2019 California Construction Law Update
January 15, 2019 —
Garret Murai - California Construction Law BlogThe California State Legislature introduced 2,637 bills during the second year fo the 2017-2018 Legislative Session. Of these, 1,016 were signed into law.
It was last official bill signing for Governor Jerry Brown who ends not only his second term as Governor but a colorful political career spanning nearly 50 years during which he has dated pop stars, practiced Zen meditation, kicked it with radical ex-nuns and an Apollo astronaut and, at 80, has sparred regularly with President Trump on issues ranging from climate change to immigration to net neutrality.
For those in the construction industry it wasn’t quite as exciting, unless of course you count SCR 120, which officially makes April “California Safe Digging Month.” Hooray!
Each of the bills discussed below took effect on January 1, 2018, except as otherwise stated.
Building Codes
SB 721 – Requires the inspection of exterior elevated elements, including balconies, decks, porches, stairways, walkways, and elevated entry structures, of multifamily buildings with three or more dwelling units by an architect, engineer or contractor with a Class A, B or C-5 license by January 1, 2025 and by January 1st every six years thereafter. Elements posing an immediate threat to the safety of occupants, or which prevent occupant access or emergency repairs, are required to be repaired immediately. Elements not posing an immediate threat to the safety of occupants, or which do not prevent occupant access or emergency repairs, are required to be repaired within 180 days.
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Garret Murai, Wendel RosenMr. Murai may be contacted at
gmurai@wendel.com
Burden to Prove Exception to Exclusion Falls on Insured
April 19, 2022 —
Tred R. Eyerly - Insurance Law HawaiiIn a dispute between two insurers, the Ninth Circuit relied upon Nevada law in finding that the burden of proving that an exception to the exclusion applies was on the insured. Zurich Am. Ins. Co. v. Ironshore Specialty Ins. Co., 2022 U.S. App. LEXIS 1626 (9th Cir. Jan. 20, 2022).
Ironshore insured seven subcontractors. The policy included an exclusion providing there was no coverage for any property damage for the subcontractors' for "work performed prior to the policy inception." An exception to the exclusion provided that the exclusion did not apply to property damage that was "sudden and accidental and takes place within the policy period."
The seven subcontractors were sued for work they had performed. Zurich defended and indemnified the subcontractors. Zurich then sued Ironshore seeking contribution and indemnification for defense and settlement costs. The parties stipulated that all construction work at issue had been completed before the inception of Ironshore's policy and that none of the complaints against the subcontractors alleged that sudden and accidental damage had occurred after the inception of Ironshore's policy.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Nevada Senate Bill 435 is Now in Effect
February 24, 2020 —
Bremer Whyte Brown & O'Meara LLPATTENTION: Nevada liability departments and auto insurance carriers! Nevada Senate Bill No. 435 was recently signed into law and there are two key points to be aware of: Disclosure of Policy Limits Demand and Voiding Releases. These both deal with pre-litigation situations.
1) Nevada law now requires a motor vehicle insurer to disclose the limits of the policy if the claimant provides a HIPAA authorization which allows the carrier to “receive all medical reports, records and bills related to the claim from the providers of health care.” This is a change from the previous Nevada statute which required the disclosure of policy limits only after litigation was commenced.
However, it appears from the language of the statute that there are limits to this new mandate. Section 4 of the new law is written in such a way to allow the argument that the new law applies only to accidents that occurred after 10/1/19, and that the insurance company has to request the HIPAA waiver from the claimant in order for the disclosure requirement to apply.
The plaintiff’s bar is already attempting to address this language in the legislature. As written, subsection (4) is governed by subsection (1) which states that the insurance company “may require the claimant … to provide … a written authorization.” The following subparts all appear to be triggered only by the act of the insurance company requesting a HIPAA waiver. The plaintiff’s bar is pushing for clarifying language that would make it clear that once the claimant sent a HIPAA waiver, irrespective of whether the document was requested by the insurance company or not, the insurance company is required to disclose policy limits. This is not how the law reads on its face, and the change would make a significant difference from a practical perspective.
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Bremer Whyte Brown & O'Meara LLP
OSHA ETS Heads to Sixth Circuit
December 13, 2021 —
George Morrison - White and Williams LLPOn November 16, 2021, the U.S. Court of Appeals for the Sixth Circuit was selected during the Judicial Panel on Multidistrict Litigation’s lottery to hear the multiple consolidated challenges to the recent COVID-19 Emergency Temporary Standard (ETS) issued by the Occupational Safety and Health Administration (OSHA). OSHA is permitted to issue an ETS if the agency arrives at the conclusion that a “grave danger” to worker safety exists. An ETS does not go through the typical notice-and-comment period that federal regulations usually follow.
Inheriting the Fifth Circuit’s recent nationwide stay on implementation and enforcement of the ETS, the Sixth Circuit will decide whether the stay should be “modified, revoked, or extended” in the short term. Early this morning, OSHA filed an emergency motion to dissolve the Fifth Circuit’s stay of the vaccine mandate with the Sixth Circuit. OSHA argued, among other things:
- The Fifth Circuit erred in holding “that OSHA lacked statutory authority to address the grave danger of COVID-19 in the place on the ground that COVID-19 is caused by a virus and also exists outside of the workplace” because “[t]hat rationale has no basis in the statutory text.”
- The Fifth Circuit erred in finding the ETS both over- and underinclusive because “OSHA recounted extensive empirical data showing that all employees can transmit COVID-19 in the workplace and that COVID-19 has spread in a vast variety of workplace.”
- The “petitioners have not shown that their claimed injuries outweigh the interests in protecting employees from a dangerous virus while this litigation proceeds . . . . These claimed injuries do not justify delaying the [ETS] that will save thousands of lives and prevent hundreds of thousands of hospitalizations.”
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George Morrison, White and Williams LLPMr. Morrison may be contacted at
morrisong@whiteandwilliams.com
Contractor Gets Benched After Failing to Pay Jury Fees
April 11, 2022 —
Garret Murai - California Construction Law BlogTrial by jury is a fundamental right under the U.S. and California Constitutions. However, to avail yourself of this right, you not only have to declare that in advance that you intend to try your case to a jury but post jury fees as well. In TriCoast Builders, Inc. v. Fonnegra, a contractor who failed to timely post jury fees, discovered on the day of trial that it waived the right to insist on a jury trial when the defendant pulled an “I gotcha” and waived his right to a jury trial.
The TriCoast Case
In May 2014, Nathaniel Fonnegra house was damaged by fire. The following month, Fonnegra entered into a construction contract with TriCoast Builders, Inc. to repair the property. Dissatisfied with the work, Fonnegra terminated the contract, and TriCoast in turn filed a complaint against Fonnegra for unpaid work.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Hunton Partner Michael Levine Appointed to Law360’s 2024 Insurance Authority Property Editorial Advisory Board
May 20, 2024 —
Hunton Insurance Recovery BlogWashington, DC-based partner
Michael Levine has been recognized for his extensive experience and insights into emerging and legacy property and business interruption insurance coverage issues by being selected to Law360’s 2024 Editorial Advisory Board for Insurance Authority Property. As a member of the board, Mike will provide feedback on Law360’s coverage of property issues and expert insight on how best to shape future reporting of issues affecting businesses across all industry sectors.
Reprinted courtesy of
Hunton Andrews Kurth llp
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Ready, Fire, Aim: The Importance of Targeting Your Delay Notices
November 08, 2021 —
Bradley Sands, Jones Walker LLP - ConsensusDocsProviding written notice of delay to subcontractors when a project is behind schedule is a regular part of good project documentation practices. A properly targeted delay notice is an important, project correspondence that is an appropriate response to a subcontractor’s specific delay or ongoing delays. However, when a project falls behind schedule and the project management team is in the fog of war, it could seem like a good idea to start firing off project delay notices to any and every subcontractor. While these delay notices may provide a short term burst of productivity, you could find that those same notices are aimed back at you in a future litigation.
This article identifies two potential unintended consequences of sending delay notices that a contractor should keep in its sights and then provides recommendations for properly calibrating future delay notices in light of these potential consequences.
Acceleration: You Might Get What You Ask For
A delay notice to a subcontractor could be interpreted as—or expressly state—direction to the subcontractor to accelerate its work. When a subcontractor is directed to accelerate its work, it may incur additional costs for premium, extended, or overtime labor, additional crews, increased supervision costs, increased overhead costs, and losses due to productivity impacts from the acceleration (e.g., stacking of trades and fatigue). A subcontractor may be entitled to recover these increased costs that are caused by a direction to accelerate.
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Bradley Sands, Jones Walker LLPMr. Sands may be contacted at
bsands@joneswalker.com
Allocating Covered and Uncovered Damages in Jury Verdict
March 01, 2021 —
David Adelstein - Florida Construction Legal UpdatesWhen a liability insurer defends an insured from a third-party claim, they oftentimes do so under a reservation of rights. A reservation of rights letter is issued to the insured that identifies certain coverage exclusions or reservations relative to the insurance policy that may impact the insurer’s duty to indemnify the insured for damages. In other words, just because the insurer is defending its insured does not mean it will be indemnifying its insured for damages asserted in the third-party claim.
Under Florida law, the party claiming insurance coverage has the initial burden to show that a settlement or judgment represents damages that fall within the coverage provisions of the insurance policy. An insured’s inability to allocate the amount of a judgment between covered and uncovered damages is therefore generally fatal to its indemnification claim. However, the burden of apportioning or allocating between covered and uncovered damages in a general jury verdict may be shifted to the insurer if the insurer did not adequately make known to the insured the availability and advisability of a special verdict.
QBE Specialty Ins. Co. v. Scrap Inc., 806 Fed.Appx. 692, *695 (11th Cir. 2020) (internal citations omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
