No Bad Faith in Insurer's Denial of Collapse Claim
July 15, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Tenth Circuit affirmed the district court's grant of summary judgment to the insurer on the insured's claims for collapse and bad faith. Christopher M. Wolpert Saddletree Holding, LLC v. Evanston Ins. Co., 2024 U.S. App. LEXIS 10377 (10th Cir. April 30, 2024).
On May 7, 2019, Saddletree filed a claim with Evanston for damages sustained to its building which was used as a community events center. After a winter of heavy snowfall, Saddletree discovered that the building's steel support columns had buckled two or more inches and the roof had deflected downward approximately six inches.
Evanston retained an engineer to inspect the building. The engineer determined that the damage was the result of the building's inadequate "design and/or construction." Evanston disclaimed coverage under the policy's exclusion for damage caused by "hidden or latent defects" or "any quality in property that causes it to damage or destroy itself."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Property Insurance Exclusion for Constant or Repeated Leakage of Water
March 14, 2018 —
David Adelstein – Florida Construction Legal UpdatesA
property insurance policy, no different than any insurance policy, contains
exclusions for events that are NOT covered under the terms of the policy. One such common exclusion in a property insurance policy is an exclusion for damages caused by "
constant or repeated seepage or leakage of water…over a period of 14 or more days."
The application of this exclusion was discussed in the recent opinion of
Hicks v. American Integrity Ins. Co. of Florida, 43 Fla. L. Weekly D446a (Fla. 5th DCA 2018). In this case, while the insured was out of town, the water line to his refrigerator started to leak. When the insured return home over a month later, the supply line was discharging almost a thousand gallons of water per day. The insured submitted a property insurance claim. The property insurer engaged a consultant that opined (likely, correctly) that the water line had been leaking for at least five weeks. Based on the above-mentioned exclusion,
i.e., that water had been constantly leaking for over a period of 14 days, the insurer
denied coverage. This denial led to the inevitable coverage dispute.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
Exclusions Bar Coverage for Damage Caused by Chinese Drywall
July 05, 2011 —
Tred R. EyerlyThe insured homeowners were unsuccessful in arguing around the policy's exclusions when seeking coverage for damage caused by Chinese drywall. Ross v. C. Adams. Constr. & Design, L.L.C., 2011 La. App. LEXIS 769 (La. Ct. App. June 14, 2011).
Before the insureds purchased and moved into their home, it was renovated. After moving in, the insures discovered foreign gypsum drywall, or Chinese drywall. The insureds submitted a claim to Louisiana Citizens Property Insurance Company. In an investigation, the insurer confirmed the presence of Chinese drywall and damage to the metal surfaces caused by corrosion. Louisiana Citizens refused coverage and the insureds sued. The trial court denied the insured's motion for summary judgment and granted summary judgment to Louisiana Citizens.
The court of appeal affirmed. Initially, the court determined the insureds sustained a direct physical loss. The inherent qualities of the Chinese drywall created a physical loss to the home and required that the drywall be removed and replaced.
Four exclusions, however, barred coverage. First, damages due to faulty or defective materials were excluded from coverage. The Chinese drywall emitted high levels of sulfuric gas which caused the damage to the insured's plumbing, electrical wiring and metal components.
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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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How New York City Plans to Soak Up the Rain
May 02, 2022 —
Linda Poon - BloombergWhen the remnants of Hurricane Ida pummeled New York City with more than 3 inches of rain in just one hour, the city struggled to soak it up. Instead, streets and subways flooded as storm drains were overwhelmed, basement apartments were inundated, and more than a dozen people died.
That September 2021 storm and the ones before it, including a cloudburst downpour during Tropical Storm Elsa in July, have forced New York to take a hard look at becoming a “spongier” city — one that combines nature-based green infrastructure like street-side rain gardens with gray infrastructure like storm drains to divert or absorb water and prevent catastrophic flooding.
“New York City is preparing for both chronic storm events — these cloudburst events that we see occurring more and more frequently — as well as extreme storm events like Ida,” says Jennifer Cherrier, a professor of earth and environmental sciences at Brooklyn College. On top of that, the city also faces mounting risks from storm surges, like during Hurricane Sandy in 2012.
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Linda Poon, Bloomberg
Second Circuit Finds Potential Ambiguity in Competing “Anti-Concurrent Cause” Provisions in Hurricane Sandy Property Loss
November 28, 2018 —
CDJ STAFFThe Second Circuit recently held that competing “anti-concurrent cause” provisions in a commercial property policy present a potential ambiguity that could result in favor of coverage for losses sustained by Madelaine Chocolate after storm surge from Hurricane Sandy combined to cause substantial damage to Madelaine’s property and a resulting loss of income.
Madelaine was insured under an all-risk insurance policy issued by Chubb subsidiary Great Northern Insurance Company. By endorsement, Madelaine’s policy added “windstorm” as a covered peril and defined “windstorm” as “wind… regardless of any other cause or event that directly or indirectly contributes concurrently to, or contributed in any sequence to, the loss or damage.” The policy also included a common flood exclusion that removed coverage for loss or damage caused by or resulting from waves, tidal water, or tidal waves, or the rising, overflowing, or breaking of any natural harbors, oceans, or any other body of water, whether driven by wind or not. Like the windstorm endorsement, the flood exclusion contained concurrency language that broadened the exclusion to any loss to which flood contributed, regardless of any other cause or event that directly or indirectly contributed to the loss.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Tae Andrews, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Andrews may be contacted at tandrews@HuntonAK.com
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Just Because You Record a Mechanic’s Lien Doesn’t Mean You Get Notice of Foreclosure
September 15, 2016 —
Christopher G. Hill – Construction Law MusingsAs longtime (or new readers for that matter) know, mechanic’s liens are near and dear to my heart here at Construction Law Musings. These powerful tools to collect for your hard work on a construction project are great when prepared and recorded in the very specific fashion required by the Virginia legislature and courts. In most situations, if done properly, a mechanic’s lien gives you some security and priority for your construction claim that you would not have with a simple judgment lien.
Despite the power of a properly perfected and enforced mechanic’s lien (and the fact that the end result of a full mechanic’s lien suit that remains unsettled is in fact a foreclosure), a recent case in the Eastern District of Virginia, Weinberg v. J.P. Morgan Chase, et. al., (thanks for the head’s up on this case to the folks at the Construction Payment Blog) held that under Virginia statute mechanic’s lien holders are not entitled to notice of foreclosure. In the Weinberg case, the plaintiff, a pro se lien claimant that recorded two different liens, one pre-foreclosure and one post-foreclosure, and who had not received notice of the intervening foreclosure, argued, among other things, that he should have been given notice of the foreclosure on the deed of trust on the property by J. P. Morgan Chase.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Construction Defect Claim not Barred by Prior Arbitration
October 28, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to Stan Martin of Commonsense Construction Law LLC, the Appellate Court of Connecticut ruled in favor of the owner of a twenty-two building development in a construction defect suit despite the contractor’s objection “that the lawsuit was barred by doctrines of res judicata or collateral estoppel.”
When issues of “construction and alleged defects” arose in 1996, the “contractor eventually filed for arbitration, seeking the contract balance.” The contractor was awarded $82,812.81. During the arbitration, “no claims for defective construction were advanced.”
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Do We Really Want Courts Deciding if Our Construction Contracts are Fair?
March 19, 2015 —
Christopher G. Hill – Construction Law MusingsAs I posted recently, the Virginia General Assembly has passed, and I can see no reason why the governor won’t sign, a bill that would
essentially invalidate preemptive contractual waivers of lien rights as they relate to subcontractors and material suppliers. It does not apply to General Contractors, but it is a step in what many (including those attorneys that represent subcontractors and suppliers) believe is the right direction.
Of course, as soon as I posted last week, my friend and colleague
Scott Wolfe (@scottwolfejr) commented on that post and then
gave his two cents worth at his Zlien blog. The gist of the comments here at Musings and the post over at his blog was essentially that these contractual provisions were inherently unfair and therefore should be abolished because of both a relative disparity in leverage between the Owner or GC and the Subcontractor when it comes to negotiations and the fact that subcontractors often don’t read their contracts or
discuss them with a construction attorney prior to signing them. I hear this first of his arguments often when I am reviewing a contract after the fact and a client or potential client acts surprised that a provision will be enforced and the courts of the Commonwealth of Virginia will actually enforce them. As to Scott’s second reason, I have always warned here at Musings that
you should read your contracts carefully because they will be the law of your business relationship in the future.
The first of his two points is more interesting and in some ways more easily supported. However, where we are speaking of contracts between businesses where both sides are bound by the terms of the contract, it begs the question of whether in seeking to make contracts more “fair” we could add a layer of uncertainty that could cause more problems than it solves. Do we really want courts stepping in after the fact to renegotiate the terms of a deal that was struck months or possibly years before because one judge believes that the deal was too one sided? Do we really need such “Monday morning quarterbacking?” Is one person’s idea of “fair” better than another’s when both parties to the contract had the full ability to read, negotiate and possibly reject the deal long ago? Personally, I think that the answer to these questions is, in all but the most egregious cases or where the legislatures have stepped in adding certainty (whether to the good or bad), “No.”
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
