City Covered From Lawsuits Filed After Hurricane-Damaged Dwellings Demolished
January 15, 2014 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit affirmed the District Court's finding that a duty to defend was owed St. Bernard Parish after it was sued for condemning and demolishing housing destroyed by Hurricane Katrina. Lexington Ins. Co. v. St. Bernard Parish Gov't, 2013 U.S. App. LEXIS 24292 (5th Cir. Dec. 6, 2013).
St. Bernard's policies with Lexington provided coverage for "property damage" and "personal and advertising injury." The policies included a $10,000,000 per occurrence and aggregate limit, subject to a $250,000 retained limit.
Lexington denied coverage and filed for a declaratory judgment that the policies' $250,000 retained limit applied separately to each alleged demolition or property damage asserted in the underlying actions. Under this theory, no defense would be owed because no property had a value exceeding $250,000. The District Court found that only one retained limit applied.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
America’s Infrastructure Gets a D+
March 16, 2017 —
Garret Murai – California Construction Law BlogThe American Society of Civil Engineers (ASCE) has issued their 2017 Infrastructure Report Card, which assigns a letter grade to the nation’s infrastructure.
Our country’s grade in 2017? A disappointing D+.
Although, if you’re a glass half full kind of person (bless your soul) at least our grade didn’t fall since the last report card was issued in 2013, when our grade was a D+ as well.
In short, we suck. Although, apparently, we don’t suck evenly across the board.
ASCE has divided its cumulative GPA into grades for specific courses, if you will. Our transit systems received a grade of D-; our airports, dams, drinking water and waste water plants, inland waterways, levees and roads received a grade of D; our power plants, hazardous waste plants, public parks and schools received a grade of D+; our bridges, ports and solid waste plants a grade of C+, and our rail systems received a grade of B.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Court’s Ruling on SB800 “Surprising to Some”
October 16, 2013 —
CDJ STAFFDescribing it as “surprising to many in the residential home building industry,” Jay Drake of Reuben, Junius & Rose LLP has a piece discussing the recent California Court of Appeals decision that SB800 is not a homeowner’s only remedy for construction defects. The court found, according to Mr. Drake that “the primary purpose of the Act was to provide a property owner with remedies for repair of construction defects before the defects caused actual damages.” In the case before the court, the construction defects had already lead to further damages.
Mr. Drake notes that the legislative history of SB800 puts the bill in response to an earlier California court case in which the courts determined that without actual damage to property, a homeowner could not file a construction defect lawsuit. The court concluded that SB800 was not intended to limit the homeowner’s rights after a construction defect situation has lead to damage.
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Insurer Must Defend General Contractor
April 03, 2023 —
Tred R. Eyerly - Insurance Law HawaiiInterpreting Massachusetts law, the federal district court determined consequential damage resulting from the insured's faulty work triggered a duty to defend. Capitol Spec. Ins. Corp. v. Dello Russo Enter. LLC, 2023 U.S. Dist. LEXIS 11627 (D. Mass. Jan. 24, 2023).
Peta-Gay and Michael Print sued the insured, Dello Russo, who they hired as the general contractor for extensive remodelling and renovation of their building. During the demolition work, certain structural load-bearing walls were removed, including a portion of an exterior bricked masonry wall. Shoring of other parts of the building was inadequate and removal of the masonry wall reduced the structural integrity of the building. Cracks began to appear in the remaining portion of the masonry wall and increased over the next few days. Soon thereafter, the City of Boston determined the building was dangerous and that salvage of the undamaged portions was not feasible. Therefore, the building was demolished.
Certain Underwriters at Lloyd's, London, filed suit against Dello Russo as subrogee of the Prinns. Dello Russo tendered the complaint to its insurer, Capitol Specialty Insurance Corporation, who defended under a reservation of rights,. Capitol then filed a suit seeking a declaratory judgment that it had no duty to defend or to indemnify. The parties cross-claimed for summary judgment.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
San Francisco Law Firm Pillsbury Winthrop Shaw Pittman Hired New Partner
May 21, 2014 —
Beverley BevenFlorez-CDJ STAFFThe San Francisco law firm Pillsbury Winthrop Shaw Pittman has hired Clark Thiel as a new partner. Thiel has “significant experience in construction disputes” and “bolsters Pillsbury’s capabilities in litigation, mediation and domestic and international arbitration,” according to The Lawyer. Furthermore, Thiel is a licensed contractor and registered architect. Formerly, he was a partner at the firm Jones Day.
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Insurer’s Discovery Requests Ruled to be Overbroad in Construction Defect Suit
October 28, 2011 —
CDJ STAFFThe US District Court has ruled in the case of D.R. Horton Los Angeles Holding Co. Inc. v. American Safety Indemnity, Co. D.R. Horton was involved in a real estate development project. Its subcontractor, Ebensteiner Co., was insured by ASIC and named D.R. Horton as an additional insured and third-party beneficiary. D.R. Horton, in response to legal complaints and cross-complaints, filed for coverage from ASIC under the Ebensteiner policy. This was refused by ASIC. ASIC claimed that “there is no potential coverage for Ebensteiner as a Named Insurer and/or D.R. Horton as an Additional Insured.” They stated that “the requirements for coverage are not satisfied.”
The case same to trial with the deadline for discovery set at March 1, 2011. ASIC stated they were seeking the developer’s “job file” for the Canyon Gate project. D.R. Horton claimed that ASIC’s discovery request was overbroad and that it would be “unduly burdensome for it to produce all documents responsive to the overbroad requests.”
D.R. Horton did agree to produce several categories of documents, which included:
“(1) final building inspection sign-offs for the homes that are the subject of the underlying litigation;(2) an updated homeowner matrix for the underlying actions; (3) the concrete subcontractor files; (4) the daily field logs for D.R. Horton’s on-site employee during Ebensteiner’s work; (5) documents relating to concrete work, including documents for concrete suppliers; (6) documents relating to compacting testing; (7) documents relating to grading; and (8) D.R. Horton’s request for proposal for grading”
The court found that the requests from ASIC were overbroad, noting that the language of the ASIC Request for Production of Documents (RFP) 3-5 would include “subcontractor files for plumbing, electric, flooring, etc. - none of these being at issue in the case.” The court denied the ASIC’s motion to compel further documents.
The court also found fault with ASIC’s RFPs 6 and 7. Here, D.R. Horton claimed the language was written so broadly it would require the production of sales information and, again, subcontractors not relevant to the case.
Further, the court found that RFPs 8, 10, 11, and 13 were also overbroad. RFP 8 covered all subcontractors. D.R. Horton replied that they had earlier complied with the documents covered in RFPs 10 and 11. The court concurred. RFP 13 was denied as it went beyond the scope of admissible evidence, even including attorney-client communication.
The court denied all of ASIC’s attempts to compel further discovery.
Read the court’s decision…
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Ill-fated Complaint Fails to State Claims Against Broker and FEMA
September 10, 2014 —
Tred R. Eyerly – Insurance Law HawaiiA complaint lodged against the insureds' broker and FEMA was dismissed for failure to state a claim. Lopez v. State Farm Gen. Ins. Co., 2014 U.S. Dist. LEXIS 109803 (E.D. La. Aug. 8, 2014).
The insureds held a Standard Flood Insurance Policy (SFIP) issued by FEMA, but sold by the broker. The insureds alleged that their property was totally destroyed by Hurricane Isaac. FEMA paid the insureds $234,513.02 for damage to their dwelling and $80,566.17 for its contents, for a total of $315,079.19. This was $34,920.81 below the policy limits. The insureds sued, claiming FEMA negligently miscalculated their damages, misvalued their property, and improperly adjusted their claim. The insureds also alleged that the broker failed to properly advise them regarding the nature of their coverage, the true value of their property, or to purchase the correct amount of insurance on their behalf.
The negligent procurement claim against the broker failed because the insureds did not allege any specific facts tending to establish that the broker failed to use reasonable diligence in procuring their insurance. Likewise, the negligent misrepresentation claim against the broker was dismissed. Insurance agents had a duty to supply their customers with correct information, and they could be liable for negligent misrepresentation if they provided incorrect information and an insured was damaged. Here, the insureds did not allege a breach of the duty to supply correct information.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Clearly Determining in Contract Who Determines Arbitrability of Dispute
April 26, 2021 —
David Adelstein - Florida Construction Legal UpdatesAs you know from prior postings: “Arbitration provisions are creatures of contract and must be construed ‘as a matter of contract interpretation.’ ” Fallang Family Limited Partnership v. Privcap Companies, LLC, 46 Fla.L.Weekly D639e (Fla. 4th DCA 2021) (citation omitted). Thus, if you prefer to arbitrate potential disputes, instead of litigating potential disputes, you want to include an arbitration provision in your contract. While there are positives and negatives to arbitration, no different than litigation, these positives and negatives should be considered during the contract negotiation process when dealing with the dispute resolution process in the contract.
Generally, under the law, the arbitrability of a dispute is determined by the court. However, this can be deferred to the arbitrator with clear and unmistakable language in the contract.
By way of example, the American Arbitration Association includes a rule that allows an arbitrator to rule on the arbitrability of the dispute, i.e., the claims asserted are subject to the governing arbitration provision in the contract. Recent law has suggested that if the objective is to authorize an American Arbitration Association arbitrator to make this determination, the contract clearly and unmistakably needs to state this intent and generally referring to the American Arbitration Association rules is not good enough. For this reason, I have included in arbitration provisions language that specifically states, “In the event of any dispute as to the arbitrability of any claim or dispute, the parties agree that an appointed arbitrator within the American Arbitration Association shall make this determination.” I have also included in arbitration provisions the converse so that if there is a dispute as to the arbitrability of a claim or dispute, the court, and not the arbitrator, will make this determination.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
