Insurance Law Alert: California Supreme Court Limits Advertising Injury Coverage for Disparagement
June 18, 2014 —
Valerie A. Moore and Chris Kendrick - Haight Brown & Bonesteel LLPIn Hartford Casualty Ins. v. Swift Distribution (No. S207172, filed 6/12/14), the California Supreme Court affirmed a 2012 appeals court holding that there is no advertising injury coverage on a theory of trade disparagement if the competitor's advertisements do not expressly refer to the plaintiff's product and do not disparage the plaintiff's product or business. In doing so, the Supreme Court expressly disapproved Travelers Property Casualty Company of America v. Charlotte Russe Holding, Inc. (2012) 207 Cal.App.4th 969 ("Charlotte Russe"), which held that coverage could be triggered for "implied disparagement" by allegations that a retailer's heavy discounts on a manufacturer's premium apparel suggest to consumers that the manufacturer's products are of inferior quality.
In Hartford v. Swift the plaintiff, Dahl, held a patent for the "Multi-Cart," a collapsible cart that could be manipulated into different configurations. When Dahl's competitor Ultimate began marketing the "Ulti-Cart," Dahl sued alleging that Ultimate impermissibly manufactured, marketed, and sold the Ulti-Cart, which infringed patents and trademarks for Multi-Cart and diluted Dahl's trademark. Dahl alleged patent and trademark infringement, unfair competition, dilution of a famous mark, and misleading advertising arising from Ultimate's sale of Ulti-Carts. However, the advertisements for Ulti-Cart did not name the Multi-Cart, Dahl, or any other products beside the Ulti-Cart.
Reprinted courtesy of
Valerie A. Moore, Haight Brown & Bonesteel LLP and
Christopher Kendrick, Haight Brown & Bonesteel LLP
Ms. Moore may be contacted at vmoore@hbblaw.com; Mr. Kendrick may be contacted at ckendrick@hbblaw.com
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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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The Prolonged Effects on Commercial Property From Extreme Weather
January 29, 2024 —
The Hartford Staff - The Hartford InsightsAs evidenced by the extraordinary heat in the Southwest, a string of tornadoes in South and Midwest, and heavy rains in California and Florida, 2023 was a banner year for extreme weather. However, 2024 may be no different, which means now is the time for businesses to rethink the way they approach volatile weather, as well as the frequency and severity of storms and natural disasters.
The risks and challenges that businesses face as extreme weather becomes stronger and causes more property damage, requires innovative technology with specialized insurance solutions. Through updated building codes, advancements in technology and meaningful infrastructure improvements, businesses can make a difference in protecting their property and reducing losses.
Stronger Building Codes To Withstand Storms
It is not uncommon to see the destruction that a hurricane or tornado leaves behind. However, stronger building codes are one of the best ways to make sure property can withstand catastrophes. Florida for example implemented changes to its building codes after Hurricane Andrew, and then again in 2007 after the Hurricanes of 2004 and 2005. New construction since then has made houses and buildings significantly more hurricane proof. Buildings constructed 30 years ago were likely built with codes that may have neglected the impact of strong winds from an extreme hurricane or significant rainfall that a storm can bring, especially along the Atlantic and Gulf coasts.
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The Hartford Staff, The Hartford Insights
Newmeyer & Dillion Appoints Partner Carol Zaist as General Counsel
June 22, 2016 —
Newmeyer & Dillion LLPNEWPORT BEACH, Calif. – June 21st, 2016 – Prominent business and real estate law firm
Newmeyer & Dillion LLP is pleased to announce that partner
Carol Zaist has been named the firm’s General Counsel. Zaist will report to the Managing Partner, Executive Committee and other senior level management as it relates to the firm’s governance and policy matters. Zaist’s appointment is effectively immediately.
“We are excited to have appointed Carol as the firm’s General Counsel,” said Jeff Dennis, Newmeyer & Dillion’s Managing Partner. “As we continue to expand across markets, this is another proactive measure to ensure our strategic growth and success.”
Zaist is a partner in the Newport Beach office of Newmeyer & Dillion, concentrating her practice on business litigation, real estate litigation, and probate litigation. She has significant experience advising clients in contract disputes, business and property torts, and trademark and trade secret disputes in both federal and state jurisdictions. Zaist also serves as strategic counsel, advising clients on the impact of multiple litigation matters in different jurisdictions, and integrating strategy and tasks efficiently and cohesively. She will lend this variety of experience to her new role as General Counsel for the firm.
“I am honored and thrilled to work with our managing partner and Executive Committee to assist the firm in its strategic growth and development,” said Zaist.
About Newmeyer & Dillion
For more than 30 years, Newmeyer & Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of business, employment, real estate, construction and insurance law, Newmeyer & Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer & Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949-854-7000 or visit www.ndlf.com.
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Plaza Construction Negotiating Pay Settlement for Florida Ritz-Carlton Renovation
August 31, 2020 —
Scott Van Voorhis - Engineering News-RecordLionstone Development, owner of the Ritz-Carlton hotel in Miami Beach's South Beach section, began a $90-million renovation in 2017 after damage by Hurricane Irma forced the property's closing. The company reopened the hotel this past January to considerable acclaim in the hospitality industry press.
Scott Van Voorhis, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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NYC Hires Engineer LERA for Parking Garage Collapse Probe
January 29, 2024 —
James Leggate - Engineering News-RecordThe investigation into the collapse of a Lower Manhattan parking garage last April is still underway. A Jan. 2 notice published in The City Record identified LERA Consulting Structural Engineers RLLP as the engineering firm assisting with the probe.
Reprinted courtesy of
James Leggate, Engineering News-Record
Mr. Leggate may be contacted at leggatej@enr.com
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When Are General Conditions and General Requirements Covered by Builder's Risk
December 18, 2022 —
Michael V. Pepe & Grace V. Hebbel - Saxe Doernberger & VitaGeneral conditions and general requirements are terms of art in the construction industry that describe the indirect costs necessary to complete a construction project. After physical loss or damage to a project, the following question often arises: Are “general conditions” and “general requirements” covered under a builder’s risk policy?
General Conditions vs. General Requirements
General conditions are usually described as the cost of managing a construction project. Examples include salaries for personnel like project managers, supervisors, engineers, field office staff, as well as the cost of field trailers, office equipment and supplies, and anything necessary to support the staff.
General requirements are the non-management indirect costs of executing the project, including items such as pre-development costs, permits, security, dumpsters, fences, temporary lighting, worker amenities, and clean-up costs.
Reprinted courtesy of
Michael V. Pepe, Saxe Doernberger & Vita and
Grace V. Hebbel, Saxe Doernberger & Vita
Mr. Pepe may be contacted at MPepe@sdvlaw.com
Ms. Hebbel may be contacted at GHebbel@sdvlaw.com
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The Activist Group Suing the Suburbs for Bigger Buildings
December 10, 2015 —
Patrick Clark – BloombergIn a speech last month, Council of Economic Advisers Chairman Jason Furman blamed zoning restrictions—local land-use rules governing things like how tall buildings can grow—for the lack of affordable housing, lost economic productivity, and rising inequality across the U.S.
On Tuesday, a San Francisco activist named Sonja Trauss took Furman's argument to the streets, filing a lawsuit in Contra Costa County (Calif.) to fight what she sees as a lost opportunity to build more housing.
Trauss's organization, the San Francisco Bay Area Renters Federation (yes, SFBARF), is suing the City of Lafayette, a Bay Area suburb of about 25,000, to block plans to build 44 single-family homes on a plot of land once slated for a 315-unit apartment complex. Her argument relies on a three-decade-old California law intended to check local governments’ ability to reduce the density of certain construction projects. Called the Housing Accountability Act, the law has been used successfully by developers of affordable housing who have had their projects blocked, Trauss said, but never by an advocacy group advocating for greater density as a public good.
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Patrick Clark, Bloomberg
