Court Holds That Parent Corporation Lacks Standing to Sue Subsidiary’s Insurers for Declaratory Relief
May 12, 2016 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn D. Cummins Corp. v. U.S. Fidelity & Guaranty (no. A142985, filed 3/30/16), a California Court of Appeal upheld the dismissal of a declaratory relief action filed by the parent holding company of an insured corporation seeking coverage for asbestos claims.
Cummings Corp. installed asbestos containing products in California. It had been insured by USF&G between 1969 and 1992. Cummings Holding, LLC was the parent and majority shareholder of Cummings Corp., which had no assets. The holding company claimed to be “the sole entity responsible for managing the affairs of Cummins Corp., including making decisions as to litigation strategy, resolution and settlement,” and sued USF&G seeking a declaratory judgment that the insurer was obligated to defend and/or indemnify Cummins Corp., “in full, including, without limitation, payment of the cost of investigation, defense, settlement and judgment . . . , for past, present and future Asbestos Suits.” The insurer demurred on the ground that the holding company had insufficient interest in its insurance policies and, consequently, lacked standing to sue for declaratory relief.
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Read the court decisionRead the full story...Reprinted courtesy of
Where-Forum Art Thou? Is the Chosen Forum Akin to No Forum at All?
May 30, 2022 —
William Doerler - The Subrogation StrategistMany courts enforce forum selection clauses in contracts between parties. In W. Bay Plaza Condo. Ass’n v. Sika Corp., No. 3D21-1834, 2022 Fla. App. LEXIS 1637 (W. Bay Plaza), the Court of Appeal of Florida, Third District (Court of Appeal) answered the question of whether a mandatory forum selection clause in a manufacturer’s warranty was enforceable as to a condominium association, who was a non-signatory. The trial court enforced the forum selection clause – calling for litigation in New Jersey rather than Florida – and the Court of Appeal affirmed the ruling.
As stated in W. Bay Plaza, in late 2013 and early 2014, West Bay Plaza Condominium Association (W.B. Plaza Condo. Ass’n) contracted with Built Right Installers International Corporation, R.J. Miranda Consultants, Inc. and UCI Engineering Inc. (collectively, the Construction Defendants) to have repairs done to the exterior of the property. In 2016, Sika Corporation (Sika), a New Jersey corporation, gave a five-year warranty to W.B. Plaza Condo. Ass’n for three sealant products used to repair the garage at the property. In 2019, W.B. Plaza Condo. Ass’n sued the Construction Defendants for breach of contract and professional negligence. Subsequently, W.B. Plaza Condo. Ass’n amended its complaint and filed a claim against Sika, alleging that Sika breached its warranty because its products failed to provide a watertight barrier. Sika filed a motion to dismiss the action, alleging that Florida was an improper venue because its’ warranty contained a mandatory forum selection clause. W.B. Plaza Condo. Ass’n argued that it was not bound by the forum selection clause because it was a non-signatory to the warranty and, even if it was bound by the clause, there were compelling reasons not to enforce it.
Read the court decisionRead the full story...Reprinted courtesy of
William Doerler, White and Williams LLPMr. Doerler may be contacted at
doerlerw@whiteandwilliams.com
Liquidated Damages Clause Not Enforced
October 02, 2023 —
David R. Cook Jr. - Autry, Hall & Cook, LLPA liquidated-damages clause was not enforced in a recent case before the Georgia Court of Appeals. The clause did not contain standard provisions that would normally allow a trial court to enforce the clause as written. As a result, the trial court looked beyond the contract to determine whether the City satisfied the requirements for enforcement of the liquidated-damages clause. Below are the relevant excerpts.
City of Brookhaven v. Multiplex, LLC, A23A0843, 2023 WL 4779591 (Ga. Ct. App. July 27, 2023)
Here, the Contract provides for “Liquidated Damages at the rate of $1,000.00 per calendar day” in the last paragraph of the Scope of Work addendum. The Contract lacks, however, any language indicating that the liquidated damages were not intended to be a penalty. See Fuqua Const. Co. v. Pillar Dev., Inc., 293 Ga. App. 462, 466, 667 S.E.2d 633 (2008) (rejecting use of parol evidence where the parties “explicitly agreed” in “unambiguous contract language” that the liquidated damages were not a penalty). Absent such language, the court can look to parol evidence in the record to determine the effect the provision was intended to have. See J.P. Carey Enterprises, 361 Ga. App. at 391-392 (1) (b), 864 S.E.2d 588 (looking to “extrinsic evidence” such as emails, documents, and deposition testimony to determine whether the damages provision at issue was a penalty); see also Gwinnett Clinic, Ltd. v. Boaten, 340 Ga. App. 598, 602-603, 798 S.E.2d 110 (2017) (“Shah’s testimony also suggested that one purpose of the liquidated damages provision was to deter employees from breaching the agreement”).
Read the court decisionRead the full story...Reprinted courtesy of
David R. Cook Jr., Autry, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
Norristown, PA to Stop Paying Repair Costs for Defect-Ridden Condo
February 10, 2014 —
Beverley BevenFlorez-CDJ STAFFThe city of Norristown, Pennsylvania has already paid “$3.4 million for construction repairs and legal expenses” for the 26-unit condominium on 770 Sandy Street, according to The Times Herald. Therefore city officials recently declared that “they will no longer pay the $40,000 annual cost for maintenance, electricity and repairs” for the building.
“At some point, the folks that own it have to step up and take responsibility for it,” Norristown Council President William Caldwell told The Times Herald. “No later than February 28, the municipality will cease to provide or pay for maintenance of 770 Sandy Street.”
Previously, Norristown had received court orders to repair the building, after numerous construction defects turned up including “missing firestops in numerous walls, missing grout and steel rebar in block-wall, emergency stair towers, faulty electrical wiring and no provision for firestopping in the first-floor garage ceiling.” City officials “were faulted by Montgomery County Common Pleas Court judges for not properly inspecting the construction.”
Charles Madracchia, past Customers Bank attorney and current Homeowner attorney, is “continuing active litigation in both federal and state court.”
Read the court decisionRead the full story...Reprinted courtesy of
Team Temporarily Stabilizes Delaware River Bridge Crack
February 02, 2017 —
Justin Rice - Engineering News-RecordThe team temporarily stabilizing the Delaware River Bridge and planning its permanent repair also are trying to find a precedent for the bridge’s uncommon fracture. Connecting the Pennsylvania and New Jersey turnpikes, the 61-year-old symmetrical truss bridge was shut down indefinitely on Jan. 20, when a complete fracture in a steel truss was discovered below the bridge deck.
Read the court decisionRead the full story...Reprinted courtesy of
Justin Rice, ENRMr. Rice may be contacted at
ricej@enr.com
Manhattan Trophy Home Sellers Test Buyer Limits on Price
February 14, 2014 —
Oshrat Carmiel – BloombergBroker Alon Chadad’s client purchased a $14.3 million apartment on Manhattan’s Central Park South, then spent nine months seeking approval for plans to overhaul it. In January, the buyer changed course, listing the unit for sale at more than double what he paid just a year ago.
“He filed all the documents for renovation and he was ready to go and he decided, ‘You know what? I see opportunity in the market,’” said Chadad, co-founder of Blu Realty Group and the agent for the 6,160-square-foot (572-square-meter) condominium, which has an asking price of $29.5 million.
Luxury-apartment owners in New York are listing a record amount of properties for sale, testing the upper limits of what buyers are willing to pay even as median prices remain off their peak set almost six years ago. Sellers have taken notice of a handful of record-shattering deals, triggered by an $88 million purchase at 15 Central Park West, and demand for trophy homes by international investors seeking havens for their cash.
Read the court decisionRead the full story...Reprinted courtesy of
Oshrat Carmiel, BloombergMs. Carmiel may be contacted at
ocarmiel1@bloomberg.net
The Biggest Trials Coming to Courts Around the World in 2021
January 04, 2021 —
Anthony Lin - BloombergSeveral former world leaders, a Hong Kong media tycoon, the CEO of Theranos and Jeffrey Epstein’s confidante — all are scheduled to have their day in court next year.
With vaccinations heralding a return to normalcy, the next year should see courtrooms around the world coming back to life. Ghislaine Maxwell, China critic Jimmy Lai and Samsung heir Jay Y. Lee are among those facing high-profile criminal cases in 2021. Some proceedings, including the fraud trial of Theranos founder Elizabeth Holmes, are resuming after being postponed by the pandemic. Another delayed case, UBS’s appeal of its $4.9 billion French government tax penalty, is among the many that will be heard by higher-level and supreme courts.
There are also a number of cases against former world leaders, including France’s Nicolas Sarkozy, Malaysia’s Najib Razak and South Africa’s Jacob Zuma. One of the most tantalizing questions will be whether a certain former U.S. president could find himself facing trial as well.
Read the court decisionRead the full story...Reprinted courtesy of
Anthony Lin, Bloomberg
Clean Water Act Cases: Of Irrigation and Navigability
January 06, 2020 —
Anthony B. Cavender - Gravel2GavelThe federal courts have recently decided two significant Clean Water Act (CWA) cases: State of Georgia, et al. v. Wheeler, where the US District Court for the Southern District of Georgia held that the 2015 rulemaking proceeding of EPA and the U.S. Army Corps of Engineers redefining the term “Waters of the United States” in the CWA violated the Act as well as the Administrative Procedure Act; and the Ninth Circuit’s decision in Pacific Coast Federation of Fishermen’s Associations, et al. v. Glaser, where the appeals court ruled that the lower court erroneously interpreted a CWA NPDES permitting exception involving agricultural return flows.
An Absence of Navigability: State of Georgia, et al. v. Wheeler
Decided on August 21, 2019, the district court, one of the few courts to grapple with the rule’s compliance with the CWA and the Administrative Procedure Act (APA), held that the agencies’ redefinition of the terms “Interstate Waters,” “Tributaries” and “Adjacent Waters” violated the CWA by reading “navigability” out of the new definitions, or by failing to adhere to the Supreme Court’s rulings in the 2005 case of Rapanos v. United States, in particular Justice Kennedy’s concurrence regarding the application of the “significant nexus” in case-by-case adjudications as to whether a particular body of water was covered by the Act. Moreover, some provisions of the rule conflicted with the APA because they were not a logical outgrowth of the rules proposed by the agencies in 2014, and on which they solicited comments, and other determinations were not supported by a reasonable explanation. In addition, without a clear statement from Congress that it supported the rule’s effect of increasing the nature and extent of enhanced federal jurisdiction over waters subject to the CWA, the court was loathe to approve the rule. Accordingly, the rule was remanded to the agencies for additional review consistent with this decision.
This decision is of particular importance as it may well be the first case to subject this new EPA rule—the linchpin of much of EPA’s regulation under the CWA—to extended review. (Other courts have only been asked to enjoin the rule, which involves a different type of review.)
Read the court decisionRead the full story...Reprinted courtesy of
Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
