CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Appeals Court Rules that Vertical and Not Horizontal Exhaustion Applies to Primary and First-Layer Excess Insurance

August 31, 2020 — Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP
In Santa Fe Braun v. Ins. Co. of North America (No. A151428, filed 7/13/20), a California appeals court relied on Montrose Chemical Corp. of California v. Superior Court (2020) 9 Cal.5th 215 (Montrose III), to hold that absent express policy wording to the contrary, horizontal exhaustion of all primary insurance is not required in order to trigger first-layer excess coverage. Beginning in 1992, Braun was sued for asbestos injuries from refineries it constructed and maintained. Braun had primary coverage and multiple layers of excess coverage for the relevant time period. After defending for years, the primary insurers reached a settlement under which they paid their limits into a trust which would fund the ongoing defense and settlements. Certain of the excess insurers settled and also contributed to the trust. 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 decision
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New Insurance Case: Owners'​ Insurance Barred in Reimbursement Action against Tenant

April 17, 2019 — Jason Adams - Gibbs Giden
The Western Heritage Ins. Co. v. Frances Todd, Inc. (2019 Cal.App. LEXIS 299 / 2019 WL 1450731) case has potential implications for insurance carriers, policyholders, condominium associations, unit owners, landlords and tenants. The case involves a fire at a commercial condominium complex (the “Association”). The Association’s CC&Rs required the Association to purchase a master fire insurance policy for the benefit of the Association and owners, with a waiver of subrogation endorsement that stated the insurance company could not seek reimbursement from the Association, its officers, owners or occupants of the units in the event of a covered fire. The CC&Rs also prohibited individual owners from obtaining their own fire insurance. The Association purchased the required fire insurance policy from Western Heritage Insurance Company (“Western Heritage”). One of the owner’s tenants, Frances Todd, Inc. (“Frances Todd”), allegedly caused a fire that damaged several units. Although the unit owner was covered as an additional named insured under the Western Heritage fire policy, the tenant, Frances Todd, was not. Western Heritage paid for the common area fire damage caused by Francis Todd, and then sued Frances Todd in a subrogation action to recover the amounts paid. Read the court decision
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Reprinted courtesy of Jason M. Adams, Gibbs Giden
Mr. Adams may be contacted at jadams@gibbsgiden.com

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Indemnity Clauses—What do they mean, and what should you be looking for?

May 07, 2015 — Craig Martin – Construction Contractor Advisor
It seems that every construction contract now-a-days, contains an indemnity clause. Contractors should be reviewing these indemnity clauses very carefully to understand the potential scope of an indemnity obligation and your opportunity to negotiate changes. What is an indemnity Clause? An indemnity clause transfers risk from one party to another. When a contractor signs an indemnity agreement, it is agreeing to pay for damages for which another party could be liable. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

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Maryland Finally set to Diagnose an Allocation Method for Progressive Injuries

February 18, 2020 — William S. Bennett - Saxe Doernberger & Vita, P.C.
Maryland’s highest court recently heard arguments regarding the proper method of allocation of the covered damages from a slowly progressing asbestos injury amongst insurance policies in place over a period of years. Rossello v. Zurich American Insurance Company, Case No. 2436 (Md. 2019). The court may also be forced to determine what the proper trigger of coverage is for latent bodily injury claims, although the plaintiff has not framed the issue in that manner. In Rossello, the plaintiff, Patrick Rossello, worked for a period of years for the now-defunct Lloyd E. Mitchell, Inc. (“Mitchell”), a construction company operating until 1976. In 1974 he was exposed to and inhaled asbestos fibers. He was ultimately diagnosed in 2013 with malignant mesothelioma as a result of that exposure. Rossello obtained a judgment for approximately $2,700,000 against Mitchell and secured the right to pursue its insurance. As relevant to this dispute, Mitchell carried liability insurance policies, which provide coverage for asbestos related claims, from 1974 to 1977. Rossello seeks to hold Zurich, as successor to Maryland Casualty Company, accountable for the full value of his award, based on the 1974 policy. Although this contention actually implicates two separate issues, plaintiff’s counsel passed over the initial trigger of coverage issue and focused instead on the issue of allocation of coverage. Read the court decision
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Reprinted courtesy of William S. Bennett, Saxe Doernberger & Vita, P.C.
Mr. Bennett may be contacted at wsb@sdvlaw.com

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Insurer's Late Notice Defense Fails on Summary Judgment

December 13, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The insurer's motion for summary judgment to dismiss the claim because the insurer did not provide notice "as soon as practicable" was denied. Vintage Hospitality Group LLC v. Nat'l Trust Ins. Co., 2021 U.S. Dist. LEXIS 192651 (M.D. Ga. Oct. 6, 2021). Vintage owned hotels, one of which was struck by a severe hailstorm on July 21, 2018. Vintage was not aware of roof damage until two months after the storm, and did not make the connection between the hailstorm and roof damage until February 2020, when it reported the damage to National. The claim was denied because it was not reported "as soon as practicable" as required by the policy. Vintage sued and National moved for summary judgment. Vintage did not notice the leaks until September 2018. The focus was on fixing the leaks, and connection to the hailstorm did not register. The leaks persisted over the next year and a half. A construction company was called in to evaluate the leaking roof. The construction company advised that the roof had experienced previous hail damage which was causing the leaks. At this point, Vintage connected the damage to the hailstorm. A claim was promptly submitted to National, which denied the claim. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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When an Insurer Proceeds as Subrogee, Defendants Should Not Assert Counterclaims Against the Insured/Subrogor

June 14, 2021 — Gus Sara - The Subrogation Strategist
In a subrogation action, one party is substituted to the rights and remedies of another with respect to a lawful claim. The substituted party (the subrogee) is legally able to pursue any right or seek any remedy that would be available to the subrogor regarding that claim. But can a defendant in a subrogation action assert any claim against the subrogee that it would have against the subrogor? In Federated Mut. Inc. Co. v. Kosciusko County, No. 3:20-CV-960, 2021 U.S. Dist. Lexis 88735, the United States District Court for the Northern District of Indiana considered whether a defendant could assert counterclaims against the insureds/subrogors in an action filed in the name of their subrogee. The court held that since the insurerds/subrogors were not a party to the action and the defendant could assert the substance of its counterclaim as a defense, the defendant could not file counterclaims against the insureds/subrogors in the insurer’s subrogation action. Kosciusko County arose from a motor vehicle accident involving a semi-tractor trailer owned by Bellman Oil Company, Inc. (Bellman) and B & B Transport, Inc. (B & B). The accident occurred on a highway in Kosciusko County in October of 2019. The accident caused the semi-tractor trailer containing ethanol fuel to roll over four times and burst into flames. Federated Mutual Insurance Company (FMIC) insured Bellman and B & B for the semi-tractor trailer and issued payments as a result of the accident. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Are Proprietary Specifications Illegal?

April 11, 2018 — Wally Zimolong – Supplemental Conditions
A friend came to me with a question regarding a case he was working: “can a public owner require that bidders use a specific brand name product?” “Of course not,” I said “proprietary specifications are illegal.” Or, at least that’s what I assumed. To my surprise, the law in the Commonwealth of Pennsylvania is not as clear as it is in other jurisdictions. What is a proprietary specification? A proprietary specification lists a product by brand name, make, model and/model that a contractor must (shall) utilize in construction. A basic example of a proprietary specification would state:

“Air Handlers shall be “Turbo Max” as manufactured by Chiller Corp.”

There are two problems with a proprietary specification (other than potentially being illegal): (a) they limit competition, and (b) invite steered contract awards. They limit competition because it limits the type of material that can be used on the project. In the example above, there could be equivalent air handlers available at a better price but the contractor could not use that lower priced product in its bid. Thus, the taxpayers end up paying more for tile. Also, contractors may not be able to secure a certain brand name product because of exclusive distribution agreements. Again, using the example above, contractor A’s competitor may have the exclusive distribution agreement with Chiller Corp. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

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San Francisco Bay Bridge Tower Rod Fails Test

May 20, 2015 — Beverley BevenFlorez-CDJ STAFF
The San Francisco Chronicle reported that “[o]ne of the steel rods anchoring the tower of the new Bay Bridge eastern span has failed a key integrity test, suggesting it became corroded and broke during years when it was soaking in water.” Hundreds of other rods have also been steeped in water, which raises concerns about how stable the bridge might be during a major earthquake. Gareth Lacy, a Transportation Agency spokesperson, told the Chronicle that “[t]hey are investigating why one seismic rod at the base at the tower moved when it was pulled by the machine,” Lacy said. “It did not carry the expected load, and the next step is to remove it to fully investigate its condition.” Read the court decision
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