Construction Litigation Roundup: “Hold the Pickles, Hold the Lettuce?”
October 02, 2023 —
Daniel Lund III - LexologyHold the pickles, hold the lettuce?
You can even hold the service… or at least proof of it!
In a dispute over the construction of a Burger King restaurant in Tupelo, Mississippi, a state court suit by the owner against its general contractor and architect was removed to federal court by one of the defendant parties, on the basis of the diversity of citizenship of the defendant parties from the plaintiff, per 28 U.S.C. § 1331(a).
For its part, plaintiff, upon achieving service of its state court complaint against the various defendants, filed a proof of service as to the party which sought to remove the case, but not as to the other defendants (even though the other defendants were served). Once the case was removed to federal court and after the deadline for removal has passed, plaintiff sought to have the matter remanded based on the lack of the consent of the entirety of the defendant group to the removal, in accordance with 28 U.S.C. § 1446 (“When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.”).
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Watchdog Opens Cartel Probe Into Eight British Homebuilders
April 02, 2024 —
Damian Shepherd & Katharine Gemmell - BloombergBritain’s top antitrust enforcer has opened an investigation into eight housebuilders to probe potential information sharing, sharpening scrutiny of a sector that’s failing to deliver enough affordable housing to meet demand.
The Competition and Markets Authority has opened a cartel investigation into eight developers including Barratt Developments Plc, the Berkeley Group, Persimmon Plc and Vistry Group Plc. The investigation centers on concerns the companies may have exchanged competitively sensitive information, which could be influencing the build-out of sites and the prices of new homes. An initial review will take place until December.
CMA Chief Executive Officer Sarah Cardell told Bloomberg Television the watchdog had seen potential evidence of companies exchanging information relating to pricing, sales rates, and incentives offered to new homebuyers. The watchdog has the power to fine firms a maximum penalty of as much as 10% of annual revenue and disqualify directors following cartel investigations.
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Damian Shepherd, Bloomberg and
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Best Practices: Commercial Lockouts in Arizona
April 15, 2024 —
Patrick Tighe - Snell & Wilmer Real Estate Litigation BlogIf a tenant defaults under a commercial lease, Arizona law permits the landlord to re-take possession of the premises by locking out the defaulting tenant. However, if the landlord’s lockout is wrongful, the landlord may be liable for the damages the tenant sustains because of the wrongful lockout. To minimize such liability, here are some general best practices to follow when locking out a defaulting tenant:
- Do Not Breach the Peace. It is vital when performing a lockout to not breach the peace. What constitutes a “breach of the peace” depends on the particular circumstances at hand. For example, if a tenant arrives during the lockout and becomes angry or threatens violence, the landlord should stop performing the lockout and return at a later time. As a general rule of thumb, it is best to perform lockouts in the early morning hours or in the late evening hours when the landlord is less likely to encounter the tenant.
- Provide A Notice of Default. Many commercial leases require the landlord to provide a notice of default before the landlord can lock out a defaulting tenant. Check, double check, and triple check that the landlord followed the lease’s notice of default provisions correctly, including that the landlord sent the notices to all required parties in accordance with the time requirements set forth in the lease.
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Patrick Tighe, Snell & WilmerMr. Tighe may be contacted at
ptighe@swlaw.com
St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc.
January 18, 2021 —
Michael Velladao - Lewis BrisboisIn St. Mary & St. John Coptic Orthodox Church v. SBS Insurance Services, Inc., ----Cal.App.5th--- (November 23, 2020), the California First District Court of Appeal reversed the trial court's entry of judgment in favor of SBC Insurance Services ("SBC") regarding a claim for water damage sustained by a residence owned by St. Mary & John Coptic Church ("St. Mary") under property coverage afforded by a policy issued by Philadelphia Indemnity Insurance Company ("Philadelphia"). The policy was procured by SBC on behalf of St. Mary. Philadelphia denied coverage of the claim based on the vacancy exclusion in its policy, but entered into a settlement and loan receipt agreement, whereby St. Mary gave Philadelphia the right to control litigation in St. Mary’s name against SBC or third parties who might be liable for the loss in exchange for a loan of money to repair and remediate the damage sustained by the residence. The loan was to be repaid out of any recovery made against SBC or third parties. After a bench trial, the trial court found in favor of SBC and held that the vacancy exclusion was ambiguous. Essentially, the exclusion did not apply to the time period prior to the time St. Mary purchased the residence, such that the 60-day vacancy requirement could not be satisfied. The trial court reasoned that since St. Mary did not have an insurable interest in the property before it purchased the property, the 60-day requirement did not include the period before such residence was purchased and St. Mary held an insurable interest.
The parties’ dispute arose of out of the Pope of the Coptic Church requesting St. Mary to purchase a home to be used as his papal residence in the Western United States. St. Mary also intended to use the home as a residence for visiting bishops. The home was purchased on May 28, 2015. As part of the purchase, SBC placed the home under St. Mary’s commercial policy, rather than purchasing a separate homeowner’s policy for the residence. Subsequently, the home sustained water damage due to a broken pipe. The water damage was discovered on July 24, 2015, 57 days after the inception of the Philadelphia policy and the loss. St. Mary tendered the property loss to Philadelphia, which denied coverage of the claim based on the reasoning that the home had been vacant for 60 consecutive days prior to the loss. Subsequently, St. Mary filed suit against SBC after securing the loan receipt agreement with Philadelphia based on the argument that the vacancy exclusion barred coverage of the claim and SBC breached its duty of care by not securing the proper coverage of the home. The trial court entered judgment in favor of SBC finding that the vacancy exclusion did not apply to bar coverage of the loss, such that SBC did not breach its duty of care owed to St. Mary as its broker.
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Michael Velladao, Lewis BrisboisMr. Velladao may be contacted at
Michael.Velladao@lewisbrisbois.com
Orchestrating Bias: Arbitrator’s Undisclosed Membership in Philharmonic Group with Pauly Shore’s Attorney Not Grounds to Reverse Award in Real Estate Dispute
June 21, 2017 —
Lyndsey Torp - Snell & Wilmer Real Estate Litigation BlogThe California court of appeal recently issued an unpublished decision in Knispel v. Shore, 2017 WL 2492535, affirming a judgment confirming an arbitration award in a real estate dispute involving Pauly Shore. The court of appeal held that the arbitrator’s failure to disclose her membership in the Los Angeles Lawyers Philharmonic Group with the attorney representing Pauly was not grounds to overturn the judgment.
The underlying arbitration involved a dispute between Michael Scott Shore, on the one hand, and his brother, Pauly, among others, on the other hand, regarding certain residential property located on Sunset Boulevard near The Comedy Store in West Hollywood (owned and operated by their mother, Mitzi Shore). The parties agreed to arbitrate their dispute before Judge Aviva K. Bobb (Ret.) of the Alternative Resolution Center. Judge Bobb issued an award in favor of Pauly, and he petitioned the trial court to affirm the award. Michael opposed, contending the arbitrator failed to disclose that she and Pauly’s attorney had both been members of the Lawyers Philharmonic, for which they had been practicing and performing together since November 2010.
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Lyndsey Torp, Snell & WilmerMs. Torp may be contacted at
ltorp@swlaw.com
Fifth Circuit Reverses Insurers’ Summary Judgment Award Based on "Your Work" Exclusion
November 18, 2011 —
Tred R. Eyerly - Insurance Law HawaiiApplication of the facts to the "your work" exclusion was the key to resolving coverage issued in Am. Home Assurance Co. v. Cat Tech L.L.C., 2011 U.S. App. LEXIS 21076 (5th Cir. Oct. 5, 2011).
Ergon Refining, Inc. hired Cat Tech L.L.C. to service a hydrotreating reactor. In January 2005, Cat Tech replaced certain parts in the reactor. After Cat Tech finished the job and left, Ergon noticed a high pressure drop in the reactor, forcing it to be shut down. Cat Tech returned in February 2005, removed, repaired and replaced the damaged parts, and loaded new parts. After completion, a second large pressure drop occurred during the reactor’s start-up process. The reactor was shut down until October 2005, when Ergon hired a different contractor to perform the repair work. Additional damage to the reactor was found.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Choice of Laws Test Mandates Application of California’s Continuous and Progressive Trigger of Coverage to Asbestos Claims
June 01, 2020 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Textron v. Travelers Casualty and Surety Co. (No. B262933, filed 2/25/20), a California appeals court held that the Restatement’s choice of laws factors mandated application of California’s continuous and progressive trigger of coverage to asbestos claims, overcoming an argument that a manifestation trigger should apply under Rhode Island law.
Travelers insured Textron from 1966 to 1987. In 2011, Textron was sued by a California resident, Esters, for damages caused by mesothelioma resulting from asbestos exposure in California. The action was defended and settled by Travelers and other insurers under reservations of rights. Textron sued Travelers in California for a declaration that Travelers owed duties to defend and indemnify the Esters action. Travelers cross-complained, seeking reimbursement.
The case turned on choice of law for trigger of coverage as between California and Rhode Island. Citing Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645 and Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996) 45 Cal.App.4th 1, the Textron court noted that California applies a continuous trigger to continuous or progressively deteriorating injury. By contrast, in Rhode Island a covered occurrence exists “when the damage … manifests itself, … is discovered or, … in the exercise of reasonable diligence is discoverable.” (Citing Textron, Inc. v. Aetna Cas. and Sur. Co. (R.I. 2002) 754 A.2d 742.) According to Travelers, the Esters action was not covered under Rhode Island law because the plaintiff’s mesothelioma was not diagnosed until 2010, after Travelers was off the risk.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
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New York Court Finds No Coverage Owed for Asbestos Losses Because Insured Failed to Prove Material Terms
February 15, 2021 —
Gregory S. Capps & Marianne E. Bradley - White and Williams LLPIn the long-tail insurance context, it is not unusual to have issues arise addressing “lost” or “missing” policies. In an opinion issued on January 22, 2021, a New York court ruled that an insurer did not owe coverage to its insured for underlying asbestos claims because the insured had failed to establish the material terms of a “lost” policy under which it sought coverage for the underlying claims. The lawsuit, Cosmopolitan Shipping Company, Inc. v. Continental Insurance Company,[1] arose out of a coverage dispute between Plaintiff Cosmopolitan Shipping Co., Inc. (Cosmopolitan) and its insurance carrier, Continental Insurance Company (CIC), in connection with bodily injury claims arising out of asbestos exposure. The case provides a good analysis of what an insured must do to establish coverage under a “lost” or “missing” policy.
During and after World War II, Cosmopolitan chartered and operated a number of shipping vessels on behalf of United Nations Relief and Rehabilitation Administration (UNRRA). In the 1980s, seamen who had worked on board Cosmopolitan’s vessels between 1946 and 1948 filed lawsuits against Cosmopolitan seeking damages for injuries arising out of alleged exposure to asbestos on Cosmopolitan’s vessels. Cosmopolitan sought coverage from CIC for the claims, alleging that CIC had insured Cosmopolitan’s vessels during the relevant time period under a protection and indemnity policy issued to the UNRAA (the P&I Policy).
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Gregory S. Capps, White and Williams LLP and
Marianne E. Bradley, White and Williams LLP
Mr. Capps may be contacted at cappsg@whiteandwilliams.com
Ms. Bradley may be contacted at bradleym@whiteandwilliams.com
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