Cambridge Massachusetts Building Expert Directory

China Construction Bank Sued in US Over Reinsurance Fraud Losses

June 21, 2024 — Robert Burnson - Bloomberg
China Construction Bank Corp., the nation’s third-largest commercial lender, was accused in a US lawsuit of enabling a massive fraud in the reinsurance industry that left companies with “monumental losses” and sinking stock prices. The bank allowed employees to conspire with Israeli insurance startup Vesttoo Ltd. to sell reinsurance policies that weren’t real, according to a complaint filed late Thursday by the Porch Group in Manhattan federal court. Vesttoo filed for Chapter 11 bankruptcy in August after it was accused of using some $2 billion of fraudulent letters of credit. The Porch Group said that its unit Homeowners of America Insurance Co. lost tens of millions of dollars when its purported $300 million letter of credit proved worthless. “Not only did HOA incur colossal losses, but news of its exposure to the fraud perpetrated by Vesttoo and CCB shocked the market and imposed severe losses on Porch Group’s shareholders as its stock price plummeted,” according to the suit. Read the court decision
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Reprinted courtesy of Robert Burnson, Bloomberg

Genuine Dispute Over Cause of Damage and Insureds’ Demolition Before Inspection Negate Bad Faith and Elder Abuse Claims

June 30, 2016 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Paslay v. State Farm General Ins. Co. (No. B265348, filed 6/27/16), a California appeals court found triable issues of fact regarding whether State Farm breached its contract in paying a water loss, but affirmed summary adjudication for the insurer on bad faith and elder abuse claims based on the genuine dispute doctrine. Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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Recent Developments Involving Cedell v. Farmers Insurance Company of Washington

September 05, 2022 — Donald Verfurth, Sally Kim, Stephanie Ries & Kyle Silk-Eglit - Gordon & Rees Insurance Coverage Law Blog
Ever since the Washington Supreme Court’s 2013 decision in Cedell v. Farmers Insurance Company of Washington, 176 Wn.2d 686, 295 P.3d 239 (2013), insurance coverage attorneys have been struggling to define the exact parameters of the Cedell ruling in order to safeguard the attorney-client privilege as to the communications between the insurer and its counsel. As a brief background, the Washington Supreme Court held in Cedell that there is a presumption of no attorney-client privilege in a lawsuit involving bad faith claims handling. However, an insurer can overcome the presumption of no attorney-client privilege by showing that its counsel provided legal advice regarding the insurer’s potential liability under the policy and law, and did not engage in any quasi-fiduciary activities, i.e. claims handling activities, such as investigating, evaluating, adjusting or processing the insured’s claim. Since Cedell, various trial courts have held that the following activities by an insurer’s counsel constitute quasi-fiduciary conduct that do not overcome the presumption of no attorney-client privilege, resulting in an order to produce documents and/or to permit the deposition of the insurer’s counsel:

Insurer’s attorney being the primary or sole point of contact with the insured for the insurer;
Insurer’s attorney requesting documents from the insured that are relevant to the investigation of the claim;
Insurer’s attorney communicating directly with the insured or the insured’s counsel regarding claims handling issues or payments;
Insurer’s attorney interviewing witnesses for purposes of the investigation of the claim;
Insurer’s attorney conducting an examination under oath of the insured;
Insurer’s attorney drafting proposed or final reservation of rights letter or denial letter to the insured; and
Insurer’s attorney conducting settlement negotiations in an underlying litigation.

Reprinted courtesy of Donald Verfurth, Gordon Rees Scully Mansukhani, Sally Kim, Gordon Rees Scully Mansukhani, Stephanie Ries, Gordon Rees Scully Mansukhani and Kyle Silk-Eglit, Gordon Rees Scully Mansukhani Mr. Verfurth may be contacted at dverfurth@grsm.com Ms. Kim may be contacted at sallykim@grsm.com Ms. Ries may be contacted at sries@grsm.com Mr. Silk-Eglit may be contacted at ksilkeglit@grsm.com Read the court decision
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ACEC Statement on Negotiated Bipartisan Debt Limit Compromise

June 05, 2023 — The American Council of Engineering Companies
Washington, D.C. – The American Council of Engineering Companies (ACEC) released the following statement applauding the negotiated bipartisan compromise to raise the debt limit ahead of the scheduled House vote tonight:

"The American Council of Engineering Companies (ACEC) applauds President Biden and Speaker McCarthy for negotiating a bipartisan compromise to raise the debt limit and avoid a catastrophic default. We are particularly pleased that the bipartisan deal protects the critical funds provided under the Infrastructure Investment and Jobs Act (IIJA) and does not include any changes to the Inflation Reduction Act's (IRA) climate and clean energy provisions, which the engineering industry is working hard to deliver successfully. ACEC also strongly supports the provisions in the deal to reform the federal permitting process. These commonsense measures to modernize the National Environmental Policy Act (NEPA), particularly through the use of digital technologies, will improve interagency collaboration and allow engineering firms to help their clients deliver project benefits more efficiently while ensuring strong environmental protections and opportunities for community and stakeholder engagement."

The American Council of Engineering Companies (ACEC) is the business association of the nation's engineering industry. Founded in 1909, ACEC is a national federation of 51 state and regional organizations representing more than 5,500 engineering firms and 600,000+ engineers, surveyors, architects, and other specialists nationwide. ACEC member firms drive the design of America's infrastructure and the built environment. Read the court decision
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U.S. Army Corps Announces Regulatory Program “Modernization” Plan

August 03, 2022 — Karen Bennett - Lewis Brisbois
Washington D.C. (June 17, 2022) - The U.S. Army Corps of Engineers and the Department of the Army recently announced plans to amend the Corps Civil Works program to better serve Indian nations and other disadvantaged and underserved communities. 87 Fed. Reg. 33758 (June 3, 2022). Comments are due by August 2, 2022. Several items warrant attention. The first are changes to Corps regulations on implementation of the National Historic Preservation Act (NHPA, or the Act) (33 CFR 325, Appendix C). Proposed options include suspension of the Corps’ Appendix C regulations and adoption of the Advisory Council on Historic Preservation’s (ACHP) regulations. Congress established the ACHP, an independent agency whose mission is to provide the President and Congress with advice as to policies and programs on historical preservation. The NHPA authorized the Council to promulgate regulations establishing procedures for evaluating the effect of a federal action on historic property. The Act also provides that a federal agency may promulgate its own regulations, consistent with the Council’s regulations. Where an agency has its own regulations, courts have consistently held that the agency’s regulations govern decision-making, provided they are not inconsistent with the Part 800 regulations. Most courts have generally regarded an agency’s regulations as inconsistent when they are less restrictive procedurally than the Council’s. Until today, the Corps has defended Appendix C and interim guidance (issued in 2005 and 2007) as consistent with the NHPA and specifically tailored for use in the Corps regulatory program. The announcement marks a significant directional change and gives the ACHP a larger role in Corps regulatory decisions. Read the court decision
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Reprinted courtesy of Karen Bennett, Lewis Brisbois
Ms. Bennett may be contacted at Karen.Bennett@lewisbrisbois.com

Equipment Costs? It’s a Steal!

July 08, 2011 — CDJ STAFF

KCBD reports on the problems of a Lubbock, Texas contractor. It’s hard to do the job when your tools keep getting stolen. Corey Meadows, owner of Top Cut Interiors, told KCBD that he had chained an air compressor to a table saw. Since the thieves couldn’t cut the chain, they cut the table saw “and just took the air compressor and the chain.” Meadows estimates the thieves cost him $2,000 in damaged or stolen equipment and time lost.

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Ordinary Use of Term In Insurance Policy Prevailed

June 08, 2020 — David Adelstein - Florida Construction Legal Updates
There are cases where you feel for the plaintiff, but understand why they did not prevail, despite the creative efforts of their counsel. The case of Robinson v. Liberty Mutual Ins. Co., 958 F.3d 1137 (11th Cir. 2020) is one of these cases. In Robinson, the plaintiff moved into a home that turned out to be infested with a highly venomous spider. Efforts to eradicate the spider proved unsuccessful and the spider apparently infested the entire home. The plaintiff made a claim under their homeowner’s property insurance policy arguing that their home suffered a physical loss caused by the spider infestation as the spider presented an irreparable condition that rendered the home unsafe for occupancy. (It probably did!). The property insurer denied coverage because the policy had an insurance exclusion for loss caused by birds, vermin, rodents, or insects. The insurer claimed the spider is an insect or vermin and, therefore, there is no coverage based on the exclusion. The insured creatively argued that “scientifically speaking” a spider is an arachnid and not an insect. Neither the trial court nor the Eleventh Circuit found this argument persuasive. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Navigating Abandonment of a Construction Project

March 02, 2020 — Bremer Whyte Brown & O’Meara
No construction or real estate developments goes completely as planned. Despite the expectation that modifications will likely be necessary to finalize a project, far too many parties suffer losses related to these projects. In California, abandonment of a project without legal excuse gives rise to a legal claim. An abandonment occurs if there was a material failure to complete any construction project or operation for the price stated in the contract or in any modification of the contact. If abandonment occurs, litigation likely follows. Disputes most commonly arise when the parties fail to retain a paper trail. Therefore, to limit litigation, document everything. Change orders can offer protection, but they must be in writing. Handshakes or oral promises are not sufficient. Rather, obtain written agreements signed by the contractor, and retain all documentation provided by the contractor, including invoices, receipts, work estimates and change orders. If the construction project has been abandoned, take photographs and/or videos of the job as it appears. To mitigate damages, preserve any leftover materials that a new contractor may be able to use. Read the court decision
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Reprinted courtesy of Bremer Whyte Brown & O’Meara

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