SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Insurer's In-House Counsel's Involvement in Coverage Decision Opens Door to Discovery

January 11, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The Mississippi Supreme Court held that the insurer must produce written communications from and make available for deposition the in-house counsel who orchestrated the denial of coverage. Travelers Pro. Cas. Co. of Am. v. 100 Renaissance, LLC, 2020 Miss. LEXIS 409 (Miss. Oct. 29, 2020). An unidentified driver struck a flagpole owned by the insured Renaissance, causing $2,134 in damages. Renaissance filed a claim with Travelers for uninsured-motorist coverage. The Travelers' claims handler, Charlene Duncan, determined there was no coverage because the flagpole was not a covered auto. Before corresponding with the insured, Duncan sought legal advice from Travelers' in-house counsel, Jim Harris. Renaissance sued Travelers for coverage and bad faith. Renaissance then took Duncan's deposition and asked that she explain both the denial letter and the reasons Travelers denied the claim. Duncan repeatedly said she did not know the basis of the denial and that she had consulted with Harris. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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New Jersey Court Adopts Continuous Trigger for Construction Defect Claims

November 15, 2017 — Tred R. Eyerly - Insurance Law Hawaii
The 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. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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Documenting Contract Changes in Construction

December 07, 2020 — J.D. Holzheauser - Construction Executive
Construction projects are almost inevitably subject to changes in the contract. A fundamental understanding of construction changes, how those changes are governed and what is necessary to ensure a complete change are of paramount importance to all parties involved in a construction project. This article is not a treatise on construction contract changes; rather, it provides advice on actions a contractor can take during construction that will help the contractor recover time or money when a contract’s schedule or scope of work needs to be changed. Changes Defined Changes to a construction project affect two broad spheres—timing and scope of work. Changes usually present themselves as either a change order or a change directive. Each may go by a different name depending on the contractual scheme in the project’s prime contract, but they essentially have the same characteristics. The difference between a change order and a change directive is one of agreement. A change order (in the owner-prime contractor context) occurs when the contractor and the owner agree to a change in the timing or scope of work in the contract. Normally, the change order is a written agreement to change the contract and is executed by the contractor and owner. Reprinted courtesy of J.D. Holzheauser, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Holzheauser may be contacted at jdholzheauser@pecklaw.com Read the court decision
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Not Just Another Client Alert about Cyber-Risk and Effective Cybersecurity Insurance Regulatory Guidance

April 01, 2015 — Robert Ansehl – White and Williams LLP
The prefix "cyber" was coined about 70 years ago to describe early stage computers, computer networks and virtual reality. Since then, the term has been used as a prefix for hundreds of words, however, the most recent (and newsworthy) usage is its link to the word “risk” and the correlative term “security.” Two sides of the same coin and not a day goes by when a data breach is not reported and the importance of cyber risk and cybersecurity underscored. Insurers, like other financial institutions, are at the forefront of the “cyber-curve.” Many insurers are particularly vulnerable on at least two fronts: (1) from a cyber risk/ cyber invasion perspective and; (2) an insurer’s insurance policy exposure, intentional and not, to third-parties under cyber policies, and even policies such as CGLs that may inadvertently cover such risks. A number of federal and state regulators have spoken to this issue in an effort to address cyber risks with varying degrees of specificity. At last count, in addition to a myriad of existing and proposed state laws and regulations, there are at least nine federal Bills under consideration by Congress (covering six federal agencies including one new agency) that seek to impose regulatory requirements upon the cyber-arena. Those Bills empower six regulatory agencies; including one new agency. Initially, some states required companies to notify affected persons of a data breach. As breaches became more serious, state and federal regulators sought to increase the industry’s awareness of the potential exposures and provided instructions on appropriate steps to protect data from cyber invasions. Now, state insurance regulators are examining not only the threat of data theft, but the balance sheet impact of insurance exposures for underwriting such risks for third-parties’ under cyber risk policies. The regulatory efforts continue to multiply in an effort to stem some of these risks. Read the court decision
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Reprinted courtesy of Robert Ansehl, White and Williams LLP
Mr. Ansehl may be contacted at ansehlr@whiteandwilliams.com

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New Jersey Appeals Court Ruled Suits Stand Despite HOA Bypassing Bylaw

January 22, 2014 — Beverley BevenFlorez-CDJ STAFF
In the case Port Liberte II Condominium Association v. New Liberty Residential Urban Renewal Company, a New Jersey appeals court ruled that a homeowners association (HOA) could bypass a bylaw that requires unit owners to approve litigation before it is filed, the New Jersey Law Journal reported. Two construction-defect suits were reinstated by the appeals court, and both had been “dismissed based on alleged violation of the bylaws.” The first suit “claimed the defendants' negligence contributed to major construction defects at the 225-unit condominium development, which was completed in 2004” while “the second suit claimed that one section of the development is sinking into the ground because of a failure to properly investigate soil conditions at the former industrial site where the buildings sit.” According to the New Jersey Law Journal, the HOA did not obtain approval from the unit owners prior to commencing litigation because “the statute of limitations was about to expire.” However, the HOA met with the residents in October of 2009 and a vote was cast “72 to 3 to pursue litigation.” In May of 2011 the second suit was dismissed because defendants stated “approval of residents was not obtained.” Another meeting of residents occurred, and another vote cast ratified “both suits by a vote of 65 to 1.” However, Judge Baber, who had previously dismissed both suits, refused to reinstate them. “The Appellate Division said in its ruling that the Condominium Act, N.J.S.A. 46:8B-1, gives the association the exclusive authority to file suit against builders and other third parties for damage to common areas in the community,” the New Jersey Law Journal reported. “Given its legal responsibility for upkeep of common areas, and its statutory authorization to sue for damages to such areas, the association had standing to file suit, the appeals court said.” Read the court decision
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Even Where Fraud and Contract Mix, Be Careful With Timing

April 12, 2021 — Christopher G. Hill - Construction Law Musings
I have often discussed the limited circumstances under which a construction contract claim and a fraud claim can coexist. A recent case from the Western District of Virginia federal court demonstrates that care is necessary even in those limited circumstances. In Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys., the Court examined the question of a fraud statute of limitations under Virginia law. The basic facts found in the Complaint are these: In 2011, the United States Army awarded BAE Systems Ordinance Systems Inc. a basic ordering agreement under which BAE was responsible for modernization projects at the Radford Army Ammunition Plant. This action stems from a subcontract between Fluor Federal Solutions LLC and BAE, under which Fluor agreed to design and construct a new natural gas boiler at the plant. Fluor has completed work on the project, and BAE has accepted that work. Nonetheless, Fluor claims that BAE has refused or failed to pay for the balance of the project costs. Fluor alleges that BAE received several changes to its prime contract from the Army but did not pass those changes along to Fluor until after BAE solicited a bid from Fluor and entered a contract with Fluor to build a temporary facility. Instead, BAE continued to misrepresent the scope of the project. Fluor alleges that the change in plans increased costs substantially, but that BAE withheld information about those changes so that it could solicit lower bids. Fluor alleges that it requested a copy of BAE’s prime contract on numerous occasions, but BAE failed to provide a copy of it. Instead, Fluor submitted a request under the Freedom of Information Act. It received a copy of BAE’s prime contract on Oct. 3, 2018. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

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Supreme Court Upholds Prevailing Wage Statute

August 19, 2024 — Ahlers Cressman & Sleight PLLC
Historically, the prevailing wage was calculated by averaging the wages within a certain industry and county. However, in 2018 the Washington Legislature amended the statute so that the prevailing wage would be assessed based on the highest wage set by collective bargaining agreements in the county. The amendment (RCW 39.12.015(3)) reads as follows: (3)(a)…the industrial statistician shall establish the prevailing rate of wage by adopting the hourly wage, usual benefits, and overtime paid for the geographic jurisdiction established in collective bargaining agreements… (b) For trades and occupations in which there are no collective bargaining agreements in the county, the industrial statistician shall establish the prevailing rate of wage by…conducting wage and hour surveys. So, for example, if union engineers bargain for a wage, that is the wage all engineers in the county must be paid on public projects. The legislature passed this law for the sake of efficiency because it took significant resources for the Industrial Statistician to compute the prevailing wage for every trade and every county, but the law has significant knock-on effects. Read the court decision
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Reprinted courtesy of Ahlers Cressman & Sleight PLLC

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Texas Supreme Court Finds Payment of Appraisal Award Does Not Absolve Insurer of Statutory Liability

April 19, 2021 — Allison Griswold & Sarah Smith - Lewis Brisbois
The Texas Supreme Court recently published its long-awaited decision in the Hinojos v. State Farm Lloyds. In it, the court affirmed its holding in Barbara Technologies, finding that payment of an appraisal award does not absolve an insurer of statutory liability when the insurer accepts a claim but pays only part of the amount it owes within the statutory deadline, and a policy holder can proceed with an action under the Texas Prompt Payment of Claims Act. In 2013, Louis Hinojos made a claim for storm damage to his home. State Farm’s initial inspection resulted in an estimate below the deductible, but Hinojos disagreed and requested a second inspection. At the second inspection, the adjuster identified additional damage resulting in a payment to Hinojos of $1,995.11. Hinojos then sued State Farm – and State Farm invoked appraisal approximately 15 months after suit was filed. The appraisal resulted in State Farm tendering an additional payment of $22,974.75. State Farm moved for summary judgment, arguing that timely payment of an appraisal award precluded prompt payment (or Chapter 542) damages. The trial court granted summary judgment and Hinojos appealed (notably Barbara Technologies had not yet been decided). The Court of Appeals affirmed State Farm’s victory on the basis that “State Farm made a reasonable payment on Hinojos’s claim within the sixty-day statutory limit….” Hinojos petitioned the Texas Supreme Court for review. Reprinted courtesy of Allison Griswold, Lewis Brisbois and Sarah Smith, Lewis Brisbois Ms. Griswold may be contacted at Allison.Griswold@lewisbrisbois.com Ms. Smith may be contacted at Sarah.Smith@lewisbrisbois.com Read the court decision
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