Sinking Floor Does Not Meet Strict Definition of Collapse
August 17, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe court determined that the sinking of the insured's floor caused by termites and rot deterioration did not meet the homeowners policy's definition of collapse. Stewart v. Metro. Lloyds Ins. Co., 2020 U.S. Dist. LEXIS 111527 (S.D. Tex. June 24, 2020).
Beatrice Stewart, the homeowner, heard a loud bang one night as she lay in bed. The next day, she found that the floor near her bathroom and hallway had sunk and the house was sitting lower. She admitted the house never completely fell down. Upon investigation, Lloyds found that rot in the floor joists and subfloor decking were caused by a combination of termite damage and exposure to moisture. Lloyds denied the claim.
Stewart sued. Lloyds argued the policy required an "entire collapse" of the building or any part of a building, which did not occur here. The policy defined "collapse" as "an abrupt falling down or caving in of a building or any part of a building." The record did not show that any part of Stewart's floor caved in.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Claim Against Broker Survives Motion to Dismiss
January 25, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe insured's complaint against its broker for failure to secure adequate coverage survived a motion to dismiss. Broecker v. Conklin Prop., LLC, 2020 N.Y. App. Div. LEXIS 7399 (Dec. 2, 2020).
Conklin Property, LLC purchased real property and entered into a contract with JJC Contracting, Inc. for construction and renovation of the property. The broker, Total Management Corp. (TMC) was retained by Conklin to secure insurance for the construction phase of the renovation project. During the renovation, an employee of JJC was injured at the property and died. The employee's estate then sued Conklin. US Underwriters, the insurer, disclaimed coverage pursuant to an exclusion for bodily injury to contractors and subcontractors and their workers.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Court Upholds Plan to Eliminate Vehicles from Balboa Park Complex
June 10, 2015 —
Kristen Lee Price and Lawrence S. Zucker II – Haight Brown & Bonesteel LLPIn Save Our Heritage Organisation v. City of San Diego, et al. (No. D063992, filed 5/28/15), the California Court of Appeal for the Fourth Appellate District upheld a controversial plan to eliminate vehicles from various plazas in historic Balboa Park. In reaching its decision, the Court of Appeal considered a question of first impression involving the interpretation of San Diego Municipal Code section 126.0504.
Balboa Park, designated a National Historic Landmark in 1940, is a large urban park in the center of San Diego. The City of San Diego (“City”) recently approved a proposed plan (“Project”) to eliminate vehicles from the plazas within the Balboa Park complex and to return the plazas to purely pedestrian zones. Subsequently, a community group named Save Our Heritage Organisation (“SOHO”) filed a petition for a writ of mandate alleging, among other things, the City erroneously approved the Project. SOHO contended Municipal Code section 126.0504 mandated two key findings be made before the Project could be approved: (1) that the intended purpose of the property would not be adversely affected; and (2) without the proposed project, the property would not be put to a “reasonable beneficial use.” SOHO argued that although the City made the requisite findings, those findings lacked substantial evidentiary support. The trial court agreed with SOHO and directed the City to rescind the site development permit.
The City argued on appeal that Municipal Code section 126.0504 vested it with “discretion to make a qualitative determination of whether an existing use of the property, even if deemed beneficial, is also a reasonable use of that property under all of the facts and circumstances applicable to the particular property in question.” The Court of Appeal agreed and reversed.
Reprinted courtesy of
Kristen Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com; Mr. Zucker may be contacted at lzucker@hbblaw.com
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Substantial Completion Explained: What Contractors & Owners Should Know
January 17, 2022 —
Travis Colburn - Ahlers Cressman & SleightA project’s Substantial Completion date is a critical construction milestone for contractors and owners. Depending on the contract, the date of Substantial Completion has project-specific contractual and statutory consequences.
Substantial Completion is an “event” – there is no universal definition of the term. It is generally understood to be (1) a point in time (2) when work performed by the contractor is sufficiently complete (3) where it can be used or occupied for the owner’s intended purpose. The date of Substantial Completion is generally established at the time of contract formation (either as a negotiated or a contract set date), and that date may be adjusted over the course of a project to account for excusable delays.
As a construction professional, your attorney should review and tailor any written agreement to your project-specific needs and risk tolerances prior to execution. Savvy construction professionals often start with standard form agreements promulgated by the American Institute of Architects (“AIA”), the Design-Build Institute of America (“DBIA”), or the Engineers Joint Contract Document Committee (“EJCDC”) as the basis for their construction contracts. The AIA, DBIA, and EJCDC standard forms each contains contract provisions relating to when and what happens once Substantial Completion has occurred, subject to any agreed-to, project-specific deviations.
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Travis Colburn, Ahlers Cressman & SleightMr. Colburn may be contacted at
travis.colburn@acslawyers.com
Beware: Hyper-Technical Labor Code Violations May Expose Employers to Significant Claims for Penalties under the Labor Code California Private Attorneys General Act of 2004 (PAGA)
May 10, 2017 —
Angela Reston-Nunez – Newmeyer & Dillion LLPMost employers know that companywide policies or practices that do not strictly comply with applicable state or federal employment laws can expose employers to class action lawsuits by large numbers of employees seeking recovery of massive sums in damages, attorneys’ fees and costs. Unfortunately, traditional class action lawsuits are not the only representative actions employers should be concerned with. Recent litigation trends have shown that California’s lesser known Labor Code Private Attorneys General Act of 2004 (“PAGA”) can be equally, if not more harmful to employers than class actions due to steep penalties for minor violations.
WHAT IS PAGA?
Under PAGA, “aggrieved employees” can sue employers for alleged Labor Code violations. Like class actions, a PAGA plaintiff sues on a representative basis on behalf of themselves and other workers. However, unlike class action plaintiffs, PAGA plaintiffs do not seek damages; rather, they seek civil and statutory penalties formerly recoverable solely by state agencies in enforcement actions.
The distinction between recovery of damages in class actions and recovery of penalties in PAGA actions reflects the often-insidious nature of PAGA claims. While workers have long alleged “derivative” PAGA claims for penalties in connection with more substantive underlying Labor Code violations (meal or rest break violations, for example), we have seen a recent spike in PAGA suits alleging hyper-technical Labor Code violations with no underlying substantive violation, and where the “aggrieved employees” have suffered no actual harm.
WHAT'S AT STAKE?
Equally troubling for employers is the method by which significant penalties are aggregated. With a few significant exceptions, penalties generally range from $50 to $250 per violation. At first blush, this may not seem like much, however total penalties rise rapidly when considering that calculations are made on a per-employee and a per-pay period basis.
AN EXAMPLE ON HOW PAGA WORKS
Consider the following example based on one recent case:
Issue: An employee brought a PAGA-only lawsuit on behalf of himself and 400 other “aggrieved employees” against his employer for alleged Labor Code violations.
Claim: The employee claimed the employer’s 30-year practice of paying employees 9 days after the close of the applicable payroll period violated Labor Code Section 204(d), which requires payment to be made within 7 days of the close of the payroll period. The employee claimed that, under PAGA, the employer was liable for a minimum penalty of $100 per employee, per pay period, going back at least one year (the statutory limitations period for PAGA claims).
Exposure: With 400 employees, 24 pay periods per year, and $100 per violation, the plaintiff sought a minimum of $960,000 in penalties (not including substantial attorneys’ fees, costs and interest also available under PAGA), despite offering no evidence of harm suffered by the employees or prior notice of the issue.
OTHER IMPORTANT CONSIDERATIONS
In addition to a draconian penalties scheme, there are a myriad of additional aggravating factors for employers involved in PAGA litigation, such as:
- PAGA plaintiffs are not required to meet the rigorous class certification standards required of class action plaintiffs, meaning plaintiffs’ attorneys may be more likely to bring meritless “strike suits” aimed at obtaining quick settlements based on significant alleged penalties exposure.
- 75% of PAGA penalties recovered by way of settlement or judgment are directed to the state of California, while the "aggrieved employees” only keep 25%, reinforcing the notion that PAGA claims are frequently attorneys’-fee-driven, rather than for protecting employees.
STEPS FOR EMPLOYERS TO PROTECT THEMSELVES
Fortunately, there are a number of measures employers can take prior to and during wage and hour litigation which can dramatically reduce, or even eliminate, exposure to substantial penalties and damages. This includes:
- Regular reviews. Prior to litigation, we recommend regular detailed reviews of company policies and practices in order to identify areas of possible concern and ensure compliance with California’s ever-changing labor laws.
- Take action. On receipt of a new PAGA claim, taking immediate action to remedy an alleged violation within the Labor Code’s 33-day “safe harbor” time-period may help limit an employer’s exposure, and could bar a plaintiff from filing suit at all.
- Be aggressive. Once a PAGA or class action claim is in litigation, a proactive, aggressive approach to claim evaluation, investigation and litigation is critical.
For these reasons and more, it’s in an employers’ best interest to monitor these issues closely and seek input when appropriate.
Angela Reston-Nunez is a labor and employment attorney in Newmeyer & Dillion’s Walnut Creek office. For questions regarding PAGA, class action or individual wage and hour issues, or other employment law matters, please feel free to contact Angela Reston-Nunez at (925) 988-3249 or angela.reston-nunez@ndlf.com.
About Newmeyer & Dillion
For more than 30 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, employment, real estate, construction and insurance law, 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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Latosha Ellis Selected for 2019 Leadership Council on Legal Diversity Pathfinder Program
April 10, 2019 —
Michael S. Levine - Hunton Andrews KurthHunton Andrews Kurth has selected Latosha Ellis, an associate in the firm’s Insurance Coverage practice, for the 2019 Leadership Council on Legal Diversity (LCLD) Pathfinder Program. Pathfinder is a national yearlong program that trains diverse, high performing, early-career attorneys in critical career development strategies, including foundational leadership and building professional networks.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com
Toddler Crashes through Window, Falls to his Death
January 24, 2014 —
Beverley BevenFlorez-CDJ STAFFTwo-year old Alijah Glenn fell 17 stories to his death after crashing through “a floor-to-ceiling window” at the Crystal Tower apartments in East Cleveland, Ohio, on January 13th, according to The Plain Dealer. Solandra Wallace, East Cleveland’s building and housing manager, told The Plain Dealer that “the city inspects the building whenever a complaint is filed and does not have regular inspections.” The apartment complex “was built in 1966 and would have to adhere to that era's building code standards,” according to the article.
The Plain Dealer reports that three complaints have been filed at the Crystal Tower since 2010. A resident complained in 2012 that “her apartment was falling apart, causing water damage and emitting a foul odor,” however, by the time an inspector arrived the ceiling was being fixed. In 2011, an “unspecified roof leak” turned out to be “condensation from a hot pipe.” An elevator was reported inoperable in 2010, however the claim was deemed “invalid” since the elevator worked when inspectors arrived.
The Cuyahoga County Medical Examiner ruled Glenn’s death accidental.
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Anchoring Abuse: Evolution & Eradication
October 09, 2023 —
Tim Capowski & Chris Theobalt - Kahana FeldOver the past few years, the plaintiff bar has expanded its use of improper anchoring tactics. Historically, improper anchoring was seen as a risky tactic in which a plaintiff’s counsel would suggest an outrageous figure for pain and suffering during summation in the hope that the lay jury would either award it or split the difference (cut the suggested figure by half) and, either way, return an excessive or runaway verdict. Plaintiff counsel deployed the tactic infrequently through the turn of the century for fear of alienating the jury by appearing greedy.
Two interrelated factors happened to change this dynamic. First, the plaintiff bar worked extremely hard in the intervening years with great success to shed its “ambulance chaser” stereotype by marketing itself as the “protector of the vulnerable”. Second, with the rise in Reptile and punitive tactics spawned in part by the publication of the Reptile handbook, the plaintiff bar also discovered that juries were not alienated by outrageous anchors as long as they were preceded by Reptile commentary essentially to “prime” the jury to punish the defendant rather than compensate the plaintiff with its award.
This is not speculation. I recall sitting outside a courtroom with one of New York’s top plaintiff attorneys in 2006 during deliberations on a catastrophic personal injury trial, during which he conceded to me that he was worried he had asked the jury for too large a figure (it was not even eight figures). A decade later in 2016, that same attorney felt no trepidation in requesting nearly $100 million for a comparable injury. He fed the jurors a steady diet of Reptile tactics from start to finish and they dutifully awarded the requested figure. Our research confirms that this two-step strategy (Reptile + improper anchor) preceded every New York nuclear verdict returned from 2010-2022. The same is almost certainly true of most nuclear verdicts in other jurisdictions.
Reprinted courtesy of
Tim Capowski, Kahana Feld and
Chris Theobalt, Kahana Feld
Mr. Capowski may be contacted at tcapowski@kahanafeld.com
Mr. Theobalt may be contacted at ctheobalt@kahanafeld.com
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