Rhode Island Finds Pollution Exclusion Ambiguous, Orders Coverage for Home Heating Oil Leak
March 06, 2023 —
Kayla S. O'Connor - Saxe Doernberger & Vita, P.C.The Rhode Island case of Regan Heating and Air Conditioning, Inc. v. Arbella Protection Insurance Company, Inc., et. al.1 provides much-needed guidance regarding ambiguity and the term “pollution.”
In Regan, the Rhode Island Supreme Court held that a pollution exclusion contained in the Plaintiff’s “Commercial Package Policy” was ambiguous as to whether home heating oil that escaped into a customer’s basement constituted a “pollutant” under the policy.
This case stems from a 2015 incident wherein Regan was in the process of removing an older heating system and installing a new heating system in a customer’s home when that customer discovered 170 gallons of home heating oil in his basement. The customer sued Regan, alleging negligence and demanding remediation for the property damage caused by the oil leak.
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Kayla S. O'Connor, Saxe Doernberger & Vita, P.C.Ms. O'Connor may be contacted at
KOconnor@sdvlaw.com
Delaware District Court Finds CGL Insurer Owes Condo Builder a Duty to Defend Faulty Workmanship Claims — Based on the Subcontractor Exception to the Your Work Exclusion
October 04, 2021 —
Anthony L. Miscioscia & Laura Rossi - White and WilliamsOn September 7, 2021, in one of the few decisions addressing the scope of coverage for faulty workmanship under Delaware law, the Delaware District Court denied an insurer’s motion seeking a declaration that it neither needed to defend nor indemnify an insured-builder under a commercial general liability policy.
In this declaratory judgment action, Pennsylvania National Mutual Casualty Insurance Company v. Zonko Builders, the insurer argued that the ongoing underlying action failed to properly plead an “occurrence” in a case alleging damages to a condominium caused by faulty workmanship involving subcontractors.* Zonko Builders (Zonko) served as the general contractor, supervising subcontractors. The Condominium Association sued Zonko for damages allegedly resulting from design and construction deficiencies. The motion was opposed by the Condominium Association, which cross-moved for partial judgment on the pleadings.
In AE-Newark Associates, L.P. v. CNA Insurance Companies, 2001 Del. Super. LEXIS 370 (Del. Super. Ct. Oct. 2, 2001), the Delaware Superior Court found that an insured was entitled to coverage for damages arising from a faulty roof system installed by a subcontractor on behalf of the insured general contractor.
Reprinted courtesy of
Anthony L. Miscioscia, White and Williams and
Laura Rossi, White and Williams
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Ms. Rossi may be contacted at rossil@whiteandwilliams.com
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Non-compliance With Endorsement Means No Indemnity Coverage
January 15, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe insured's failure to verify that subcontractors had CGL policies and to provide a contract stating that the subcontractors would indemnify the insured as required by the policy's endorsement meant there was no coverage for the insured. Cincinnati Spec. Underwriters Ins. Co. v. Milionis Constr., Inc., 2018 U.S. Dist. LEXIS 199658 (E.D. Wash. Nov. 26, 2018).
The homeowners filed suit against Milionis, the general contractor for construction of a home. The underlying suit alleged that Milionis breached the parties' agreement by leaving the home unfinished. Cincinnati defended Milionis under a reservation of rights.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
While Construction Permits Slowly Rise, Construction Starts and Completions in California Are Stagnant
December 05, 2022 —
John Kazanovicz & Jason Feld - Kahana FeldThere is an interesting phenomenon happening in the California construction market since the Summer of 2022. There is a steady but slow rise in the construction building permits being issued throughout California. According to the U.S. Census and the U.S. Department of Housing and Urban Development’s joint announcement (https://www.census.gov/construction/nrc/pdf/newresconst.pdf) of new residential construction statistics for September 2022, privately‐owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,564,000. This is 1.4 percent above the revised August rate of 1,542,000. While this is slightly lower than a year ago (3.2 percent below the September 2021 rate of 1,615,000), the trend for obtaining new home permits was reportedly ahead of the projected rates given the market conditions and inflation throughout the country. Interestingly, single‐family authorizations in September were at a rate of 872,000 which was also 3.1 percent below the revised August 2022 figure of 900,000. Authorizations of units in buildings with five units or more were at a rate of 644,000 in September. Overall, while slowly recovering from the record lows during the height of the pandemic, the economic forecast for new home construction in California is positive, but cautious.
The flip side of this coin is the construction starts in California, which continue to remain stagnant despite additional building permits being issued. Privately‐owned housing starts in September were at a seasonally adjusted annual rate of 1,439,000. This is 8.1 percent (±14.9 percent) below the revised August estimate of 1,566,000 and is 7.7 percent (±11.5 percent) below the September 2021 rate of 1,559,000. Single‐family housing starts in September were at a rate of 892,000; this is 4.7 percent (±10.7 percent) below the revised August figure of 936,000. The September rate for units in buildings with five units or more was 530,000.
Reprinted courtesy of
John Kazanovicz, Kahana Feld and
Jason Feld, Kahana Feld
Mr. Kazanovicz may be contacted at jkazanovicz@kahanafeld.com
Mr. Feld may be contacted at jfeld@kahanafeld.com
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Georgia Federal Court Says Fact Questions Exist As To Whether Nitrogen Is An “Irritant” or “Contaminant” As Used in Pollution Exclusion
May 20, 2019 —
Lawrence J. Bracken II, Michael S. Levine & Alexander D. Russo - Hunton Andrews KurthThe Southern District of Georgia recently ruled that Evanston Insurance Company is not entitled to summary judgment on whether its policies’ pollution exclusion bars coverage for the release of nitrogen into a warehouse. The case stems from an incident at Xytex Tissue Services, LLC’s warehouse, where Xytex stored biological material at low temperatures. Xytex used an on-site “liquid nitrogen delivery system” to keep the material properly cooled. This system releases liquid nitrogen, which would vaporize into nitrogen gas and cool the biological material. On February 5, 2017, a Xytex employee, Deputy Greg Meagher, entered the warehouse to investigate activated motion detectors and burglar alarms. Deputy Meagher was overcome by nitrogen gas and died as a result. Following Deputy Meagher’s death, his heirs filed suit against Xytex and other defendants. Evanston denied coverage based on the pollution exclusion in its policy. Evanston then brought a declaratory judgment action to confirm its coverage position.
In denying Evanston’s summary judgment motion, the Southern District of Georgia reasoned that the type of injury sustained is essential in analyzing whether the pollution exclusion applies. Specifically, Xytex argued, and the court agreed, that the underlying lawsuit alleged that the bodily injury was caused by a lack of oxygen, not exposure to nitrogen. The court also distinguished prior decisions, explaining that injury caused by a lack of oxygen is not a contamination or irritation of the body in the same way as injury resulting from exposure to carbon monoxide or lead. The court also found that Xytex “reasonably expected that liability related to a nitrogen leak would be insured.”
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Lawrence J. Bracken II,
Michael S. Levine and
Alexander D. Russo
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Russo may be contacted at arusso@HuntonAK.com
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Green Construction Claims: More of the Same
May 10, 2021 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday, Musings welcomes back Timothy R. Hughes, Esq., LEED AP. Tim (@timrhughes on Twitter) is a Shareholder in the Arlington, Virginia firm of Bean, Kinney & Korman, P.C. In his practice as a business, corporate, and construction law attorney, Tim was the Chair of the Construction Law and Public Contracts Section of the Virginia State Bar. He was recognized by Virginia Lawyer’s Weekly as a 2010 “Leader in the Law” and a member of the Legal Elite for Construction Law for 2010 by Virginia Business Magazine. A regular speaker and writer, Tim is the lead editor of his firm blog, Virginia Real Estate, Land Use and Construction Law.
Green construction liability risk has received a lot of discussion over time. My take is that sustainable design and construction projects present the same type of risk profile as other construction projects, with the caveat that there may be “a little more”. A little more risk. A little more lack of predictability. A little more process overlay. Thus, green construction claims really are just “more of the same”.
I have watched and participated in the discussion. With regards to the Chesapeake Bay Foundation building, the reality is that any project can face challenges of product specification and performance, green or not. We can see plenty of examples where products have created tremendous risk and liability to the construction industry, the avalanche of EIFS litigation and Chinese drywall standing as just two of the most recent examples. A product failed, but that is nothing truly new.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Architectural Firm, Fired by School District, Launches Lawsuit
October 01, 2013 —
CDJ STAFFEl Associates Architects and Engineers is suing the Boyertown School District after the district fired them for underestimating the cost of an expansion project. The school district, located in Pennsylvania, was seeking to increase student capacity. El Associates estimate lead to a $55 million budget, but D’Huy Engineering, the district’s construction management firm, estimated $70 million for the project.
After the Boyertown School District hired KCBA Architects, El Associates filed suit. El Associates contends that it had followed the contract requirements and that the school district was in violation of the contract’s provisions on terminating the agreement.
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Connecticut Gets Medieval All Over Construction Defects
February 10, 2012 —
CDJ STAFFThe Hartford Courant reports that Connecticut is trying a very old tactic in a construction defect suit. The law library building at the University of Connecticut suffered from leaks which have now been repaired. The state waited twelve years after was complete to file lawsuit, despite that Connecticut has a six-year statute of limitations on construction defect claims. Connecticut claims that the statute of limitations does apply to the state.
The state is arguing that a legal principle from the thirteenth century allows it to go along with its suit. As befits a medieval part of common law, the principle is called “nullum tempus occurrit regi,” or “time does not run against the king.” In 1874, the American Law Register said that nullum tempus occurrit reipublicae “has been adopted in every one of the United States” and “is now firmly established law.”
In the case of Connecticut, Connecticut Solicitor General Gregory D’Auria said that “the statute of limitations does not apply to the state.” He also noted that “the state did not ‘wait’ to file the lawsuit. The lawsuit was filed only after all other options and remedies were exhausted.”
Connecticut also argued that “nullus tempus occurrit regi” applied in another construction defect case at the York Correctional Institution. The judge in that case ruled in December 2008 to let the case proceed. But in the library case, Judge William T. Cremins ruled in February 2009 that the statute of limitations should apply to the state as well. Both cases have been appealed, with the library case moving more quickly toward the Connecticut Supreme Court.
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