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DIRECTORY AND CAPABILITIES

Delaware Supreme Court Allows Shareholders Access to Corporation’s Attorney-Client Privileged Documents

August 13, 2014 — Marc S. Casarino and Lori S. Smith – White and Williams LLP
Delaware corporations may be required to turn over internal documents of directors and officers, including those of in-house counsel, where the factors enumerated in Garner v. Walfinbarger, 430 F.2d 1093 (5th Cir. 1970) weigh in favor of disclosure. In a July 23, 2014 decision of first-impression, the Delaware Supreme Court ruled in Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, that the Garner doctrine applies to plenary shareholder/corporation disputes, as well as to books and records inspection actions under Section 220 of the Delaware General Corporation Law. The Garner doctrine provides that a shareholder may invade the corporation’s attorney-client privilege in order to prove fiduciary breaches by those in control of the corporation upon a showing of good cause. The non-exhaustive list of factors by which a finding of good cause should be tested are: “(i) the number of shareholders and the percentage of stock they represent; (ii) the bona fides of the shareholders; (iii) the nature of the shareholders’ claim and whether it is obviously colorable; (iv) the apparent necessity or desirability of the shareholders having the information and the availability of it from other sources; (v) whether, if the shareholders’ claim is of wrongful action by the corporation, it is of action criminal, or illegal but not criminal, or of doubtful legality; (vi) whether the communication is of advice concerning the litigation itself; (vii) the extent to which the communication is identified versus the extent to which the shareholders are blindly fishing; and (viii) the risk of revelation of trade secrets or other information in whose confidentiality the corporation has an interest for independent reasons.” Reprinted courtesy of Marc S. Casarino, White and Williams LLP and Lori S. Smith, White and Williams LLP Mr. Casarino may be contacted at casarinom@whiteandwilliams.com; Ms. Smith may be contacted at smithl@whiteandwilliams.com Read the court decision
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Boston’s Tunnel Project Plagued by Water

August 11, 2011 — CDJ STAFF

Boston’s Tip O’Neil Tunnel, part of the “Big Dig” project, is suffering from water leaks which has lead to millions of dollars of damage, according to an article in the Boston Globe. The report quotes Frank DePaola, the highway administrator, as likening the water leaks to “three garden hoses.” The project’s chief engineer notes that those “three garden hoses” add up to 17 million gallons a year.



Further, the chief engineer reports notes that the leaks could compromise both safety and structural integrity. Problems have included a 110-pound light fixture that fell in February, ventilation ducts clogged with ice during the winter, and mold in utility rooms and ventilation buildings.

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Statutes of Limitations May be the Colorado Contractors’ Friend

April 18, 2011 — Beverley BevenFlorez CDJ STAFF

Albert Wolf, a principal in Wolf Slatkin & Madison P. C., has written an interesting article on statutes of limitations in construction defect claims in Colorado. While Wolf states that in most cases, “construction defect claims against construction industry participants (contractors, subcontractors, architects, engineers, etc.) requires that suits be started within two years after construction defects have been or should have been—in the exercise of reasonable diligence (care)—discovered,” if a project used the AIA General Conditions (AIA Document A2010) before the 2007 edition, the “statutes of limitations begin to run (accrue) at either substantial completion or breach by the contractor (installation of defective work), depending on the circumstances.”



“That’s a huge difference,” Wolf writes in his article. “For example, if the structural defect caused by faulty foundation work is not discovered or discoverable until walls begin to exhibit cracking more than two years after the building is completed, the owner’s claim against the contractor may be barred if the AIA provision is applied.”



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Fact of Settlement Communications in Underlying Lawsuits is Not Ground for Anti-SLAPP Motion in Subsequent Bad Faith Lawsuit

August 24, 2020 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Trilogy Plumbing, Inc. v. Navigators Specialty Ins. Co. (No. G057796, filed 5/27/20, ord. pub. 6/18/20), a California appeals court ruled that an insurance bad faith lawsuit alleging a variety of claim handling misconduct in defending the insured was not subject to an insurer’s special Strategic Lawsuit Against Public Participation (SLAPP) motion to strike because, while the alleged acts were generally connected to litigation, they did not include any written or oral statement or writing made in connection with an issue under consideration or review by a judicial body and, therefore, did not constitute protected activity under California’s anti-SLAPP statute. In Trilogy Plumbing, the policyholder was sued in 33 different construction defect lawsuits, some of which Navigators defended, and others which were denied or had the defense withdrawn. The Navigators’ policies were subject to a $5,000 deductible, and Trilogy alleged that Navigators breached the contracts by “demanding deductible reimbursement amounts greater than the policies’ $5,000 stated deductible, and by seeking reimbursement of ordinary defense fees and expenses as if they were subject to deductible reimbursement,” “claiming a right to seek reimbursement from Trilogy for defense fees and expenses Navigators paid for the benefit of third-party additional insureds,” “providing conflicted defense counsel who took instructions only from Navigators without disclosing conflicts of interest,” “failing to reasonably settle cases and by withdrawing [the] defense as a strategic means of trying to force Trilogy to fund its own settlements,” “misrepresenting its deductible provisions,” “refusing to account for deductible amounts it charges and collects,” and others. Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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Florida County Suspends Impact Fees to Spur Development

November 18, 2011 — CDJ STAFF

Hernando County, just north of Tampa on Florida’s west coast, has suspended impact fees for a year, hoping to spur development. Hernando Today reports that the move drew applause from the audience at the county commissioners meeting. Many of those in attendance were builders or members of the Greater Hernando Chamber of Commerce.

Not all were convinced. Frankie Burnett, the mayor of Brooksville, told the commissioners that his city council were not convinced that this would spur development. “Development should pay its fair share, even in slow economic times.” Burnett’s letter to the board warned that “if lowering impact fees succeeded in stimulating more residential overbuilding, it would only further depress the current real estate market.”

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New York’s Comprehensive Insurance Disclosure Act Imposes Increased Disclosure Requirements On Defendants at the Beginning of Lawsuits

February 07, 2022 — Craig Rokuson & Lisa M. Rolle - Traub Lieberman Insurance Law Blog
On December 31, 2021, New York Governor Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act, which amends Section 3101(f) of the Civil Practice Law & Rules (CPLR) to require the automatic disclosure of insurance-related items within sixty days of the filing of an answer in a civil suit. For lawsuits pending as of the effective date of the Act, the disclosures required by Section 3101(f) must be provided by March 1, 2022. Pursuant to amended Section 3101(f), defendants (including third-party defendants, cross-claim defendants, and counterclaim defendants) must provide the following information to plaintiffs within sixty days of answering the affirmative pleading, accompanied with a certification from both the defendant and his/her/their/its defense counsel that the disclosures are accurate and complete:

• Copies of all insurance policies that may be liable to satisfy a judgment in the lawsuit, including the insurance application.
• The contact information of any individuals responsible for adjusting the claim on each policy, including his/her/their phone number and email address. If a TPA is involved, his/her/their contact information must also be disclosed.

Reprinted courtesy of Craig Rokuson, Traub Lieberman and Lisa M. Rolle, Traub Lieberman Mr. Rokuson may be contacted at crokuson@tlsslaw.com Ms. Rolle may be contacted at lrolle@tlsslaw.com Read the court decision
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New York High Court: “Issued or Delivered” Includes Policies Insuring Risks in New York

December 20, 2017 — Bethany Barrese & Samantha Martino - Case Alert Blog
On November 20th, the New York Court of Appeals reinstated a case seeking more than six million dollars in damages against the insurers for DHL Worldwide Express Inc. (“DHL”), originating from a fatal head-on car crash between Claudia Carlson and a truck owned by MVP Delivery and Logistics Inc. (“MVP”), a DHL contractor. The truck, which bore DHL’s logo, was owned by MVP and driven by an MVP employee. The MVP employee was running an errand unrelated to his job at the time of the accident. Mrs. Carlson’s husband sued the employee, DHL, and MVP. The jury award of $20 million was reduced to $7.3 million by the Appellate Division. MVP’s insurer paid Mr. Carlson just over $1 million, and the employee assigned his rights to any other insurance coverage to Mr. Carlson Mr. Carlson sued DHL and its insurers, seeking the balance of the outstanding judgment pursuant to New York Insurance Law § 3420. The defendants successfully moved to dismiss Mr. Carlson’s claims, which dismissal was affirmed by the Appellate Division on the basis that § 3420 did not apply since the policies in question were not “issued or delivered” in New York; they had been issued in New Jersey and delivered in Washington and Florida. The Court of Appeals was subsequently presented with two questions: (1) whether the DHL policies fell within the purview of Insurance Law § 3420 as policies “issued or delivered” in New York; and (2) whether MVP was an “insured” pursuant to the “hired auto” provisions of DHL’s policies. Reprinted courtesy of Bethany Barrese, Saxe Doernberger & Vita, P.C. and Samantha Martino, Saxe Doernberger & Vita, P.C. Ms. Barrese may be contacted at blb@sdvlaw.com Ms. Martino may be contacted at smm@sdvlaw.com Read the court decision
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A Court-Side Seat: “Inholdings” Upheld, a Pecos Bill Come Due and Agency Actions Abound

January 25, 2021 — Anthony B. Cavender - Gravel2Gavel
Here are some significant environmental and regulatory rulings and administrative actions from December 2020. THE U.S. SUPREME COURT Texas v. New Mexico On December 14, 2020, the U.S. Supreme Court decided a water rights controversy involving sharing the water of the Pecos River. The 1949 Pecos River Compact provides for the equitable apportionment of the use of the Pecos River’s water by New Mexico and Texas, and a “River Master’s Manual,” approved by the Court in 1988, implements the Compact. These are very dry areas, and access to this water is very important. In 2014, a rare tropical storm drenched the Pecos River Basin, and Texas asked New Mexico to temporarily store the water that would otherwise flow into Texas. A few months later, New Mexico released the water to Texas, but the quantity was reduced because some of the water held by New Mexico had evaporated. The River Master awarded a delivery credit to New Mexico, and after Texas objected, Texas “in response” filed the Original Jurisdiction of the Court, suing New Mexico and seeking a review of the River Master’s determination. The Court held for New Mexico, deciding that this dispute was subject to and resolved by the Manual. This case is important because it highlights the high value the states place on the equitable apportionment of water that flows through different states. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

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