California Clarifies Its Inverse Condemnation Standard
December 30, 2019 —
Gus Sara - The Subrogation StrategistIn City of Oroville v. Superior Court, 446 P.3d 304 (Cal. 2019), the Supreme Court of California considered whether the City of Oroville (City) was liable to a dental practice for inverse condemnation damages associated with a sewer backup. The court held that in order to establish inverse condemnation against a public entity, a property owner must show that an inherent risk in the public improvement was a substantial cause of the damage. Since the dental practice did not have a code-required backwater valve — which would have prevented or minimized this loss — the court found that the city was not liable because the sewage system was not a substantial cause of the loss. This case establishes that a claim for inverse condemnation requires a showing of a substantial causal connection between the public improvement and the property damage. It also suggests that comparative negligence can be a defense to inverse condemnation claims.
In December 2009, a dental practice, WGS Dental Complex (WGS), located in the City, incurred significant water damage as a result of untreated sewage from the City’s sewer main backing up into WGS’ building. WGS submitted a claim to its insurance carrier, The Dentists Insurance Company (TDIC) and, in addition, sued the City for its uninsured losses, alleging inverse condemnation and nuisance. TDIC joined the litigation, alleging negligence, nuisance, trespass and inverse condemnation. Under California law, when a government entity fails to recognize that an action or circumstance essentially amounts to a taking for public use, a property owner can pursue an inverse condemnation action for compensation. The City filed a cross-complaint against WGS for failing to install a code-required backwater valve on their lateral sewer line, which would have prevented or minimized the backup.
The City filed a motion for summary judgment, which the trial court denied. WGS then sought a judicial determination on the issue of inverse condemnation. The City presented evidence that the sewage system was designed in accordance with industry standards, and that WGS failed to comply with the City’s plumbing code by failing to install a backwater valve on its private sewer lateral. The trial court found the City liable for inverse condemnation because the blockage that caused the backup originated in the City’s sewer line. The court held that the blockage was an inherent risk of sewer operation. The Court of Appeals affirmed the decision, holding that the City would have had to prove that the WGS’s lack of a backwater valve was the sole cause of the loss in order to absolve itself of liability.
Read the court decisionRead the full story...Reprinted courtesy of
Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
Federal Court Finds Occurrence for Faulty Workmanship Under Virginia Law
July 31, 2013 —
Tred Eyerly, Insurance Law HawaiiThe Federal District Court in Virginia found that allegations of faulty workmanship could arise from an occurrence. Nautilus Ins. Co. v. Strongwell Corp., 2013 U.S. Dist. LEXIS 79163 (W. D. Va. June 4, 2013).
Strongwell supplied certain fiberglass reinforced plastic materials to a subcontractor of Black & Veatch for a construction project at power plant. Black & Veatch subsequently sued Strongwell, claiming that numerous defects in Strongwell's materials and work were discovered after the project was completed. The complaint further alleged that as a result of the defects, there was widespread property damage to portions of the power plant.
Nautilus defended under a reservation of rights. Nautilus also filed suit for a declaratory judgment that to establish it had no duty to defend or indemnify Strongwell. Strongwell moved to dismiss the complaint insofar as it requested a declaration that there was no duty to defend. Strongwell also filed a motion to stay the coverage action until the underlying case was completed.
Read the court decisionRead the full story...Reprinted courtesy of
Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Court Slams the Privette Door on Independent Contractor’s Bodily Injury Claim
May 06, 2019 —
Brett G. Moore, Michael C. Parme, Lindsey N. Ursua & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Johnson v. The Raytheon Company, Inc., Case No. B281411 (2019) WL 1090217, plaintiff Laurence Johnson (Johnson) was a maintenance engineer employed by an independent contractor that provided control room staff to defendant Raytheon Company, Inc. (“Raytheon”). Johnson was monitoring the computers in the control room when he received low water level alarms pertaining to the water cooling towers. Johnson went to the cooling tower wall in order to look over the wall and verify the water level. Johnson saw the upper half of an extension ladder leaning against the cooling tower’s wall. The ladder had a warning sign which said, “CAUTION” and “THIS LADDER SECTION IS NOT DESIGNED FOR SEPARATE USE.” Despite these warnings, Johnson used the ladder. As he was climbing the ladder it slid out causing him to fall and suffer injuries.
Johnson sued Raytheon, the hirer of the independent contractor, arguing the ladder, among other things, was unsafe and lead to Johnson’s injuries. Johnson believed that Raytheon’s course of conduct of leaving a platform ladder (as opposed to the extension ladder) at the wall constituted an implied agreement to always have one present, on which the independent contractor’s employees relied. Johnson further argued that Raytheon was negligent in providing a dangerous extension ladder, as opposed to a platform ladder, at the wall on the night of the accident.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Brett G. Moore,
Michael C. Parme,
Lindsey N. Ursua and
Lawrence S. Zucker II
Mr. Moore may be contacted at bmoore@hbblaw.com
Mr. Parme may be contacted at mparme@hbblaw.com
Ms. Lindsey may be contacted at lursua@hbblaw.com
Mr. Lawrence may be contacted at lzucker@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Supreme Court of Washington State Upholds SFAA Position on Spearin Doctrine
September 13, 2021 —
Peter Roth – The Surety & Fidelity Association of AmericaSeptember 9, 2021 (WASHINGTON, DC) –
The Surety & Fidelity Association of America (SFAA) commends the decision of The Supreme Court of The State of Washington to reverse the lower court ruling in the case of Lake Hills Investments, LLC vs. Rushforth Construction Co. As argued by SFAA, the Supreme Court found the contractor should not be responsible for damage caused by the defective design provided by the owner even where the contractor was responsible for certain defective work. In addition, the contractor is not completely barred from asserting this defense if the defects were caused by a combination of deficient performance by the contractor and deficient design, and proportional liability should be determined.
The SFAA, along with the National Electrical Contractors Association Puget Sound Chapter (NECA), Mechanical Contractors Association of Western Washington (MCAWW) and SMACNA-Western Washington (SMACNA), issued an Amici Curiae in support of Petitioner AP Rushforth Construction Co., Inc. d/b/a AP Rushforth, and Adolfson & Peterson, Inc.’s (collectively “AP”) Petition for Discretionary Review. In the brief they argued the Court should grant the Petition because the decision by the lower court is contrary to precedent of limiting a contractor’s liability when the owner’s defective plans and specifications caused the defective work, and upsets settled expectations of allocation of risk and liability between contractors, owners and architects (among others) on construction projects. This allocation of risk and the principle of limiting the contractor’s liability for defective work based on defective plans and specifications is long settled doctrine in Washington State and throughout the country, a doctrine based on the US Supreme Court’s landmark decision in U.S. vs. Spearin more than 100 years ago.
The Surety & Fidelity Association of America (SFAA) is a trade association of more than 425 insurance companies that write 98 percent of surety and fidelity bonds in the U.S. SFAA is licensed as a rating or advisory organization in all states and it has been designated by state insurance departments as a statistical agent for the reporting of fidelity and surety experience. www.surety.org
Read the court decisionRead the full story...Reprinted courtesy of
Peter Roth, SFAAMr. Roth may be contacted at
proth@surety.org
Are Millennials Finally Moving Out On Their Own?
July 16, 2014 —
Beverley BevenFlorez-CDJ STAFFBrad Hunter of Big Builder reported that there is “some evidence that young people who had moved in with their parents or relatives are now finding the means and the motivation to move out and get their own place.”
According to the 2013 Current Population Survey (as quoted by Big Builder), there was “a drop in the percentage of twenty-somethings living with parents. This was the first decline since 2005, back when the speculative foundations of the housing market started to crumble.” However, a study by the Harvard Joint Center on Housing found that “2.1 million more people between in their 20's lived with their parents than would have typically been the case based on normal headship rates.” This demonstrates that demand for housing should increase as this group gets older and decides to break out on their own.
Read the court decisionRead the full story...Reprinted courtesy of
Client Alert: Michigan Insurance Company Not Subject to Personal Jurisdiction in California for Losses Suffered in Arkansas
February 05, 2015 —
R. Bryan Martin, Lawrence S. Zucker II, and Kristian B. Moriarty – Haight Brown & Bonesteel LLPIn Greenwell v. Auto-Owners Ins. Co. (No. C074546, Filed 1/27/2015) (“Greenwell”), the California Court of Appeal, Third Appellate District, held a California resident could not establish specific personal jurisdiction over an insurance company, located in Michigan, which issued a policy of insurance to the California resident where the claimed loss occurred in Arkansas.
Plaintiff purchased a policy of insurance from defendant, Auto-Owners Ins. Co. (“Auto”), a Michigan corporation. The policy provided commercial property coverage for an apartment building owned by Plaintiff, located in Arkansas. The policy also provided commercial general liability coverage for plaintiff’s property ownership business, which plaintiff operated from California.
Both coverage provisions insured certain risks, losses, or damages that could have arisen in California. The dispute which arose between Plaintiff and Defendant, however, involved two fires that damaged the apartment building in Arkansas. As a result of coverage decisions that Auto made in the handling of the claim, plaintiff filed suit for breach of contract and bad faith.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
R. Bryan Martin,
Lawrence S. Zucker II and
Kristian B. Moriarty
Mr. Martin may be contacted at bmartin@hbblaw.com;
Mr. Zucker may be contacted at lzucker@hbblaw.com;
and Mr. Moriarty may be contacted at kmoriarty@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Expired Contract Not Revived Due to Sovereign Immunity and the Ex Contractu Clause
September 15, 2016 —
David R. Cook Jr. – AHHC Construction Law BlogA few months ago, a decision by the Supreme Court of Georgia in Georgia Department of Labor v. RTT Associates, Inc. provided a strict rule for contractors who work with state agencies to determine whether a state agency has waived its sovereign immunity. The issue as framed by the Court was “whether an agency’s waiver of immunity from a breach of contract claim as a result of entering into a written contract remains intact in the event the contract is extended without a written document signed by both parties expressly amending the contract, as required by its terms.”
The case involved a contract executed on March 1, 2012, by a contractor, RTT Associates, Inc. (RTT), and the Georgia Department of Labor (DOL), whereby RTT was to develop certain computer software for the DOL by the completion date, June 30, 2012. The contract required that amendments be in writing and fully executed by both parties. Time was of the essence and RTT’s obligation under the contract survived the expiration or termination of the contract.
Read the court decisionRead the full story...Reprinted courtesy of
David R. Cook Jr., Autry, Hanrahan, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
Professional Services Exclusion Bars Coverage Where Ordinary Negligence is Inseparably Intertwined With Professional Service
August 17, 2017 —
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLPIn Energy Ins. Mutual Ltd. v. Ace American Ins. Co. (No. A140656, filed 7/11/17, ord. Pub. 8/10/17), a California appeals court found that a professional services exclusion barred coverage for wrongful death and other claims blamed on pipeline inspectors’ failure to identify and properly mark a gas pipeline that was ruptured during construction of another pipeline, resulting in an explosion and fire.
In Energy Ins. Mutual, a pipeline owner hired two temporary construction inspectors through a staffing company. The inspectors had to ensure compliance with engineering and safety standards, practices and procedures for pipeline construction, and understand construction drawings and blueprints. They worked together with one of the owner’s employees to perform daily surveillance to ensure the integrity of the pipeline and avoid third party damage.
Reprinted courtesy of
Christopher Kendrick, Haight Brown & Bonesteel LLP and
Valerie A. Moore, Haight Brown & Bonesteel LLP
Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
