Construction Defect Dispute Governed by Contract Disputes Act not yet Suited to being a "Suit"
June 25, 2019 —
William S. Bennett - Saxe Doernberger & Vita, P.C.The Southern District of California recently held that a series of demands for a general contractor to investigate and repair several construction defects at a U.S. Army facility did not constitute a “suit” within the meaning of the general contractor’s commercial general liability (“CGL”) policy.
In Harper Construction Co., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., the U.S. Government hired Harper Construction Company (“Harper”) to construct a U.S. Army training facility for the Patriot Missile System in Fort Sill, Oklahoma. No. 18-cv-00471-BAS-NLS (S.D. Cal. Mar. 28, 2019). During the project, Harper hired Harper Mechanical Contractors (“Harper Mechanical”), an independent company, as a subcontractor “to perform demolition, grading, and other work at the Project.”
After Harper completed the project, the government informed Harper of property damage at the project, “including, but not limited to, gypsum wallboard cracks and binding doors.” Harper attempted to repair the issues, but the problems continued. The issues were apparently the result of Harper Mechanical’s grading work. Subsequently, the government sent two letters requesting an investigation and asking Harper to “propose a plan to correct the issues.” As Harper undertook an investigation spanning multiple years, the government became increasingly frustrated with the delays. The government threatened to initiate “formal administrative recourse” and to demolish the project, forcing Harper to re-build from the ground up. It also sent Harper another letter requesting Harper submit a formal proposal to correct the issues.
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William S. Bennett, Saxe Doernberger & Vita, P.C.Mr. Bennett may be contacted at
wsb@sdvlaw.com
How the Pandemic Pushed the Construction Industry Five Years Into the Future
September 06, 2021 —
Alexandra McManus & Hussein Cholkamy - Construction ExecutiveOn any given day, there are a multitude of variables playing out on construction jobsites, from maintaining daily logs to track hundreds of workers to creating daily schedules to keep projects on track. What made an industry that’s arguably about 20 years in the past get a dramatic technology boost five years into the future? A global pandemic that nobody saw coming.
When COVID-19 made its first appearance on construction sites in early 2020, the domino effect of project shutdowns and labor shortages created uncertainty along with budget and timeline nightmares. The pandemic shook up the industry, with many projects coming to a screeching halt. As general contractors scrambled to keep their projects moving and workers safe, technology proved to be the solution.
With jobsites shutting down, coupled with a nationwide labor shortage, real-time visibility over workforce variables, such as who was on-site, where they were and who they interacted with was more important than ever. Safe proximity tracking, virtual density and access control technologies helped construction companies gain more control, visibility and the ability to deal with the ever-changing regulations due to the global pandemic. More importantly, it helped keep their valuable workforce safe.
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Alexandra McManus & Hussein Cholkamy, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Cholkamy may be contacted at hussein@eyrus.com
Ms. McManus may be contacted at alex@eyrus.com
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Traub Lieberman Partner Eric D. Suben Obtains Federal Second Circuit Affirmance of Summary Judgment in Insurer’s Favor
April 10, 2023 —
Eric D. Suben - Traub LiebermanIn the underlying action, a property owner hosting a motorcycle rally was sued after a motorcycle collided with an auto near the entrance to the premises, injuring the cyclists. The cyclists sued the property owner, among others, alleging failure to supervising traffic on the adjoining roadway. The property owner tendered the claim under its CGL policy, which was endorsed with an “absolute auto exclusion,” precluding coverage for claims “arising out of or resulting from the ownership, maintenance, use or entrustment to others of any…auto.” The CGL insurer disclaimed coverage based on the endorsement.
In the ensuing coverage litigation, Traub Lieberman represented the insurer, and moved for summary judgment arguing that the “absolute auto exclusion” was dispositive of coverage on the facts alleged, citing case law from New York state courts enforcing similar exclusions to preclude coverage for multi-vehicle accidents. The insured argued in opposition that the outcome should be controlled by Essex Insurance Company v. Grande Stone Quarry, LLC, 82 A.D.3d 1326, 918 N.Y.S.2d 238 (3rd Dep’t 2011), in which the court declined to apply such exclusion in the case of a single-vehicle accident caused by a dangerous condition of the insured’s premises. The federal district judge disagreed with the insured’s argument in this regard, granting Traub Lieberman’s motion for summary judgment in favor of the insurer.
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Eric D. Suben, Traub LiebermanMr. Suben may be contacted at
esuben@tlsslaw.com
Rainwater Collecting on Rooftop is not Subject to Policy's Flood Sublimits
October 15, 2024 —
Tred R. Eyerly - Insurance Law HawaiiResponding to a certified question from the First Circuit, the Supreme Judicial Court of Massachusetts determined that rainwater collecting on the insureds' rooftop and causing interior damage was not "flood" as defined in the policy and subject to sublimits. Zurich Am. Ins. Co. v. Medical Properties Trust, Inc., 2024 Mass. LEXIS ___ (Mass. July 23, 2024).
A severe thunderstorm caused heavy rain and strong winds which damaged a hospital. The hospital was owned by Medical Properties Trust, Inc. (MPT) and leased to Steward Health Care System LLC (Steward). Ground water accumulated and flooded the basement. Rainwater also accumulated on the hospital's parapet roofs and on the second-story courtyard, and eventually seeped through the parapet roofs and courtyard to the hospital's upper floors, causing damage to the building and property within.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
House Bill Clarifies Start Point for Florida’s Statute of Repose
September 14, 2017 —
Lian Skaf - White and Williams LLPThe Florida legislature recently enacted a law clarifying when the ten-year statute of repose begins to run for cases involving “improvements to real property,” as that phrase is used in Florida Statute Section 95.11. House Bill 377 was signed into law on June 14, 2017 and took effect in all cases accruing on or after July 1, 2017. This amendment is significant to subrogation professionals evaluating when cases involving contractors and design professionals are time barred.
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Lian Skaf, White and Williams LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Arizona Supreme Court Upholds Constitutionality of Provision Relating to Statutory Authority for Constructing and Operating Sports and Tourism Complexes
June 18, 2019 —
Amanda Z. Weaver - Snell & WilmerIn an opinion published February 25, 2019, the Arizona Supreme Court held that Maricopa County’s surcharge on car rental agencies to fund a stadium and other sports- and tourism-related projects did not violate either the dormant Commerce Clause of the United States Constitution or the anti-diversion provision of the Arizona Constitution, art. 9, § 14. Saban Rent-a-Car LLC v. Ariz. Dep’t of Revenue.
In 2000, the Arizona Legislature created the Arizona Tourism and Sports Authority (the Authority) to build and/or operate a variety of sports-related facilities, including Major League Baseball spring training facilities, and youth and amateur sports and recreation centers. Taxes and surcharges, approved by voters, are the sole funding for the Authority’s construction projects, including the challenged surcharge in Maricopa County. This surcharge is based on the income from car rental companies leasing vehicles to customers for less than one year, and is the greater of $2.50 per rental or 3.25% of the company’s gross proceeds or income. A.R.S. § 5-839. The state treasurer deposits $2.50 per rental transaction into the Maricopa County Stadium District, as it has since 1991, and the remaining amount of the difference between $2.50 per transaction and 3.25% of the company’s gross income or proceeds is distributed to the Authority. Rental car companies often pass this surcharge on to their customers.
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Amanda Z. Weaver, Snell & WilmerMs. Weaver may be contacted at
aweaver@swlaw.com
Amada Family Limited Partnership v. Pomeroy: Colorado Court of Appeals Expressly Affirms the Continuing Viability of the Common-Law After-Acquired Title Doctrine and Expressly Recognizes Utility Easements by Necessity
June 28, 2021 —
Luke Mecklenburg - Snell & Wilmer Real Estate Litigation BlogOn May 27, 2021, a division of the Colorado Court of Appeals issued its opinion in Amada Family Limited Partnership v. Pomeroy, 2021 COA 73. In that case, the court decided two significant issues that apparently had never been expressly ruled on by a Colorado appellate court before: (1) that Colorado’s common-law after-acquired title doctrine was not abrogated by adoption of the after-acquired interest statute; and (2) that utility easements may be implied by necessity.
As is often the case in matters involving access and implied property rights, the facts and history underlying Amada are complicated, but the case’s two most significant rulings are not. Instead, the basic legal principles established (or confirmed) in Amada appear to be broadly applicable, and real property practitioners should take note of these significant developments (or clarifications) in the law.
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Luke Mecklenburg, Snell & WilmerMr. Mecklenburg may be contacted at
lmecklenburg@swlaw.com
Nevada Supreme Court Holds That Insureds Can Use Extrinsic Evidence to Prove Duty to Defend
February 28, 2022 —
Bethany L. Barrese - Saxe Doernberger & VitaThe recent Nevada Supreme Court ruling in Zurich American Insurance Company v. Ironshore Specialty Insurance Company1 benefits insureds seeking to establish an insurer’s duty to defend. As a matter of first impression, the court clarified that insureds have the burden to prove that an exception to a policy exclusion applies in order to trigger the insured’s duty to defend. However, while the policyholder may use extrinsic evidence to establish the insurer’s duty to defend, the insurer may not use extrinsic evidence to deny that duty.
The facts of the underlying claim are set in the 2000s when the insured subcontractors worked to build thousands of homes in Nevada. The subcontractors were insured by Zurich American Insurance Company (“Zurich”) during that period. After the homes were complete, the subcontractors switched from Zurich to Ironshore Specialty Insurance Company (“Ironshore”). Between 2010 and 2013, homeowners brought claims against the subcontractors alleging that the properties were damaged due to construction defects. The subcontractors tendered the claims to Zurich as the insurer at the time of construction. Zurich then sought defense and indemnification from Ironshore. Ironshore denied coverage under a “continuing and progressive” policy exclusion, claiming that the property damage occurred due to faulty work that predated the Ironshore policy. Notably, an exception to the exclusion applied if “sudden and accidental” property damage occurred within the Ironshore policy period. Given that the underlying lawsuits did not include specific allegations describing when or how the property damage occurred, Ironshore and Zurich disagreed on whether the exception to the exclusion was triggered..
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Bethany L. Barrese, Saxe Doernberger & VitaMs. Barrese may be contacted at
BBarrese@sdvlaw.com
