Insurance Alert: Insurer Delay Extends Time to Repair or Replace Damaged Property
November 26, 2014 —
Valerie A. Moore & Christopher Kendrick – Haight Brown & Bonesteel LLPIn Stephens & Stephens XII v. Fireman's Fund Ins. (No. A135938, filed November 24, 2014), the plaintiffs obtained property insurance on a warehouse. Within a month, it was discovered to be stripped of all wiring and metal. Fireman's Fund paid for emergency repairs but nothing more, concerned that the damage had occurred outside the policy period.
The policy provided for valuation of either "replacement cost," meaning the expenditure required to replace the damaged property with "new property of comparable material and quality," or "actual cash value," defined as the actual, depreciated value of the damaged property. For replacement cost, Fireman’s Fund was not required to pay "until the lost or damaged property is actually repaired ... as soon as reasonably possible after the loss or damage," and only "[t]he amount [the insured] actually spend[s]...."
In the subsequent bad faith lawsuit, the jury awarded the full cost of repair, despite there being no repairs. The appeals court reversed, holding that there was no right to an immediate award for the costs of repairing the damage; however, the court nonetheless held that the insured was entitled to a "conditional judgment," awarding those costs if repairs were actually made.
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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Requesting an Allocation Between Covered and Non-Covered Damages? [Do] Think Twice, It’s [Not Always] All Right.
October 12, 2020 —
Todd Likman - Colorado Construction LitigationAs is often the case in construction defect and other insurance defense litigation, a plaintiff’s claims for relief typically encompass both covered and uncovered damages. Obviously, it is in the insured’s best interests to have as many damages covered by insurance as possible. From the insurer’s perspective and against the backdrop of owing duty of good faith and fair dealing to its insureds, however, it is generally better to have an allocation of covered vs. non-covered damages. This places the insurer, insured, and insurance retained defense counsel in a difficult position.
A recent opinion from U.S. District Court for the District of Colorado, Rockhill Ins. Co. v. CFI-Global Fisheries Mgmt, Civil Action No. 1:16-CV-02760-RM-MJW, 2020 U.S. Dist. LEXIS 35209 (D. Colo. Mar. 2, 2020), sheds light on the issue, even though some may feel it only further muddies already murky waters.
Rockhill involved review of an arbitration proceeding that property-owner, Heirloom I, LLC (“Heirloom”) filed against CFI-Global Fisheries Management (“CFI”). Rockhill Insurance Company (“Rockhill Insurance”) was asked to defend the arbitration as CFI’s professional and general liability insurer. At issue in the arbitration was Heirloom’s claim that CFI defectively designed and constructed a fisheries enhancement that was destroyed by natural processes four times in three years.
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Todd Likman, Higgins, Hopkins, McLain & RoswellMr. Likman may be contacted at
likman@hhmrlaw.com
Pennsylvania’s Supreme Court Clarifies Pennsylvania’s Strict Liability Standard
January 14, 2015 —
William Doerler and Edward Jaeger, Jr. – White and Williams LLPIn Tincher v. Omega Flex, Inc., -- A.3d --, 2014 WL 6474923 (Pa. Nov. 19, 2014), the Supreme Court of Pennsylvania discussed the Commonwealth of Pennsylvania’s products liability law and, overturning prior precedent, clarified the law. In particular, the Court, overturned Azzarello v. Black Brothers Company, 480 Pa. 547, 391 A.2d 1020 (1978), clarified the role of the judge and the jury in products liability cases and settled the question of whether Pennsylvania would adopt the Restatement (Third) of Torts: Products Liability §§ 1, et. seq. (Third Restatement) as the standard for deciding Pennsylvania products liability cases. The Tincher decision makes clear that Pennsylvania will continue to apply § 402A of the Restatement (Second) of Torts (Second Restatement) in products liability cases and that jurors, not the court, will decide the question of whether a product is in a defective condition. Plaintiffs may prove that a product is defective using either the consumer expectations test or the risk-utility test.
Background
The Tincher case arose out a fire that occurred at the home of Terrance and Judith Tincher on June 20, 2007. The Tinchers alleged that the fire started when a lightning strike near their home caused a small puncture in corrugated steel tubing (CSST) carrying natural gas to a fireplace located in their home. The defendant, Omega Flex, Inc. (Omega Flex) manufactured the CSST.
Reprinted courtesy of
William Doerler, White and Willams LLP and
Edward Jaeger, Jr., White and Williams LLP
Mr. Doerler may be contacted at doerlerw@whiteandwilliams.com; Mr. Jaeger may be contacted at jaegere@whiteandwilliams.com
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Report to Congress Calls for Framework to Cut Post-Quake Recovery Time
February 01, 2021 —
Bruce Buckley - Engineering News-RecordEngineers and government agencies along with model building code and standard developers should work together to create a national framework more focused on earthquake resilience and post-quake recovery time, according to a report delivered to Congress last week. While current seismic codes address life safety, the report says stakeholders should also consider re-occupancy and functional recovery time, taking into account the potential impacts to a community as a whole.
Reprinted courtesy of
Bruce Buckley, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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DRCOG’s Findings on the Impact of Construction Defect Litigation Have Been Released (And the Results Should Not Surprise You)
November 13, 2013 —
Derek Lindenschmidt — Higgins, Hopkins, McLain & Roswell, LLC.The downward trend in attached-housing construction in Colorado is well-known and discussed often within the region’s construction, insurance, finance, and legal communities. In recent years, builders and insurers in particular have striven to bring greater awareness to local governments and lawmakers regarding the impact that construction defect lawsuits have on the builders’ ability to introduce desirable, affordable, yet cost-efficient attached-housing options, such as condominiums and townhomes, into the marketplace. The Denver Regional Council of Governments (“DRCOG”) has been aware of the builders’ and insurers’ plight, largely because of the impact that the scarcity of affordable attached-housing has had on their respective communities.
On October 29th, DRCOG released its long-awaited Denver Metro Area Housing Diversity Study, prepared by Economic & Planning Systems, Inc., which investigated the factors contributing to the recent (downward) attached-housing development trends and conditions. The Study evaluated factors including changing financing and insurance requirements for builders and homebuyers, the impacts of foreclosures, changes in prospective homebuyer demographics, economic conditions which limit options for prospective homebuyers, and the costs and risks associated with construction defect regulations and lawsuits.
Despite the retorts and rebukes of the naysayers, the negative impact of construction defect regulations and lawsuits on Colorado’s housing market is significant.
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Derek LindenschmidtDerek Lindenschmidt can be contacted at
lindenschmidt@hhmrlaw.com
New Evidence Code Requires Attorney to Obtain Written Acknowledgement that the Confidential Nature of Mediation has been Disclosed to the Client
January 02, 2019 —
Steven J. Pearse, Esq. & David A. Napper, Esq. – Chapman Glucksman Dean Roeb & BargerSenate Bill 954: MEDIATION CONFIDENTIALITY DISCLOSURES.
California regards mediation as a beneficial process for parties to resolve disputes in an expeditious and economical fashion. To assure open and candid participation, there is a longstanding policy in California to maintain confidentiality during the mediation process. However, the mediation confidentiality statutes have prevented some clients from suing their·attorneys for alleged malpractice that occurred during the mediation process. (see Cassel v. Superior Court, (2011) 51 Cal.4th 113). Senate Bill ("SB") 954, was recently passed and thereafter approved by the Governor on September 11, 2018 to address this concern.
SB 954, which will amend California Evidence Code section 1122 and add California Evidence Code section 1129, requires that an attorney representing a client participating in a mediation or a mediation consultation provide that client with a written disclosure and acknowledgement containing the mediation confidentiality restrictions as set forth in the California Evidence Code.
This written disclosure and acknowledgement requirement does not apply to class or representative actions. Additionally, the failure of an attorney to follow the new requirement will not be a basis to set aside an agreement prepared in the course of, or pursuant to, a mediation. Any communication, document, or writing related to an attorney's compliance with the disclosure requirement will not be considered confidential and may be used in a disciplinary proceeding if the communication, document, or writing does not disclose anything said or done or any admission made in the course of the mediation.
California Evidence Code section 1129 sets forth the exact language that must be used in the disclosure. It even informs the client that all communications between the client and the attorney made in preparation for a mediation, or during a mediation, are confidential and cannot be disclosed or used (except in extremely limited circumstances), even if the client later decides to sue the attorney for malpractice because of something that happens during the mediation.
The new disclosure requirement will allow mediation to maintain the confidentiality that encourages open and candid communications during the process while ensuring that before clients agree to mediation that the clients are made aware of how that confidentiality can potentially impact them. SB 954, will take effect on January 1,2019.
Reprinted courtesy of
Stephen J. Pearce, Chapman Glucksman Dean Roeb & Barger and
David A. Napper, Chapman Glucksman Dean Roeb & Barger
Mr. Pearce may be contacted at dnapper@cgdrblaw.com
Mr. Napper may be contacted at jpaster@HuntonAK.com
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Save A Legal Fee? Sometimes You Better Talk With Your Construction Attorney
May 10, 2012 —
Douglas Reiser, Builders Council BlogI love writing this column, because I think it’s refreshing for contractors to hear that they don’t always need an attorney. Today’s post is the “Un-Save a Legal Fee” because I want to point out a specific illustration of when you definitely need your attorney. Using a construction contract template can be fine, but you always need to consider its application to each project ? or it could bite you in the rear.
Seattle attorney Paul Cressman published a prime depiction of bad contract management, last week. A Florida appellate court struck down a general contractor’s “pay if paid” clause when it became ambiguous because of some incorporated language from its prime contract. Specifically, a clause in the prime contract required the general contractor to pay all subcontractors before receiving payment from the owner, while the general contractor’s “pay if paid” clause required its subcontractors to wait for payment until it arrived from the owner.
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2017 Legislative Changes Affecting the Construction Industry
July 13, 2017 —
Melinda S. Gentile – Peckar & Abramson, P.C.The 2017 Florida Legislative Session recently concluded, and a number of important construction-related House Bills (HB) and Senate Bills (SB) were presented during the Session, most notably SB 204/HB 377. These Bills may impact General Contractors and Construction Managers in a number of ways, not the least of which is the period of time that a cause of action may be initiated for the design, planning or construction of an improvement.
The following construction-related Bills passed in both the House and Senate and will become law if approved by the Governor.
Senate Bill (SB) 204/House Bill (HB) 377: Relating to the Statute of Repose for causes of action based on design, planning or construction of an improvement to real property. This bill passed both the House and the Senate and was approved by the Governor on June 14, 2017. This bill becomes effective on July 1, 2017.
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Melinda S. Gentile, Peckar & Abramson, P.C.Ms. Gentile may be contacted at
mgentile@pecklaw.com
