Appraisal Panel Can Determine Causation of Loss under Ohio Law
February 19, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court granted the insured's motion to compel an appraisal that would include a determination of causation of the loss. Eagle Highland Owners Association v. State Farm Fire and Casualty Co., 2023 U.S. Dist. LEXIS 220937 (S.D. Ohio Dec. 12, 2023).
Plaintiff argued its property suffered wind and hail damage from a storm on June 18, 2021. A claim was submitted to State Farm. State Farm's investigation determined the loss to be $0.00. Plaintiff's investigator determined the loss to be $586,647.08 in repair costs.
State Farm opposed appraisal because, in its view, the damage arose from a loss in 2019, not from the June 18, 2021 storm. Plaintiff submitted a loss claim in 2019 for damage that State Farm alleged was exactly the same as the damage alleged in the loss claim for the June 18, 2021 storm. Therefore, State Farm did not view the matter as a dispute over an amount of loss, but rather over whether a loss even occurred on June 18, 2021.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Hawaii Building Codes to Stay in State Control
March 01, 2012 —
CDJ STAFFThe Hawaii State Senate voted down Senate Bill 2692. Had it been passed, the State Building Code Council would have been abolished and building codes would have become the responsibility of county governments. The bill was opposed by the Insurance Institute for Business and Home Safety. Their director of code development, Wanda Edwards said that the bill “would have undermined key components that are essential to an effective state building code regime.”
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Court Holds That Public Entity Can Unilaterally Replace Subcontractor Under California’s Subletting and Subcontracting Fair Practices Act
July 22, 2019 —
Garret Murai - California Construction Law BlogThe Subletting and Subcontracting Fair Practices Act (Public Contract Code section 4100 et seq.), also known as the Listing Law, is intended to prevent direct contractors on public works projects from “bid shopping” and “bid peddling.”
Bid Shopping: Bid shopping is when a direct contractor discloses a subcontractor’s bid to other subcontractors in an attempt to obtain a lower bid than the one in which it based its bid to the owner.
Bid Peddling: Bid peddling is the other side of the equation. It is when a subcontractor whose bid was not selected, lowers its bid in an attempt to induce the direct contractor to substitute it for another subcontractor after the prime contractor’s bid has been awarded.
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Garret Murai, Wendel, Rosen, Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Defense Victory in Breach of Fiduciary Action
February 26, 2015 —
Beverley BevenFlorez-CDJ STAFFEarlier this month, Scott Calkins and Anthony Gaeta of Collinsworth, Specht, Calkins & Giampaoli, LLP obtained a defense verdict in a breach of fiduciary duty action involving a high-rise condominium in downtown San Diego, California. The Association asked for excess of over $3 million, however, the jury returned with a 10-2 defense verdict in favor of K. Hovnanian.
Cortez Blu Community Association, Inc. v. K. Hovnanian at Cortez Hill, LLC, et al. initially involved construction defect claims against the developer, K. Hovnanian, and the general contractor, Turner Construction, as well as a claim of breach of fiduciary duty. However, the construction defect claims settled prior to trial leaving only the breach of fiduciary claim.
“While it is now becoming ever more common for attorneys representing homeowners associations to allege a breach of fiduciary duty by the developer, there has been little actual litigation of the issues surrounding those claims which test the viability of the allegations or the defenses to them,” defense attorney Anthony Gaeta stated. “A breach of a fiduciary duty by a developer, which is demonstrated to damage the viability of an HOA either to perform regularly scheduled maintenance, or replace building components from its reserves, has the potential in economic terms to surpass the damages from purported construction defects.
The Plaintiff argued that K. Hovnanian breached its fiduciary duty to the Association by failing to set adequate reserves within the initial Department of Real Estate budget (“DRE”) for painting, caulking, and power washing the exterior of the building, referencing Raven’s Cove Townhomes, Inc. v. Knuppe Development Co., Inc. (1981) 114 Cal. App. 3d 783. In response, K. Hovnanian stated that in part, the initial reserves as set forth in the DRE budget were adequate, good faith estimates and, therefore, there was no liability for breach of fiduciary duty.
“Our case was exclusively concerned with the duties of the developer when forming the initial HOA, preliminary budgets, and reserves,” Gaeta said. “We litigated the duties and responsibilities of the initial board and whether a developer may rely on reports prepared by third-parties during the formation of a common interest development. The jury found our client’s actions and reliance on third-parties was reasonable and, thus, no breach of fiduciary duty occurred.”
Collinsworth, Specht, Calkins & Giampaoli is a general civil litigation firm representing clients throughout California and Arizona. You may learn more about the firm at www.cslawoffices.com
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A New Hope - You Now May Have Coverage for Punitive Damages in Connecticut
February 15, 2018 —
Stella Szantova Giordano – SDV BlogOn December 19, 2017, the Connecticut Supreme Court released its decision in Nationwide Mutual Ins. Co. v. Pasiak. The decision is significant for two reasons: 1) it clarifies the amount of proof an insurer needs to determine whether an exclusion to coverage applies; and 2) it found that where an insurance policy expressly provides coverage for an intentional act such as false imprisonment, common-law punitive damages are also covered.
Underlying action
The underlying action proves that real life is often stranger than fiction. Ms. S worked as an office help for a construction company owned by Mr. P, which operated out of his home. Ms. S was working alone in the home office, when an armed, masked intruder entered the office, tied her hands, gagged and blindfolded her and, pointing a gun to her head, threatened to kill her family if she did not give him the combination to a safe in the home. As this was happening, Mr. P entered the office, unmasked the intruder, and discovered it was his lifelong friend. After Ms. S was untied, she asked to leave, but Mr. P told her to stay. She was not allowed to leave for several hours as Mr. P made her accompany him to an errand. Ms. S sued Mr. P for false imprisonment, among other things. The trial court awarded her compensatory and punitive damages. Insurance coverage for the underlying judgment is at the heart of the Pasiak case.
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Stella Szantova Giordano, Saxe Doernberger & Vita, P.C.Ms. Szantova Giordano may be contacted at
ssg@sdvlaw.com
Recent Regulatory Activity
October 25, 2021 —
Anthony B. Cavender - Gravel2GavelSelected federal regulatory actions taken or proposed by several federal agencies, including the Environmental Protection Agency:
EPA Actions.
On September 15, 2021, EPA’s Water Office issued a memo rescinding a January 2021 guidance document that purported to provide the regulatory community with EPA’s understanding of the Supreme Court’s Clean Water Act ruling in the case of County of Maui v. Hawaii Wildlife Fund. That case involved a discharge of pollutants to groundwater which eventually made their way to the Pacific Ocean. Was an NPDES permit required to authorize this discharge, which was not initially made to a navigable body of water? The text of the Clean Water Act provided little guidance, and the matter has become very controversial. The Court held that if the discharge was the “functional equivalent” of a direct discharge, a permit may be required, and the Court described some factors that could influence a determination that there was the functional equivalent of a direct discharge. However, EPA has rescinded the January 2021 guidance, opining that EPA’s earlier analysis was inconsistent the Court’s opinion, and that the guidance was issued without proper deliberation within EPA or with its federal partners. Until new guidance is prepared, EPA will continue to apply “site-specific, science-based evaluations” to resolve these questions. On October 1, 2021, EPA released its “Climate Adaption Action Plan.” Briefly, EPA will take steps to ensure that its programs and policies consider current and future impacts of climate change and how the impacts disproportionately affect certain underserved or environmental justice communities. The agency’s air and water quality programs, contaminated sites activities and chemical safety and pollution prevention programs will be analyzed to determine their impact. Also on October 1, 2021, EPA released its draft FY 2022-2026 Strategic Plan to protect health and the environment. The plan, essentially an internal directive to all offices and regions, reflects a new “foundational principle”—to advance justice and equity by taking on the climate crisis and taking decisive action to advance civil rights and environmental justice.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
The Right to Repair Act (Civ.C §895 et seq.) Applies and is the Exclusive Remedy for a Homeowner Alleging Construction Defects
February 07, 2018 —
Craig Wallace – Smith Currie McMillin Albany LLC v. Superior Court (01.18.18) ____ Cal.4th _____ (2018 WL 456728)
The California Supreme Court confirmed that the Right to Repair Act (CA Civil Code § 895, et seq. and often referred to by its legislative nomenclature as “SB800”) applies broadly to any action by a residential owner seeking recovery of damages for construction defects, regardless of whether such defects caused property damages or only economic losses. This includes the right in the Act of the builder to attempt repairs prior to the owner filing a lawsuit.
Background
Homeowners sued builder for construction defects. Included in their causes of action was a cause of action for violation of the Right To Repair Act. The Act requires that before filing litigation, a homeowner must give the builder notice and engage in a nonadversarial prelitigation process which gives the builder a right to repair the defects. The builder asked the court to stay the homeowners’ action so the prelitigaiton process could be undertaken. Rather than give the builder the repair right, the homeowners dismissed the particular cause of action from their case, leaving only other so-called common law and warranty causes of action. The common law claims sought recovery for property damage caused by the defects. The builder nonetheless asked to the Court to stay the action so it could exercise its right to repair.
The trial court, relying on
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, denied builder’s request to stay the action. The
Liberty Mutual Court concluded that certain common law construction defect claims fell outside the purview of the Act. Builder appealed. The Court of Appeal disagreed with
Liberty Mutual, so did not follow it, granted the builder’s request for a stay, and directed that the homeowners afford the builder the right to repair the claimed defects as provided under the Act.
The California Supreme Court affirmed, disapproving
Liberty Mutual and the subsequent cases relying on it.
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Craig Wallace, Smith CurrieMr. Wallace may be contacted at
swwallace@smithcurrie.com
4 Steps to Take When a Worker Is Injured on Your Construction Site
March 27, 2023 —
Zachary Perecman - Construction ExecutiveThe construction industry continues to be one of the fastest-growing labor trades. According to the
Center for Construction Research and Training, since 2019, 11.4 million U.S. workers have been employed in construction, a 25% increase from 2011. Amid this growth, the industry has remained one of the most dangerous, and workers are often at higher risk of injuries and deaths due to occupational incidents. According to the U.S. Bureau of Labor Statistics, there are 150,000 injuries on construction work sites annually.
Under Occupational Health and Safety Administration (OSHA) law, employers have a responsibility to provide a safe work environment. That includes providing a workplace that is free of serious recognized hazards. Despite best efforts in implementing risk-mitigation and safety protocols, employers must be prepared with an incident procedure should an incident occur on a jobsite. Taking immediate, clear actions can impact the severity and outcome of injuries from a workplace incident. With this in mind, employers should take the lead in implementing safety procedures for injuries on construction sites and should inform all safety site managers and workers of the steps that should be taken.
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Zachary Perecman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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