California Court Broadly Interprets Insurance Policy’s “Liability Arising Out of” Language
December 20, 2017 —
Garret Murai - California Construction Law BlogIn McMillin Mgmt. Servs. v. Financial Pacific Ins. Co., Cal.Ct.App. (4th Dist.), Docket No. D069814 (filed 11/14/17), the California Court of Appeal held that the term “liability arising out of,” as used in an ongoing operations endorsement, does not require that the named insured’s liability arise while it is performing work on a construction project.
In the McMillin case, the general contractor and developer (McMillin) contracted with various subcontractors, including a concrete subcontractor and stucco subcontractor insured by Lexington Insurance Company. Both subcontractors performed their work at the project prior to the sale of the units.
The Lexington policies contained substantively identical additional insured endorsements that provided coverage to McMillin “for liability arising out of your [the named insured subcontractor’s] ongoing operations performed for [McMillin].” Several homeowners filed suit against McMillin, alleging that they had discovered various defective conditions arising out of the construction of their homes, including defects arising out of the work performed by Lexington’s insureds. Lexington argued that there was no potential for coverage in McMillin’s favor under the endorsements because there were no homeowners during the time that the subcontractors’ operations were performing work at the project (the homes closed escrow after the subcontractors had completed their work); thus, McMillin did not have any liability for property damage that took place while the subcontractors’ operations were ongoing.
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Garret Murai, Wendel Rose Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
What Should Business Owners Do If a Customer Won’t Pay
January 02, 2024 —
Scott L. Baker - Los Angeles Litigation BlogIt should be simple: you provide a service, and your customer pays you for that service. Unfortunately, it is not always so simple.
Not getting paid for your work can be one of the most frustrating issues, especially for small businesses. It also does not take much for money matters to
lead to larger disputes. So, what should small business owners do in these cases?
1. Start with a reminder notice
Most sources, including the
U.S. Chamber of Commerce, agree that business owners should not begin by escalating the situation. Take time to review and fully understand the circumstances of this individual case. Then, begin with resending the invoice or sending reminders to pay.
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Scott L. Baker, Baker & AssociatesMr. Baker may be contacted at
slb@bakerslaw.com
OSHA Set to Tag More Firms as Severe Violators Under New Criteria
November 01, 2022 —
Richard Korman & Stephanie Loder - Engineering News-RecordIn announcing last month broadened criteria for classifying employers as severe safety violators, U.S. Occupational Safety and Health Administration official Douglas Parker singled out a steel fabricator near El Paso, Texas. The U.S. Labor Dept. assistant secretary for occupational safety and health, he posted a blog stating that OSHA had placed Kyoei Steel Ltd. in its severe violators program, which subjects the firm to numerous re-inspections until it is allowed to exit.
Reprinted courtesy of
Richard Korman, Engineering News-Record and
Stephanie Loder, Engineering News-Record
Mr. Korman may be contacted at kormanr@enr.com
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Hawaii Supreme Court Finds Climate Change Lawsuit Barred by “Pollution Exclusion”
November 05, 2024 —
Jason Taylor - Traub Lieberman Insurance Law BlogOn October 7, 2024, the Hawaii Supreme Court answered the question of whether an “accident” includes an insured’s reckless conduct in emitting harmful greenhouse gases (“GHGs”) and whether such emissions are “pollutants” as defined in a general liability policy’s pollution exclusion. In Aloha Petro., Ltd. v. National Union Fire Insurance Co. of Pitt., PA, No., 2024 Haw. LEXIS 179 (Oct. 7, 2024), the Hawaii Supreme Court answered in the affirmative as to both certified questions from the United States District Court for the District of Hawaii, holding that an insured’s reckless conduct can be an “accident” and that GHGs are “pollutants” under the policies’ pollution exclusions.
In the underlying case, the County of Honolulu and the County of Maui (the “Counties”) sued Aloha Petroleum, Ltd. (“Aloha”) and several other fossil fuel companies for climate change-related harms. Namely, the Counties alleged that the fossil fuel industry knew that its products would cause catastrophic climate change, and rather than mitigating their emissions, defendants concealed such knowledge, promoted climate science denial, and increased their production of fossil fuels. Aloha was allegedly on notice that its products caused harmful climate change through its former parent company, Phillips 66, and its current parent company, Sunoco. Given this knowledge, the District Court determined that the Counties allegations constituted reckless conduct by Aloha.
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
Maritime Law: An Albatross for Contractors Navigating Marine Construction
January 03, 2022 —
Cindy Matherne Muller - ConsensusDocs“Ah! Well a-day! When evil looks, Had I from old and young! Instead of the cross, the Albatross, About my neck was hung.” 1
Contractors and subcontractors performing construction over water may find themselves encountering maritime law for the first time. Like the ancient mariner’s encounter with an albatross in The Rime of the Ancient Mariner, a contractor may be able to use maritime law to safely guide it through rough seas, or, if not careful, a contractor may find itself with maritime law hung, like an albatross, around its neck. This article gives an overview of key maritime law issues to demystify this historical body of law and answers some basic questions.
What is admiralty jurisdiction?
The Constitution gives federal courts jurisdiction over all maritime cases. This jurisdiction gives litigants the opportunity to remove state court cases to federal court and to avoid a jury trial. The purpose of admiralty jurisdiction in federal court is to protect and ensure the uniform treatment of nationwide maritime commerce and extends to maritime contracts and accidents. Any contract which relates to the navigation, business, or commerce of the sea is a maritime contract. Even contracts with mixed obligations on land and sea can fall within admiralty jurisdiction – such as construction contracts with a waterborne component. Admiralty jurisdiction also extends to maritime accidents – those that occur on navigable waters and have a maritime nexus.
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Cindy Matherne Muller, Jones Walker LLPMs. Muller may be contacted at
cmuller@joneswalker.com
Pay Loss Provision Does Not Preclude Assignment of Post-Loss Claim
July 30, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe court determined that a policy's loss payment provision did not bar a post-loss assignment. One Call Prop. Servs. v. Sec. First Ins. Co., 2015 Fl. App. LEXIS 7643 (Fla. Ct. App. May 20, 2015).
After One Cell performed emergency water removal for the insured, the insured assigned his rights to policy proceeds as payment. One Cell alleged that Security First refused to reimburse the insured adequately for the services provided. One Cell filed suit, and Security First moved to dismiss. The trial court granted the motion based upon the policy's non-assignment provision.
One Cell appealed. One Cell argued post-loss assignments were valid under Florida law even when the policy contained an anti-assignment provision, and the right to payment accrued on the date of the loss.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
SEC Recommendations to Protect Against Cybersecurity Threats
March 09, 2020 —
Shaia Araghi and Jeffrey Dennis – Newmeyer DillionWhat Happened?
The Securities and Exchange Commission's Office of Compliance Inspections and Examinations ("OCIE") issued a detailed
report on January 27, 2020 regarding various ways for organizations to safeguard data and protect against security and data breaches. Cyber threat actors are now invading data in a more sophisticated manner than ever before, and implementation of the SEC's recommended practices are essential in order to protect from outside vulnerabilities.
What is at Risk?
If market participants fail to implement these recommended policies, they will become more vulnerable to external attacks and data breaches. This can weaken an organization or firm if all employees are not properly trained and informed of the increasing dangers of cybersecurity breaches.
What Can You Do to Protect Yourself from a Cybersecurity Threat?
1.
Governance and Risk Management. Senior leaders should make efforts to improve the cyber safety at their organization. Some of these efforts may include:
- Devote attention to overseeing the organization's cybersecurity and resilience programs;
- Develop a risk assessment process to identify and mitigate cybersecurity risks to the organization;
- Adopt and implement policies and procedures regarding these risks;
- Promptly respond and adapt to changes by updating policies and procedures when necessary; and
- Establish communication policies and procedures to provide timely information to customers, employees, and others when needed.
2.
Access Rights and Controls. Implement updated controls to determine appropriate users for organization systems, limit access as appropriate to authorized users (including the set-up of multi-factor authentication) and monitor user access.
3.
Data Loss Prevention. OCIE has recommended various important data loss prevention measures for organizations:
- Establish a vulnerability management program;
- Implement capabilities that can monitor network traffic and detect threats on endpoints;
- Establish a patch management program covering all software and hardware;
- Maintain an inventory of hardware and software assets;
- Encrypt data and implement network segmentation;
- Create an insider threat program to monitor any suspicious behaviors; and
- Secure legacy systems and equipment through disposal of sensitive information from hardware and software and by reassessing vulnerability and risk assessments.
4.
Mobile Security. Establish policies and procedures for mobile device use, manage use of mobile devices through a mobile device management application, implement security measures for internal and external users, and train employees on mobile device policies and effective practices.
5.
Incident Response and Resiliency. Detect and disclose material information regarding incidents in a timely manner and assess appropriateness of corrective actions taken in response to incidents. Organizations should develop a plan if an incident occurs, address applicable reporting requirements, assign staff to execute specific areas of the plan, and test and assess the plan. In the event that a data breach occurs, an organization should improve its resiliency by maintaining an inventory of core business services and prioritizing business operations based on an assessment of risks.
6.
Vendor Management. Establish a vendor management program to ensure that vendors meet your organization's security requirements. Organizations should aim to understand all contract terms with vendors to ensure that all parties are in agreement regarding risk and security. Organizations should also monitor third-party vendors and ensure that the vendor continues to meet the organization's security requirements.
7.
Training and Awareness. Train staff to implement cybersecurity policies of the organization. Organizations should provide cybersecurity and resiliency training and re-evaluate the effectiveness of training procedures.
A Final Reminder for Organizations
Organizations should strive to implement as many of the SEC's recommended protection measures as possible. Ensuring that senior members of an organization are leading the initiative in increased awareness about cybersecurity threats through training of employees will lead to greater cyber safety for the overall organization. Although prevention of all breaches cannot be guaranteed, developing data loss prevention plans to keep the organization and its core businesses safe from attack will benefit the entire organization.
How We Can Help
If you feel that your business falls below the SEC's recommended security measures, our firm can assist with compliance. Contact us for a free initial consultation to determine a reasonable and practical way for your business to become compliant with these guidelines.
Shaia Araghi is an associate in the firm's Privacy & Data Security, and supports the team in advising clients on cyber-related matters, including compliance and prevention that can protect their day-to-day operations. For more information on how Shaia can help, contact her at shaia.araghi@ndlf.com.
Jeff Dennis (CIPP/US) is the Head of the firm's Privacy & Data Security practice. Jeff works with the firm's clients on cyber-related issues, including contractual and insurance opportunities to lessen their risk. For more information on how Jeff can help, contact him at jeff.dennis@ndlf.com.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's success and bottom line. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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Waive Not, Want Not: Waivers and Releases on California Construction Projects
February 18, 2015 —
Garret Murai – California Construction Law BlogCalifornia is one of a handful of states (12 to be exact) which have statutory mandated waiver and release forms for construction projects.
So here’s what you need to know before you sign one (or two, or three).
What are California’s statutory waiver and release forms?
California has four statutory waiver and release forms for construction projects.
Which form applies depends on two things: (1) whether it is for progress payments or final payment; and (2) whether it is provided before or after you have been paid.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
