Fairfield Connecticut Building Expert Directory

Fifth Circuit Rules that Settlements in Underlying Action Constitute "Other Insurance"

April 17, 2019 — Tiffany Casanova - Saxe Doernberger & Vita, P.C.
The Fifth Circuit ruled that settlements between an insured and its subcontractors qualified as “other insurance” to the extent those settlements were used to pay for damages covered by an excess insurance policy. Policyholders should note the outcome of this case as it demonstrates the significant impact that settlements can have on coverage. Satterfield & Pontikes Construction, Inc. v. Amerisure Mutual Ins. Co.1 was the result of a construction project gone wrong. Zapata County, Texas hired Satterfield & Pontikes (“S&P”) as a general contractor for the construction of a courthouse building. When the project did not go as planned, Zapata County terminated S&P, hired new subcontractors to complete the project, and sued S&P. S&P, in turn, sought indemnification from its subcontractors, who were contractually obligated to indemnify S&P and procure insurance for any damage the subcontractors caused at the project. S&P also sought coverage from its own primary insurers, American Guarantee and Liability Insurance Company (“AGLIC”) and Amerisure Mutual Insurance Company (“Amerisure”), and its excess insurer, U.S. Fire Insurance Company (“U.S. Fire”) who provided liability coverage for S&P’s potential liabilities at the project. The policies contained exclusions for losses arising from mold and did not provide coverage for attorney’s fees or similar legal costs. Read the court decision
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Reprinted courtesy of Tiffany Casanova, Saxe Doernberger & Vita, P.C.
Ms. Casanova may be contacted at tlc@sdvlaw.com

Insurers' Motion to Void Coverage for Failure to Attend EUO Denied

January 04, 2023 — Tred R. Eyerly - Insurance Law Hawaii
The insurer's motion for summary judgment and disposal of the insureds' claim due to failure to attend an examination under oath (EUO) was denied. Perkins v Syndicate 4242 of Lloyd's of London, 2022 U.S. Dist. LEXIS 196922 (W.D. La. Oct. 28, 2022). The insureds' home suffered damage from Hurricane Laura on August 27, 2020, and Hurricane Delta on October 9, 2020. The insureds reported damage after Hurricane Laura under the homeowners policy. They filed suit in August 2021, alleging that Lloyds failed to adequately inspect their claims. The court issued a Case Management Order (CMO) that governed initial disclosures and the parties' participation in a streamlined settlement process for hurricane claims. The dispute did not settle, however, so the matter was set for a bench trial. 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

Back to Basics: What is a Changes Clause?

July 18, 2018 — J. Cole Phillips – Smith Currie
The Changes Clause is one of the most important, perhaps the most important, provision in any construction contract. Project designs are rarely perfect. A Changes Clause provides a mechanism for dealing with such imperfections as well as allowing project owners the flexibility to update a project’s design as the project progresses. A good Changes Clause specifies when an owner can change the original scope of the contract, how the parties should resolve the value of the changed scope and when payment should be made to the contractor or a credit given to the owner. A good Changes Clause will also provide a mechanism for the contractor to notify the owner when it believes a change order is due and specify the time within which such notice must be given. For the contractor, failure to pay attention to the requirements of the Changes Clause can lead to forfeiture of the right to seek an adjustment to the contract value or contract completion date. For an Owner, failure to pay attention to and enforce the requirements of the Changes Clause can result in unnecessary payments to the Contractor. Read the court decision
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Reprinted courtesy of J. Cole Phillips, Smith Currie
Mr. Phillips may be contacted at jcphillips@smithcurrie.com

Bankruptcy on a Construction Project: Coronavirus Edition

May 25, 2020 — Garret Murai - California Construction Law Blog
Experts are warning of a wave of bankruptcies in the wake of the coronavirus pandemic. In some industries, such as the hard hit retail sector, that rising tide has already begun as J. Crew and Neiman Marcus filed for bankruptcy protection this past week. While the federal government’s stimulus package, including the $660 billion Paycheck Protection Program which is part of the larger 2.2 trillion CARES Act, may help to stem the tide of bankruptcies, Chapter 11 bankruptcy filings increased 26% in April over the same period last year. How the pandemic will impact the construction industry is uncertain. Anecdotally, we’ve been hearing from clients that some project owners are stalling projects that are still in the planning stages as they evaluate the situation, which suggests long term impacts that can be ridden out rather than short term impacts that can devastate on-going construction projects. Nevertheless, with 24-7 coverage of the pandemic, project owners, contractors, material suppliers, and equipment lessors are understandably concerned with the impact a bankruptcy might have on a construction project. So, here’s a primer on bankruptcies on a construction project. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Builder’s Risk Coverage—Construction Defects

August 20, 2019 — Brian Hearst - Construction Executive
This is the second of three articles bringing clarity to the complex and challenging course of construction exposures and providing solutions for mitigating risk through builder’s risk insurance coverage. Part I, Builder’s Risk Coverage – Language Matters, addressed a select few critical exposures to projects under the course of construction. Part II addresses how a standard builder’s risk policy may respond to a loss arising from defective construction and alternative insurance market offerings that can help with specific costs associated with construction defect loss. Coverage for Loss Ensuing from Faulty Workmanship Part I tackled the standard builder’s risk exclusion that applies to losses arising from faulty materials or workmanship. Traditionally, carriers do not have an appetite for covering a contractor’s failure to perform their work properly. There is one exception, which is coverage is available for ensuing loss – or the resulting damage to other property from faulty workmanship. If the excluded cause of loss (i.e., faulty workmanship) causes resultant damage, the builder’s risk policy will cover the damages to the extent the peril of fire is covered. The ensuing loss exception limits the faulty work exclusion to costs directly related to repairing or replacing the faulty work. For example, suppose faulty wiring work leads to a fire which damages part of a structure under construction. The faulty workmanship exclusion would apply to the actual faulty wiring work, but if fire is a covered peril under the policy (this is nearly always the case), the policy would respond to the structure’s fire damage. Reprinted courtesy of Brian Hearst, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Hearst may be contacted at Brian.Hearst@lockton.com

Real Estate & Construction News Round-Up 04/13/22

April 25, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
Phishing schemes target the mortgage industry, housing prices rise in Europe as Ukrainian refugees flee from their home country, the SEC announces new climate change regulations that will impact commercial real estate, and more.

The Federal Reserve aims to rein in one of the biggest drivers of runaway inflation: the U.S. housing market. (Lance Lambert, Fortune)
Late last month, the SEC announced that publicly traded organizations would soon need to disclose their climate change risks and exposure, causing a shake up in the real estate industry. (Hiten Samtani, The Real Deal)
As the purpose of in-person office work continues to be questioned, the return to office debate causes challenges for occupier services, a backbone of commercial real estate. (Patrick Sisson, Bisnow)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

Real Estate & Construction News Roundup (10/11/23) – Millennials Struggle Finding Homes, Additional CHIPS Act Funding Available, and the Supreme Court Takes up Hotel Lawsuit Case

November 16, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, EV charging stations become more prevalent at commercial locations, home ownership becomes more difficult for younger Americans, Macy’s announces plans to build additional stores within strip malls, and more!

Due to several factors including overpriced housing and student debt, millennials will not have the same level of home ownership as previous generations. (Jordan Rosenfeld, Yahoo)
With the U.S. being short about 3.8 million housing units according Freddie Mac, 3-D printing may prove to be the answer while also being cost effective and environmentally friendly. (Lesley Stahl, Aliza Chasan, Shari Finkelstein and Collette Richards, CBS)
The Department Commerce of announced a new initiative to funnel $500 million in CHIPS Act funding to projects with capital investments below $300 million that support the construction, expansion or modernization of semiconductor-related facilities in the U.S. (Sebastian Obando, Construction Dive)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team, Pillsbury

Can We Compel Insurers To Cover Construction Defect in General Liability Policies?

December 09, 2011 — Douglas Reiser, Builders Council Blog

Recently, I read an article on Engineering News-Record that outlines a remarkable movement by as many as four states, to mandate coverage of construction defects in contractor general liability insurance policies. Say what? Is this a reality? What will become of affordable insurance?

Commercial General Liability insurance, or CGL, is your basic liability insurance. Every contractor doing business in the State of Washington, and most likely those abroad, has this insurance. Contractors buy this insurance to protect them from unforeseen liabilities arising from their negligence - and right now it’s reasonably affordable.

Why is it so affordable in such a risk-heavy industry? Because CGL policies significantly limit the scope of their coverage. Coverage is generally afforded for damages resulting from negligence (The roofer put a hammer through the drywall contractor’s wall) or which resulted from your defective construction (the roof leaked and flooded the rest of the house). But, that coverage does not include replacement of your faulty construction (the contents of the home might be protected by your leaky roof - the leaky roof itself is not).

The debate over coverage typically stems from the definition of “occurrence,” a term used to describe the event from which coverage arises, “resulting loss,” a term used to describe the type of loss covered.

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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com

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FAIRFIELD CONNECTICUT BUILDING EXPERT DIRECTORY AND CAPABILITIES