Eleventh Circuit Finds No “Property Damage” Where Defective Component Failed to Cause Damage to Other Non-Defective Components
October 11, 2021 —
Anthony L. Miscioscia & Margo Meta - White and WilliamsIn Florida, damage caused by faulty workmanship constitutes “property damage;” however, the cost of repairing or removing defective work does not. Amerisure Mutual Insurance Company v. Auchter Company, 673 F.3d 1294 (11th Cir. 2012) (Auchter). But what happens when the cost of repairing or removing defective work results in loss of use of the tangible property which is not physically injured?
The United States Court of Appeals for the Eleventh Circuit was recently faced with this question in Tricon Development of Brevard, Inc. v. Nautilus Insurance Company, No. 21-11199, 2021 U.S. App. LEXIS 27317 (11th Cir. Sep. 10, 2021). Tricon arose out of the construction of a condominium. Tricon was hired to serve as general contractor for the project and hired a subcontractor to fabricate and install metal railings. The railings installed by the subcontractor were defective and damaged, improperly installed, and failed to meet the project’s specifications. Tricon filed an insurance claim with Nautilus Insurance Company, the subcontractor’s commercial general liability insurer, for the cost to remove and replace the railings.[1]
Reprinted courtesy of
Anthony L. Miscioscia, White and Williams and
Margo Meta, White and Williams
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Ms. Meta may be contacted at metam@whiteandwilliams.com
Read the court decisionRead the full story...Reprinted courtesy of
Insurer Need Not Pay for Rejected Defense When No Reservation of Rights Issued
November 08, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe Massachusetts Appeals Court reversed the trial court's order that defense costs be paid for a period during which the insured rejected the defense even though no reservation of rights was issued. OneBeacon Am. Ins. Co. v. Celanese Corp., 2017 Mass. App. LEXIS 140 (Mass. App. Ct. Oct. 16, 2017).
Celanese was sued over many years for claims of bodily injury due to asbestos and chemicals allegedly contained in its products and facilities. For many years, Celanese had an agreement with its insurer, OneBeacon, for defense cost-sharing. In April 2009, Celanese terminated this agreement and demanded that OneBeacon defend the cases under the policies previously issued. OneBeacon agreed to defend without a reservation of rights. OneBeacon also agreed to waive any issues of coverage and to indemnify Celanese from any settlements of judgments up to ts full liability limits. However, OneBeacon also sought to assume full control of the defense of claims against Celanese.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly - Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.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.
Read the court decisionRead the full story...Reprinted courtesy of
Patrick J. Paul, Snell & Wilmer Mr. Paul may be contacted at
ppaul@swlaw.com
Important Information Regarding Colorado Mechanic’s Lien Rights.
November 07, 2012 —
David McLain, Colorado Construction LitigationWith payment problems in the construction economy having accelerated over the past few years, there has been a substantial increase in mechanic’s lien activity and associated litigation. The typical mechanic’s lien claimant is a material supplier, a trade subcontractor, or even a general contractor that has not been paid by the developer/owner of the construction project. The reason for filing a mechanic’s lien claim is that it offers the prospect in many cases to make the unpaid construction professional a priority creditor, with a lien on the real estate that is superior to the construction lender.
One of the primary rules governing a mechanic’s lien claim is that the creditor’s formal written “Notice of Intent to File a Mechanic’s Lien” (hereafter “Lien Notice”) must be (1) served on the owner of the property for which the work was done or the materials used, and (2) served at the same time on the general contractor who has handled the construction project. After the creditor has made service of the lien claim by USPS certified mail (using the green return receipt card for proof of service) or separate personal delivery of the notice to the property owner and general contractor, ten full days must pass (not including the date of mailing of the notices) before the lien notice is filed in the public records.
After ten days have expired following the date of mailing using certified mail, or personal delivery of the notice to the property owner and the general contractor, the lien notice can be filed to make the lien valid.
Read the court decisionRead the full story...Reprinted courtesy of
David M. McLain, Higgins, Hopkins, McLain & Roswell, LLC.Mr. McLain can be contacted at
mclain@hhmrlaw.com
Fifth Circuit -- Damage to Property Beyond Insured’s Product/Work Not Precluded By ‘Your Product/Your Work Exclusion’
January 24, 2022 —
Anthony L. Miscioscia & Marianne Bradley - White and Williams LLPOn January 11, 2022, the United States Court of Appeals for the Fifth Circuit issued its decision in Siplast, Incorporated v. Employers Mutual Casualty Company, 2022 U.S. App. LEXIS 795 (5th Cir. Jan. 11, 2022), finding that an insurer had a duty to defend its insured in a construction defect case where the underlying complaint alleged damage to property beyond the product and work of the insured.
Siplast, Inc. (Siplast) had contracted with the Archdiocese of New York (the Archdiocese) to install a roof membrane system at a high school in the Bronx, New York. Id. at *1. As part of the contract, Siplast guaranteed that the roof membrane system would remain in a watertight condition for at least twenty years. Id. at *2. If it did not, Siplast would repair the roof membrane system at its own expense. Id.
Several years after the installation, the Archdiocese observed water damage in the ceiling tiles at the high school. Id. The Archdiocese contacted Siplast, who attempted to repair the damage and prevent further leaks; however, leaks and resultant damage continued to occur. Id. Siplast subsequently refused to make any more improvements to the roof. Id.
Reprinted courtesy of
Anthony L. Miscioscia, White and Williams LLP and
Marianne Bradley, White and Williams LLP
Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com
Ms. Bradley may be contacted at bradleym@whiteandwilliams.com
Read the court decisionRead the full story...Reprinted courtesy of
Admissibility of Expert Opinions in Insurance Bad Faith Trials
November 04, 2019 —
David M. McLain – Colorado Construction LitigationIn 2010, Hansen Construction was sued for construction defects and was defended by three separate insurance carriers pursuant to various primary CGL insurance policies.[i] One of Hansen’s primary carriers, Maxum Indemnity Company, issued two primary policies, one from 2006-2007 and one from 2007-2008. Everest National Insurance Company issued a single excess liability policy for the 2007-2008 policy year, and which was to drop down and provide additional coverage should the 2007-2008 Maxum policy become exhausted. In November 2010, Maxum denied coverage under its 2007-2008 primarily policy but agreed to defend under the 2006-2007 primarily policy. When Maxum denied coverage under its 2007-2008 primary policy, Everest National Insurance denied under its excess liability policy.
In 2016, pursuant to a settlement agreement between Hansen Construction and Maxum, Maxum retroactively reallocated funds it owed to Hansen Construction from the 2006-2007 Maxum primary policy to the 2007-2008 Maxum primary policy, which became exhausted by the payment. Thereafter, Hansen Construction demanded coverage from Everest National, which continued to deny the claim. Hansen Construction then sued Everest National for, among other things, bad faith breach of contract.
In the bad faith action, both parties retained experts to testify at trial regarding insurance industry standards of care and whether Everest National’s conduct in handling Hansen Construction’s claim was reasonable. Both parties sought to strike the other’s expert testimony as improper and inadmissible under Federal Rule of Evidence 702.
Read the court decisionRead the full story...Reprinted courtesy of
David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
Brookfield to Start Manhattan Tower After Signing Skadden
April 15, 2015 —
David M. Levitt – BloombergBrookfield Property Partners LP said it will start building its 1 Manhattan West office tower, after signing a lease with the law firm Skadden, Arps, Slate, Meagher & Flom LLP for about a quarter of the skyscraper.
The agreement, announced Tuesday in a statement by New York-based Brookfield, jump-starts office construction at the 7 million-square-foot (650,000-square-meter) Manhattan West project, part of an effort to draw the Midtown business district west toward toward the Hudson River. It’s another step in the plan to remake the once-industrial Hudson Yards area into a neighborhood for housing and commerce, with office tenants including Coach Inc. and Time Warner Inc. and stores such as the city’s first Neiman Marcus.
The Skadden law firm agreed to a 20-year lease for 550,000 square feet on floors 28 to 43 of the 67-story tower.
Read the court decisionRead the full story...Reprinted courtesy of
David M. Levitt, Bloomberg
More Fun with Indemnity and Construction Contracts!
June 04, 2024 —
Christopher G. Hill - Construction Law MusingsWell, I’m back. It’s been quite a while since my last post due to some busy family times and running my law practice. Hopefully, you will hear from me more often in the future.
Now. . . on with the post:
I have often discussed indemnity provisions here at Construction Law Musings. I’ve posted on a range of things relating to indemnity from when those
sticky clauses are unenforceable to
what to look out for in such a clause when reviewing your construction contract. A recent case out of Fairfax examines another wrinkle in these indemnity clauses. In
Leesburg Pike, Falls Church, LLC v. Paramount Constr. Servs., LLC, the Court examined the language of a fairly typical indemnity clause in a construction contract.
The general facts of the case are as follows. The Plaintiff alleged that it owns the property at 6129 Leesburg Pike, that it entered into a contract with Paramount Construction Services LLC to install clothes washers and dryers in individual units at the property, and that, in the process, Paramount (or one of its subcontractors) negligently severed a water pipe, which caused significant damage to the property. The plaintiff’s property insurance carrier agreed to pay the plaintiff $2,598,918.41. But the actual damages exceeded that payment by $952,020.90. The plaintiff sued Paramount for $952,020, pursuant to an indemnity provision in the contract. Paramount demurred to the Complaint arguing that the indemnity clause did not apply to create liability for Paramount.
Read the court decisionRead the full story...Reprinted courtesy of
The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com