Revamp to Nationwide Permits Impacting Oil and Gas Pipeline, Utility and Telecom Line Work
March 29, 2021 —
Alex P. Prochaska, Jones Walker LLP - ConsensusDocsTo avoid delay costs and penalties, contractors involved in pipeline and utilities construction maintenance, repair and removal need to understand how the 43 year old Nationwide Permit (NWP) regime has changed specific to the NWP 12 and what is now required for compliance. This change is important for contractors who construct, maintain, or repair pipelines that cross or impact waters of the United States, including wetlands. NWPs are a useful tool to streamline construction of a pipeline project, but it is important for contractors to know when certain terms and conditions still apply to the particular NWP and those that have been eliminated.
On January 13, 2021, the United States Army Corps of Engineers (the Corps) published a final rule that reissued and modified twelve existing NWPs and issued four new NWPs that will take effect on March 15, 2021.1 The remaining 40 NWPs that were not reissued or modified under this rule will continue under the general conditions and definitions of the January 6, 2017 final rule.
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Alex P. Prochaska, Jones Walker LLPMr. Prochaska may be contacted at
aprochaska@joneswalker.com
Tension Over Municipal Gas Bans Creates Uncertainty for Real Estate Developers
February 07, 2022 —
Sidney L. Fowler, Robert G. Howard & Emily Huang - Gravel2Gavel Construction & Real Estate Law BlogOn November 15, 2021, the New York City Council approved a bill banning gas hookups in new buildings, making the biggest city in the U.S. the latest in a string of municipalities to prohibit natural gas infrastructure in new homes and buildings. In the two-and-a-half years since Berkeley, California, passed its then-novel municipal ban on new natural gas infrastructure, numerous cities have found themselves at odds with state governments and industry groups on the issue of full electrification in residential and commercial real estate. The resulting disputes, litigation and regulatory uncertainty have created headaches for the real estate industry. Although not all view the restrictions as negative, and many developers have embraced the push for more climate-neutral buildings, these bans introduce complexity to the real estate market, raising additional legal and commercial challenges.
Background
According to the U.S. Environmental Protection Agency, the use of natural gas in homes and businesses accounts for 13 percent of annual U.S. greenhouse gas emissions. For that reason, advocacy groups have pushed cities to prohibit natural gas infrastructure in new construction and encourage full electrification of newly constructed buildings. In addition to New York and Berkeley, cities that have either passed or considered such ordinances include San Francisco, Sacramento, Seattle and Denver, as well as numerous smaller cities. New York City’s newly passed gas ban, in particular, prohibits natural gas hookups in new buildings under seven stories by 2024, and in taller buildings by 2027, but exempts hookups in commercial kitchens.
Reprinted courtesy of
Sidney L. Fowler, Pillsbury,
Robert G. Howard, Pillsbury and
Emily Huang, Pillsbury
Mr. Fowler may be contacted at sidney.fowler@pillsburylaw.com
Mr. Howard may be contacted at robert.howard@pillsburylaw.com
Ms. Huang may be contacted at emily.huang@pillsburylaw.com
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Toxic Drywall Not Covered Under Homeowner’s Policy
March 28, 2012 —
CDJ STAFFThe Duphuys of Baton Rouge Louisiana found themselves needing to argue both sides of an issue, according to the judge in Duphuy v. USAA Casualty Insurance Company. The Duphuys alleged that the drywall in their home “emits odorous gases that cause damage to air-condition and refrigerator coils, copper tubing, electrical wiring, computer wiring, and other household items.” Additionally, they reported damage to “their home’s insulation, trimwork, floors, cabinets, carpets, and other items” which they maintained were “covered under the ‘ensuing loss’ portion of their policy.”
Their insurer declined coverage, stating that the damages were not a “direct, physical loss,” and even if they were “four different exclusions independently exclude coverage, even if such loss occurred.” The policy excludes defective building materials, latent defects, pollutants, and corrosion damage. The court noted that “ambiguities in policy exclusions are construed to afford coverage to the insured.”
The court did determine that the Duphuys were not in “a situation where the plaintiffs caused the risk for which they now seek coverage.” The judge cited an earlier case, In re Chinese Drywall, “a case with substantially similar facts and construing the same policy” and in that case, “property damage” was determined to “include the loss of use of tangible property.” The court’s conclusion was that the Duphuys “suffered a direct, physical loss triggering coverage under their policy.”
Unfortunately for the Duphuys, at this point the judge noted that while they had a “direct, physical loss,” the exclusions put them “in the tough predicament of claiming the drywall is neither defective nor its off-gassing corrosive or a pollutant, but nonetheless damage-causing.”
In the earlier Chinese Drywall case, the judge found that “faulty and defective materials” “constitutes a physical thing tainted by imperfection or impairment.” The case “found the drywall served its intended purpose as a room divider and insulator but nonetheless qualified under the exclusion, analogizing the drywall to building components containing asbestos that courts have previously determined fit under the same exclusion.” In the current case, the judge concluded that the drywall was “outside the realm of coverage under the policy.”
The court also found that it had to apply the corrosion exclusion, noting that the plaintiffs tried to evade this by stating, “simplistically and somewhat disingenuously, that the damage is not caused by corrosion but by the drywall itself.” The plaintiffs are, however, parties to another Chinese drywall case, Payton v. Knauf Gips KG, in which “they directly alleged that ‘sulfides and other noxious gases, such as those emitted from [Chinese] drywall, cause corrosion and damage to personal property.’” As the court pointed out, the Duphuys could not claim in one case that the corrosion was caused by gases emitted by the drywall and in another claim it was the drywall itself. “They hope their more ambiguous allegations will be resolved in their favor and unlock the doors to discovery.”
The court quickly noted that “the remaining damage allegations are too vague and conclusory to construe” and permitted “exploration of the latent defect and pollution exclusions.”
The judge concluded that the plaintiffs did not provide sufficient facts to establish coverage under the ensuing loss provision, stating that the “plaintiffs must allege, at the very least, how the drywall causes damage to the trimwork, carpet, etc., not simply that it does so.” Given the court’s determinations in the case, the plaintiffs’ motion was dismissed.
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Insurer Has Duty to Defend Despite Construction Defects
January 06, 2012 —
CDJ STAFFIn a case the judge attributed to “shoddy masonry work,” the US District Court of Illinois has rendered a decision in AMCO Insurance Company v. Northern Heritage Builders. Northern Heritage built a home in Chicago for Michael McGrath (who joined Northern Heritage as a defendant). According to the decision, “seven months after he moved into the house, McGrath noticed water coming in the house and warped millwork.” This was attributed to porous block, installed by the mason with Northern Heritage’s knowledge.
McGrath sued National Heritage for both the damage to his house and its contents. The court rejected his claim for the contents. For the damages to his house, he was awarded $601,570.50 in damages. He also sued his homeowner’s insurance carrier for damages not covered in his suit against National Heritage. There he was awarded $1,130,680.16.
AMCO informed National Heritage that it had neither duty to defend nor duty to indemnify. The judge considered whether AMCO had a duty to defend. Under Illinois law, “damage to a construction project resulting from construction defects is not an ‘accident’ or ‘occurrence’ because it represents the natural and ordinary consequence of faulty construction.” However, it is noted that while if the defects lead only to damage to the project itself, there is no occurrence, “if the building owner asserts damages to other property besides the construction itself, there is an ‘occurrence’ and ‘property damage.’” The judge further noted that were construction defects an occurrence, “shoddy work” would be rewarded by double pay, once by the homeowner and a second time by the insurer. Judge Kendall concluded that as McGrath had alleged damage to the contents of his house, AMCO had a duty to defend National Heritage.
She then looked at the issue of whether AMCO had a duty to indemnify. Should they pay the $601,570.50? Judge Kendall noted that “the duty to indemnify is narrower than the duty to defend.” The key point here was that once McGrath’s insurance carrier covered him for the damage to the contents of his house, “AMCO’s duty to defend ended.” Once McGrath “only sought damages for the natural consequences of faulty workmanship” there was no occurrence, hence nothing for AMCO to cover.
Judge Kendall granted a summary dismissal of AMCO’s claim that they had no duty to defend while upholding their claim that they had no duty to indemnify.
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Washington Court of Appeals Divisions Clash Over Interpretations of the Statute of Repose
August 07, 2023 —
Masaki Yamada & Ryanne Mathisen - Ahlers Cressman & Sleight PLLCThe construction statute of repose under RCW 4.16.310 bars any claims arising from construction, design, or engineering of any improvement upon real property that has not accrued within six years after substantial completion or termination of services, whichever is later, even if the injury has not yet occurred.
On June 20, 2023, Division One of the Washington Court of Appeals (Div. I) published its decision in
Welch v. Air & Liquid Systems severely criticizing and rejecting the statute of repose reasoning contained in
Maxwell v. Atlantic Richfield Co., 15 Wn. App. 2d 569, 476 P.3d 645 (2020), a Division Two (Div. II) opinion.
More than a mere difference of opinion, the courts in Welch and Maxwell reached different results as to whether claims asserted against Brand Insulations, Inc. were barred by the statute of repose despite involving (i) the same procedural posture, both appeals from summary judgment decisions; (ii) the same facility, Atlantic Richfield Corporation’s (ARCO) petroleum refinery at Cherry Point in Ferndale; (iii) the same activity of installation of asbestos laden insulation on pipes; (iv) the same type of injury, mesothelioma; and (v) application of the same test set forth in Condit v. Lewis Refrigeration Co., 101 Wn.2d 106, 676 P.2d 466 (1984).
Reprinted courtesy of
Masaki Yamada, Ahlers Cressman & Sleight PLLC and
Ryanne Mathisen, Ahlers Cressman & Sleight PLLC
Mr. Yamada may be contacted at masaki.yamada@acslawyers.com
Ms. Mathisen may be contacted at ryanne.mathisen@acslawyers.com
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Virginia Chinese Drywall and pollution exclusion
May 27, 2011 —
CDCoverage.comIn Nationwide Mut. Ins. Co. v. The Overlook, LLC, No. 4:10cv69 (E.D. Va. May 13, 2011), homeowner Edmonds sued insured developer/general contractor Overlook seeking damages resulting from defective Chinese drywall installed in Edmonds’ home. Overlook’s CGL insurer Nationwide defended Overlook under a reservation of rights and filed a declaratory judgment action. The federal district trial court granted Nationwide’s motion for summary judgment.
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Can Baltimore Get a Great Bridge?
June 21, 2024 —
James S. Russell - BloombergWhen the Francis Scott Key Bridge collapsed
after being struck by a massive container ship early in the morning on March 26, six highway workers were killed, a segment of the Baltimore Beltway was severed, the Port of Baltimore was largely shut down for two months — and the city lost an important piece of its identity.
Before its destruction made it famous, the Key Bridge was not really a landmark like San Francisco’s Golden Gate Bridge or other charismatic spans that serve as symbols for their host cities. Built in 1977, it was a more utilitarian structure, with brawny trusswork that evoked the city’s industrial past, and an important job to do: It could carry the fuel-hauling tanker trucks that are prohibited from traveling through two nearby tunnels. Its visibility at the mouth of Baltimore’s harbor marked it as a prominent link between the modest communities that line the blue-collar waterfront and the glass apartment and office towers that now define the downtown skyline.
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James S. Russell, Bloomberg
Negligence Claim Not Barred by Gist of the Action Doctrine
February 18, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Pennsylvania Supreme Court held that the insureds' negligence claim survived because it was not based upon breach of a duty created by the policy, but upon the alleged breach of a duty imposed by tort law. Bruno v. Erie Ins. Co,, 2014 Pa. LEXIS 3319 (Dec. 15, 2014).
After purchasing their home, the insureds obtained a homeowner's policy from Erie. A separate endorsement covered loss to the property caused by "fungi," which was included as any form of mold. The endorsement obligated Erie to pay up to $5,000 for loss caused by mold. The policy required Erie to pay the cost of testing the air to confirm the absence or presence of mold. If mold was present, Erie was to pay for the cost of removal, including the cost of tearing out any part of the property needed to gain access to the mold.
While renovating the basement, the insureds discovered two areas of black mold in close proximity to leaking water pipes. Erie was notified and sent an adjuster to view the mold. The adjuster took no action, but returned a couple of days later with an engineer. The adjuster and engineer informed the insureds that the mold was harmless and that health problems associated with mold were a media frenzy and overblown.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
