Seattle Washington Building Expert Directory

Washington Supreme Court Interprets Ensuing Loss Exception in All-Risk Property Insurance Policy

May 20, 2024 — David G. Jordan & William E. Phillips IV - Saxe Doernberger & Vita, P.C.
The "ensuing loss" clause is a provision that restores coverage for property insurance claims that are subject to certain policy exclusions, such as “faulty workmanship” and “faulty design.” It applies in cases where there is damage from a covered cause of loss that ensues, or results from, the excluded cause of loss. Courts across jurisdictions have grappled with interpreting the breadth of this clause, leading to varying conclusions regarding its scope and applicability. One of the primary challenges in interpreting “ensuing loss” lies in determining the ultimate cause of damage. Courts must ascertain whether the ensuing loss is sufficiently distinct from the excluded event to warrant coverage under the policy. This analysis often hinges on whether the cause of loss is thought to constitute a separate and independent occurrence or is merely a continuation or exacerbation of the excluded event. Reprinted courtesy of David G. Jordan, Saxe Doernberger & Vita, P.C. and William E. Phillips IV, Saxe Doernberger & Vita, P.C. Mr. Jordan may be contacted at DJordan@sdvlaw.com Mr. Phillips may be contacted at WPhillips@sdvlaw.com Read the court decision
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The Anatomy of a Construction Dispute Stage 3- The Last Straw

January 28, 2015 — Christopher G. Hill – Construction Law Musings
Over the past two weeks here at Construction Law Musings, I’ve discussed the first two stages of a typical construction dispute (if such a thing exists): the claim, and how to bring heat short of litigation/arbitration. As promised, this week I’ll be discussing the next step or “last straw” in a construction dispute, namely, arbitration or litigation to enforce all of those rights that you preserved in the first two stages. Construction litigation is expensive, time consuming, and, quite frankly, a pain in the neck. Because of this fact, I almost always recommend that my construction clients exhaust all of the non-litigation methods (including mediation of course) of resolving their disputes prior to “going nuclear” and filing suit. Unfortunately, even the most diligent attempts at less formal resolution means can be unfruitful and more formal means become necessary. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Motions to Dismiss, Limitations of Liability, and More

January 23, 2023 — Christopher G. Hill - Construction Law Musings
Remember BAE Sys. Ordnance Sys. V. Fluor Fed. Sols? I examined that case on two occasions previously here at Construction Law Musings. Previously the discussions were about the mix (or lack thereof) between fraud and contract and about how careful contract drafting is key. In the most recent opinion in this ongoing litigation from March of 2022, the Court examined various motions to dismiss the Complaint and Counterclaim in the matter. As a reminder, the basic facts are as follows. The US Army Joint Munitions Command (“Army”) contracted with BAE Systems OrdnanceSystems, Inc. (“BAE”) to operate and maintain the Radford Army Ammunition Plant (“RFAAP”)under a basic ordering agreement (“BOA”). Under BOA Task Order 002, BAE contracted to replace the legacy NC facility at the RFAAP with a newer one (the “NC Project”). Initially, BAE subcontracted the NC Project to Lauren Engineers & Constructors (“Lauren”), but later terminated Lauren. Despite terminating Lauren, BAE’s timeline to complete the NC Project remained unchanged and BAE was required to use Lauren’s design for the NC Project. BAE gave interested bidders access to the Lauren design and other related documents and required the selected subcontractor to perform in accordance with the 85% complete Lauren design, that the Lauren design could be relied on for accuracy, and the selected subcontractor only had to complete the unfinished parts. Fluor Federal Solutions, LLC (“Fluor”) submitted a request for information (“RFI”) asking BAE about the standards referenced in the SOW. Fluor was unable to determine the completeness of the Lauren design but relied on BAE’s assertion that the design was 85% complete. BAE rejected Fluor’s initial bid as being too high given what BAE had already paid Lauren for its design and told Fluor to lower its bid because the design was close to complete. Fluor lowered its price and submitted another bid proposal that outlined a firm-fixed-price design/build that forecasted 32 months to complete the NC Project. BAE awarded Fluor an Undefinitized Contract Action (“UCA”) in the amount of $9 million dollars, later increased to $32 million. Under the UCA, Fluor began procuring materials and physical construction before a formal subcontract was agreed upon. On December 17, 2015, BAE and Fluor agreed to a fixed-price design and build subcontract (the “Subcontract”) in which Fluor agreed to design, construct, and partially commission the NC Project for $245,690,422.00, which included money spent already in the UCA. When this litigation began, Fluor was scheduled to complete its work by December 2020, 2.5 years beyond the originally agreed-upon completion date. 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

Court Rules that Damage From Squatter’s Fire is Not Excluded as Vandalism or Malicious Mischief

April 15, 2015 — Valerie A. Moore, Christopher Kendrick, and Colin T. Murphy – Haight Brown & Bonesteel LLP
In Ong v. Fire Insurance Exchange (No. B252773, filed 4/3/15), a California appeals court ruled that a vacancy exclusion limited to damage caused by “vandalism or malicious mischief” did not bar coverage for damage to a vacant property caused by a warming fire purposely started by a transient that got out of control and spread to other parts of the property. In Ong, the insured’s rental premises had been vacated by tenants and the utilities turned off. Nearly two years later, the insured submitted a claim for fire damage that had just occurred. An investigator reported finding signs that a squatter had been living in the building, stating that: “[I]t appears the fire may have been initiated as the result of an uncontrolled warming fire started by an unauthorized inhabitant.” The investigator found firewood and a mattress, and concluded that holes burned in the floor were the result of the squatter attempting to throw burning wood out the door when the fire got out of control. The policy excluded vandalism as follows: “We do not cover direct or indirect loss from: . . . 4. Vandalism or Malicious Mischief, breakage of glass and safety glazing materials if the dwelling has been vacant for more than 30 consecutive days . . . just before the loss. A dwelling under construction is not considered vacant.” The term “Vandalism” was not defined in the policy. The insurer denied coverage based on the exclusion, stating: “Our investigation indicates that this loss was the result of vandalism. A trespasser entered the vacant dwelling and intentionally set a fire on the kitchen floor.” Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys Valerie A. Moore, Christopher Kendrick and Colin T. Murphy Ms. Moore may be contacted at vmoore@hbblaw.com. Mr. Kendrick may be contacted at ckendrick@hbblaw.com Mr. Murphy may be contacted at cmurphy@hbblaw.com Read the court decision
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Confidence Among U.S. Homebuilders Little Changed in January

January 28, 2015 — Bloomberg News
(Bloomberg) -- Confidence among U.S. homebuilders hovered in January close to a nine-year high, indicating the residential real estate market is poised to expand this year. While the National Association of Home Builders/Wells Fargo builder sentiment gauge fell to 57 this month from 58 in December, readings greater than 50 mean more respondents report good market conditions, according to figures issued from the Washington-based group Tuesday. The median forecast in a Bloomberg survey called for 58. Read the court decision
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Reprinted courtesy of Bloomberg News

New California Employment Laws Affect the Construction Industry for 2019

February 18, 2019 — Smith Currie
The California Legislature introduced more than 2637 bills in the second half of the 2017-2018 session that became law effective January 1, 2019, many of which address employment issues facing California employers in the construction industry. Below we have summarized some of the more important laws (the summary titles are live links to the text of the new law), and employers are urged to protect their companies by updating contracts, policies, and/or practices for compliance. The following is for general knowledge, and we recommend you consult with your attorney for specific legal advice. AB 1565 – Contractor Wage Liability: AB 1565 repeals the provision that relieved direct contractors for liability for anything other than unpaid wages and fringe or other benefit payments or contributions, including interest owed. In the past, a direct contractor could withhold “disputed” sums owed to a subcontractor if the subcontractor failed to provide “information” about their and lower-tier subcontractors’ payroll records. Read the court decision
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Reprinted courtesy of Smith Currie
Smith Currie attorneys may be contacted at info@smithcurrie.com

Surety’s Several Liability Under Bonds

March 20, 2023 — David Adelstein - Florida Construction Legal Updates
When a payment or performance bond is issued on behalf of its bond-principal, the surety is jointly and severally liable with its bond-principal. This means the surety has several liability under the bond, i.e., you don’t need to pursue the principal of the bond to pursue liability under the bond, which is a separate written intrument. Thus, if you are claiming damages of $500,000, by way of example, you can sue both the principal and surety under the bond, you can ONLY sue the principal under the bond (which is rarely practical), or you can ONLY sue the surety under the bond (which, oftentimes, is very practical). In many instances where I am pursuing a bond claim on behalf of a client, particularly a payment bond claim, I only sue the surety and do not sue the bond-principal unless there are certain strategic reasons in doing so. This is because of the surety’s several liability under the bond and there may be solvency issues with the principal or contractual reasons that, strategically, make much more sense to exclude the principal from the action. In MJM Electric, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2023 WL 2163087 (M.D.Fla. 2023), an electrical subcontractor was hired to perform electrical work by the prime contractor. The prime contractor had a payment bond. The project was delayed for two years. The electrical subcontractor claimed the prime contractor failed to compensate it for significant delays and out of scope work. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Vallagio v. Metropolitan Homes: The Colorado Court of Appeals’ Decision Protecting a Declarant’s Right to Arbitration in Construction Defect Cases

May 20, 2015 — David M. McLain – Colorado Construction Litigation
On May 7th, the Colorado Court of Appeals issued its much anticipated ruling in Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc., et al., 2015COA65 (Colo. App. May 7, 2015). By way of background, the Vallagio at Inverness Residential Condominiums were developed by Metro Inverness, LLC, which also served as the declarant for its homeowners association. Metropolitan Homes was Metro Inverness’ manager and the general contractor on the project. Greg Krause and Peter Kudla served as declarant-appointed members of the Association’s board during the period of declarant control. When it set up the Association, Metro Inverness included within the Association’s declaration a mandatory arbitration provision specifically for construction defect claims. This provision stated that it “shall not ever be amended without the written consent of Declarant and without regard to whether Declarant owns any portion of the Real Estate at the time of the amendment.” Read the court decision
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Reprinted courtesy of David M. McLain, Higgins, Hopkins, McLain & Roswell, LLC
Mr. McLain may be contacted at mclain@hhmrlaw.com

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