Seattle Washington Building Expert Directory

Just Decided – New Jersey Supreme Court: Insurers Can Look To Extrinsic Evidence To Deny a Defense

September 05, 2022 — Randy J. Maniloff - White and Williams LLP
Last week, the New Jersey Supreme Court decided Norman International, Inc. v. Admiral Insurance Company, No. 086155 (N.J. Aug. 11, 2022). At issue was coverage for a work-site injury and the interpretation of a policy exclusion for operations or activities performed by an insured in certain counties in New York. The case is significant in terms of addressing causation for purposes of the application of exclusions. But the more wide-reaching issue has nothing to do with the scope of the exclusion. The real story from Norman is the New Jersey high court’s pronouncement that an insurer, in certain circumstances, can use extrinsic evidence to deny a defense to its insured. New Jersey duty to defend law has been a jungle land and in need of more supreme court guidance. Read the court decision
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Reprinted courtesy of Randy J. Maniloff, White and Williams LLP
Mr. Maniloff may be contacted at maniloffr@whiteandwilliams.com

Good and Bad News on Construction Employment

February 10, 2012 — CDJ STAFF

The construction industry hit a two-year high in January, with 21,000 jobs added that month. The mild winter is assumed to have helped. According to the General Contractors of America, the construction industry currently employs about 5.57 million people. This is a 21 percent gain over January 2010. Ken Simonson, the chief economist of GCA, noted that “the unemployment rate in construction is still double that of the overall economy.” He said it was not currently clear if “the recent job growth reflects a sustained pickup or merely acceleration of homebuilding and highway projects that normally halt when the ground freezes in December and January.”

Stephen Sandherr, the chief executive officer of the GCA, said that the federal government had to make infrastructure funding a top priority. “Without adequate long-term funding for infrastructure, competitive tax rates and fewer costly regulatory hurdles, the construction industry may lose some of the jobs it gained in the last year.”

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Expert Medical Science Causation Testimony Improperly Excluded under Daubert; ID of Sole Cause of Medical Condition Not Required

April 15, 2014 — R. Bryan Martin & Whitney L. Stefko - Haight Brown & Bonesteel LLP
On April 4, 2014, in Messick v. Novartis Pharmaceuticals Corp., the United States Court of Appeals for the Ninth Circuit reversed the district court's summary judgment in favor of Defendant Pharmaceutical Corporation because the district court improperly excluded expert testimony. The three-judge panel held that the district court erred by excluding causation testimony offered by Plaintiff's expert it found to be irrelevant and unreliable. Plaintiff was diagnosed with breast cancer in 2000. In response to her development of osteoporosis after chemotherapy, Plaintiff treated with the drug Zometa for several months in 2002. Zometa is a bisphosphonate, a class of drug commonly used to treat multiple myeloma. Such drugs are generally used to reduce or eliminate the possibility of skeletal-related degeneration and injuries to which cancer patients are particularly susceptible. Novartis Pharmaceuticals Corporation produces Zometa, which was approved by the FDA in 2001 and 2002. In 2005 after encountering issues with her jaw, it was discovered that Plaintiff had osteonecrosis near three of her teeth. The oral specialists treating Plaintiff did so under the assumption that she was suffering from bisphosphonate-related osteonecrosis of the jaw ("BRONJ"), a condition recognized by the American Association of Oral and Maxillofacial Surgeons ("AAOMS"). Plaintiff's BRONJ healed in 2008 - three years after beginning treatment. Thereafter, Plaintiff brought suit against Novartis for strict products liability, negligent manufacture, negligent failure to warn, breach of express and implied warranty, and loss of consortium. In support of her claims, Plaintiff offered her expert's testimony on ONJ and BRONJ, and on the causal link between plaintiff's bisphosphonate treatment and later development of BRONJ. Novartis filed a Daubert motion to exclude the specific causation testimony of Plaintiff's experts and a motion seeking summary judgment. The district court granted both motions on the basis that Plaintiff's expert testimony was irrelevant and unreliable. Reprinted courtesy of R. Bryan Martin, Haight Brown & Bonesteel LLP and Whitney L. Stefko, Haight Brown & Bonesteel LLP Mr. Martin may be contacted at bmartin@hbblaw.com; Ms. Stefko may be contacted at wstefko@hbblaw.com Read the court decision
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Failure to Allege Property Damage Within Policy Period Defeats Insured's Claim

October 03, 2022 — Tred R. Eyerly - Insurance Law Hawaii
The insured's inability to determine when water damage occurred meant it could not pursue claims of property damage against the insurers. Creek v. State Farm Fire & Cas. Co., 2022 U.S. Dist. LEXIS 116939 (W.D. Wash. July 1, 2022). Gold Creek Condominium complex experienced water damage. The complex was completed in 1982. The owners sued State Farm and Travelers under all-risk policies when tenders for the damage were denied. In 2017, Creek hired an expert to investigate deterioration due to water intrusion. The expert noted that "water intrusion had been evident in the exterior walls, soffits, terraces, handrails and elevated entry walkways for some time." Thereafter, Creek tendered claims for property damage to State Farm and to Travelers. 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

Navigating the Hurdles of Florida Construction Defect Lawsuits

April 03, 2013 — CDJ STAFF
The Florida law firm of Williams Law Association reminds readers that under the law, homeowners “cannot immediately file a lawsuit against their contractor if they subsequently discover construction defects.” The contractor must first have a chance to fix the defect. Further, there is a waiting period between informing the contractor and actually filing the lawsuit. For individual homeowners, that wait is 60 days, but for associations of more than 20 parcels, it’s 120 days. Read the court decision
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Norristown, PA to Stop Paying Repair Costs for Defect-Ridden Condo

February 10, 2014 — Beverley BevenFlorez-CDJ STAFF
The city of Norristown, Pennsylvania has already paid “$3.4 million for construction repairs and legal expenses” for the 26-unit condominium on 770 Sandy Street, according to The Times Herald. Therefore city officials recently declared that “they will no longer pay the $40,000 annual cost for maintenance, electricity and repairs” for the building. “At some point, the folks that own it have to step up and take responsibility for it,” Norristown Council President William Caldwell told The Times Herald. “No later than February 28, the municipality will cease to provide or pay for maintenance of 770 Sandy Street.” Previously, Norristown had received court orders to repair the building, after numerous construction defects turned up including “missing firestops in numerous walls, missing grout and steel rebar in block-wall, emergency stair towers, faulty electrical wiring and no provision for firestopping in the first-floor garage ceiling.” City officials “were faulted by Montgomery County Common Pleas Court judges for not properly inspecting the construction.” Charles Madracchia, past Customers Bank attorney and current Homeowner attorney, is “continuing active litigation in both federal and state court.” Read the court decision
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Shimmick Gets Nod for Second Pilot Pile at Settling Millennium Tower

December 13, 2021 — Nadine M. Post - Engineering News-Record
After the successful installation of a 24-in.-dia permanent pilot pile at the troubled foundation upgrade of the settling Millennium Tower in San Francisco, the Dept. of Building Inspection (DBI) has given Shimmick Construction Co. permission to install a second pilot pile, beginning Dec. 1. Reprinted courtesy of Nadine M. Post, Engineering News-Record Ms. Post may be contacted at postn@enr.com Read the full story... Read the court decision
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Exact Dates Not Needed for Construction Defect Insurance Claim

March 01, 2012 — CDJ STAFF

The Texas Court of Appeals reversed the decision of the trial court in Vines-Herrin Custom Homes v Great American Lloyds Insurance Company on December 21, 2011. Vines-Herrin Custom Homes built a single-family home in Plano, Texas in 1999. They obtained a commercial general liability policy from Great American, later purchasing coverage from Mid-Continent, which the decision describes as “a sister company of Great American.”

While the home was under construction, Emil G. Cerullo sought to purchase it. At the time, it was under contract to another buyer. Two months later, Vines-Herrin told Cerullo that the deal had “fell through.” Cerullo bought the house with modifications from the original plan. Upon moving in, Cerullo began having water intrusion and other problems. “Cerullo noticed water gathering on window sills and damage to the sheetrock and baseboard.” Additional problems followed, including cracks, leaks, “and in early 2002, the ceiling and roof began to sag.”

Cerullo sued Vines-Herrin, claiming negligent construction. Vines-Herrin filed a claim seeking defense and indemnification under the insurance policies. Coverage was denied and Vines-Herrin filed suit to require coverage and also bringing claims for “breach of the duty of good faith and fair dealing, breach of contract, and DTPA and insurance code violations.”

In May, 2006 Vines-Herrin stated that it had no more defense funds and went into arbitration with Cerullo. The underlying construction defect action was settled for about $2.5 million. As part of the settlement, “Cerullo became the rightful owner of all remaining claims, rights, and causes of action against” Vines-Herrin’s insurers. He then joined the coverage lawsuit.

The non-jury trial was held under the controlling law of the time which “imposed a duty to defend only if the property damage manifested or became apparent during the policy period.” The court concluded in Cerullo’s favor. During the post-judgment motions, the Texas Supreme Court rejected the manifestation rule. Under this ruling, the trial court set aside its judgment and found in favor of the insurance companies. The trial court noted that although “the Residence was covered by an uninterrupted period of insurance (which began before the Residence was constructed) and that the damages to the Residence manifested during the uninterrupted period of insurance coverage,” “Mr. Cerullo failed to allege the date when actual physical damage to the property occurred.”

The first claim by Cerullo and Vines-Herrin was that the “Final Judgment” occurred in October 2004, and that all proceedings thereafter were void. The court rejected this as the “final judgment” is not “final for the purposes of an appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” Despite the use of the word “final,” the trial court’s decision did not do this.

The second issue was the application of the Texas Supreme Court case Don’s Building Supply Inc. v. OneBeacon Insurance. In this case, framing rot due to defective stucco was not discovered until after the end of the policy period. The Supreme Court noted that “the key date is when injury happens, not when someone happens on it.”

The appeals court found that the trial court misapplied the Don’s Building Supply decision. Rather than an exact date, “so long as that damage occurred within the policy period, coverage was provided.” The appeals court noted that “Cerullo alleged the house was constructed in 1999 and he purchased it in May 2000.” “By April of 2001, Cerullo noticed that the windowsills in the study were showing signs of leakage and water damage.” As the court put it, “the petitions then alleged a litany of defects.”

The court noted that coverage by Great American was in effect from November 9, 1999 to November 9, 2000. In May of 2000, the house suffered “substantial flooding from a rainstorm that caused damage.” This was during the policy period. “As a matter of law, actual damages must occur no later than when they manifest.”

The court concluded that as damage manifested during the period of coverage, so must have the damage. The court ruled that “contrary to the trial court’s determination otherwise, the evidence showed Great American’s duty to indemnify was triggered, and expert testimony establishing the exact date of injury was not required to trigger the duty.”

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