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DIRECTORY AND CAPABILITIES

Mind The Appeal Or: A Lesson From Auto-Owners Insurance Co. V. Bolt Factory Lofts Owners Association, Inc. On Timing Insurance Bad Faith And Declaratory Judgment Insurance Claims Following A Nunn-Agreement

August 06, 2019 — Jean Meyer - Colorado Construction Litigation
On May 30, 2019, Judge Richard Brooke Jackson of the United States District Court for the District of Colorado offered an insightful lesson to the parties in Auto-Owners Insurance Co. v. Bolt Factory Lofts Owners Association, Inc.[1] on the importance of ripeness in declaratory judgment insurance actions and bad faith counterclaims. The case arrived in front of Judge Jackson based on the following fact pattern. A homeowner association (Bolt Factory Lofts Owners Association, Inc.) (“Association”) brought construction defect claims against a variety of prime contractors and those contractors subsequently brought third-party construction defect claims against subcontractors. One of the prime contractors assigned their claims against a subcontractor by the name Sierra Glass Co., Inc. (“Sierra”) to the Association and all the other claims between all the parties settled. On the eve of trial involving only the Association’s assigned claims against Sierra, the Association made a settlement demand on Sierra for $1.9 million. Sierra asked its insurance carrier, Auto-Owners Insurance, Co. (“AOIC”), which had been defending Sierra under a reservation of rights letter, to settle the case for that amount, but AOIC refused. This prompted Sierra to enter into a “Nunn-Agreement” with the Association whereby the case would proceed to trial, Sierra would refrain from offering a defense at trial, the Association would not pursue any recovery against Sierra for the judgment, and Sierra would assign any insurance bad faith claims it may have had against AOIC to the Association. (“Nunn-Agreement”) Read the court decision
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Reprinted courtesy of Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLC
Mr. Meyer may be contacted at meyer@hhmrlaw.com

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Court Holds That Parent Corporation Lacks Standing to Sue Subsidiary’s Insurers for Declaratory Relief

May 12, 2016 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In D. Cummins Corp. v. U.S. Fidelity & Guaranty (no. A142985, filed 3/30/16), a California Court of Appeal upheld the dismissal of a declaratory relief action filed by the parent holding company of an insured corporation seeking coverage for asbestos claims. Cummings Corp. installed asbestos containing products in California. It had been insured by USF&G between 1969 and 1992. Cummings Holding, LLC was the parent and majority shareholder of Cummings Corp., which had no assets. The holding company claimed to be “the sole entity responsible for managing the affairs of Cummins Corp., including making decisions as to litigation strategy, resolution and settlement,” and sued USF&G seeking a declaratory judgment that the insurer was obligated to defend and/or indemnify Cummins Corp., “in full, including, without limitation, payment of the cost of investigation, defense, settlement and judgment . . . , for past, present and future Asbestos Suits.” The insurer demurred on the ground that the holding company had insufficient interest in its insurance policies and, consequently, lacked standing to sue for declaratory relief. Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Read the court decision
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Janus v. AFSCME

July 18, 2018 — Ryan Foltz – Gordon & Rees Construction Law Blog
On June 27, 2018, the Supreme Court of the United States issued its decision in Janus v. AFSCME1. By a 5-4 vote, SCOTUS ruled that public employee unions cannot require non-members to pay union dues, even if those employees are benefiting from the services provided by the union. 28 states already had “right-to-work” laws on the books, meaning that unions in those states were already precluded from collecting fees from non-union members. This ruling makes that ban a national standard. Read the court decision
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Reprinted courtesy of Ryan Foltz, Gordon & Rees Scully Mansukhani
Mr. Foltz may be contacted at rfoltz@grsm.com

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Providing Notice of Claims Under Your Construction Contract

April 02, 2014 — Beverley BevenFlorez-CDJ STAFF
Craig Martin on his blog Construction Contractor Advisor explained the importance of knowing when to provide notice under your construction contract: “Time and time again, courts rule that contractors must follow notice requirements in order to submit a claim for additional time or compensation.” Martin cited the case JEM Contracting v. Morrison-Maierle, where the contractor provided verbal notice of a claim to the engineer, but failed to submit in writing until eighteen days later, which was past the notice requirement as stated in the contract. The judge denied the contractor’s claim and sided with the engineer and county. Read the court decision
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No Choice between Homeowner Protection and Bankrupt Developers?

February 10, 2012 — CDJ STAFF

Donna DiMaggio Berger, writing in the Sun Sentinel argues those may be the only current choices in Florida. A recent court case, Lakeview Reserve HOA v. Maronda Homes has caused a swift response from the legislators. Ms. Berger notes that the construction defect bill, HB 1013, “would take away a homeowner’s rights to pursue a developer for defects to the driveways, roads, sidewalks, utilities, drainage areas and other so-called ‘off-site’ improvements.” The alternative? She notes that applying the Maronda decision would “bankrupt developers who don’t build defect-free roads and sidewalks.”

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The American Rescue Plan Act: What Restaurants Need to Act on NOW

March 22, 2021 — Michael Krueger - Newmeyer Dillion
The American Rescue Plan Act (“Act”) was passed by the Senate over the weekend and passed by the House today. President Biden is set to sign the Act into law on Friday, March 12th. The Act has $1.9 Trillion in relief funds with $28.6 Billion set aside for the restaurant industry in the Restaurant Revitalization Fund (“Fund”). The Fund has apportioned funds into two funding groups; $5 Billion for restaurants with annual gross revenue under $500,000 and $23.6 Billion for restaurants over $500,000 in annual gross revenue. Differences from the Paycheck Protection Program (“PPP”) This is a grant program with no loan documents or forgiveness applications. Instead, each restaurant entity can apply for and receive up to $10M in grant funds through the Act. The amount a restaurant receives is based on the sum of the restaurant’s gross revenue in 2019 minus the gross revenue in 2020 minus PPP and EIDL money received. For example, Restaurant A made $7M gross revenue in 2019, made $3M gross revenue in 2020 and received $1M in PPP and EIDL combined. ($7M - $3M -$1M =$3M) The restaurant will receive $3M in grant funds directly from the SBA (as long as funds are available). Read the court decision
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Reprinted courtesy of Michael Krueger, Newmeyer Dillion
Mr. Krueger may be contacted at michael.krueger@ndlf.com

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4 Steps to Take When a Worker Is Injured on Your Construction Site

March 27, 2023 — Zachary Perecman - Construction Executive
The construction industry continues to be one of the fastest-growing labor trades. According to the Center for Construction Research and Training, since 2019, 11.4 million U.S. workers have been employed in construction, a 25% increase from 2011. Amid this growth, the industry has remained one of the most dangerous, and workers are often at higher risk of injuries and deaths due to occupational incidents. According to the U.S. Bureau of Labor Statistics, there are 150,000 injuries on construction work sites annually. Under Occupational Health and Safety Administration (OSHA) law, employers have a responsibility to provide a safe work environment. That includes providing a workplace that is free of serious recognized hazards. Despite best efforts in implementing risk-mitigation and safety protocols, employers must be prepared with an incident procedure should an incident occur on a jobsite. Taking immediate, clear actions can impact the severity and outcome of injuries from a workplace incident. With this in mind, employers should take the lead in implementing safety procedures for injuries on construction sites and should inform all safety site managers and workers of the steps that should be taken. Reprinted courtesy of Zachary Perecman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Think Twice About Depreciating Repair Costs in Our State, says the Tennessee Supreme Court

July 09, 2019 — Andres Avila - Saxe Doernberger & Vita, P.C.
Tennessee’s Supreme Court recently held that an insurer may not withhold repair labor costs as depreciation when the policy definition of actual cash value is found to be ambiguous. Tennessee joins other states like California and Vermont that prohibit the depreciation of repair labor costs in property policies. In Lammert v. Auto-Owners (Mut.) Ins. Co., No. M201702546SCR23CV, 2019 WL 1592687, the Lammerts and other insureds sought property damage coverage from Auto Owners Insurance for hail damage to a home and other structures they owned in Tennessee. Auto-Owners Insurance agreed to settle the claims on an actual cash value basis (ACV), which is a method of establishing the value of insured property that must be replaced to determine the indemnity by the insurer. There are multiple methods to calculate ACV. Auto-Owners decided to use the ACV calculation method of deducting depreciation from the cost to repair or replace the damaged property. Depreciation is the decline in value of a property since it was new because of use, age or wear. The rationale behind this method is that an insured should not make a profit by recovering the cost of, for example, a new roof for a damaged roof that was ten years old, and thus depreciation is deducted from the indemnity. Read the court decision
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Reprinted courtesy of Andres Avila, Saxe Doernberger & Vita, P.C.
Mr. Avila may be contacted at ara@sdvlaw.com

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