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DIRECTORY AND CAPABILITIES

First Suit to Enforce Business-Interruption Coverage Filed

April 20, 2020 — Lorelie S. Masters & Michael S. Levine - Hunton Insurance Recovery Blog
On Monday, Oceana Grill, a restaurant in New Orleans, Louisiana, became the first to file a lawsuit over coverage for COVID-19 business interruption losses. The lawsuit, styled Cajun Conti, LLC, et al. v. Certain Underwriters at Lloyd’s of London, et al. (La. Dist. Court, Orleans Parish), seeks a declaratory judgment that an “all risks” property insurance policy issued by Lloyd’s of London must cover losses resulting from the closure of the restaurant following an order by the Governor of Louisiana restricting public gatherings and the Mayor of New Orleans’ order closing restaurants. The Lloyds’ policy, like most first-party property insurance policies, affords coverage for business- interruption losses and contains an “extension of coverage in the event of the businesses closure by order of Civil Authority.” Specifically, the lawsuit seeks a declaration that “the policy provides coverage to plaintiffs for any future civil authority shutdowns of restaurants in the New Orleans area due to physical loss from Coronavirus contamination and that the policy provides business income coverage in the event that the coronavirus has contaminated the insured premises.” Furthermore, according to the complaint, “[t]he policy does not provide any exclusion due to losses, business or property, from a virus or global pandemic.” As the complaint implies, an important issue will be whether the novel coronavirus constitutes the requisite “direct physical loss or damage” under the policy. Understanding COVID-19, its manner of transmission and its ability to live beyond a host organism helps support a conclusion that COVID-19 does indeed amount to the required direct physical loss or damage. Reprinted courtesy of Lorelie S. Masters, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth Ms. Masters may be contacted at lmasters@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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Prison Time and Restitution for Construction Fraud

February 14, 2013 — CDJ STAFF
Federal prosecutors have obtained prison sentences and fines for the two leaders of a construction kickback scheme. Others are awaiting sentencing. The Chicago Sun-Times reports that John Paderta the former president of Krahl Construction has been sentenced to five years in prison and must pay $10 million in restitution. His executive vice president, Doug Harner will be spending five years in prison and has been ordered to pay $9.6 million in restitution. Paderta and Harner overbilled two clients on renovation projects, giving kickbacks to employees at the client companies. Two employees of these client companies have pled guilty. A further five employees of the three companies have admitted that they were involved in the fraud. They are yet to be sentenced. Read the court decision
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Maximizing Contractual Indemnity Rights: Components of an Effective Provision

December 02, 2015 — William Kennedy – White and Williams LLP
Tort law is aimed at providing compensation to the victims of negligence. Tort law encourages plaintiffs to cast a wide net, pursuing claims or suits against not only those whose fault seems manifestly primary, but also against defendants whose causal exposure is minimal, against those whose exposure is purely by operation of law. As discussed in the first installment of this series, "Maximizing Contractual Indemnity: Problems with Common Law," three common law principles – vicarious liability, joint and several liability, and common law indemnity – cause some parties to pay in excess of their actual degree of causal fault. Contractual indemnity can remedy that harsh result. Part Two: Components of an Effective Provision Properly composed, “broad form” contractual indemnity provisions permit an Indemnitee to shift the full range of financial consequences from tort exposure, including civil damages, defense fees, expert fees, and litigation expenses. Such contracts permit indemnity even where the underlying damage was incurred due to a degree of negligence or fault on the part of the Indemnitee. Such contracts can also allow an Indemnitee to shift to the Indemnitor the risk of loss for someone from whom the Indemnitor would otherwise be immune from suit (e.g., the Indemnitor’s employees). A well-written contract can even convert an entity which is an Indemnitor as to one party (e.g., a general contractor which has to indemnify a property owner) into an Indemnitee as to another party (e.g., a subcontractor) for the very same risk. Read the court decision
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Reprinted courtesy of William Kennedy, White and Williams LLP
Mr. Kennedy may be contacted at kennedyw@whiteandwilliams.com

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Kumagai Drops Most in 4 Months on Building Defect: Tokyo Mover

June 11, 2014 — Kathleen Chu and Kevin Buckland - Bloomberg
Kumagai Gumi Co. (1861), a Japanese construction company, fell the most in four months after saying an apartment complex it had built has defects. The shares dropped 5.7 percent to 264 yen at the close of trading in Tokyo, the biggest decline since Feb. 4. Construction flaws in supporting pillars were found in the building completed in March 2003 in Yokohama City, south of Tokyo, the company said in a statement through the stock exchange today. The residents have been asked to relocate to temporary shelters and further investigation is required, it said. “This is a big negative for Kumagai’s reputation and it may hurt the company’s future earnings,” said Yoji Otani, an analyst at Deutsche Bank AG in Tokyo. The latest defect comes after Mitsubishi Estate Co. (8802) said in March it will rebuild a residential complex, constructed by Kajima Corp. (1812), in central Tokyo, after defects were found. Mitsui Fudosan Co. (8801) said it would repair some parts of an apartment building in Kawasaki City after the builder Shimizu Corp. (1803) found cracks in the concrete of some columns in April. Ms. Chu may be contacted at kchu2@bloomberg.net; Mr. Buckland may be contacted at kbuckland1@bloomberg.net Read the court decision
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Reprinted courtesy of Kathleen Chu and Kevin Buckland, Bloomberg

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Real Estate & Construction News Roundup (04/26/23) – The Energy Transition and a Bit of Brick-and-Mortar Blues

May 01, 2023 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
In today’s roundup, Americans can buy homes with bitcoin, new tech aims to engineer a novel building material, federal investments boost the coastline (and construction sales), and more.

• A bitcoin real estate marketplace, claiming it can close deals within one business day, made its U.S. debut. (Carla Mozée, Markets Insider)
• Amid record-setting real estate prices in Dubai, the $34 million sale of a parcel of empty land on a luxury island marks a new high. (Megan Cerullo, CBS)
• Analysts at Goldman Sachs and UBS weigh in on a predicted commercial real estate downturn. (Alena Botros, Fortune)

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Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team

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Former NJ Army Base $2B Makeover is 'Buzzsaw' of Activity

June 14, 2021 — Tom Stabile - Engineering News-Record
Take a developed property the size of New York City’s Central Park with 5 million sq ft of building area, program in new construction or renovation over 20 years and across three dozen parcels for 1,600 housing units, 300,000 sq ft of civic or government space, 500,000 sq ft for retail and 2 million sq ft of offices, and you have a pretty ambitious undertaking. The $2-billion effort to redevelop Fort Monmouth, a decommissioned former U.S. Army base in the thick of New Jersey’s suburban sprawl, is all kinds of ambitious. Reprinted courtesy of Tom Stabile, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Zillow Topping Realogy Shows Web Surge for Housing Market

July 30, 2014 — Prashant Gopal and John Gittelsohn – Bloomberg
Zillow Inc. (Z)’s purchase of Trulia Inc. makes the online company such a force in U.S. real estate that its market value now surpasses that of Realogy Corp., owner of renowned brokerage brands from Coldwell Banker to Century 21. Zillow, the biggest U.S. real estate website, has seen its market value jump to about $5.83 billion from $4.99 billion on July 23, the day before Bloomberg News reported the deal talks with rival Trulia. Realogy, the largest residential brokerage operator, has a market value of about $5.47 billion, compared with $5.67 billion last week, data compiled by Bloomberg show. The shift underscores the growing role of the Web in U.S. home sales as buyers start their hunt for homes and mortgages online and rely less on real estate agents, a migration that has taken longer than in industries such as music or travel. While Zillow is unlikely to compete directly with brokers, whose ad dollars are its top revenue source, buying Trulia (TRLA) gives it more command over marketing fees, sparking concerns among Realtors such as Stephen FitzMaurice that costs will rise. Mr. Gopal may be contacted at pgopal2@bloomberg.net; Mr. Gittelsohn may be contacted at johngitt@bloomberg.net Read the court decision
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Reprinted courtesy of Prashant Gopal and John Gittelsohn, Bloomberg

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Business Risk Exclusions (j) 5 and (j) 6 Found Ambiguous

April 22, 2019 — Tred R. Eyerly - Insurance Law Hawaii
Reversing the district court's grant of summary judgment in favor of the insurer, the Tenth Circuit found that exclusions (j) 5 and (j) 6 were ambiguous as applied to the facts of the case. MTI, Inc. v. Emplrs. Ins. Co., 2019 U.S. App. LEXIS 2543 (10th Cir. Jan. 25, 2019). Western Farmers Electrical Cooperative (WFEC) owned cooling towers which were serviced by MTI, Inc. Wausau provided a CGL policy to MTI. In 2011, MTI found that anchor bolts in Cooling Tower 1 were corroded. WFEC hired MTI to make repairs by installing new anchor castings with anchor bolts and anchor adhesive. On May 23, 2011, MTI employees removed all of the corroded anchor bolts in Tower 1. Because the adhesive applicator had not yet arrived, MTI did not immediately install new anchor bolts. On the night of May 24, strong winds struck the tower, causing it to lean and several structural components broke. Due to the extent of the structural damage, removal and replacement of the tower was determined to be the only viable option. 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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