SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Federal Court Requires Auto Liability Carrier to Cover Suit Involving Independent Contractor Despite “Employee Exclusion”

August 30, 2017 — H. Scott Williams & Brendan Holt - Saxe Doernberger & Vita, P.C.
A recent federal court decision rendered in July of 2017 highlights the importance of worker classification in the transportation industry and the potential insurance implications. In Spirit Commercial Auto Risk Retention Grp., Inc. v. Kailey, 1 the court determined that an “employee exclusion” in a motor carrier’s automobile liability insurance policy did not exclude coverage for liability resulting from the bodily injury of an independent contractor operating the motor carrier’s tractor-trailer. In April of 2014, a team of two drivers hired by the motor carrier, Kailey Trucking Line (KTL), were involved in a collision while operating KTL’s truck. The passenger in the truck, who was not operating the vehicle at the time, was killed in the accident. Subsequently, the spouse of the decedent filed suit against KTL as well as the driver of the truck. KTL sought coverage for the suit under its automobile liability insurance policy, issued by Spirit Commercial Auto Risk Retention Group, Incorporated (Spirit). However, Spirit took the position that it had no duty to defend or indemnify KTL, and ultimately filed a declaratory judgment action in United States District Court for the Eastern District of Missouri. The policy issued to KTL provided coverage for damages due to bodily injury or property damage caused by an accident resulting from the ownership, maintenance, or use of a covered auto. However, the policy excluded from coverage any bodily injury to an employee or fellow employee of the insured arising out of and in the course of employment of the insured. Accordingly, to the extent that the decedent qualified as an “employee” of KTL, Spirit had no duty to indemnify KTL in the litigation. Reprinted courtesy of H. Scott Williams, Saxe Doernberger & Vita, P.C. and Brendan C. Colt, Saxe Doernberger & Vita, P.C. Mr. Holt may be contacted at bch@sdvlaw.com Mr. Williams may be contacted at hsw@sdvlaw.com Read the court decision
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Jury Awards Aluminum Company 35 Million in Time Element Losses

September 23, 2019 — Michael S. Levine & Daniel Hentschel - Hunton Insurance Recovery Blog
On July 3, 2019, a Delaware jury determined that fourteen property insurers for Noranda Aluminum Holding Corp., an aluminum producer that filed for bankruptcy and ceased operations three years ago, owe Noranda over $35 million in time element losses that Noranda sustained as a result of two separate catastrophic incidents that occurred at its aluminum facility in 2015 and 2016. In August 2015, an aluminum explosion occurred at Noranda’s facility, resulting in substantial property damage and bodily injuries. Though the insurers paid for Noranda’s property damage claim, the insurers only covered $5.64 million of Noranda’s $22 million time element claim. In January 2016, the same facility sustained significant damage as a result of equipment failure. The insurers again paid for Noranda’s property damage claim arising from the equipment failure but declined to pay any of its $22.8 million time element claim. Reprinted courtesy of Michael S. Levine, Hunton Andrews & Kurth and Daniel Hentschel, Hunton Andrews & Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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#3 CDJ Topic: Underwriters of Interest Subscribing to Policy No. A15274001 v. ProBuilders Specialty Ins. Co., Case No. D066615

December 30, 2015 — Beverley BevenFlorez-CDJ STAFF
Michael R. Vellado and Nicole R. Kardassakis of Lewis Brisbois Bisgaard & Smith LLP analyzed the appeals case that “reversed the trial court’s entry of summary judgment in favor of ProBuilders Specialty Insurance Company (“ProBuilders”) and held that the ‘other insurance’ clause in the ProBuilders policy did not relieve it of its duty to participate in the defense of its insured, Pacific Trades Construction & Development, Inc. ('Pacific Trades')." Read the full story... Another discussion of the ProBuilders appeal ruling occurred on the California Construction Law Blog, written by Yas Omidi of Wendel Rosen Black & Dean LLP. Omidi explained the appeal’s court decision: “In reversing the trial court’s decision, the appellate court characterized ProBuilder’s ‘other insurance’ clause as an ‘escape clause’—i.e., a clause that attempts to have coverage, paid for with the insured’s premiums, evaporate in the presence of other insurance.” Furthermore, she noted that “California public policy disfavors such clauses.” Read the full story... Read the court decision
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Colorado’s New Construction Defect Law Takes Effect in September: What You Need to Know

September 07, 2017 — Jesse Witt - The Witt Law Firm
Colorado’s new construction defect law officially takes effect this month. Although HB 17-1279 was passed in May, the statutory text provides that it only applies “with respect to events and circumstances occurring on or after September 1, 2017.” With that date now upon us, practitioners should be mindful of the law’s new requirements. The law applies to any lawsuit wherein a homeowner association files a construction defect action on behalf of two or more of its members. “Construction defect action” is defined broadly to include any claims against construction professionals relating to deficiencies in design or construction of real property. Before an association may commence such an action, its board must follow several steps. First, the board must deliver notice of the potential construction defect action to all homeowners and the affected construction professionals at their last known addresses. This requirement does not apply to construction professionals identified after the notice has been mailed, or to construction professionals joined in a previously-approved lawsuit. The notice must include a description of the alleged construction defects with reasonable specificity, the relief sought, a good-faith estimate of the benefits and risks involved, and a list of mandatory disclosures concerning assessments, attorney fees, and the marketability of units affected by construction defects. The notice must also call a meeting of all homeowners. The notice should be sent to the construction professionals at least five days before the homeowners. Reprinted courtesy of Jesse Howard Witt, Acerbic Witt Mr. Witt may be contacted at www.witt.law Read the full story... Read the court decision
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Handling Construction Defect Claims – New Edition Released

February 11, 2013 — CDJ STAFF
A lot has changed in the twenty-seven years since the Miller Law firm first released Handling Construction Defect Claims: Western States, and those changes are reflected in the recent publication of the fourth edition. Frank H. Wu, the Chancellor and Dean of UC Hastings College of Law describes the work as “more than a scholar’s treatise, it is the first resource for construction defect plaintiff and defense attorneys; as well as mediators, arbitrators and judges — or ought to be!” In the time since the first edition, the number of homeowner associations has grown nearly ten-fold. Further, as Rachel M. Miller, a Senior Partner at the firm and one of the authors, notes, “thousands of construction defect claims are filed every year, and in most cases, the developers insurance pick up these claims.” The book is available at Amazon at a price of $299. Read the court decision
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Colorado Senate Voted to Kill One of Three Construction Defect Bills

May 05, 2014 — Beverley BevenFlorez-CDJ STAFF
The Denver Business Journal reported that the Colorado Senate Appropriations Committee voted 5-2 to kill SB 219, one of the three construction defect bills introduced by Sen. Jessie Ulibarri, D-Commerce City. SB 219 “would have given the divisions of housing, insurance and law a combined $150,000 to collect data that would shine light on the reasons for the current shortage of owner-occupied affordable housing.” However, the two other construction defect related bills are still alive. SB 216 “would offer financial incentives for building condos worth less than $500,000 and SB 220, would make it more difficult for condo owners to file a class-action lawsuit regarding alleged defects.” Read the court decision
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Certificates as Evidence of Additional Insured Coverage Are All the Rage, But You Deserve Better

August 30, 2021 — Joseph L. Cohen, W. Mason & Sean Milani-nia - ConsensusDocs
Consider the following scenario: the construction project is ready to proceed. The deal is done. The agreements have all been carefully crafted, with detailed provisions on insurance dedicated to reducing risk. Those provisions require the downstream trade contractors to furnish certificates of insurance listing the owner and prime contractor as additional insureds on the downstream contractor’s policies of insurance. A provision in the prime contract further requires the prime contractor to provide the owner with a certificate of insurance showing the owner as an additional insured on the prime contractor’s policies. At the ceremonial ground-breaking and right before work commences, the downstream contractors deliver their insurance certificates to the prime contractor and the prime contractor delivers its certificate plus the downstream certificates to the owner. From there, each insurance certificate will begin its final destination to the project file (either electronic or physical) where, with any luck, it will serve the regular stint before being discarded after the project’s successful conclusion. Otherwise, it will be retrieved under much stress and heavy scrutiny. The acceptance of insurance certificates is often viewed as standard industry practice, but should it be? The answer is a resounding “no.” There are many form development and construction agreements in circulation that deem insurance certificates to be acceptable evidence of insurance. But, a certificate of insurance should not be relied upon because it does not mean that insurance has been placed. You deserve real evidence that the requisite additional insured coverage is in place (in the form of a policy endorsement), and here is why. Reprinted courtesy of Joseph L. Cohen, Fox Rothschild, W. Mason, Fox Rothschild and Sean Milani-nia, Fox Rothschild Mr. Cohen may be contacted at jlcohen@foxrothschild.com Mr. Mason may be contacted at wmason@foxrothschild.com Mr. Milani-nia may be contacted at smilani@foxrothschild.com Read the court decision
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Mich. AG Says Straits of Mackinac Tunnel Deal Unconstitutional

June 03, 2019 — Jeff Yoders - Engineering News-Record
Michigan Attorney General Dana Nessel (D) has declared unconstitutional a late-2018 law that would create an authority to oversee construction of a key tunnel. The tunnel would house an oil-and-gas pipeline under the Straits of Mackinac. Read the court decision
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Reprinted courtesy of Jeff Yoders, ENR
Mr. Yoders may be contacted at yodersj@enr.com

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