Seattle Washington Building Expert Directory

Recent Third Circuit OSHA Decision Sounds Alarm for Employers and Their Officers

October 14, 2019 — John Baker - White and Williams LLP
The Third Circuit Court of Appeals recently issued an opinion that should serve as a warning not only to employers, but to their corporate officers. The case against Altor, Inc., a New Jersey-based construction company, began in 2012 when the Occupational Safety and Health Administration (OSHA) directed Altor and its sole director and officer to pay a $412,000 penalty (Payment Order) to OSHA for several violations, including the failure to comply with fall protection standards. The company refused to pay, arguing that it did not possess sufficient assets. The Secretary of Labor filed a Petition for Civil Contempt against Altor and its President, Vasilios Saites. The court acknowledged that the company and Mr. Saites could defend against a contempt finding by showing that he and the company were unable to comply with the Payment Order. Beyond merely stating that they could not pay, the court required that they must show that they made good faith efforts to comply with the Order. After considering all of the evidence, the court ultimately relied on Altor’s bank records, which reflected that the company ended each month during a two-year period after the violations with a positive bank balance. Thus, the court determined that Altor could have made “at least relatively modest” payments and emphasized that the company never attempted to negotiate a reduced sum or a payment plan. Read the court decision
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Reprinted courtesy of John Baker, White and Williams LLP
Mr. Baker may be contacted at bakerj@whiteandwilliams.com

Illinois Appellate Court Addresses Professional Services Exclusion in Homeowners Policy

August 03, 2022 — James M. Eastham - Traub Lieberman
In Stonegate Ins. Co. v. Smith, 2022 IL App (1st) 210931, the Insured was performing plumbing work at a multi-story townhouse when a fire ensued causing damage to the second story unit. Although a carpenter by trade, the Insured was performing plumbing work consisting of the replacement of a shower valve as a favor for a friend. To accomplish the task, the Insured utilized a small propane torch to attempt to remove the old water piping to the shower. In doing so, the insulation behind the bathroom wall caught fire and the flame spread upward to the neighboring unit. Stonegate had issued a homeowner’s policy to the Insured during the relevant time period. The homeowner's policy excluded coverage for property damage "[a]rising out of the rendering of or failure to render professional services." Subsequent to tender of the loss, Stonegate initiated a declaratory judgment action seeking a declaration that it owned no duty to defend or indemnity pursuant to the professional services exclusions. In finding in favor of the Insured, the Court began its analysis by noting that the homeowner's policy did not define the term "professional services" such that it was the Court’s task to determine whether the Insured’s work qualified as a "professional service" for purposes of the exclusion. The Court further prefaced its holding by stating that for an exclusionary clause to effectively deny coverage, its applicability must be clear and free from doubt because any doubts as to coverage will be resolved in favor of the insured. Looking to Illinois case precedent, the Court found that the term "professional service" is not limited to services for which the person performing them must be licensed by a governmental authority. Rather, "professional services" encompass any business activity conducted by an insured that (1) involves specialized knowledge, labor, or skill, and (2) is predominantly mental or intellectual as opposed to physical or manual in nature. Read the court decision
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Reprinted courtesy of James M. Eastham, Traub Lieberman
Mr. Eastham may be contacted at jeastham@tlsslaw.com

New York Court of Appeals Finds a Proximate Cause Standard in Additional Insured Endorsements

June 15, 2017 — Geoffrey Miller - Saxe Doernberger & Vita, P.C.
In The Burlington Insurance Company v. NYC Transit Authority, et al., No. 2016-00096, the New York Court of Appeals issued a landmark decision with regard to the meaning of “caused, in whole or in part, by” in the additional insured context. In a split decision, the court rejected Burlington Insurance Company’s argument that the language implied a “negligence” standard, but held that coverage was provided to the additional insured only where the named insured’s acts or omissions were the proximate cause of the injury:

While we [the majority] agree with the dissent that interpreting the phrases differently does not compel the conclusion that the endorsement incorporates a negligence requirement, it does compel us to interpret ‘caused, in whole or in part’ to mean more than ‘but for’ causation. That interpretation, coupled with the endorsement’s application to acts or omissions that result in liability, supports our conclusion that proximate cause is required here.[1]

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Reprinted courtesy of Geoffrey Miller, Saxe Doernberger & Vita, P.C.
Mr. Miller may be contacted at gjm@sdvlaw.com

Pennsylvania Finds Policy Triggered When Property Damage Reasonably Apparent

January 28, 2015 — Tred R. Eyerly – Insurance Law Hawaii
The Pennsylvania Supreme Court addressed when a liability policy was triggered for ongoing property damage. The Court also declined to apply the multiple trigger theory. Pennsylvania Nat'l Mut. Cas. Ins. Co. v. John, 2014 Pa. LEXIS 3313 (Pa. Dec. 15, 2014). In 2002, Appellants, co-owners of a dairy farm, expanded the size of their dairy herd and milking facility. Appellants hired LPH Plumbing to install a new plumbing system, which would include a wastewater drainage system and a separate freshwater drinking system. LPH Plumbing subcontracted with Stoltzfus Welding to weld metal pipes leading to a holding tank for the new freshwater drinking system. Construction was completed in July 2003. Unknown to Appellants, the plumbing system was defective when dairy operations began. PVC piping for the wastewater was cracked, allowing "gray water" to escape. Further Stoltzfus failed to properly weld an intake pipe leading to a holding tank that formed a part of the freshwater drinking system for the dairy herd. Consequently, Appellants' herd was exposed to contaminated drinking water shortly after dairy operations began in July 2003. 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

Fungi, Wet Rot, Dry Rot and "Virus": One of These Things is Not Like the Other

November 02, 2020 — Hugh D. Hughes - Saxe Doernberger & Vita
The Hartford’s so-called virus exclusion in its commercial property forms is getting a workout, and policyholders now have an argument that may help their cases move past the pleadings stage. A U.S. District Court in Florida has deemed the exclusion ambiguous and denied an insurer’s motion to dismiss.1 The exclusion applies to “presence, growth, proliferation, spread, or any activity of ’fungi’, wet rot, dry rot, bacteria or virus.”2 The Court held that the parties did not necessarily intend to exclude a pandemic. In Urogynecology, the plaintiff sought coverage for the loss of the usefulness and functionality of its business location due to the Florida Governor’s shutdown order. The policy contained a 'fungi', wet rot, dry rot, bacteria, or virus” exclusion.3 The carrier moved to dismiss, and the plaintiff argued that the exclusion only applied if COVID-19 was present on-site, which was not the case. The Court addressed none of the issues regarding direct physical loss and instead decided the motion on the fungi exclusion. The Court held the exclusion ambiguous because the exclusion of virus “does not logically align with the grouping of the virus exclusion with other pollutants such that the Policy necessarily anticipated and intended to deny coverage for these kinds of business losses.”5 In addition, the Court stated that pollution case law was not on point because “none of the cases dealt with the unique circumstances of the effect COVID-19 has had on our society – a distinction this Court considers significant.” Read the court decision
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Reprinted courtesy of Hugh D. Hughes, Saxe Doernberger & Vita
Mr. Hughes may be contacted at hdh@sdvlaw.com

Maybe Supervising Qualifies as Labor After All

May 22, 2023 — Christopher G. Hill - Construction Law Musings
Remember back in 2021 when I “mused” about Dickson v. Fidelity and Deposit Company of Maryland et al.? Remember how the Eastern District of Virginia held that mere supervision does not qualify as “labor” under the federal Miller Act? Well, the 4th Circuit recently weighed in on the appeal of that case and had some interesting things to say about the definition of labor. As a quick reminder, Plaintiff worked as a project manager on a project to repair and upgrade certain stairs at the Pentagon. Plaintiff subcontracted with prime contractor Forney Enterprises Inc. on this project. On Dec. 20, 2018, the prime contract was terminated. Plaintiff filed the Miller Act suit on Feb. 5, 2020. Dickson alleged that Fidelity and Deposit Company of Maryland, or F&D, must pay him, pursuant to the Miller Act, the amount he is owed for the labor he performed on the project. Now before the district court were cross-motions for summary judgment. In evaluating Plaintiff’s claims, the district court examined the defendant’s claims that (1) Dickson’s work did not qualify as “Labor” under the Miller Act, and (2) that the suit was not timely filed. The Eastern District of Virginia court agreed with both arguments. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

No Coverage Based Upon Your Prior Work Exclusion

October 01, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The California Court of Appeal affirmed the trial court's determination of no coverage for construction defects based upon the policy's prior work exclusion. Yu v. Landmark Am. Ins. Co., 2014 Cal. App. Unpub. LEXIS 5966 (Cal. Ct. App. Aug. 22, 2014). Plaintiff was the owner and developer of a hotel. She contracted with ATMI Design Build to act as general contractor to construct the hotel. C&A Framing Company was a subcontractor to provide rough framing for the project. In May 2003, ATMI fired C&A before it had completed all the work required by the subcontract. After May 2003, C&A never returned to the construction site. Notice of Completion for the project was recorded April 15, 2004. In September 2004, Landmark issued to C&A a CGL policy for the period September 18, 2004 to September 18, 2005. The policy was later cancelled, effective January 14, 2005. The policy contained an endorsement entitled, "Exclusion - Your Prior Work." The exclusion barred coverage for "'property damage' arising out of 'your work' prior to 9/18/04." 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

Final Rule Regarding Project Labor Agreement Requirements for Large-Scale Federal Construction Projects

January 29, 2024 — Aaron C. Schlesinger & Julia Loudenburg - Peckar & Abramson, P.C.
Beginning on January 22, 2024, in compliance with President Biden’s February 4, 2022 Executive Order, 14603, federal construction projects with a total estimated cost of $35 million are required to utilize a project labor agreement (“PLA”) unless the contracting agency grants an exception. The Federal Register estimates that this rule will impact approximately 119 IDIQ contracts each year; these contracts have an average award value of about $114 million. The White House claims the PLAs will improve projects by:

Eliminating project delays from labor unrest, such as strikes;
Creating dispute resolution procedures and cooperation for labor-management disputes, such as those over safety;
Including provisions “to support workers from underserved communities and small businesses”;
Helping to create a steady pipeline of workers for federal projects; and
Promoting competition on government contracts so that all builders, even those who are non-union, can bid on jobs that require a PLA.

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Reprinted courtesy of Aaron C. Schlesinger, Peckar & Abramson, P.C.
Mr. Schlesinger may be contacted at aschlesinger@pecklaw.com

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