Construction Litigation Roundup: “Wrap Music to an Insurer’s Ears?”
February 05, 2024 —
Daniel Lund III - LexologyThe general contractor on a New Orleans condominium construction project obtained a Contractor Controlled Insurance Program/CCIP policy or "Wrap-Up" policy for the job.
An accident occurred on the job when a construction elevator/hoist fell, injuring several workers. The elevator/hoist was provided by a subcontractor, pursuant to a rental agreement and related subcontract with the general contractor. Contained within the subcontract was a provision which states that the general contractor "has arranged for the Project to be insured under a controlled insurance program (the "CCIP" or "WrapUp"),” and that the CCIP shall provide "commercial general liability insurance and excess liability insurance, in connection with the performance of the Work at the Project site."
A third-party administrator for the wrap-up policy had been in communication with the subcontractor prior to the commencement of the work, “specifically advising that insurance coverage was not automatic” and providing the subcontractor with an enrollment form for the CCIP. Ultimately, the subcontractor “declined to comply with the request,” stating that the subcontractor would "not participate in paying any wrap insurance premiums" – because the subcontractor had its own insurance.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
A Changing Climate for State Policy-Making Regarding Climate Change
February 18, 2020 —
Sheila McCafferty Harvey - Gravel2Gavel Construction & Real Estate Law BlogIssued by 13 federal agencies, the 2018 Fourth National Climate Assessment presented a stark warning on the consequences of climate change for the United States. The report predicts that if significant steps are not taken to rein in global warming, the damage will reduce the U.S. economy by as much as 10 percent by the end of the century. The report, which was mandated by Congress and made public by the White House, is notable not only for the precision of its calculations and bluntness of its conclusions—the 1,656-page assessment lays out the devastating effects of a changing climate on the economy—but also in how it conflicts with President Donald Trump’s environmental deregulation plan. U.S. policy efforts at the state and local levels are ramping up to address this complex topic. These include:
Targeting Net-Zero Emissions. Hailed as the most aggressive climate law in the nation, New York State’s Climate Leadership and Community Protection Act are targeting 100 percent carbon-free electricity by 2040 and economy-wide, net-zero carbon emissions by 2050. California set a statewide target to reach carbon neutrality by 2045.
Reducing and Renewing. New Mexico established a statewide goal of reducing greenhouse gas emissions by 45 percent below 2005 levels by 2030. Nevada passed a bill to increase the amount of electricity it gets from renewable resources to 50 percent by 2030.
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Sheila McCafferty Harvey, PillsburyMs. Harvey may be contacted at
sheila.harvey@pillsburylaw.com
Equal Access to Justice Act Fee Request Rejected in Flood Case
January 06, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe insured's claim for fees under the Equal Access to Justice Act (EAJA) for seeking coverage under a flood policy was rejected. Hampson v. Wright Nat'l Flood Ins. Co., No. 4:19-cv-10083-KMM (S.D. Fla. Aug. 11, 2019)(Order on Motion to Dismiss). The order is here.
The insurer did not compensate plaintiff for flood-related damages under the terms of a Standard Flood Insurance Policy (SFIP). The insurer was a Write-Your-Own (WYO) Program insurance carrier participating in the National Flood Insurance Program (NFIP). By statute, a WYO carrier acts as a "fiscal agent" and "fiduciary" of the United States.
The insured's property suffered damage from a hurricane. The insured sued the carrier for breach of contract and attorney's fees under EAJA. The insurer moved to dismiss the claim for fees under EAJA. A party could recover fees and costs under the EAJA as the prevailing party in a case "brought by or against the United States . . . unless the court finds the position of the United States was substantially justified." 28 U.S.C. 2412 (d) (1) (A), (b). The statute defined the "United States" to include "any agency and any official of the United States acting in his or her official capacity." However, attorney's fees were not recoverable under the EAJA in cases for breach of an SFIP brought against a WYO program insurance carrier participating in the NFIP because WYO carriers were not considered "agencies" under the EAJA.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Expert Can be Questioned on a Construction Standard, Even if Not Relied Upon
August 07, 2022 —
Garret Murai - California Construction Law BlogIt’s not uncommon in construction defect litigation for each side retain one or more experts to give their opinion as to whether something was constructed in accordance with the standard of care. This usually results in what we legal practitioners call a “battle of the experts.”
The California Code of Civil Procedure and Evidence Code include specific provisions applicable to experts including when they must be disclosed, when and how they can be deposed, and what opinions they can render. When attempting to challenge an expert it is not uncommon for one side to argue that the other side’s expert did not consider a certain fact or certain standard in reaching his or her opinion, therefore, allowing that party to argue at trial that the expert’s opinion is somehow flawed.
However, there are also certain limitations, including a limitation restricting a party from cross-examining an expert on any scientific, technical, or professional test, treatise, journal or similar publication if the witness did not rely on such publication in arriving at or forming his or her opinion. The next case,
Paige v. Safeway, Inc. (2021) 74 Cal.App.5th 1108, involved a case of first impression: Namely, whether an expert who did not rely on a publication in forming his or her opinion can nevertheless be questioned on a publication (in this case an ASTM standard) because the publication is a “reliable authority.”
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
No Repeal Process for Rejected Superstorm Sandy Grant Applications
February 12, 2014 —
Beverley BevenFlorez-CDJ STAFFEven though it’s been revealed that “faulty data” was used to reject many New Jersey recovery grants for victims of Superstorm Sandy, the state has announced that it’s too late to appeal, according to The Wall Street Journal.
“The applicants were informed by letter that they weren't eligible,” state officials told The Wall Street Journal, “and it should have been clear that they needed to appeal last year, so the application process won't be reopened.”
The majority of the rejected applicants that did appeal within the open period were found to be eligible for the grant: “Nearly 80% of people who appealed their rejections ended up winning their cases, according to data released by the Fair Share Housing Center, a public-interest law firm critical of the Christie administration. And of the 8,007 applicants rejected from both programs, 5,583 didn't appeal, or 70%, according to Fair Share Housing Center's analysis.”
U.S. Representative Bill Pascrell called for “an independent monitor” to be “appointed to oversee the state’s storm spending ‘to ensure there isn’t further mismanagement.’”
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Ohio: Are Construction Defects Covered in Insurance Policies?
January 09, 2015 —
Beverley BevenFlorez-CDJ STAFFAmanda M. Leffler of Brouse McDowell analyzed Ohio’s 2012 Supreme Court case Westfield Ins. Co. v. Custom Agri Sys., Inc., which ruled that “’[c]laims of defective construction or workmanship brought by a property owner are not claims for ‘property damage’ caused by an ‘occurrence’ under a commercial general liability policy.’”
Leffler stated that the Ohio Supreme Court decision wasn’t as “sweeping” as it might at first appear: “Rather, the Ohio Supreme Court adopted the rule that construction defects are covered ‘occurrences’ within the meaning of commercial general liability (‘CGL’) policies, but only to the extent that property other than the policyholder’s own work is damaged.“
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Texas Supreme Court Cements Exception to “Eight-Corners” Rule Through Two Recent Rulings
March 06, 2022 —
Jeremy S. Macklin - Traub Lieberman Insurance Law BlogThe Texas “eight corners” rule precludes insurers from disclaiming a defense obligation based on facts not alleged in the underlying pleadings. Texas federal and appellate courts have been issuing rulings addressing exceptions to the eight corners rule and recently sought guidance from the Texas Supreme Court on whether Texas law recognizes such exceptions to the “eight corners” rule. The Texas Supreme Court has now spoken on the issue.
Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 65 Tex. Sup. Ct. J. 440 (2022).
In Monroe, David Jones contracted with 5D Drilling & Pump Services in the summer of 2014 to drill a 3,600-foot commercial irrigation well on his farmland. In 2016, Jones sued 5D for breach of contract and negligence relating to 5D’s drilling operations on Jones’s property. Jones’s pleading was silent as to when the damage flowing from 5D’s alleged acts of misconduct occurred. BITCO and Monroe stipulated that 5D’s drill struck a bore hole during 5D’s drilling operations in or around November 2014.
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Jeremy S. Macklin, Traub LiebermanMr. Macklin may be contacted at
jmacklin@tlsslaw.com
Ahead of the Storm: Preparing for Dorian
September 16, 2019 —
Adam P. Handfinger, Stephen H. Reisman & Gary M. Stein - Peckar & Abramson, P.C.While Hurricane Dorian churns in the Atlantic with its sights currently set on the east coast of Florida, storm preparations should be well underway. As you are busy organizing efforts to secure your job sites, we at Peckar & Abramson offer some quick reminders that may prove helpful:
- Review your contracts, particularly the force majeure provisions, and be sure to comply with applicable notice requirements
- Even if not expressly required at this time, consider providing written notice to project owners that their projects are being prepared for a potential hurricane or tropical storm and that the productivity and progress of the work will be affected, with the actual time and cost impact to be determined after the event.
- Consult your hurricane plan (which is often a contract exhibit) and confirm compliance with all specified safety, security and protection measures.
- Provide written notice to your subcontractors and suppliers of the actions they are required to take to secure and protect their portions of the work and the timetable for completion of their storm preparations.
Reprinted courtesy of Peckar & Abramson, PC attorneys
Adam P. Handfinger,
Stephen H. Reisman and
Gary M. Stein
Mr. Handfinger may be contacted at ahandfinger@pecklaw.com
Mr. Reisman may be contacted at sreisman@pecklaw.com
Mr. Stein may be contacted at gstein@pecklaw.com
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