Superior Court Of Pennsylvania Holds That CASPA Does Not Allow For Individual Claims Against A Property Owner’s Principals Or Shareholders
January 07, 2015 —
William J. Taylor and Michael Jervis – White and Williams LLPIn Scungio Borst Assocs. v. 410 Shurs Lane Developers, LLC, the Superior Court of Pennsylvania held that an individual principal/shareholder of a property owner could not be held personally liable as an “agent of the owner” for unpaid invoices, penalties, and attorneys fees under the Pennsylvania Contractor and Subcontractor Payment Act (CASPA), 73 P.S. §§ 501-516, even though the property owner itself had failed to make payments allegedly due under a construction contract.
CASPA is a Pennsylvania statute which is designed to protect contractors and subcontractors from nonpayment and which, to that end, establishes rules and deadlines for payment under construction contracts between property owners, contractors, and subcontractors. An owner or contractor who does not adhere to the Act’s payment requirements is subject to the imposition of interest, penalties, and attorneys’ fees. In this recent case, the property owner, a limited liability company, had retained the plaintiff contractor to perform construction services on a condominium project. Upon completion of the work, the contractor was not paid approximately $1.5 million that it was owed under the contract. The contractor filed suit under CASPA to obtain the payment it was owed plus interest, penalties and fees, and named both the property owner and its individual principal as defendants. The trial court granted summary judgment to the individual principal on all claims asserted against him, and the contractor appealed, arguing that CASPA allows for claims against both a property owner and its principal when the principal is an “agent of the owner acting with the owner’s authority.”
Reprinted courtesy of
Michael Jervis, White and Williams LLP and
William J. Taylor, White and Williams LLP
Mr. Jervis may be contacted at jervism@whiteandwilliams.com; Mr. Taylor may be contacted at taylorw@whiteandwilliams.com
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Insurance Attorney Gary Barrera Joins Wendel Rosen’s Construction Practice Group
July 26, 2017 —
Garret Murai - California Construction Law BlogWendel Rosen’s Construction Practice Group welcomes a new member to our band of merry men (and women), Gary Barrera.
Gary, an insurance attorney, has extensive experience with construction defect, property damage, professional liability and environmental claims. He has represented real estate developers and contractors in all aspects of construction defect litigation and has resolved insurance coverage disputes arising out of construction claims on behalf of policyholders. Prior to attending law school, Gary worked as a claims representative and examiner for several insurance carriers and third-party administrators.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Loss Ensuing from Faulty Workmanship Covered
April 28, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe court found coverage for damage resulting from faulty workmanship. Drury Co. v. Mo. United Sch. Ins. Counsel, 2014 Mo. App. LEXIS 319 (Mo. Ct. App. March 25, 2014).
The School District entered a contract with general contractor, Penzel Construction Company, Inc., to build an addition to a high school. Under the prime contract, the School District was to purchase property insurance, including builder's risk "all-risk" coverage. The policy was to cover the interests of the owner, the contractor, subcontractors and sub-subcontractors in the project.
The School District obtained a policy from Missouri United School Insurance Counsel (MUSIC). Exclusions in the all-risk policy included loss due to faulty workmanship or materials, "unless loss by a peril not otherwise excluded ensues and then MUSIC shall be liable only for such ensuing loss."
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Not Just Another Client Alert about Cyber-Risk and Effective Cybersecurity Insurance Regulatory Guidance
April 01, 2015 —
Robert Ansehl – White and Williams LLPThe prefix "cyber" was coined about 70 years ago to describe early stage computers, computer networks and virtual reality. Since then, the term has been used as a prefix for hundreds of words, however, the most recent (and newsworthy) usage is its link to the word “risk” and the correlative term “security.” Two sides of the same coin and not a day goes by when a data breach is not reported and the importance of cyber risk and cybersecurity underscored. Insurers, like other financial institutions, are at the forefront of the “cyber-curve.” Many insurers are particularly vulnerable on at least two fronts: (1) from a cyber risk/ cyber invasion perspective and; (2) an insurer’s insurance policy exposure, intentional and not, to third-parties under cyber policies, and even policies such as CGLs that may inadvertently cover such risks.
A number of federal and state regulators have spoken to this issue in an effort to address cyber risks with varying degrees of specificity. At last count, in addition to a myriad of existing and proposed state laws and regulations, there are at least nine federal Bills under consideration by Congress (covering six federal agencies including one new agency) that seek to impose regulatory requirements upon the cyber-arena. Those Bills empower six regulatory agencies; including one new agency. Initially, some states required companies to notify affected persons of a data breach. As breaches became more serious, state and federal regulators sought to increase the industry’s awareness of the potential exposures and provided instructions on appropriate steps to protect data from cyber invasions. Now, state insurance regulators are examining not only the threat of data theft, but the balance sheet impact of insurance exposures for underwriting such risks for third-parties’ under cyber risk policies. The regulatory efforts continue to multiply in an effort to stem some of these risks.
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Robert Ansehl, White and Williams LLPMr. Ansehl may be contacted at
ansehlr@whiteandwilliams.com
$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed to Prove Supplier’s Negligence or Breach of Contract Caused an SB800 Violation
March 16, 2017 —
Jon A. Turigliatto, Esq. & Chelsea L. Zwart, Esq. – Chapman Glucksman Dean Roeb & Barger BulletinAcqua Vista Homeowners Assoc. v. MWL Inc. (2017) 2017 WL 371379
COURT OF APPEAL EXTENDS GREYSTONE HOMES, INC. v. MIDTEC, INC., HOLDING THAT CIVIL CODE §936 CREATES A NEGLIGENCE STANDARD FOR CLAIMS AGAINST MATERIAL SUPPLIERS BROUGHT UNDER SB800.
The Fourth District California Court of Appeal recently published its decision Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 2017 WL 371379, holding that claims against a material supplier under SB800 (Civil Code §895 and §936) require proof that the SB800 violation was caused by the supplier's negligence or breach of contract.
Civil Code §936 states in relevant part, that it applies "to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract .... [T]he negligence standard in this section does not apply to any general contractor, subcontractor, material supplier, individual product manufacturer, or design professional with respect to claims for which strict liability would apply."
Acqua Vista Homeowners Association (the "HOA") sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development. The HOA's complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building. After trial, the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury's finding that MWI was 92% responsible for the HOA's damages.
MWI filed a motion for a directed verdict and motion for judgment notwithstanding the verdict on the grounds that the HOA had failed to present any evidence that MWI had caused an SB800 violation as a result of its negligence or breach of contract, and had therefore failed to prove negligence and causation as required by SB800, citing to Greystone Homes, Inc. v. Midtec, Inc.(2008) 168 Cal.App.4th 1194. The trial court denied both motions, relying on the last sentence of Civil Code §936, which states in part, "[T]he negligence standard in this section does not apply to any ... material supplier ... with respect to claims for which strict liability would apply."
The Court of Appeal reversed and ordered the trial court to enter judgment in favor of MWI. The Court of Appeal relied on the legislative history of S8800 and Greystone, which held that the first sentence of Civil Code §936 contains an "explicit adoption of a negligence standard" for S8800 claims against product manufacturers. The Court of Appeal reasoned that since §936 treats product manufacturers and material suppliers identically, the holding of Greystone must equally apply to material suppliers.
Because the complaint did not state a common law cause of action for strict liability, the HOA was required to prove that the damages were caused by MWI' s negligence or breach of contract. Although, the Court of Appeal found that while the HOA's evidence may have supported a finding that the manufacturer of the leaking pipes was negligent, the HOA had not provided any evidence that MWI, the supplier, had failed to supply the type of pipe ordered, acted unreasonably in failing to detect any manufacturing defects present in the pipe, or damaged it during transportation. Accordingly, the HOA could not prove that the alleged S8800 violation was caused, in whole or in part, by MWI' s negligence, omission, or breach of contract.
In light of the decision, homeowner and associations that allege only violations of SB800 standards without asserting a common law cause of action for strict liability cannot prevail by simply producing evidence of a violation, and are required to prove that violation was caused by the negligent act or omission, or breach of contract, of the defendant contractor, material supplier, and/or product manufacturer.
Reprinted courtesy of
Jon A. Turigliatto, Esq, Chapman Glucksman Dean Roeb & Barger and
Chelsea L. Zwart, Esq., Chapman Glucksman Dean Roeb & Barger
Mr. Turigliatto may be contacted at jturigliatto@cgdrblaw.com
Ms. Zwart may be contacted at czwart@cgdrblaw.com
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Federal Courts Reject Insurers’ Attempts to Recoup Defense Costs Expended Under Reservation of Rights
April 11, 2022 —
Anthony L. Miscioscia & Margo Meta - White and WilliamsIn situations where there is a dispute over a duty to defend, an insurer may provide a defense to its insured, subject to a reservation of rights, to not only deny coverage for a defense, but also to file a declaratory judgment action and recoup defense costs in the event it is determined there is no duty to defend. But are defense costs recoupable? Last week, federal trial courts in Georgia and Pennsylvania answered this question with a resounding “no”.
In Chemical Equipment Labs, Inc. v. Travelers Property Casualty Company of America, Case No. 19-3441, 2022 U.S. Dist. LEXIS 61298 (E.D.Pa. Mar. 31, 2022), the United States District Court for the Eastern District of Pennsylvania was called to determine whether Travelers Property Casualty Company of America (Travelers) was entitled to reimbursement of defense costs after it was determined that it had no duty to defend its insured in an arbitration for breach of a charter agreement. The Travelers’ policies did not contain an express reimbursement provision. The court found that Travelers was not entitled to reimbursement because under Pennsylvania law, “[r]eimbursement of defense costs requires an express provision in the written insurance contract.”
Reprinted courtesy of
Anthony L. Miscioscia, White and Williams and
Margo Meta, White and Williams
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Ms. Meta may be contacted at metam@whiteandwilliams.com
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Natural Disasters’ Impact on Construction in the United States
December 14, 2020 —
Robert S. Peckar & Crystal T. Dang - Construction ExecutiveIn these times of easy and instant access to news from around the globe, the effects of major earthquakes in Indonesia and Mexico, cyclones in Southeast Asia, Tsunamis around the world, volcanoes in Europe in unexpected places and, of course, raging forest fires and hurricanes in the United States are frequently in the news. Accompanying each of these disasters are immediate threats to construction projects, both physical and those affecting the safety and health of personnel.
However, after the dust settles or the waters recede, myriad issues will become obstacles to the road to recovery for a contractor to navigate. In 2020 alone, the volume of strong storms and forest fires have focused so much attention on the impact of disasters. The purpose of this article is to provide guidelines in anticipation of disasters, for reviewing the impact of a disaster as it is happening, and developing a mitigation plan to limit losses.
Anticipating Disasters
The best time to prepare for a disaster on a project is before the project starts. Reviewing contract rights, insurance policies and company disaster response protocols while a category 3 hurricane is a day away is not a best practice. To avoid falling into that situation, a contractor should follow the following guidelines. Doing so facilitates proper action during the actual disaster itself and in the aftermath.
Reprinted courtesy of
Robert S. Peckar & Crystal T. Dang, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Peckar may be contacted at rpeckar@pecklaw.com
Ms. Dang may be contacted at cdang@pecklaw.com
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U.K. Construction Unexpectedly Strengthens for a Second Month
March 05, 2015 —
Bloomberg News(Bloomberg) -- U.K. construction growth unexpectedly accelerated for a second month in February, led by a strengthening in homebuilding.
Markit Economics said its Purchasing Managers’ Index rose to 60.1, the highest in four months, from 59.1 in January. It fell to a 17-month low of 57.6 in December. Economists forecast the gauge would slip to 59 in February, according to the median estimate in a Bloomberg News survey.
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Bloomberg NewsScott Hamilton may be contacted at
shamilton8@bloomberg.net
