MDL Panel Grants Consolidation for One Group of COVID-19 Claims
November 02, 2020 —
Tred R. Eyerly - Insurance Law HawaiiPreviously denying consolidation of all COVID-19 business interruption claims [post here], the Judicial Panel on Multidistrict Litigation allowed consolidation of one group of cases against Society Insurance Company while denying consolidation of four other groups of cases. In re Soc'y Ins. Co. COVID-19 Bus. Interruption Protection Ins. Litigation, 2020 U.S. Dist. LEXIS 183678 (J.P.M.L. Oct. 2, 2020).
Claims against Society encompassed 34 actions filed in Illinois, Indiana, Iowa, Minnesota, Wisconsin, and Tennessee. The court found that centralization of the Society actions would serve the convenience of the parties and witnesses and further the just and efficient conduct of the litigation. The actions shared common factual allegations that Society wrongfully denied policy holders' claims for business interruption coverage. Plaintiffs contended that Society preemptively decided to deny their claims.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Supreme Court of New York Denies Motion in all but One Cause of Action in Kikirov v. 355 Realty Assoc., et al.
April 28, 2011 —
Beverley BevenFlorez CDJ STAFFIn the construction defect suit Kikirov v. 355 Realty Associates, LLC, et al., the Supreme Court of the State of New York granted a dismissal of the plaintiff’s fourth cause of action, but denied the defendants’ motion in all other respects. The plaintiff alleged breach of contract, among other claims. “355 Realty was the sponsor of 355 Kings Highway Condominium, a condominium project located at 355 Kings Highway, in Brooklyn, New York. The condominium units were allegedly marketed as ‘ultra luxury condos,’ and a ‘Manhattan style condominium building,’ which would be the ‘epitome of luxury and quality.’ The construction of the six-story 28 unit residential condominium building began in approximately November 2003. […] Plaintiff entered into a purchase agreement, dated December 21, 2005, with 355 Realty (which was executed on behalf of 355 Realty by Michael Marino, as its member) for the purchase of Unit 2G in the building.”
The plaintiff alleged that construction defects emerged soon after moving into the unit: “After taking occupancy of his condominium unit, plaintiff allegedly experienced serious leakage and moisture problems in his unit, which caused a dangerous mold condition to develop, in addition to causing actual damage to the structural elements of his unit. According to plaintiff, the walls, moldings, and wood floors of his unit are constantly wet and moist, and there is severe buckling of the wood floors. Plaintiff claims that these problems have caused his unit to be uninhabitable. Plaintiff alleges that he has been forced to remove all of his personal belongings from his unit and has been unable to occupy his unit.”
According to the plaintiff, Foremost attempted to repair the defects, but only made the situation worse: “Specifically, plaintiff asserts that Foremost’s contractors opened his walls to remove the stained drywall, but never corrected the cause of the leaks, destroyed the walls, and never properly taped and painted the sheet rock. Plaintiff alleges that Foremost repaired the openings in a defective manner. Plaintiff also claims that his floor was repaired at that time by a subcontractor hired by Foremost, but the basic structural problem was never resolved and the leaks continued, compromising the beams and causing the mold conditions, in addition to all of the physical damage present in the unit. On or about July 16, 2009, plaintiff allegedly sent a notice of the defects to 355 Realty and to the managing agent designated by the condominium board, by certified mail, return receipt requested. Plaintiff asserts that defendants have failed and refused to repair and remedy the defective condition, and that the damage is extensive and requires major structural repairs.”
The plaintiff filed suit on May 4, 2010, and the original complaint asserted eight causes of action. “By decision and order dated September 13, 2010, the court granted a motion by defendants to dismiss plaintiff’s second cause of action for breach of implied covenants of good faith and fair dealing, his third cause of action for breach of implied warranties, his fifth cause of action for negligence as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his seventh cause of action for negligence as against Vision, Foremost, and MMJ, and his eighth cause of action for violations of General Business Law § 349 and § 350, and granted plaintiff leave to replead his first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his fourth cause of action for breach of statutory warranties, and his sixth cause of action for breach of contract as against Vision, Foremost, and MMJ.”
The plaintiff amended their complaint on October 18, 2010, and “has repleaded these three causes of action by asserting a first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, a second cause of action for breach of statutory warranties, and a third cause of action for breach of contract as against Vision, Foremost, and MMJ. In addition, plaintiff, in his amended complaint, has added a fourth cause of action for fraud.”
The defendants, on the other hand, “argue that each of the four causes of action alleged by plaintiff in his amended complaint fail to state a claim upon which relief may be granted, and that plaintiff’s amended complaint must be dismissed pursuant to CPLR 3211 (a) (7). Defendants also cite to CPLR 3211 (a) (1), and (5), asserting that dismissal is also required based upon documentary evidence and the Statute of Limitations contained in the limited warranty.” The defendants’ motion to dismiss the first cause of action, breach of contract against 355 Realty, was denied: “While defendants dispute that the alleged defects are actually structural in nature, plaintiff’s allegations as to their structural nature are sufficient, at this juncture, to withstand defendants’ motion to dismiss. Thus, dismissal of plaintiff’s first cause of action must be denied.”
Next, the court reviewed the second cause of action, which was breach of statutory warranties: “Defendants’ motion also seeks dismissal of plaintiff’s second cause of action for breach of statutory warranties, which alleges that, under applicable law, including General Business Law § 777-a, et seq., the sponsor warranted to purchasers of units that the units would be constructed in a skillful, careful, and workmanlike manner, consistent with proper design, engineering, and construction standards and practices, and free of material latent, design, and structural defects. Defendants argue that General Business Law § 777-a, known as the housing merchant implied warranty, is inapplicable to this case because it is limited to the construction of a ‘new home,’ defined in General Business Law § 777 (5) as ‘any single family house or for-sale unit in a multi-unit residential structure of five stories or less.’ As noted above, the building in which plaintiff’s condominium unit is located is a six-story building.”
The motion to dismiss the second cause of action is denied. The court provided this reasoning: “the full text of the offering plan has not been provided, the court is unable to examine the entire written agreement so as to determine the purpose of the inclusion of the text of General Business Law § 777.”
In the third cause of action, the plaintiff alleges “a breach of contract claim as against Vision, Foremost, and MMJ based upon their contract with 355 Realty, pursuant to which they agreed to be the general contractors/construction managers for the condominium, to undertake oversight responsibility for the design and construction of the condominium, to prepare and/or review drawings, plans, and specifications for the condominium, and to otherwise manage and oversee the project. Plaintiff alleges that Vision, Foremost, and MMJ breached their contractual obligations in that the condominium units were improperly and inadequately designed and constructed, and completed in an incompetent and unworkmanlike manner, with material design and construction defects.”
The motion to dismiss the third cause of action was denied as well: “Plaintiff alleges, in his amended complaint, that Vision, Foremost, and MMJ have acknowledged notice of the defects and have not denied that they are responsible for providing a warranty to plaintiff. Plaintiff also refers to this warranty, in his amended complaint, by noting that paragraph 16 of the purchase agreement stated that the ‘[s]eller shall not be liable to . . . the [p]urchaser for any matter as to which an assignable warranty . . . has been assigned . . . to [p]urchaser and in such case the sole recourse of such . . . [p]urchaser . . . shall be against the warrantor . . . except that in the event a contractor or subcontractor is financially unable or refuses to perform its warranty . . . [s]eller shall not be excused from its obligations enumerated in the [offering p]lan under Rights and Obligations of Sponsor.’ Consequently, the court finds that dismissal of plaintiff’s third cause of action as against Foremost and MMJ must also be denied.”
In the fourth cause of action, the plaintiff alleges “that defendants made false statements and representations orally, in advertisements, and in the purchase agreement, that the condominium was properly and adequately designed and constructed and completed in a competent and workmanlike manner, in accordance with the condominium plans and specifications and proper design, engineering, and construction standards and practices consistent with applicable standards for a first class, luxury condominium in Brooklyn.”
The court dismissed the fourth cause of action stating, “it must be dismissed because it is duplicative of his first cause of action for breach of contract.” Therefore, “defendants’ motion to dismiss plaintiff’s amended complaint is granted to the extent that it seeks dismissal of plaintiff’s fourth cause of action, and it is denied in all other respects.”
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No Coverage Under Ensuing Loss Provision
September 09, 2011 —
Tred R. Eyerly - Insurance Law HawaiiThe cost of removing and replacing cracked flanges to prevent future leakage was not covered as an ensuing loss under a builder’s risk policy in RK Mechanical, Inc. v. Travelers Prop. Casualty Co. of Am., 2011 U.S. Dist. LEXIS 83958 (D. Colo. Aug. 1, 2011).
The insured, RK Mechanical Inc., was a subcontractor hired to install plumbing for a residential construction project. RK was an additional insured on the general contractor’s policy with Travelers. RK installed approximately 170 CPVC flanges on the project. Subsequently, two of the flanges cracked, allowing water to overflow and causing water damage to the project. Travelers was notified of the flange failure and resulting water damage.
RK subsequently removed and replaced the two cracked flanges and began water remediation. Travelers paid for the cost of the water damage due to the cracked flanges.
RK then examined all of the flanges installed in the project and discovered many were cracked and/or showed signs of potential failure. RK removed and replaced the cracked flanges. RK tendered a claim and demand for indemnity to Travelers for these repair costs. Travelers denied the claim. RK then sued for breach of contract and declaratory relief. The parties filed cross motions for summary judgment.
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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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Finding Highway Compromise ‘Tough,’ DOT Secretary Says
May 05, 2014 —
Alan Levin – BloombergDivisions in Congress over boosting funding for bridge repairs and highway construction are making it difficult to pass a long-term measure in time to prevent a disruption in existing road projects, U.S. Transportation Secretary Anthony Foxx said.
“I would say that we have a tough, a tough challenge ahead of us that hasn’t been solved for a long time,” Foxx said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.
The Highway Trust Fund, financed by gasoline and diesel taxes, may soon not be able to meet its financial obligations, according to Foxx’s agency. The Obama administration on April 29 sent legislation to Congress proposing $302 billion for road and mass transit projects over four years, with part of the money coming from new taxes on company earnings overseas.
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Alan Levin, BloombergMr. Levin may be contacted at
alevin24@bloomberg.net
Appellate Court Lacks Jurisdiction Over Order Compelling Appraisal
January 16, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Eleventh Circuit recently held that the district court's order compelling appraisal and staying the proceedings pending appraisal was an interlocutory order that was not immediately appealable under 28 U.S.C. 1292 (a) (1). Positano Place at Naples Condominium Association, Inc. v. Empire Indem. Ins. Co., 2023 U.S. App. LEXIS 27961 (11th Cir. Oct. 20, 2023).
Postiano Condominium Association suffered damage from Hurricane Irma. Pastiano notified its insurer, Empire, seven months later. Empire investigated the claim and inspected the property. Positano sent a written request for appraisal. Empire did not respond and Pastiano filed suit, alleging that the parties' dispute was not a coverage dispute but a dispute over the amount of the loss. Postiano moved to compel appraisal and to stay the proceedings pending completion of the appraisal.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Hunton Partner Michael Levine Appointed to Law360’s 2024 Insurance Authority Property Editorial Advisory Board
May 20, 2024 —
Hunton Insurance Recovery BlogWashington, DC-based partner
Michael Levine has been recognized for his extensive experience and insights into emerging and legacy property and business interruption insurance coverage issues by being selected to Law360’s 2024 Editorial Advisory Board for Insurance Authority Property. As a member of the board, Mike will provide feedback on Law360’s coverage of property issues and expert insight on how best to shape future reporting of issues affecting businesses across all industry sectors.
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Hunton Andrews Kurth llp
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Proving Contractor Licensure in California. The Tribe Has Spoken
October 21, 2015 —
Garret Murai – California Construction Law BlogAs I mentioned in an earlier post, in California you must “prove” you’re a licensed contractor in a construction case. But in whose hands are you entitled to place your fate – the judge or the jury?
Well, the tribe has spoken.
Jeff Tracy, Inc. v. City of Pico Rivera
In Jeff Tracy, Inc. v. City of Pico Rivera, Case Nos. B258563 and B258648, California Court of Appeals for the Second District (September 15, 2015), general contractor Jeff Tracy, Inc. doing business as Land Forms Construction (“Land Forms”) was walloped with a nearly $5.5 million judgment for being improperly licensed on a park project owned by the City of Pico Rivera (“City”). The judgment followed a bench trial over Land Form’s objection that it was entitled to a jury trial.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
ASCE Releases First-of-its-Kind Sustainable Infrastructure Standard
October 24, 2023 —
American Society of Civil EngineersRESTON, VA — The
American Society of Civil Engineers (ASCE) today released a first-of-its-kind standard, ASCE/COS 73-23: Standard Practice for Sustainable Infrastructure, which provides guidance for infrastructure owners to develop and implement sustainable solutions through a project's entire life cycle. It is a non-mandatory, performance-based standard designed for civil infrastructure ranging from transportation projects to water systems to the energy grid, developed over a period of five years involving a multitude of diverse stakeholders.
ASCE President Maria Lehman noted, "This is a transformational standard that for the first time will establish consensus guidance on how infrastructure owners should address sustainability in their projects. As of early September, there have been 23 confirmed weather/climate disaster events in the U.S. with losses exceeding $1 billion. That's almost one every week and a half. Sustainability and resilience are more important than ever. Infrastructure owners and designers have a responsibility to develop and implement practices that promote sustainability and long-term reliability of infrastructure projects, while also being cost-effective and collaborative with community stakeholders."
The standard complements existing ASCE standards and tools like the Envision rating system.
A discussion and examination of the ASCE/COS 73-23 standard will be held at the
ASCE INSPIRE 2023 Conference in Arlington, Virginia from November 16th-18th. Print copies of the standard will also be available for purchase at the conference.
Click here to register for the event and learn more about sustainable and resilient innovations in the civil engineering space.
To purchase the standard, visit
the link here.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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