U.S. Supreme Court Limits the Powers of the Nation’s Bankruptcy Courts
June 11, 2014 —
Earl Forte – White and Williams LLPOn June 9, 2014, the Supreme Court of the United States issued its much-awaited decision in Executive Benefits Insurance Agency v. Arkison, Chapter 7 Trustee of Estate of Bellingham Insurance Agency, Inc., Case No. 12-1200, in which the court confirmed that the power of the nation’s bankruptcy courts to hear and decide cases involving state-created private rights in which the bankruptcy proof of claim process has not been directly invoked, is severely limited by Article III of the Constitution of the United States.
The decision in Executive Benefits, while providing some clarity to practitioners and the public following the Court’s June 2011 decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), nevertheless will make a substantial portion of bankruptcy litigation matters more cumbersome and potentially more expensive to guide through the bankruptcy system. Clients and practitioners are best advised to hire knowledgeable counsel to help navigate the more complex procedural waters created by this decision.
Although the Court in Executive Benefits did resolve a pending procedural question that had dogged practitioners since Stern was decided in 2011, the Court’s decision in Executive Benefits now makes it abundantly clear that many disputes that were previously heard and decided in the nation’s bankruptcy courts can no longer be decided there and must be submitted to the district courts for full de novo review and entry of a final judgment or order. It is difficult to see how this decision will not make bankruptcy litigation more cumbersome and expensive by adding an additional layer of judicial involvement to many matters, notably to fraudulent transfer and other avoidance “claw back” actions that historically have been decided in the bankruptcy courts and used famously in Madoff and other cases as an efficient device for creating value for creditors.
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Earl Forte, White and Williams LLPMr. Forte may be contacted at
fortee@whiteandwilliams.com
Residential Construction Rise Expected to Continue
May 10, 2013 —
CDJ STAFFHousingwire reports that Fannie Mae has predicted strong increases in housing starts over the last few years, with an expected return to normal by 2016. If this holds true, residential construction will include 2.5 million jobs.
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Project-Specific Commercial General Liability Insurance
May 13, 2019 —
Jeremiah M. Welch - Saxe Doernberger & Vita, P.C.Many markets which provide insurance for construction projects include an endorsement providing coverage for “repair work” as part of their standard policy. “Repair work” endorsements are largely misunderstood by policyholders and the insurance broker community. They are typically assumed to be coverage enhancements, but many provide no additional coverage and actually risk reduction of coverage otherwise provided as part of the products-completed operations (“PCO”) extensions also found in these project-specific policies. This article is designed to help the reader understand these endorsements so that better decisions can be made at the point of purchase.
Intent
The common feature of these endorsements is a grant of coverage for bodily injury and property damage resulting from “repair work” for a specified period of time. Most endorsements define “repair work” to mean the repair of completed work performed pursuant to a contract or warranty.
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Jeremiah M. Welch, Saxe Doernberger & Vita, P.C.Mr. Welch may be contacted at
jmw@sdvlaw.com
The Impact of Sopris Lodging v. Schofield Excavation on Timeliness of Colorado Construction Defect Claims
January 26, 2017 —
Jean Meyer - Colorado Construction LitigationOn October 20, 2016, the Colorado Court of Appeals announced the Sopris Lodging, LLC v. Schofield Excavation, Inc.[1] decision. The Sopris decision significantly altered the potential pitfalls awaiting a general contractor in pursuit of third-party claims as well as potential defenses available for a subcontractor defending against third-party claims.
By way of background, the Sopris construction defect case arose out of the following facts: TDC was the general contractor for the construction of a hotel owned by Sopris Lodging. On March 11, 2011, Sopris Lodging sent TDC a notice of claim regarding alleged construction defects. On May 24, 2013, Sopris Lodging filed a complaint in district court asserting construction defect claims against one of the subcontractors of the hotel, and against the general contractor’s principals, but not the general contractor. Contemporaneous with the filing of the suit, Sopris Lodging and TDC entered into an agreement to toll the statute of limitations on Sopris Lodging’s potential claims against TDC. In August 2013, Sopris Lodging joined the general contractor to the suit. A year later, in 2014, the general contractor joined a variety of subcontractors as third-party defendants.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Jean may be contacted at
meyer@hhmrlaw.com
Acord Certificates of Liability Insurance: What They Don’t Tell You Can Hurt You
June 28, 2013 —
David McLainAs anyone involved in construction knows, one of the most heavily used forms for tracking insurance information during the subcontracting phase of a project is the Acord Certificate of Liability Insurance. General contractors often require subcontractors to provide these ubiquitous forms as evidence that the subcontractor maintains adequate insurance or insurance which complies with the requirements of the subcontract. Unfortunately, experience has shown that the Acord forms being used today are insufficient sources of the information needed by the developer and general contractor.
Historically, developers and GCs would require Acord forms to ensure that a subcontractor had a CGL insurance policy, with sufficient limits, and which named them as additional insureds. More recently, developers and GCs took the additional step of requiring a confirmation on the Acord forms that they were named as additional insureds for both ongoing and completed operations. This is important because coverage for ongoing operations only provides coverage during the construction process. Once the homes are put to their intended use, developers and GCs must be named as additional insureds for completed operations also in order to avail themselves of the benefits of the policy. Unfortunately, this is where the evolution of the use of the Acord forms ended, resulting in a failure to provide sufficient information to protect developers and GCs from the unknown.
My firm has had a rash of recent experience where our clients have not obtained the benefit of additional insured coverage for which they bargained because they relied on Acord forms which failed to provide sufficient information to allow them to protect themselves from insufficient insurance coverage on the part of the subcontractors with which they did business. For example, in one recent case a homeowners association alleged insufficient grading and drainage away from the homes within a development built by one of our clients. In reviewing the insurance information from the construction files, we found the Acord forms from the excavating company that performed all of the grading work around the homes. To our delight, the Acord form listed our client as an additional insured for both ongoing and completed operations.
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David M. McLainDavid M. McLain can be contacted at
mclain@hhmrlaw.com
Law Firm Settles Two Construction Defect Suits for a Combined $4.7 Million
October 25, 2013 —
CDJ STAFFConstruction Lawyers, LLP has announced that it has settled two Florida construction defect suits, both of which were filed by condominium associations. The first of these involved the Estates at Park Central Condominium Association, a 244-unit condominium complex in Orlando Florida. The condominium association alleged leaks into balconies and garages, and deficiencies in stucco application. After nearly three years since the filing of the lawsuit, and only weeks before the trial was to begin, the case was settled for $2 million.
The second case has also spent the last three years in mediation, however its trial date was further away. The Grand Venezia Condominium Owners Association alleged construction defects including leaking roofs and windows, and improperly installed stucco, leading to dry rot and water damage. The condominium community comprises 336 units in Clearwater, Florida and the units were originally built as apartments. Here, the settlement with the contractor was for $2.75 million. A lawsuit against the developer continues.
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With VA Mechanic’s Liens Sometimes “Substantial Compliance” is Enough (but don’t count on it) [UPDATE]
October 14, 2019 —
Christopher G. Hill - Construction Law MusingsVirginia mechanic’s liens are a powerful and tricky beast that in most cases require absolute precision in their preparation. However, an interesting opinion recently came out of the Virginia Supreme Court that may provide a bit of a “safe harbor” from the total form over function nature of a mechanic’s lien.
In Desai, Executrix v. A.R. Design Group Inc., the Court considered a lien memorandum that had what could be described as technical flaws in the preparation of the mechanic’s lien by A. R. Design Group. The basic facts are that A. R. Design Group used the form of lien found in Va. Code Sec. 43-5 (also found as Form CC-1512 at the Virginia Judiciary website) when it recorded two lien memoranda for two pieces of property owned by a trust. Relating to one of the two properties, the memorandum failed to identify the “Owner” as the trustee of the trust. On the memoranda relating to both properties the affidavit verifying the amounts claimed did not identify the signatory as agent for A. R. Design Group, instead listing the agent as the claimant and further failed to state a date from which interest is claimed or a date on which the debt was due.
Needless to say, the owner argued that each of these technical defects invalidated the memoranda and therefore they should have been released. Somewhat surprisingly the Fairfax, Virginia Circuit Court disagreed and held the liens to be valid. On appeal, the Virginia Supreme Court affirmed the lower court. The held that the failure to add the word “Trustee” after Ulka Desai’s name did not invalidate the lien because the trustee had all of the rights of ownership and furthermore that naming Desai in the memorandum served the purpose of putting third parties on notice of the lien.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
White and Williams LLP Secures Affirmation of Denial to Change Trial Settings Based on Plaintiffs’ Failure to Meet the Texas Causation Standard for Asbestos Cases
July 06, 2020 —
Christian Singewald & Rochelle Gumapac - White and Williams LLPThe Delaware Supreme Court, in a rare split opinion, affirmed the trial court’s denial of Plaintiffs’ Request to Change Trial Settings in favor of all defendants, including a major automotive manufacturer represented by White and Williams LLP, in a mesothelioma case with a young decedent who had an alleged economic loss claim exceeding $9,000,000, in Shaw v. American Friction, Inc. et al., No. 86, 2019. This decision operates to dismiss all of Plaintiffs’ claims based on their failure to meet Delaware’s strict expert deadlines and establish a prima facie case under Texas law.
Plaintiffs’ Complaint invoked the application of Texas substantive law and alleged that multiple manufacturers were negligent and strictly liable for failing to warn the decedent of the alleged dangers posed by the use of asbestos-containing products. Plaintiffs’ alleged asbestos exposures from defendants’ products caused Mr. Shaw’s disease and subsequent death.
In 2007, Texas instituted its now well-known causation requirement, which requires the “dose” of asbestos exposure from each defendant’s products to be quantified by an expert. Borg-Warner Corp. v. Flores, 232 S.W.3d 765, 773 (Tex. 2007). Prior to decedent’s death, Plaintiffs’ counsel deposed decedent and his father for product identification purposes. During the depositions, Plaintiffs’ counsel failed to obtain the necessary factual information from his clients for an expert to be able to opine as to alleged exposure doses from any defendant’s product. Despite lacking the requisite information for a prima facie case under Texas law, Plaintiffs sought and were given placement in an expedited trial setting, which had strict, defined deadlines.
Reprinted courtesy of
Christian Singewald, White and Williams LLP and
Rochelle Gumapac, White and Williams LLP
Mr. Singewald may be contacted at singewaldc@whiteandwilliams.com
Ms. Gumapac may be contacted at gumapacr@whiteandwilliams.com
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