Architect Responds to Defect Lawsuit over Defects at Texas Courthouse
October 08, 2013 —
CDJ STAFFLee County, Texas has sued the architect responsible for designing the drainage system at its historic courthouse. The suit seeks $1.7 million in damages to pay for replacing the defective system and repairing the building from damage sustained due to soil saturation.
Dale A. Rabe responds that the county commissioners were more concerned with “beautifying the building” than on needed foundation repairs. Further, Mr. Rabe notes that “Lee County contracted directly with a civil engineering firm to design a drainage system.” But according to Mr. Rabe what they used instead was “a cheaper pump-based design to save money.” And even there, “Lee County failed to maintain the drainage system properly.
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4 Ways to Mitigate Construction Disputes
March 20, 2023 —
Bill Shaughnessy - ConsensusDocsResolving construction disputes in litigation (court or arbitration) can be expensive and may drag on for years. Most disputes could have been avoided, or at least mitigated, had the parties (both owners and contractors) identified contract risks during negotiations and been more proactive in communicating the risks during execution of the work. This article highlights four practical risk management approaches that help all parties focus on their mutual interest in close coordination and clear communication at the beginning of the project as well as throughout performance:
- Identifying and allocating risks;
- Accurate scheduling;
- Clear project documentation and communication; and
- Real-time dispute resolution.
The intent of these techniques is not to shift legal obligations or risks. Rather, the intent is to keep project personnel and project management for all the participants focused on communicating and working together, including responsibly confronting real problems to avoid or mitigate their impact. Allocating risks, scheduling, project documentation and communication, and real-time dispute resolution are independently relevant on a bilateral basis between the owner, designer, and the various contractors. These approaches and their diligent execution by the parties during construction contribute far more to a successful project than anything lawyers and claims consultants can contribute in after-the-fact legal proceedings.
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Bill Shaughnessy, Jones Walker LLP (ConsensusDocs)Mr. Shaughnessy may be contacted at
bshaughnessy@joneswalker.com
COVID-19 Win for Policyholders! Court Approves "Direct Physical Loss" Argument
October 12, 2020 —
Gregory D. Podolak & Christine Baptiste-Perez - Saxe Doernberger & VitaLate last week, a Missouri federal district court provided a significant victory for insurance policyholders for COVID-19 losses. In Studio 417, Inc. v. The Cincinnati Insurance Company 6:20-cv-03127-SRB (W.D. MO, So. Div., Aug. 12, 2020), the Court was called upon to decide whether allegations involving the presence of COVID-19 in and around physical structures qualify as “direct physical loss or damage” to covered property. For those actively monitoring the COVID-19 insurance coverage litigation landscape, this has been a central question – and hotly contested debate – in virtually all first-party property and business interruption claims. Through a detailed and well-reasoned discussion, the Court answered the question with an emphatic “Yes.”
The Plaintiffs – a proposed class of hair salons and restaurants - purchased “all-risk” property insurance policies (the “Policies”) from Cincinnati. The Policies provide that Cincinnati would pay for “direct ‘loss’ unless the ‘loss’ is excluded or limited.” They also defined a “Covered Cause of Loss” as “accidental [direct] physical loss or accidental [direct] physical damage.” The Policies did not contain a virus exclusion. Anecdotally, Cincinnati has been vocal about the general lack of virus exclusions on its standard forms, having recently publicized that the company considers such exclusions “unnecessary” because, in its view, “a virus does not produce direct physical damage or loss to property.” From Cincinnati’s perspective, the insuring agreement is not triggered by these events, so there’s no need to analyze exclusions. Cincinnati relied heavily on that analysis in this case.
Reprinted courtesy of
Gregory D. Podolak, Saxe Doernberger & Vita, P.C. and
Christine Baptiste-Perez, Saxe Doernberger & Vita, P.C.
Mr. Podolak may be contacted at gdp@sdvlaw.com
Ms. Baptiste-Perez may be contacted at cbp@sdvlaw.com
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How Pennsylvania’s Supreme Court Decision Affects Coverage of Faulty Workmanship Claims
March 31, 2014 —
Beverley BevenFlorez-CDJ STAFFDarin J. McMullen of the firm Anderson Kill explained how a recent opinion by the Pennsylvania Supreme Court allows “Pennsylvania policyholders” to “more confidently challenge insurance companies’ denials of faulty workmanship claims.”
The decision in Indalex Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 2013 Pa. Super 311 (Dec. 3, 2013) “reverses a nearly decade-long trend of Pennsylvania decisions narrowing the scope of insurance coverage for construction and defect-related claims under commercial general liability insurance policies,” according to McMullen. “Equally important, the Indalex ruling dealt a blow to the insurance industry’s continual efforts to win overbroad expansion of the rulings in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., and Erie Ins. Exchange v. Abbott Furnace Co., which found that claims of faulty workmanship in some circumstances may not constitute coverage-triggering ‘occurrences.’”
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NJ Supreme Court Declines to Review Decision that Exxon Has No Duty to Indemnify Insurers for Environmental Liability Under Prior Settlement Agreement
November 29, 2021 —
Patricia B. Santelle & Laura Rossi - White and WilliamsOn November 1, 2021, in a single-sentence Order, the Supreme Court of New Jersey denied a request for review of a decision that ExxonMobil Corporation (Exxon) did not have to indemnify certain of its insurers over environmental liabilities as required by a previous settlement agreement. The case, entitled Home Insurance Company v. Cornell-Dubilier Electronics Incorporated, et al., has a unique and convoluted procedural history but, in short, the denial of review leaves standing a holding by the intermediate appellate court that the insurers’ “untimely notice actually prejudiced Exxon, violated the no-prejudice rule, and breached the covenant of good faith and fair dealing.” The court declined to consider the question framed by the insurers: whether the importance of enforcing settlement agreements outweighs New Jersey’s entire controversy doctrine.
The matter dated back almost thirty years, when the New Jersey Department of Environmental Protection notified the Appearing London Market Insurers (ALMI) of the potential liability of Cornell-Dublier Electronics (CDE), a former indirect subsidiary of Exxon, for pollution at a site in New Jersey. Coverage litigation followed in New Jersey, which ALMI defended under policies issued to CDE. Exxon was not named in the CDE suit nor were the policies which ALMI issued to Exxon at issue in that case; Exxon instead had its own pollution coverage case pending in New York. In June 2000, Exxon and its insurers, including ALMI, entered into a settlement agreement which (a) required Exxon to indemnify the insurers for any environmental liability claims involving its subsidiaries, and (b) provided for application of New York substantive law and litigation in New York City court for any dispute between the parties under it.
Reprinted courtesy of
Patricia B. Santelle, White and Williams and
Laura Rossi, White and Williams
Ms. Santelle may be contacted at santellep@whiteandwilliams.com
Ms. Rossi may be contacted at rossil@whiteandwilliams.com
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When Are General Conditions and General Requirements Covered by Builder's Risk
December 18, 2022 —
Michael V. Pepe & Grace V. Hebbel - Saxe Doernberger & VitaGeneral conditions and general requirements are terms of art in the construction industry that describe the indirect costs necessary to complete a construction project. After physical loss or damage to a project, the following question often arises: Are “general conditions” and “general requirements” covered under a builder’s risk policy?
General Conditions vs. General Requirements
General conditions are usually described as the cost of managing a construction project. Examples include salaries for personnel like project managers, supervisors, engineers, field office staff, as well as the cost of field trailers, office equipment and supplies, and anything necessary to support the staff.
General requirements are the non-management indirect costs of executing the project, including items such as pre-development costs, permits, security, dumpsters, fences, temporary lighting, worker amenities, and clean-up costs.
Reprinted courtesy of
Michael V. Pepe, Saxe Doernberger & Vita and
Grace V. Hebbel, Saxe Doernberger & Vita
Mr. Pepe may be contacted at MPepe@sdvlaw.com
Ms. Hebbel may be contacted at GHebbel@sdvlaw.com
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Fifth Circuit Reverses Summary Judgment Award to Insurer on Hurricane Damage Claim
December 18, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit reversed the district court's grant of summary judgment to the insurer on a property damage claim arising from Hurricane Harvey. Advanced Indicator and Manufacturing, Inc. v. Acadia Ins. Co., 50 F.4th 469 (2022).
After Hurricane Harvey struck southern Texas in 2017, Advanced submitted a claim to Acadia for damage to its building that it claimed was caused by the hurricane's winds. Acadia sent an adjuster, Nick Warren, as well as an engineer, Jason Watson. Watson determined that pre-existing conditions - including ongoing leaks from deterioration and poor workmanship - caused the damage, rather than winds from Hurricane Harvey. Warren adopted these conclusions in his recommendations to Acadia. Acadia denied Advanced's claim based on these reports.
Advanced sued Acadia, alleging breach of contract and bad faith. Advanced filed a motion to remand to state court which was denied. Acadia moved for summary judgment arguing that it did not breach the policy and that Advanced could not segregate any damages caused by hurricane from pre-existing damage. The district court granted Acadia's motion, finding that Acadia's denial of Advanced's claim was based on "extensive consideration of the evidence." Further, Advanced failed to carry its burden of showing that covered and non-covered damages could be segregated as required by Texas's concurrent causation doctrine. Finally, the bad faith claim was dismissed because there was no breach of contract.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
It Ain’t Over Till it’s Over. Why Project Completion in California Isn’t as Straightforward as You Think
May 07, 2015 —
Garret Murai – California Construction Law BlogBaseball legend Yogi Berra was famous for his pithy quotes such as “the future ain’t what it used to be,” “half the lies they tell about me aren’t true,” and what is probably his most famous, “it ain’t over till it’s over.”
The last, of course, begs the question of when over is over? And, on California construction projects when over is over, or more accurately, when a project is complete, can be as paradoxical as a “yogiism.”
Why “Completion” is Important in California
In California, project “completion,” is important not only for getting paid, but for knowing the deadlines associated with California’s statutory construction payment remedies.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
