Patriarch Partners Decision Confirms Government Subpoenas May Constitute a “Claim” Under D&O Policy; Warns Policyholders to Think Broadly When Representing Facts and Circumstances to Insurers
January 08, 2019 —
Michael S. Levine, Sergio F. Oehninger, & Joshua S. Paster - Hunton Andrews KurthThe Second Circuit recently confirmed in Patriarch Partners, LLC v. Axis Insurance Co. that a warranty letter accompanying the policyholder’s insurance application barred coverage for a lengthy SEC investigation, which ripened into a “Claim” prior to the policy’s inception date. The opinion left intact the lower court’s finding that the SEC subpoena constituted a “demand for non-monetary relief” and thus qualified as a “Claim” under the directors and officers (D&O) insurance policy.
Reprinted courtesy of Hunton Andrews Kurth attorneys
Michael S. Levine,
Sergio F. Oehninger and
Joshua S. Paster
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Oehninger may be contacted at soehninger@HuntonAK.com
Mr. Paster may be contacted at jpaster@HuntonAK.com
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Insurer's Motion for Summary Judgment in Collapse Case Denied
November 10, 2016 —
Tred R. Eyerly – Insurance Law HawaiiThe court denied the insurer's motion for summary judgment seeking to establish it did not breach the policy when denying coverage for the collapse of basement walls. Belz v. Peerless Ins. Co., 2016 U.S. Dist. LEXIS 118900 (D. Conn. Sept. 2, 2016).
The Belzes purchased their home in 2001. Prior to the purchase, they were aware of notable cracking in the basement walls. An engineer was hired to inspect the cracking and determined the cracks did not threaten the structural integrity of the home.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Texas Court of Appeals Conditionally Grant Petition for Writ of Mandamus to Anderson
April 25, 2011 —
Beverley BevenFlorez CDJ STAFFThe Texas Court of Appeals conditionally grant mandamus relief to Anderson Construction Company and Ronnie Anderson (collectively “Anderson”)… from the trial court in a construction defect lawsuit filed by Brent L. Mainwaring and Tatayana Mainwaring. See Tex. Prop. Code Ann. 27.001-.007 (West 2000 & Supp. 2010). Relators contend the trial court abused its discretion by compelling discovery while the case was abated by operation of law.
The Court of Appeals opinion describes what led up to the proceedings: “The Mainwarings’ original petition identified certain defects in their Anderson-constructed home. Those defects concerned the roof trusses and framing, air conditioning, mortar and masonry, exterior doors and windows, and weep holes. With respect to the five areas of defects identified in their original petition, the Mainwarings gave Anderson the statutorily required notice on January 13, 2010. After implementing agreed extensions, Anderson made an offer of settlement for the defects the Mainwarings identified in their notice. Almost eight months later, the Mainwarings filed an amended petition adding defects they had not included in their original petition and notice. The additional defects the Mainwarings included in their amended petition had not been addressed by Anderson’s offer of settlement.”
Following these events, Anderson claimed the Mainwarings did not respond in writing to their settlement offer. “Anderson filed a verified plea in abatement on December 2, 2010. In the trial court, Anderson claimed that the Mainwarings failed to respond in writing to Anderson’s settlement offer, as required by Section 27.004(b) of the RCLA. See Tex. Prop. Code Ann. 27.004(b)(1). The Mainwarings moved to compel discovery responses from Anderson. The Mainwarings alleged that they rejected Anderson’s settlement offer, and that if their response was insufficient, they contend that Anderson’s offer was rejected by operation of law on the twenty-fifth day after the Mainwarings received it. See Tex. Prop. Code Ann. 27.004(i). The Mainwarings’ motion to compel was not supported by affidavit. See Tex. Prop. Code Ann. 27.004(d)(2). On January 13, 2011, Anderson filed a verified supplemental plea in abatement. Anderson alleged that the Mainwarings failed to provide written notice concerning the newly alleged defects and complained the Mainwarings were attempting to circumvent the inspection and resolution procedure of the RCLA. Over Anderson’s objection that the lawsuit had been abated, the trial court granted the Mainwarings’ motion to compel discovery.”
After listening to both sides, the Court of Appeals offered this reasoning for their opinion: “The parties do not dispute that Anderson inspected the property before the Mainwarings alleged the existence of additional defects in their amended pleading, nor do the Mainwarings claim that Anderson has been given an opportunity to inspect the additional defects the Mainwarings identified in their amended pleadings. We conclude the trial court did not have the discretion to deny or lift the abatement until the Mainwarings established their compliance with the statute. In other words, the Mainwarings are required to provide Anderson a reasonable opportunity to inspect the additional defects identified by their amended pleading, which will allow Anderson the opportunity to cure or settle with respect to the newly identified defects.”
The Court of Appeals spoke directly on the issue of mandamus relief: “The Mainwarings contend that mandamus relief is not available because the trial court’s ruling does not prevent Anderson from making settlement offers during the discovery process. ‘An appellate remedy is “adequate” when any benefits to mandamus review are outweighed by the detriments.’ In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 136 (Tex. 2004). The failure to abate a case is typically not subject to mandamus. See In re Allstate Cnty. Mut. Ins. Co., 85 S.W.3d 193, 196 (Tex. 2002) (citing Abor v. Black, 695 S.W.2d 564, 567 (Tex. 1985)). In this case, however, the case was abated by operation of law. By ignoring the statutory abatement, the trial court interfered with the statutory procedure for developing and resolving construction defect claims. See In re Kimball Hill Homes Tex., Inc., 969 S.W.2d 522, 525 (Tex. App. Houston [14th Dist.] 1998, orig. proceeding) (An appeal provides an inadequate remedy for the trial court’s failure to observe automatic abatement pursuant to the RCLA.). The benefits of mandamus review are not outweighed by the detriments of mandamus review in this case.“
In conclusion, “The trial court had no discretion to compel discovery while the case was abated, and Anderson, who has been compelled to respond to discovery during a period the case was under an automatic abatement, has no adequate remedy on appeal. Accordingly, we conditionally grant the petition for writ of mandamus. The writ will issue only if the trial court fails to vacate its order of February 3, 2011, and fails to refrain from proceeding with the case until a motion to reinstate is filed that establishes compliance with the notice and inspection requirements of the Residential Construction Liability Act.”
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Payne & Fears LLP Recognized by Best Lawyers in 2024 “Best Law Firms” Rankings
November 27, 2023 —
Payne & Fears LLPPayne & Fears LLP has been recognized by Best Lawyers 2024 “Best Law Firms” list. Firms included in the 2024 edition of Best Lawyers “Best Law Firms” are recognized for professional excellence with consistently impressive ratings from clients and peers.
Payne & Fears LLP has been ranked in the following practice areas:
- Metropolitan Tier 1
- Orange County
- Commercial Litigation
- Employment Law – Management
- Insurance Law
- Labor Law – Management
- Litigation – Labor & Employment
- Litigation – Real Estate
- Metropolitan Tier 3
- Orange County
- Litigation – Intellectual Property
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Wilke Fleury Attorneys Featured in 2021 Best Lawyers in America and Best Lawyers: Ones To Watch!
August 16, 2021 —
Wilke Fleury LLPWilke Fleury congratulates attorneys David Frenznick, Adriana Cervantes and Dan Egan on their inclusion in the 2021 Edition of Best Lawyers in America!
Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 108,000 industry leading lawyers are eligible to vote (from around the world), and they have received over 13 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2021 Edition of The Best Lawyers in America©, 9.4 million votes were analyzed.
Daniel L. Egan – Recognized in Best Lawyers since 2021
- First year recognized in Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law: 2021
David A. Frenznick – Recognized in Best Lawyers since 2016
- First year recognized in Litigation – Real Estate: 2016
Adriana C. Cervantes – Recognized in Best Lawyers: Ones to Watch*
- First year recognized in Medical Malpractice Law – Defendants: 2021
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Wilke Fleury LLP
Do Not Forfeit Coverage Under Your Property Insurance Policy
February 22, 2021 —
David Adelstein - Florida Construction Legal UpdatesIf you have read prior articles (see
here and
here as an example), then you know that when it comes to first-party property insurance policies, an insured must comply with post-loss obligations in the policy. Failure to comply with a post-loss obligation gives the insurer the argument that the insured materially breached the policy and, therefore, forfeited rights to coverage. Naturally, this is avoidable by ensuring post-loss obligations are complied with, ideally under the guidance of counsel and qualified public adjusters to ensure your rights are being preserved and maximized.
[W]hen an insurer has alleged, as an affirmative defense to coverage, and thereafter has subsequently established, that an insured has failed to substantially comply with a contractually mandated post-loss obligation, prejudice to the insurer from the insured’s material breach is presumed, and the burden then shifts to the insured to show that any breach of post-loss obligations did not prejudice the insurer.
Universal Property & Casualty Ins. Co. v. Horne, 46 Fla.L.Weekly D201b (Fla. 3d DCA 2021) quoting American Integrity Ins. Co. v. Estrada, 276 So.3d 905, 916 (Fla. 3d DCA 2019).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Another Municipality Takes Action to Address the Lack of Condominiums Being Built in its Jurisdiction
March 12, 2015 —
Heather M. Anderson – Higgins, Hopkins, McLain & Roswell, LLCWhether you are in the market to downsize or are looking to be a first time home buyer, you have likely noticed that your housing options in Colorado have become extremely limited over the course of the last several years. If you are a contractor and have worked on multi-family projects in the recent past, you know why the housing options are limited in the State of Colorado. In the past two years, there have been studies commissioned and articles published in local periodicals investigating the extreme slowdown seen in the construction of owner-occupied multi-family housing, namely condominiums and townhomes. Those of us involved in and with the construction industry are intimately familiar with the lengthy, complicated, and incredibly expensive construction defect litigation that has plagued multi-family construction in the State of Colorado and brought it to a virtual halt.
And now, local municipalities and elected officials are starting to take notice. Most recently, the City of Lone Tree passed Ordinance No. 15-01, to become effective on April 1, 2015. According to the City of Lone Tree, Ordinance No. 15-01 is “aimed at encouraging the development of owner-occupied, multi-family residential projects through the adoption of regulations designed to balance the risk and exposure to builders and developers of such projects, while still protecting homeowners from legitimate construction defect claims.”
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Heather M. Anderson, Higgins, Hopkins, McLain & Roswell, LLCMs. Anderson may be contacted at
Anderson@hhmrlaw.com
California Supreme Court Upholds Precondemnation Procedures
September 22, 2016 —
Patrick J. Paul – Snell & Wilmer Real Estate Litigation BlogOn July 21, 2016, the California Supreme Court in Property Reserve v. Superior Court upheld the state’s precondemnation entry and testing statutes provided they were reformed to allow impacted property owners the ability to have a jury trial to determine damages associated with such entry and testing.
The California Department of Water Resources (DWR) sought to construct water conveyance facilities that would require significant property condemnation. As part of this process, DWR further sought to investigate the environmental and geological suitability of more than 150 private properties considered for the conveyance route.
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Patrick J. Paul, Snell & Wilmer Mr. Paul may be contacted at
ppaul@swlaw.com
