Policy's Limitation Period for Seeking Replacement Costs Not Enforced Where Unreasonable
March 12, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe New York Court of Appeals determined that a two year period for obtaining replacement costs for damage to property was unenforceable where the property could not be reasonably replaced in two years. Executive Plaza, LLC v. Peerless Ins. Co., 2014 WL 551251 (N.Y. Ct. App. Feb. 13, 2014).
Plaintiff's office building was severely damaged in a fire on February 23, 2007. It cost more than a million dollars to restore the building to its previous condition. Plaintiff had $1 million in coverage from Peerless. The policy provided that replacement costs for any loss would be paid after the damaged property was repaired. The insured was required to make the repairs as soon as possible. Further, the policy provided that any legal action against the insurer had to be brought within two years of the loss.
Peerless paid the "actual cash value" of the destroyed building pursuant to the policy in the amount of $757,812.50. Peerless informed the plaintiff that it would have to provide documentation of the completion of repairs to collect the full replacement value, another $242,187.50.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
When “Substantially Similar” Means “Fundamentally Identical”: Delaware Court Enforces Related Claim Provision to Deny D&O Coverage for Securities Class Action
August 10, 2021 —
Geoffrey B. Fehling, Lawrence J. Bracken II & Lorelie S. Masters - Hunton Andrews KurthA company faces two class action lawsuits—filed by different plaintiffs, complaining of different allegedly wrongful conduct, asserting different causes of action subject to different burdens of proof, and seeking different relief based on different time periods for the alleged harm. Those facts suggest the suits are not “fundamentally identical,” but that is what a Delaware Superior Court recently concluded in barring coverage for a policyholder seeking to recover for a suit the court deemed “related” to an earlier lawsuit first made outside the policy’s coverage period. First Solar Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. N20C-10-156 MMJ CCLD (Del. Super. Ct. June 23, 2021). The decision, which is not on all fours with some of the authority upon which it relies, underscores the inherent unpredictability of “related” claim disputes and need for careful analysis of the policy language against the factual and legal bases of the underlying claims.
Underlying Shareholder Class Actions and D&O Claims
Shareholders of solar panel manufacturer First Solar sued the company and its directors and officers in a class action lawsuit (the “Smilovits Action”) for the class period April 2008 to February 2012. The Smilovits Action asserted federal securities violations arising from First Solar’s alleged misrepresentations about the company’s business strategies, product design, financial strength, and ability to offer solar electricity at comparable rates to conventional energy producers (i.e., achieving “grid parity”), artificially inflated stock price, insider trading, manipulation of solar power metrics, and violations of GAAP accounting standards. First Solar submitted a claim to its D&O insurer, National Union, which provided coverage for the Smilovits Action and exhausted the policy.
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Geoffrey B. Fehling, Hunton Andrews Kurth,
Lawrence J. Bracken II, Hunton Andrews Kurth and
Lorelie S. Masters, Hunton Andrews Kurth
Mr. Fehling may be contacted at gfehling@HuntonAK.com
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Ms. Masters may be contacted at lmasters@HuntonAK.com
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Lawmakers Strike Deal on New $38B WRDA
January 09, 2023 —
Tom Ichniowski - Engineering News-RecordKey Senate and House leaders have reached a bipartisan agreement on a new Water Resources Development Act (WRDA) that would authorize more than $37 billion in federal funds for 25 new and five modified Army Corps of Engineers flood and hurricane protection, harbor dredging and other civil works projects across the U.S.
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Tom Ichniowski, Engineering News-Record
Mr. Ichniowski may be contacted at ichniowskit@enr.com
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Boyfriend Pleads Guilty in Las Vegas Construction Defect Scam Suicide
November 07, 2012 —
CDJ STAFFOne of the odder twists of the Las Vegas construction defect scandal was the charge that Nancy Quon’s boyfriend helped her in an initial suicide attempt. Quon, implicated by not charged in the case of taking control of homeowner boards in order to profit from construction defect settlements. William Webb was alleged to have bought the drug GBH in order to allow Quon, his girlfriend, to commit suicide. Ms. Quon later overdosed on a combination of alcohol and prescription drugs.
In addition to pleading guilty to the drug charges, Webb also made a plea bargain with prosecutors in which he did not admit guilt in an insurance fraud charge, but acknowledged that prosecutors would likely be successful at obtaining a conviction. Webb will be sentenced February 7 and is expected to receive a sentence of six years imprisonment.
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Subsequent Owners of Homes Again Have Right to Sue Builders for Construction Defects
October 07, 2016 —
Mark L. Parisi – White and Williams LLPOwners of homes with damage from construction defects have long had the standing to sue the builders of their homes using the legal theories of 1) breach of contract, 2) breach of implied warranty, and 3) breach of Pennsylvania’s consumer fraud statute, the Unfair Trade Practices and Consumer Protection Law (UTPCPL).
Before the 2014 decision of the Pennsylvania Supreme Court in Conway v. Cutler, even owners who were not the original purchasers of their homes, so-called subsequent owners, had a right to sue the builder of their homes using implied warranty as the legal theory. But the Supreme Court in Conway said in 2014 that even though an implied warranty theory is not based on a written contract, it is a quasi contract theory and because subsequent owners never had a contractual relationship with the builder of their home, the implied warranty cause of action was not available. Subsequent purchasers were thus left without a remedy for damage from defective construction in their homes and builders had a second safe harbor from claims regarding homes they built. The first safe harbor is Pennsylvania’s Statute of Repose. If the home was completed more than 12 years before a lawsuit was filed, the Statute of Repose bars the claim. But after Conway, if the home was sold, this also cut off a builder’s potential liability for construction defects in the home.
ENTER THE UTPCPL
On July 26, 2016 the Pennsylvania Superior Court in the case of Adams v. Hellings Builders issued a non-published (and therefore non-precedential) decision in a stucco construction defect case that held that subsequent purchasers could sue their home’s builder under the UTPCPL because the Act had no requirement that the purchaser of a product, or home, be the original purchaser. The decision cites several other appellate cases not involving construction defect claims that held that the UTPCPL was a valid legal theory for claims regarding products purchased second hand by the plaintiffs in those other cases. The court in Adams held that there was no reason that a suit regarding construction defects in a home should be treated any differently.
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Mark L. Parisi, White and Williams LLPMr. Parisi may be contacted at
parisim@whiteandwilliams.com
Luxury Homes Push City’s Building Permits Past $7.5 Million
December 30, 2013 —
CDJ STAFFThe city of Ardmore, Oklahoma is seeing a building boom with the total value of building permits issued by the city in November slightly exceeded $7.5 million, reports Ardmoreite.com. Most of that total comes from residential construction, with the bulk of it coming from just three homes. While Lance Windel Construction plans on building 46 homes, the top value of those homes will be $153,000. The total value for the homes being built by three other firms is more $6.4 million, and those contractors are building just one home each.
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East Coast Evaluates Damage After Fast-Moving 'Bomb Cyclone'
March 06, 2022 —
Scott Van Voorhis - Engineering News-RecordCoastal areas in the northeast US are assessing damage from a fast-moving “bomb cyclone” that caused temperatures to plummet, triggered heavy flooding and high winds, and dumped 2 ft of snow in some New England areas.
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Scott Van Voorhis, Engineering News-Record
ENR may be contacted at enr@enr.com
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Is the Manhattan Bank of America Tower a Green Success or Failure?
April 15, 2014 —
Beverley BevenFlorez-CDJ STAFFConstruction Digital reported that the Bank of America tower in Manhattan, New York, “has been conversely hailed as both the greenest skyscraper in the world and an energy-guzzling toxic tower that exposes the charade of the LEED rating system.” It is the first skyscraper to ever achieve the highest LEED Platinum rating. However, a critic alleged that the eighty-year old Empire State Building “uses half the energy” of the new Bank of America tower.
The Bank of America tower, designed by architects Cook and Fox, was built with “local and recycled materials,” as well as “floor-to-floor insulated glazing” that maximizes “natural light and traps heat, and lights are automatically dimmed in daylight.” Rainwater is captured for reuse, and “waterless urinals save an estimated 8,000,000 US gallons of water per year.”
However, Construction Digital reported that Sam Roudman in New Republic Magazine “pointed out that buildings contribute more to global warming than any other sector of the economy, consuming more energy and producing more greenhouse gas emissions in America than every car, bus, jet, and train combined; and furthermore, than every factory combined.”
Joel Levy writing for Construction Digital declared, “We can call LEED a failed artifice and even suggest abandoning it as a pointless charade, but unless we want to live in caves and go back to using candles for light, we must accept the fact that the 155,000,000 people that make up America’s workforce power the country and indeed the world’s economy…need somewhere to work.”
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