Although Property Damage Arises From An Occurrence, Coverage Barred By Business Risk Exclusions
July 08, 2011 —
Tred R. Eyerly - Insurance Law HawaiiThe homeowners hired the insured to raise the structure of their home twenty-four inches above the flood zone. Lafayette Ins. Co. v. Peerboom, 2011 U.S. Dist. LEXIS 58985 (S.D. Miss. June 2, 2011). When the insured’s crew returned from lunch one day, they found the house had fallen from hydraulic jacks being used to raise the structure a few inches at a time. There was substantial damage to the entire structure.
The homeowners sued, asserting several claims, including negligence and breach of contract. The complaint alleged the homeowners entered a contract with the insured to raise their structure while maintaining its integrity. However, the insured failed to use proper equipment, which caused the house to fall and be completely destroyed.
The insured tendered the claim to its insurer, Lafayette Insurance Company. Lafayette defended under a reservation of rights and filed suit for a declaratory judgment. Lafayette’s subsequent motion for summary judgment contended there was no “occurrence” alleged in the underlying complaint and, even if there was, the business risk exclusions barred coverage.
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com
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Another Reminder to ALWAYS Show up for Court
July 20, 2020 —
Christopher G. Hill - Construction Law MusingsI have discussed the need to always respond to a lawsuit on multiple occasions here at Construction Law Musings. However, I keep reading cases where the defendant fails to appear either by pleading or in person. Such action is never a good idea as demonstrated once again in the case of Balfour Beatty Infrastructure, Inc. v. Precision Constr. & Mgmt. Group, LLC, a case out of the Eastern District of Virginia.
The basic facts are not a surprise and are taken from the magistrates report that was adopted by the District Court. Balfour Beatty and Precision entered into a subcontract for some electrical work at a project located in Loudoun County. The subcontract included an attorney fees provision and provided for liquidated damages for late performance and the typical damages for default. The project began in July of 2016 with substantial completion July 5, 2018. Precision failed to supply sufficient manpower and sent a letter to Precision stating the same. After an agreement between the parties regarding supplementation by Balfour Beatty and to the accompanying back charge, Balfour Beatty informed Precision by letter that it would be liable for any liquidated damages. The Owner began assessing liquidated damages and Balfour Beatty subsequently terminated the subcontract and discovered defective work by Precision.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Insured's Motion for Reconsideration on Denial of Coverage Unsuccessful
September 28, 2017 —
Tred R. Eyerly - Insurance Law HawaiiThe insured's motion to reconsider an order granting the insurer summary judgment challenges the insured's theory it was an additional insured was rejected by the federal district court. Hanover Ins. Co. v. Superior Labor Servs., 2017 U.S. Dist. LEXIS 133127 (E.D. La. Aug. 21, 2017).
The court previously granted Lexington Insurance Company's motion for summary judgment, finding Allied Shipyard, Inc. was not an additional insured and was not entitled to a defense in the underlying actions. On reconsideration, Allied argued the court ruled it was not a "certificate holder" under the Lexington policy, but Allied was not given the opportunity to conduct discovery with respect to whether it was a "certificate holder." Summary judgment was granted before Allied answered Lexington's amended complaint in intervention. Allied submitted its answer could have raised a genuine issue of material fact because it was entitled to coverage under the policy if it was a certificate holder.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
South Adams County Water and Sanitation District Takes Proactive Step to Treat PFAS, Safeguard Water Supplies
November 28, 2022 —
Cameron McWilliam – Brown and CaldwellDENVER, Colo., Nov. 15, 2022 — The South Adams Country Water and Sanitation District (District) is enhancing its water treatment process to meet EPA Health Advisory Levels (HALs) for per- and polyfluoroalkyl substances (PFAS) in drinking water supplies.
Deemed “forever chemicals,” PFAS is a group of human-made chemicals used in many applications, including stain- and water-resistant fabrics and carpeting, cleaning products, paints, and firefighting foams. PFAS are resistant to grease, oil, water, and heat and may enter water supplies from landfills, the use of firefighting foam (e.g., at airports, fire training facilities, petroleum fires, etc.), industrial sites, and wastewater treatment plant discharge.
The District’s water supply, serving over 67,000 residents in Commerce City and parts of unincorporated Adams County, comes primarily from 13 groundwater supply wells. As it continues to meet all federal and state drinking water requirements, the District has been proactively pursuing PFAS reduction strategies since it first discovered a low-level presence in its water supply through voluntary testing in 2018. Upon discovery, the District stopped drawing from its most impacted wells and has been purchasing additional treated water to blend into its supply to reduce PFAS levels along with optimizing use of their existing granular activated carbon treatment system.
“Ever since the District first began voluntarily testing for PFAS, we have been monitoring for these compounds and working to reduce their impact on our customers,” said District Manager Abel Moreno. “The EPA has moved the goalposts, and we are taking steps to reduce the presence of PFAS even further. We are committed to finding long-term, sustainable solutions to offer our community high-quality drinking water.”
To tackle the challenge, the District has hired leading environmental and construction services firm Brown and Caldwell to design a new 18 million gallons per day (MGD) ion exchange (IX) process at its Klein Water Treatment Facility. IX treatment is currently the most effective technology in removing PFAS/PFOA, consisting of a highly porous resin that acts as a powerful magnet to adsorb and hold onto the substances. The new system at the Klein facility will consist of seven IX treatment trains, a 375,000-gallon equalization tank, and six vertical turbine pumps to feed the IX trains from the District’s 13 groundwater supply wells.
Furthermore, nine 5-micron cartridge filters will be installed to remove particulate matter in the water before reaching the IX trains, thus increasing the efficacy of the treatment process.
Scheduled for completion by the end of 2026, the new IX treatment facility will provide a peak combined capacity of 26 MGD.
About South Adams County Water and Sanitation District
The South Adams County Water and Sanitation District is a special district providing water and sanitary sewer service to over 67,000 residents in Commerce City and parts of unincorporated Adams County. For more information about the District, please visit www.sacwsd.org
About Brown and Caldwell
Headquartered in Walnut Creek, California., Brown and Caldwell is a full-service environmental engineering and construction services firm with 52 offices and 1,800 professionals across North America and the Pacific. For 75 years, our creative solutions have helped municipalities, private industry, and government agencies successfully overcome their most challenging water and environmental obstacles. As an employee-owned company, Brown and Caldwell is passionate about exceeding our clients’ expectations and making a difference for our employees, our communities, and our environment. For more information, visit www.brownandcaldwell.com
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Construction Contract Basics: Indemnity
October 30, 2023 —
Christopher G. Hill - Construction Law MusingsI’m back after a welcome
change of offices from a Regus location to a separate and more customer-friendly
local shared office space location. I thought I’d jump back into posting with a series of construction contract-related posts, the first of which relates to indemnification clauses.
An indemnification clause in a contract obligates one party (the Indemnitor) to take on liability (read pay for) any damages to another party (the Indemnitee) under certain circumstances. In a construction context, this type of arrangement can arise in a
bonding context with a general indemnity obligation to the surety among other contexts outside of the four corners of any prime or subcontract. I will not be discussing those other contexts and will focus on the typical indemnity clause found in most if not all, construction contracts. These clauses most often state that the “downstream” party is to indemnify all of the upstream parties for any and all damages incurred by the indemnitees due to any action of the downstream party, its employees, subcontractors, sub-subcontractors, etc. The clauses are often not limited in scope and generally include attorney fee provisions and generally require indemnity for breaches of contract by their terms.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Traub Lieberman Partner Greg Pennington and Associate Kevin Sullivan Win Summary Judgment Dismissing Homeowner’s Claim that Presented an Issue of First Impression in New Jersey
December 02, 2019 —
Gregory S. Pennington & Kevin Sullivan - Traub LiebermanOn July 12, 2019, Traub Lieberman Straus & Shrewsberry LLP’s Gregory S. Pennington and Kevin Sullivan secured summary judgment dismissing a homeowner’s claim for damaged flooring. The claim at issue arose from the homeowners’ attempt to discard their refrigerator. In the process of removing the refrigerator, the homeowners scratched their kitchen and dining room floors. The homeowners made a claim under their homeowners policy for the cost to repair and replace the damaged flooring. Their homeowners’ insurer denied their claim based on a policy exclusion barring coverage for damage consisting of or caused by marring and scratching. When their insurer denied coverage, the homeowners filed suit in the New Jersey Superior Court, Law Division in Bergen County. The case presented the issue of first impression in New Jersey of whether a homeowner’s self-inflicted, but accidental damaging of its own floors was barred by the homeowner’s policy’s marring or scratching exclusion. Greg and Kevin successfully argued that the exclusion applied to bar coverage.
Reprinted courtesy of
Gregory S. Pennington, Traub Lieberman and
Kevin Sullivan, Traub Lieberman
Mr. Pennington may be contacted at gpennington@tlsslaw.com
Mr. Sullivan may be contacted at ksullivan@tlsslaw.com
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Burden to Prove Exception to Exclusion Falls on Insured
April 19, 2022 —
Tred R. Eyerly - Insurance Law HawaiiIn a dispute between two insurers, the Ninth Circuit relied upon Nevada law in finding that the burden of proving that an exception to the exclusion applies was on the insured. Zurich Am. Ins. Co. v. Ironshore Specialty Ins. Co., 2022 U.S. App. LEXIS 1626 (9th Cir. Jan. 20, 2022).
Ironshore insured seven subcontractors. The policy included an exclusion providing there was no coverage for any property damage for the subcontractors' for "work performed prior to the policy inception." An exception to the exclusion provided that the exclusion did not apply to property damage that was "sudden and accidental and takes place within the policy period."
The seven subcontractors were sued for work they had performed. Zurich defended and indemnified the subcontractors. Zurich then sued Ironshore seeking contribution and indemnification for defense and settlement costs. The parties stipulated that all construction work at issue had been completed before the inception of Ironshore's policy and that none of the complaints against the subcontractors alleged that sudden and accidental damage had occurred after the inception of Ironshore's policy.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Sanibel Causeway Repair: Contractors Flooded Site With Crews, Resources
November 15, 2022 —
Derek Lacey - Engineering News-RecordAfter Hurricane Ian slammed into southwest Florida, washing out the Sanibel Causeway and cutting off thousands of Sanibel Island residents, another flood hit the area: construction crews and resources that swarmed the area to rebuild two roadway sections and five washed-out approaches to restore access.
Reprinted courtesy of
Derek Lacey, Engineering News-Record
Mr. Lacey may be contacted at laceyd@enr.com
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