemnity agreements and liability insurance coverage.
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Wilke Fleury
The U.S. Tenth Circuit Court of Appeals Rules on Greystone
November 18, 2011 —
Derek J. Lindenschmidt, Higgins, Hopkins, McLain & Roswell, LLCOn November 1, 2011, the Tenth Circuit Court of Appeals ruled on the certified question of whether property damage caused by a subcontractor’s faulty workmanship is an “occurrence” for purposes of a commercial general liability (CGL) insurance policy. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., No. 09-1412 (10th Cir. Nov. 1, 2011), the Tenth Circuit determined that because damage to property caused by poor workmanship is generally neither expected nor intended, it may qualify under Colorado law as an occurrence and liability coverage should apply. Id. at 2.
The short history of the Greystone case is as follows. In Greystone Const., Inc. v. National Fire & Marine Ins. Co., 649 F. Supp. 2d 1213 (D. Colo. 2009), two contractors and one of their insurers brought an action against a second insurer after the second insurer refused to fund the contractors’ defense in construction defect actions brought by separate homeowners. Id. at 1215. The U.S. District Court for the District of Colorado, relying on General Sec. Indem. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo. App. 2009), granted summary judgment in favor of the second insurer on the basis that the homeowners’ complaints did not allege accidents that would trigger covered occurrences under the second insurer’s policies. Id. at 1220. Notably, the Greystone, General Security, and other similar decisions prompted the Colorado General Assembly to enact C.R.S. § 13-20-808, which was designed to provide guidance for courts interpreting perceived coverage conflicts between insurance policy provisions and exclusions. The statute requires courts to construe insurance policies to favor coverage if reasonably and objectively possible. C.R.S. § 13-20-808(5).
The Tenth Circuit began its analysis by determining whether C.R.S. § 13-20-808, which defines the term “accident” for purposes of Colorado insurance law, would have a retroactive effect, and thereby settle the question before the court. The Tenth Circuit gave consideration to several Colorado district court orders issued since the enactment of C.R.S. § 13-20-808 which have suggested that the statute does not apply retroactively, including Martinez v. Mike Wells Constr., No. 09cv227 (Colo. Dist. Ct., Mar. 1, 2011), and Colo. Pool. Sys., Inv. V. Scottsdale Ins. Co., No. 09cv836 (Colo. Dist. Ct., Oct. 4, 2010). The Tenth Circuit also attempted to ascertain the General Assembly’s intent behind the term “all insurance policies currently in existence...” Greystone, No. 09-1412, at 12. The Tenth Circuit determined that the General Assembly would have more clearly stated its intentions for the term if it was supposed to apply retroactively to expired policies, rather than those still running. Id. at 12-13. Ultimately, the Tenth Circuit decided that C.R.S. § 13-20-808 did not apply retroactively, but noted that “the retrospective application of the statute is not necessarily unconstitutional.” Id. at 9, 11-14. As such, the Tenth Circuit advised that it was required to decide the question presented in the appeal under the principles of Colorado insurance law. Id. at 15.
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Reprinted courtesy of Higgins, Hopkins, McLain & Roswell, LLC. Mr. Lindenschmidt can be contacted at lindenschmidt@hhmrlaw.com
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Shoring of Ceiling Does Not Constitute Collapse Under Policy's Definition
November 12, 2019 —
Tred R. Eyerly - Insurance Law HawaiiDespite the need to shore up the ceiling, the building was not in a state of collapse under the language of the policy. Ravinia Vouge Cleaners v. Travelers Cas. Ins. Co. of Am., 2019 U.S. Dist. LEXIS 123594 (N.D. Ill. July 24, 2019).
Ravinia Cleaners held a property policy issued by Travelers for the building from which it operated its dry-cleaning business. On February 2, 2015, there was heavy snowfall. On February 4, Ravinia reported to Travelers a leak coming from the ceiling. A temporary "shoring " was placed on the ceiling. Ravinia reported to Travelers that there was damage to the roof on February 25, 2015. Travelers hired an engineer who observed a buckling truss and roof displacing downward. The inspector recommended that the building be vacated and not occupied until adequate shoring was in place.
Travelers denied coverage because the building was in a state of imminent collapse which was caused by the weight of ice and snow, and defective construction of the truss system. The policy excluded damage relating to a "collapse of a building." Collapse was defined by the policy as "an abrupt falling down or caving in of a building or any part of a building," such that the building could not be occupied for its intended purpose. There were exceptions to the exclusion, however, if the cause of the collapse was: (1) weight of snow; or (2) use of defective materials or methods in construction if the collapse occurred after construction. The policy also excluded damage from a building being in a state of imminent collapse unless the damage was caused by: (1) weight of snow; or (2) use of defective materials or methods in construction if the collapse occurred during construction.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
The EPA’s Renovation, Repair, and Painting Rule: Are Contractors Aware of It?
March 12, 2015 —
Beverley BevenFlorez-CDJ STAFFRemodeling Magazine reported recently that some remodelers are unaware of the U.S. Environmental Protection Agency’s (EPA) Renovation, Repair and Painting (RRP) rule despite that it took effect back in April of 2010.
“There are still quite a few remodelers who have never heard of RRP,” Mark Schlager, president of Access Training Services, an EPA and Occupational Safety and Health Administration (OSHA) trainer in Pennsauken, N.J. told Remodeling Magazine.
According to the article, “The RRP rule applies to homes, apartments, and child-occupied commercial facilities built before 1978.” There are two RRP certifications required on every job: “a “Firm” certification for the company that contracts to do the work, and a “Renovator” certification for the person overseeing the work. A solo operator needs both certifications, which are good for five years.”
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Acquisition, Development, and Construction Lending Conditions Ease
May 21, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the National Association of Home Builders’ (NAHB) Eye on Housing, “[b]uilders and developers continue to report easing credit conditions for acquisition, development, and construction (AD&C) loans according to NAHB’s survey on AD&C financing.”
Eye on Housing stated that while “commercial banks remain the primary source of credit for AD&C by a wide margin, private individual investors have emerged as a viable alternative, especially for A&D loans.”
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Cal/OSHA ETS: Newest Version Effective Today
January 17, 2022 —
Amy R. Patton, Matthew C. Lewis & Rana Ayazi - Payne & FearsThe newest version of the Cal/OSHA ETS goes into effect today, Jan. 14, 2022, and will expire on April 15, 2022. A redline of the recently expired Cal/OSHA ETS and the newest Cal/OSHA ETS is available HERE. The newest Cal/OSHA ETS, which was drafted prior to Dec. 16, 2021, is already partially out-of-date based on the California Department of Public Heath’s Guidance For the Use of Masks (released Jan. 5, 2022) and the CDPH’s Guidance for Local Health Jurisdictions on Isolation and Quarantine of the General Public (released Jan. 8, 2022); these changes have been addressed in the Cal/OSHA ETS FAQs.
With all of these changes occurring (not to mention all of the litigation surrounding the now-stayed federal OSHA ETS), California employers are asking: How do I comply with the current Cal/OSHA ETS and the updated CDPH Guidance? Here are the key points to ensure you are in compliance:
- New Shorter Isolation and Quarantine Periods
Isolation: When an employee has COVID-19 (even without symptoms).
- Day 0: First day of symptoms or the day a positive test specimen was collected. Begin isolation.
- Day 1: First full day after symptoms developed or positive test specimen was collected.
- Day 5: Recommended day to take COVID-19 test.
Reprinted courtesy of
Amy R. Patton, Payne & Fears,
Matthew C. Lewis, Payne & Fears and
Rana Ayazi, Payne & Fears
Ms. Patton may be contacted at arp@paynefears.com
Mr. Lewis may be contacted at mcl@paynefears.com
Ms. Ayazi may be contacted at ra@paynefears.com
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Construction Defect Dispute Governed by Contract Disputes Act not yet Suited to being a "Suit"
June 25, 2019 —
William S. Bennett - Saxe Doernberger & Vita, P.C.The Southern District of California recently held that a series of demands for a general contractor to investigate and repair several construction defects at a U.S. Army facility did not constitute a “suit” within the meaning of the general contractor’s commercial general liability (“CGL”) policy.
In Harper Construction Co., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., the U.S. Government hired Harper Construction Company (“Harper”) to construct a U.S. Army training facility for the Patriot Missile System in Fort Sill, Oklahoma. No. 18-cv-00471-BAS-NLS (S.D. Cal. Mar. 28, 2019). During the project, Harper hired Harper Mechanical Contractors (“Harper Mechanical”), an independent company, as a subcontractor “to perform demolition, grading, and other work at the Project.”
After Harper completed the project, the government informed Harper of property damage at the project, “including, but not limited to, gypsum wallboard cracks and binding doors.” Harper attempted to repair the issues, but the problems continued. The issues were apparently the result of Harper Mechanical’s grading work. Subsequently, the government sent two letters requesting an investigation and asking Harper to “propose a plan to correct the issues.” As Harper undertook an investigation spanning multiple years, the government became increasingly frustrated with the delays. The government threatened to initiate “formal administrative recourse” and to demolish the project, forcing Harper to re-build from the ground up. It also sent Harper another letter requesting Harper submit a formal proposal to correct the issues.
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William S. Bennett, Saxe Doernberger & Vita, P.C.Mr. Bennett may be contacted at
wsb@sdvlaw.com
