FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Wildfire Insurance Coverage Series, Part 6: Ensuring Availability of Insurance and State Regulations

August 03, 2022 — Scott P. DeVries & Yosef Itkin - Hunton Insurance Recovery Blog
Because of the potential exposure associated with wildfires, many insurers have attempted to withdraw from the property coverage market in various states. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the challenges businesses and individuals face in obtaining wildfire insurance coverage, and the regulatory scheme that is intended to help them secure adequate coverage. Given the increasing exposures associated with climate change, numerous insurers have sought to withdraw from the wildfire-related coverage market or increase rates to a level where they are effectively unavailable. States have been resistant to their doing so. As one commentator reports, “[e]ven where insurers have tried to withdraw policies or raise rates to reduce climate-related liabilities, state regulators have forced them to provide affordable coverage anyway, simply subsidizing the cost of underwriting such a risk policy or, in some cases, offering it themselves.” At least 30 states have developed regulation, referred to as “Fair Access to Insurance Requirements” (FAIR), to ensure the continued availability of insurance. The FAIR plan provides a channel to insurance for property owners who would be stuck without any reasonable access to insurance without state intervention. Reprinted courtesy of Scott P. DeVries, Hunton Andrews Kurth and Yosef Itkin, Hunton Andrews Kurth Mr. DeVries may be contacted at sdevries@HuntonAK.com Mr. Itkin may be contacted at yitkin@HuntonAK.com Read the court decision
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The Latest News on Fannie Mae and Freddie Mac

May 01, 2014 — Beverley BevenFlorez-CDJ STAFF
The Federal Housing Finance Agency released a report on April 30th, which stated that in a severe economic downturn Fannie Mae (FNMA) and Freddie Mac (FMCC) “could require an additional bailout of as much as $190 billion… according to the results of stress tests,” according to Clea Benson writing for Bloomberg. “These results of the severely adverse scenario are not surprising given the company’s limited capital,” FNMA Senior Vice President Kelli Parsons said in a statement, as reported by Benson published in Bloomberg. “Under the terms of the senior preferred stock purchase agreement, Fannie Mae is not permitted to retain capital to withstand a sudden, unexpected economic shock of the magnitude required by the stress test.” Furthermore, in another Bloomberg article, Cheyenne Hopkins and Clea Benson reported that Democrats remain divided on how to replace FNMA and FMCC. “If we don’t get this right, we’ll create major disturbances in the housing market which will have a profound impact on families, on homeownership and certainly on our national economy,” Oregon Democrat Jeff Merkley said in an interview, as reported by Cheyenne and Benson. “Merkley described himself as ‘still in negotiations’ with the bill’s sponsors.” Read the full story, Clea Benson Article... Read the full story, Cheyenne Hopkins & Clea Benson Article... Read the court decision
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Consequential Damages Flowing from Construction Defect Not Covered Under Florida Law

November 17, 2016 — Tred R. Eyerly -Insurance Law Hawaii
Interpreting Florida law, the United States District Court found there was no duty to defend a contractor against construction defect claims. Evanston Ins. Co. v. Dimmucci Dev. Corp. of Ponce Inlet, Inc., 2016 U.S. Dist. LEXIS 123678 (M.D. Fla. Sept 13, 2016). The insured built condominiums and townhomes. It held three successive CGL policies issued by Evanston. The "your work" exclusion in the policies barred coverage as follows:

"Property Damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard." This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

The insured constructed the Towers Grande Condominium. In 2012 the Towers Grande Condominium Association, Inc. initiated the underlying action alleging that the insured's failure to construct the Towers Grande properly resulted in building defects and deficiencies. Damage to the roof, generator exhaust pipe, and HVAC system was alleged. Further, water intrusion and decking/structural issues were claimed. In addition to the construction defects, the Association also alleged that the insured's faulty work led to additional damages. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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When Is an Arbitration Clause Unconscionable? Not Often

April 05, 2021 — Christopher G. Hill - Construction Law Musings
Here at Construction Law Musings, I have discussed the pros and cons of various forms of Alternative Dispute Resolution (ADR), including arbitration. I am a fan of most ADR, but less of one for arbitration than for mediation. However, where the arbitration can be done under a good set of cost-containing rules and with an arbitrator that is experienced in construction, arbitration can help with the resolution of construction claims. Of course, arbitration provisions in construction contracts are routinely upheld by the courts of Virginia with limited exceptions. One of these exceptions is where the arbitration clause is unconscionable and therefore unenforceable. A recent case out of the Western District of Virginia, Marroquin v. Dan Ryan Builders Mid-Atlantic LLC, shows how high a hurdle it is to get a court to invalidate an arbitration provision. In this case, the Marroquins purchased a new construction home from the Defendants. As is often the case in such purchase transactions, Defendant provided a limited warranty agreement (in this case provided by Quality Builders Warranty Corporation (“QBW”)) that along with the sales contract contained a mandatory arbitration provision. The parties executed the limited warranty and the sale proceeded with the Marroquins taking possession. Over the next year or so, the County inspector’s office issued several correction orders to Defendant, and the Marroquins, through counsel, identified numerous defects in construction, many of which they alleged to remain unremedied. Needless to say, they sued for breach of statutory warranty and for breach of the limited warranty. Defendant removed the case to Federal District Court and then moved to compel arbitration. 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

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Construction Law: Unexpected, Fascinating, Bizarre

April 25, 2012 — CDJ STAFF

Guy Randles offers an amusing set of odd construction law cases in the Daily Journal of Commerce, which he describes as “the unexpected, the fascinating and even the bizarre.” He noted that in one case “a whistleblower claimed he was terminated for reporting to the owner that the contractor’s painters had not applied the required coating thickness.” The whistleblower was the project manager and “was responsible for ensuring the proper coating thickness.”



A less amusing case was that of an architect who was arrested for manslaughter. Gerard Baker “told investigators that the considered the fireplaces to be merely decorative.” Randles notes that “the mansion’s fireplaces were built of wood framing and lined with combustible drywall.” Further, a “gas fireplace even vented into the house’s interior.” Building officials called the house “a death trap.” According to the LA police chief this may be the only case in which building defects lead to a manslaughter charge.



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Real Estate & Construction News Roundup (05/10/23) – Wobbling Real Estate, Booming (and Busting) Construction, and Eye-Watering Insurance Premiums

May 22, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, the commercial real estate sector continues to wobble, construction booms and busts, flood insurance premiums reach eye-watering levels, and more.

• In its latest Financial Stability report, the Federal Reserve acknowledges that the shaky commercial real estate sector could potentially harm the U.S. financial system. (Courtenay Brown, Axios)
• New data from the California Department of Finance shows that even though the state’s population significantly decreased during the COVID-19 pandemic, home building soared, reaching levels not seen since 2008. (Terry Castleman, Los Angeles Times)
• Already weakened by rising interest rates, inflation and debt, Sweden’s real estate sector took another hit as SBB’s shares continued to slump. (Reuters)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Missouri Legislature Passes Bill to Drastically Change Missouri’s “Consent Judgment” Statute

August 10, 2021 — Jason Taylor - Traub Lieberman Insurance Law Blog
On June 29, 2021, Missouri Governor Mike Parson signed SB-HB 345 into law, which will drastically change Section 537.065 of the Missouri Revised Statutes. Section 537.065 provides an insured who has been denied insurance coverage a statutory mechanism to settle certain tort claims through an agreement akin to a consent judgment. Typically referred to as a “065 Agreement,” the statute allows a plaintiff and insured-tortfeasor to settle a claim for damages and specify which assets are available to satisfy the claim, typically the tortfeasor’s available insurance policy. In the past, such agreements were often accomplished without the insurer’s participation or even its knowledge. Under such agreements, the insured-tortfeasor assigns all rights to the insurance policy to the plaintiff and agrees not to contest the issues of liability or damages. In exchange the plaintiff agrees not to execute any judgment against the insured. The parties conduct what amounts to an uncontested and often “sham” trial resulting in a judgment far in excess of any actual damages or applicable policy limits had the case been contested. In a subsequent proceeding to collect on the judgment, the tortfeasor’s insurer is bound by the determinations of liability and damages made in the underlying action. This statutory framework presented plenty of opportunities for abuse. In 2017, the statute was amended in order to address some of those issues, including a requirement that the insured provide notice of a settlement demand under Section 065 and providing insurers a limited right to intervene in the tort action before liability and damages have been determined. Ostensibly, the intent of the 2017 amendments was to reduce the number of large and uncontested judgments and allow the insurance carrier an opportunity to continue litigating the injured party’s claim where the insured has no incentive or is contractually prohibited from doing so. Yet, creative plaintiff’s attorneys found several “loopholes” around these changes, most prominently, by moving their disputes from state court to binding arbitration and dispensing with notice to the insurer altogether, or at least until after the arbitration has concluded. Read the court decision
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Reprinted courtesy of Jason Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com

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Unpunished Racist Taunts: A Pennsylvania Harassment Case With No True 'Winner'

December 04, 2023 — Richard Korman - Engineering News-Record
The taunts started in the first days of Andre Pryce’s new job, camouflaged as joking. During the nine months of 2019 spent working as a drill rig hand, mostly in the woods in western Pennsylvania, for a contractor that also performs much construction-related drilling, he said coworkers filled his ears with racist insults. Reprinted courtesy of Richard Korman, Engineering News-Record Mr. Korman may be contacted at kormanr@enr.com Read the full story... Read the court decision
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