Third Circuit Follows Pennsylvania Law - Damage Caused by Faulty Workmanship Does Not Arise from an Occurrence
May 10, 2013 —
Tred EyerlyThe Third Circuit followed Pennsylvania law in determining that damage caused by faulty workmanship did not arise from an occurrence. Zurich Am. Ins. Co. v. R. M. Shoemaker Co., 2013 U.S. App. LEXIS 6093 (3d Cir. March 27, 2013).
The County sued R. M. Shoemaker, alleging faulty construction of an addition to a correctional institution. The County alleged Shoemaker negligently supervised its subcontractor, thereby permitting the subcontractor to engage in willful misconduct, resulting in damage to structural elements of the correctional institution. The County alleged that Shoemaker's negligence permitted water to intrude, damaging the electrical systems, acoustic ceilings and miscellaneous equipment.
Zurich sought a declaratory judgment that it was not required to defend or indemnify Shoemaker. The district court granted Zurich summary judgment. Relying on Pennsylvania law, the district court found that the allegations in the underlying action did not arise from an occurrence.
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Tred EyerlyMr. Eyerly can be contacted at
te@hawaiilawyer.com
Car Crashes Through Restaurant Window. Result: Lesson in the History of Additional Insured Coverage
December 29, 2020 —
Randy J. Maniloff - White and Williams LLPBack in the day, additional insureds were oftentimes afforded coverage for liability “arising out of” the named insured’s work for the additional insured. When confronted with such language, courts often concluded that it dictated “but for” causation. In other words, but for the named insured doing the work for the additional insured, the additional insured would not be in the liability-facing situation that it is in. The result in some cases: additional insureds were entitled to coverage for their sole negligence. Decisions reaching such a conclusion were generally not well-received by insurers. This was especially so when you consider that the premium received by insurers, for the AI coverage, may not have been enough to buy a package of Twizzlers.
Insurer frustration with such decisions -- which insurers did not believe expressed the intent of additional insured coverage -- led ISO to make revisions to additional insured forms in 2004 (later revisions followed). At the heart of these revisions was an attempt to require fault on the part of the named insured before coverage could be afforded to the additional insured. (This is a very brief and simple history of this complex issue.)
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Randy J. Maniloff, White and Williams LLPMr. Maniloff may be contacted at
maniloffr@whiteandwilliams.com
Bill Introduced to give Colorado Shortest Statute of Repose in U.S.
January 21, 2015 —
Jesse Howard Witt – Acerbic WittYesterday, State Senator Ray Scott (R-Mesa County) introduced a bill to shorten Colorado’s already short statute of repose. If this bill passes, it will severely undermine the rights of Colorado homeowners.
Colorado already has one of the shortest construction defect statutes of repose in the United States. If a homeowner does not discover a defect within six years of a house’s completion, the homeowner may forfeit all legal rights to seek repairs. Senator Ray’s bill would cut this time in half and could preclude homeowners from obtaining any relief three years after a home is built. No other state in America has such a severe limit on homeowner rights.
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Jesse Howard Witt, The Witt Law FirmMr. Witt welcomes comments at www.wittlawfirm.net
GSA Releases Updated Standards to Accelerate Federal Buildings Toward Zero Emissions
August 12, 2024 —
The U.S. General Services AdministrationWASHINGTON — The U.S. General Services Administration (GSA) is advancing progress toward the Biden-Harris Administration's federal sustainability goals by releasing updated standards for federal buildings. P100 Facilities Standards for the Public Buildings Service establish mandatory design and construction standards and performance criteria for 300,000 federal buildings nationwide. The updated standards will help advance the adoption of cleaner, more efficient technologies for buildings; lead the way towards realizing the goals of the Federal Sustainability Plan to achieve net-zero emissions from all federal buildings by 2045; and promote the use of American-made, low carbon construction materials.
P100 requires that facilities adopt advanced energy conservation strategies and eliminate on-site fossil fuel use, directives that align with federal sustainability goals and will accelerate the transition to a clean energy economy. The industry-leading standard calls for grid-interactive efficient buildings, leverages innovative technologies through GSA's Green Proving Ground, requires the use of low-embodied carbon materials, and directs potable water reuse. These comprehensive measures ensure that new and renovated federal facilities achieve peak performance while minimizing environmental impact.
The 2024 P100 establishes exceptional benchmarks for:
- Electrification: New standards for building equipment and systems to be powered by clean energy sources.
- Embodied Carbon: Requirement to utilize low-embodied carbon materials, including salvaged, reused, regenerative, and biomimetic options.
- Energy Efficiency: Enhanced building envelope performance to minimize energy loss and improve overall efficiency.
- Grid-Interactive Efficient Buildings: New measures to support a more resilient, responsive grid.
- Water Reuse: Mandating that buildings have a 15% potable water reuse rate.
- Construction Decarbonization: Ground breaking new low-carbon methods for constructing federal buildings including clean energy operations, material salvage, and offsite assemblage.
- Labor Practices: New standards protecting workers from unfair or unsafe labor practices, ensuring supply chains are free from child and forced labor and that workers are protected from the impacts of extreme heat.
P100 is updated and published every three years. For more detailed information on the 2024 P100 and other GSA initiatives, visit www.gsa.gov/p100.
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Fla. Researchers Probe 'Mother of All Sinkholes'
August 24, 2017 —
Thomas F. Armistead - Engineering News-RecordIt will take months to complete remediation of the largest sinkhole in Pasco County, Fla.’s recent history, county officials say. Seven houses have been lost or condemned since the sinkhole was reported at 7:21 a.m. on July 14. That day, two houses collapsed into the hole, which initially measured 225 ft long and 50 ft deep. As the cavity’s dimensions grew to between 260 ft and 180 ft, the county red-tagged five additional houses.
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Thomas F. Armistead, ENRENR may be contacted at
ENR.com@bnpmedia.com
Federal Court of Appeals Signals an End to Project Labor Agreement Requirements Linked to Development Tax Credits
October 20, 2016 —
Gregory R. Begg & Aaron C. Schlesinger – Peckar & Abramson, P.C.What Action Should Owners, Developers and Contractors Take in Anticipation of Successful Challenges to PLA Requirements?
Recently, a federal court in New Jersey issued a decision which very well may invalidate all Project Labor Agreements (“PLA’s”) entered into as a condition to receipt of tax incentives for private development. Tax incentives utilized to promote private development are different, according to the court, than typical public works projects where PLA requirements have generally been held valid. Owners, developers, contractors and governmental entities must assess the consequences of this decision upon contracts already and to be awarded in the future where tax benefits may be linked to a PLA requirement.
In 1993, in what has become known as the Boston Harbor Case, the United States Supreme Court held that state and local governmental entities may condition the award of public works contracts on the contractor’s agreement to enter into PLA’s.
That decision has been followed nationwide since then to uphold the validity of various state and local law bidding conditions requiring successful bidders to negotiate and enter into project labor agreements as a condition to the award of public works contracts. The rationale is that when the government, like any other private party, is participating in an economic market, it may exercise its discretion in setting terms and conditions it believes best suit its interests in the efficient procurement of goods and services in that market. Therefore, a PLA requirement by a governmental entity engaged in market activity is no more or less valid than a PLA requirement on a purely private project.
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Gregory R. Begg, Peckar & Abramson, P.C. Aaron C. Schlesinger, Peckar & Abramson, P.C.
Mr. Begg may be contacted at gbegg@pecklaw.com
Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com
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Duty to Defend Construction Defect Case Triggered by Complaint's Allegations
August 20, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe subcontractor's insurer could not escape contributing to defense costs of its insured when coverage was possible based upon the underlying complaint's allegations. Seneca Ins. Co. v. James River Ins. Co., 2014 U.S. Dist. LEXIS 97156 (D. Ore. July 17, 2014).
The underlying action alleged construction defects in a 60-unit complex located in Seaside, Oregon. S.D. Deacon Corp. was the general contractor and contracted with the owners association to reconstruct portions of the building, including the curtain wall. Deacon subcontracted with Superwall Design, LLP for work on the curtain wall renovation.
At some point not specified in the underlying complaint, the Association notified Deacon of construction defects in the curtain wall renovation. Deacon investigated and concluded that the alleged property damage was the result of inadequate usage of materials, violations of state and local building codes, and violations of relevant industry standards relating to the work performed by Superwall. Deacon contended that the problems were caused by Superwall's faulty workmanship.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
The Evolution of Construction Defect Trends at West Coast Casualty Seminar
May 03, 2018 —
Don MacGregor - Bert L. Howe & Associates, Inc.Twenty-five years ago. 1993. On January 23rd, Bill Clinton was sworn in as the 42nd President of the United States. The average cost of a gallon of gasoline was $1.16, a movie ticket cost $4.00, and the average cost of a new home was $113,200.00.
1993 also marked the first of what would be a quarter century of annual seminars hosted by West Coast Casualty Service, and provided to the combined professionals within the construction defect community. As the seminar has grown both in attendance and prominence within this community under the watchful stewardship of David and Coral Stern, much has changed both with regard to the content of the seminar and the climate within which it was presented. A quick look at the topics addressed over the past 25 years of the Construction Defect Seminar provides one with a veritable history of construction defect litigation and insurance coverage trends across the United States and beyond.
While the first seminar was hosted in 1993, my first attendance didn’t occur until 1999, and the first time I was honored to be a panelist would have to wait until 2007. In the subsequent years, I’ve had the opportunity to sit on panels an additional three times, and each one I gained rare and valuable insights into the construction defect community, its willingness to challenge itself, and the amazing professionals we all have the distinct pleasure of working with every day (and whom we sometimes take too much for granted).
In the mid to late 90’s, topics at the seminar included such subjects as the Montrose Chemical Corp v. Superior Court decision (Montrose) regarding a carrier’s duty to defend and the subsequent Stonewall Insurance case that examined the duty to indemnify in the context of construction defect claims. The California Calderon Act of 1997, laying out the roadmap for HOA’s filing construction defect lawsuits was also a topic of discussion and debate within the West Coast “arena.”
The new millennium saw the landmark Aas v. William Lyon decision, which disallowed negligence claims for construction defects in the absence of actual resultant damage. This was followed by Presley Homes v. American States Insurance wherein the court ruled that a duty to defend applies where there is mere potential for coverage and the duty to defend applies to the entire action. Each of these bellwether decisions was addressed contemporaneously by panels at the West Coast seminar, contemporaneously bringing additional dialog to the CD community, from within the community.
2002 brought what has become the defining legislation in California regarding construction defect litigation and a builder’s right to repair. Senate Bill 800 (SB800), and its subsequent codification as Title 7, Part 2 of Division 2 of the California Civil Code, Sections 895 through 945.5 would become the defining framework for similar legislation across the United States. During the course of its drafting, movement through the legislature, and final adoption in January of 1993, many of the questions raised and debated in committees in Sacramento, had already been and were continuing to be addressed by panelists at the West Coast Seminar. How does SB800 work with Calderon? How does it affect the prior Aas decision? What now constitutes a defect, and what are timeframes established within the complex pre-litigation process? Open the pages of the 2002 – 2004 seminar invitations and you’ll see panels comprised of the finest members of the insurance law and coverage communities addressing those very questions (and more)!
As the first decade of the new century drew to a close, a brief review of the WCC invitations from that period suggests a trend towards programmatic analyses of key themes selected for the seminar. In 2008, my second opportunity as a guest speaker, topics included a review of the state of construction defect litigation in a post-SB 800 environment. Panelists offered retrospective insight into the state of right to repair statutes in multiple states, while others offered a glimpse at where the industry might be headed, as similar legislation was enacted across the country. As always, pertinent court decisions bearing on construction defect, both in California, and elsewhere were given unique perspective and additional clarity by multiple panels of gifted speakers. In 2009, claims and coverage were examined from multiple unique perspectives, including that of plaintiff, the policyholder, and the insurer. Wrap policies and the gaps in due to self-insured retention obligations were examined.
As we rapidly approach the end of the second decade of the 21st Century, West Coast Casualty’s Construction Defect Seminar continues to lead the construction defect community as the premier source for information and peer dialog on all matters relating to construction law, coverage, and emerging trends. In 2017, the Seminar tackled such broad subjects as the role of women in the construction industry, claims management, and risk management, challenges raised by wrap versus non-wrap litigation, and the emergent trend of apartment to condo conversions (and the attendant coverage challenges).
This month, beginning on May 16th at the Disneyland Resort, in Anaheim California, America’s largest Construction Defect event kicks off its 25th Anniversary celebration. As has been every year since 1993, the seminar invitation promises insurance, legal, and industry professionals an exciting and informative array of salient and timely panel topics, as well as a stellar faculty of gifted panelists. If this year’s seminar is anything like the past 25 years, this edition of West Coast Casualty’s Construction Defect Seminar will not only be informative and educational, but also a promise for another 25 years of peerless service to the construction defect community.
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