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DIRECTORY AND CAPABILITIES

Replacement of Gym Floor Due to Sloppy Paint Job is Not Resulting Loss

January 02, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The court granted the insurer's motion for summary judgment finding damage to the gym floor due to a poor paint job was not a resulting loss. Bob Robinson Commercial Flooring, Inc. v. RLI Ins,. Co., 2023 U.S. Dist. LEXIS 196105 (D. Ark. Nov. 1, 2023). Bob Robinson Commercial Flooring (BRCF) submitted a bid to the general contractor, Nabholz Construction Corporation, to install a vinyl athletic floor and striping at a middle school. The job also included the painting of a "Wildcat" logo the main gym floor. Therefore, BRCF's job was to install floors with proper painting and striping. Robert Liles and Robert Lines Parking Lot Services was the subcontractor hired to do the painting and striping. BRCF did not supervise or inspect Liles' work while it was ongoing. Nabholz informed BRCF that there were problems with the floor painting, including crooked lines, incorrect markings, misplacement of the three point lines for the basketball surface, drips, smudges, etc. The gym floor was eventually rejected due to the nature of the vinyl flooring, once primer and paint were applied, the paint could not be removed and repainted. BRCF had to hire a new subcontractor to remove the flooring, install new flooring and then paint new lines. The cost for removal and replacement was $134,188.95. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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JD Supra’s 2017 Reader’s Choice Awards

March 22, 2017 — Garret Murai – California Construction Law Blog
JD Supra, one of the world’s leading content distribution companies for the legal industry, announced its Readers’ Choice Awards for 2017 earlier this week. We were honored to be among a group of 200 authors selected from over 40,000 who published legal news, commentary and analysis on legal issues of importance to the clients we serve. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel Rosen Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

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An Interesting Look at Mechanic’s Lien Priority and Necessary Parties

May 13, 2019 — Christopher G. Hill - Construction Law Musings
As regular readers of Construction Law Musings are well aware, I like to discuss mechanic’s liens. Whether it is their picky nature, the way court’s treat them or the soon to take effect changes in the form, mechanic’s liens are a topic near and dear to my heart as a construction attorney. This past month the Fairfax Circuit Court took on the intersection of mechanic’s lien priority under Virginia Code section 43-21 (the lien priority statute) and what constitute necessary parties that must be named in any enforcement suit. In Marines Plumbing, LLC v. Durbin, et al., the Court discussed an all too typical scenario. Marines Plumbing performed repair work on the defendants’ property and the defendants did not pay for the work. Marines Plumbing recorded a memorandum of lien and subsequently sued to enforce that lien. In filing its suit, Marines Plumbing failed to name the trustees and lender on a deed of trust securing the loan on the property. Needless to say, the Defendants moved to dismiss the action for failure to name necessary parties (lender and trustees). Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Federal Court in New York Court Dismisses Civil Authority Claim for COVID-19 Coverage

October 11, 2021 — Eric D. Suben - Traub Lieberman
Courts nationwide have been grappling with coverage for business interruption claims arising from closures occasioned by the COVID-19 pandemic, with mixed results by jurisdiction. A recent decision on the issue from the federal Southern District of New York sheds light on New York law regarding this pressing issue. In Elite Union Installations, LLC v. National Fire Insurance Company of Pittsburgh, PA, 2021 WL 4155016 (Sept. 13, 2021), directives issued by governmental authorities required the insured construction company to shut its doors, leading to a layoff of some employees while others continued to work from home. The insured made a claim under its commercial property coverage for damage to its premises, which it claimed were rendered “uninhabitable” and required repair in the form of alterations to comply with social distancing requirements. In the ensuing coverage litigation, National Union moved to dismiss the complaint alleging covered first-party property damage defined in the policy as “direct physical loss of or damage to property.” Read the court decision
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Reprinted courtesy of Eric D. Suben, Traub Lieberman
Mr. Suben may be contacted at esuben@tlsslaw.com

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Recent Developments Involving Cedell v. Farmers Insurance Company of Washington

September 05, 2022 — Donald Verfurth, Sally Kim, Stephanie Ries & Kyle Silk-Eglit - Gordon & Rees Insurance Coverage Law Blog
Ever since the Washington Supreme Court’s 2013 decision in Cedell v. Farmers Insurance Company of Washington, 176 Wn.2d 686, 295 P.3d 239 (2013), insurance coverage attorneys have been struggling to define the exact parameters of the Cedell ruling in order to safeguard the attorney-client privilege as to the communications between the insurer and its counsel. As a brief background, the Washington Supreme Court held in Cedell that there is a presumption of no attorney-client privilege in a lawsuit involving bad faith claims handling. However, an insurer can overcome the presumption of no attorney-client privilege by showing that its counsel provided legal advice regarding the insurer’s potential liability under the policy and law, and did not engage in any quasi-fiduciary activities, i.e. claims handling activities, such as investigating, evaluating, adjusting or processing the insured’s claim. Since Cedell, various trial courts have held that the following activities by an insurer’s counsel constitute quasi-fiduciary conduct that do not overcome the presumption of no attorney-client privilege, resulting in an order to produce documents and/or to permit the deposition of the insurer’s counsel:

• Insurer’s attorney being the primary or sole point of contact with the insured for the insurer;
• Insurer’s attorney requesting documents from the insured that are relevant to the investigation of the claim;
• Insurer’s attorney communicating directly with the insured or the insured’s counsel regarding claims handling issues or payments;
• Insurer’s attorney interviewing witnesses for purposes of the investigation of the claim;
• Insurer’s attorney conducting an examination under oath of the insured;
• Insurer’s attorney drafting proposed or final reservation of rights letter or denial letter to the insured; and
• Insurer’s attorney conducting settlement negotiations in an underlying litigation.

Reprinted courtesy of Donald Verfurth, Gordon Rees Scully Mansukhani, Sally Kim, Gordon Rees Scully Mansukhani, Stephanie Ries, Gordon Rees Scully Mansukhani and Kyle Silk-Eglit, Gordon Rees Scully Mansukhani Mr. Verfurth may be contacted at dverfurth@grsm.com Ms. Kim may be contacted at sallykim@grsm.com Ms. Ries may be contacted at sries@grsm.com Mr. Silk-Eglit may be contacted at ksilkeglit@grsm.com Read the court decision
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Don’t Conspire to Build a Home…Wait…What?

June 08, 2020 — Ben Volpe - Colorado Construction Litigation Blog
In 1986, the Colorado General Assembly enacted the Pro Rata Liability Act, codified at C.R.S. § 13-21-111.5, which eliminated joint and several liability for defendants in favor of pro rata liability.[1] The statute was “designed to avoid holding defendants liable for an amount of compensatory damages reflecting more than their respective degrees of fault.”[2] However, the following year, the Colorado legislature carved out an exception to preserve joint liability for persons “who consciously conspire and deliberately pursue a common plan or design to commit a tortious act.”[3] Because of this conspiracy exception, plaintiffs try to circumvent the general rule against joint and several liability by arguing that construction professionals defending construction defect cases were acting in concert, as co-conspirators. Plaintiffs argue that if they can prove that two or more construction professionals consciously conspired and deliberately pursued a common plan or design, i.e., to build a home or residential community, and such a plan results in the commission of a tort, i.e., negligence, the defendants may be held jointly and severally liable for all of the damages awarded. Since 1986, Colorado courts have construed the “conspiracy” provision in § 13-21-111.5(4), but some have disagreed as to what constitutes a conspiracy for purposes of imposing joint liability. Civil Conspiracy In Colorado, the elements of civil conspiracy are that: “(1) two or more persons; (2) come to a meeting of the minds; (3) on an object to be accomplished or a course of action to be followed; (4) and one or more overt unlawful acts are performed; (5) with damages as the proximate result thereof.”[4] Read the court decision
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Reprinted courtesy of Benjamin Volpe, Higgins, Hopkins, McLain & Roswell, LLC
Mr. Volpe may be contacted at volpe@hhmrlaw.com

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Ongoing Operations Exclusion Bars Coverage

December 09, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The insurer denied the insured contractor's claim seeking a defense for faulty workmanship based upon the ongoing operations exclusion. PJR Constr. of N.J. v. Valley Forge Ins. Co., 2019 U.S. Dist. LEXIS 127973 (D. N. J. July 31, 2019). PJR Construction was the general contractor to build a swim club and pavilion building for Cambridge Real Property, LLC. PJR began construction on May 29, 2012, and was to complete the construction by March 1, 2013. The project took much longer than anticipated. PJR was denied access to the site on November 13, 2014. Cambridge contended PJR tolerated shoddy workmanship and breached the terms of the contract documents. Cambridge estimated that the project was between 55% and 74.3% complete. PJR and Cambridge went to arbitration. PJR sought a defense from the insurers. Coverage was denied based upon exclusions j (5) and j (6). Exclusion j (5), which the court referred to as the "Ongoing Operations Exclusion," provided the policy did not apply to,

Property Damage to . . . [t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the property damage arises out of those operations.

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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Construction and Contract Issues Blamed for Problems at Anchorage Port

August 27, 2013 — CDJ STAFF
A third-party audit of the construction at the Port of Anchorage has found fault with the design provided by the engineers. In response, PND, the engineering firm involved, has claimed that it was not their design, but faulty construction of it that lead to an interruption in the construction project. Separately, the Office of the Inspector General has called into question how MARAD, the agency which oversaw the port construction, handled the planning and contracts for the project. Control of the project has been taken over by the Municipality of Anchorage, and they have called into question PND’s open cell sheet pile design and PND’s design of the dock infrastructure. Simpson, Gumpertz and Heger reviewed the design, comparing it to a design provided by CH2M Hill, and found that the PND design was inadequate. A contract was subsequently awarded to CH2M Hill. Read the court decision
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