Tenth Circuit Finds Appraisal Can Decide Causation of Loss Under Colorado Law
November 29, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe Tenth Circuit determined that the Colorado Supreme Court would agree with other state courts that appraisers can decide the causation of a loss. Bonbeck Parker, LLC v. The Travelers Indem. Co. of Am., 2021 U.S. App. LEXIS 29607 (10th Cir. Oct. 1, 2021).
A hailstorm damaged three buildings owned by BonBeck. A claim was submitted to Travelers under BonBeck's commercial property policy. Travelers acknowledged that some hail damage occurred to all the buildings except for the roofs. Travelers paid $34,200 for damage to the buildings. Coverage for the roof damage was denied because it resulted not from the hail damage but from uncovered events like wear and tear, deterioration, and improperly installation.
BonBeck requested an appraisal. Travelers insisted that the appraisal would only determine the amount of loss of covered claims. BonBeck rejected these conditions and Travelers filed suit.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
What You Need to Know About Additional Insured Endorsements
August 30, 2017 —
Gary Barrera - California Construction Law BlogA well-drafted insurance clause is an integral part of a construction contract because it sets forth a subcontractor’s obligations to add the general contractor to its policies of insurance as an additional insured and identifies the manner by which the general contractor will qualify as an additional insured. In a typical construction contract, the general contractor will be an additional insured via a scheduled endorsement or a blanket endorsement.
Scheduled Endorsements
A scheduled endorsement contains a “schedule” in which the person or organization that is named in the schedule is added to the policy as an additional insured. The following scheduled endorsements are commonly used in construction contracts.
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Gary Barrera, Wendel Rosen Black & Dean LLPMr. Barrera may be contacted at
gbarrera@wendel.com
Sinking Buildings on the Rise?
July 01, 2019 —
Jason M. Adams - Gibbs GidenBy now everyone in the construction and insurance industries is familiar with the 58-story Millennium Tower building in San Francisco that has sunk 17 inches and tilted another 14 inches to the northwest. Another recent New York lawsuit alleges that a 58-story luxury Manhattan condo high-rise is also sinking and causing significant damage. With construction booming in the Southeast and other areas with questionable soils, sinking building cases may be on the rise. Given this reality, the issue of subsidence should be of paramount importance to every construction and insurance professional when insuring a project.
Most insurance carriers will include a subsidence and/or other earth movement exclusion on a commercial general liability ("CGL") quote for insurance as a matter of course. Construction professionals (owners/developers, general contractors, and subcontractors) or their brokers may be under the mistaken impression that they have no choice but to accept these subsidence exclusions as part of a standard construction policy. This is not the case. To the contrary, most insurance carriers are willing to remove subsidence exclusions if the underwriters are provided with acceptable geotechnical/soils reports when considering the project.
The insured construction professional often pushes back on the insurance carrier's request for soils reports because the insured sees the request as an unnecessary hassle, expense or unwelcome interference in the job. However, the carrier's soils review is designed to benefit everyone. If potential soils issues are discovered during the underwriting process they can be addressed at the outset of the project rather than after the project is built, which will typically cost substantially more to remedy. Moreover, a thorough analysis of the condition of the soils at the outset of the project allows the risk management team to recognize any potential issues and ensure that the proper coverage is obtained in order to provide protection down the road. Even if the insurance carrier charges more money to sign off on questionable soils after a review of the reports, the slight increase in premium is likely a worthwhile investment in the event of a subsidence loss.
The lesson is that the insured should not blindly accept a subsidence exclusion and should negotiate its removal. The insured should provide its broker and the insurance carrier the information they need in order to make a fully-informed decision as it pertains to the soils. Once the insurance carrier has had the opportunity to review and sign off on the condition of the soil, the carrier should feel comfortable enough to remove any subsidence exclusions or other similar earth movement limitations.
Subsidence is a relatively straightforward issue to deal with as long as the project team’s lawyers, brokers, risk managers and insurance company underwriters are working together toward the common goal of properly evaluating the risk and adequately insuring the project. This simple cooperative process between the entire risk management team could mean the difference between being covered or not covered in the event of a loss related to earth movement.
Jason M. Adams, Esq. is Senior Counsel at Gibbs Giden representing construction professionals (owners/developers, contractors, architects, etc.) in the areas of Construction Law, Insurance Law and Risk Management, Common Interest Community Law (HOA) and Civil Litigation. Adams is also a licensed property and casualty insurance broker and certified Construction Risk & Insurance Specialist (CRIS). Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms. Mr. Adams can be reached at jadams@gibbsgiden.com.
The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. The transmission of information by email, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. This publication may not be reproduced or used in whole or in part without written consent of the author. Copyright 2019 ©
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New Jersey Supreme Court Upholds $400 Million Award for Superstorm Sandy Damages
February 22, 2021 —
Kerianne E. Kane - Saxe Doernberger & Vita In New Jersey Transit Corp. v. Certain Underwriters at Lloyd’s London,1 New Jersey’s highest court upheld an appellate decision2 finding that New Jersey Transit Corporation (“NJT”) was entitled to full coverage under its property insurance policy for damages caused by Superstorm Sandy.
In July 2012, NJT secured a multi-layered “all risks” property insurance program from eleven insurers for the policy period of July 1, 2012, to July 1, 2013. The policies covered all perils and damage to NJT’s property unless specifically excluded. The primary layer, issued by Lexington Insurance Company, provided the first $50 million of coverage. The second layer provided coverage up to $100 million, the third layer provided an additional $175 million, and the fourth layer provided coverage of $125 million, for a total of $400 million in coverage.
The excess layer insurers included Certain Underwriters At Lloyd’s, London, Torus Specialty Insurance Company, and several other carriers. All participating insurers’ policies included a standard policy form and separate endorsements, some of which were included in all policies and some of which were unique to specific insurers.
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Kerianne E. Kane, Saxe Doernberger & VitaMs. Kane may be contacted at
kkane@sdvlaw.com
Application of Frye Test to Determine Admissibility of Expert
April 03, 2019 —
David Adelstein - Florida Construction Legal UpdatesFlorida went back to the Frye test/standard, instead of the Daubert test utilized in federal court, to determine the admissibility of expert testimony. The Frye test is more favorable to plaintiffs because it applies when an expert renders an opinion based on new or novel scientific principles. See D.R. Horton, Inc. v. Heron’s Landing Condominium Ass’n of Jacksonville, Inc., 44 Fla.L.Weekly D109b (Fla. 1st DCA 2018) (“The supreme court has described the Frye test as one in which the results of mechanical or scientific testing are not admissible unless the testing has developed or improved to the point where the experts in the field widely share the view that the results are scientifically reliable as accurate. Stated differently, under Frye, the proponent of the evidence has the burden of establishing by a preponderance of the evidence with the general acceptance of the underlying scientific principles and methodology. However, as stated, the Frye standard only applies when an expert attempts to render an opinion that is based upon new or novel scientific principles.”).
In D.R. Horton, Inc., a condominium association sued the developer and general contractor (same entity) for construction defects that included claims in negligence, violation of building code, and breach of statutory warranties. The developer/general contractor moved in limine / to strike the association’s experts under, at the time, a Daubert analysis, but which became a Frye analysis during the pendency of the appeal. The expert opined as to construction defects and damage and the appropriate repairs – really, no different than any construction defect dispute, from what it appeared. The trial court denied the motion and during trial the experts testified and a sizable damages judgment was entered against the developer/contractor prompting the appeal. One issue on appeal was the admissibility of the expert’s opinion. The appellate court noted that a Frye analysis is not necessary because the experts used a scientifically reliable and peer-reviewed methodology.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Cybersecurity on Your Project: Why Not Follow National Security Strategy?
August 28, 2018 —
Rick Erickson - Snell & Wilmer Real Estate Litigation BlogIn its recent Cybersecurity Strategy, the U.S. Department of Homeland Security (DHS) defined “cyberspace” as “the independent network of information technology infrastructure, including the Internet, telecommunications networks, computers, information and communications systems, and embedded processors and controllers.” To DHS, protecting cyberspace includes threats against “federal and nonfederal information systems.” In other words, both private and public interests are at risk. In his 2018 National Defense Strategy, U.S. Department of Defense Secretary, Jim Mattis, essentially concurred in declaring cyberspace a “warfighting domain” and promising to “invest in cyber defense, resilience, and the continued integration of cyber capabilities into the full spectrum of military operations.”
The construction industry is a key player in cybersecurity because contractors, designers and owners are responsible for building and delivering projects providing critical public services like national defense, health care, law enforcement, transportation, and utilities. Like any business reckoning with risks in cyberspace, moreover, everyone on a construction project has valuable data and confidentialities to protect. Cyber breaches on a project may also compromise electrical power, physical safety and, inevitably, a lot more than the critical path schedule and profit margins. Cybersecurity insurance is not very affordable or comprehensive, either, and it usually excludes any property damage or bodily injury resulting from a cyber event.
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Rick Erickson, Snell & WilmerMr. Erickson may be contacted at
rerickson@swlaw.com
Real Estate & Construction News Roundup (8/21/24) – REITs Show Their Strength, Energy Prices Increase Construction Costs and CRE Struggles to Keep Pace
October 01, 2024 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogIn our latest roundup, UBS to liquidate $2 billion real estate fund, hotel workers in San Francisco vote to strike, housing market to change after blockbuster settlement, and more!
- When it comes to buying and selling homes, new rules are about to be put in play, five months after the National Association of Realtors agreed to a settlement over how its 1.5 million agents across the U.S. are paid commissions. (Kate Gibson, CBS)
- Project abandonments tumbled in July in one of the largest monthly declines ever due to the anticipated interest rate cut. (Sebastian Obando, Construction Dive)
- Increases in energy prices drove most of the total rise in construction input costs over the past month. (Sebastian Obando, Construction Dive)
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Pillsbury's Construction & Real Estate Law Team
Watch Your Step – Playing Golf on an Outdoor Course Necessarily Encompasses Risk of Encountering Irregularities in the Ground Surface
May 08, 2023 —
Kaitlyn A. Jensen & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPOn April 27, 2023, the First District Court of Appeal issued an opinion in Walter Wellsfry, et al. v. Ocean Colony Partners, LLC (A165175, April 27, 2023) affirming summary judgment for a golf course owner on the grounds that the injured golfer’s lawsuit was barred by the primary assumption of risk doctrine. In doing so, the Court of Appeal found that outdoor golfers assume the risks associated with the topographical features of the course, including the risk of stepping on an inconspicuous tree root.
Recreational golfer Walter Wellsfry was walking from a tee box back to his golf cart when he allegedly stepped on a small tree root concealed by grass, causing him to fall into his golf cart in immediate pain. The ground consisted of mixed terrain, including a combination of grass, dirt, and sand. The tree root was estimated to be approximately 1.5 inches high by 1.5 inches wide. Believing he may have only sprained an ankle, Wellsfry continued the course and reported the incident to management. He later sued the golf course owner Ocean Colony Partners for negligence, claiming that the tree root was a “hidden obstruction” creating an unreasonable risk of harm to anyone who traversed the area.
Reprinted courtesy of
Kaitlyn A. Jensen, Haight Brown & Bonesteel LLP and
Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Mr. Jensen may be contacted at kjensen@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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