Missouri Legislature Passes Bill to Drastically Change Missouri’s “Consent Judgment” Statute
August 10, 2021 —
Jason Taylor - Traub Lieberman Insurance Law BlogOn June 29, 2021, Missouri Governor Mike Parson signed SB-HB 345 into law, which will drastically change Section 537.065 of the Missouri Revised Statutes. Section 537.065 provides an insured who has been denied insurance coverage a statutory mechanism to settle certain tort claims through an agreement akin to a consent judgment. Typically referred to as a “065 Agreement,” the statute allows a plaintiff and insured-tortfeasor to settle a claim for damages and specify which assets are available to satisfy the claim, typically the tortfeasor’s available insurance policy. In the past, such agreements were often accomplished without the insurer’s participation or even its knowledge. Under such agreements, the insured-tortfeasor assigns all rights to the insurance policy to the plaintiff and agrees not to contest the issues of liability or damages. In exchange the plaintiff agrees not to execute any judgment against the insured. The parties conduct what amounts to an uncontested and often “sham” trial resulting in a judgment far in excess of any actual damages or applicable policy limits had the case been contested. In a subsequent proceeding to collect on the judgment, the tortfeasor’s insurer is bound by the determinations of liability and damages made in the underlying action.
This statutory framework presented plenty of opportunities for abuse. In 2017, the statute was amended in order to address some of those issues, including a requirement that the insured provide notice of a settlement demand under Section 065 and providing insurers a limited right to intervene in the tort action before liability and damages have been determined. Ostensibly, the intent of the 2017 amendments was to reduce the number of large and uncontested judgments and allow the insurance carrier an opportunity to continue litigating the injured party’s claim where the insured has no incentive or is contractually prohibited from doing so. Yet, creative plaintiff’s attorneys found several “loopholes” around these changes, most prominently, by moving their disputes from state court to binding arbitration and dispensing with notice to the insurer altogether, or at least until after the arbitration has concluded.
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Jason Taylor, Traub LiebermanMr. Taylor may be contacted at
jtaylor@tlsslaw.com
Five Frequently Overlooked Points of Construction Contracts
October 18, 2021 —
Craig H. O'Neill - White and Williams LLPThere is no shortage of articles addressing the key points of construction contracts. Just enter that phrase into any internet search engine and you will find plenty. It should go without saying that a construction contract should be in writing, it should clearly identify the scope of work to be performed and the sums to be paid for that work, and it should address the parties’ rights and responsibilities with regard to termination or suspension of the contract, correcting defective work, and handling claims and disputes—just to name a few. Of course, these items should receive their due consideration. Too often, however, other important aspects of the construction contract get shortchanged. This article aims the spotlight on five often overlooked aspects of construction contracts.
Project Schedules
Surprisingly, many construction contracts pay little attention to a central component of any construction project: the project schedule. Many contracts provide the dates of commencement and substantial completion but not much else. With the frequent use of project management techniques such as the Critical Path Method (CPM) and the associated software, it is easier than ever to identify which tasks should be prioritized and identify potential areas of delay. The owner’s contract with the general contractor should clearly define the scheduling methods used and provide measures to keep the parties informed of the progress of the work. By including basic scheduling requirements in the contract documents—such as the submission of “Baseline Project Schedules” (consistent with the contract time provisions), “Schedule Progress Updates” (comparing the progress of the work against the Baseline Project Schedule), and “Schedule Recovery Plans” (when Schedule Project Updates indicate projected delays)—the parties can avoid or reduce disputes over project delays that often lead to litigation.
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Craig H. O'Neill, White and Williams LLPMr. O'Neill may be contacted at
oneillc@whiteandwilliams.com
Construction Defect Settlement in Seattle
June 28, 2013 —
CDJ STAFFThe Seattle Post-Intelligencer reports that a settlement has been reached in the Mosler Lofts construction defect claim. The settlement received by the homeowners was for about $8.5 million, which will used for repairs of the construction defects and for paying their legal costs.
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Hunton Insurance Team Wins Summary Judgment on Firm’s Own Hurricane Harvey Business Income Loss
March 23, 2020 —
Michael S. Levine & Michelle M. Spatz - Hunton Insurance Recovery BlogA Texas judge has ruled that Hunton Andrews Kurth is entitled to coverage from Great Northern Insurance Co., a unit of Chubb, Ltd. (“Chubb”), for losses its predecessor firm suffered when Hurricane Harvey closed its Houston office and disrupted business in 2017.
The court agreed with Hunton’s position that the policy, written specifically for a law firm, covered its business income loss until the firm’s operations were restored to their pre-loss levels. The court rejected in its entirety Chubb’s argument that coverage lasted only until the physical damage that closed the building had been repaired. Rather, siding with Hunton, the court found that the policy language affords, in addition to ordinary business income coverage during the damage period, “extended period” coverage that commences after the damaged property is repaired and after the firm’s operations resume.
From August 27 to August 31, 2017, the firm was forced to close its Houston office due to flooding and damage caused by Hurricane Harvey. While employees were permitted to return to the office on August 31, income did not return to its pre-loss level until September 14, 2017. The firm submitted a claim to Chubb for the loss sustained from August 27 to September 14, but Chubb paid only for income loss suffered during the 3-day closure period, and refused to cover the loss suffered after the building reopened.
Reprinted courtesy of
Michael S. Levine, Hunton Andrews Kurth and
Michelle M. Spatz, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Ms. Spatz may be contacted at mspatz@HuntonAK.com
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Doctrine of Merger Not a Good Blend for Seller of Sonoma Winery Property
April 15, 2015 —
Kristen Lee Price and Lawrence S. Zucker II – Haight Brown & Bonesteel LLPIn Ram’s Gate Winery, LLC v. Joseph G. Roche, et al. (No. A139189 & A141090, filed 4/9/15) (Ram’s Gate), the California Court of Appeal for the First Appellate District held the doctrine of merger did not extinguish a seller’s contractual duty to disclose potentially hazardous seismic conditions on a Sonoma winery property.
In Ram’s Gate, the buyer of the property filed a lawsuit alleging the seller failed to disclose information relating to earthquake issues prior to the close of escrow. In the parties’ “Purchase and Sales Agreement” (Purchase Agreement) the seller agreed to disclose any information known to it regarding “known geological hazards . . . soil reports . . . geotechnical reports” and other facts “having effect on the value of the ownership or use of the property.” The seller, however, argued this disclosure warranty did not survive the escrow period because it did not expressly provide for survival while other provisions in the Purchase Agreement did.
Reprinted courtesy of
Kristen Lee Price, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Ms. Price may be contacted at kprice@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Top Five General Tips for All Construction Contracts
October 26, 2020 —
Christopher G. Hill - Construction Law MusingsFor this week’s Guest Post Friday here at Musings we welcome Spencer Wiegard. Spencer is a Partner with Gentry Locke Rakes & Moore, LLP. He is a member of the firm’s Construction Law and Commercial Litigation practice groups. Spencer focuses his practice in the areas of construction law and construction litigation. Spencer is a member of the Board of Governors for the Virginia State Bar Construction Law and Public Contracts Section, and a member of the Legislative Committee of the Associated General Contractors of Virginia and the Executive Committee for the Roanoke/SW Virginia District of the Associated General Contractors of Virginia.
I would like to thank Chris for inviting me to author today’s guest post. Over the past few days, I have found myself wading through the terms and conditions of a lengthy and complicated construction contract, while at the same time aggressively negotiating for Houston house leveling cost readjustments. As I slogged through the legalese, I was reminded of a presentation that I gave earlier this year to the Roanoke District of the Virginia Associated General Contractors. The district’s executive committee asked me to speak to its members concerning the broad topic of “Construction Contracts 101.” At the beginning of my presentation, I passed along my top five general tips for all construction contracts. Although some of these tips may sound like common sense, I often encounter situations where these basic rules are violated by experienced contractors, subcontractors, suppliers and design professionals. My top five general tips for all construction contracts are:
- Reduce the terms of the agreement to writing.
- The written agreement should include all important and relevant information and terms. If it was important enough to discuss prior to signing the contract, it is important enough to include in the written contract;
- At a minimum, include who, what, when, where, how, and how much;
- Both parties should sign the written agreement; and
- Don’t ignore handwritten changes to the contract, as these changes may either mean that you don’t have a deal, or they may become part of the contract when you sign it.
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com
Georgia State and Local Governments Receive Expanded Authority for Conservation Projects
May 31, 2021 — David R. Cook Jr. - Autry, Hall & Cook, LLP
In the 2020-2021 session, the Georgia General Assembly amended existing laws to expand state and local governments’ authority to enter conservation projects. In connection with these projects, the contractor guarantees that cost savings or revenue increases will cover any payments for the project.
Read more about conservation projects, including Guaranteed Energy Savings Performance Contracts
With regard to school systems, conservation projects had previously included facility alterations designed to reduce energy or water consumption or operation costs. But the new law expands the permitted projects to include equipment purchases used in new construction or building retrofit, addition, or renovation. It also adds training programs incidental to the contract. Read the court decision
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Reprinted courtesy of David R. Cook Jr., Autry, Hall & Cook, LLP
Mr. Cook may be contacted at cook@ahclaw.com
Construction Workers Unearth Bones
June 28, 2011 — CDJ STAFF
While digging for a new steam line at Eastern Michigan University, workers unearthed some old bones. Experts have yet to determine if the bones are human or animal, however Walter Kraft, the EMU vice president of communications, noted that a handle also unearthed might have come from a casket. Cindy Heflin, reporting in AnnArbor.com notes that until 1900 a Catholic cemetery was located in the area. Although the bodies were relocated, these may have been left behind.
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