Builders Beware: A New Class Of Defendants In Asbestos Lawsuits
January 06, 2016 —
David J. Byassee, Bremer Whyte Brown & O’Meara, LLP & Timothy A. Gravitt, Ulich, Ganion, Balmuth, Fisher & Feld, LLPResidential, commercial and industrial builders face new and potentially significant liability for construction activities that took place in the 1960s, 1970s and 1980s: personal injury lawsuits filed by construction workers from exposure to building products containing asbestos. After emptying the pockets of manufacturers and suppliers of raw asbestos and asbestos-containing products over the last 20 years, plaintiff lawyers are beginning to set their sights on a new class of defendants in asbestos litigation: residential, commercial and industrial builders who unknowingly allowed asbestos-containing products to be incorporated into their projects.
The men and women who have been involved in the building industry for 40 years or more may remember the subject of asbestos surfacing in the 1970s with the enactment of the Occupational Safety and Health Act (OSHA). At that point builders were just beginning to learn that asbestos was a component of some building materials, and the potential risk of cancer presented by asbestos was being debated in scientific and medical journals. Although the use of building materials containing asbestos was mostly phased out by the 1980s, the health risks associated with exposure to asbestos continue – and in fact increase – for the duration of an exposed person’s life.
Today it is generally accepted that exposure to asbestos increases the risk of developing asbestosis and certain kinds of cancer, including mesothelioma. Cancers associated with exposure to asbestos are typically diagnosed at least 15 years (and sometimes up to 50 years) after a person’s exposure to asbestos, meaning that exposures in the 1960s, 1970s and 1980s might not manifest in disease until now. The class of persons who may be at risk for asbestos-related disease is long and varied: insulators, HVAC installers, pipe fitters, plumbers, drywall installers, painters, plasterers and roofers, to name a few. Long-term exposure history, coupled with the theory that “each and every” exposure during a lifetime is a substantial factor increasing the risk of developing cancer, presents potential liability to builders acting as general contractors and/or property owners, as well as the usual defendants in asbestos lawsuits, which include manufacturers, suppliers, and users of asbestos-containing materials.
In recent years, plaintiff lawyers have set their sights on builders as the financial wherewithal of traditional asbestos defendants has dried up. Plaintiff lawyers have created a new theory of liability which they use to rope builders in as defendants in asbestos lawsuits: that the builder knew – or should have known – that a deadly ingredient (asbestos) was contained in the building materials used in construction, and the builder failed to warn its subcontractors or anyone else on the project that exposure to asbestos could harm them.
Builders have unique legal defenses to claims brought by employees of subcontractors who have developed asbestos-related disease. For example, the California Supreme Court in Privette v. Superior Court (1993) 5 Cal.4th 689, held that an injured employee of a subcontractor cannot maintain a claim against the hirer (builder) for the employee’s injury absent affirmative contribution on the part of the builder to the injury. Thus the first line of defense in an asbestos exposure case is to argue that the developer had no direct role in the plaintiff’s exposure to asbestos and therefore the Privette doctrine precludes the plaintiff from suing the builder. But resourceful plaintiff lawyers are coming up with arguments to get around this so-called Privette defense in asbestos lawsuits by claiming that builders’ activities such as cleanup of asbestos-containing materials, or assertion of control over the work of the subcontractor, directly contributed to the plaintiff’s injuries and therefore provide exceptions to Privette and allow the claim to proceed.
A practical question is raised in asbestos cases: How is a plaintiff able to prove, decades after working on a project, what building materials contained asbestos, or that a builder knew or should have known in the 1960s, 1970s or 1980s that asbestos-containing materials were used on their project, or that asbestos presented a health risk? To answer the first part of the question (what building materials contained asbestos), plaintiff’s experts will say that during the relevant timeframe asbestos was a common ingredient in many building products, e.g., drywall joint compounds, stucco/plaster/gun cement, acoustic ceiling products, cement pipe, insulation, roofing mastic, caulk and plumber’s putty; this can be further proven by reference to product manufacturers’ disclosures made pursuant to the Asbestos Information Act. Also, through the decades of asbestos litigation against product manufacturers and suppliers, resourceful plaintiff lawyers have developed vast banks of data and documentation identifying the manufacturers of asbestos-containing building products, the end-users of those products, and the projects where those products were supplied. With this bank of knowledge, all that is necessary for them to make the claim against a builder is to have the plaintiff identify a construction project where he or she remembers working during the relevant timeframe. Once that identification is made, it is a simple matter for the lawyers to dig and find out who developed the building/project, who then becomes a defendant in an asbestos lawsuit.
The answer to the second part of the question (whether the developer knew or should have known that the products brought to their projects contained asbestos) requires a detailed investigation into the dates at which the products were supplied to the project, the manufacturer of the product, and what information was available in the market place about the material content of the particular product.
The answer to the third part of the question (knowledge that asbestos presented a health risk) is trickier. One of the first standards set by OSHA in 1972 related to permissible levels of exposure to asbestos. It is a common tactic for plaintiff lawyers to argue that the existence of OSHA standards created a presumption of knowledge in the building industry about the dangers of asbestos. But what about pre-OSHA knowledge? Here plaintiff lawyers will argue that well before OSHA, going back as far as 1936, exposure to asbestos was regulated in California under General Industry Safety Orders relating to Dusts, Fumes, Mists, Vapors and Gases. They argue that the General Industry Safety Orders put builders “on notice” of the dangers of asbestos by virtue of being regulated by the State of California, and, by extension, builders had “knowledge” of the health risks associated with asbestos.
There are defenses that skilled defense counsel can utilize to defeat asbestos claims, assuming the Privette defense is not available. The first is to thoroughly investigate and evaluate all of the plaintiff’s potential exposures to asbestos throughout his entire lifetime, and identify those sources that likely were the major contributors to his disease. Next, counsel has to properly investigate the project at which the plaintiff is alleged to have been exposed to asbestos, identify all of the possible sources of exposure, i.e., the products that were used or might have been used at the project, and finally how the plaintiff was allegedly exposed at the project. As most builders do not maintain records of what products were used in their projects dating back 15 years or more, let alone the identities of the trades that worked on the projects, knowledgeable defense counsel can be a valuable partner in unearthing the brands of products typically in use in the locale where the construction took place, and identifying the manufacturers of those products. Defense counsel must analyze the frequency, duration, proximity and intensity of the exposure, as well as the type of asbestos the plaintiff was allegedly exposed to (not all asbestos is created equal – some types are more toxic than others). This will involve careful evaluation of the levels of exposure created by the alleged activity of the builder, to determine, through experts and a thorough understanding of the scientific and medical studies on the subject, whether the levels of asbestos exposure created by the activity could be considered a “substantial factor” in contributing to the risk of the plaintiff’s development of his asbestos-related disease.
Asbestos lawsuits present a significant risk to the unsuspecting and unprepared builder. Money damages available to a plaintiff are substantial. Medical expenses for treatment of asbestos-related disease typically run into the hundreds of thousands of dollars, lost income (including retirement benefits) can also be significant, and jury awards for pain, suffering and emotional distress can be staggering - often millions of dollars. In some cases punitive damages are even awarded.
The bottom line is that a builder runs a big risk if it treats an asbestos claim like any other claim. The level of analysis and investigation to properly defend against the claim requires prompt action by knowledgeable counsel, and frequently there is no insurance coverage.
David J. Byassee is an attorney with the firm
Bremer Whyte Brown & O’Meara, LLP, and is a litigator who has devoted nearly a decade to representation of real estate developers and builders. He can be reached at: dbyassee@bremerwhyte.com.
Timothy A. Gravitt is an attorney with the firm
Ulich, Ganion, Balmuth, Fisher & Feld, LLP who is devoted to defending real estate developers and builders in a variety of litigation. He can be reached at: tgravitt@ulichlaw.com.
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Fifth Circuit Rules that Settlements in Underlying Action Constitute "Other Insurance"
April 17, 2019 —
Tiffany Casanova - Saxe Doernberger & Vita, P.C.The Fifth Circuit ruled that settlements between an insured and its subcontractors qualified as “other insurance” to the extent those settlements were used to pay for damages covered by an excess insurance policy. Policyholders should note the outcome of this case as it demonstrates the significant impact that settlements can have on coverage.
Satterfield & Pontikes Construction, Inc. v. Amerisure Mutual Ins. Co.1 was the result of a construction project gone wrong. Zapata County, Texas hired Satterfield & Pontikes (“S&P”) as a general contractor for the construction of a courthouse building. When the project did not go as planned, Zapata County terminated S&P, hired new subcontractors to complete the project, and sued S&P.
S&P, in turn, sought indemnification from its subcontractors, who were contractually obligated to indemnify S&P and procure insurance for any damage the subcontractors caused at the project. S&P also sought coverage from its own primary insurers, American Guarantee and Liability Insurance Company (“AGLIC”) and Amerisure Mutual Insurance Company (“Amerisure”), and its excess insurer, U.S. Fire Insurance Company (“U.S. Fire”) who provided liability coverage for S&P’s potential liabilities at the project. The policies contained exclusions for losses arising from mold and did not provide coverage for attorney’s fees or similar legal costs.
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Tiffany Casanova, Saxe Doernberger & Vita, P.C.Ms. Casanova may be contacted at
tlc@sdvlaw.com
LA Lakers Partially Survive Motion to Dismiss COVID-19 Claims
June 13, 2022 —
Tred R. Eyerly - Insurance Law HawaiiWhile the appellate court affirmed dismissal of a majority of the claims submitted by the Los Angeles Lakers for closure of the Staples Center and other properties due to COVID-19, a portion of their claims survived. L.A. Lakers v. Fed Ins. Co., 2022 U.S. Dist. LEXIS 31503 (C.D. Calif. March 17, 2022).
Government orders closed the Staples Center in March 2020. The Lakers alleged they lost tens of millions of dollars in revenue. They further alleged that the presence of coronavirus particles on fixtures and building systems caused physical alterations to the covered properties. The Lakers had to upgrade their properties to include new air filters, touchless light switches, toilets and sinks; sleeves or coatings for high-touch surfaces; and plexiglass dividers. The Lakers also alleged that five Metro stations within a mile of the Staples Center, that was used to get to games, were closed by civil authorities due to the presence of COVID-19.
The Lakers submitted a claim for property damage and business interruption to Federal. The claim was denied and the Lakers filed suit. In February 2021, the court granted Federal's motion to dismiss without prejudice, after concluding that the Lakers' allegations of direct physical loss or damage were mere legal conclusions and not sufficient to state a claim.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Florida Supreme Court: Notice of Right to Repair is a CGL “Suit,” SDV Amicus Brief Supports Decision
January 10, 2018 —
Gregory Podolak & Brian Clifford - SD&V Case AlertConstruction policyholders in Florida have been given substantial ammunition to compel general liability insurers to provide a defense against pre-suit accusations of defective work. Florida is one of approximately thirty (30) states that require property owners to serve contractors with notice and an opportunity to repair construction defects before filing suit. Only a few states have addressed whether a CGL policy should provide a defense for similar processes. Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., decided late in December by the Florida Supreme Court, acknowledged that the 558 process is a “suit,” thus impeding insurers from refusing a defense during this notice period.
Section 558.004(1), Florida Statutes (2012) requires a property owner alleging construction defects to serve a written notice to repair on the contractor before filing an action in court. Altman Contractors built a condominium in Broward County, Florida. In 2012, the condominium owners alleged defects in accordance with Section 558. Altman demanded that its general liability carrier, Crum & Forster, defend and indemnify it against the 558 notices. Crum & Forster denied coverage, claiming that 558 notices are not a “suit” as defined by the policy.
Reprinted courtesy of
Gregory Podolak, Saxe Doernberger & Vita, P.C. and
Brian Clifford, Saxe Doernberger & Vita, P.C.
Mr. Podolak may be contacted at gdp@sdvlaw.com
Mr. Clifford may be contacted at bjc@sdvlaw.com
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First-Time Homebuyers Make Biggest Share of Deals in 17 Years
February 22, 2018 —
Prashant Gopal – BloombergMillennials are playing homeownership catch-up.
First-time buyers rushed into the market last year, making 38 percent of all U.S. single-family home purchases, the biggest share since 2000, data released Thursday by Genworth Mortgage Insurance show. The 2.07 million new or existing homes bought by first-timers was 7 percent more than in 2016, according to the insurer, part of
Genworth Financial Inc.
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Prashant Gopal, Bloomberg
A Court-Side Seat: Guam’s CERCLA Claim Allowed, a “Roundup” Verdict Upheld, and Judicial Process Privilege Lost
June 14, 2021 —
Anthony B. Cavender - Gravel2GavelThis is a brief account of some of the important environmental and administrative law cases recently decided.
THE U.S. SUPREME COURT
BP PLC, et al. v Mayor and City of Baltimore
The issue the court confronted was a procedural matter: Can the defendant energy companies use the federal removal statutes (see 28 USC Section 1442) to remove a state law climate change lawsuit to federal court? Here, a group of energy companies were sued by the mayor and city council of Baltimore in state court, where they alleged that the defendants had concealed the adverse environmental effects of the fossil fuel products they promoted and sold in Baltimore City. Several similar lawsuits have been filed in many state courts, where typically it is alleged that the defendants can be sued on various common law theories. Rather than defend these cases in state court, the defendants have sought to remove these cases to federal court because climate change liability appears to be an issue that should be settled at the federal level. These efforts have been unsuccessful, with most federal trial and appellate courts holding that the reasons cited for removal (oftentimes the federal officer removal statute) have not been persuasive. In this case, both the Maryland federal district court and the U.S. Court of Appeals held they had no jurisdiction to authorize removal, and thus returned the case to the state court. Noting that the U.S. Court of Appeals for the Seventh Circuit ruled that a removal action could be countenanced under Section 1442, thus creating a circuit split, the Supreme Court held that a straightforward reading of the removal statute empowers the reviewing court to examine all theories for removal that a district court has rejected. Consequently, the Court remanded the case to the Fourth Circuit where it can decide, “in the first instance,” whether there actually exist grounds to remove this case to federal court.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Wildfire Insurance Coverage Series, Part 7: How to Successfully Prepare, Submit and Negotiate the Claim
August 22, 2022 —
Scott P. DeVries & Yosef Itkin - Hunton Insurance Recovery BlogPrior posts in this series have discussed insurance coverage issues that pertain directly to wildfire claims, but we have not yet addressed how one proceeds following a loss. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the preparation, submission and negotiation of the insurance claim.
Preparing a Claim
As different policies provide different timelines, where possible, it is advisable to submit the claim as soon as reasonably possible. Insurers commonly cite late submission as a basis for denial with jurisdictions varying on the import of “late” submission.
Insurers have a right to reasonable documentation of a claim before paying. Often, they will decline to consider a claim on its merits until such documentation is provided. The policy will specify whether to submit a hard copy or file online, but either way it is advisable to maintain a copy online or in a remote geographic location.
Reprinted courtesy of
Scott P. DeVries, Hunton Andrews Kurth and
Yosef Itkin, Hunton Andrews Kurth
Mr. DeVries may be contacted at sdevries@HuntonAK.com
Mr. Itkin may be contacted at yitkin@HuntonAK.com
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New Pedestrian, Utility Bridge Takes Shape on Everett Waterfront
December 16, 2019 —
Tim Newcomb - Engineering News-RecordAmidst the constraints of weight limits, a seawall, a waterfront restaurant and high-voltage power poles, crews from ICI Interwest Construction Inc. and heavy mover Oxbo Mega Transport Solutions positioned a $20 million, 282-ft-long pedestrian and utility bridge in place this fall along the Everett, Washington, waterfront.
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Tim Newcomb, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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