“For What It’s Worth”
October 21, 2024 —
Daniel Lund III - LexologyThe legal doctrine of quantum meruit is essentially referring to recovering “for what it’s worth,” incorporating the Latin phrase for “as much as one has deserved.”
Quantum meruit recovery occurs when there is no contract between parties for the particular item for which recovery is sought. Hence, quantum meruit recovery is generally a means of last resort to endeavor to make oneself whole.
So, it was for a subcontractor seeking nearly $14,000,000 for work it performed on a construction project in Portsmouth, New Hampshire. The subcontractor sued on contract as well as quantum meruit/unjust enrichment. The court initially dismissed the quantum meruit/unjust enrichment claims – because there was a contract claim – whereupon the contract claim was dismissed on summary judgment: the subcontractor failed to timely submit change proposals and, consequently, “lost contract remedies available to recover amounts it sought in the change proposals.”
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Daniel Lund III, PhelpsMr. Lund may be contacted at
daniel.lund@phelps.com
Hawaii Supreme Court Bars Insurers from Billing Policyholders for Uncovered Defense Costs
April 23, 2024 —
Amanda C. Stefanatos - Saxe Doernberger & Vita, P.C.Across the country, there is a split in authority as to whether an insurance company should be allowed to recoup defense costs where it is ultimately determined that the carrier has no duty to defend under the policy and the policy is silent as to such reimbursement. The Hawaii Supreme Court is the latest to enter the fray to address this very question, ruling in favor of policyholders in the recent case of
St. Paul Fire & Marine Insurance Company v. Bodell Construction Company.
Facts of the Case and Procedural History
The Bodell case arose in response to a pair of certified questions from the US District Court for Hawaii to the Hawaii Supreme Court. The case involved a group of primary and excess insurers that sold liability policies to Bodell Construction and sought reimbursement of defense costs that the insurers had paid to defend a construction defect claim against Bodell. In the Underlying Action, the District Court ultimately ruled that the claims against Bodell Construction were not covered under the policies. Because the claims were not covered, the insurers demanded reimbursement of the defense fees from Bodell . Having determined there was no Hawaii state law on this issue, and in light of conflicting decisions in the district courts, the US District Court for Hawaii requested guidance from the Hawaii Supreme Court.
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Amanda C. Stefanatos, Saxe Doernberger & Vita, P.C.Ms. Stefanatos may be contacted at
AStefanatos@sdvlaw.com
Scaffolding Purchase Suggests No New Building for Board of Equalization
July 30, 2014 —
Beverley BevenFlorez-CDJ STAFFEmployees at California’s Board of Equalization spoke out against the Brown administration after the state purchased new scaffolding for the defect-riddled building, rather than finding a new facility, reported the Sacramento Bee. The existing scaffolding was leased for $10,000 per month, but the lease expired, prompting the purchase of new scaffolding for about $100,000.
The board’s Chairman Jerome Horton stated “that while the change may make financial sense in the short term, it sends a signal that the Department of General Services intends to keep Equalization’s 2,200 or so employees in the troubled building,” according to the Sacramento Bee.
Building problems include “toxic mold, defective elevators, leaking windows, corroded wastewater pipes, floods, and exterior glass panels that spontaneously break or pop off.” So far, $2.3 million has been paid “in connection with building-related employee injury claims” along with $60 million in repairs. However, an additional $115 million is estimated to completely fix the defects.
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Construction Contract Terms Matter. Be Careful When You Draft Them.
February 01, 2022 —
Christopher G. Hill - Construction Law MusingsIn a prior post, I discussed the case of Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys in the context of the interplay between fraud, contract, and statutes of limitation. Some cases just keep on giving. This time the case illustrates the need for careful drafting of those
pesky, and highly important, clauses in your construction documents.
In the
current iteration of this ongoing saga, the Court considered the contractual aspects of the matter. As a reminder, the facts are as follows: In May 2011, the United States Army (“Army) awarded BAE Systems Ordnance Systems, Inc. (“BAE”) a contract to design and construct a natural gas-fired combined heating and power plant for the Radford Army Ammunition Plant (“RAAP”). On October 7, 2015, BAE issued a request for a proposal from Fluor Federal Solutions, LLC (“Fluor”) to design and build a temporary boiler facility at a specific location on the RAAP property. On October 13, 2015, the Army modified the prime contract to change the location of the boiler facility. On December 10, 2015, the Army modified the prime contract to require BAE to design and construct a permanent boiler facility. On December 30, 2015, Fluor and BAE executed a fixed-price subcontract for Fluor to design and construct the temporary boiler. Throughout 2016, BAE issued several modifications to Fluor’s subcontract to reflect the modifications BAE received from the Army on the prime contract. On March 23, 2016, BAE directed Fluor to build a permanent – rather than temporary – boiler facility. On March 28, 2016, Fluor began construction of the permanent facility and began negotiations with BAE about the cost of the permanent facility. On September 1, 2016, the parties reached an agreement on the cost for the design of the permanent facility, but not on the cost to construct the permanent facility. On November 29, 2016, the parties executed a modification to the subcontract, officially replacing the requirement to construct a temporary facility with a requirement to construct a permanent facility and agreeing to “negotiate and definitize the price to construct by December 15, 2016.” The parties were unable to reach an agreement on the construction price.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
New ANSI Requirements for Fireplace Screens
March 19, 2015 —
Beverley BevenFlorez-CDJ STAFFThe American National Standards Institute (ANSI) now requires “vented gas fireplaces to include a safety barrier screen as standard equipment,” according to Remodeling.
"While gas fireplaces, stoves and inserts are a great asset to any home, the glass can become very hot during operation and stay hot long afterwards, creating a potential burn hazard," Jack Goldman, HPBA president and CEO told Remodeling.
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"Multiple Claims" Provisions on Contractor's Professional Liability Policy Creates a Trap for Policyholders
May 24, 2021 —
Michael V. Pepe - Saxe Doernberger & VitaIn Berkley Assurance Company v. Hunt Construction Group, Inc., 465 F.Supp.3d 370 (S.D.N.Y., 2020), professional liability insurer Berkley sued its insured, Hunt, a construction management firm, seeking a declaration that it did not owe Hunt a duty to defend and indemnify against breach of contract claims. The United States District Court for the Southern District of New York granted Berkley’s motion for summary judgment and denied Hunt’s motion for partial summary judgment. Among other things, the court held that the policy’s automatic extended reporting period did not apply to Hunt’s first claim. The multiple claims provision barred Hunt’s second claim because the claims were related.
The court’s holding creates a potential trap for policyholders who wait to see how a claim develops before reporting it to their insurance carrier. This case demonstrates that waiting to see how a claim develops can result in a loss of coverage. Policyholders need to be aware of this trap and report all claims and circumstances immediately.
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Michael V. Pepe, Saxe Doernberger & VitaMr. Pepe may be contacted at
MPepe@sdvlaw.com
Insurers' Motion to Determine Lack of Occurrence Fails
August 19, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe federal district court, interpreting Massachusetts law, found there were genuine issues of fact as to whether the insured's mixing of biodiesel with home heating fuel was an occurrence. United States Fire Ins. Co. v. Peterson's Oil Serv., Inc., 2024 U.S. Dist. LEXIS 106980 (D. Mass. June 17, 2024).
Homeowners sued Peterson's Oil Service, alleging that Peterson sold them fuel for home heating which contained more that 5% biodiesel. The homeowners further alleged that fuel containing more than 5% biodiesel did not meet industry standards and caued damage to their home heating equipment. Peterson allegedly did not fully disclose the presence of biodiesel in their fuel, despite knowing the risk posed by high-biodiesel blended fuel.
The insurers, United States Fire Insurance Company and The North River Insurance Company, defended Peterson under a reservation of rights. United States Fire issued priomary policies with limits of $1,000,000 per occurrence and $2,000,000 as a general aggregate limit. An endorsement titled "Limited Coverage - Failure to Supply" limited the amount covered for "property damage arising out of the failure of any insured to adequately supply gas, oil, water, electricty or steam" to $250,000. North River issued umbrella policies with additional coverage in the amount of $15,000,000 per occurrnce and in the aggregate if property damage was caused by an occurrence. The umbrella policies also contained a "Failure to Supply Exclusion" which excluded coverage for "property damage arising out of the failure of an insured to adequately supply gas, oil, water, electricty or steam."
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
A Compilation of Quirky Insurance Claims
August 13, 2014 —
Beverley BevenFlorez-CDJ STAFFProperty Casualty 360 showcased five “nutty claims stories” based upon recollections by several insurance professionals.
Number four, subtitled, “The Case of the Soaked Survivalists,” described a claim by an elderly couple who “made a $350,000 water-damage claim after heavy rains and an inadequate sump pump ruined what they described as thousands of ‘valuable items’ in their storage area.” However, a claims adjuster discovered during the investigation that the area in question was actually a bomb shelter built during the Cold War era, and the so-called valuable items were actually “soap, toothpaste, canned goods, and more.” The insurer ended up settling for about $200,000.
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