Properly Trigger the Performance Bond
January 05, 2017 —
David Adelstein – Florida Construction Legal UpdatesA performance bond is a valuable tool designed to guarantee the performance of the principal of the contract made part of the bond. But, it is only a valuable tool if the obligee (entity the bond is designed to benefit) understands that it needs to properly trigger the performance bond if it is looking to the bond (surety) to remedy and pay for a contractual default. If the performance bond is not properly triggered and a suit is brought upon the bond then the obligee could be the one materially breaching the terms of the bond. This means the obligee has no recourse under the performance bond. This is a huge downside when the obligee wanted the security of the performance bond, and reimbursed the bond principal for the premium of the bond, in order to address and remediate a default under the underlying contract.
A recent example of this downside can be found in the Southern District of Florida’s decision in Arch Ins. Co. v. John Moriarty & Associates of Florida, Inc., 2016 WL 7324144 (S.D.Fla. 2016). Here, a general contractor sued a subcontractor’s performance bond surety for an approximate $1M cost overrun associated with the performance of the subcontractor’s subcontract (the contract made part of the subcontractor’s performance bond). The surety moved for summary judgment arguing that the general contractor failed to property trigger the performance bond and, therefore, materially breached the bond. The trial court granted the summary judgment in favor of the performance bond surety. Why?
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dma@katzbarron.com
Heavy Rains Cause Flooding, Mudslides in Japan
July 31, 2023 —
Associated Press - BloombergTOKYO (AP) — Torrential rain pounded southwestern Japan, triggering floods and mudslides and leaving two people dead and at least six others missing, officials said Monday.
Rain falling in the regions of Kyushu and Chugoku since the weekend caused flooding along many rivers, triggered mudslides, closed roads, disrupted trains and cut the water supply in some areas.
The Japan Meteorological Agency issued an emergency heavy rain warning for Fukuoka and Oita prefectures on the southern main island of Kyushu, urging residents in riverside and hillside areas to take maximum caution. More than 1.7 million residents in vulnerable areas were urged to take shelter. The emergency warning was downgraded later Monday to a regular warning.
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The "Dark Overlord" Strikes The Practice Of Law: What Law Firms Can Do To Protect Themselves
April 17, 2019 —
Ivo G. Danielle – Newmeyer & DillionCybersecurity breaches involving law firms are on the rise with each passing year. Law firms are prime targets for cyber criminals seeking confidential and sensitive information because of the various types of legal work that law firms normally handle for their clients. Whether it be mergers and acquisitions, the use of intellectual property, purchase agreements, bankruptcy or even litigation involving divorce, law firms are a rich depository for highly confidential and sensitive information. As a result, law firms must employ comprehensive security measures to protect themselves from security breaches or risk being on the losing end of a costly malpractice claim, and suffer severe reputational harm.
Law Firms Continue To Be Targeted By Cybercriminals
According to the American Bar Association ("ABA") 2018 Legal Technology Survey Report, 23% of the law firms who participated in the survey reported that their law firm experienced a data breach. Although this may be just a 1% increase from the 22% who reported a breach in 2017, it is important to understand that this is an increase of 8% from the stable percentages reported from 2013 through 2016.1 The 2018 survey report also revealed that security breaches fluctuated with firm size – 14% for solo law firms, 24% for firms employing 2-9 attorneys, approximately 24% for firms with 10-49 attorneys, 42% for firms with 50-99 attorneys, and approximately 31% for those firms employing 100 or more attorneys.
Latest Law Firm Security Breaches
The notorious criminal group called "The Dark Overlord" has a history of committing data breaches of high profile companies such as Gorilla Glue, Netflix, Larson Studios, multiple healthcare companies, and Little Red Door Cancer Agency. Their goal is simple – steal sensitive information and then extort payment from the victims by threatening to release the sensitive information to the public.
On December 31, 2018, this cybercriminal group announced to the world that they had acquired 18,000 documents containing highly sensitive legal information related to insurance based litigation connected to the 9/11 tragedy. The stolen information was the attorney/client property of Lloyd's of London, Silverstein Properties, and Hiscox Syndicates, Ltd. In its announcement, The Dark Overlord boasted that they were in possession of client sensitive information, such as: "emails; retainer agreements; non-disclosure agreements; settlements, litigation strategies; liability analysis; defense formation; collection of expert witness testimonies; communication with government officials in countries all over the world; voice mails; dealings with the FBI, USDOJ, DOD, confidential communications, and so much more."
Subsequent to the data breach, The Dark Overlord announced to the public that they designed a compensation plan that would allow for public crowd-funding for its organization to permit the public to view the stolen information in exchange for bitcoin payment. The more public funding it receives, the more stolen sensitive information will be unlocked and released to the public. It is estimated that this cybercriminal group already distributed information to the public on two separate occasions during the month of January 2019.
High profile cybersecurity breaches of law firms is nothing new – for example, the infamous Panama Papers breach, where cybercriminals leaked 11.5 million documents exposing the shadowy business of setting up offshore corporations as tax shelters for businesses, celebrities, and politicians - and the infamous Petya Malware attack which resulted in a digital lockdown of one of the world's largest law firms, DLA Piper. However, despite the infrequency of publicized cyber-attacks of law firms by the media, the FBI has recently announced that law firms should expect an increase in security attacks by cybercriminals because law firms are now viewed as "one-stop shops" for cybercriminals. Therefore, in order to combat the inevitable increase in cyber-attacks, law firms must get prepared.
How Law Firms Can Protect Themselves
All law firms will agree that the most serious consequence of a security breach for their firm would be the unauthorized access to sensitive client data. The American Bar Association's Model Rules of Professional Conduct, specifically Rules 1.1 and 1.62 and related Comments, require an attorney to take competent and reasonable measures to safeguard information relating to their clients. This duty to "safeguard' information imposes a significant challenge to firms when using technology in connection with protecting client information because most law firms are not savvy with technology and lack proper cyber security training.
In order for a law firm to protect itself from security breaches and inadvertently violate its duty of safeguarding a client's sensitive information, it is important to take the following actions:
- Start by taking an inventory and risk assessment of the firm to determine what needs to be protected – the inventory should include both technology and data;
- Develop, implement and maintain an appropriate cybersecurity program that complies with applicable ethical and legal obligations;
- Ensure the cybersecurity program addresses people, policies and procedures, and technology. The cybersecurity program must designate an individual or a group to be in charge and coordinate security;
- Develop an incident response plan scaled to the size of the firm;
- Continually train staff and attorneys to identify and understand potential cybersecurity threats;
- Consider implementing a third-party assessment of firm's cybersecurity program and policies;
- Purchase cyber liability for insurance which not only covers first party losses to law firms (like lost productivity, data restoration, and legal expenses) but also liability protection to third parties;
- Implement authentication and access controls for network, computers and mobile devices used by the firm's staff and attorneys;
- Consider the use of full-drive encryption for computers and mobile devices;
- Have staff and attorneys avoid and/or limit the use of public WiFi when working remotely; and
- Create a disaster recovery plan to backup all data in the event of a cyber-attack or natural catastrophe.
Continually reviewing, implementing, training and updating a firm's cybersecurity program and protocols will help safeguard sensitive and confidential client information and/or data. No law firm wants to be the next data breach headline – so take the necessary steps to avoid a potential disaster.
1 Past ABA Legal Technology Surveys reported 14% in 2016, 15% in 2015, 14% in 2014 and 15% in 2013.
2 On November 1, 2018, California adopted ethics rules patterned after the ABA Model Rules of Professional Conduct.
Ivo Daniele is a seasoned associate in Newmeyer & Dillion's Walnut Creek office. His practice includes representing private and public companies with both their transactional and litigation needs. You can reach Ivo at ivo.daniele@ndlf.com.
About Newmeyer & Dillion
For almost 35 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business law, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer & Dillion delivers legal services tailored to meet each client's needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.ndlf.com.
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New OSHA Regulations on Confined Spaces in Construction
May 20, 2015 —
Craig Martin – Construction Contractor AdvisorOn May 1, OSHA announced its final rules for construction workers in confined spaces. The Final Rules, which will take effect August 3, 2015, will require more comprehensive training , with the goal of providing construction workers the same or similar protections as employees in manufacturing and general industry.
The final rule will cover confined spaces such as:
- Crawl spaces
- Manholes
- Tanks
- Sewers
The final rule will require the following:
- Confined spaces must be large enough for an employee to enter and have a means of exiting.
- The air in confined spaces must be tested before workers enter them to ensure that the air is safe.
- Construction workers must share safety information with others when they are going to work in enclosed/confined spaces.
- Hazards associated with confined spaces must be continuously monitored and abated to the extent possible.
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Craig Martin, Lamson, Dugan and Murray, LLPMr. Martin may be contacted at
cmartin@ldmlaw.com
Electronic Signatures On Contracts: Are They Truly Compliant?
April 10, 2023 —
Rebecca S. Glos - ConsensusDocsElectronic Signatures On Contracts: Are They Truly Compliant
As companies move to work-from-home situations in the wake of the COVID-19 pandemic, the issue of whether electronic signatures are legally recognized becomes more relevant. For many platforms, an electronic signature merely requires logging in, clicking a button, or typing your name. This process, which replaces the mighty pen and quill, is so effortless that oftentimes an electronic signature may feel like it does not carry the same weight as a handwritten signature. Thus, the question that we should be asking ourselves is whether the law recognizes this type of signature as being valid? Additionally, if electronic signatures are, indeed, valid, are there exceptions on whether they can be used?
Difference Between “Electronic” And “Digital” Signatures
Before delving into this issue, an understanding of some related terms may be helpful. In basic terms, an electronic signature (or “e-signature”) is any signature created or captured through a computer or other electronic device. Electronic signatures can include touch-sensitive screens where you use your finger or a stylus to sign your name as you would on a paper document. Electronic signatures can also include forms where you merely type in your name and perhaps other identifying information, then check a box stating that you intend to sign the document. They cover the full range of technologies and solutions to create signatures electronically such as:
- Clicking “I Agree” on a website;
- Signing with your finger on a mobile device;
- Typing your name or PIN into an online form; or
- Using e-signature software
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Rebecca S. Glos, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)Ms. Glos may be contacted at
rglos@watttieder.com
Insurer Must Defend Additional Insured Though Its Insured is a Non-Party
November 18, 2019 —
Tred R. Eyerly - Insurance Law HawaiiThe plaintiff insurer's motion for partial summary judgment seeking an order that defendant insurer was obligated to defend a non-party as an additional insured was granted. Am Empire Surplus Lines Ins. Co. v. Burlington Ins. Co., 2019 N. Y. Misc. LEXIS 4145 (N. Y. Sup. Ct. July 25, 2019).
Quality Building Construction, LLC was the contractor hired to work on exterior facade of a building owned by Central Park West Corporation. The underlying complaint alleged that Quality caused plastic spacers and pedestals used for the penthouse terrace to fall down the roof drain riser. A clog and rainwater backup resulted in water damage to apartment 8A. The resulting damage was allegedly due to the clogged roof drain riser.
Quality subcontracted the work to Mega State, Inc. The subcontract required Mega to indemnify and hold Quality harmless against claims in connection with Mega's work, as well as name Quality as an additional insured on a primary, non-contributory bases under Mega's CGL policy. Burlington issued a policy to Mega naming Quality as an additional insured. American Empire issued a CGL policy to Quality.
Quality was sued in the underlying action, but Mega was not. American Empire tendered a demand for coverage to Mega and Burlington, relying on the agreement between Quality and Mega. Burlington responded that Mega was not liable for the alleged damages. American Empire sued Burlington. Subsequently, Burlington accepted the tender to defend Quality in the underlying action, and reserved rights as to whether Burlington's policy was primary and on the question of indemnification. American Empire agreed to withdraw its suit if Burlington would modify its reservation of rights. Burlington refused.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Reinsurer Must Reimburse Health Care Organization for Settlement Costs
June 17, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Indiana Supreme Court reversed summary judgment issued to reinsurer Continental Casualty Company (CNA) and determined it must reimburse the insured for settlement costs under the E & O policy. Wellpoint, Inc., et al. v. National Union Fire Ins. Co. of Pittsburgh, PA, et al., 2015 Ind. LEXIS 316 (Ind. April 22, 2015).
Anthem, Inc. was a large managed health care organization. Anthem was its own primary and excess insurer for E&O liability. It had numerous excess reinsurers. Beginning in 1998, anthem was confronted by various lawsuits alleging it and other managed care organizations failed to pay claims in a full and timely manner, thereby breaching state and federal statutes. The various lawsuits alleged substantially the same wrongful conduct, namely that after promising to pay doctors in a timely manner for their services, Anthem sought to improperly deny, delay and diminish payments due.
The cases were consolidated into a federal multi-district litigation proceeding in the Southern District of Florida. Claims for breach of contract, unjust enrichment, and violations of state prompt pay statutes were dismissed or dropped. Anthem then settled the underlying litigation in July 2005 without admitting and instead denying any wrongdoing or liability. The settlement called for both cash payments and implementation of specific business practices consistent with requested injunctive relief.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Fires, Hurricanes, Dangerous Heat: The US Is Reeling From a String of Disasters
August 22, 2023 —
Will Wade & Brian K Sullivan - BloombergFrom deadly wildfires to floods, the US is reeling from several natural disasters in quick succession — and more are likely on the way.
Torrential rains from the remnants of Hurricane Hilary are inundating parts of California. Two tropical storms, one post-tropical cyclone and two potential storms are lined up in the Atlantic Ocean. Almost 100 wildfires are burning across 15 states as officials in Hawaii investigate the deadliest US blaze in more than a century. And record heat will test Midwest power grids this week.
All of this, all at once, is a lot — and it’s not just bad luck. Climate change has triggered heat waves around the world, leading to ideal fire conditions in forests across the Northwest and Canada. It’s also boosting Atlantic water temperatures, which can intensify storms as the peak of hurricane season approaches. And unusually warm Pacific Ocean waters fueled Hilary, which in turn will contribute to scorching heat in the Midwest.
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