Texas Windstorm Insurance Agency Under Scrutiny
April 05, 2011 —
Beverley BevenFlorez CDJ STAFFRepresentative Larry Taylor has introduced a bill in the Texas Legislature (HB 2818) that would further regulate the Texas Windstorm Insurance Agency (TWIA). According to Taylor, “In order to be adequately prepared for future hurricane seasons, it is imperative that TWIA be operating at maximum efficiency, that the Reserve Trust Fund be solvent and that the agency have adequate management measures in place to protect consumers and ensure that claims are paid in a timely manner. House Bill 2818 is an important step in the right direction toward restoring public confidence in TWIA.”
HB 2818 includes measures that would create an expert panel that would advise the commissioner on how to evaluate loss from the storm, and a greater transparency of TWIA Board meetings and actions.
In addition, the Texas Department of Insurance (TDI) has placed TWIA on Administrative Oversight. According to TDI, “While under Administrative Oversight, the Department may require its prior review and approval of executive decisions, certain expenditures, and other transactions. The insurer is required to fully cooperate with the Department and provide complete and timely disclosure of all information responsive to Department requests.”
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West Coast Casualty Construction Defect Seminar Announced for 2014
October 30, 2013 —
CDJ STAFFOrganizers describe the even as “America’s largest, America’s favorite, America’s best construction defect seminar.” And in 2014, they will hold the twenty-first of these annual construction defect seminars. As for size, last year’s event comprised 1,614 attendees, travelling not only from across the county, but from outside the United States as well.
West Coast Casualty is beginning to line up its speakers for next May’s seminar. The organizers are asking speakers to submit proposed topics by November 25 and the list will be finalized on December 15. The theme for the event will be “Back to Business … Working Smarter … Not Harder.” While West Coast Casualty is looking for topics that focus on the central theme, they are also interested in presentations on emerging trends in construction defect litigation.
In addition to seminars, there will be booths for many of the companies in the construction defect resolution industry, demonstrating products and services of use to professionals in the field. This gives attendees a chance for less-structured interaction than is possible within a seminar.
Continuing education credits were granted for the 2013 seminar by a lengthy list of organizations, which included the Bar Associations of 22 states and the Departments of Insurance of 35. The 2014 West Coast Casualty Construction Defect Seminar will be held May 15 and 16 at the Disneyland Hotel and Resort.
During the seminar comes the awarding of the prestigious Jerrold S. Oliver Award of Excellence, named in honor of the late Judge Jerrold S. Oliver, who was known for his skills as a mediator. In 2013, the “Ollie” was awarded to Margie Luper in acknowledgement of her contributions to the betterment of the construction defect resolution field. The recipients of the Jerrold S. Oliver Award of Excellence are selected by the votes of about 6,000 industry professionals.
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A Lien Might Just Save Your Small Construction Business
April 04, 2011 —
Douglas Reiser, Builders Council BlogMany owners incorrectly believe that payment to the general contractor gets the owner off the hook for payment to subcontractors and suppliers. This assumption sometimes fosters the irresponsible owner, who fails to ensure that everyone is getting paid. Fortunately for those contractors further down the contracting chain, this assumption is incorrect.
Suppliers and subcontractors can file a lien to secure payment for their labor and materials. A filing party must offer proper notice (if applicable) and file an adequate and timely lien in the County where the work is performed. You can read our earlier posts on these topics by following this link.
A lien notice and a lien put an owner on notice that your business has provided labor and/or materials for the improvement of the owner’s property (See RCW 60.04.031 for more info). If the owner fails to take care to ensure that your business is paid the law mandates that the owner may have to pay twice.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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CDJ’s #6 Topic of the Year: Does Colorado Need Construction Defect Legislation to Spur Affordable Home Development?
December 31, 2014 —
Beverley BevenFlorez-CDJ STAFFThe question involves whether a Colorado law passed in 2005 has made it too easy for homeowners to sue developers for construction defects, allegedly causing a decline in condominium building in the state. The Construction Defect Journal became a forum for this lively debate with two prominent, Colorado, construction defect attorneys providing their views on the subject:
Jesse Howard Witt, of the Witt Law Firm, published “Colorado Mayors Should Not Sacrifice Homeowners to Lure Condo Developers.”
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In response, James M. Mulligan of Snell & Wilmer, LLP presented his perspective in, “Are Construction Defect Laws Inhibiting the Development of Attached Ownership Housing in Colorado?”
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The city of Lakewood did not wait for the state, but instead passed its own ordinance, which “gives developers and builders a ‘right to repair’ defects before facing litigation and would require condominium association boards to get consent from a majority of homeowners — rather than just the majority of the board — before filing suit,” according to John Aguilar’s piece in The Denver Post.
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Court Rules on a Long List of Motions in Illinois National Insurance Co v Nordic PCL
May 10, 2012 —
CDJ STAFFThe case Illinois National Insurance Co. v Nordic PCL, et al. “involves a dispute about whether insurance benefits are available to a general contractor who built structures that allegedly have construction defects. Plaintiffs Illinois National Insurance Company (‘Illinois National’) and National Union Fire Insurance Company of Pittsburgh, PA (‘National Union’) (collectively, the ‘Insurers’), commenced this action for declaratory relief against Defendant Nordic PCL Construction, Inc., f/k/a Nordic Construction, Ltd. ("Nordic"), on August 23, 2011.”
The court was asked to rule on a long list of motions: “Counterclaim Defendants’ Request for Judicial Notice in Support of Their (1) Motion to Dismiss the Counterclaim and (2) Motion to Strike Portions of the Counterclaim, ECF No. 16 (‘Request for Judicial Notice’); Counterclaim Defendants’ Motion to Dismiss Counterclaim Filed October 24, 2011, ECF No. 14 (‘Motion to Dismiss Counterclaim’); Counterclaim Defendants’ Motion to Strike Portions of the Counterclaim Filed October 24, 2011, ECF No. 15 (‘Motion to Strike’); Third-Party Defendant Marsh USA, Inc.’s Motion to Dismiss or, in the Alternative, Stay Proceedings in Favor of Pending State Action, ECF No. 33 (‘Marsh’s Motion To Dismiss Or Stay’); Defendant and Third-Party Plaintiff Nordic PCL Construction, Inc., f/k/a Nordic Construction Ltd.’s Substantive Joinder to Third-Party Defendant Marsh USA Inc.’s Motion to Dismiss or, in the Alternative, Stay Proceedings in Favor of Pending State Action, ECF No. 36 (‘Nordic’s Joinder’); and Third-Party Defendant Marsh USA, Inc.’s Motion for Judgment on the Pleadings on Counts V and VI of Defendant/Third-Party Plaintiff Nordic PCL Construction, Inc.’s Third-Party Complaint, ECF No. 29 (‘Marsh’s Motion for Judgment on the Pleadings’).”
In result, the court reached the following decisions: “The court GRANTS IN RELEVANT PART the Insurers’ Request for Judicial Notice to the extent it covers matters relevant to these motions; GRANTS IN PART the Insurers’ Motion to Dismiss Counterclaim, but gives Nordic leave to amend the Counterclaim in certain respects; DENIES the Insurers’ Motion to Strike; DENIES Marsh’s Motion To Dismiss Or Stay and Nordic’s Joinder; and GRANTS Marsh’s Motion for Judgment on the Pleadings.”
The court provides a bit of background on the case: “This action arises out of alleged construction defects involving two projects on which Nordic acted as the general contractor. Nordic is a defendant in a pending state court action with respect to one of the projects and says it spent more than $400,000 on repairs with respect to the other project. Nordic tendered the defense of the pending state court action to the Insurers and sought reimbursement of the cost of repairs already performed. The Insurers responded by filing this action to determine their rights under the insurance policies issued to Nordic.”
Furthermore, the court presented a brief procedural history: “The Insurers commenced this declaratory action in this court on August 23, 2011. The Complaint asserts two claims, one seeking a declaration that the Insurers have no duty to provide a defense or indemnification regarding the Safeway Action, the other seeking such a declaration regarding the Moanalua Claims. Along with its Answer, Nordic filed a Counterclaim against the Insurers. The Counterclaim asserts breach of contract, breach of the covenant of good faith and fair dealing, misrepresentations and omissions of material fact, and bad faith, and seeks declaratory relief against the Insurers.”
The procedural history continues: “Nordic also filed a Third-Party Complaint against Marsh, the broker that had procured the Policies from the Insurers for Nordic. Nordic alleges that it reasonably believed that the Policies would provide completed operations insurance coverage for the types of construction defects alleged in the Safeway Action and Moanalua Claims. The Third-Party Complaint asserts breach of contract, negligence, promissory estoppel, breach of fiduciary duties, implied indemnity, and contribution and equitable subrogation.”
In conclusion, “The court GRANTS IN RELEVANT PART the Insurers’ Request for Judicial Notice. With regard to the Insurers’ Motion to Dismiss Counterclaim, the court GRANTS the motion as to Count I (breach of contract), Count II (duty of good faith and fair dealing), Count III (fraudulent and negligent misrepresentation), the portion of Count IV (bad faith) premised on fraud, and Count IV (declaratory relief). The court DENIES the motion as to Count IV (bad faith) that is not premised on fraud. Except with respect to the "occurrence" issue, which the court disposes of here on the merits, and Count V, which concerns only a form of relief, Nordic is given leave to amend its Counterclaim within three weeks of the date of this order. The court DENIES the Insurers’ Motion to Strike, DENIES Marsh’s Motion to Dismiss or Stay and Nordic’s Joinder, and GRANTS Marsh’s Motion for Judgment on the Pleadings with respect to Counts V and VI of the Third-Party Complaint.”
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Insurer Doomed in Delaware by the Sutton Rule
September 12, 2023 —
Katherine Dempsey - The Subrogation StrategistIn Donegal Mut. Ins. Co. v. Thangavel, No. 379, 2022, 2023 Del. LEXIS 227, the Supreme Court of Delaware (Supreme Court) considered whether the Sutton Rule prevented the plaintiff from pursuing subrogation against the defendants. As applied in Delaware, the Sutton Rule explains that landlords and tenants are co-insureds under the landlord’s fire insurance policy unless a tenant’s lease clearly expresses an intent to the contrary. If the Sutton Rule applies, the landlord’s insurer cannot pursue the tenant for the landlord’s damages by way of subrogation. Here, the Supreme Court affirmed the trial court’s decision that the Sutton Rule applied because the lease did not clearly express an intent to hold the tenants liable for the landlord’s damages.
In Thangavel, the plaintiff, Donegal Mutual Insurance Company (Insurer), provided property insurance to Seaford Apartment Ventures, LLC (Landlord) for a residential property in Delaware. Sathiyaselvam Thangavel and Sasikala Muthusamy (Tenants) leased an apartment (the Premises) from Landlord and signed a lease. Insurer alleged that Tenants hit a sprinkler head while flying a drone inside the Premises which caused water to spray from the damaged sprinkler head, resulting in property damage to the Premises. Landlord filed an insurance claim with Insurer, who paid Landlord $77,704.06 to repair the damage. Insurer then sought to recover the repair costs from Tenants via subrogation.
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Katherine Dempsey, White and Williams LLPMs. Dempsey may be contacted at
dempseyk@whiteandwilliams.com
Antidiscrimination Clause Required in Public Works and Goods and Services Contracts –Effective January 1, 2024
January 22, 2024 —
Travis Colburn - Ahlers Cressman & SleightIn July 2023, the Washington legislature passed Senate Bill 5186, which mandates inclusion of select antidiscrimination clauses in every state contract and subcontract for public works, goods, or services executed after January 1, 2024.
[i] RCW 49.60.530(3) codifies the now-required antidiscrimination clauses, which prohibit four categories of discrimination against any person because of age, sex, marital status, sexual orientation, gender identity, race, creed, color, national origin, citizenship or immigration status, honorably discharged veteran or military status, the presence of any sensory, mental, or physical disability, or the use of a trained dog guide or service animal by a person with a disability (the “Protected Class”).
Under the new law, public contractors and subcontractors (“Public Contractor”) may not refuse to hire a person because that person is a member of the Protected Class, unless that refusal is based upon a bona fide occupational qualification or if a person with a particular disability would be prevented from properly performing the particular work involved.
[ii] Similarly, Public Contractors may not discharge or bar a person from employment or discriminate against any person – either in terms of compensation or other terms and conditions of employment – because that person is a member of the Protected Class.
[iii] Last, Public Contractors may not print or circulate (or cause to be printed or circulated) any statement, advertisement, publication, form of application for employment, or make inquiry in connection with prospective employment, which expresses any limitation, specification, or discrimination as to the Protected Class.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
The Best Laid Plans: Contingency in a Construction Contract
September 13, 2021 —
Josh Levy, Katesha Long & Samantha Schacht - Construction ExecutiveThis article is the first of a three-part series on contingencies in construction contracts. This series will explain:
- what a construction contingency is;
- the two primary schools of thought regarding how a construction contingency fund should be used and managed; and
- construction contract drafting considerations for contingency clauses.
Armed with this information, owners and contractors will be better equipped to tackle the inevitable project surprises.
Life is full of surprises, some good and some not too good. Surprises during construction are seldom welcome events. However, experienced owners and contractors know to expect the unexpected and plan accordingly by including contingency funds in their budgets. For them, the question is not whether or not to include a contingency, but how much to set aside and how to structure and manage the fund.
Reprinted courtesy of
Josh Levy, Katesha Long & Samantha Schacht, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Ms. Schacht may be contacted at samantha.schacht@huschblackwell.com
Ms. Long may be contacted at katesha.long@huschblackwell.com
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