SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

2023’s Bank Failures: What Contractors, Material Suppliers and Equipment Lessors Can Do to Protect Themselves

May 15, 2023 — Garret Murai - California Construction Law Blog
It has been a tumultuous year for the banking industry. Since the beginning of this year the industry has seen the collapse of Silicon Valley Bank and Signature Bank, the shotgun marriage between failing Credit Suisse and USB, and, most recently, the collapse of First Republic Bank this past week and its purchase by JP Morgan Chase. Indeed, according to the New York Times, these three bank failures cum bailouts alone were bigger than the 25 banks that collapsed during the financial crises of 2008 and some are concerned that it is just the beginning. This, of course, has impacted the stock market, with Forbes reporting that the banking industry lost more than $300 billion in market value as of the end of March. However, it also raises concerns regarding liquidity on construction projects. While the failing banks have either been bought out by other banks or shored up by the federal government, which, in the case of Silicon Valley Bank and Signature Bank, involved the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve stepping into to protect depositors by guaranteeing deposits in excess of the current FDIC limit of $250,000, there continues to be concerns over access to cash. This can impact construction projects in several ways. Read the court decision
Read the full story...
Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

---

Insurer Obligated to Cover Preventative Remediation of Construction Defects

November 06, 2013 — CDJ STAFF
A recent Texas construction defect case gets covered on a blog post on the web site of Manatt, Phelphs & Phillps, LLC. In the case, the home builder built homes using EIFS which later had problems with mold, mildew, and structural damage. The home builder remediated all of the homes in the project, not just those that had experienced problems with the EIFS.The home builder’s insurers refused to cooperate. Various insurers settled with the home builder, leaving only Markel America Insurance Company. Markel refused coverage on the grounds that proactively replacing the EIFS to preclude damage meant that there was no damage for their policy to cover. The policy also read that “no insured, except at their own cost, [may] voluntary make any payment, assume any obligation, or incur any expense,” unless Markel agreed to it. But the Texas Supreme Court ruled that “Markel failed to prove that it was prejudiced in any way by the home builder’s settlements,” which was a necessary condition for the cited clause. The Texas Supreme Court ruled that Markel was obligated to indemnify the home builder. The court also concluded that the damage occurred during the coverage period and that “all 465 houses at issue suffered property damage during the policy period.” Read the court decision
Read the full story...
Reprinted courtesy of

---

Court Requires Adherence to “Good Faith and Fair Dealing” in Construction Defect Coverage

September 30, 2011 — CDJ STAFF

The California Court of Appeals has ruled in the case of Allied Framers, Inc. v. Golden Bear Insurance Company. Allied had been sued in a construction defect case and its primary insurer had become insolvent. Coverage for Allied’s defense was paid for by the California Insurance Guarantee Association through June 8, 2006. When warned that CIGA’s involvement was ending, Allied notified Golden Bear, which declined to provide coverage.

In the matters that followed, Golden Bear claimed that Allied had not exhausted its $1 million in primary insurance. Allied then showed that $1 million had already been paid out in the case. A few months thereafter, Golden Bear offered a $500,000 settlement on behalf of Allied which was rejected. Thereafter, Golden Bear hired new counsel to defend Allied. Golden Bear received, but allegedly did not pay, invoices Allied sent from their former counsel. Golden Bear finally settled the construction defect case for $2 million.

Allied’s original counsel sued Allied for payment. Golden Bear declined coverage. Allied then claimed that Golden Bear liable on several counts, arising from its failure to settle the construction defect action earlier than it did and its failure to pay Allied’s counsel. Golden Bear demurred, arguing that Allied had now exhausted is coverage with the $2 million settlement. The lower court sustained Golden Bear’s demurrer, dismissing Allied’s complaints.

The appeal court reviewed Allied’s seven complaints and sustained most of them. However, the court did reverse the trial court’s order in regard to Allied’s complaint that Golden Bear breached an implied covenant of good faith and fair dealing. The appeals court was not convinced that Golden Bear properly evaluated the settlement demand in the underlying construction defect case. The court found three other ways in which Golden Bear’s actions might show bad faith, in refusing to pay defense fees “after promising [Allied] such costs would be paid in full,” “failing to advise Allied about ‘actual or potential negative consequences of agreeing to the proposed settlement,’” and that their choice of counsel “failed to protect [Allied’s] interests in the negotiation.”

Read the court’s decision…

Read the court decision
Read the full story...
Reprinted courtesy of

---

Bremer Whyte’s Newport Beach Team Prevails on a Motion for Summary Judgment in a Wrongful Death Case!

September 02, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Congratulations on another win to Orange County Partners Jonathan Cothran and Rachel Mihai for prevailing on a Motion for Summary Judgment in a wrongful death case! Plaintiffs filed a wrongful death lawsuit alleging negligence and vicarious liability against BWB&O’s client, a licensed electrical contractor. BWB&O’s client installed a solar system at the Plaintiffs’ home in January 2018. In October 2018, an electrical fire broke out at the home in an upstairs bedroom. Tragically, the family’s father perished in the fire when he entered the home after the fire started. Plaintiffs alleged that BWB&O’s client was liable for the fire and Plaintiffs’ resulting injuries due to its electrical work on the solar system at the home. Read the court decision
Read the full story...
Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

---

Flying Solo: How it Helps My Construction Clients

February 18, 2015 — Christopher G. Hill – Construction Law Musings
Two and a half years ago, on July 1, 2010, I opened my solo practice. At the time, I really had no insight into how big this change would be from a positive, customer service, perspective. When I made the decision to go solo with my construction law practice, I knew I wanted to have flexibility to serve my client base of contractors and subcontractors in Virginia. I started some flat rate billing and had the ability to take cases that were below the dollar value of those that my old firm was willing to take. I also knew that I would be a master of my own destiny for better or worse (and it has been much more of the former than the latter). What I did not realize is the impact that owning my own business would have on my perspective. I have always believed that, in most cases where construction disputes occur, mediation is a great option. However mediation only occurs with conflict. For any business, whether construction or otherwise, conflict creates expenses that were not likely to have been anticipated or built in to the budget. Litigation is not something that most businesses can, or should, build into their operating budgets. Read the court decision
Read the full story...
Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

---

Reminder: Always Order a Title Search for Your Mechanic’s Lien

June 02, 2016 — Christopher G. Hill – Construction Law Musings
Mechanic’s liens are close to my heart as a construction attorney. These powerful tools for collection have been (and likely will be) discussed often here at Construction Law Musings. In fact, they rated their own page here at this little construction blog. While the form for a mechanic’s lien that is found in the Virginia Code looks simple enough, what goes into that form is key to getting past the initial stage of the mere recording of the lien and moving on to where a lien claimant wishes to go: Payment. Everything from the proper amount of the lien to the timing of filing, the parties named, type of work performed and who signs the lien can trip you up even before you get a chance to have a judge examine your payment claim. In short, this simple form has many pitfalls. On final item that is not often discussed is the description of the property and who the owner is on a project. A mistake on either of these fronts can be fatal as well. Often the “Owner” listed on the construction documents (the contracts, etc.) is not the same as the owner of the real estate to which your lien would attach. Sometimes a company may hire the general contractor as owner and either be a tenant of the property or could be the operating entity, but not the land holder. In either of these scenarios, merely naming the contract “owner” can be a mistake that could cost you your lien. The owner for lien purposes must be the land owner or there will be a problem. Read the court decision
Read the full story...
Reprinted courtesy of Christopher G. Hill, Law Office of Christopher G. Hill, PC
Mr. Hill may be contacted at chrisghill@constructionlawva.com

---

Illinois Appellate Court Finds That Damages in Excess of Policy Limits Do Not Trigger Right to Independent Counsel

June 22, 2020 — Jason Taylor - Traub Lieberman
Under Illinois law, an insurer’s duty to defend includes the right to control the defense, which allows insurers to protect their financial interest in the outcome of the litigation. However, where a conflict of interest exists, the insured, rather than the insurer, is entitled to assume control of the defense of the underlying action. If this occurs, the insurer satisfies its obligation to defend by reimbursing the insured for the cost of defense provided by independent counsel selected by the insured. What circumstances and situations arise to the level of an actual conflict of interest between the insurer and insured are often grounds for dispute. In Joseph T. Ryerson & Son, Inc. v. Travelers Indemnity Co. of America, 2020 IL App (1st) 182491 (Apr. 7, 2020), the Illinois Appellate Court addressed whether damages awarded by a jury in excess of the policy limits were sufficient to trigger a right to independent counsel for post-trial and appellate proceedings. According to the Illinois Appellate Court, at least under the facts of the Ryerson case, the answer is “no.” In Ryerson, Nancy Hoffman sued Ryerson for injuries sustained in a tractor-trailer accident. Ryerson tendered the suit to its primary insurer, Travelers, and its umbrella insurer, Illinois National. The policy limits were $2 million and $25 million, respectively. A jury found in favor of Hoffman for over $27.6 million in damages, and Ryerson appealed. Read the court decision
Read the full story...
Reprinted courtesy of Jason Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com

---

Leveraging the 50-State Initiative, Connecticut and Maine Team Secure Full Dismissal of Coverage Claim for Catastrophic Property Loss

March 23, 2020 — Regen O'Malley - Gordon & Rees Insurance Coverage Law Blog
On behalf of Gordon & Rees’ surplus lines insurer client, Hartford insurance coverage attorneys Dennis Brown, Joseph Blyskal, and Regen O’Malley, with the assistance of associates Kelcie Reid, Alexandria McFarlane, and Justyn Stokely, and Maine counsel Lauren Thomas, secured a full dismissal of a $15 million commercial property loss claim before the Maine Business and Consumer Court on January 23, 2020. The insured, a wood pellet manufacturer, sustained catastrophic fire loss to its plant in 2018 – just one day after its surplus lines policy expired. Following the insurer’s declination of coverage for the loss, the wood pellet manufacturer brought suit against both its agent, claiming it had failed to timely secure property coverage, as well as the insurer, alleging that it had had failed to comply with Maine’s statutory notice requirements. The surplus lines insurer agreed to extend the prior policy several times by endorsement, but declined to do so again. Notably, the insured alleged that the agent received written notice of the non-renewal prior to the policy’s expiration 13 days before the policy’s expiration. However, the insured (as well as the agent by way of a cross-claim) asserted that the policy remained effective at the time of the loss as the insured did not receive direct notice of the decision not to renew coverage and notice to the agent was not timely. Although Maine’s Attorney General and Superintendent intervened in support of the insured’s and agent’s argument that the statute’s notice provision applied such that coverage would still be owed under the expired policy, Gordon & Rees convinced the Court otherwise. At issue, specifically, was whether the alleged violation of the 14-day notice provision in Section 2009-A of the Surplus Lines Law (24-A M.R.S. § 2009-A), which governs the “cancellation and nonrenewal” of surplus lines policies, required coverage notwithstanding the expiration of the policy. The insured, the agent, and the State of Maine intervenors argued that “cancellation or nonrenewal” was sufficient to trigger the statute’s notice requirement, and thus Section 2009-A required the insurer to notify the insured directly of nonrenewal. In its motion to dismiss, Gordon & Rees argued on behalf of its client that Section 2009-A requires both “cancellation and nonrenewal” in order for the statute to apply. Since there was no cancellation in this case – only nonrenewal – Gordon & Rees argued that Section 2009-A is inapt and that the insurer is not obligated to provide the manufacturer with notice of nonrenewal. Alternatively, it argued that the statute is unconstitutionally vague and unenforceable. Read the court decision
Read the full story...
Reprinted courtesy of Regen O'Malley, Gordon & Rees
Ms. O'Malley may be contacted at romalley@grsm.com

---