Damron Agreement Questioned in Colorado Casualty Insurance v Safety Control Company, et al.
February 10, 2012 —
CDJ STAFFSafety Control and EMC appealed the judgment in Colorado Casualty Insurance Company versus Safety Control Company, Inc., et al. (Ariz. App., 2012). The Superior Court in Maricopa County addressed “the validity and effect of a Damron agreement a contractor and its excess insurer entered into that assigned their rights to sue the primary insurer.” Judge Johnsen stated, “We hold the agreement is enforceable but remand for a determination of whether the stipulated judgment falls within the primary insurer’s policy.”
The Opinion provides some facts and procedural history regarding the claim. “The Arizona Department of Transportation (“ADOT”) hired DBA Construction Company (“DBA”) to perform a road-improvement project on the Loop 101 freeway. Safety Control Company, Inc. was one of DBA’s subcontractors. As required by the subcontract, Safety Control purchased from Employer’s Mutual Casualty Company (“EMC”) a certificate of insurance identifying DBA as an additional insured on a policy providing primary coverage for liability arising out of Safety Control’s work.”
A collision occurred on site, injuring Hugo Roman. Roman then sued ADT and DBA for damages. “Colorado Casualty tendered DBA’s defense to the subcontractors, including Safety Control. Safety Control and EMC rejected the tender. Roman eventually settled his claims against DBA and ADOT. DBA and ADOT stipulated with Roman for entry of judgment of $750,000; Roman received $75,000 from DBA (paid by Colorado Casualty) and $20,000 from ADOT, and agreed not to execute on the stipulated judgment. Finally, DBA, ADOT and Colorado Casualty assigned to Roman their rights against the subcontractors and other insurers.”
Colorado Casualty attempted to recover what “it had paid to defend DBA and ADOT and settle with Roman. However, Roman intervened, and argued that “Colorado Casualty had assigned its subrogation rights to him as part of the settlement agreement.” The suit was not dismissed, but the Superior Court allowed Roman to intervene. “Roman then filed a counterclaim against Colorado Casualty and a cross-claim against the subcontractors.”
All claims were settled against all of the defendants except Safety Control and EMC. “The superior court ruled on summary judgment that EMC breached a duty to defend DBA and that as a result, ‘DBA was entitled to settle with Roman without EMC’s consent as long as the settlement was not collusive or fraudulent.’ After more briefing, the court held the stipulated judgment was neither collusive nor procured by fraud and that EMC therefore was liable to Roman on the stipulated judgment and for his attorney’s fees. The court also held Safety Control breached its subcontract with DBA by failing to procure completed-operations insurance coverage and would be liable for damages to the extent that EMC did not satisfy what remained (after the other settlements) of the stipulated judgment and awards of attorney’s fees.” Safety Control and EMC appealed the judgment.
Four reasons were given for the decision of the ruling. First, “the disagreement between Roman and Colorado Casualty does not preclude them from pursuing their claims against EMC and Safety Control.” Second, “the settlement agreement is not otherwise invalid.” Third, “issues of fact remain about whether the judgment falls within the EMC policy.” Finally, “Safety Control breached the subcontract by failing to procure ‘Completed Operations’ coverage for DBA.”
In conclusion, the Superior Court affirmed in part, reversed in part, and remanded . “Although, as stated above, we have affirmed several rulings of the superior court, we reverse the judgment against EMC and remand for further proceedings consistent with this Opinion to determine whether the stipulated judgment was a liability that arose out of Safety Control’s operations. In addition, we affirm the superior court’s declaratory judgment against Safety Control but remand so that the court may clarify the circumstances under which Safety Control may be liable for damages and may conduct whatever further proceedings it deems appropriate to ascertain the amount of those damages. We decline all parties’ requests for attorney’s fees pursuant to A.R.S. § 12-341.01 without prejudice to a request for fees incurred in this appeal to be filed by the prevailing party on remand before the superior court.”
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“You Can’t Make Me Pay!”
January 28, 2025 —
Daniel Lund III - LexologySeveral years ago, Louisiana enacted a law prescribing a mandamus proceeding for unpaid contract sums purportedly owed by a public entity to a contractor – Louisiana Revised Statute 38:2191. The statute tackles both progress payments and final payment, distinguishing between the two and allowing withholding of a progress payment when there is “reasonable cause” to do so.
On the other hand, at least one Louisiana appellate decision held on the topic of final payment: once a final payment amount is “due” per the statute – based upon passage expiration of the lien period following “formal final acceptance” – the act of making the final payment is purely ministerial and not subject to defenses. According to that court, a defense to payment based on assessed liquidated damages – because the damages were disputed by the contractor – could not trump the essence of the statute allowing the contractor to pursue mandamus to collect the final payment.
More recently, on a public works levee project in Lafourche Parish, a dispute arose during the work concerning the means to secure material for constructing the levees. The net effect of the dispute entailed a major change in the contract price.
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Risk Management for Condominium Conversions
July 31, 2013 —
David McLain, Higgings, Hopkins, McLain & Roswell, LLCOne of the bright spots in the Colorado construction industry over the last few years has been the construction of for-rent apartments. It seems as though apartments are going up everywhere you look along the Front Range. As market forces change, it will be interesting to see whether these units will remain apartments or whether they will be converted into for-sale condominiums or townhouses. One of the risk management strategies we have recently discussed with our general contractor clients who have been asked to build apartments is to ensure that the project remains a for-rent apartment project through the applicable statute of repose, conservatively assumed to be eight years. Unfortunately this is not always feasible, usually because the owner and/or lender are not interested in encumbering the property for such a long period of time, and want to retain the ability to convert the project if and when market forces allow, even if that is before the running of the statute of repose. The purpose of this article is to discuss the insurance and risk management ramifications of converting a project too early.
I have recently heard from several sources in the insurance industry that there are owners and contractors who are currently building apartments with the idea that they will be held as apartments for two to three years and then converted to for-sale condominiums or townhomes. While this strategy may have great appeal from a business point of view, it has a very serious risk management downside. Apparently, these owners and contractors are operating under the mistaken belief that they will have no liability exposure to the ultimate purchasers of the converted units or to the homeowners association for construction defects. This is an incorrect belief.
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David M. McLainDavid M. McLain can be contacted at
mclain@hhmrlaw.com
State-Fed Fight Heats Up Over Building Private Nuclear Disposal Sites
August 03, 2022 —
Mary B. Powers & Debra K. Rubin - Engineering News-RecordThe U.S. Nuclear Regulatory Commission and Interim Storage Partners, a joint venture that gained a federal license last year to build an interim storage facility for spent commercial nuclear fuel at a Texas site, have until Aug. 3 to answer a federal lawsuit claim by state officials that a new U.S. Supreme Court decision eliminates the federal agency’s licensing authority.
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Mary B. Powers, Engineering News-Record and
Debra K. Rubin, Engineering News-Record
Ms. Rubin may be contacted at rubind@enr.com
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Traub Lieberman Attorneys Recognized in the 2025 Edition of The Best Lawyers in America®
September 09, 2024 —
Traub LiebermanTraub Lieberman is pleased to announce that five Partners have been selected by their peers for inclusion in the 2025 edition of The Best Lawyers in America®. In addition, seven attorneys have been included in the 2025 Best Lawyers®: Ones to Watch list. These recognitions include attorneys from the firm’s Hawthorne, NY; Chicago, IL; Palm Beach Gardens, FL; and St. Petersburg, FL offices.
2025 Best Lawyers®
Hawthorne, NY
- Lisa L. Shrewsberry – Commercial Litigation
Chicago, IL
- Brian C. Bassett – Insurance Law
Palm Beach Gardens, FL
- Rina Clemens – Personal Injury Litigation – Defendants, Product Liability Litigation – Defendants
St. Petersburg, FL
- Lauren S. Curtis – Insurance Law
- Scot E. Samis – Appellate Practice
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Traub Lieberman
Bert L. Howe & Associates Brings Professional Development Series to Their San Antonio Office
March 28, 2014 —
Beverley BevenFlorez-CDJ STAFFMirroring similar seminars currently provided in other regional markets, BHA’s Professional Development Series provides seminar attendees with a heightened level of knowledge and understanding on a wide range of subjects covering construction and construction defect litigation, tailored to the unique needs of local counsel and insureds.
The first seminar in this series will be presented on May 9th, and is entitled THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION.
This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.0 credit hours, of which 0.0 credit hours will apply to legal ethics/professional responsibility credit.
The seminar will be presented by Don MacGregor, general contractor and project manager, at BHA’s San Antonio office during the noontime hour, and luncheon will be provided. As with all BHA Professional Development activities, there is no cost for participation.
Water intrusion through doors, windows and roofing systems, as well as soil and foundation-related movement, and the resultant damage associated therewith, are the triggering effects for the vast majority of homeowner complaints today and serve as the basis for most residential construction defect litigation.
The graphic and animation-supported workshop/lecture activity will focus on the residential construction process from site preparation through occupancy, an examination of associated damages most often encountered when investigating construction defect claims, and the inter-relationships between the developer, general contractor, sub trades and design professionals.
Typical plaintiff homeowner/HOA expert allegations will be examined in connection with those building components most frequently associated with construction defect and claims litigation.
The workshop will examine:
* Typical construction materials, and terminology associated with residential construction
* The installation process and sequencing of major construction elements, including interrelationship with other building assemblies
* The parties (subcontractors) typically associated with major construction assemblies and components
* The various ASTM standard testing protocols utilized to field test buildings
* An analysis of exposure/allocation to responsible parties
Attendance at THE RESIDENTIAL CONSTRUCTION PROCESS & CONSTRUCTION DEFECT LITIGATION seminar will provide the attendee with:
* A greater understanding of the terms and conditions encountered when dealing with common construction defect issues
* A greater understanding of contractual scopes of work encountered when reviewing construction contract documents
* The ability to identify, both quickly and accurately, potentially responsible parties
* An understanding of damages most often associated with construction defects, as well as a greater ability to identify conditions triggering coverage
* Assistance in the satisfaction of important continuing education requirements.
Course #: 901290467 / Sponsor #: 14152
To register for the event, please email Don MacGregor at dmac@berthowe.com.
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Second Circuit Upholds Constitutionality of NY’s Zero Emissions Credit Program
November 21, 2018 —
Anthony B. Cavender - Gravel2GavelOn September 27, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s ruling that the “Zero Emissions Credit” (ZEC) program of the New York Public Service Commission is not unconstitutional. The case is Coalition for Competitive Electricity, et al. v. Zibelman, Chair of the New York Public Service Commission, et al.
In effect, the ZEC program provides subsidies to qualifying New York nuclear power plants as a way to reduce greenhouse gas emissions. The ZEC program is intended to prevent nuclear plants from being prematurely retired from generating power until suitable replacement facilities are operating.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Balcony Collapses Killing Six People
June 17, 2015 —
Beverley BevenFlorez-CDJ STAFFSix college students died from injuries that occurred when a balcony collapsed at a downtown apartment complex in Berkeley, California, according to Berkeleyside. The city of Berkeley ordered a structural inspection of the remaining balconies at Library Gardens, and to immediately remove the failed balcony.
The following day Berkeleyside reported that the city ordered the Library Gardens’ owners to remove another balcony after “[i]nspectors determined that the third-floor balcony ‘was structurally unsafe and presented a collapse hazard endangering public safety.’”
Berkeley’s mayor, Tom Bates, stated that “investigators believe the wood wasn’t sealed properly at the time of construction and was damaged by moisture as a result,” the Wall Street Journal reported.
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