Insured's Failure to Challenge Trial Court's Application of Exclusion Makes Appeal Futile
November 15, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Texas Court of Appeals affirmed the trial court's granting of summary judgment to the insurer because the appeal failed to challenge the exclusion under which the insurer found no coverage. Sosa v. Auto Club Indemn. Co., 2022 Tex. App. LEXIS 6520 (Tex. Ct. App. Aug. 30, 2022).
Sosa's house was damaged during Hurricane Harry on August 26, 2017. Sosa filed a claim with Auto Club. She reported that two feet of floodwater had entered her home, her roof was missing shingles and was leaking, and she had sustained interior damage. An adjuster estimated the cost to prepare the roof damage was $1,191.96, less that her deductible. Auto Club determined that any remaining damage was caused by flood water, which was expressly excluded from coverage.
On November 11, 2020, Sosa filed suit against Auto Club for breach of the policy. Among other things, she argued the adjuster spent minimal time at her home inspecting and was inexperienced. In its answer, Auto Club asserted Sosa's claim was time-barred by the statute of limitations. Sosa then filed an amended complaint and changed the date of the loss from August 26, 2017, to June 28, 2019.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Third Circuit Holds No Coverage for Faulty Workmanship Despite Insured’s Expectations
November 21, 2018 —
Brian Margolies - TLSS Insurance Law BlogIn its recent decision in Frederick Mut. Ins. Co. v. Hall, 2018 U.S. App. LEXIS 31666 (3d Cir. Nov. 8, 2018), the United States Court of Appeals for the Third Circuit had occasion to consider Pennsylvania’s doctrine of reasonable expectations in the context of a faulty workmanship claim.
Hallstone procured a general liability policy from Frederick Mutual to insure its masonry operations. Notably, when purchasing the policy through an insurance broker, Hallstone’s principal stated that he wanted the “maximum” “soup to nuts” coverage for his company. Hallstone was later sued by a customer for alleged defects in its masonry work. While Frederick agreed to provide a defense, it also commenced a lawsuit seeking a judicial declaration that its policy excluded coverage for faulty workmanship. The district court agreed that the business risk exclusions applied, but nevertheless found in favor of Hallstone based on the argument that Hallstone had a reasonable expectation that when applying for an insurance policy affording “soup to nuts” coverage, it this would include coverage for faulty workmanship claims.
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Brian Margolies, Traub Lieberman Straus & Shrewsberry LLPMr. Margolies may be contacted at
bmargolies@tlsslaw.com
Court Concludes That COVID-19 Losses Can Qualify as “Direct Physical Loss”
September 28, 2020 —
Lorelie S. Masters & Jorge R. Aviles - Hunton Andrews KurthIn a victory for policyholders, a federal district court found that COVID-19 can cause physical loss under business-interruption policies. In Studio 417, Inc., et al. v. The Cincinnati Insurance Co., No. 20-cv-03127-SRB (W.D. Mo. Aug. 12, 2020), the court rejected the argument often advanced by insurers that “all-risks” property insurance policies require a physical, structural alteration to trigger coverage. This decision shows that, with correct application of policy-interpretation principles and strategic use of pleading and evidence, policyholders can defeat the insurance industry’s “party line” arguments that business-interruption insurance somehow cannot apply to pay for the unprecedented losses businesses are experiencing from COVID-19, public-safety orders, loss of use of business assets, and other governmental edicts.
The policyholders in Studio 417 operate hair salons and restaurants asserting claims for business interruption. In suing to enforce their coverage, the policyholders allege that, over the last several months, it is likely that customers, employees, and/or other visitors to the insured properties were infected with COVID-19 and thereby infected the insured properties with the virus. Their complaint asserts that the presence of COVID-19 “renders physical property in their vicinity unsafe and unusable.” Unlike some other complaints seeking to enforce such coverage, it also alleges that the presence of COVID-19 and government “Closure Orders” “caused a direct physical loss or direct physical damage” to their premises “by denying use of and damaging the covered property, and by causing a necessary suspension of operations during a period of restoration.”
Reprinted courtesy of
Lorelie S. Masters, Hunton Andrews Kurth and
Jorge R. Aviles, Hunton Andrews Kurth
Ms. Masters may be contacted at lmasters@HuntonAK.com
Mr. Aviles may be contacted at javiles@HuntonAK.com
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Public Law Center Honors Snell & Wilmer Partner Sean M. Sherlock As Volunteers For Justice Attorney Of The Year
June 10, 2019 —
Sean M. Sherlock – Snell & Wilmer Real Estate Litigation BlogSnell & Wilmer is pleased to announce the Public Law Center (PLC) has named Orange County partner Sean M. Sherlock as the 2019 Volunteers for Justice Attorney of the Year.
Sherlock donates his time and knowledge to his community through his pro bono work with PLC. From 2015 to earlier this year he headed a team of attorneys who represented an elderly PLC client in danger of losing her mobile home. The client is the primary caregiver for her disabled grandson who survives solely on a fixed income of disability and Social Security, causing her to fall behind on her space rent for her mobile home. In addition to pro bono work, Sherlock is an avid community volunteer, spending his time supporting organizations that have included Big Brothers/Big Sisters, Orange County Coastkeeper, AYSO and the Boy Scouts of America.
“One of the most rewarding aspects of being an attorney is being able to obtain justice for the vulnerable and defenseless in our society who would otherwise be unable to navigate our legal system,” said Sherlock. “My relationship with the PLC has given me many opportunities to do some very gratifying work, and it is a real pleasure working with and learning from the excellent staff attorneys at PLC.”
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Sean M. Sherlock, Snell & Wilmer Mr. Sherlock may be contacted at
ssherlock@swlaw.com
Insured's Complaint for Breach of Contract and Bad Faith Adequately Pleads Consequential Damages
March 27, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe appellate court overturned the trial court's dismissal of the insured's complaint seeking consequential damages. D.K. Prop. Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh v, Pa., 2019 N.Y. App. Div. LEXIS 329 (N.Y. App. Div. Jan. 17, 2019).
The insured's building began to shift and exhibit structural damage, including cracks, after construction began in an adjoining building. The insured submitted a claim under its commercial insurance policy. The insurer did not pay the claim, nor did it disclaim coverage.
The insured sued, alleging breach of contract for failure to pay covered losses under the policy. The second cause of action was for breach of the implied covenant of good faith and fair dealing. The complaint also requested consequential damages in connection with each cause of action. The trial court granted the insurer's motion to dismiss the claim for consequential damages.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
WSDOT Excludes Non-Minority Women-Owned DBEs from Participation Goals
June 15, 2017 —
Ellie Perka - Ahlers & Cressman PLLCA drastic change has been implemented by the Washington State Department of Transportation (“WSDOT”) to the Disadvantaged Business Enterprise (“DBE”) Program in Washington. Effective June 1, 2017, WSDOT has implemented a “waiver” to exclude women-owned DBEs[i] from qualifying toward Condition of Award (“COA”) Goals on federally-funded projects. This move is significant. It will likely result in long-lasting detrimental impacts on the DBE community, women-owned businesses, and the entire construction community in Washington. The construction industry should be in an uproar over this change. Instead, it has largely gone unnoticed (likely because its impacts have not yet been felt). It is a de facto exclusion of women-owned businesses from the DBE program, and the severity of this change cannot be overstated.
Under the waiver, women-owned businesses no longer satisfy COA Goals on federally-funded projects (i.e., projects receiving funding from the Federal Highway Administration) advertised after June 1, 2017. Existing contracts are not impacted and may continue to utilize women-owned DBEs to satisfy COA Goals until the project is complete. The waiver is not retroactive.
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Ellie Perka, Ahlers & Cressman PLLCMs. Perka may be contacted at
eperka@ac-lawyers.com
French Laundry Spices Up COVID-19 Business Interruption Debate
April 20, 2020 —
Jeffrey J. Vita & Melanie A. McDonald - Saxe Doernberger & VitaOn March 26, 2020, Michelin-rated Napa Valley restaurants, French Laundry and Bouchon Bistro, and their celebrity chef, Thomas Keller, filed the second known
coronavirus-related declaratory judgment (DJ) lawsuit by a restaurant. The restaurants filed their DJ against Hartford Fire Insurance Company just seven days after Napa County issued a Shelter at Home Order.1 Chef Keller’s suit comes on the heels of the first such suit by a restaurant seeking to recover business income losses, filed by iconic New Orleans French Quarter restaurant Oceana Grill2 on March 17, just four days after the Louisiana governor issued an order prohibiting gatherings of more than 250 people.
As local governments seek to protect their citizens and prevent an onslaught of cases in area hospitals, they are issuing various “stay home,” “shelter at home,” and similar orders to force social distancing and to help flatten the curve of the growth in COVID-19 cases. Restaurants nationwide are especially hard hit by these orders, as many of these orders contain size limitations on gatherings, which have required that restaurants and bars limit capacity (as in the March 13th Louisiana order). Other such orders require non-essential businesses to “cease all activities in the County” (as in the Napa County Shelter at Home order). The Napa County order does not exempt restaurants as “essential businesses,” except when providing food for take-out or delivery. Other orders, still, directly address restaurants and require them to cease allowing public consumption of food and beverages (as in the subsequent, March 17th Louisiana order).
Reprinted courtesy of
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and
Melanie A. McDonald, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. McDonald may be contacted at mam@sdvlaw.com
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Generally, What Constitutes A Trade Secret Is A Question of Fact
February 01, 2021 —
David Adelstein - Florida Construction Legal UpdatesIn construction, contractors maintain competitiveness by compiling, combining, utilizing, or developing proprietary and unique systems. The systems can be from a cost standpoint (determining general conditions or general requirement costs and percentages including percentages for insurance) or can be with respect to certain construction assembly or delegated design components. Such proprietary and unique systems are trade secrets to the contractors and efforts are taken to identify such information as confidential when proposing on a project. Contractors would not want such systems disclosed to others because it would dilute and impact what they believe is valuable and makes them competitive in the marketplace.
Florida’s Uniform Trade Secret Act (“FUTSA”) creates a statutory cause of action for the misappropriation of trade secrets. (FUTSA is set forth in Florida Statute s. 688.001 en seq.) FUTSA displaces or “preempts all claims [such as common law claims] based on misappropriation of trade secrets.” Alphamed Pharmaceuticals Corp. v. Arriva Pharmaceuticals, Inc., 391 F.Supp.2d 1148, 1167 (S.D.Fla. 2005). See also Fla. Stat. s. 688.008.
Florida Statute s. 688.002 (found here) defines the terms “trade secret” and “misappropriation.”
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
