Duty to Defend Broadly Applies to Entire Action; Insured Need Not Apportion Defense Costs, Says Maryland Appeals Court
January 27, 2020 —
Michael S. Levine & Kevin V. Small - Hunton Insurance Recovery BlogIn a recent decision, the Maryland Court of Special Appeals reiterated that the duty to defend broadly requires a liability insurer to defend an entire lawsuit against its insured, even where only some of the allegations are potentially covered. The court further held that the insured has no obligation to apportion defense costs among multiple implicated policies. The decision, Selective Way Insurance Company v. Nationwide Property and Casualty Insurance Company, et al., can be found here.
The coverage litigation arose out of a construction defect case against a general contractor. The general contractor tendered the action to its insurer, Nationwide, which, in turn, filed a declaratory judgment action against the various insurers of construction project subcontractors that had named the general contractor as an additional insured. Ultimately, the court granted a summary judgment motion declaring that all of the subcontractors’ insurers had a duty to defend the general contractor “because the allegations in the underlying lawsuit raised claims that potentially arose from the [s]ubcontractors’ work at the [construction site].” All of the subcontractors’ insurers settled with Nationwide except for one, Selective Way; and the parties proceeded to a jury trial on various issues. The jury found for Nationwide on all issues. Selective Way appealed.
Selective Way argued on appeal that even if some of the allegations were covered under its policy, it had no obligation to defend the general contractor because its insureds, the subcontractors, could not have been responsible for all of the losses given the nature of their work. Further, Selective Way contended that if it was responsible for defending the general contractor, it was not responsible for the entire defense, and the general contractor was responsible for apportioning the costs among the various subcontractors. The panel disagreed on both points.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Kevin V. Small, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Small may be contacted at ksmall@HuntonAK.com
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Richest NJ Neighborhood Fights Plan for Low-Cost Homes on Toxic Dump
May 28, 2024 —
Nacha Cattan - BloombergJosh Bauers has long had his sights set on the town dump in Millburn.
Bauers wants to put 75 affordable apartments on the site where piles of Styrofoam and food scraps lie in heaps.
But that’s a bridge too far for many residents of New Jersey’s richest ZIP code, Short Hills, where multimillion dollar Tudor and colonial-style mansions are perched atop grassy hillocks less than an hour’s commute from Manhattan.
Many in the community, favored by finance types and lawyers, are up in arms over the development’s potential effect on the environment and its highly-rated schools. But the years-long fight to put affordable housing in the town has become about far more than that, and has raised accusations over inequality and race.
Millburn Township, whose largest community is Short Hills, may be forced to build on the dump after a state court ruled last month that it will decide where the development will go. The town had agreed to build on the polluted site three years ago, only to backtrack.
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Nacha Cattan, Bloomberg
Beyond Inverse Condemnation in Wildfire Litigation: An Oregon Jury Finds Utility Liable for Negligence, Trespass and Nuisance
July 10, 2023 —
Marisa Miller, John Yacovelle & Kazim Naqvi - Sheppard MullinOn June 10, 2023, a jury in Portland, Oregon found PacifiCorp and Pacific Power (collectively, “PacifiCorp”) liable for negligence, trespass, and nuisance based on a series of four wildfires that occurred during Labor Day weekend in 2020. PacifiCorp prevailed against the plaintiffs on the claim of inverse condemnation. With respect to the tort-based claims, the jury awarded approximately $72 million in compensatory damages to 17 plaintiffs. The jury later found PacifiCorp liable for $18 million in punitive damages, or one quarter of the compensatory damages that the jury awarded to the 17 plaintiffs. The jury’s liability findings apply to a broader class of owners, whose damages will need to be individually proven in a yet-to-be defined second phase of proceedings. Post-verdict motion practice and appeals may affect the jury’s findings.
Reprinted courtesy of
Marisa Miller, Sheppard Mullin,
John Yacovelle, Sheppard Mullin and
Kazim Naqvi, Sheppard Mullin
Ms. Miller may be contacted at mmiller@sheppardmullin.com
Mr. Yacovelle may be contacted at jyacovelle@sheppardmullin.com
Mr. Naqvi may be contacted at knaqvi@sheppardmullin.com
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Insurance Client Alert: Denial of Summary Judgment Does Not Automatically Establish Duty to Defend
January 28, 2015 —
Valerie A. Moore and Christopher Kendrick – Haight Brown & Bonesteel LLPIn McMillin Companies v. American Safety Indemnity (No. D063586, filed 1/20/15), a California appeals court ruled that an insurer's loss of a summary judgment motion on the duty to defend does not necessarily establish that a duty to defend existed.
McMillin was the general contractor for a series of residential construction projects, sued in a construction defect action brought by 117 homeowners. McMillin tendered its defense to its subcontractors' insurers, including American Safety (ASIC), claiming status as an additional insured (AI). ASIC denied the tender.
McMillin sued ASIC and other insurers alleging breach of contract and bad faith for the failure to defend McMillin as an additional insured. Eventually, all of the other insurers settled, leaving ASIC as the sole defendant. ASIC moved for summary judgment, but the trial court denied the motion, ruling that ASIC had failed to carry its burden of disproving coverage under a blanket additional insured endorsement in the policy.
Reprinted courtesy of
Valerie A. Moore, Haight Brown & Bonesteel LLP and
Christopher Kendrick, Haight Brown & Bonesteel LLP
Ms. Moore may be contacted at vmoore@hbblaw.com, Mr. Kendrick may be contacted at ckendrick@hbblaw.com
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Pulte Home Corp. v. CBR Electric, Inc.
August 24, 2020 —
Michael Velladao - Lewis BrisboisIn Pulte Home Corp. v. CBR Electric, Inc., 50 Cal.App.5th 216 (June 10, 2020), the California Court of Appeal reversed the trial court’s entry of judgment in favor of six subcontractors with respect to an equitable subrogation lawsuit filed by St. Paul Mercury Insurance Company (“St. Paul”). St. Paul filed the lawsuit after defending Pulte Home Corp. (“Pulte”) against two construction defect lawsuits. The lawsuit contended that St. Paul was entitled to seek recovery of defense costs incurred on behalf of Pulte based on equitable subrogation. St. Paul relied on the indemnity clauses in each of the subcontracts, and argued that the subcontractors had breached their contracts with Pulte. As such, each subcontractor was obligated to pay an equitable share of the defense of the construction defect lawsuits relating to their work on the homes at issue in such lawsuits. The trial court ruled against St. Paul and held that the subcontractors’ failure to pay defense costs did not “cause” the homeowners’ claims, such that there was no causal connection supporting a claim for equitable subrogation. In addition, the trial court found that “equitable subrogation was an all-or-nothing claim, meaning it required a shifting of the entire amount of defense costs to the subcontractors on a joint and several basis and did not allow for an apportionment of costs among the defendant subcontractors.”
In reversing the trial court’s decision, the Court of Appeal reasoned that St. Paul stood in the shoes of Pulte and was limited to pursuing recovery from the subcontractors based on the same rights as afforded to Pulte under the subcontracts. The Court of Appeal noted that St. Paul was seeking reimbursement of defense costs from the subcontractors based on the theory that they were contractually liable for paying an equitable share of defense costs. The Court of Appeal also noted that St. Paul’s claim was not premised on the contention that the subcontractors’ failure to pay defense costs caused the homeowners’ claims. Rather, St. Paul’s claim was premised on the subcontractors’ breach of their defense duty owed to Pulte under the indemnity clauses in their subcontracts.
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Michael Velladao, Lewis BrisboisMr. Velladao may be contacted at
Michael.Velladao@lewisbrisbois.com
Lewis Brisbois Moves to Top 15 in Law360 2022 Diversity Snapshot
August 15, 2022 —
Rima Badawiya - Lewis Brisbois NewsroomLos Angeles, Calif. (August 4, 2022) - Lewis Brisbois has ranked 13th in Law360’s 2022 Diversity Snapshot – a measure of the overall presence of individuals from underrepresented backgrounds in law firms of all sizes.
Throughout Lewis Brisbois’ history, the firm has been recognized for high achievements in the areas of diversity, equity, and inclusion. Over the past year, its focus on capturing the full picture of its diversity has led to the firm’s rise in several diversity rankings – including the Law360 Diversity Snapshot. As described in the Law360 Pulse article,
"Diversity Snapshot: Representation in the Ranks," the Diversity Snapshot serves as a “comprehensive ranking of law firms on their overall representation of minority attorneys,” providing “a picture of where firms are now, and where the future might lead.”
Moreover, as explained in the main article of this special publication,
"Diversity Snapshot: How Firms Stack Up," Law360 used its own historical surveys as well as data from the American Bar Association to evaluate the diversity in firm headcounts against benchmarks that reflected diversity in the potential marketplace of new hires. Lewis Brisbois’ efforts to capture its diversity numbers has led to a significant increase in the firm’s position from 58th to 13th. This year's Snapshot includes 291 law firms, with 75 in the 600+ attorneys category.
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Rima Badawiya, Lewis BrisboisMs. Badawiya may be contacted at
Rima.Badawiya@lewisbrisbois.com
Ireland Said to Plan Home Loans Limits to Prevent Bubble
October 01, 2014 —
Joe Brennan – BloombergIreland’s central bank plans to impose limits for the first time on how much banks can lend home buyers as real estate values soar again in the home of western Europe’s worst property collapse, two people with knowledge of the matter said.
The regulator is preparing to publish a consultation paper on its proposals within weeks, said one of the people, who asked not to be named, as the matter is private. Banks and lobby groups will have a chance to comment on the plans, which center on introducing loan-to-value and loan-to-income restrictions. A spokesman for the central bank in Dublin declined to comment.
Irish homes prices are surging even as banks grapple with the aftermath of mortgage crisis that forced the government to bail out most of the nation’s lenders. A quarter of the country’s owner-occupier home loans are in arrears or had their terms eased. Loans granted during the boom for more than 85 percent of the property value were most likely to default in the wake of the crash, central bank economists said today.
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Joe Brennan, BloombergMr. Brennan may be contacted at
jbrennan29@bloomberg.net
Oregon Courthouse Reopening after Four Years Repairing Defects
April 01, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Courthouse Square in Marion County, Oregon is due to reopen after four years and nearly $23 million of repair costs to fix structural defects, according to the Statesman Journal. The square includes a courthouse building and bus mall, and is jointly owned by the county and transit district.
Two years after the Courthouse Square had been built, cracks were observed “in the building’s walls” and “paving stones on the bus mall shifted and settled.” A construction defect suit was filed in 2006.
However, the situation worsened in July of 2010 when “engineers determined that the entire complex was dangerous,” according to the Statesman Journal. “Building safety officials gave Courthouse Square’s occupants 60 days to move out, forcing county and transit district operations into temporary leased space.”
Now that the structural repairs have been completed, Dave Clark, project manager with Structural Preservation Systems LLC (the company awarded the repair contract), stated that the building’s structure is now stronger than most buildings. “If there’s an earthquake, come to this building,” Clark said.
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