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DIRECTORY AND CAPABILITIES

The United States Court of Appeals, Fourth Circuit, Finds Wrap-Up Exclusion Does Not Bar Coverage of Additional Insureds

February 18, 2020 — Callie E. Waers - Florida Construction Law News
The United States Court of Appeals, Fourth Circuit, recently took a close look at the application of a “controlled insurance program exclusion” (wrap-up exclusion) to additional insureds on a commercial general liability policy. In Cont’l Cas. Co. v. Amerisure Ins. Co., 886 F.3d 366 (4th Cir. 2018), the Fourth Circuit examined the interplay of an enrolled party’s additional insured status on an unenrolled party’s commercial general liability (“CGL”) policy with a wrap-up exclusion. The court applied North Carolina law and found that pursuant to the policy’s own language, the exclusion only applied to the original named insured, not the additional insureds. The case arose out of an injury incurred by an employee of a second-tier subcontractor during the construction of a hospital. On this particular project, the owner maintained a “rolling owner controlled insurance program” (wrap-up insurance program) in which all tiers of contractors were required to enroll, but enrollment was not automatic. The general contractor was enrolled in the owner’s wrap-up policy, but neither the steel manufacturer subcontractor nor its sub-subcontractor, the steel installation company, were enrolled. The underlying plaintiff was injured while he was an employee of the steel installation company, but he did not name his employer in his personal injury lawsuit. The Cont’l Cas. Co. case was instituted by Continental Casualty Company (“Continental”) after it defended and settled the underlying plaintiff’s claims against its insured and additional insured, the steel manufacturer and general contractor, respectively. Continental sought to be reimbursed for the $1.7 million settlement and attorneys’ fees and costs incurred for the defense and indemnity of the underlying lawsuit. Continental alleged that Amerisure Insurance Company (“Amerisure”) breached its duty to defend and Amerisure’s policy provided the primary coverage for both the general contractor and steel manufacturer, who were additional insureds on the Amerisure policy. Amerisure denied a duty to defend the additional insureds based on the presence of the wrap-up exclusion. Read the court decision
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Reprinted courtesy of Ryan M. Charlson, Cole, Scott & Kissane, P.A.
Mr. Charlson may be contacted at Ryan.Charlson@csklegal.com

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Righting Past Wrongs Through Equitable Development

January 17, 2022 — Bruce Buckley & Pam Radtke Russell - Engineering News-Record
Standing on a dead-end street in Spartanburg, S.C., Harold Mitchell can plainly see the history of injustice in his community. On one side lies the remains of his childhood home. On the other, a shuttered fertilizer plant that was operational when Mitchell was growing up. He distinctly recalls smells of ammonia and sulfur emanating through the neighborhood that “were so pervasive, you didn’t even think about it.” He remembers his father regularly cleaning white dust off their cars, and workers emerging from the plant gates “looking like the Pillsbury Doughboy” covered in fertilizer dust from head to toe. Sometimes, he’d walk with the plant’s night watchman, strolling alongside neon green sewage lagoons located not far from his bedroom window. Reprinted courtesy of Bruce Buckley, Engineering News-Record and Pam Radtke Russell, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Heat Stress Deaths Show Europe Isn’t Ready for Climate Change

August 07, 2023 — Olivia Rudgard - Bloomberg
More than 60,000 people died as a result of record-breaking temperatures in Europe last summer, a study has found, raising concerns about multiple countries’ lack of preparation for extreme heat fueled by climate change. Between May 30 and Sept. 4 of last year, there were 61,672 deaths caused by hot weather across 35 European countries, according to the study by researchers at the Barcelona Institute for Global Health and the French National Institute of Health, published in the journal Nature Medicine. Last year’s was the warmest summer ever recorded on the continent, breaking a record set just one year earlier. Temperatures were more than 2C above the recent average for countries that included France, Switzerland and Spain. Last year’s extreme-heat casualties echo an earlier hot summer in 2003, when 70,000 excess deaths were recorded across Europe. The loss of life led several countries to introduce early-warning systems for heat waves, as well as more planning around health care services. But the large number of deaths in 2022 shows the limitations of these measures, the study’s authors noted. Read the court decision
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Reprinted courtesy of Olivia Rudgard, Bloomberg

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Burden of Proof Under All-Risk Property Insurance Policy

January 31, 2018 — David Adelstein - Florida Construction Legal Updates

A recent Florida case, Jones v. Federated National Ins. Co., 43 Fla. L. Weekly D164a (Fla. 4th DCA 2018) discusses the burden of proof of an insured in establishing coverage under an all-risk property insurance policy. Getting right to this critical point, the court explained the burden of proof as follows:

1. The insured has the initial burden of proof to establish that the damage at issue occurred during a period in which the damaged property had insurance coverage. If the insured fails to meet this burden, judgment shall be entered in favor of the insurer.

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2. If the insured’s initial burden is met, the burden of proof shifts to the insurer to establish that (a) there was a sole cause of the loss, or (b) in cases where there was more than one cause, there was an “efficient proximate cause” of the loss.

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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

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Real Property Alert: Recording Notice of Default as Trustee Before Being Formally Made the Trustee Does Not Make Foreclosure Sale Void

February 18, 2015 — Krsto Mijanovic and Annette F. Mijanovic – Haight Brown & Bonesteel LLP
In Ram, et al. v. OneWest Bank, FSB, et al. (filed 2/6/15, No. A139055), the California Court of Appeal held that a nonjudicial foreclosure sale is not void merely because the notice of default was recorded by an entity who had not yet been substituted as trustee. The court also held that because the sale was voidable, rather than void, the plaintiffs were required to allege an ability and willingness to tender their debt in addition to alleging that they were prejudiced by the irregularity in the foreclosure process. Plaintiffs were borrowers who purchased a home subject to a deed of trust. After they defaulted on their loan, nonjudicial foreclosure proceedings were initiated, and the beneficiary of the deed of trust, OneWest Bank, FSB ("OneWest"), purchased the property at the foreclosure sale. Plaintiffs sued OneWest and other entities for wrongful foreclosure, alleging that the sale was void because the entity identified as the trustee on the notice of default, Aztec Foreclosure Corporation ("Aztec"), had not been formally substituted as trustee until after the notice of default was recorded. The trial court sustained OneWest's demurrer and plaintiff appealed. Reprinted courtesy of Krsto Mijanovic, Haight Brown & Bonesteel LLP and Annette F. Mijanovic, Haight Brown & Bonesteel LLP Mr. Mijanovic may be contacted at kmijanovic@hbblaw.com Ms. Mijanovic may be contacted at amijanovic@hbblaw.com Read the court decision
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Hudson Tunnel Plan Shows Sign of Life as U.S. Speeds Review

April 19, 2021 — Elise Young - Bloomberg
The U.S. Transportation Department has committed to finishing an environmental review for a new Hudson River rail tunnel, after a three-year delay helped prevent the groundbreaking of one of the nation’s most urgently needed infrastructure projects. The evaluation of the new commuter link between New Jersey and New York City will be finished by May 28, according to an update to the federal government’s online permitting dashboard. If the study is cleared, the $11.6 billion Gateway project could potentially qualify for partial federal funding. Transportation Secretary Pete Buttigieg last month told lawmakers that the tunnel is among President Joe Biden’s priorities. Biden on Wednesday introduced a $2 trillion infrastructure plan, fed by a tax increase on the wealthy, that he called a “once-in-a-generation investment in America.” The proposal calls for rebuilt bridges and highways, a shift to cleaner energy and boosts for mass transit. Read the court decision
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Reprinted courtesy of Elise Young, Bloomberg

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Claim for Vandalism Loss Survives Motion to Dismiss

October 02, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The court ruled that the insured's claim for vandalism of his house by a renter and for bad faith survived the insurer's motion to dismiss. Wehrenberg v. Metro. Prop. & Cas. Ins. Co., 2015 U.S. Dist. LEXIS 103758 (W.D. Pa. Aug. 7, 2015). The insured's home was insured by a homeowner's policy issued by Metropolitan. The insured rented his home to Alphonso Hyman in October 2011. In lieu of rent, Hyman was to pay the mortgage company the equivalent of his rent each month. In early 2012, Hyman stopped making the monthly rent/mortgage payments. The insured went to the home and found the locks had been changed. Looking in the windows, he saw the interior had been gutted. When the insured reached Hyman, Hyman said he was a contractor and was fixing the structural problems and would put the house back together. He also promised to make up late payments to the mortgage company. The insured did not report what he found to Metropolitan. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Business Risk Exclusions (j) 5 and (j) 6 Found Ambiguous

April 22, 2019 — Tred R. Eyerly - Insurance Law Hawaii
Reversing the district court's grant of summary judgment in favor of the insurer, the Tenth Circuit found that exclusions (j) 5 and (j) 6 were ambiguous as applied to the facts of the case. MTI, Inc. v. Emplrs. Ins. Co., 2019 U.S. App. LEXIS 2543 (10th Cir. Jan. 25, 2019). Western Farmers Electrical Cooperative (WFEC) owned cooling towers which were serviced by MTI, Inc. Wausau provided a CGL policy to MTI. In 2011, MTI found that anchor bolts in Cooling Tower 1 were corroded. WFEC hired MTI to make repairs by installing new anchor castings with anchor bolts and anchor adhesive. On May 23, 2011, MTI employees removed all of the corroded anchor bolts in Tower 1. Because the adhesive applicator had not yet arrived, MTI did not immediately install new anchor bolts. On the night of May 24, strong winds struck the tower, causing it to lean and several structural components broke. Due to the extent of the structural damage, removal and replacement of the tower was determined to be the only viable option. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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