D&O Insurer Must Cover Mortgage Broker’s $15 Million Settlement of Alleged False Claims Act Violations
November 15, 2022 —
Michael S. Levine, Geoffrey B. Fehling & Matthew J. Revis - Hunton Insurance Recovery BlogA Delaware court recently
granted summary judgment to a mortgage broker targeted in a federal government investigation for alleged False Claims Act violations, holding that the company’s directors and officers liability (“D&O”) insurer was required to indemnify more than $15 million in settlement costs with the U.S. Department of Justice. Guaranteed Rate, Inc. v. ACE American Insurance Company, No. N20C-04-268 MMJ CCLD (Del. Super. Ct. Sept. 6, 2022). We
previously reported on the policyholder’s earlier victory in this case, in which the court held that a Civil Investigative Demand (“CID”) from federal authorities triggered the insurer’s obligation to pay defense costs under the D&O policy.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth,
Geoffrey B. Fehling, Hunton Andrews Kurth and
Matthew J. Revis, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Fehling may be contacted at gfehling@HuntonAK.com
Mr. Revis may be contacted at mrevis@HuntonAK.com
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Quick Note: Attorney’s Fees on Attorney’s Fees
June 13, 2022 —
David Adelstein - Florida Construction Legal UpdatesIn a recent
case, the appellate court held that the attorney’s fees provision in the contract was NOT broad enough to entitle the prevailing party to recover attorney’s fees for litigating the amount of attorney’s fees. This is known as “fees on fees” which is when you can recover your prevailing party attorney’s fees when you are fighting over the quantum that should be awarded to you as the prevailing party.
The attorney’s fees provision at-issue stated:
“In any lawsuit to enforce the Lease or under applicable law, the party in whose favor a judgment or decree has been rendered may recover its reasonable court costs including attorney’s fees from the non-prevailing party.”
Language similar to this language can be found in many contracts as a prevailing party attorney’s fees provision.
However, this provision was NOT broad enough to recover “fees on fees.” As explained in
this article, if this is a consideration, you can negotiate or include this provision into your construction contract by expanding the scope of the prevailing party attorney’s fees provision to clarify that it entitles the prevailing party to recover attorney’s fees in litigating the amount of attorney’s fees.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Real Estate & Construction News Round-Up (01/25/23) – Artificial Intelligence, Proptech Innovation, and Drone Adoption
February 14, 2023 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogThis week’s round-up explores new artificial intelligence tools and their projected impact on real estate agents, key trends driving proptech innovation, barriers to adopting drones in the construction industry, and more.
- Artificial intelligence (AI) has the potential to become an invaluable tool to streamline the selling journey of a property, empower buyers to make informed decisions, and enhance the work of real estate agents. (Alexandra Cain, The Urban Developer)
- Miami real estate agents experiment with the new artificial intelligence tool, ChatGPT, which can generate text based on simple prompts, to write house listings, communicate with developers, and produce content. (Martin Vassolo, Axios)
- Asset owners in Asia and Europe turn to artificial intelligence to collect ESG information across public and private markets, including from residential buildings in Japan. (Hugo Cox, Asian Investor)
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Pillsbury's Construction & Real Estate Law Team
The A, B and C’s of Contracting and Self-Performing Work Under California’s Contractor’s License Law
July 19, 2017 —
Garret Murai - California Construction Law BlogThe California Contractors State License Board issues licenses in three general classifications:
- Class A – General Engineering Contractors;
- Class B – General Building Contractors; and
- Class C – Specialty Contractors of which there are currently 42 different Class C specialty contractors license types.
Each of these license classifications has separate contracting rules, and rules regarding when work can be self-performed, which for many can be confusing.
Minor Work Exception
One important (albeit “minor”) exception is that no contractor’s license is required no matter what type of work is being performed if the project has a value of less than $500. Known as the “minor work exception,” the exception is a project-based, not work-based, exception. Thus, for example, if a project owner is remodeling their kitchen at a cost of $6,000 and the cost of doing the flooring is only $300, the person doing the flooring would need to have a contractor’s license in the appropriate classification since the aggregate cost of the work is $500 or more.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Texas Federal Court Upholds Professional Services Exclusion to Preclude Duty to Defend
March 16, 2020 —
Jeremy S. Macklin - Traub Lieberman Insurance Law BlogIn Project Surveillance, Inc. v. The Travelers Indemnity Company, No. 4:19-CV-03324, 2020 WL 292247 (S.D. Tex. Jan. 21, 2020), a Texas federal court held that a professional services exclusion in a commercial general liability policy precluded Travelers’ duty to defend its insured.
The underlying lawsuit was a wrongful death action brought by the family of a worker killed on a construction site. Project Surveillance was present at the construction site “to provide safety supervision or other services.” The underlying lawsuit alleged that Project Surveillance negligently failed to inspect or adequately inspect the project and failed to warn or adequately warn the decedent of a dangerous condition. The underlying lawsuit also alleged that Project Surveillance was negligent in failing to stop work.
At the time of the incident, Project Surveillance had commercial general liability insurance through Travelers and professional liability insurance through RLI. RLI agreed to defend Project Surveillance in the underlying lawsuit. Travelers, however, denied owing a duty to defend or indemnify based on an exclusion for “bodily injury” arising out of the rendering or failure to render any “professional service.” The Traveler policy defined the term “professional services” to mean any service requiring specialized skill or training, including “failure to prepare [. . .] any warning,” “supervision,” “inspection,” “control,” “surveying activity or service,” “job site safety,” “construction administration,” and “monitoring [. . .] necessary to perform and of [those] services.”
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Jeremy S. Macklin, Traub LiebermanMr. Macklin may be contacted at
jmacklin@tlsslaw.com
House Approves $715B Transportation and Water Infrastructure Bill
July 11, 2021 —
Tom Ichniowski - Engineering News-RecordAnother building block for infrastructure legislation has moved into place with the House’s approval of a five-year $715-billion surface transportation and water infrastructure package.
Reprinted courtesy of
Tom Ichniowski, Engineering News-Record
Mr. Ichniowski may be contacted at ichniowskit@enr.com
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Colorado House Bill 20-1290 – Restriction on the Use of Failure to Cooperate Defense in First-Party Claims
May 18, 2020 —
David M. McLain – Colorado Construction LitigationOn February 7th, Representative Garnett, with Senator Fenberg as the Senate sponsor, introduced HB 20-1290, concerning the ability of an insurer to use a failure-to-cooperate defense in an action in which the insured has made a claim for insurance coverage.
If the bill were to pass, in order to plead or prove a failure-to-cooperate defense in any action concerning first-party insurance benefits, the following conditions must be met:
- The carrier has submitted a written request for information the carrier seeks to the insured or the insured’s representative, by certified mail;
- The written request provides the insured 60 days to respond;
- The information sought would be discoverable in litigation;
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David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
Equitable Lien Designed to Prevent Unjust Enrichment
November 09, 2020 —
David Adelstein - Florida Construction Legal UpdatesThere are instances where a party does not have construction lien rights but, nevertheless, feels the need to pursue an equitable lien against the real property.
No different than a construction lien, an action to enforce an equitable lien has a one-year limitations period if it arises from the “furnishing of labor, services, or material for the improvement of real property.” Fla. Stat. s. 95.11(5)(b). In other words, an equitable lien–not nearly as powerful as a construction lien because a construction lien is recorded in the official public records whereas an equitable lien is not–is tied to an analogous one-year limitations period for those liening for construction improvements. (Notably, if the equitable lien arises outside of the construction improvement context, the one-year statute of limitations would not apply. See Gabriji, LLC v. Hollywood East, LLC, 45 Fla. L. Weekly D2251a (Fla. 4th DCA 2020) (one-year statute of limitations period does not apply to all equitable liens such as those that do not arise from furnishing labor, services, or material for the improvement of real property)).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com