For Whom Additional Insured Coverage Applies in New York
November 11, 2024 —
Bill Wilson - Construction Law ZoneSimply including a requirement in a contract to add certain parties as additional insureds under a commercial general liability insurance (CGL) policy may not be enough to ensure such coverage is provided in New York. In New York City Hous. Auth. v. Harleysville Worcester Ins. Co., 226 A.D.3d 804 (2024), the New York Supreme Court Appellate Division – Second Department ruled that the language in an insurance endorsement required privity of contract with the insured party subcontractor to obtain additional insured status and denied coverage to others despite a provision in a subcontract requiring such additional insured coverage.
In this case, an owner entered into a contract with a general contractor for construction services. The general contractor entered into a subcontract with a subcontractor. The subcontractor agreed to procure and maintain a CGL policy naming the owner, the general contractor, and another related party as additional insureds thereunder. An employee of the subcontractor was injured on the project and sued the three additional insureds and several other parties. Subcontractor’s insurance company refused to defend and indemnify any party other than the general contractor. All the parties sued by the subcontractor’s employee brought an action against the subcontractor’s insurance company, seeking coverage for defense and indemnification as additional insureds under the subcontractor’s CGL policy.
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Bill Wilson, Robinson & Cole LLPMr. Wilson may be contacted at
wwilson@rc.com
APROPLAN and GenieBelt Merge, Creating “LetsBuild” – the Build Phase End-to-End Digital Platform
March 18, 2019 —
Aarni Heiskanen - AEC BusinessResponding to a rising need to deliver an all-in-one solution, supporting on-site planning, progress communication, snagging, drawings and checklists, GenieBelt and APROPLAN have decided to merge to form LetsBuild – the European leader in delivering an end-to-end solution to the global construction industry.
For the past five years, GenieBelt CEO Klaus Nyengaard and APROPLAN CEO Thomas Goubau have met on a regular basis to discuss developments in the construction technology sector and how to increase efficiency and minimise rework, miscommunication, and errors.
“We share the vision that ‘simple to use’-products will bring immense value to the construction sector. When we met in October 2018, we concluded that the way to realize this vision was to unite our companies to create a broader product and cover more needs in the market,” says LetsBuild CEO Klaus Nyengaard.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Insurer Must Defend Where Possible Continuing Property Damage Occurred
January 13, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe California Court of Appeal overturned the trial court's issuance of summary judgment based upon the possibility of continuing property damage during the insurer's policy period. Tidwell Enters. v. Fin. Pac. Ins. Co., 2016 Cal. App. LEXIS 1038 (Cal. Ct. App. Nov. 29, 2016).
Financial Pacific insured Greg Tidwell, Tidwell Enterprises, Inc. and Tidwell Enterprises Fireplace Division (Tidwell) under CGL policies issued between March 2003 and March 2010. In 2006 or 2007, Tidwell installed a fireplace in a home. On November 11, 2011, 20 months after the end of the last policy period of Financial Pacific's coverage, the home owned by Kendall Fox, was damaged by fire. Fox was insured by State Farm. State Farm's attorney advised Tidwell of the fire, and Tidwell forwarded the information to Financial Pacific.
State Farm hired an investigator who reported that the fire was caused by the installation of an "unlisted shroud at the top of the chimney chase". This prevented the fireplace from drafting properly, resulting in overheating of the fireplace and heat transfer to the surround wood framing members. This resulted in the ignition of the framing members at the sides, top and bottom of the fireplace. State Farm sent the report to Financial Pacific.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
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 BlogIn 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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Pillsbury's Construction & Real Estate Law Team, Pillsbury
Don’t Put Yourself In The Position Of Defending Against An Accord And Satisfaction Defense
October 10, 2022 —
David Adelstein - Florida Construction Legal UpdatesThe doctrine of accord and satisfaction lives and breathes in disputes including construction disputes. Unfortunately, a contractor, in the case discussed below, found out the hard way after it cashed checks that were accompanied with a letter that clearly indicated the checks were final payment. Once those payments were cashed, there was no “buyer’s remorse” that would allow it to still pursue disputed amounts. Remember this the next time you accept and cash a payment that says on the check it is full and final payment OR is accompanied by a letter that makes clear the payment is full and final payment. If you cash it, there is no second bite out of the apple, so to speak. If you are not interested in the payment being full and final payment, return the check. If you are not sure, either return the check or inquire and get that response in writing. Don’t put yourself in the position of defending against an
accord and satisfaction defense.
Even without the doctrine of accord and satisfaction, the contract between the contractor and owner discussed below made clear that contractor’s acceptance of final payment meant that contractor was unconditionally waiving other claims against the owner, further reinforcing that there would be no second bite out of the apple.
The morale:
(1) read the letter that accompanies a check and do NOT cash a check that indicates it is for final payment unless you are prepared to accept that amount; and
(2) read your contract to understand any contractual obligation that kicks-in with the acceptance of final payment.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Mitigating the Consequences of Labor Unrest on Construction Projects
February 14, 2023 —
Cameron Lukas, Alan Winkler & Gregory Begg - ConsensusDocsUntil this past year, we have enjoyed an era of relative labor stability. It’s true, however, that labor unrest frequently coincides with inflationary pressure on prices, something that we are currently experiencing. The recent nationwide rail workers strike was averted only through the extraordinary intervention of the federal government. More recently, thousands of academic workers in the University of California system went on strike. Underscoring this development was a November 2022 New York Times article reporting that polls showed the highest level of support for organized labor since the 1960s. The same article also quoted a professor of labor relations warning that the current economy presents a high potential for strikes. This recalls the sixties and seventies when increased costs due to inflation led to a multitude of strikes.
The construction industry has been historically strike-prone with approximately 22% of all strikes during the 1960s involving construction projects, contrasted with the fact that construction workers themselves accounted for only roughly 5% of the nation’s nonagricultural labor force. Incredibly, in 1969 alone, a record number of nearly 1,000 construction strikes occurred nationwide with 20 million worker days lost, more than five times the lost working time of the rest of the economy.
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Reprinted courtesy of
Cameron Lukas, Peckar & Abramson, P.C,
Alan Winkler, Peckar & Abramson, P.C and
Gregory Begg, Peckar & Abramson, P.C
Mr. Lukas may be contacted at clukas@pecklaw.com
Mr. Winkler may be contacted at awinkler@pecklaw.com
Mr. Begg may be contacted at gbegg@pecklaw.com
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Significant Victory for the Building Industry: Liberty Mutual is Rejected Once Again, This Time by the Third Appellate District in Holding SB800 is the Exclusive Remedy
December 15, 2016 —
Richard H. Glucksman & Ravi R. Mehta – Chapman Glucksman Dean Roeb & Barger Bulletin I. Elliott Homes, Inc. v. Superior Court (Certified for Publication, Cal. Ct. App. Dec. 2, 2016
The California Court of Appeal for the Third Appellate District recently elaborated on the scope of the Right to Repair Act, commonly known as SB-800 (“Act”). In
Elliott Homes, Inc. v. Superior Court of Sacramento County (Kevin Hicks, et al.) (certified for publication, Cal. Ct. App. Dec. 2, 2016), the Court considered whether the Act (and specifically the Act’s pre-litigation procedure) applies, when homeowners plead construction defect claims based only on common law causes of action, as opposed to violations of the building standards set forth in the Act (
Civil Code §896). The Court answered this question affirmatively.
The homeowners of seventeen (17) single-family homes filed a Complaint against the builder of their homes, Elliott Homes, Inc. (“Elliott”), alleging common law causes of action for construction defects. Elliott filed a motion to stay the litigation on the ground that the homeowners failed to comply with the pre-litigation procedure set forth in the Act. The trial court denied the motion, agreeing with the homeowners that this pre-litigation procedure did not apply because the homeowners had not alleged a statutory violation of the Act. Elliott appealed. The Court of Appeal purely considered the question of whether the Act, including its pre-litigation procedure, applies when a homeowner pleads construction defect claims based on common law causes of action, and not on statutory violations of the Act’s building standards.
To answer this question, the Court analyzed a recent case decided by the Court of Appeal for the Fourth Appellate District:
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98. In this subrogation case, a builder’s insurer asserted common law causes of action (but not statutory building standard violations) alleging construction defects against the builder to recover amounts paid to the homeowner after a sprinkler system failure caused extensive damage to the subject property. The trial court sustained the builder’s demurrer to the Complaint on the ground that it was time-barred under the Act. The Court of Appeal reversed the trial court’s order, holding that common law construction defect claims arising from actual damages are not covered by the Act because “the Act does not provide the exclusive remedy in cases where actual damage has occurred.” (
Liberty Mutual, 219 Cal.App.4th 98, 109).
The
Elliott Court declined to follow
Liberty Mutual, finding that that Court failed to properly analyze the language of the Act. The
Elliott Court analyzed both the statutory scheme and the legislative history of the Act to arrive at the conclusion that common law causes of action for construction defects do indeed fall within the purview of the Act.
According to the
Elliott Court, the Act “broadly applies to
any action seeking recovery of damages arising out of, or related to deficiencies in…residential construction and in such an action, a homeowner’s claims or causes of action shall be limited to violation of the standards set forth in the Act, except as specified.” Further, the Act expressly provides that “no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.”
Civil Code §943(a). In turn,
Civil Code §944 allows for a recovery for the cost of repairing a building standard violation, or for the cost of repairing any damage caused by such a violation, among other things.
The limited exceptions to the Act’s applicability concern the enforcement of a contract, or any action for fraud, personal injury, or violation of a statute. Civil Code §943(a). Additionally, the Act does not apply to condominium conversions. Civil Code §896.
The Elliott Court explains that apart from these exceptions, the Legislature intended the Act to apply to all construction defect claims (regardless of damage) relating to the construction of residential properties whose sales contracts are signed after January 1, 2003. There is no exception in the Act, express or implied, for common law causes of action.
Next, the Court turns to the Act’s legislative history to buttress this conclusion. This history makes clear that the Act is a legislative response to the California Supreme Court’s holding in
Aas v. Superior Court (2000) 24 Cal.4th 627, that construction defects in residential properties are only actionable in tort when actual property damage manifests. Senate Judiciary Committee hearings indicate that the Act was the product of protracted negotiations between varying interested parties, including construction industry trade groups and consumer protection groups. The Legislature intended (1) to promulgate building standards, violations of which would be actionable, even without damage, and (2) to allow homeowners to recover for actual damage caused by construction defects not covered by the building standards. In other words, the Act was intended to provide homeowners redress regardless of whether damage had manifested.
Therefore, the Court concluded that common law causes of action for construction defects, regardless of damage, are subject to the pre-litigation procedure set forth in the Act. The Court issued a writ of mandate directing the trial court to vacate its earlier order, and to enter a new order granting Elliott’s motion to stay the litigation until the homeowners (and Elliott) have satisfied the pre-litigation procedure of the Act.
II. McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132
Similar to the Third Appellate District Court’s ruling in
Elliott, the Fifth Appellate District Court also rejected the holding of
Liberty Mutual in a matter now pending before the California Supreme Court:
McMillin Albany, LLC v. Superior Court (2015) 239 Cal.App.4th 1132 (review granted and opinion superseded sub nom.
Albany v. Superior Court 360 P.3d 1022). Also similar to
Elliott, in
McMillin a group of homeowners filed common law construction defect claims against the builder of their homes. The builder,
McMillin, moved to stay the litigation pending compliance with the Act’s pre-litigation procedure. The trial court denied the motion, holding that the Act does not apply because the homeowners have not asserted statutory building standard violations contained within the Act.
In reasoning substantially similar to that of
Elliott, the
McMillin Court rejected Liberty Mutual’s holding that the Act is not the exclusive remedy for pursuing construction defect claims, with or without damage. Thus, the
McMillin Court issued a writ of mandate to vacate the trial court’s earlier order and to enter a new order granting McMillin’s motion to stay.
On November 24, 2015, the California Supreme Court granted the homeowners’ petition for review. In August of 2016, briefing was completed and the matter is now awaiting the scheduling of arguments. CGDRB will continue to closely monitor the pending appeal of this matter to the California Supreme Court, as well as all related developments.
Reprinted courtesy of
Richard H. Glucksman, Chapman Glucksman Dean Roeb & Barger and
Ravi R. Mehta, Chapman Glucksman Dean Roeb & Barger
Mr. Glucksman may be contacted at rglucksman@cgdrblaw.com
Mr. Mehta may be contacted at rmehta@cgdrblaw.com
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Ahead of the Storm: Preparing for Dorian
September 16, 2019 —
Adam P. Handfinger, Stephen H. Reisman & Gary M. Stein - Peckar & Abramson, P.C.While Hurricane Dorian churns in the Atlantic with its sights currently set on the east coast of Florida, storm preparations should be well underway. As you are busy organizing efforts to secure your job sites, we at Peckar & Abramson offer some quick reminders that may prove helpful:
- Review your contracts, particularly the force majeure provisions, and be sure to comply with applicable notice requirements
- Even if not expressly required at this time, consider providing written notice to project owners that their projects are being prepared for a potential hurricane or tropical storm and that the productivity and progress of the work will be affected, with the actual time and cost impact to be determined after the event.
- Consult your hurricane plan (which is often a contract exhibit) and confirm compliance with all specified safety, security and protection measures.
- Provide written notice to your subcontractors and suppliers of the actions they are required to take to secure and protect their portions of the work and the timetable for completion of their storm preparations.
Reprinted courtesy of Peckar & Abramson, PC attorneys
Adam P. Handfinger,
Stephen H. Reisman and
Gary M. Stein
Mr. Handfinger may be contacted at ahandfinger@pecklaw.com
Mr. Reisman may be contacted at sreisman@pecklaw.com
Mr. Stein may be contacted at gstein@pecklaw.com
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