California Court Holds No Coverage Under Pollution Policy for Structural Improvements
October 02, 2018 —
Brian Margolies - TLSS Insurance Law BlogIn its recent decision in Essex Walnut Owner L.P. v. Aspen Specialty Ins. Co., 2018 U.S. Dist. LEXIS 138276 (N.D. Cal. Aug. 15, 2018), the United States District Court for the Northern District of California had occasion to consider the issue of a pollution liability insurer’s obligation to pay for the redesign of a structural support system necessitated by the alleged presence of soil contamination.
Aspen’s insured, Essex, owned a parcel of property it was in the process of redeveloping for commercial and residential purposes. The project required excavation activities in order to construct an underground parking lot, and as part of this process, Essex designed a temporary shoring system comprising tied-in retaining walls in order to stabilize the area outside of the excavation. During the excavation work, construction debris was encountered requiring removal. Aspen agreed to pay for a portion of the costs to remove and dispose the debris under the pollution liability policy it issued to Essex.
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Brian Margolies, Traub Lieberman Straus & Shrewsberry LLPMr. Margolies may be contacted at
bmargolies@tlsslaw.com
Breaking the Impasse by Understanding Blame
January 13, 2020 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday (on a Thursday) here at Construction Law Musings, Victoria Pynchon (@vickiepynchon) joins us for the 4th time. Victoria is an attorney-mediator with ADR Services, Inc. in Century City; an arbitrator with the American Arbitration Association in Los Angeles, California; and, a negotiation consultant and trainer world-wide. Victoria co-founded She Negotiates Training and Consulting in 2010 and writes for ForbesWoman at its She Negotiates blog. She is the author of one of my favorite books on conflict resolution, A is for A*@!#, the Grownups’ ABC’s of Conflict Resolution reviewed at Musings here.
First Let’s Talk About Anger
Please raise your hand if your clients — corporate clients — are angry about the burdens of litigation. Irritated with the document “demands” and interrogatories. Frustrated about the e-discovery. Ticked off at the way opposing counsel asks them questions as if they’re lying. Hot under the collar about the mounting attorneys’ fees and the distance between the day suit was filed and the probable day on which a trial might eventually be scheduled. Simmering about the time the litigation consumes, time they’d prefer to be spending doing their actual jobs — planning for and implementing business strategies for a profitable future instead of fighting about the unprofitable past.
And we’re not even talking about your clients’ anger at the defendant who has stolen their intellectual property or stopped worked at the construction site or refused to release the remaining funds in the construction loan account. And if you believe that powerful people in highly successful and profitable businesses do not fear that litigation might hurt their careers, think again.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Court Narrowly Interprets “Faulty Workmanship” Provision
March 28, 2018 —
Jeffrey J. Vita and Thersa A. Guertin – SDV BlogIn a recent victory in their home state of Connecticut, Saxe Doernberger & Vita partners,
Jeffrey Vita and
Theresa Guertin, representing owner-developer 777 Main Street, LLC, overcame a summary judgment motion filed by Liberty Mutual Fire Insurance Company. The Connecticut Superior court refused to adopt the insurer’s broad interpretation of the “faulty workmanship” exclusion in an all-risk builders’ risk insurance policy.
In 2014, 777 Main Street, LLC began renovations on the 27-story former Hartford National Bank building in downtown Hartford, converting the property from an office building to a mixed residential and commercial space. During the renovation, a subcontractor hired to perform the cleaning the concrete façade of the building accidentally over-sprayed the cleaning material onto the property’s windows. The subcontractor’s attempts to clean the overspray further damaged the structural integrity and cosmetic look of the windows. As a result, the owner was forced to replace over 1,800 windows, costing millions.
Mr. Vita may be contacted at jjv@sdvlaw.com
Ms. Guertin may be contacted at tag@sdvlaw.com
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Insurer Unable to Declare its Coverage Excess In Construction Defect Case
January 06, 2012 —
CDJ STAFFThe Ninth Circuit Court of Appeals has upheld a summary judgment in the case of American Family Mutual Insurance Co. v. National Fire & Marine Insurance Co. Several other insurance companies were party to this case. In the earlier case, the US District Court of Appeals for Arizona had granted a summary judgment to Ohio Casualty Group and National Fire & Marine Insurance Company. At the heart of it, is a dispute over construction defect coverage.
The general contractor for Astragal Luxury Villas, GFTDC, contracted with American Family to provide it with a commercial liability policy. Coverage was issued to various subcontractors by Ohio Casualty and National Fire. These policies included blanket additional insured endorsements that provided coverage to GFTDC. The subcontractor policies had provisions making their coverage excess over other policies available to GFTDC.
The need for insurance was triggered when the Astragal Condominium Unit Owners Association filed a construction defect claim in the Arizona Superior Court. CFTDC filed a third-party claim against several subcontractors. The case was settled with American Family paying the settlement, after which it filed seeking reimbursement from the subcontractor’s insurers. The court instead granted summary judgment in favor of Ohio Casualty and National Fire.
American Family appealed to the Ninth Circuit for a review of the summary judgment, arguing that the “other insurance” clauses were “mutually repugnant and unenforceable.” The Ninth Circuit cited a case from the Arizona Court of Appeals that held that “where two policies cover the same occurrence and both contain ‘other insurance’ clauses, the excess insurance provisions are mutually repugnant and must be disregarded. Each insurer is then liable for a pro rate share of the settlement or judgment.”
The court noted that unlike other “other insurance” cases, the American Family policy “states that it provides primary CGL coverage for CFTDC and is rendered excess only if there is ‘any other primary insurance’ available to GFTDC as an additional insured.” They note that “the American Family policy purports to convert from primary to excess coverage only if CFTDC has access to other primary insurance as an additional insured.”
In comparison, the court noted that “the ‘other insurance’ language in Ohio Casualty’s additional insured endorsement cannot reasonably be read to contradict, or otherwise be inconsistent with, the ‘other primary insurance’ provision in the American Family policy.” They find other reasons why National Fire’s coverage did not supersede American Family’s. In this case, the policy is “written explicitly to apply in excess.”
Finally, the Astragal settlement did not exhaust American Family’s coverage, so they were obligated to pay out the full amount. The court upheld the summary dismissal of American Family’s claims.
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Why Construction Firms Should Think Differently on the Issue of Sustainability
May 25, 2020 —
Chris Batterson - Construction ExecutiveHow does a construction company differentiate itself from the competition? If the company owner don’t know the answer to this question, or if the first thought that popped into his or her mind was a generic answer along the lines of customer service, keep reading.
While all businesses should strive to deliver better results for their customers, if a construction firm is looking to stand out from the crowd, putting sustainability at the very center of everything it does will be a clear difference maker.
Finding ways to divert construction and demolition (C&D) waste materials away from landfills and into recycling streams is a must. Keeping track of and measuring your C&D recycling rates on a per-project basis, and also company-wide, can be the difference between winning and losing a contract.
Reprinted courtesy of
Chris Batterson, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Batterson may be contacted at
chris.batterson@rubiconglobal.com
Louisiana Politicians Struggle on Construction Bills, Hospital Redevelopment
June 16, 2011 —
CDJ STAFFLouisiana politicians are still working on a compromise in the state’s construction budget, as reported in the Times-Picayune. Rob Marrianneax, the chair of the Senate Revenue and Fiscal Affairs Committee, removed a $45 million request from Governor Bobby Jindal and added $4 million for projects that Jindal vetoed last year.
Two senators have formed competing plans to fund redevelopment construction for New Orleans’s Methodist Hospital. Mitch Landrieu, the mayor of New Orleans, hoped for $30 million dollars in state bonds. Senator Cynthia Willard-Lewis proposed an amendment that would supply $1.6 million, while Senator J.P. Morrell has an amendment that would supply $4 million.
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Restrictions On Out-Of-State Real Estate Brokers Being Challenged In Nevada
April 10, 2019 —
Aaron D. Lovaas - Newmeyer & Dillion LLPFor years, the Nevada Real Estate Division (“NRED”) and its sub-entity, the Nevada Real Estate Commission (“NREC”), have been tasked with administering the licensing procedures applicable to real estate professionals in Nevada, as well as enforcement of the regulations governing business practices, advertising, commissions, license maintenance, and a host of other dayto-day parameters within which the profession operates. Within the past five years, however, the NREC has tasked itself with the publicly stated goal of “protecting” Nevada real estate licensees and the commissions they earn from out-of-state real estate professionals seeking to do business in the Silver State. While efforts to preserve local real estate opportunities for local brokers might seem sound, an international brokerage firm is challenging the foundation of that structure. If they win, the outcome could have huge implications on the real estate industry in Nevada. Businesses, here’s a breakdown of the existing structure and what the challenge is all about.
The Existing Regulatory Structure
Through amending their own regulations, the NRED and NREC have created a regulatory structure that:
- Prohibits any non-Nevada licensed real estate broker from representing any seller (Nevada based or non-Nevada based) of any Nevada real estate;
- Prohibits any non-Nevada licensed real estate broker from representing any Nevada resident in the purchase of Nevada real estate; and
- Allows non-Nevada licensed real estate brokers to represent non-Nevada purchasers of Nevada real estate only if the out-of-state broker formally affiliates (and therefore shares commissions with) a resident Nevada-licensed broker.
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Aaron D. Lovaas, Newmeyer & Dillion LLPMr. Lovaas may be contacted at
aaron.lovaas@ndlf.com
Project Completion Determines Mechanics Lien Recording Deadline
April 08, 2024 —
William L. Porter - Porter Law GroupThe California mechanics lien is one of the most powerful collection remedies available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California private works construction project. The mechanics lien allows the claimant to actually sell the property where the work was carried out in order to obtain payment, entirely of course, against the wishes of the property owner. There are a number of important steps to follow and timelines to be met in order to pursue this remedy.
First, Understand Your Preliminary Notice Deadline
Working within deadlines is absolutely crucial to preserving mechanics lien rights under California law. The deadlines differ, depending on whether you are a “direct” contractor, also known as “original” or “prime” contractor (one who contracts directly with the property owner) or a subcontractor or material supplier. The process begins with the serving of a “preliminary notice” no later than 20 days after the party serving the preliminary notice begins supplying labor or materials to the project. Direct contractors are only required to serve the preliminary notice on the construction lender (Civil Code section 8200-8216), whereas subcontractors and material suppliers must serve not only the construction lender, but also the owner and direct contractor (see Civil Code section 8200(e)).
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com