Fairfield Connecticut Building Expert Directory

Resulting Loss From Faulty Workmanship Covered

May 20, 2024 — Tred R. Eyerly - Insurance Law Hawaii
The Washington Supreme Court found there was coverage for resulting loss despite the original faulty contraction, an exclusion in the policy. Gardens Condominium v. Farmers Ins. Exchange, 544 P.3d 499 (Wash. 2024). Farmers issued a policy to Gardens Condominium providing coverage for loss or damage caused by a "Covered Cause of Loss." "Covered Cause of Loss" was defined as any risk of direct physical loss. However, a loss was not covered if it was caused by an excluded event. The policy further provided that damage was caused by an excluded event if that event "initiates a sequence of events that results in loss or damage, regardless of the nature of any intermediate or final event in that sequence." The policy excluded coverage for faulty, inadequate, or defective design, specifications, workmanship, repair, construction, or renovation. The faulty workmanship exclusion also contained a resulting loss exception: "[I]f loss or damage caused by a Covered Cause of Loss results, we will pay for that resulting loss or damage." Gardens found damage to the building that was caused by faulty design and construction of the building's roof. There was insufficient interior vents and the design of the rafters and joists prevented need ventilation Water vapor condensed on the underside of the roof sheathing, causing damage. Gardens redesigned and repaired the roof assembly to increase ventilation and eliminate condensation by installing sleepers on top of the joists. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

LA’s $1.2 Billion Graffiti Towers Put on Sale After Bankruptcy

June 04, 2024 — John Gittelsohn - Bloomberg
For sale: Steel skeletons of three towers in downtown Los Angeles, erected by a Chinese developer that spent $1.2 billion before running into financial troubles. The site, called Oceanwide Plaza, became famous this year when graffiti artists covered the 49-floor-tall structures. Now, the property is going on the market, with lenders and other creditors needing about $400 million to recoup their money. The brokerage Colliers and advisory firm Hilco Real Estate have been hired to market and handle a sale of the property, subject to bankruptcy court approval, according to a statement. “We are determined to run a disciplined and orderly process to identify the right developer to finish the project in time for the 2028 Summer Olympics,” said Mark Tarczynski, an executive vice president at Colliers. Read the court decision
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Reprinted courtesy of John Gittelsohn, Bloomberg

Tallest U.S. Skyscraper Dream Kept Alive by Irish Builder

May 01, 2014 — Brian Louis – Bloomberg
Garrett Kelleher, the Irish developer trying to restore Chicago’s status as home to the tallest building in the U.S., has one last chance to keep his dream alive. The planned lakefront skyscraper is nothing more than a hole in the ground six years after the financial crisis derailed Kelleher’s ambitions. To salvage the project, he must line up money to get out of bankruptcy, then obtain financing for the 2,000-foot (610-meter), Santiago Calatrava-designed Chicago Spire condominium tower, which would surpass New York’s 1 World Trade Center by 224 feet. “I never understood how that project was going to work, frankly,” said Alan Lev, chief executive officer of Belgravia Group Ltd., a Chicago-based housing developer uninvolved in the project. “It’s a real eyesore sitting in the ground, so I hope somebody does something with it.” Read the court decision
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Reprinted courtesy of Brian Louis, Bloomberg
Mr. Louis may be contacted at blouis1@bloomberg.net

Surety Trends to Keep an Eye on in the Construction Industry

March 25, 2024 — Oliver Craig - Construction Executive
Reflecting on the dynamics of the 2023 construction and surety industries, it is evident that opportunities and challenges have emerged for contractors that will shape the landscape for the year ahead. Contractors can not only capitalize on these trends but protect the successful companies they have already built. PROJECT OPPORTUNITIES There has been a notable increase in public works opportunities, driven by increased government spending and the aging infrastructure in the United States. This trend is expected to continue in 2024 and beyond, with a notable portion of work coming in transportation- and public-utility-related infrastructure. Due to increased spending, many contractors are reporting historically high backlogs—and that often includes the largest project their company has contracted in their history. While increased spending presents more opportunity, it’s critical contractors be even more diligent about new opportunities, giving additional consideration to the following: Job Selection: New geographies, scope, project owners and/or subcontractor relationships commonly come with a learning curve. With the current state of the market, it’s not the ideal time to be learning costly lessons. Contractors should focus on having a proactive go/no-go strategy when reviewing potential projects to identify risks early and plan accordingly. Reprinted courtesy of Oliver Craig, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Is There Direct Physical Loss Under A Property Policy When COVID-19 is Present?

April 06, 2020 — Tred R. Eyerly - Insurance Law Hawaii
Most property policies provide coverage for property damage only when there is "direct physical loss" to covered property. Early indications are that COVID-19 remains on surfaces. The duration can last from a few hours to three weeks, depending on the type of surface material. If an employee is infected and the store or restaurant must closed because the virus may rest on surfaces within the building, is there direct physical loss, even though the building structure itself is unharmed? To answer this question, cases from jurisdictions outside Hawaii may provide guidance. In a case from Louisiana, the homeowner had to move out of her home when excessive levels of organic lead were discovered in the kitchen, living room, master bedroom, and attic. Widder v. La. Citizens Prop. Ins. Corp., 82 So. 3d 294 (La. Ct. App. 2011). The insurer denied coverage because there was no direct physical loss. The trial court agreed; since the home was still intact, no direct physical loss had occurred, so there was no coverage under the policy. The appellate court reversed. It compared the presence of inorganic lead in the home to cases that found a direct physical loss from the existence of Chinese drywall, from which gaseous fumes were released, rendering the home unusable or uninhabitable. Physical damage was not necessary. What if smoke from a nearby wildfire fills an outdoor theater, forcing cancellation of performances and loss of business income? This was the situation in Oregon Shakespeare Festival Ass'n v. Great Am. Inc. Co., 2016 U.S. DIst. LEXIS 74450 (D. Ore. Jun 7, 2016). Wildfires in the area caused smoke, soot, and ash to accumulate on the surface of seats and concrete ground of the open-air theater. The air quality was poor, but no federal, state or local agency ordered cancellation of the performances. Further, the theater did not suffer any permanent or structural damage to its property. The insurer denied coverage, contending that the loss or damage must be structural to the building itself. After all, the smoke in the air at the theater did not require any repairs to the structure of the property. The court disagreed. The theater sustained "physical loss or damage to property" when the wildfire smoke infiltrated the theater and rendered it unusable for its intended purpose. The decision in Oregon Shakespeare Festival was eventually vacated by a joint stipulation of the parties. Oregon Shakespeare Festival Ass'n v. Great Am. Ins.Co., 2017 U.S. Dist. LEXIS 33208 (D. Ore. March 6, 2017), but the reasoning is still sound. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Judgment for Insured Upheld After Insurer Rejects Claim for Hurricane Damage

April 15, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The Texas Court of Appeals affirmed a trial court's judgment as modified against Lloyds for improperly denying a claim for damage caused by Hurricane Ike. Nat'l Lloyds Ins. Co. v. Lewis, 2015 Tex. App. LEXIS 1573 (Tex. Ct. App. Feb. 19, 2015). Lewis sued Lloyds, alleging that, although her home and personal property were seriously damaged by Hurricane Ike, her claim was denied. At trial, Lloyds testified that the damage to Lewis' home had been previously caused by Hurricane Rita and Lloyds had already paid for repair of the roof. Nevertheless, Lewis had not used the payment for roof repairs. Lewis admitted that she used some of the payment after Hurricane Rita to purchase a generator and for evacuation expenses, but the majority of the payment was used for roof repairs. Lewis' expert engineer testified that the damage to Lewis' home was caused by wind and water intrusion through a hole caused by a tree limb that fell during Hurricane Ike. The expert further opined that the cost to mitigate the damage to the home and bring it up to livable standard was $156,155. Further, the home was a constructive total loss. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Spotting Problem Projects

October 26, 2017 — David R. Cook Jr. - Autry, Hanrahan, Hall & Cook, LLP
Perhaps more than any other specialty contractor, electrical contractors bear the brunt of the “problem project.” Long after most other trades have completed their work and scattered in the wind, electrical contractors remain on site until the owner’s last inspection. And when the project is a “problem project,” the owner or prime contractor tend to liberally share their losses and liquidated damages among those specialty contractors remaining on site at the end. So what is an electrical contractor to do when the project starts coming off the rails? What is a Problem Project? First, it helps to identify the attributes of a problem project. While there are many negative qualities of a bad job, a problem project is one that busts budgets – whether labor, material, or time. Most commonly, the problem project will significantly exceed the labor budget. Because an electrical contractor’s most important (and understandably expensive) resource is its people, the labor budget is critical to the success of a job. When a project suffers delays or is ineptly managed, the labor costs soar, turning a potentially profitable job into a disaster. Read the court decision
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Reprinted courtesy of David R. Cook, Autry, Hanrahan, Hall & Cook, LLP
Mr. Cook may be contacted at cook@ahclaw.com

Gain in Home Building Points to Sustained U.S. Growth

October 22, 2014 — Michelle Jamrisko and Danielle Trubow – Bloomberg
Builders started work on more homes in September and American consumers this month were the most optimistic in seven years, signaling the U.S. economy will ride out a global slowdown. Housing starts climbed 6.3 percent to a 1.02 million annualized rate from a 957,000 pace in August as multifamily and single-family projects advanced, the Commerce Department reported today in Washington. The Thomson Reuters/University of Michigan preliminary sentiment index for October increased to 86.4, the strongest since July 2007, another report showed. Gains in residential construction will help underpin the economic expansion as the recent drop in mortgage rates lifts home sales and gives builders reason to take on more projects. Other figures showing factory production rebounded last month and claims for jobless benefits dropped last week to the lowest level in 14 years added to evidence the turbulence in global markets has yet to depress the world’s largest economy. Ms. Jamrisko may be contacted at mjamrisko@bloomberg.net; Ms. Trubow may be contacted at dtrubow@bloomberg.net Read the court decision
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Reprinted courtesy of Michelle Jamrisko and Danielle Trubow, Bloomberg

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