SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Whose Employee is it Anyway?: Federal Court Finds No Coverage for Injured Subcontractor's Claim Based on Modified Employer's Liability Exclusion

September 28, 2020 — Jeffrey J. Vita & Kerianne E. Kane - Saxe Doernberger & Vita
In Nagog Real Estate Consulting Corp. v. Nautilus Insurance Co.,1 the United States District Court for the District of Massachusetts held that an insurer had no duty to defend its insureds against claims brought by an injured subcontractor, based on an overbroad employer’s liability exclusion in the policy. Nautilus Insurance Company issued a commercial general liability policy to developer Nagog Homes LLC and its related construction company, Nagog Real Estate. The policy was endorsed with an Employer’s Liability Exclusion (the L205 Endorsement) that expanded the scope of the standard exclusion in the coverage form to include bodily injury claims of employees of “any” insured and their contractors or subcontractors, as opposed to simply the employees of the named insured. Nagog Homes was the developer, and Nagog Real Estate was the general contractor for a residential construction project. An employee of the framing subcontractor hired by Nagog Real Estate was injured while working on the project and sued both Nagog entities for his injuries. Nautilus, relying on the modified employer’s liability exclusion, denied coverage for the lawsuit based on allegations that the Nagog entities hired the framing subcontractor to perform work, which effectively made the plaintiff an employee of one or both of the Nagog entities. Reprinted courtesy of Jeffrey J. Vita , Saxe Doernberger & Vita and Kerianne E. Kane, Saxe Doernberger & Vita Mr. Vita may be contacted at jjv@sdvlaw.com Ms. Kane may be contacted at kek@sdvlaw.com Read the court decision
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Read Before You Sign: Claim Waivers in Project Documents

July 06, 2020 — William E. Underwood - ConsensusDocs
Not all claim waivers are appropriately titled “Waiver of Claims.” In fact, claim waivers can be found “hiding” without any advertisement or fanfare in a number of project documents, including change orders and applications for payment. So although getting work quickly approved and paid for is important, taking time to read the specific language in your project documents is just as important. Failure to pay close attention to this language could result in the waiver of key, unresolved project claims. Further, and although it should go without saying, it is also just as important to read all of the terms of your contract. Important waiver language might not exist on the face of form project documents, but rather might be contained in the general and/or supplemental conditions of your contract and automatically incorporated into your form project documents. And these types of incorporated waivers can be just as enforceable. So it is critically important to understand what you are signing and the implications it might have on future claims. This article will explore some of the common types of claim waivers that can be found in project documents so that you are better positioned to avoid inadvertently waiving claims in the future. Read the court decision
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Reprinted courtesy of William E. Underwood, Jones Walker LLP
Mr. Underwood may be contacted at wunderwood@joneswalker.com

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Ninth Circuit Finds Policy’s Definition of “Policy Period” Fatal to Insurer’s “Related Claims” Argument

April 10, 2019 — Jason M. Taylor - TLSS Insurance Law Blog
Professional liability policies often include some form of a “related claims” or “related acts” provision stating that if more than one claim results from a single wrongful act, or a series of related wrongful acts, such claims will be treated as a single claim and deemed first made during the policy period in which the earliest claim was made. These provisions can have significant implications on the applicable policy and policy limits, retroactive date issues, and whether such claims were first made and reported during a particular policy period. Recently, the Ninth Circuit issued a stern reminder of how the particular policy language can effect, and in this case thwart, the intended scope of the carrier’s “related claims” provision. In Attorneys Ins. Mut. Risk Retention Grp., Inc. v. Liberty Surplus Ins. Corp., 2019 WL 643442 (9th Cir. Feb. 15, 2019), the Ninth Circuit construed a “related claims” provision included in two consecutive lawyers professional liability policies. During both the 2009–2010 and 2010–2011 insurance policy periods, attorney J. Wayne Allen (“Allen”) was insured through his employer by Liberty Surplus Insurance Corporation’s (“Liberty”) professional liability insurance. Third parties filed suit against Allen during the 2009–2010 policy period in a probate case, and a second, related civil suit during the 2010–2011 policy period. Read the court decision
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Reprinted courtesy of Jason M. Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com

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Will the Hidden Cracks in the Bay Bridge Cause Problems During an Earthquake?

June 26, 2014 — Beverley BevenFlorez-CDJ STAFF
Despite a “no cracks” welding code and contract provision for the San Francisco-Oakland Bay Bridge, in 2008 Caltrans proceeded with the project despite welding cracks created by the Chinese firm hired to build the roadway, according to the Sacramento Bee. By the time the cracks had been discovered, the costs were at $6.5 billion and climbing, and fixing the cracks would be time-consuming and expensive. However, there is some dispute as to rather the welding “cracks represent a hazard to the traveling public.” “Examine history,” Brian Maroney, Caltrans’ chief engineer for the bridge, said in a recent interview by the Sacramento Bee. “… Caltrans reviewed major quakes around the globe and never found a case in which weld cracks caused bridge-roadway fractures.” However, the Sacramento Bee reported that there was a case where welding cracks led to fractures. For instance, after the southern California earthquake in 1994 centered in Northridge, the Santa Clara River Bridge “suffered several fractures in steel girders. The breaks were traced to tiny cracks in welds, likely present before the quake, and worsened by vibrations of heavy trucks passing overhead. When the quake struck, the girders fractured.” The Santa Clara bridge did not collapse. Sacramento Bee claimed it remained standing because the I-beam-shaped girders were “not fracture-critical.” However, the Bay Bridge’s “roadway consists of box-girder segments welded together. In effect, they create one contiguous, fracture-critical girder,” Abolhassan Astaneh-Asl, UC Berkeley engineering professor told the Sacramento Bee. “If welds crack and grow rapidly during a large quake, the entire roadway could fail.” Read the court decision
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In Louisiana, Native Americans Struggle to Recover From Ida

August 07, 2022 — The Associated Press (Rebecca Santana) - Bloomberg
Along Bayou Pointe-Au-Chien, La. (AP) -- Driving through her village along a southeastern Louisiana bayou, tribal official Cherie Matherne points out the remnants of house after house — including her own — wrecked nine months ago when Hurricane Ida roared through the Pointe-au-Chien Indian Tribe community. Beige trailers from the Federal Emergency Management Agency and travel campers sit next to pilings that elevated homes 14 feet (4.3 meters) off the ground to protect them from flooding. But it was the wind that got them this time. For hours, the Category 4 hurricane tore off roofs and siding, ripped out insulation and scattered treasured belongings. It destroyed shrimp boats and tossed crab traps. “It’s going to take years before people can get back to their lives. The majority of people are still at a standstill,” said Matherne, the tribe’s cultural heritage and resiliency coordinator. Read the court decision
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Reprinted courtesy of Bloomberg

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Ohio Rejects the Majority Trend and Finds No Liability Coverage for a Subcontractor’s Faulty Work

December 11, 2018 — Shannon M. Warren - The Subrogation Strategist
In Ohio N. Univ. v. Charles Constr. Servs., 2018 Ohio LEXIS 2375 (No. 2017-0514, October 9, 2018), the Supreme Court of Ohio was recently called upon to determine if a general contractor’s Commercial General Liability (CGL) insurance policy provided coverage for defective work completed by its subcontractor. Rejecting the majority trend, the court held that, because the subcontractor’s faulty work was not an “occurrence” caused by an accident – i.e. a fortuitous event – within the meaning of the contractor’s CGL policy, the insurer did not have to defend or indemnify the contractor with respect to the plaintiff’s claims. Read the court decision
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Reprinted courtesy of Shannon M. Warren, White and Williams LLP
Ms. Warren may be contacted at warrens@whiteandwilliams.com

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Design-Assist Collaboration/Follow-up Post

March 16, 2020 — John P. Ahlers - Ahlers Cressman & Sleight PLLC
Shortly after posting the blog article “Design-Assist an Ambiguous Term Causing Conflict in the Construction Industry,” I received an email from Brian Perlberg, the Executive Director and Senior Counsel for ConsensusDocs. He brought two ConsensusDocs forms to my attention: ConsensusDocs 541 Design Assist Addendum and ConsensusDocs 300 Integrated Form of Agreement (IFOA). In the ConsensusDocs model of “design-assist,” the lead design professional retains design responsibility but benefits from input and consultation from the construction team during design development. By contrast, in the design-build project delivery method, the constructor assumes design responsibility and liability for either the entire project design (design-build) or just a component of the design (delegated design). The ConsensusDocs 541 document goal is to provide “accurate information concerning program, quality, cost, constructability and schedule from all parties.” It provides a range of standard and optimal services during design development that essentially shifts the curve of selecting the construction manager (CM) and most importantly, special trade contractors, to much earlier in the process, perhaps as soon as the owner’s program is developed. This opens a world of possibilities for the design and construction team to collaborate early and often. The design professional, however, does not abdicate its design responsibility or authority in this process. The ultimate goal is to end the all-too-common wasteful cycle of design and redesign that is common in construction projects.[1] Read the court decision
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Reprinted courtesy of John P. Ahlers, Ahlers Cressman & Sleight PLLC
Mr. Ahlers may be contacted at john.ahlers@acslawyers.com

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Evacuations in Santa Barbara County as more Mudslides are Predicted

March 14, 2018 — Dave Suggs – CDJ Staff
Alene Tchekmedyian’s LA times article “Storm triggers evacuations in Santa Barbara County: 'Don't be fooled into thinking that this can’t happen again',” warns of the deadly potential of mudslides following the devastation that occurred in January that caused 21 fatalities and damaged homes in Montecito. Debris flow could be triggered by rainfall rates predicted to exceed half and inch per hour. In some areas as much as seven-tenths of an inch of rain per hour are possible because of a chance of thunderstorms. Mandatory evacuations began Monday to protect residents from the fast-moving storm that is predicted to be worse than January’s. Santa Barbara county officials asked that people help spread the word of the evacuation to everyone in their community. They also created an interactive map to help residents determine their risk level. Matilija Canyon and North Fork in Ventura County are under voluntary evacuation orders. Areas at the highest risk include Thomas, Sherpa, and Whittier burn areas. Residents can find shelter at the Goleta Valley Community Center at 5679 Hollister Avenue. Read the court decision
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