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California Appellate Court Holds “Minimal Causal Connection” Satisfies Causation Requirement in All Risk Policies

July 20, 2020 — Scott P. DeVries & Michael S. Levine - Hunton Andrews Kurth
On May 26, 2020, a California Court of Appeals (4th District) issued its decision in Mosley et al. v. Pacific Specialty Ins. Co. The case arose in the context of a marijuana-growing tenant who rerouted a home’s electrical system and caused an electrical fire. The issue was whether the homeowner’s policy covered the loss. The trial court granted the insurer’s motion for summary judgment and, in a divided decision, the Court of Appeals reversed in part. The policy excluded losses “resulting from any manufacturing, production or operation, engaged in … the growing of plants.” The parties agreed that the fire resulted from the rewiring of the electrical system, but disagreed on “whether that means the damage” “result[ed] from” “the growing of plants.” The Court held that “resulting from” “broadly links a factual situation with the event creating liability, and connotes only a minimal causal connection or incidental relationship.” In doing so, it equated the terms “results from” and “arising from.” Concluding that a “common sense” approach was to be used, it found a “minimal causal connection” to be present. This expansive standard could be beneficial to policyholders in arguing the causal connection between COVID-19 and ensuing business interruption losses; specifically, that the pandemic, a covered event, is the underlying and proximate cause of the insureds’ physical loss and/or damage and the insured’s resulting business interruption loss, and that intervening events, whether they be orders of civil authority, prevention of ingress/egress or otherwise, would not sever the chain of causation. Reprinted courtesy of Scott P. DeVries, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth Mr. DeVries may be contacted at sdevries@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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Three-Year Delay Not “Prompt Notice,” But Insurer Not “Appreciably Prejudiced” Either, New Jersey Court Holds

November 04, 2019 — Anthony L. Miscioscia and Timothy A. Carroll - White and Williams LLP
In Harleysville Preferred Insurance Company v. East Coast Painting & Maintenance, LLC, 2019 U.S. Dist. LEXIS 135295 (D.N.J. Aug. 12, 2019) (East Coast Painting), the U.S. District Court for the District of New Jersey held that an insurer, which received notice of a bodily injury accident three years after it happened, was not “appreciably prejudiced” by such late notice, even as the court acknowledged notice three years later did not satisfy the policy’s “prompt notice” condition. The court also held that the policy’s “Operational Exclusion,” which excluded coverage for bodily injury arising out of the operation of “cherry pickers and similar devices,” did not apply because the accident arose out of the use of a “scissor lift,” which is not a device similar to a cherry picker. East Coast Painting arose out of a Queens, New York bridge-painting project, during which an employee of the insured, East Coast Painting and Maintenance LLC was injured while “standing on a scissor lift mounted to the back of a truck,” owned and operated by East Coast. The employee sued various project-related entities which, in turn, joined East Coast as a defendant. East Coast sought coverage under its business auto policy, and the insurer agreed to defend the insured under a reservation of rights. The insurer subsequently sought a declaration that it did not owe coverage based on, among other things, the policy’s “Operational Exclusion,” and the insured’s failure to satisfy the policy’s “prompt notice” condition. The insurer moved for summary judgment on both of those bases, but the court in East Coast Painting denied the motion. As for the insurer’s “prompt notice” defense, the court in East Coast Painting concluded that, the insured’s notice to the insurer was not prompt because it did not receive notice until three years after the accident. But, the court added, the inquiry does not end there. “[T]his Court must determine whether [the insurer] was appreciably prejudiced by that delay.” Reviewing the facts, the court held that the insurer was not “appreciably prejudiced,” even though during the three-year delay the lift truck was “not properly maintained” or “in the same condition it was at the time of the Accident.” The court observed that the insurer had “ample other evidence with which it can defend itself,” such as experts who inspected the lift truck and opined about the cause of the accident.” [Emphasis added.] Further, “there are multiple contemporaneous accident reports,” “a list of the East Coast employees on site at the time,” “photographs of the lift truck and its location when [the employee] was injured,” and “depositions of [the employee] and others regarding the events at issue.” Thus, the court held, the insurer was not prejudiced and summary judgment was inappropriate. Reprinted courtesy of Anthony L. Miscioscia, White and Williams LLP and Timothy A. Carroll, White and Williams LLP Mr. Miscioscia may be contacted at misciosciaa@whiteandwilliams.com Mr. Carroll may be contacted at carrollt@whiteandwilliams.com Read the court decision
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Super Lawyers Recognized Five Lawyers from Hunton’s Insurance Recovery Group

August 29, 2022 — Hunton Insurance Recovery Blog
Partners, Larry Bracken, Lorie Masters, and Koorosh Talieh (KT), were each recognized as Super Lawyers, while associates Yaniel Abreu and Rachel Hudgins were selected as Rising Stars for Insurance Coverage in 2022. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The patented selection process includes independent research, peer nominations and peer evaluations. Ultimately, no more than 5% of lawyers in a state are selected as Super Lawyers, and less than 2.5% are recognized as Rising Stars. Congratulations on this achievement! Reprinted courtesy of Hunton Andrews Kurth LLP Read the full story... Read the court decision
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Construction Defect Class Action Lawsuit Alleges National Cover-up of Pipe Defects

December 10, 2015 — Beverley BevenFlorez-CDJ STAFF
Two Miami condominium associations have filed suit “concerning defective fire sprinkler systems and a national cover up over a significant life safety issue in multi-unit condominiums in Florida and across the country.” The attorneys representing the class action lawsuit, Gonzalez, Montoya, Siegfried, Sobel, and Hale, “believe that the problem is nationwide and that monetary damages arising from the claims will exceed $1 billion,” a press release by Colson Hicks Eidson stated. “The 56-count lawsuit filed against a dozen manufacturers, suppliers and distributors seeks compensatory, incidental and consequential damages.” According to CBS Miami, “The suit claims the companies knowingly used [a] chemical that caused cracks and leaks in pipes that affected the water pressure in sprinkler systems.” Plaintiff attorneys claim that the cost to repair each building is estimated at between $50 to $100 million each. Read the full story, Press Release... Read the full story, CBS Miami... Read the court decision
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Tips for Contractors Who Want to Help Rebuild After the California Wildfires

November 02, 2017 — Garret Murai - California Construction Law Blog
I received a call from one of my contractor clients this past week to see what he could do to help those affected by California’s North Bay fires. The North Bay fires are the deadliest and most destructive wildfires in California’s history. To date, the fires have claimed 42 lives, burned more than 200,000 acres of land, destroyed an estimated 8,400 structures and likely damaged tens of thousands more. By comparison, the state’s second most deadly wildfire, the Oakland Hills fire of 1991, claimed the lives of 25 people, burned 1,600 acres of land, and destroyed 2,900 structures. Rebuilding costs for the North Bay fires, according to the California Insurance Commissioner, are expected to top $1 billion. For those with insurance, insurance experts say that the rebuilding process can take two years or more for those whose homes and businesses were destroyed. For those whose homes and businesses were fortunate enough only to be damaged, rebuilding efforts are already underway. 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

Receiving a $0 Verdict and Still Being Deemed the Prevailing Party for Purposes of Attorney’s Fees

May 24, 2018 — David Adelstein - Florida Construction Legal Updates
Low and behold, a party can be the prevailing party for purposes of attorney’s fees even if that party is awarded $0. That’s right, even if the party is awarded a big fat zero, they can still be the prevailing party for purposes of being entitled to attorney’s fees. This is because a party is the prevailing party if they prevail on the significant issues in the case. A party can prevail on the significant issues even if that party is awarded $0. Whoa! For example, in Coconut Key Homeowner’s Association, Inc. v. Gonzalez, 43 Fla.L.Weekly D1045a (Fla. 4th DCA 2018), a homeowner sued her homeowner’s association claiming the association breached its governing documents. There was a basis for fees under Florida’s homeowner’s association law (and there likely was a basis under the governing documents). At trial, the jury held that the association breached its governing documents, but awarded the homeowner nothing ($0). The trial court also issued injunctive relief in favor of the homeowner. The homeowner claimed she should be deemed the prevailing party for purposes of attorney’s fees; however, this was denied by the trial court based on the $0 verdict and no fees were awarded to the homeowner. Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

Homeowner’s Claims Defeated Because “Gravamen” of Complaint was Fraud, not Breach of Contract

September 29, 2021 — Garret Murai - California Construction Law Blog
Be careful what you wish for or, as in the next case, what you plead. In Vera v. REL-BC, LLC, Case Nos. A155807, A156823, and A159141 (June 30, 2021) 1st District Court of Appeal, a the buyer of a remodeled home who asserted breach of contract and fraud claims against a developer discovered that her claims, including her breach of written contract claim, was subject to a shorter 3 year statute of limitations because the “gravamen” of her complaint was fraud. The REL-BC Case Homeowner Adriana Vera purchased a remodeled home in Oakland, California from developers REL-BC, LLC and SNL Real Estate Solutions, LLC. The developers had purchased the home in July 2011, remodeled it, and sold it to Vera in November 2011. As is typical in such transactions, the purchase agreement for the house required that the sellers disclose known material facts and defects affecting the property. In their disclosure, the sellers stated that they were not aware of any significant defects or malfunctions with respect to the property. The disclosure also stated that the sellers were not aware of any water intrusion issues with respect to the property. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

Insurer Must Defend Insured Against Construction Defect Claims

November 14, 2018 — Tred R. Eyerly - Insurance Law Hawaii
Finding various exclusions inapplicable, the Federal District Court ruled that the insurer owed a defense to the general contractor based upon Texas law. Mt. Hawley Ins. Co. v. Slay Engineering, 2018 U.S. Dist. LEXIS 139363 (W.D. Texas Aug. 15, 2018). Huser Construction had a CGL policy issued by Mt. Hawley Insurance Company. Huser contracted to design and construct a municipal sports complex with the City of Jourdanton. The project consisted of four baseball fields, a softball field, parking lots and swimming pool. Huser subcontracted with Cody Pools, Inc. to design and build the swimming pool. Huser also subcontracted with Q-Haul, Inc. to perform earth work, grading and storm drainage work at the site. 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

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