Irene May Benefit Construction Industry
September 01, 2011 —
CDJ STAFFNoting that while it wasn’t the $15 billion disaster some predicted, Hurricane Irene still caused quite a bit of damage on its path up the Eastern Seaboard. Martha White, reporting for MSNBC cites Kinetc Analysis Corp. with an estimate of $7 billion in damage. Carl Van Horn, a professor of public policy at Rutgers University expected an initial decline in construction jobs, due to projects delayed due to the storm’s arrival, but he said, “a few weeks later, employment picks up as people rebuild.”
Kinetic says that one unknown is how much of the damage is insured. They expect only $3 billion of damage will be covered by insurance. This would likely put a drag on consumer spending, as homeowners would have to dig into their own pockets to pay for repairs, according to Karl Smith, associate professor of economics and government at the University of North Carolina at Chapel Hill.
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Everyone Wins When a Foreclosure Sale Generates Excess Proceeds
August 07, 2018 —
Ben Reeves - Snell & Wilmer Real Estate Litigation BlogIntroduction
When a foreclosure sale generates more money than needed to pay off the lien, the excess proceeds usually go first to creditors in the order of their priority, and second to the owner after creditors are paid in full. So, in truth, not everyone wins when a foreclosure sale brings in too much money. Amusingly, in Steinmetz v. Everyone Wins, the court awarded excess sale proceeds to….you guessed it…Everyone Wins, despite the owner’s argument that Arizona’s anti-deficiency statutes barred it from recovering anything.
In addition to supplying a clever title for this post, Steinmetz v. Everyone Wins provides an important analysis of how Arizona’s anti-deficiency statutes, homeowner’s assessment lien statutes, and foreclosure statutes apply when determining who “wins” when it comes to excess sale proceeds.
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Ben Reeves, Snell & WilmerMr. Reeves may be contacted at
breeves@swlaw.com
Wisconsin “property damage” caused by an “occurrence.”
April 04, 2011 —
CDCoverage.comIn American Family Mut. Ins. Co. v. American Girl, Inc., 673 N.W.2d 65 (Wis. 2004), the insured general contractor was hired by the owner to design and build a warehouse on the owner s property. The general contractor hired a soil engineer to do a soil analysis and make site preparation recommendations. The soil engineer determined that the soil conditions were poor and recommended a compression process which the general contractor followed. After the warehouse was completed and the owner took possession, excessive soil settlement caused the foundation to sink which in turn caused structural damage to the warehouse. The warehouse had to be torn down.
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Why You Make A Better Wall Than A Window: Why Policyholders Can Rest Assured That Insurers Should Pay Legal Bills for Claims with Potential Coverage
March 14, 2018 —
Alan Packer and Graham Mills - Newmeyer & Dillion, LLPUnfortunately, policyholders, such as manufacturers and contractors, routinely face the unnecessary challenge of how to access all of the insurance coverage which they have purchased. Frequently, the most pressing need is to get the insurance company to pay the legal bills when the policyholders have been sued. The recent Iowa federal district court opinion in
Pella Corporation v. Liberty Mutual Insurance Company should help a policyholder in a dispute to require its insurance company to pay those legal bills sooner rather than later by highlighting that the duty to defend arises from the potential for coverage, and the insurer may not force the policyholder to prove the damage to obtain a defense.
In
Pella, a window manufacturer purchased several years of insurance coverage from Liberty Mutual. Similar to many companies, Pella had many “layers” of insurance coverage in any given year. These layers collectively function like a tower. The general idea is that each layer provides a certain amount of coverage after the insurance policy below it had paid its money. The Liberty Mutual insurance policies provided excess coverage.
After the
Pella window manufacturer made and sold its windows, it was sued in numerous lawsuits alleging that its windows were defective and that those defective windows caused a wide variety of damage to the structures in which they were installed. The window manufacturer tendered those lawsuits to its insurance companies in its tower of coverage, asking that the insurance companies pay its legal bills incurred in its defense. As to Liberty Mutual, the window manufacturer argued that the Liberty Mutual insurance policies were triggered, and so obligated to reimburse it, if a window was installed during the years that those policies provided coverage or if there was a mere allegation that a window was installed during the years that those policies provided coverage. Liberty Mutual opposed, arguing that the date of installation of the windows was insufficient to trigger the policies, and that the manufacturer was required to demonstrate the date that damage actually occurred to trigger a defense.
The key issue before the
Pella Court in this decision was a simple one: which insurance policies, if any, issued by Liberty Mutual had an obligation to pay the window manufacturer’s legal bills? The answer to that question is critical and financially significant. Getting an insurance company to honor its obligations and start paying the legal bills as soon as possible is very important for a policyholder because of the cost of defending oneself in a lawsuit; often the key reason why an insurance policy is even purchased is to provide the policyholder with the right to call upon the insurance company’s financial resources to defend it should it be sued.
In a ruling that will be welcomed by policyholders, the
Pella Court held that Liberty Mutual’s multiple insurance policies were triggered, and so obligated to pay for the window manufacturer’s defense, if one of two events occurred during the years in which those insurance policies provided coverage: (1) a window was actually installed during a year when the insurance policy provided coverage or (2) the window was alleged to be installed in the year that the insurance policy provided coverage. The Court agreed with the policyholder that once the windows were installed, property damage was alleged and “may
potentially have occurred” from that point on, thus the policies on the risk from that point forward. The practical effect of this ruling meant that Liberty Mutual had to reimburse the window manufacturer for the defense fees and costs that it had paid.
While
Pella was decided under Iowa law, the principles upon which it relied are similar to those applied under California law. Importantly, both California and Iowa law hold that an insurance company must provide a defense in response to a claim that is, or could be, covered by the insurance policy. The mere potential that the claim might be covered is enough for the insurance company to be obligated to pay for policyholder’s legal fees and costs.
Establishing that an insurance company must pay legal fees and costs as soon as possible allows a policyholder to save its own money. Why should a policyholder pay legal bills when it purchased an insurance policy as protection to ensure that it did not have to pay those bills? The answer is that a policyholder should not and, under
Pella, the policyholder does not have to. Rather, the insurance company must start paying for that defense from a very early date. Pella confirms for policyholders the position that their insurance companies should pay legal bills earlier rather than later.
Alan Packer is a partner in the Walnut Creek office for Newmeyer & Dillion, LLP, representing homebuilders, property owners, and business clients on a broad range of legal matters, including risk management, insurance matters, wrap consultation and documentation, efforts to counter solicitation of homeowners, subcontract documentation, as well as complex litigation matters. Alan can be reached at alan.packer@ndlf.com.
Graham Mills is a partner in the Walnut Creek offce of Newmeyer & Dillion, LLP, representing clients in the area of complex insurance law with an emphasis on insurance recovery, construction litigation, real estate litigation, and business litigation. He regularly examines and analyzes a wide variety of insurance policies. Graham can be reached at graham.mills@ndlf.com.
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Code Changes Pave Way for CLT in Tall Buildings and Spark Flammability Debate
May 13, 2019 —
Sam Barnes - Construction ExecutiveAlthough nothing new, the debate over which is better as a building material—wood or concrete—intensified in December following the preliminary approval of new codes for cross-laminated timber and mass timber in tall structures.
The discussion among industry professionals has been less about CLT’s structural capabilities and more about its perceived flammability, with either side offering decidedly different perspectives. Comparatively new to the United States, CLT and mass timber products are constructed of several layers of pressed lumber board stacked in alternating directions.
In December, the International Code Council released the unofficial voting results on several code change proposals, including passage of the entire package of 14 tall mass timber codes. The proposals were presented by the ICC’s Ad Hoc Committee on Tall Wood Buildings, comprised mostly of engineers, architects, building and fire code officials, fire service, materials and testing lab representatives.
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Sam Barnes, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Manhattan to Get Tall, Skinny Tower
October 21, 2013 —
CDJ STAFFAt its narrowest, it’s going to be only sixty feet wide. And that will run 1,350 feet into the air. A new apartment tower is going up in New York, and one of its amenities will be that residents in the top floors will be able to look down on the Empire State Building. “It may be the skinniest building ever,” said Gregg Pasquarelli, the principal of SHoP Architects, the firm that designed the building. He estimates its ratio of height to width as “something like 25-to-1.”
For all its height, the building will be divided into about 100 units. As part of the development deal, the tower will incorporate and preserve the landmark Steinway Hall. The chair of the Landmarks Preservation Commission, Robert Tierney, described it as “the best of both worlds of new construction and design and historic preservation.”
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Ex-Pemex CEO Denies Allegations of Involvement in Brazil Scandal
April 13, 2017 —
Carlos M Rodriguez & Juan Pablo Spinetto - Bloombergormer Petroleos Mexicanos Chief Executive Officer Emilio Lozoya denied participating in an alleged bribery scheme involving Brazilian construction company Odebrecht SA in Mexico, after Veja magazine reported the executive was mentioned in connection with an ongoing corruption probe.
"I haven’t requested nor have I received illegal money," Lozoya said in an emailed response to questions by Bloomberg News on Wednesday. "I reiterate my interest in having this matter investigated and penalties issued, but without dishonoring and defaming without proof along the way."
In a report this week, Brazilian magazine Veja cited court documents suggesting the former Pemex CEO allegedly requested a $5 million illegal payment to Odebrecht, Latin America’s biggest construction company, to obtain benefits in Mexico. Veja says it based its reporting on portions of a plea-bargain agreement between prosecutors and a former top executive at Odebrecht. The allegations are part of a three-year, sweeping corruption probe in Brazil known as Operation Carwash.
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A Downside of Associational Standing - HOA's Claims Against Subcontractors Barred by Statute of Limitations
March 28, 2012 —
Bret Cogdill, Colorado Construction LitigationIn multi-family construction defect litigation in Colorado, homeowners associations rely on associational standing to pursue claims affecting more than two units and to bring claims covering an entire development. This practice broadens an association’s case beyond what individual, aggrieved owners would otherwise bring on their own against a developer or builder-vendor. However, reliance on associational standing to combine homeowners’ defect claims into a single lawsuit has its drawbacks to homeowners.
A recent order in the case Villa Mirage Condominium Owners’ Association, Inc., v. Stetson 162, LLC, et al., in El Paso County District Court, presents an example. There, the HOA unsuccessfully sought a determination from the court that its claims against subcontractors were not barred by the statute of limitations. To do so, the HOAs attempted to apply the Colorado Common Interest Ownership Act (“CCIOA”), which governs the creation and operation of HOAs, and a statute intended to apply to persons under a legal disability.
Under CCIOA, during the period of “declarant control” the developer may appoint members to the association’s executive board until sufficient homeowners have moved into the development and taken seats on the board.
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Reprinted courtesy of Bret Cogdill of Higgins, Hopkins, McClain & Roswell, LLC. Mr. Cogdill can be contacted at cogdill@hhmrlaw.com.
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