FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Tennessee High Court Excludes Labor Costs from Insurer’s Actual Cash Value Depreciation Calculations

May 27, 2019 — Michael S. Levine & Geoffrey B. Fehling - Hunton Andrews Kurth
The Tennessee Supreme Court has refused to construe an ambiguous definition of actual cash value to allow for deduction of labor costs as part of depreciation calculations where that subset of repair costs are not clearly addressed in the policy. Despite the split of authority nationwide, the Tennessee case presents a straightforward application of policy interpretation principles to a common valuation issue in first-party property claims. In Lammert v. Auto-Owners (Mutual) Insurance Co., No. M2017-2546-SC-R23-CV (Tenn. Apr. 15, 2019), insureds brought a class-action lawsuit against their property insurer, Auto-Owners, alleging breach of contract. The plaintiffs each owned buildings damaged by a hail storm and had each submitted claims to Auto-Owners. Auto-Owners accepted the claims and determined that the losses would be determined on an actual cash value basis. In performing those valuations, Auto-Owners depreciated both the building materials and the labor costs associated with repairing the properties. The insureds challenged the labor cost depreciation. Auto-Owners moved to dismiss the lawsuit. In response, the insureds requested that the district court certify to the Tennessee Supreme Court whether, “[u]nder Tennessee law, may an insurer in making an actual cash value payment withhold a portion of repair labor as depreciation when the policy (1) defines actual cash value as ‘the cost to replace damaged property with new property of similar quality and features reduced by the amount of depreciation applicable to the damaged property immediately prior to the loss,’ or (2) states that ‘actual cash value includes a deduction for depreciation?”’ Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Geoffrey B. Fehling, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Fehling may be contacted at gfehling@HuntonAK.com Read the court decision
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Emotional Distress Damages Not Distinct from “Annoyance and Discomfort” Damages in Case Arising from 2007 California Wildfires

February 16, 2017 — Kirsten Lee Price & Lawrence S. Zucker II - Haight Brown & Bonesteel LLP
In Hensley v. San Diego Gas & Elec. Co., (No. D070259, filed 1/31/17), the California Court of Appeal for the Fourth Appellate District held that emotional distress damages are available on claims for trespass and nuisance as part of “annoyance and discomfort” damages. In Hensley, plaintiffs sustained fire damage to their home and property during the 2007 California wildfires. The Hensleys were forced to evacuate as the fires advanced. Although their home was not completely destroyed, it sustained significant damage and they were not able to return home permanently for nearly two months. Thereafter, the Hensleys filed suit against San Diego Gas and Electric Company (“SDG&E”) asserting causes of action for trespass and nuisance, among others. Mr. Hensley, who had suffered from Crohn’s disease since 1991, further claimed that as a result of the stress from the fire, he experienced a substantial increase in his symptoms and his treating physician opined that “beyond a measure of reasonable medical certainty... the stress created by the 2007 San Diego fires caused an increase of [Mr. Hensley’s] disease activity, necessitating frequent visits, numerous therapies, and at least two surgeries since the incident.” SDGE moved, in limine, to exclude evidence of Mr. Hensley’s asserted emotional distress damages arguing he was not legally entitled to recover them under theories of trespass and nuisance. The trial court agreed and excluded all evidence of such damages. Reprinted courtesy of Kirsten 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 Read the court decision
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Seven Coats Rose Attorneys Named to Texas Rising Stars List

March 12, 2014 — Beverley BevenFlorez-CDJ STAFF
Seven attorneys from Coats Rose were named to the “Texas Rising Stars list,” which is comprised of “the top up-and-coming attorneys in Texas for 2014,” according to a press release on PR Newswire. “Each year, no more than 2.5 percent of the lawyers in the state receive this honor. The selection for this respected list is made by the research team at Super Lawyers.” The Coats Rose attorneys named include “Charles Conrad, Jon Paul Hoelscher, Ryan Kinder, Matthew Moore and Timothy Rothberg in Houston; Brian Gaudet in League City; and Mason Hester in San Antonio.” According to PR Newswire, “For more than 30 years, Coats Rose attorneys have worked with clients in construction/surety law, real estate law, commercial litigation of all types, municipal law, public finance, affordable housing, insurance law, labor and employment law, and governmental relations. Coats Rose is comprised of over 90 attorneys, with offices in Houston, Clear Lake, Dallas, Austin, San Antonio, and New Orleans.” Read the court decision
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California Department of Corrections Gets Hit With the Prison Bid Protest Blues

October 16, 2018 — Garret Murai - California Construction Law Blog
“I’m breakin’ rocks in the hot sun . . . I fought the law and the law won . . . I needed money ’cause I had none . . . I fought the law and the law won” – The Clash, I Fought the Law (1978) In the recent case, West Coast Air Conditioning Company, California Department of Corrections and Rehabilitation, Case No. D071106 (February 22, 2018), those lyrics could be aptly revised to, “the law fought the courts and the courts won.” West Coast Air Conditioning Company, Inc. v. California Department of Corrections In February 2015, the California Department of Corrections and Rehabilitation (CDCR) published an invitation for bids for a new central air conditioning plant for the Ironwood State Prison in Blythe, California. West Coast Air Conditioning Company, Inc., Hensel Phelps Construction Co., and four other companies submitted bids. Read the court decision
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Reprinted courtesy of Garret Murai, Wendel, Rosen, Black & Dean LLP
Mr. Murai may be contacted at gmurai@wendel.com

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Deferred Maintenance?

December 17, 2024 — Daniel Lund III - Lexology
A Tennessee-based “outsourced maintenance vendor” to an engine company filed suit in Louisiana state court seeking to recover nearly $150,000 on “open account,” for work previously performed. The engine company removed the case to the Federal District Court in New Orleans and asserted as a defense that the vendor lacked a proper Louisiana construction contractor’s license. The engine company filed a motion for summary judgment based on the defense. Under Louisiana law, a contract between parties is “absolutely null”--considered to have never existed--where one of the parties performed services without a required Louisiana contractor’s license, and the combined work reaches a $50,000 threshold. The engine company asserted that the vendor performed typical construction contractor work, including plywood flooring, applied epoxy to concrete flooring, erected part of a commercial carport, undertook certain heavy demolition, and installed fences, guardrails, and wire racks. Read the court decision
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Reprinted courtesy of Daniel Lund III, Phelps
Mr. Lund may be contacted at daniel.lund@phelps.com

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Texas Jury Finds Presence of SARS-CoV-2 Virus Causes “Physical Loss or Damage” to Property, Awards Over $48 Million to Baylor College of Medicine

September 26, 2022 — Michael S. Levine & Kevin V. Small - Hunton Insurance Recovery Blog
A Texas jury has found that the presence of SARS-CoV-2 virus on the property of Baylor College of Medicine (BCM) caused “physical loss or damage” and resulting economic loss, triggering coverage under BCM’s commercial property insurance program. The jury awarded BCM over $48 million following a three-day trial; the award consisted of $42.8 million in business interruption, $3.3 million in extra expense, and $2.3 million in damage to research projects. The verdict came after the court denied the insurers’ pre-trial motion for summary judgment, rejecting the insurers’ contention that a virus cannot—as a matter of law—cause physical loss or damage to property. In denying the motion, the court held that whether the presence of the virus causes physical loss or damage presents a question of fact for the jury to resolve; a copy of the order rejecting the insurers’ summary judgment argument can be found here. Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Kevin V. Small, Hunton Andrews Kurth Mr. Levine may be contacted at mlevine@HuntonAK.com Mr. Small may be contacted at ksmall@HuntonAK.com Read the court decision
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The End of Eroding Limits Policies in Nevada is Just the Beginning

August 28, 2023 — Payne & Fears LLP
On June 3, 2023, Nevada Gov. Joe Lombardo signed into law AB 398 (the Act) which modifies the Nevada insurance code by restricting the types of liability policies that can be offered in the state. The End of Eroding Limits Policies in Nevada First, the Act prohibits liability insurers from issuing “eroding limits” or “burning limits” policies. These are insurance policies under which defense costs decrease policy limits. Most professional liability policies are eroding limits policies. As of Oct. 1, 2023, insurers in Nevada may no longer issue or renew any policy where policy limits are eroded by defense costs. This change may result in higher premiums on these types of policies to compensate for the higher payouts they will now have to provide in Nevada. Read the court decision
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Reprinted courtesy of Payne & Fears LLP

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Federal Court Finds Occurrence for Faulty Workmanship Under Virginia Law

July 31, 2013 — Tred Eyerly, Insurance Law Hawaii
The Federal District Court in Virginia found that allegations of faulty workmanship could arise from an occurrence. Nautilus Ins. Co. v. Strongwell Corp., 2013 U.S. Dist. LEXIS 79163 (W. D. Va. June 4, 2013). Strongwell supplied certain fiberglass reinforced plastic materials to a subcontractor of Black & Veatch for a construction project at power plant. Black & Veatch subsequently sued Strongwell, claiming that numerous defects in Strongwell's materials and work were discovered after the project was completed. The complaint further alleged that as a result of the defects, there was widespread property damage to portions of the power plant. Nautilus defended under a reservation of rights. Nautilus also filed suit for a declaratory judgment that to establish it had no duty to defend or indemnify Strongwell. Strongwell moved to dismiss the complaint insofar as it requested a declaration that there was no duty to defend. Strongwell also filed a motion to stay the coverage action until the underlying case was completed. Read the court decision
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Reprinted courtesy of Tred Eyerly
Tred Eyerly can be contacted at te@hawaiilawyer.com

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