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Leveraging the 50-State Initiative, Connecticut and Maine Team Secure Full Dismissal of Coverage Claim for Catastrophic Property Loss

March 23, 2020 — Regen O'Malley - Gordon & Rees Insurance Coverage Law Blog
On behalf of Gordon & Rees’ surplus lines insurer client, Hartford insurance coverage attorneys Dennis Brown, Joseph Blyskal, and Regen O’Malley, with the assistance of associates Kelcie Reid, Alexandria McFarlane, and Justyn Stokely, and Maine counsel Lauren Thomas, secured a full dismissal of a $15 million commercial property loss claim before the Maine Business and Consumer Court on January 23, 2020. The insured, a wood pellet manufacturer, sustained catastrophic fire loss to its plant in 2018 – just one day after its surplus lines policy expired. Following the insurer’s declination of coverage for the loss, the wood pellet manufacturer brought suit against both its agent, claiming it had failed to timely secure property coverage, as well as the insurer, alleging that it had had failed to comply with Maine’s statutory notice requirements. The surplus lines insurer agreed to extend the prior policy several times by endorsement, but declined to do so again. Notably, the insured alleged that the agent received written notice of the non-renewal prior to the policy’s expiration 13 days before the policy’s expiration. However, the insured (as well as the agent by way of a cross-claim) asserted that the policy remained effective at the time of the loss as the insured did not receive direct notice of the decision not to renew coverage and notice to the agent was not timely. Although Maine’s Attorney General and Superintendent intervened in support of the insured’s and agent’s argument that the statute’s notice provision applied such that coverage would still be owed under the expired policy, Gordon & Rees convinced the Court otherwise. At issue, specifically, was whether the alleged violation of the 14-day notice provision in Section 2009-A of the Surplus Lines Law (24-A M.R.S. § 2009-A), which governs the “cancellation and nonrenewal” of surplus lines policies, required coverage notwithstanding the expiration of the policy. The insured, the agent, and the State of Maine intervenors argued that “cancellation or nonrenewal” was sufficient to trigger the statute’s notice requirement, and thus Section 2009-A required the insurer to notify the insured directly of nonrenewal. In its motion to dismiss, Gordon & Rees argued on behalf of its client that Section 2009-A requires both “cancellation and nonrenewal” in order for the statute to apply. Since there was no cancellation in this case – only nonrenewal – Gordon & Rees argued that Section 2009-A is inapt and that the insurer is not obligated to provide the manufacturer with notice of nonrenewal. Alternatively, it argued that the statute is unconstitutionally vague and unenforceable. Read the court decision
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Reprinted courtesy of Regen O'Malley, Gordon & Rees
Ms. O'Malley may be contacted at romalley@grsm.com

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Colorado Springs may be Next Colorado City to Add Construction Defects Ordinance

October 28, 2015 — Beverley BevenFlorez-CDJ STAFF
The Gazette reported that Colorado Springs city councilwoman Jill Gaebler stated that “she would bring a proposal to the council next month that would address the construction defects issue.” Gaebler told The Gazette: “We have gone back and forth with how best to address this issue. It is a statewide concern, so how do we bring forward something that is meaningful to our community without stepping on the toes of our legislators?” The state of Colorado has tried and failed to pass construction defects legislation three years in a row, according to The Gazette. If Colorado Springs adopts an ordinance, it will become the ninth city to pass construction defects laws. Read the court decision
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It’s Time to Include PFAS in Every Property Related Release

June 01, 2020 — John Van Vlear & Gregory Tross - Newmeyer Dillion
While the federal government and states (including California) are working on establishing standards and how to manage the toxic chemicals known as PFAS (as defined below), certain states and banks are requiring testing for PFAS to approve no-further-action (NFA) determinations or to underwrite loans. PFAS do not easily fit within standard definitions of hazardous substances used in today’s agreements. Thus, if you want to ensure you and your successors are released for PFAS which later environmental testing may reveal, ensure such is specifically listed in your releases. What Are PFAS As depicted in the recent major-release movie Dark Waters, PFAS are a group of very stable man-made chemicals that are both toxic and ubiquitous. They are long-chain chemicals which means they do not naturally degrade easily. Reprinted courtesy of John Van Vlear, Newmeyer Dillion and Gregory Tross, Newmeyer Dillion Mr. Vlear may be contacted at john.vanvlear@ndlf.com Mr. Tross may be contacted at greg.tross@ndlf.com Read the court decision
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Dorian’s Wrath: How Event Cancellation Insurance Helps Businesses Recoup Losses from Severe Weather

December 16, 2019 — Sergio F. Oehninger, Andrea DeField & Daniel Hentschel - Hunton Insurance Recovery Blog
As the 2019 hurricane season peaks, the Bahamas and the Southeast United States have already endured a catastrophic storm. Hurricane Dorian not only tragically caused loss of life and substantial property damage, but it also led to the cancellation or postponement of major events, resulting in considerable economic losses for affected companies. For instance, Hurricane Dorian forced the cancellation of one of the Rolling Stones’ concerts at Hard Rock Stadium in Miami, as well as the cancellation of R&B singer Chris Brown’s concert in Fort Lauderdale. Dorian also affected the college football game between Florida State University and Boise State University in Jacksonville. Having sold 45,000 tickets to the game, officials were forced to move the game inland to Tallahassee at great expense and effort. The planners, headliners, teams and fans of these and similar events were not the only ones affected by the cancellations and schedule changes. Hotels, restaurants and businesses relying on tourism also were severely impacted by the schedule changes resulting from Hurricane Dorian over Labor Day weekend. Other programming that may have been affected includes conventions and meetings, fairs and festivals, trade shows and exhibitions, or any other corporate events planned to take place outdoors, requiring travel or with ticket-paying audiences. Reprinted courtesy of Hunton Andrews Kurth attorneys Sergio F. Oehninger, Andrea DeField and Daniel Hentschel Mr. Oehninger may be contacted at soehninger@HuntonAK.com Ms. DeField may be contacted at adefield@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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Naples, Florida, Is Getting So Expensive That City Workers Can’t Afford It

April 10, 2023 — Amanda Albright - Bloomberg
The city of Naples on Florida’s Gulf Coast is paradise on Earth, if you believe those slick websites that rank the best US cities to live in or retire in. But if you talk with the people who work in its hospitals, restaurants and city government, you’ll get another story. They’d like to live in Naples, too, but most of them can’t afford to. The city of 19,000 is home to the second-richest ZIP code in the US, after Miami Beach. Median household income stood at about $125,000 in 2021, compared with about $62,000 in Florida overall, according to the Census Bureau. Naples landed on a 2022 list of least affordable places for renters compiled by the National Apartment Association. Amid a dearth of reasonably priced housing, at least 90% of city employees live outside Naples. Job vacancies are going unfilled, leading to chronic staffing shortages. The shortfall among firefighters, police officers and other essential workers in Collier County, which includes Naples, verges on unsafe, according to one local advocate. Private-sector employers have converted a hotel into apartments for workers as a temporary fix. Read the court decision
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Reprinted courtesy of Amanda Albright, Bloomberg

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Exclusions Bar Coverage for Damage Caused by Chinese Drywall

July 05, 2011 — Tred R. Eyerly

The insured homeowners were unsuccessful in arguing around the policy's exclusions when seeking coverage for damage caused by Chinese drywall. Ross v. C. Adams. Constr. & Design, L.L.C., 2011 La. App. LEXIS 769 (La. Ct. App. June 14, 2011).



Before the insureds purchased and moved into their home, it was renovated. After moving in, the insures discovered foreign gypsum drywall, or Chinese drywall. The insureds submitted a claim to Louisiana Citizens Property Insurance Company. In an investigation, the insurer confirmed the presence of Chinese drywall and damage to the metal surfaces caused by corrosion. Louisiana Citizens refused coverage and the insureds sued. The trial court denied the insured's motion for summary judgment and granted summary judgment to Louisiana Citizens.



The court of appeal affirmed. Initially, the court determined the insureds sustained a direct physical loss. The inherent qualities of the Chinese drywall created a physical loss to the home and required that the drywall be removed and replaced.



Four exclusions, however, barred coverage. First, damages due to faulty or defective materials were excluded from coverage. The Chinese drywall emitted high levels of sulfuric gas which caused the damage to the insured's plumbing, electrical wiring and metal components.



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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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Real Estate & Construction News Roundup (07/05/23) – A Hospitality Strike in Southern California, Agencies Step in With Lenders and the Social in ESG

August 14, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In our latest roundup, we see promising developments for climate change action in commercial real estate, how homeowners are reacting to new energy concerns, the fallout of the U.S. debt ceiling fight on global M&A deals, and more!

• There are new ways the commercial real estate sector can grow its commitment to climate goals and contributions to reducing its carbon footprint. (Mahesh Ramanujam, Forbes)
• Thousands of hospitality workers in Southern California went on strike to demand higher wages, access to affordable family health care benefits and stronger workplace protections. (Julianne McShane, NBC)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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EPA Looks to Reduce Embodied Carbon in Materials With $160M in Grants

August 19, 2024 — James Leggate - Engineering News-Record
The U.S. Environmental Protection Agency estimates that construction materials used for buildings and built infrastructure account for more than 15% of global greenhouse gas emissions. The agency now hopes to boost adoption of materials with lower embodied emissions by offering $160 million in grants to better track and ultimately reduce climate pollution associated with those materials. Reprinted courtesy of James Leggate, Engineering News-Record Mr. Leggate may be contacted at leggatej@enr.com Read the full story... Read the court decision
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