Louisiana Court Holds That Application of Pollution Exclusion Would Lead to Absurd Results
October 21, 2019 —
Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery BlogA Louisiana court recently denied an excess insurer’s bid for summary judgment, finding that the insurer’s interpretation of a pollution exclusion would lead to “absurd results.”
Central Crude, Inc., a crude oil transporter company, experienced an oil pipeline leak, allegedly causing damage to property belonging to Columbia Gas Transmission Company. Columbia Gas sued Central Crude seeking compensatory damages and injunctive relief to compel remediation of the site. Central Crude sought coverage under a CGL primary insurance policy issued by Liberty Mutual. The insurer initially agreed to cover Central Crude’s “reasonable and necessary costs” relating to the incident, but later refused to defend or indemnify Central Crude for any costs incurred from the incident. As a result, Central Crude brought suit against Liberty Mutual and its excess insurer, Great American, to enforce coverage.
Great American moved for summary judgment arguing coverage was excluded by the excess policy’s pollution exclusion, which precludes coverage for injury “arising out of a discharge of pollutants.” Central Crude responded arguing that the exclusion’s applicability was invalidated or at least rendered ambiguous by the Following Form Endorsements, which reflect an intent to mirror the coverage afforded under the primary Liberty Mutual policy, and because coverage appears to be specifically authorized through the Premises Operations Liability Endorsement.
Reprinted courtesy of
Sergio F. Oehninger, Hunton Andrews Kurth and
Daniel Hentschel, Hunton Andrews Kurth
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Hentschel may be contacted at dhentschel@HuntonAK.com
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Fannie-Freddie Elimination Model in Apartments: Mortgages
April 08, 2014 —
Sarah Mulholland – BloombergThe apartment-lending units of Fannie Mae (FNMA) and Freddie Mac were among their few money makers after the U.S. housing collapse. Now they should help transform the U.S. mortgage industry.
Lawmakers seeking to eliminate the two government lenders, which were seized by regulators during the 2008 credit crisis, see an antidote to the reckless lending that blew up the U.S. housing market in the structure of the firms’ multifamily operations, which share risks with lenders.
Senate Banking Committee Chairman Tim Johnson and Republican Mike Crapo are proposing legislation to create a new government-backed reinsurer of mortgage bonds that would require private investors to bear losses on the first 10 percent of capital. The model for the provision mirrors Fannie Mae and Freddie Mac (FMCC)’s multifamily lending operations, requiring lenders to shoulder some of the risk on loans they originate.
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Sarah Mulholland, BloombergMs. Mulholland may be contacted at
smulholland3@bloomberg.net
Hurricane Claim Cannot Survive Anti-Concurrent Causation Clause
May 15, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe court upheld the insurer's denial of coverage for hurricane damage caused by storm surge. Heritage Motorcoach Resort & Marina Condominium Association, Inc v. Axis Ins. Co., 2023 U.S. Dist. LEXIS 58931 (S.D. Ala. April 4, 2023).
Heritage operated a resort with a marina, dock and clubhouse. Hurricane Sally caused damage to the property. Heritage submitted a claim to its insurer, Axis. Axis investigated the claim. One investigator reported that the marina structures sustained damage caused by storm tide forces, wave action and debris impact. He opined that the marina structures did not sustain wind damage. When deposed, he testified that there was a combination of vessels and wave action causing damage to the marina. A second investigator found that the storm drove boats and other debris into the marina area causing much of the damage.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Kiewit Hired as EPC for Fire-Damaged Freeport Gas Terminal Fix
September 19, 2022 —
Mary B. Powers - Engineering News-RecordFreeport LNG’s $13.5-billion natural gas liquefaction plant and export terminal in Texas, closed since a June 8 fire and explosion that damaged the facility, said it will not partially reopen until possibly mid-November, and not fully operate until next March—the third delay it has announced.
Reprinted courtesy of
Mary B. Powers, Engineering News-Record
ENR may be contacted at enr@enr.com
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Nondelegable Duties
June 04, 2024 —
David Adelstein - Florida Construction Legal UpdatesHave you heard the expression “nondelegable duty”? The issue of a nondelegable duty comes into play when a party hires an independent contractor and the independent contractor commits negligence, primarily in the personal injury context. In other words, a plaintiff wants to hold a defendant liable for the injuries caused by the defendant’s independent contractor.
A nondelegable duty is one that “may be imposed by statute, contract, or the common law. In determining whether a duty is nondelegable, the question is whether the responsibility at issue is so important to the community that an employer should not be allowed to transfer it to a third party.” Garcia v. Southern Cleaning Service, Inc., 360 So.3d 1209, 1211 (Fla. 3d DCA 2023) (internal citation omitted).
When it comes to CONTRACTUAL duties:
[S]pecifically the principle that one who undertakes by contract to do for another a given thing cannot excuse himself to the other for a faulty performance by showing that he hired someone else to perform the task and that other person was the one at fault. In other words, where the contracting party makes it her or his duty to perform a task, that party cannot escape liability for the damage caused to the other contracting party by the negligence of independent contractors hired to carry out the task.
Gordon v. Sanders, 692 So.2d 939, 941 (Fla. 3d DCA 1997).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
California Supreme Court Finds Vertical Exhaustion Applies to First-Level Excess Policies
August 26, 2024 —
Tred R. Eyerly - Insurance Law HawaiiAddressing issues left open in its seminal decision in Montrose, the California Supreme Court found that the language in the first-level excess policies meant that the insured could access the policies upon exhaustion of the directly underlying policies purchased for the same policy period. Truck Ins. Exchange v. Kaiser Cement & Gypsum Corp., 2024 Cal. LEXIS 3271 (Cal. June 17, 2024).
From 1944 through the 1970's, Kaiser manufactured asbestos-containing products at numerous different facilities. By 2004, more than 24,000 claimants had filed product liability claims against Kaiser alleging that they had suffered bodily injury as a result of exposure to Kaiser's asbestos products. Kaiser tendered these claims to Truck, one of several primary insurers that had issued CGL policies to Kaiser.
In 2001, Truck initiated this coverage action to determine its indemnity and defense obligations to Kaiser. Truck later amended its complaint to add a cause of action for contribution against several of Kaiser's excess insurers. The issue presently before the court was whether Truck was entitled to contribution from various coinsurers that issued first-level excess policies to Kaiser during the period in question.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
DOI Aims to Modernize its “Inefficient and Inflexible” Type A Natural Resource Damages Assessment Regulations
March 25, 2024 —
Amanda G. Halter, Jillian Marullo & Ashleigh Myers - Gravel2Gavel Construction & Real Estate Law BlogThe U.S. Department of the Interior (DOI) published a
proposed rule aimed at modernizing and streamlining the “Type A” Natural Resource Damage Assessment (NRDA) regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Clean Water Act (CWA). (The comment deadline was later
extended.) The revisions,
first previewed in a January 2023 Advanced Notice of Proposed Rulemaking (ANPR), are intended to fulfill “the original statutory purpose of providing a streamlined and simplified assessment process” with the overarching goal of facilitating settlements and expediting restoration efforts following injury resulting from pollution in a broader range of cases.
The NRDA regulations provide two paths to assessing natural resource damages (NRD): (1) the more complex, site-specific Type B procedures for detailed NRDAs and (2) what is intended to be the standard, simplified Type A assessment procedures requiring minimal field observation. Particularly, the Type A process is reserved for two specific aquatic environments (coastal and marine areas or Great Lakes environments) when a relatively minor release of a single hazardous substance occurs, resulting in a smaller scale and scope of natural resource injury, and the rebuttal presumption for the Type A procedure is limited to damages of $100,000 or less under the current version of the rule.
Reprinted courtesy of
Amanda G. Halter, Pillsbury,
Jillian Marullo, Pillsbury and
Ashleigh Myers, Pillsbury
Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Ms. Marullo may be contacted at jillian.marullo@pillsburylaw.com
Ms. Myers may be contacted at ashleigh.myers@pillsburylaw.com
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Builders Beware: Smart Homes Under Attack by “Hide ‘N Seek” Botnet
October 30, 2018 —
Scott L. Satkin & Amtoj S. Randhawa - Newmeyer & Dillion LLPGerman manufacturer eQ-3 has found itself under siege by a botnet known as "Hide 'N Seek." This pernicious malware has infected tens of thousands of eQ-3's smart home devices by compromising the device's central control unit. Once a device has been infected, the malware spreads to other Internet of Things ("IoT") devices connected to the same wireless network. IoT devices have become the prime target for botnet attacks. As opposed to computers, laptops, or other larger computing devices, the smaller storage capacity and lower processing power of IoT devices limit the amount and complexity of the security measures that can be installed—making them an easier target for botnets.
What is a Botnet?
For those unfamiliar with the term, a botnet is a network of devices infected with a malware program allowing the infector to control and/or exploit the devices. Once a suitable number of devices are infected, the person or group controlling the botnet can harness the computing power of each infected device to perform activities which were previously constrained by a single device's capabilities (i.e. DDoS attacks, spamming, cryptocurrency mining, etc.).
Hide 'N Seek – History and Capabilities
The Hide 'N Seek botnet first appeared in January 2018 and has since spread rapidly. Its sophisticated design and capabilities have captivated the attention of many security watchdogs and researchers. While many botnets are designed to be "quick and dirty" (i.e. infect a few devices, eke out a little profit, and inevitably be cleared out or rendered ineffective by security updates and fixes), Hide 'N Seek was designed to maintain itself in the host's system indefinitely. When it was first released, Hide 'N Seek primarily targeted certain routers and internet-enabled security cameras; however, it has now began targeting digital video recorders, database servers, and most recently, smart home hubs.
Hide 'N Seek's communication capabilities are also more advanced than previous botnets. Previous botnets relied on existing communications protocols to communicate with other another, but Hide 'N Seek uses a custom-built peer-to-peer system to communicate. This advancement allows Hide 'N Seek to spread more rapidly than previous botnets.
Hide 'N Seek is also capable of extracting a device owner's personal information (i.e. name, address, e-mail, telephone numbers, etc.) whereas previous botnets were not. Most importantly, Hide 'N Seek is consistently updated to increase its infection rate, decrease its detection probability, and bypass any security measures designed to detect and remove it from the system. This modularity has proved to be Hide 'N Seek's greatest strength.
Protecting Against Hide 'N Seek and Other Botnets
While many of the precautions will undoubtedly come from the device manufactures vis-à-vis software programming and updates, homebuilders can still take some precautions to protect their customers.
- When selecting a smart home system to incorporate into a home's construction, be sure to evaluate its security features including, but not limited to its: wireless connectivity, password/passphrase requirements, interconnectedness with other IoT devices, etc. Third-party reviews from tech-oriented outlets will likely have useful information on a device's security measures, vulnerabilities, and any recent security compromises.
- Be vigilant in installing any eQ-3 smart home systems. The extent of the damage caused by Hide 'N Seek botnet remains unknown, as does damage from other potentially-infected technology. Thus, it may be prudent to avoid installing any eQ-3 device until it becomes evident that the threat has been neutralized and all security vulnerabilities have been remedied.
- If a builder uses technology other than eQ-3, precautions must be taken. Ensure that technology providers are thoroughly researched. It is also recommended to include strong contractual indemnity provisions, and require vendors to carry cyber-specific insurance policies.
- Homebuilders should consider purchasing their own stand alone cyber liability policies as a safety net, should potential exposure arise.
Scott Satkin and Amtoj Randhawa are associates in the Cybersecurity group of Newmeyer & Dillion. Focused on helping clients navigate the legal dispute implications of cybersecurity, they advise businesses on implementing and adopting proactive measures to prevent and neutralize cybersecurity threats. For questions on how they can help, contact Scott at scott.satkin@ndlf.com and Amtoj at amtoj.randhawa@ndlf.com.
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