SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Global Insurer Agrees to Pay COVID-19 Business Interruption Claims

July 06, 2020 — Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery Blog
AXA, one of the biggest insurance companies in the world, has agreed to pay COVID-related business interruption claims by a group of restaurants in Paris after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under AXA’s policies. AXA initially took the position that its insurance policies did not cover business interruption caused by COVID-19. The restaurant then sued AXA in a French court, seeking coverage for operating losses resulting from a government order issued in March mandating the closure of restaurants and bars in response to the COVID-19 pandemic. The court concluded that the government orders, which prohibited restaurants from receiving the public and offering traditional sit-down dining services, triggered the policy’s coverage for business interruption coverage. The court rejected AXA’s argument that the pandemic was uninsurable, and made clear that if AXA intended to exclude such a risk it should have done so expressly in its policy. The court also rejected AXA’s argument that there must be a prerequisite of an insured event for the application of the “administrative closure” provision, noting that no prerequisite was required by the policy. AXA’s argument that the government orders did not require the restaurant to be closed because the restaurant was authorized to maintain take-away services was also rejected. As a result, the court ruled in favor of the policyholders, holding that the business interruption loss resulting from the government orders qualified for insurance coverage. Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews Kurth and Daniel Hentschel, Hunton Andrews Kurth Mr. Oehninger may be contacted at soehninger@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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Traub Lieberman Senior Trial Counsel Timothy McNamara Wins Affirmation of Summary Judgment Denial

August 28, 2023 — Timothy G. McNamara - Traub Lieberman
In this appeal brought before the State of New York Appellate Division, Second Judicial Department, the court ruled in favor of Traub Lieberman’s client, a housing complex owner, affirming the denial of co-defendant landscaping company’s summary judgment motion seeking dismissal of the cross-claims asserted by the complex owner against the co-defendant. In the underlying case, the plaintiff was allegedly injured when she slipped and fell on ice on the exterior stairs of the housing complex where she lived. The complex owner had contracted with the co-defendant to provide snow removal services for the complex. The plaintiff commenced action against both the complex owner and the landscaping company to recover damages for personal injuries. The complex owner asserted cross-claims against the landscaping company for contribution, common-law indemnification, and contractual indemnification. The landscaping company sought summary judgment dismissing the complaint and all cross-claims asserted against it, but the branch of the motion seeking dismissal of the cross-claims was denied. In the appeal brought before the Appellate Division, the court ruled in favor of Traub Lieberman’s client, the complex owner, affirming the denial of summary judgment for the cross-claims. Read the court decision
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Reprinted courtesy of Timothy G. McNamara, Traub Lieberman
Mr. McNamara may be contacted at tmcnamara@tlsslaw.com

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Colorado Senate Revives Construction Defects Reform Bill

March 01, 2017 — Beverley BevenFlorez-CDJ STAFF
A re-booted construction defects reform bill recently passed its first Senate committee, according to the Denver Business Journal. Next, Senate Bill 156, sponsored by Sen. Owen Hill, R-Colorado Springs, heads to the Senate floor for debate. SB 156 “would require that condominium owners alleging construction defects take their disputes to arbitration or mediation if requested by builders,” the Denver Business Journal reported. “It also would require that homeowners be informed of the consequences of filing legal actions over purported disputes and that a majority of all owners in a condominium complex vote to proceed with legal action, rather than just a majority of homeowners association board members.” However, it is almost identical to the failed measures that were introduced in 2014 and 2015. Homeowners association group members and owners of defective condominiums argued against the measure, stating “that the effort would not improve the quality of building in the state, but simply would block aggrieved Coloradans from taking their complaints before a jury of their peers.” Proponent of the bill, Tom Clark, CEO of Metro Denver Economic Development Corp., said “that Denver’s housing costs have risen since the first bill was introduced in 2013 to the sixth-most-expensive in the country – and are tops for any metro area not on a coast.” Read the court decision
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Bad Faith and a Partial Summary Judgment in Seattle Construction Defect Case

February 10, 2012 — CDJ STAFF

The US District Court of Washington has issued a ruling in the case of Ledcor Industries v. Virginia Surety Company, Inc. Ledcor was the builder of a mixed-use real estate project in Seattle called the Adelaide Project. Ledcor purchased an insurance policy from Virginia Surety covering the project. After the completion of the project, Ledcor received complaints of construction defects from the homeowners, which they forwarded to Virginia Surety.



Virginia Surety denied coverage on several grounds. Absent any lawsuit, Virginia claimed that there was “not yet any duty to defend or indemnify.” Further, as the policy commenced ten days after work on the project was substantially completed, Virginia cited a provision in the policy that excluded coverage for damage that occurred before the policy began. As problems included water intrusion, Virginia noted an exclusion for fungal damage. Finally, Virginia noted that it was not clear whether damage was due to Ledcor’s own actions.



The homeowners sued over the construction defects. Ledcor settled these suits before trial. In this, they were defended by, and settlements were paid by American Home, another of Ledcor’s insurers. Ledcor claims that Virginia Surety acted in bad faith by denying coverage and by its failure to investigate the ongoing nature of the work at the project.



The judge determined that Virginia Surety acted in bad faith when it invoked the fungus exclusion. Virginia noted that fungal damage “‘would have been’ referenced in the list of construction defects,” however, the HOAs claimed only “water stains” and “water damage,” and made no mention of mold or fungus. The court found that Virginia Surety “was not entitled to deny coverage simply because it may have suspected that mold or fungus damage existed.” The court noted that further proceedings would be needed to determine what portion of the settlement Virginia is obligated to pay.



The court found that there were matters of fact to be determined on the further issues in the case. The judge wrote that although Virginia acted in bad faith in invoking the fungus exclusion, it still had to be determined if they were in breach of contract by failing to defend Ledcor. Ledcor still needs to show that the damages claimed by the HOA were due to work actually covered by Virginia Surety.



Ledcor made an additional claim that Virginia Surety violated Washington’s laws concerning the insurance industry. Here, the court noted that the improper exclusion for fungus issues “constitutes a per se unfair trade practice.” Six other claims were made under this law. The court found that Virginia Surety did not misrepresent “pertinent facts or insurance policy provisions.” It also issued its denial letter promptly, satisfying the fifth provision. However, Virginia Surety did violate the second provision, in that it failed “to acknowledge and act reasonably promptly upon communications with respect to claims.” Two other issues could not be determined.



Judge Martinez’s decision granted a summary judgment to Ledcor on the issue of bad faith. An additional summary judgment was granted that Virginia Surety violated Washington’s Insurance Fair Conduct Act. Judge Martinez did not grant summary judgment on any of the other issues Ledcor raised.

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Condominium Association Wins $5 Million Judgment against Developer

July 31, 2013 — CDJ STAFF
Belgravia Condominium Association, a group of condo owners in Philadelphia, Pennsylvania, have secured a $5.05 million judgment against the contractor who converted their 1902 building into condominiums. The suit alleged that the developers and engineers failed to disclose structural problems to the condominium buyers. One issue at hand was the maintenance of the building’s façade which has historic status. Repairs to the façade alone are expected to require $2 million. Ronald Williams, the lawyer for the association, noted that the iron canopy at the entrance had begun to break away and fall even before the condominium association came into being. The decision isn’t yet final, as the developer has an opportunity to appeal. Read the court decision
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National Lobbying Firm Opens Colorado Office, Strengthening Construction Defect Efforts

January 05, 2017 — Beverley BevenFlorez-CDJ STAFF
Michael Best Strategies, a national law and lobbying firm, has recently opened an office in Colorado. According to the Denver Business Journal, the firm “has recruited several big-name associates — a move that could give business leaders even more clout with the Legislature on issues such as construction-defects reform.” One of the firm’s recruits, Jeff Thormodsgaard, the lead lobbyist in the recent movement to make it harder to sue condominium builders, told the Denver Business Journal, “The only change [in the construction-defects reform effort] is that we’re going to be adding more feet and more boots on the ground and more gravitas.” Read the court decision
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McDermott International and BP Team Arbitrate $535M LNG Site Dispute

April 02, 2024 — Mary B. Powers - Engineering News-Record
BP and Kosmos Energy are seeking “maximum recoverable damages” of about $535 million in binding arbitration with contractor McDermott International over a claim that it failed to meet contract obligations on subsea pipeline installation for an estimated $4.8 billion liquefied natural gas project off Africa. Reprinted courtesy of Mary B. Powers, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Roadway Contractor Owed Duty of Care to Driver Injured Outside of Construction Zone

January 04, 2021 — Garret Murai - California Construction Law Blog
For the roadway contractor it appeared to be an open and shut case: Plaintiff car driver was stopped at a standard one-way “reversing lane closure” traffic control in which traffic going in one direction would be stopped while traffic going in the other direction was allowed to proceed, and then the procedure would be reversed. Plaintiff, while stopped at the traffic control, was rear-ended by another vehicle driven by George Smithson. Smithson testified that he “must have looked off to the side” at some point prior to the collision because he did not see plaintiff’s vehicle before hitting it. He also testified that the primary reason the accident happened was that he was not paying attention and that he knew of no other cause of the accident. For the roadway contractor you couldn’t ask for a better admission. And it ended in the trial court just the way you thought it would, with a win for the roadway contractor. That is, until it was appealed. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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