NY State Appellate Court Holds That Pollution Exclusions Bar Duty to Defend Under Liability Policies for Claims Alleging Exposure to PFAS
February 01, 2022 —
Robert F. Walsh & Paul A. Briganti - White and Williams LLPOn January 6, 2022, the New York Supreme Court, Appellate Division, Third Department, held that the “sudden and accidental” pollution exclusion (SAPE) and “absolute” pollution exclusion (APE) in liability policies relieved two insurers of a duty to defend the insured-manufacturer in connection with claims alleging damages as a result of exposure to perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), which are man-made chemicals within the group of per- and polyfluoroalkyl substances (PFAS). See Tonoga, Incorporated v. New Hampshire Insurance Company, No. 532546, 2022 N.Y. App. Div. LEXIS 105 (App. Div. 3rd Dep’t Jan. 6, 2022).
In Tonoga, starting in 1961, the insured and its predecessors owned and operated a manufacturing facility in Petersburg, New York that produced materials coated with polytetrafluoroethylene (PTFE). Until 2013, the manufacturing process involved the use of PFOA and/or PFOS. In early 2016, excessive PFOA and/or PFOS concentrations were detected in Petersburg’s municipal water supply. Later that year, the New York Department of Environmental Conversation designated the insured’s facility a Superfund site, and the insured entered into a consent agreement that required it to assist in remedial measures. 2022 N.Y. App. Div. LEXIS 105, at *1-2.
Reprinted courtesy of
Robert F. Walsh, White and Williams LLP and
Paul A. Briganti, White and Williams LLP
Mr. Walsh may be contacted at walshr@whiteandwilliams.com
Mr. Briganti may be contacted at brigantip@whiteandwilliams.com
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The Year 2010 In Review: Design And Construction Defects Litigation
February 25, 2011 —
Candace Matson, Harold Hamersmith, and Helen LauderdaleThis article is the first in a series summarizing construction law developments for 2010
1. Centex Homes v. Financial Pacific Life Insurance Co., 2010 U.S. Dist. LEXIS 1995 (E.D. Cal. 2010)
After settling numerous homeowners’ construction defect claims — and more than ten years after the homes were substantially completed — a home developer brought suit against one of the concrete fabrication subcontractors for the development seeking indemnity for amounts paid to the homeowners, as well as for damages for breach of the subcontractor’s duties to procure specific insurance and to defend the developer against the homeowners’ claims. The subcontractor brought a motion for summary adjudication on the ground the developer’s claims were barred by the ten year statute of repose contained in Code of Civil Procedure Section 337.15.
The District Court agreed the developer’s claim for indemnity was barred by Section 337.15. And it held that because the damages recoverable for breach of the subcontractor’s duty to purchase insurance are identical to the damages recoverable through the developer’s indemnity claim, the breach of duty to procure insurance claim also was time-barred. The District Court, however, allowed the claim for breach of the duty to defend to proceed. The categories of losses associated with such a claim (attorneys’ fees and other defense costs) are distinct from the damages recoverable through claims governed by Section 337.15 (latent deficiency in the design and construction of the homes and injury to property arising out of the latent deficiencies).
2. UDC — Universal Development v. CH2M Hill, 181 Cal. App. 4th 10 (6th Dist. Jan. 2010)
Indemnification clauses in construction agreements often state that one party to the agreement — the “indemnitor” — will defend and indemnify the other party from particular types of claims. Of course, having a contract right to a defense is not the same as actually receiving a defense. Any indemnitor attempting to avoid paying for defense costs can simply deny the tender of defense with the hope that when the underlying claim is resolved the defense obligations will be forgotten. In the past, when parties entitled to a defense — the “indemnitees” — had long memories and pressed to recover defense costs, indemnitors attempted to justify denying the tender by claiming their defense obligations coincided with their indemnity obligations and neither arose until a final determination was made that the underlying claim was one for which indemnity was owed.
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Reprinted courtesy of Candace Matson, Harold Hamersmith, and Helen Lauderdale, Sheppard Mullin Richter & Hampton LLP. Ms. Matson can be contacted at cmatson@sheppardmullin.com, Mr. Hamersmith can be contacted at hhamersmith@sheppardmullin.com, and Ms. Lauderdale can be contacted at hlauderdale@sheppardmullin.com.
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Design-Build Contracting: Is the Shine Off the Apple?
March 09, 2020 —
John P. Ahlers - Ahlers Cressman & Sleight PLLCThe design-build delivery method offers many benefits to owners. Among the cited benefits are that projects are generally completed faster, at a lower cost, by allowing innovative approaches through early and continual contractor involvement in the design process. The design contractor serves as a single point of contact responsible for both the design and construction of the project.
The Washington State Department of Transportation (“WSDOT”) utilized the design-build procurement method on the largest project ($2 billion) of its type in the state of Washington: the Highway 99 Tunnel, which was finished almost three years late after the tunnel-boring machine (“Bertha”) broke down six years ago. The sorted tale of the SR-99 Tunnel Project was the source of many of this firm’s blog articles.[1] The State of Washington staunchly maintained that the design-build contract protected its taxpayers from covering the repair costs to the tunnel-boring machine when it broke down in 2013. Bertha did not resume tunneling for almost two years, putting on hold removal of the Alaska Way viaduct and rebuilding of the Seattle Waterfront without an elevated highway.
In December 2013, the contractor for the project, Seattle Tunnel Partners (“STP”), contended that a 110-foot long 8” steel pipe which Bertha hit caused the breakdown. That pipe had been installed for groundwater testing by WSDOT in 2002 during its preliminary engineering for the viaduct replacement project. The project’s Dispute Review Board (“DRB”) composed of three tunneling experts found that the pipe constituted a “differing site condition” for which the State was responsible to disclose to contractors. The Board, whose views were non-binding, did not opine about how much damage the undisclosed pipe cost.[2] In other words, the mere fact that a differing site condition occurred did not establish that there was a causal connection between the damages which STP was seeking (in excess of $600 million) and the differing site condition (the 8” steel pipe which WSDOT lawyers at trial derisively referred to as “nothing more than a toothpick for Bertha’s massive cutter head”). STP maintained that Bertha had made steady progress except for three days immediately after hitting the pipe. It didn’t help the contractors’ case that during the discovery phase of the two-month trial, WSDOT lawyers uncovered documents showing that the contractor’s tunnel workers encountered and logged the pipe before digging began.[3]
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John P. Ahlers, Ahlers Cressman & Sleight PLLCMr. Ahlers may be contacted at
john.ahlers@acslawyers.com
CCPA Class Action Lawsuits Are Coming. Are You Ready?
March 23, 2020 —
Daniel Schneider & Jeffrey Dennis – Newmeyer DillionThe only certainties in life used to be death and taxes. In 2020, it would be safe to add California Consumer Privacy Act (CCPA) class actions to that "distinguished" list. On February 3, Barnes v. Hanna Andersson, LLC, N.D. Cal., Case No. 20-cv-00812, was filed in the Northern District of California, setting in motion the certainty that CCPA class actions are on their way, if not already here.* Filed on behalf of all California residents, the Barnes complaint alleges that between September and November 2019, clothing retailer Hanna Andersson and Salesforce, its online payment services provider, failed to properly safeguard the personally identifiably information (PII) of its customers after hackers stole customers' private information and posted it to the dark web for sale.
What You Need to Know
- Under the CCPA, a data breach is any unauthorized access, theft or disclosure of a consumer's non-encrypted and non-redacted personal information that results from a company's failure to implement and maintain "reasonable" security procedures and practices. Here, the complaint alleges that the defendants failed to maintain reasonable security procedures and practices in order to protect the consumers' PII.
- Although the CCPA is largely viewed as new law related to California consumers' privacy rights (and placement of subsequent obligations to companies doing business in California), the CCPA includes potentially draconian damages for a data breach permitted by unreasonable cybersecurity. Under the new law, an individual need not show any actual harm caused by a data breach, yet he/she may seek statutory fines of up to $750 per incident per individual in the event of a breach. Plaintiffs estimate that at least 10,000 California residents could have been affected by this breach, thereby exposing defendants to up to $7.5 million dollars in damages if proven true.
- There exists a duty to monitor and ensure that third party organizations are properly safeguarding a company's data. During the course of the investigation into the breach, it was discovered that the Salesforce ecommerce platform was infected with malware which allowed the hackers to steal consumers' PII from Hanna Andersson's website.
- The CCPA went into effect on January 1, 2020, yet enforcement by the California Attorney General is not allowed until July 2020. However, no such delay is required for private litigation under the data breach portion of the CCPA. Interestingly, although the complaint alleges that the data breach occurred in 2019, the court could choose to apply the CCPA but that is still yet to be determined.
While Barnes may be the first class action lawsuit to mention violation of the CCPA, it certainly will not be the last. In fact, numerous class actions lawsuits have been filed in the new year which either mention the CCPA or utilize CCPA-like language to style particular claims. As such, it is evident that the Plaintiffs' bar sees the CCPA as a potential for extensive class action litigation. Expect to see an ongoing deluge of class action litigation in California under the data breach portions of the CCPA. In addition, although the Barnes' plaintiffs may not be able to invoke the CCPA due to the data breach occurring in 2019 (before the CCPA took affect), Barnes serves as a stark reminder that implementing and maintaining reasonable data security is vital to defend a business against CCPA claims. Newmeyer Dillion can assist companies analyze their cyber risk profile, and provide access to experienced forensic teams which can ensure reasonable security exists in your organization.
*While Barnes does not yet expressly state a cause of action under the CCPA, relying upon violations of the California Unfair Competition Law in its place, we anticipate that an amendment will soon be filed to include a CCPA claim.
Daniel Schneider is a Partner in Newmeyer Dillion's Privacy & Data Security group. Focused on advocating on behalf of clients when cyber threats inevitably happen, Dan also advises on best practices to help protect the company and mitigate future concerns. Dan can be reached at daniel.schneider@ndlf.com.
Jeff Dennis (CIPP/US) is the Head of the firm's Privacy & Data Security practice. Jeff works with the firm's clients on cyber-related issues, including contractual and insurance opportunities to lessen their risk. For more information on how Jeff can help, contact him at jeff.dennis@ndlf.com.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that achieve client objectives in diverse industries. With over 70 attorneys working as a cohesive team to represent clients in all aspects of business, employment, real estate, environmental/land use, privacy & data security and insurance law, Newmeyer Dillion delivers holistic and integrated legal services tailored to propel each client's success and bottom line. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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Winners Announced in Seattle’s Office-to-Residential Call for Ideas Contest
July 10, 2023 —
Ryanne Mathisen - Ahlers Cressman & Sleight PLLCOn June 7, 2023, the City of Seattle announced three winners of its Office to Residential: Call for Ideas contest for which it received a total of 13 submissions. Hybrid Architecture, LLC, took first place; Gensler, Seattle Office Project Team took second; and the Miller Hull Partnership took third. Seattle’s Department of Construction and Inspections will study the submissions and determine what legislative and regulatory modifications would be necessary to support and further these proposals and other future office-to-residential conversion projects.
Seattle will also be holding a series of exhibitions over the coming weeks where project submissions will be available to the public. On June 14, 2023, from 5:30 PM to 7:30 PM, a reception will be hosted by the Seattle Architecture Foundation and the City at the American Institute of Architects. The gallery will also be open to the public from 10:00 AM to 5:00 PM on June 21, 28, and July 5. After June 14, 2023, those interested can access contest submissions at the
project website.
Seattle’s primary goal with this contest was to provide a vision for the future of downtown and begin charting a concrete path to getting there. Since working from home has become more common following the COVID-19 pandemic, vacancy rates in many office buildings have risen sharply, while housing availability and affordability remain ongoing issues. If Seattle can show a realistic—and profitable—path to converting commercial office spaces into residences, it would be addressing both problems, killing two birds with one stone.
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Ryanne Mathisen, Ahlers Cressman & Sleight PLLCMs. Mathisen may be contacted at
ryanne.mathisen@acslawyers.com
Elevators Take Sustainable Smart Cities to the Next Level
May 26, 2019 —
Chris Smith - Construction ExecutiveFrom electric cars to solar panels, technology has been at the forefront of innovation in sustainability efforts. As greenhouse gas emissions continue to be a critical global concern, developing smart cities and sustainable energy practices are more important than ever.
In fact, Gartner predicts that by 2020, half of all smart city objectives will be centered around climate change, resilience and sustainability. To build truly intelligent cities, we need to optimize the sharing of information at a foundational level, starting with the structures on which these cities are built.
Where do we begin?
The United Nations estimates that almost 40 percent of today’s global greenhouse gas emissions come from buildings. To reduce these levels, the industry needs to begin creating smarter structures that use data insights to streamline functions in the building, and this starts with the infrastructural backbone: the elevator.
Reprinted courtesy of
Chris Smith, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Steps to Defending against Construction Defect Lawsuits
July 21, 2011 —
CDJ STAFFWriting in Claims Journal, Bryan Rendzio notes that the decline in construction has not been matched by a decline in construction defect lawsuits over condominiums. He reviews the ways in which lawyers representing developers can help protect their clients. He identifies four important considerations in defending developers from claims of construction defects.
He advocates a careful review of the contract. “Under a breach of contract claim, the insured’s duties to the party who brought the claim against the insured flow from the contract. Commonly, construction contracts limit the scope of recoverable damages, such as by waiving consequential damages.’
The next step, according to Rendzio is to check of a settlement agreement is already in place, noting that these are “a familiar occurrence in the construction industry, regardless of any lawsuits having been filed.”
He considers the statute of repose “the single-most decisive weapon an insured possesses in its arsenal during a condo defect lawsuit.” He notes that no lawsuits can be brought for construction defects after the end specified by the statute of repose, and if a lawsuit is brought beforehand, no additional parties can be named once the statute has taken effect.
Finally, he warns adjusters to be suspicious when a condo association requests contractual indemnification. He notes that the pitfall in this is that developers and the subsequent condominium association often have similar names, given the theoretical example of a condo project built by “Fake Lakes LLC” and later run by the “Fake Lakes Condominium Association.” Writing in regards to Florida law, he notes that condominium associations do not have successor interest in contracts developers made with contractors.
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Safeguarding the U.S. Construction Industry from Unfair Competition Abroad
November 07, 2022 —
Ric Macchiaroli - Gravel2Gavel Construction & Real Estate Law BlogIn April 2015, the U.S. International Trade Commission (ITC) issued an exclusion order prohibiting the importation of certain foreign-made crawler cranes into the United States for a period of at least 10 years. That order was the result of a 20-month investigation by the ITC, initiated by a Wisconsin-based crane manufacturer based on allegations of patent infringement and trade secret misappropriation by a China-based company. Defined by powerful injunctive remedies, unique rules, and a lightning-fast docket, the ITC can help protect American industry from unfair acts in the importation of articles into the United States. This post explores the traits that make the ITC an attractive venue for potential complainants.
ITC Site Plan
The ITC is a specialized trade court located in Washington, D.C., that has broad authority to investigate and remedy unfair trade practices. One of the ITC’s primary functions is to conduct unfair import investigations, also known as “section 337” investigations, after the authorizing statute. A section 337 investigation can be instituted based on any number of unfair acts, including, but not limited to, patent infringement (utility and design), registered and common law trademark infringement, copyright infringement (including violations of the Digital Millennium Copyright Act), trade dress infringement, and trade secret misappropriation. Business torts such as passing off, false advertising, and tortious interference with business relations have also formed the bases of investigations.
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Ric Macchiaroli, PillsburyMr. Macchiaroli may be contacted at
ric.macchiaroli@pillsburylaw.com
