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Leveraging the 50-State Initiative, Connecticut and Maine Team Secure Full Dismissal of Coverage Claim for Catastrophic Property Loss

March 23, 2020 — Regen O'Malley - Gordon & Rees Insurance Coverage Law Blog
On behalf of Gordon & Rees’ surplus lines insurer client, Hartford insurance coverage attorneys Dennis Brown, Joseph Blyskal, and Regen O’Malley, with the assistance of associates Kelcie Reid, Alexandria McFarlane, and Justyn Stokely, and Maine counsel Lauren Thomas, secured a full dismissal of a $15 million commercial property loss claim before the Maine Business and Consumer Court on January 23, 2020. The insured, a wood pellet manufacturer, sustained catastrophic fire loss to its plant in 2018 – just one day after its surplus lines policy expired. Following the insurer’s declination of coverage for the loss, the wood pellet manufacturer brought suit against both its agent, claiming it had failed to timely secure property coverage, as well as the insurer, alleging that it had had failed to comply with Maine’s statutory notice requirements. The surplus lines insurer agreed to extend the prior policy several times by endorsement, but declined to do so again. Notably, the insured alleged that the agent received written notice of the non-renewal prior to the policy’s expiration 13 days before the policy’s expiration. However, the insured (as well as the agent by way of a cross-claim) asserted that the policy remained effective at the time of the loss as the insured did not receive direct notice of the decision not to renew coverage and notice to the agent was not timely. Although Maine’s Attorney General and Superintendent intervened in support of the insured’s and agent’s argument that the statute’s notice provision applied such that coverage would still be owed under the expired policy, Gordon & Rees convinced the Court otherwise. At issue, specifically, was whether the alleged violation of the 14-day notice provision in Section 2009-A of the Surplus Lines Law (24-A M.R.S. § 2009-A), which governs the “cancellation and nonrenewal” of surplus lines policies, required coverage notwithstanding the expiration of the policy. The insured, the agent, and the State of Maine intervenors argued that “cancellation or nonrenewal” was sufficient to trigger the statute’s notice requirement, and thus Section 2009-A required the insurer to notify the insured directly of nonrenewal. In its motion to dismiss, Gordon & Rees argued on behalf of its client that Section 2009-A requires both “cancellation and nonrenewal” in order for the statute to apply. Since there was no cancellation in this case – only nonrenewal – Gordon & Rees argued that Section 2009-A is inapt and that the insurer is not obligated to provide the manufacturer with notice of nonrenewal. Alternatively, it argued that the statute is unconstitutionally vague and unenforceable. Read the court decision
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Reprinted courtesy of Regen O'Malley, Gordon & Rees
Ms. O'Malley may be contacted at romalley@grsm.com

Don’t Just Document- Document Right!

February 06, 2019 — Christopher G. Hill - Construction Law Musings
I have stated to clients on many occasions that paper is a lawyer’s best friend. Because of a recent case from the Virginia Supreme Court, I should modify that to the correct paper is a lawyer’s best friend. In Commonwealth v. AMEC Civil, LLC, AMEC sued the Virginia Department of Transportation (“VDOT”) seeking more than $21 million in damages. The Mecklenburg County Circuit Court granted AMEC almost all of its damages and found that AMEC’s notice of intent to make a claim was proper under the Virginia Code even if it was not in the proper form. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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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“Families First Coronavirus Response Act”: Emergency Paid Leave for Construction Employers with Fewer Than 500 Employees

March 30, 2020 — Sidney Lewis & Alex Glaser, Jones Walker LLP - ConsensusDocs
COVID-19 has already taken a toll on construction projects across the nation. Construction industry participants, including general contractors, now face risks and challenges that are exceedingly difficult to anticipate and plan for. The spread of this virus has and will continue to create new labor force issues and amplify existing ones. On March 18, 2020, the House of Representatives passed H.R. 6021, the “Families First Coronavirus Response Act,” which, contains provisions related to mandatory paid leave for employers with fewer than 500 employees. This legislation and the substantial obligations it imposes apply to the overwhelming number of general contractors in the nation—those with less than 500 full-time employees! The bill mandates up to 80 hours of “emergency paid leave” related to COVID-19, and not just for those who contract the illness. However, contractors with less than 50 employees may seek exemption. Reprinted courtesy of Sidney Lewis, Jones Walker LLP and Alex Glaser, Jones Walker LLP Mr. Lewis may be contacted at slewis@joneswalker.com Mr. Glaser may be contacted at aglaser@joneswalker.com Read the court decision
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Massachusetts Judge Holds That Insurer Breached Its Duty To Defend Lawsuit After Chemical Spill

October 16, 2018 — Lawrence J. Bracken, II & Alexander D. Russo - Hunton Insurance Recovery Blog
A District Court Judge for the District of Massachusetts recently ruled that Ace Property and Casualty Insurance Co. breached its duty to defend its insured in a lawsuit brought by Plaistow Project, LLC, after a family owned laundromat leaked chemicals onto Plaistow Project’s property. Plaistow Project, LLC v. ACE Prop. & Cas. Ins. Co., No. 16-CV-11385-IT, 2018 WL 4357480, (D. Mass. Sept. 13, 2018). Plaistow Project sued State Line Laundry Services in state court, and ACE denied coverage under the pollution exclusion in State Line Laundry’s insurance policy. Plaistow Project then settled with State Line Laundry. Under the settlement terms, Plaistow Project was assigned State Line Laundry’s rights against ACE. In the subsequent coverage litigation, Plaistow Project alleged that ACE had breached its duty to defend State Line Laundry under its insurance policy. ACE argued that (1) the burden was on the policyholder to demonstrate that the policy’s “sudden and accidental” exception applied to the policy’s pollution exclusion; and (2) the policyholder could not show the “sudden and accidental” exception applied based on the complaint. Reprinted courtesy of Lawrence J. Bracken, II, Hunton Andrews Kurth and Alexander D. Russo, Hunton Andrews Kurth Mr. Bracken, may be contacted at lbracken@HuntonAK.com Mr. Russo may be contacted at arusso@HuntonAK.com Read the court decision
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Real Estate & Construction News Round-Up (11/02/22) – Flexible Workspaces, Sustainable Infrastructure, & Construction Tech

November 15, 2022 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
This week’s round-up dives into digital transformation in the construction industry, renewed interest in flexible workspaces, and how the infrastructure sector can become more resilient and sustainable, both economically and environmentally.

Digital transformation in the construction industry is top of mind for many firms, but most are still in the beginning and intermediate phases of implementing new digital capabilities. (Ursula Cullen, PBC Today)
Companies could mitigate climate hazards and build resilience into the life cycle of their infrastructure and capital projects by facilitating a comprehensive approach to understanding risk. (Brodie Boland and Daphne Luchtenberg, McKinsey & Company)
The use of drones in project planning, as well as the incorporation of other technology, is proposed as an alternative solution to addressing the construction industry’s labor shortage. (Shaun Passley, For Construction Pros)

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

Additional Insured Not Entitled to Coverage for Post-Completion Defects

December 21, 2016 — Tred R. Eyerly – Insurance Law Hawaii
The general contractor, an additional insured on the subcontractor's policy, was not entitled to coverage for construction defect claims that arose after completion of the project. Weitz Co. v. Acuity, 2016 U.S. Dist. LEXIS 150433 (S.D. Ohio Oct. 31, 2016). Weitz was the general contractor hired by Twin Lakes for construction of a residential community. One of the subcontractors, Miter Masonry, was insured by Acuity under a CGL policy. Work on the project began in 2002 and was substantially completed in 2005. In 2011, Twin Lakes notified Weitz that there were moisture infiltration issues at the project that may be related to work during the project. Twin Lakes filed a Demand for Arbitration against Weitz on November 30, 2012. Twin Lakes alleged that the defects included the building wrap, windows, doors, wood trim, aluminum wrap, vinyl siding, flashing and brick veneer not being installed in accordance with contract documents and/or industry standards. The arbitration panel awarded damages to Twin Lakes in the amount of $2,775,771.86. The panel found that Weitz breached sections of the contract which caused moisture intrusion and damage to all the units. The panel ultimately held that Weitz could recover from the subcontractors 100% of the $2,775,771.86 awarded. Acuity's insured, Miter Masonry, was determined to be 4% at fault for the damages. 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

Home Numbers Remain Small While Homes Get Bigger

June 28, 2013 — CDJ STAFF
Catherine Rampell reports in the New York Times that while the number of single-family homes built in 2012 was still at the very bottom of the range, since the government starting recording this data in 1973, the medium size for these homes is at its largest ever. According to data collected by the Census Bureau, these homes also have more bedrooms and bathrooms than previously. Of all homes built in 2012, forty-one percent had four or more bedrooms and thirty percent had three or more bathrooms. Both of these were the highest percentages in those categories. Meanwhile, the size of newly-built rental units declined in 2012. While still larger than the average rental unit built in 1999 (the earliest date given in the article), there has been little change over the last decade. During the same period, the size of sale units in multi-family buildings did show an increase. Read the court decision
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CAMBRIDGE MASSACHUSETTS BUILDING EXPERT DIRECTORY AND CAPABILITIES