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Wisconsin Court Enforces Breach of Contract Exclusion in E&O Policy

July 21, 2018 — TLSS Insurance Law Blog
In its recent decision in Crum & Forster Specialty Ins. Co. v. GHD Inc.,2018 U.S. Dist. LEXIS 111827 (E.D. Wisc. July 5, 2018), the United States District Court for the Eastern District of Wisconsin had occasion to consider the application of a breach of contract exclusion in a professional liability policy. Crum’s insured, DVO, was sued in connection with its contract to construct a biogas converter mechanism. The underlying suit alleged a sole cause of action; namely, breach of contract based on DVO’s failure to have fulfilled its obligations to design the mechanism to specification. Read the court decision
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Reprinted courtesy of Traub Lieberman Straus & Shrewsberry LLP

Brazil's Detained Industry Captain Says No Plea Deals Coming

September 03, 2015 — Sabrina Valle & Yasmine Batista – Bloomberg
Marcelo Odebrecht, the most prominent executive who has been detained in Brazil’s largest corruption scandal, said he sees no reason to strike a plea bargain with authorities because he has nothing to reveal. Odebrecht said in a congressional hearing Tuesday that he probably discussed with President Dilma Rousseff and her predecessor Luiz Inacio Lula da Silva the relationship between Odebrecht SA and Petrobras, the state-controlled oil producer at the center of the kickback investigation. It was a natural topic given the economic importance of his construction and engineering empire, he said. He declined to answer questions related to the criminal case, saying it is ongoing and he is unaware of the full extent of the accusations. Reprinted courtesy of Sabrina Valle, Bloomberg and Yasmine Batista, Bloomberg Read the court decision
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Avoiding Disaster Due to Improper Licensing

February 18, 2019 — Candace Matson - Construction & Infrastructure Law Blog
IT’S NOT ENOUGH FOR A CONTRACTOR TO BE LICENSED . . . it must be properly licensed. We are reminded of this by the recent case of JMS Air Conditioning and Appliance Service, Inc. v. Santa Monica Community College District, Bernards Bros., Inc., 30 Cal. App. 5th 945 (2018). In that case, JMS entered into an $8.2M subcontract with Bernards to install an HVAC system in a new facility being built for the District. JMS held a C-20 warm-air heating, ventilating and air-conditioning license. A year into the project, Bernards sought permission from the District to substitute another subcontractor for JMS (as required under Public Contract Code Section 4107 for listed subcontractors on public works of improvement). Among other things, Bernards contended that JMS was not properly licensed to perform that portion of the work which consisted of hydronic plumbing and hydronic boiler work. JMS countered that this work was an integral part of installing an HVAC system, and relied on Business & Profession Code Section 7059, which permits work that is “incidental and supplemental to the performance of the work for which the specialty contractor is licensed,” and a California State Licensing Board regulation which defines “incidental and supplemental” as meaning “essential to accomplish the work in which the contractor is classified.” (Cal. Code Regs., tit. 16, §831.) Read the court decision
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Reprinted courtesy of Candace Matson, Sheppard Mullin
Ms. Matson may be contacted at cmatson@sheppardmullin.com

Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors

April 10, 2019 — Thomas Cronin - Gordon & Rees Construction Law Blog
In a recent decision, the Illinois Supreme Court held that a purchaser of a newly constructed home could not assert a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser. Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, ¶ 1. The decision overruled Minton v. The Richards Group of Chicago, which held that a purchaser who “has no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor” could assert a claim of a breach of the warranty of habitability against the subcontractor. 116 Ill. App. 3d 852, 855 (1983). In Sienna Court Condo. Ass’n, the plaintiff alleged that the condo building had several latent defects which made individual units and common areas unfit for habitation. 2008 IL 122022 at ¶ 3. The Court rejected the plaintiff’s argument that privity should not be a factor in determining whether a claim for a breach of the warranty of habitability can be asserted. Id. at ¶ 19. The Court also rejected the plaintiff’s argument that claims for a breach warranty of habitability should not be governed by contract law but should instead be governed by tort law analogous to application of strict liability. Id. The Court reasoned that the economic loss rule, as articulated in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 91 (1982), refuted the plaintiff’s argument that the implied warranty of habitability should be covered by tort law. 2008 IL 122022 at ¶ 20. Under the economic loss rule, a plaintiff “cannot recover for solely economic loss under the tort theories of strict liability, negligence, and innocent misrepresentation.” National Tank Co., 91 Ill. 2d at 91. The Court explained that the rule prevented plaintiffs from turning a contractual claim into a tort claim. 2008 IL 122022 at ¶ 21. The Court further noted that contractual privity is required for a claim of economic loss, and an economic loss claim is not limited to strict liability claims. Id. Because the plaintiff’s claim was solely for an economic loss, it was a contractual claim in nature; therefore, the Court concluded that “the implied warranty of habitability cannot be characterized as a tort.” Id. at ¶ 22. Read the court decision
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Reprinted courtesy of Thomas Cronin, Gordon & Rees Scully Mansukhani
Mr. Cronin may be contacted at tcronin@grsm.com

Attorneys’ Fees Are Available in Arizona Eviction Actions

December 19, 2018 — Ben Reeves - Snell & Wilmer Real Estate Litigation Blog
The Arizona Court of Appeals recently held that any successful plaintiff in a forcible detainer action (i.e., an eviction action) may recover an award of its attorneys’ fees and costs incurred at trial under A.R.S. § 12-1178(A). See Bank of New York v. Dodev, 1 CA-CV 17-0652 (Ct. App. Nov. 20, 2018). Prior to this decision, caselaw held that fees were only awardable in actions arising out of the termination of a residential lease. RREEF Mgmt. Co. v. Camex Prods., Inc., 190 Ariz. 75, 945 P.2d 386 (Ct. App. 1997). Changes to the statute, however, rendered the prior caselaw obsolete. Although the holding in Dodev is important, the facts of the case are truly astonishing…and somewhat depressing. The Facts In Dodev, Ivaylo Dodev (Dodev) defaulted on his home loan in 2008. He nevertheless “succeeded in remaining on the [p]roperty by filing numerous legal actions that delayed the foreclosure and subsequent trustee’s sale” at least through the date of the opinion—a ten (10) year period. Read the court decision
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Reprinted courtesy of Ben Reeves, Snell & Wilmer
Mr. Reeves may be contacted at breeves@swlaw.com

Hurricane Ian: Florida Expedites Road Work as Damage Comes Into Focus

October 10, 2022 — Derek Lacey - Engineering News-Record
Hurricane Ian’s devastation is coming into view days after the storm decimated southwest Florida. Work is underway to rebuild much of the state’s electrical, transportation and other infrastructure, with certain emergency road repairs expedited and restoration of power prioritized after the storm's devastation left millions in the dark and washed out roadways serving as the only access to barrier islands such as Sanibel Island and Pine Island. Reprinted courtesy of Derek Lacey, Engineering News-Record Mr. Lacey may be contacted at laceyd@enr.com Read the full story... Read the court decision
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Partner John Toohey is Nominated for West Coast Casualty’s Jerrold S. Oliver Award of Excellence!

March 11, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Bremer Whyte Brown & O’Meara, LLP is honored to share that Newport Beach Partner John Toohey is nominated for West Coast Casualty’s 2024 Jerrold S. Oliver Award of Excellence! Every year, West Coast Casualty recognizes an individual who is committed, trustworthy, and has contributed years to the betterment of the construction defect community. The award is named after the late Judge Jerrold S. Oliver who is considered a “founding father” in the alternate resolution process in construction claims and litigation. Each year, members of the construction community are asked to nominate individuals who invoke the same spirit as Judge Oliver. Read the court decision
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Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

Florida Federal Court Reinforces Principle That Precise Policy Language Is Required Before An Insurer Can Deny Coverage Based On An Exclusion

February 07, 2018 — Walter J. Andrews and Katherine Miller - Hunton Insurance Recovery Blog
A recent ruling by U.S. District Judge Paul Byron of the Middle District of Florida has made clear that the actual words used in an insurance contract matter. The court, in Mt. Hawley Insurance Co. v. Tactic Security Enforcement, Inc., No. 6:16-cv-01425 (M.D. FL. 2018), denied an insurance company’s motion for summary judgment attempting to rely on an exclusion to deny coverage to its policyholder. The policyholder, Que Rico La Casa Del Mofongo, operated a restaurant establishment in Orlando, Florida, and sought coverage for two negligence lawsuits filed against it for allegedly failing to prevent a shooting and another violent incident on its premises. Reprinted courtesy of Walter J. Andrews, Hunton & Williams and Katherine Miller, Hunton & Williams Mr. Andrews may be contacted at wandrews@hunton.com Ms. Miller may be contacted at kmiller@hunton.com Read the court decision
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