FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Crime Policy Insurance Quotes Falsely Represented the Scope of its Coverage

July 13, 2020 — Brian J Clifford - Saxe Doernberger & Vita
An Indiana businessman found out the hard way how far his insurance company was willing to go to avoid paying a claim after it misrepresented the coverage of a crime policy it sold to him. The quote for the policy indicated that it included coverage for losses resulting from computer hacking. Despite this representation, when the policyholder’s bank accounts were hacked, the insurer denied coverage on the ground that there was no provision for hacking coverage in the policy. Fortunately, the Indiana Court of Appeals recognized the insured’s right to argue before a jury that the insurer’s quotes falsely represented the scope of its coverage. In Metal Pro Roofing, LLC v. Cincinnati Ins. Co., Richard Cornett, principal of Metal Pro Roofing, LLC and Cornett Restoration, LLC (the “LLCs”), purchased a Cincinnati Insurance Company CinciPlus Crime XC+ Policy (the “Policy”). At the time Mr. Cornett purchased this coverage, and during all subsequent renewals, Cincinnati issued insurance quotes that stated:

Cincinnati can insure your money and securities while at your premises, inside your bank and even off site in the custody of a courier. While you’ve taken precautions to protect your money and securities, you run the risk of loss from employees, robbers, burglars, computer hackers and even physical perils such as fire.

Give yourself peace of mind with Cincinnati’s crime coverage to insure the money and securities you worked so hard to earn.

Crime Expanded Coverage (XC®)Plus Endorsement $125.00.

(Emphasis added.) Read the court decision
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Reprinted courtesy of Brian J Clifford, Saxe Doernberger & Vita
Mr. Clifford may be contacted at bjc@sdvlaw.com

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Congratulations to BWB&O’s Newport Beach Team on Obtaining a Defense Verdict in Favor of their Subcontractor Client!

April 02, 2024 — Dolores Montoya - Bremer Whyte Brown & O'Meara LLP
Bremer Whyte Brown & O’Meara’s Newport Beach Partner Morgan Stiefel and Associate Brandon Cook obtained a defense verdict after years-long litigation in favor of their subcontractor client. This lawsuit stemmed from a claim made by Plaintiff for eye injuries arising out of claimed negligence and strict liability associated with our client’s performance of a sandblasting job at a construction site adjacent to Plaintiff’s home. Plaintiff alleges that while she was in her backyard, sand hit her in the eyes at a high velocity speed, resulting in permanent damage to her eyes. We argued our clients took all necessary safety precautions in the performance of this job, and Plaintiff’s eye irritation symptoms could not have been caused by our client. All of her alleged injuries were either pre-existing or could be explained by circumstances other than our client’s actions. Through expert testimony and our arguments, we were able to show the jury that Plaintiff lied about the sand entering her eyes at a high velocity and her symptoms being caused by our clients’ performance of the sandblasting job. Read the court decision
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Reprinted courtesy of Dolores Montoya, Bremer Whyte Brown & O'Meara LLP

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Construction Litigation Roundup: “A Fastball Right to the Bean!”

May 06, 2024 — Daniel Lund III - Lexology
The Metropolitan Municipality of Lima, Peru, filed suit in federal court in Washington DC to vacate two separate arbitration awards rendered against the city in international arbitration proceedings subject to the Federal Arbitration Act. The city had contracted to build, improve, and maintain various highways in and around the city. To pay for this infrastructure, Lima agreed that the contractor would “receive revenues from existing and new toll booths.” Apparently, the City of Lima forgot how much citizens of the area loathed tolls, and, according to the court, the local public officials “quickly truckled” (how apropos for a road project!) to the pressure. As a result, revenues promised to the contractor were not forthcoming, and the city did nothing about it. The contractor initiated arbitration, and the city countered by arguing that the contractor had bribed its way into the contract. The city lost and was held in breach. 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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It’s All a Matter of [Statutory] Construction: Supreme Court Narrowly Interprets the Good Faith Dispute Exception to Prompt Payment Requirements in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co.

May 30, 2018 — Erinn Contreras & Joy O. Siu - Sheppard Mullin Construction & Infrastructure Law Blog
On May 14, 2018, the California Supreme Court issued its opinion in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., No. S231549, slip. op. (Cal. Sup. Ct. May 14, 2018). In it, the Court narrowly construed the “good faith” exception to the general rule that a direct contractor must make retention payments to its subcontractors within 10 days of receiving any retention payment. The exception provides that “[i]f a good faith dispute exists between the direct contractor and a subcontractor, the direct contractor may withhold from the retention to the subcontractor an amount not in excess of 150 percent of the estimated value of the disputed amount.” Cal. Civ. Code section 8814(c). Reprinted courtesy of Erinn Contreras, Sheppard Mullin and Joy O. Siu, Sheppard Mullin Ms. Contreras may be contacted at econtreras@sheppardmullin.com Ms. Siu may be contacted at jsiu@sheppardmullin.com Read the court decision
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Difficulty in Defending Rental Supplier’s Claim Under Credit Application

October 11, 2021 — David Adelstein - Florida Construction Legal Updates
In construction, one of the easiest claims to prove from a burden of proof standpoint is that of a supplier, particularly a rental equipment supplier. Oftentimes, these claims are more in the realm of a collection claim because a rental supplier will generally be able to establish that a party opened an account with them, signed a credit application and personal guaranty, and equipment was rented and even delivered to a specific jobsite during set dates. Defending these claims is not so easy. And even if there is a defense as it relates to some amounts, there needs to be an upside challenging those amounts when factoring in the attorney’s fees, costs, and interest on the other amounts and on continuing the dispute. An example of the difficulty in defending these claims from rental suppliers can be found in the recent case of Custom Design Expo, Inc. v. Synergy Rents, Inc., 2021 WL 4125806 (Fla. 2d DCA 2021). Here, a contractor rented equipment (e.g, forklifts) from a supplier. The equipment was rented on an open account and the contractor signed a personal guaranty. The supplier sued the contractor for about $81,000 that remained unpaid. The supplier appeared to waste no time and moved for summary judgment with an affidavit from its credit manager. The credit manager affirmed that the contractor executed a credit application for purposes of renting equipment on an open account, the application contained a personal guaranty, and the credit application formed the basis of a contract. The credit manager authenticated the credit application and affirmed that the contractor owed it about $81,000 in unpaid amounts for rental equipment that was furnished under the credit application. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Providing Your Insurer Prompt Notice

May 20, 2024 — David Adelstein - Florida Construction Legal Updates
Sometimes, when it comes to insurance, you may hear the argument that you breached your insurance policy by failing to provide your insurer with prompt notice as the insurance policy requires. Well, this is not such an absolute issue. With that said, you should absolutely provide your insurer with prompt notice of a claim or loss. No legitimate reason not to. But, if you don’t, it is not an absolute get out of jail free card for your insurer, but it does give them a good argument, which you don’t really want to deal with. In Gulfpoint Construction Co., Inc. v. Westfield Ins. Co., 2024 WL 1759228 (11th Cir. 2024), an insured appealed a trial court’s ruling that found it did not provide prompt notice to its property insurer as the policy required. In this case, notice was provided two years after a loss from a hurricane. The insurer denied coverage and, in doing so, relied on the insured’s failure to provide prompt notice. Although the trial court agreed, the appellate court found this was a genuine issue of material fact. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Exclusions Bar Coverage for Damage Caused by Chinese Drywall

July 05, 2011 — Tred R. Eyerly

The insured homeowners were unsuccessful in arguing around the policy's exclusions when seeking coverage for damage caused by Chinese drywall. Ross v. C. Adams. Constr. & Design, L.L.C., 2011 La. App. LEXIS 769 (La. Ct. App. June 14, 2011).



Before the insureds purchased and moved into their home, it was renovated. After moving in, the insures discovered foreign gypsum drywall, or Chinese drywall. The insureds submitted a claim to Louisiana Citizens Property Insurance Company. In an investigation, the insurer confirmed the presence of Chinese drywall and damage to the metal surfaces caused by corrosion. Louisiana Citizens refused coverage and the insureds sued. The trial court denied the insured's motion for summary judgment and granted summary judgment to Louisiana Citizens.



The court of appeal affirmed. Initially, the court determined the insureds sustained a direct physical loss. The inherent qualities of the Chinese drywall created a physical loss to the home and required that the drywall be removed and replaced.



Four exclusions, however, barred coverage. First, damages due to faulty or defective materials were excluded from coverage. The Chinese drywall emitted high levels of sulfuric gas which caused the damage to the insured's plumbing, electrical wiring and metal components.



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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

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First Circuit Limits Insurers’ Right to Recoup Defense Costs or Settlement Payments

April 02, 2024 — Eric Hermanson, Austin Moody & Victoria Ranieri - White and Williams LLP
Weighing in on an issue that has divided courts nationwide, the U.S. Court of Appeals for the First Circuit has ruled that an insurer under Massachusetts law has no right to recoup defense costs, or amounts the insurer pays in settlement – even if the insurer reserves rights prior to payment and obtains a ruling, after the fact, that no defense or indemnity was owed. Berkley Natl. Ins. Co. v. Atlantic-Newport Realty LLC, No. 22-1959, 2024 U.S. App. LEXIS 4115 (1st Cir. Feb 22, 2024) (“Granite Telecomm"). However, the First Circuit rested its ruling on narrow procedural grounds, which may prolong the controversy rather than resolve it. The insureds in Granite Telecomm owned a company cafeteria. They were sued by a food service worker who suffered a foot infection after being exposed to bacteria during a sewage backup. They sought coverage from their insurer, Berkley. Berkley argued that coverage was barred by a fungus and bacteria exclusion in the policy. The insureds disagreed. They threatened suit under M.G.L. ch. 93A, and demanded that Berkley defend the case. Reprinted courtesy of Eric Hermanson, White and Williams LLP, Austin Moody, White and Williams LLP and Victoria Ranieri, White and Williams LLP Mr. Hermanson may be contacted at hermansone@whiteandwilliams.com Mr. Moody may be contacted at moodya@whiteandwilliams.com Ms. Ranieri may be contacted atranieriv@whiteandwilliams.com Read the court decision
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