Consumer Confidence in U.S. Increases More Than Forecast
August 26, 2015 —
Victoria Stilwell – BloombergConsumer confidence climbed more than forecast in August to the second-highest level in eight years as Americans held more favorable views of the labor market.
The Conference Board’s index rose to 101.5 this month from a revised July reading of 91, the New York-based private research group said Tuesday. The gauge exceeded the highest estimate in a Bloomberg survey of economists, whose median forecast was 93.4. The cutoff date for the survey was Aug. 13, before the recent stock-market sell-off.
Americans remained emboldened by job gains, cheaper gasoline and rising home prices in the period leading up to a slump in stock prices as global financial markets took a turn for the worse. The risk for the economy is that households will reassess their spending plans as they wait for evidence the U.S. expansion can withstand such shocks.
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Victoria Stilwell, Bloomberg
Illinois Appellate Court Finds That Damages in Excess of Policy Limits Do Not Trigger Right to Independent Counsel
June 22, 2020 —
Jason Taylor - Traub LiebermanUnder Illinois law, an insurer’s duty to defend includes the right to control the defense, which allows insurers to protect their financial interest in the outcome of the litigation. However, where a conflict of interest exists, the insured, rather than the insurer, is entitled to assume control of the defense of the underlying action. If this occurs, the insurer satisfies its obligation to defend by reimbursing the insured for the cost of defense provided by independent counsel selected by the insured. What circumstances and situations arise to the level of an actual conflict of interest between the insurer and insured are often grounds for dispute.
In Joseph T. Ryerson & Son, Inc. v. Travelers Indemnity Co. of America, 2020 IL App (1st) 182491 (Apr. 7, 2020), the Illinois Appellate Court addressed whether damages awarded by a jury in excess of the policy limits were sufficient to trigger a right to independent counsel for post-trial and appellate proceedings. According to the Illinois Appellate Court, at least under the facts of the Ryerson case, the answer is “no.”
In Ryerson, Nancy Hoffman sued Ryerson for injuries sustained in a tractor-trailer accident. Ryerson tendered the suit to its primary insurer, Travelers, and its umbrella insurer, Illinois National. The policy limits were $2 million and $25 million, respectively. A jury found in favor of Hoffman for over $27.6 million in damages, and Ryerson appealed.
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
New Jersey Court Adopts Continuous Trigger for Construction Defect Claims
November 15, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe New Jersey Superior Court, Appellate Division, adopted the continuous trigger for establishing which insurers were on the risk for construction defect claims. Air Master & Cooling, Inc. v. Selective Ins. Co. of Am., 2017 N.J. Super. LEXIS 144 (N.J. Super. Ct., App. Div. Oct. 10, 2017).
The insured, Air Master, worked as a subcontractor on the construction of a condominium building. Air Master performed HVAC work in the building between November 2005 and April 2008. Air Master's work consisted of installing condenser units on rails on the building's roof, and also HVAC devices within each individual unit.
Starting in early 2008, some of the unit owners began to notice water infiltration and damage in their windows, ceilings, and other portions of their units. On April 29, 2010, an expert consultant, Jersey Infrared Consultants, performed a moisture survey of the roof for water damage. A report identified 111 spots on the roof damaged by moisture from water infiltration. The report noted it was impossible to determine when moisture infiltration occurred. The expert recommended that these damaged areas of the roof be removed and replaced.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Lockton Expands Construction and Design Team
July 19, 2011 —
CDJ STAFFLockton Companies, LLC, the largest privately held independent insurance broker, has announced that it is expanding its construction and design team with the hiring of Karen Erger and Tom Miller.
Ms. Erger will provide professional liability practice management, loss prevention, contract and complex claims management consulting services to Lockton's architectural, engineering and construction clients in her role as Vice President, Director of Practice Management. Her background includes construction litigation at a leading construction law firm, professional liability claims defense and claims consulting for major professional liability underwriters.
Miller joins Lockton as a Senior Vice President within the Design and Construction Unit. His role will be dedicated to serving the needs of engineering, architecture and construction firms performing services around the globe. He has spent more than 15 years concentrating on professional liability for design professionals and contractors in multiple roles. He previously managed the professional liability underwriting of one of the largest construction insurers and has developed numerous manuscript insurance products as well as focused on strategic planning to enhance business unit opportunities.
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When Is an Arbitration Clause Unconscionable? Not Often
April 05, 2021 —
Christopher G. Hill - Construction Law MusingsHere at Construction Law Musings, I have discussed the pros and cons of various forms of Alternative Dispute Resolution (ADR), including arbitration. I am a fan of most ADR, but less of one for arbitration than for mediation. However, where the arbitration can be done under a good set of cost-containing rules and with an arbitrator that is experienced in construction, arbitration can help with the resolution of construction claims. Of course, arbitration provisions in construction contracts are routinely upheld by the courts of Virginia with limited exceptions. One of these exceptions is where the arbitration clause is unconscionable and therefore unenforceable. A recent case out of the Western District of Virginia, Marroquin v. Dan Ryan Builders Mid-Atlantic LLC, shows how high a hurdle it is to get a court to invalidate an arbitration provision.
In this case, the Marroquins purchased a new construction home from the Defendants. As is often the case in such purchase transactions, Defendant provided a limited warranty agreement (in this case provided by Quality Builders Warranty Corporation (“QBW”)) that along with the sales contract contained a mandatory arbitration provision. The parties executed the limited warranty and the sale proceeded with the Marroquins taking possession. Over the next year or so, the County inspector’s office issued several correction orders to Defendant, and the Marroquins, through counsel, identified numerous defects in construction, many of which they alleged to remain unremedied. Needless to say, they sued for breach of statutory warranty and for breach of the limited warranty. Defendant removed the case to Federal District Court and then moved to compel arbitration.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Georgia Supreme Court Addresses Anti-Indemnity Statute
October 21, 2019 —
David R. Cook - AHC Construction and Procurement BlogIn prior blog posts, we addressed Georgia’s anti-indemnity statute. One of the posts addressed the statute in the context of an electric utility easement near an airport. That case made its way to the Supreme Court Georgia, which provided some additional clarity to the statute. Milliken & Co. v. Georgia Power Co., — Ga. –, 829 S.E.2d 111 (2019).
When a plane crashed and several passengers and crew died or were injured, their representatives sued several defendants, including a nearby plant owner, Milliken & Company (“Milliken”), based on claims that transmission lines on Milliken’s property were too close to the runways, were too high, and encroached on the airport easements. Milliken cross claimed against Georgia Power Company (“GPC”). Milliken’s claim was based on an easement it granted to GPC, which required GPC to indemnify it for any claims arising out of GPC’s construction or maintenance of the transmission lines.
On appeal, the Supreme Court considered whether the clause was unenforceable under O.C.G.A. § 13-8-2(b). In general, “a party may contract away liability to the other party for the consequences of his own negligence without contravening public policy, except when such agreement it prohibited by statute.” Id. at 113 citing Lanier at McEver v. Planners & Eng’rs Collaborative, 284 Ga. 204, 205 (2008). As one such statute, O.C.G.A. § 13-8-2(b) applies when an indemnification provision (i) “relates in some way to a contract for construction, alteration, repair, or maintenance of certain property” and (ii) “promises to indemnify a party for damages arising from that own party’s sole negligence.” Id. at 114 (internal punctuation omitted).
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David R. Cook, Autry, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
Construction Defects Lead to Demolition of Seattle’s 25-story McGuire Apartments Building
March 16, 2011 —
CDJ STAFFAccording to a story published last Thursday in Seattle PI: " The 25-story McGuire Apartments, at Second Avenue and Wall Street, would cost more to fix than the building is worth, according to its owners. Its most serious defect involves steel cables that are corroding inside of concrete slabs because the ends weren’t properly treated with a rust-proof coating and a pocket in the edge of the concrete that wasn’t properly sealed"
The report by Aubrey Cohen outlines the demolition plans which are expected to take between 12 and 18 months, and will utilize robotic Brokk Machines. The demolition plan calls for one story at a time to be demolished, with the debris to be trucked offsite. Demolition plans aim to minimize disruption to residents and businesses in the area by Limiting work 7 a.m. to 6 p.m. on weekdays and 9 a.m. to 6 p.m. Saturdays with "impact and percussive activities" limited to 8 a.m to 5 p.m weekdays.
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When “Substantially Similar” Means “Fundamentally Identical”: Delaware Court Enforces Related Claim Provision to Deny D&O Coverage for Securities Class Action
August 10, 2021 —
Geoffrey B. Fehling, Lawrence J. Bracken II & Lorelie S. Masters - Hunton Andrews KurthA company faces two class action lawsuits—filed by different plaintiffs, complaining of different allegedly wrongful conduct, asserting different causes of action subject to different burdens of proof, and seeking different relief based on different time periods for the alleged harm. Those facts suggest the suits are not “fundamentally identical,” but that is what a Delaware Superior Court recently concluded in barring coverage for a policyholder seeking to recover for a suit the court deemed “related” to an earlier lawsuit first made outside the policy’s coverage period. First Solar Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. N20C-10-156 MMJ CCLD (Del. Super. Ct. June 23, 2021). The decision, which is not on all fours with some of the authority upon which it relies, underscores the inherent unpredictability of “related” claim disputes and need for careful analysis of the policy language against the factual and legal bases of the underlying claims.
Underlying Shareholder Class Actions and D&O Claims
Shareholders of solar panel manufacturer First Solar sued the company and its directors and officers in a class action lawsuit (the “Smilovits Action”) for the class period April 2008 to February 2012. The Smilovits Action asserted federal securities violations arising from First Solar’s alleged misrepresentations about the company’s business strategies, product design, financial strength, and ability to offer solar electricity at comparable rates to conventional energy producers (i.e., achieving “grid parity”), artificially inflated stock price, insider trading, manipulation of solar power metrics, and violations of GAAP accounting standards. First Solar submitted a claim to its D&O insurer, National Union, which provided coverage for the Smilovits Action and exhausted the policy.
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Geoffrey B. Fehling, Hunton Andrews Kurth,
Lawrence J. Bracken II, Hunton Andrews Kurth and
Lorelie S. Masters, Hunton Andrews Kurth
Mr. Fehling may be contacted at gfehling@HuntonAK.com
Mr. Bracken may be contacted at lbracken@HuntonAK.com
Ms. Masters may be contacted at lmasters@HuntonAK.com
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