SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

A Relatively Small Exception to Fraud and Contract Don’t Mix

April 06, 2016 — Christopher G. Hill – Construction Law Musings
Remember all of my posts about how fraud and contract claims don’t usually play well in litigation? Well, as always with the law, there are exceptions. For instance, a well plead Virginia Consumer Protection Act claim will survive a dismissal challenge. A recent opinion out of the Alexandria division of the U. S. District Court for the Eastern District of Virginia sets out another exception, namely so called fraudulent inducement. In XL Specialty Ins. Co. v. Truland et al, the Court considered the question of whether both a tort and contract claim can coexist in the same lawsuit when the tort claim is based upon the information provided to the plaintiff when that information proves false. Read the court decision
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Reprinted courtesy of Christopher G. Hill, Construction Law Musings
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Golden Gate Bridge's $76 Million Suicide Nets Near Approval

June 30, 2014 — Alison Vekshin – Bloomberg
Officials of the agency that runs San Francisco’s Golden Gate Bridge today approved a $76 million funding plan to erect a suicide barrier along the span, where people plunge to their deaths at a rate of about once a week. The Golden Gate Bridge Highway and Transportation District’s 19-member board voted unanimously to approve the funding, which includes $20 million from district reserves. “We must fight mental illness on many fronts and this budget action is a critical component of saving the lives of people who might not see that their brightest days are ahead of them,” Senator Mark Leno, a Democrat from San Francisco, said in a news release yesterday ahead of the meeting. Read the court decision
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Reprinted courtesy of Alison Vekshin, Bloomberg
Ms. Vekshin may be contacted at avekshin@bloomberg.net

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Application of Efficient Proximate Cause Doctrine Supports Coverage

January 06, 2012 — Tred R. Eyerly - Insurance Law Hawaii

Relying on the efficient proximate cause doctrine, the court determined coverage potentially existed for damage caused by water. Union Sav. Bank v. Allstate Indem. Co., 2011 U.S. Dist. LEXIS 134398 (S.D. Ind. Nov. 21, 2011).

The Tods purchased property that was mortgaged by Union Savings. The Tods obtained a Landlords Policy for the property from Allstate. When the Tods were in default on their loan, Union Savings notified them that foreclosure proceedings would commence. Union Savings sent an appraiser to the property who discovered water in the basement. Water and electricity to the building were off. Union Savings notified Allstate and later filed a formal claim under the mortgagee clause in the Landlords Policy. This clause stated, "A covered loss will be payable to the mortgagees named on the policy declaration. . . ."

Allstate denied coverage, citing exclusions for water damage.

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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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Bad Faith and a Partial Summary Judgment in Seattle Construction Defect Case

February 10, 2012 — CDJ STAFF

The US District Court of Washington has issued a ruling in the case of Ledcor Industries v. Virginia Surety Company, Inc. Ledcor was the builder of a mixed-use real estate project in Seattle called the Adelaide Project. Ledcor purchased an insurance policy from Virginia Surety covering the project. After the completion of the project, Ledcor received complaints of construction defects from the homeowners, which they forwarded to Virginia Surety.



Virginia Surety denied coverage on several grounds. Absent any lawsuit, Virginia claimed that there was “not yet any duty to defend or indemnify.” Further, as the policy commenced ten days after work on the project was substantially completed, Virginia cited a provision in the policy that excluded coverage for damage that occurred before the policy began. As problems included water intrusion, Virginia noted an exclusion for fungal damage. Finally, Virginia noted that it was not clear whether damage was due to Ledcor’s own actions.



The homeowners sued over the construction defects. Ledcor settled these suits before trial. In this, they were defended by, and settlements were paid by American Home, another of Ledcor’s insurers. Ledcor claims that Virginia Surety acted in bad faith by denying coverage and by its failure to investigate the ongoing nature of the work at the project.



The judge determined that Virginia Surety acted in bad faith when it invoked the fungus exclusion. Virginia noted that fungal damage “‘would have been’ referenced in the list of construction defects,” however, the HOAs claimed only “water stains” and “water damage,” and made no mention of mold or fungus. The court found that Virginia Surety “was not entitled to deny coverage simply because it may have suspected that mold or fungus damage existed.” The court noted that further proceedings would be needed to determine what portion of the settlement Virginia is obligated to pay.



The court found that there were matters of fact to be determined on the further issues in the case. The judge wrote that although Virginia acted in bad faith in invoking the fungus exclusion, it still had to be determined if they were in breach of contract by failing to defend Ledcor. Ledcor still needs to show that the damages claimed by the HOA were due to work actually covered by Virginia Surety.



Ledcor made an additional claim that Virginia Surety violated Washington’s laws concerning the insurance industry. Here, the court noted that the improper exclusion for fungus issues “constitutes a per se unfair trade practice.” Six other claims were made under this law. The court found that Virginia Surety did not misrepresent “pertinent facts or insurance policy provisions.” It also issued its denial letter promptly, satisfying the fifth provision. However, Virginia Surety did violate the second provision, in that it failed “to acknowledge and act reasonably promptly upon communications with respect to claims.” Two other issues could not be determined.



Judge Martinez’s decision granted a summary judgment to Ledcor on the issue of bad faith. An additional summary judgment was granted that Virginia Surety violated Washington’s Insurance Fair Conduct Act. Judge Martinez did not grant summary judgment on any of the other issues Ledcor raised.

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Boston Catwalk Collapse Injures Three Workers

May 10, 2022 — Scott Van Voorhis - Engineering News-Record
The collapse of a catwalk in a defunct, 124-year-old power plant building in Boston on May 4 injured three workers in the latest in a spate of serious construction accidents in the city and its environs. Reprinted courtesy of Scott Van Voorhis, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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California Bullet Train Clears Federal Environmental Approval

June 30, 2014 — Michael B. Marois – Bloomberg
The U.S. Federal Railroad Administration has approved an environmental review needed to begin building a portion of a $68 billion California high-speed rail line that has been mired in lawsuits. The agency, part of the Transportation Department, said in a release that it cleared a 114-mile (183-kilometer) stretch of the project in the Central Valley. The California High-Speed Rail Authority has been blocked from selling bonds to begin construction of the first U.S. bullet train until a court decides whether details of the financing were adequately disclosed. Read the court decision
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Reprinted courtesy of Michael B. Marois, Bloomberg
Mr. Marois may be contacted at mmarois@bloomberg.net

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Condo Developers Buy in Washington despite Construction Defect Litigation

October 22, 2014 — Beverley BevenFlorez-CDJ STAFF
Marc Stiles writing for Puget Sound Business Journal stated that “[t]he belief that contractors have been scared off by the legal liabilities that come with [condo] projects doesn't seem to hold water.” He interviewed Suzi Morris, of Lowe Enterprises, who plans on building a new condo tower in Seattle this November. Morris stated that they didn’t have any problems getting construction bids for the 24-story tower. According to the Puget Sound Business Journal, “The development team is trying to head off construction defect claims by planning and documenting with photos their work.” Stiles did admit that an unnamed “source in Seattle who consults on condo projects knows of two large general contracting companies that won't bid on condo projects because of” potential construction defect litigation. Read the court decision
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Policy's Operation Classification Found Ambiguous

May 21, 2014 — Tred R. Eyerly – Insurance Law Hawaii
Property damage caused by a subcontractor's sheet piling was found to be within the policy's operation classification, which included "grading of land." Canal Indemn. Co. v. Margaretville of NSM, Inc., No. 13-13541 (11th Cir. April 15, 2014). Canal issued a CGL policy to the insured. The policy had a classification limitation provision: “This insurance applies to bodily injury, property damage, personal injury, advertising injury or medical expense arising out of only those operations that are classified and shown on the Commercial General Liability Coverage Declarations . . .” The policy's Declarations, in turn, referred to the operation classification as "Grading of Land - INCL. Borrowing, Filling or Back Filling." The policy did not define these terms. 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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