Finding an "Occurrence," Appellate Court Rules Insurer Must Defend
March 11, 2024 —
Tred R. Eyerly - Insurance Law HawaiiReversing the trial court, the Wisconsin Court of Appeals found the insurer must defend a cross-claim against the insured owner of a building after an explosion occurred. LBC, LLC v Spectrum Brands, Inc., 2023 Wis. App. LEXIS 1251 (Wis. Ct. App, Nov. 30, 2023).
LBC leased commercial property to Spectrum. Spectrum stored lithium on the property. The lithium exploded when it came into contact with water that entered the premises during historic flooding in August 2018. Spectrum remediated the premises, vacated the premises prior to the lease's termination date, and stopped paying rent.
LBC sued Spectrum, alleging that Spectrum negligently stored the lithium and that Spectrum breached the lease. Spectrum counterclaimed, alleging that LCB breached the lease in various respects, that LCB negligent allowed water to infiltrate the premises, and that Spectrum was constructively evicted. LCB tendered the counterclaim to its insurer, General Casualty. The tender was denied and LCB sued.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Minnesota Civil Engineers Give the State's Infrastructure a "C" Grade for the Second Time
May 02, 2022 —
American Society of Civil EngineersSAINT PAUL, Mn. — The Minnesota Section of the
American Society of Civil Engineers (ASCE) today released preliminary findings from the 2022
Report Card for Minnesota's Infrastructure, with 10 categories of infrastructure receiving an overall grade of a 'C', meaning Minnesota's infrastructure is in mediocre condition. Minnesota has taken steps to make its infrastructure network more sustainable to withstand increasingly severe weather, but additional steps must be taken as the state's infrastructure is aging. Funding has been limited for systems throughout the state, particularly for surface transportation networks, and local and state funding must be increased to bring these critical systems up to speed. Civil engineers graded aviation (B), bridges (C), dams (C), drinking water (C-), energy (C), parks (B-), ports (C-), roads (D+), transit (C-) and wastewater (C).
"The ASCE report card serves as an important benchmark for where our infrastructure currently stands and lays out how we can make improvements," said Sen. Sandy Pappas, DFL-St. Paul. "Knowing that these systems play such a crucial role in economic progress and the safety of Minnesotan families, we have made infrastructure a topline issue and must continue to do so to secure a prosperous future here in Minnesota."
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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Wisconsin Supreme Court Upholds Asbestos Exclusion in Alleged Failure to Disclose Case
January 22, 2014 —
Beverley BevenFlorez-CDJ STAFFIn the case Phillips v. Parmelee, the Wisconsin Supreme court ruled “that an asbestos exclusion in a liability policy barred a duty to defend and indemnify a building seller for claims that the seller failed to disclose that the building contained asbestos,” according to an article in Mondaq by Ruth S. Kochenderfer and Deanna P. Cook, both from Steptoe & Johnson LLP. The policyholder received a building report stating that the “heating ducts likely contained asbestos,” however, the buyers alleged that the policyholder never provided them the report. After the buyers purchased the property, contractors “cut through the heating ducts, unknowingly dispersing asbestos throughout the building.”
According to Kochenderfer and Cook’s article, “The insurer intervened in the buyers' suit and sought summary judgment against the policyholder and buyers, arguing that an asbestos exclusion precluded coverage for the buyers' suit against the policyholder.” The buyers took the case to the Wisconsin Supreme court and “attacked the asbestos exclusion,” but the court rejected every argument.
Kochenderfer and Cook stated that the “decision is significant because three courts, including Wisconsin's highest court, squarely rejected attempts to narrow a broad, clearly-worded asbestos exclusion. Further, it confirms that such an asbestos exclusion will apply to all causes of action, including an alleged failure to disclose the presence of asbestos.”
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Tennessee Looks to Define Improvements to Real Property
January 27, 2020 —
Lian Skaf - The Subrogation StrategistFor subrogation practitioners dealing with an installation-based statute of repose, knowing what is an improvement to real property is the first battle in what can, but does not have to be, a long fight. Like many other states, Tennessee’s statute of repose bars claims based on improvements to real property. Tennessee’s statute of repose runs four years after substantial completion of the improvement. See Tennessee Code Ann. § 28-3-202. In the case of Maddox v. Olshan Found. Repair & Waterproofing Co. of Nashville, L.P., E A, 2019 Tenn.App. LEXIS 464, 2019 WL 4464816, the Court of Appeals of Tennessee examined whether or not the work done by the defendant, Olshan Foundation Repair & Waterproofing Co. of Nashville, L.P., E.A. (Olshan) — which addressed bowing walls, cracks in the foundation and walls and water intrusion — qualified as improvements to real property for the purposes of the statute of repose. The court held that the work by Olshan essentially amounted to repairs, and did not qualify as improvements to real property.
In Maddox, the plaintiff, Rachel Maddox (Maddox), noticed cracking in her home in 2005 and hired Olshan to assess the issue and conduct necessary repairs. Olshan made several recommendations and the parties agreed on Olshan’s proposal for the price of $27,000. From their initial work in 2005 until late 2011, Olshan visited the property several times to address ongoing structural issues with the home. Eventually, eight months after Olshan told Maddox they could not fix the house and failed to return her phone calls, Maddox filed suit, alleging fraud against the company.
After a three-day bench trial, the trial court found in favor of the plaintiff for $187,000, plus $15,0000 in punitive damages. Among other holdings, the court rejected Olshan’s statute of repose defense. Olshan appealed, raising the statute of repose issue again.
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Lian Skaf, White and Williams LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
Insurer Granted Summary Judgment on Denial of Construction Defect Claim
January 27, 2020 —
Tred R. Eyerly - Insurance Law HawaiiThe court granted the insurer's motion for summary judgment, confirming there was no duty to defend or indemnify a construction defect claim against the insured. Fontaine Bros. v. Acadia Ins. Co., 2019 U.S. Dist. LEXIS 148056 (D. Mass. Aug. 29, 2019).
The City of Worcester contracted with Fontaine Brothers, Inc. to install a new ice refrigeration system at the City's indoor ice rink. After construction, the condensers in two chiller units eroded and stopped operating.
The City sued Fontaine for the costs of leasing temporary chillers and installing new ones. The City alleged that Fontaine installed condensers with carbon steel tubes instead of contractually required stainless stell tubes.Further, Fontaine and its subcontractors did not adequately maintain the condensers, in breach of the contract.
Fontaine's insurer, Acadia Insurance Company, denied coverage. Fontaine sued Acadia. The court noted that the City's complaint plainly alleged faulty workmanship by Fontaine. However, the City's complaint did not allege that Fontaine intended the condensers to corrode and left open the possibility that Fontaine was unaware of any potential problem or did not foresee the corrosion likely to result from the use of carbon steel components or the maintenance work being done by its subcontractor. Therefore, the Cit's complaint did not foreclose the possibility that the corrosion resulting from Fontaine's alleged faulty workmanship and maintenance might be shown to be an unforeseen or unintended consequence of reckless or negligent conduct. Accordingly, it was possible that there was an occurrence under the policy language.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Nationwide Immigrant Strike May Trigger Excusable Delay and Other Contract Provisions
February 23, 2017 —
Adam P. Handfinger & Meredith N. Reynolds – Peckar & Abramson, P.C.Yesterday, February 16, 2017, media outlets reported a nationwide strike by immigrants and
businesses referred to as “A Day Without Immigrants”. The protest, organized largely through
social media, was a response by some to the Trump Administration’s immigration and foreign
trade policies. Participating businesses shut down and immigrants refused to work or spend
money in an eff ort to demonstrate the role of foreign-born workers in the U.S. economy.
While the number of businesses and individuals that participated is not yet known, several
contractors reported labor shortages and construction project delays or temporary shut
downs as a result of the protest.
Reprinted courtesy of
Adam P. Handfinger, Peckar & Abramson, P.C. and
Meredith N. Reynolds, Peckar & Abramson, P.C.
Mr. Handfinger may be contacted at ahandfinger@pecklaw.com
Ms. Reynolds may be contacted at mreynolds@pecklaw.com
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'Regluing' Oregon State's Showcase for Mass Timber
September 17, 2018 —
Nadine M. Post - Engineering News-RecordThe tally of how many defective cross-laminated timber panels need replacement on a $79-million college of forestry building under construction at Oregon State University is almost complete, nearly six months after two layers of a seven-layer CLT floor panel, 30 ft x 4 ft, came unglued and crashed 14 ft from the third to the second floor of the three-story building.
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Nadine M. Post, ENRMs. Post may be contacted at
postn@enr.com
Los Angeles Wildfires Will Cause Significant Insured Losses, Ranking Amongst the Most Destructive in California's History
January 14, 2025 —
Morningstar DBRSWildfires currently burning in the Pacific Palisades, Eaton, Hurst and other Los Angeles neighborhoods will cause significant losses for the insurance industry, in
Morningstar DBRS’ view. The fires have already burned more than 1,100 homes and threaten more than 28,000 additional structures, according to local fire officials. Preliminary estimates point to total insured losses in excess of $8 billion depending on the final number of properties being affected by the wildfires. By way of comparison, the 2018 Woolsey Fire, which destroyed 1,643 structures just north of Los Angeles, caused more than $6 billion in property damages at that time. Morningstar DBRS expects the ongoing wildfires to have a negative but manageable impact on major property insurers active in the Californian market, with the impact somewhat mitigated by their use of reinsurance and their high degree of diversification. Similarly, losses should be manageable for the global reinsurance industry and not affect their credit profiles.
While leading U.S. property insurers are in good financial condition, the California property insurance market has been challenging because of high wildfire and other natural catastrophe risks combined with regulatory restrictions on coverage and pricing, leading many insurers to re-think their product offering, including an outright exit from the market. For example, market leaders such as State Farm and Allstate started reducing their exposure to the California market beginning 2022-2023. It is therefore possible that a larger than usual portion of the losses caused by the wildfires will be uninsured or may be covered under the California FAIR Plan, which is designed to provide fire coverage up to $3 million per home and spread the risk across the industry when it is not available from traditional carriers.
This event reinforces the need for adequate rate increases on home insurance in California, based on forward-looking pricing and catastrophe modelling, as well as for additional fire prevention and mitigation initiatives. However, property insurance affordability is likely to remain a challenge in the state going forward, with many property owners opting to remain uninsured or under-insured because of the high costs.
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