Seattle Washington Building Expert Directory

Top Developments March 2024

April 22, 2024 — Complex Insurance Coverage Reporter
CLAIMS-MADE COVERAGE Zurich Am. Ins. Co. v. Syngenta Crop Prot. LLC, 2024 Del. LEXIS 68 (Del. Feb. 26, 2024) Delaware Supreme Court concludes that a letter from a lawyer informing an insured of possible lawsuits without identifying potential plaintiffs or demanding payment is not a “claim for damages” within the meaning of claims-made CGL and umbrella liability policies. Citing case law from Delaware and other jurisdictions, it reasoned that, in the ordinary sense, a “claim for damages” (which the policies did not define) is “a demand or request for monetary relief by or on behalf of an identifiable claimant.” According to the court, the letter in question did not meet this definition because it did not identify any claimants “except in the vaguest terms” or request monetary relief on any claimant’s behalf, but rather communicated only a threat of future litigation. As a result, the letter was not a claim made before the policy periods at issue. POLLUTION EXCLUSION Wesco Ins. Co. v. Brad Ingram Constr., 2024 U.S. App. LEXIS 1488 (9th Cir. Jan. 23, 2024) A divided Ninth Circuit panel, applying California law, holds that a pollution exclusion* in a CGL policy does not preclude a duty to defend an underlying suit alleging physical injury from exposure to “clouds of toxic dust” deposited in the environment by a wildfire and released during clean up efforts. Citing MacKinnon v. Truck Ins. Exch., 73 P.3d 1205 (Cal. 2003), the majority explained that determining whether a “pollution event” (i.e., “environmental pollution”) resulting in excluded injury has occurred involves consideration of “the character of the injurious substance” and whether the exposure resulted from a “mechanism specified in the policy.” It concluded that a potential for coverage (and, therefore, a defense obligation) existed because, although wildfire debris may be considered a “pollutant” in certain circumstances, the mechanism alleged in the underlying complaint – “expos[ure] . . . to clouds of toxic dust during the loading and unloading of [the underlying plaintiff’s] truck” – did not clearly constitute an “event commonly thought of as pollution.” Read the court decision
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Reprinted courtesy of White and Williams LLP

Anti-Concurrent Causation Endorsements in CGL Insurance Policies: A Word of Caution

August 29, 2022 — David M. McLain – Colorado Construction Litigation
While I have not performed exhaustive research into the origin of anti-concurrent causation (“ACC”) endorsements on insurance policies, or how or when they migrated from first-party property policies to commercial general liability (“CGL”) policies, they have done so. The result for Colorado’s construction professionals may rear its ugly head as an unwelcome and surprise outright declination of coverage for construction defect claims. ACC endorsements state that if there are two causes of damage: one of which is covered by a policy and one of which is not, the carrier can invoke the ACC endorsement to disclaim coverage for all of the damage. An exemplar ACC endorsement is ISO Form CG 21 67, entitled “Fungi or Bacteria Exclusion.” Read the court decision
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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell
Mr. McLain may be contacted at mclain@hhmrlaw.com

New York Considers Amendments to Construction Industry Wage Laws that Would Impose Significant Burden Upon Contractors

August 04, 2021 — Richard W. Brown & Michael D. Angotti - Saxe Doernberger & Vita, P.C.
A bill that would amend the the wage and hour requirements of the New York Labor Law was recently passed by the New York State Legislature and is expected to be signed by Governor Cuomo. Bill Number S2766C (the “Bill”) is intended to protect construction workers against wage theft. However, it places a heavy burden on contractors to police the payroll practices of its downstream subcontractors and exposes them to potentially significant liability for the wage and hour violations of their subcontractors. The proposed Bill would make a contractor or upstream subcontractor jointly and severally liable for any wages owed to employees of their subcontractors. The Bill allows for a private right of action for such subcontractor’s employee (or such employee’s representative) to bring a civil or administrative action seeking payment of unpaid wages owed pursuant to Section 198 of the New York Labor Law. In such an action against a subcontractor for unpaid wages, the contractor or upstream subcontractor is not only jointly and severally liable for any unpaid wages, but also for the prevailing claimant’s reasonable attorney fees, prejudgment interest, and, absent a good faith defense, liquidated damages equal to the amount of the wages owed. Reprinted courtesy of Richard W. Brown, Saxe Doernberger & Vita, P.C. and Michael D. Angotti, Saxe Doernberger & Vita, P.C. Mr. Brown may be contacted at RBrown@sdvlaw.com Mr. Angotti may be contacted at MAngotti@sdvlaw.com Read the court decision
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Constructive Suspension (Suspension Outside of an Express Order)

December 13, 2022 — David Adelstein - Florida Construction Legal Updates
In the federal procurement arena, there is a concept known as “constructive suspension.” Constructive suspension, while known in the federal arena, should reasonably apply to all projects when work is stopped outside of an express order to stop the work based on the law below. An unreasonable suspension is an unreasonable suspension and an express order to stop the work does not negate the effects of what really amounts to a suspension. “Constructive suspension occurs when work is stopped absent an express order by the contracting officer and the government is found to be responsible for the work stoppage.” P.R. Burke Corp. v. U.S., 277 F.3d 1346, 1359 (Fed. Cir. 2002). The government delay must be unreasonable to support a constructive acceleration claim. Id. “To demonstrate such a constructive suspension of work, the contractor must show that the delay (1) was for an ‘unreasonable length of time,’ (2) was proximately caused by the government’s actions, and (3) resulted in some injury to the contractor.” Fireman’s Fund Ins. Co. v. U.S., 2001 WL 36415627, *6 (Fed.Cl. 2001) (citation omitted). “Relative to proving that the delay was directly caused by the government, the contractor must concomitantly show that it was not delayed by any concurrent cause that would have independently generated the delay during the same time period even if it does not predominate over the government’s action as the cause of the delay.” Beauchamp Const. Co. v. U.S., 14 Cl.Ct. 430, 437 (Cl.Ct. 1988). 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

Recent Statutory Changes Cap Retainage on Applicable Construction Projects

March 11, 2024 — Patrick McKnight - The Dispute Resolver
Recent reforms to certain state retainage laws have reduced the lawful amount of withholding permitted on construction projects. In theory, retainage allows an owner to mitigate the risk of incomplete or defective work by withholding a certain portion of payment until the construction project is substantially complete. Recent statutory developments in Washington, New York, and Georgia represent significant changes in how much an owner may retain on applicable construction projects in those jurisdictions. The details of each state’s retainage laws vary in many important respects. Most states set caps at 5% or 10%, with important variations depending on the type of project and the amount of progress completed. Some states require retainage to be held in an escrow account, but most do not. Many federal construction projects allow up to 10% retainage, while other federal agencies do not require any retention. See 48 CFR § 52.232-5(e) - Payments Under Fixed-Price Construction Contracts. The ongoing motivation for retainage reform is typically framed in terms of reducing delays in getting payment to subcontractors who complete their scope of work on time and free from defects. Read the court decision
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Reprinted courtesy of Patrick McKnight, Fox Rothschild LLP
Mr. McKnight may be contacted at pmcknight@foxrothschild.com

Connecticut District Court to Review Proposed Class Action in Defective Concrete Suit

July 13, 2017 — Tiffany Casanova - Saxe Doernberger & Vita, P.C.
Thousands of Connecticut homeowners have fallen victim to a defective concrete epidemic. Over the last thirty years, the foundation in many homes, particularly in the Northeast region of the state, was built with a concrete aggregate that contained the mineral pyrrhotite. When exposed to the elements, including water and air, pyrrhotite oxidizes, resulting in cracking and disintegration over time. For Connecticut homeowners, this has resulted in disaster, both financially and to the foundations of their homes. Previously, many homeowners insurance policies provided coverage for a “collapse” caused by the “use of defective material . . . in construction, remodeling or renovation.” As the pyrrhotite epidemic became more prevalent, insurers altered the coverage afforded for a “collapse” in several ways that potentially minimized or eliminated coverage for these types of claims. Primarily, coverage for a “collapse” is now restricted to collapses that are “abrupt,” and coverage is excluded for buildings in danger of falling down or those that are still standing, even if evidence of cracking or settling is demonstrated. The insurers did not notify homeowners of the change. Thus, homeowners who renewed policies were not informed of a coverage reduction nor were they provided with a corresponding reduction in the amount of premium. Read the court decision
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Reprinted courtesy of Tiffany Casanova, Saxe Doernberger & Vita, P.C.
Ms. Casanova may be contacted at tlc@sdvlaw.com

Justin Clark Joins Newmeyer & Dillion’s Walnut Creek Branch as its Newest Associate

May 03, 2017 — Newmeyer & Dillion LLP
WALNUT CREEK, Calif. – APR. 28, 2017 – Up and coming associate and insurance attorney Justin Clark is the newest associate to join the ever-growing litigation practice at Newmeyer & Dillion LLP’s Walnut Creek office. Clark brings experience in the areas of insurance litigation, construction defect litigation, and business transactions. Walnut Creek’s managing partner Brian Morrow explained why he is so excited by the addition of Clark: “We are thrilled to have Clark on board, as his emphasis on insurance coverage will assist in a key area for our clients, and further expand our capabilities in our northern California office.” Clark has a background in a variety of practice areas, including insurance coverage, products liability, and asbestos litigation. He advocates for manufacturers, suppliers, distributers, and contractors in all phases of litigation. Clark represents developers, builders, and general contractors in construction and insurance disputes. He also helps small business clients draft commercial contracts to better serve their growing business needs. Clark can be reached at justin.clark@ndlf.com or 925-988-3263. About Newmeyer & Dillion For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com. Read the court decision
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Owner Bankruptcy: What’s a Contractor to Do?

February 28, 2018 — Troy R. Covington and Stephen M. Parham - Construction Executive Magazine
Bankruptcy of the owner or developer of a real estate construction project can be very unsettling to contractors. But a declaration of bankruptcy by the developer, in and of itself, does not constitute a breach of contract such that the contractor can stop working. Contract provisions providing that the contract is terminated if a party becomes insolvent or files for bankruptcy are generally unenforceable. Partially-performed construction contracts are executory contracts, meaning that the obligations of the parties to the contract have not yet been fully performed. The Bankruptcy Code allows a bankruptcy trustee (in a Chapter 7 dissolution case) or the debtor-in-possession (in a Chapter 11 reorganization case) either to assume or to reject an executory contract. A debtor-in-possession has until the time of the confirmation of its plan of reorganization to decide if it will assume or reject the contract. The contractor may ask the bankruptcy court to require the debtor-in-possession to make a decision on the contract sooner, but the court will most likely give the debtor-in-possession a fair amount of time to make the decision. Reprinted courtesy of Troy R. Covington and Stephen M. Parham, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Covington may be contacted at sparham@bloomparham.com Mr. Parham may be contacted at tcovington@bloom-law.com Read the court decision
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