Court Agrees to Stay Coverage Matter While Underlying State Action is Pending
October 29, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe federal district court granted the insured's motion to stay the coverage action while the construction defect case was pending in state court. Auto Owners Ins. Co. v. Essex Homes Southeast, Inc., 2014 U.S. Dist. LEXIS 133120 (D. S.C., Sept. 23, 2014).
The homeowners sued Essex Homes in state court for construction defects in a home built and sold to them by Essex Homes. The suit sought damages for property damage based on negligence, breach of implied warranty, and breach of express warranties arising out of the alleged construction defects. The complaint alleged that a water leak in the house caused water damage and resulted in mold growth that was not discovered for several years.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Awarding Insurer Summary Judgment Before Discovery Completed Reversed
August 29, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Florida Court of Appeal reversed the trial court's awarding of summary judgment to the insurer because discovery was not completed. Sacramento v. Citizens Prop. Ins. Corp., 2022 Fla. App. LEXIS 4292 (Fla. Ct. App. June 22, 2022).
The insured filed a claim under the all-risk policy for water damage caused by Hurricane Irma. Citizens denied the claim based upon a policy exclusion. The insured filed suit on March 8, 2019.
On April 24, 2020, Citizens moved for summary judgment. A hearing was set for August 10, 2020. Citizens filed a notice for a deposition of a Mitigation Company representative scheduled to occur on December 1, 2020. On August 14, 2020, the insured filed an opposition to the summary judgment motion arguing that it would be premature to grant the motion because there were still pending depositions. The insured specifically requested that the trial court not enter summary judgment until the mitigation company's representative was deposed because he was a key witness who would be testifying regarding the cause of loss.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Illusory Insurance Coverage: Real or Unreal?
August 24, 2017 —
David Adelstein - Florida Construction Legal UpdatesIn insurance coverage declaratory relief actions, there are times an insured will argue that the insurance policy coverage is illusory. Typically, an insured will raise this illusory argument if its insurer is denying coverage based on an exclusion or limitation in the policy. If a court agrees and deems the coverage illusory, the court will construe the policy to afford coverage to the insured. This is the obvious value of the argument: coverage!
“A policy is illusory only if there is an internal contradiction that completely negates the coverage it expresses to provide.” The Warwick Corp. v. Turetsky, 42 Fla.L.Weekly D1797a (Fla. 4th DCA 2017). Thus, if a policy grants coverage in one section but then excludes the same coverage in another section, the coverage would be deemed illusory. Id. quoting Tire Kingdom, Inc. v. First S. Ins. Co., 573 So.2d 885, 887 (Fla. 3d DCA 1990). An illusory policy was found in the following examples: (a) a policy covered certain intentional torts but then excluded intended acts; (b) a policy covered advertising injury but elsewhere excluded advertising injury; and (c) a policy covered parasailing but excluded watercrafts. Id. (citations omitted). In all examples, coverage in the policy was completely swallowed up by an exclusion rendering the coverage illusory. Stated differently, coverage was completely contradicted by an exclusion in the policy rendering the policy absurd.
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David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
Dadelstein@gmail.com
Insured's Failure to Challenge Trial Court's Application of Exclusion Makes Appeal Futile
November 15, 2022 —
Tred R. Eyerly - Insurance Law HawaiiThe Texas Court of Appeals affirmed the trial court's granting of summary judgment to the insurer because the appeal failed to challenge the exclusion under which the insurer found no coverage. Sosa v. Auto Club Indemn. Co., 2022 Tex. App. LEXIS 6520 (Tex. Ct. App. Aug. 30, 2022).
Sosa's house was damaged during Hurricane Harry on August 26, 2017. Sosa filed a claim with Auto Club. She reported that two feet of floodwater had entered her home, her roof was missing shingles and was leaking, and she had sustained interior damage. An adjuster estimated the cost to prepare the roof damage was $1,191.96, less that her deductible. Auto Club determined that any remaining damage was caused by flood water, which was expressly excluded from coverage.
On November 11, 2020, Sosa filed suit against Auto Club for breach of the policy. Among other things, she argued the adjuster spent minimal time at her home inspecting and was inexperienced. In its answer, Auto Club asserted Sosa's claim was time-barred by the statute of limitations. Sosa then filed an amended complaint and changed the date of the loss from August 26, 2017, to June 28, 2019.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
The Evolution of Construction Defect Trends at West Coast Casualty Seminar
May 24, 2018 —
Don MacGregor – Bert L. Howe & Associates, Inc.Twenty-five years ago. 1993. On January 23rd, Bill Clinton was sworn in as the 42nd President of the United States. The average cost of a gallon of gasoline was $1.16, a movie ticket cost $4.00, and the average cost of a new home was $113,200.00.
1993 also marked the first of what would be a quarter century of annual seminars hosted by West Coast Casualty Service, and provided to the combined professionals within the Construction Defect Community. As the seminar has grown both in attendance and prominence within this community under the watchful stewardship of David and Coral Stern, much has changed both with regard to the content of the seminar and the climate within which it was presented. A quick look at the topics addressed over the past 25 years of the Construction Defect Seminar provides one with a veritable history of construction defect litigation and insurance coverage trends across the United States and beyond.
While the first seminar was hosted in 1993, my first attendance didn’t occur until 1999, and the first time I was honored to be a panelist would have to wait until 2007. In the subsequent years, I’ve had the opportunity to sit on panels an additional three times, and each one I gained rare and valuable insights into the Construction Defect Community, its willingness to challenge itself, and the amazing professionals we all have the distinct pleasure of working with every day (and whom we sometimes take too much for granted).
In the mid to late 90’s, topics at the seminar included such subjects as the Montrose Chemical Corp v. Superior Court decision (Montrose) regarding a carrier’s duty to defend and the subsequent Stonewall Insurance case that examined the duty to indemnify in the context of construction defect claims. The California Calderon Act of 1997, laying out the roadmap for HOA’s filing construction defect lawsuits was also a topic of discussion and debate within the West Coast “arena.”
The new millennium saw the landmark Aas v. William Lyon decision, which disallowed negligence claims for construction defects in the absence of actual resultant damage. This was followed by Presley Homes v. American States Insurance wherein the court ruled that a duty to defend applies where there is mere potential for coverage and the duty to defend applies to the entire action. Each of these bellwether decisions was addressed contemporaneously by panels at the West Coast seminar, contemporaneously bringing additional dialog to the CD community, from within the community.
2002 brought what has become the defining legislation in California regarding construction defect litigation and a builder’s right to repair. Senate Bill 800 (SB800), and its subsequent codification as Title 7, Part 2 of Division 2 of the California Civil Code, Sections 895 through 945.5 would become the defining framework for similar legislation across the United States. During the course of its drafting, movement through the legislature, and final adoption in January of 1993, many of the questions raised and debated in committees in Sacramento, had already been and were continuing to be addressed by panelists at the West Coast Seminar. How does SB800 work with Calderon? How does it affect the prior Aas decision? What now constitutes a defect, and what are timeframes established within the complex pre-litigation process? Open the pages of the 2002 – 2004 Seminar invitations and you’ll see panels comprised of the finest members of the insurance law and coverage communities addressing those very questions (and more)!
As the first decade of the new century drew to a close, a brief review of the WCC invitations from that period suggests a trend towards programmatic analyses of key themes selected for the seminar. In 2008, my second opportunity as a guest speaker, topics included a review of the state of construction defect litigation in a post-SB 800 environment. Panelists offered retrospective insight into the state of right to repair statutes in multiple states, while others offered a glimpse at where the industry might be headed, as similar legislation was enacted across the country. As always, pertinent court decisions bearing on construction defect, both in California, and elsewhere were given unique perspective and additional clarity by multiple panels of gifted speakers. In 2009, claims and coverage were examined from multiple unique perspectives, including that of plaintiff, the policyholder, and the insurer. Wrap policies and the gaps in due to self-insured retention obligations were examined.
As we rapidly approach the end of the second decade of the 21st Century, West Coast Casualty’s Construction Defect Seminar continues to lead the Construction Defect Community as the premier source for information and peer dialog on all matters relating to construction law, coverage, and emerging trends. In 2017, the Seminar tackled such broad subjects as the role of women in the construction industry, claims management, and risk management, challenges raised by wrap versus non-wrap litigation, and the emergent trend of apartment to condo conversions (and the attendant coverage challenges).
On May 16th at the Disneyland Resort, in Anaheim California, America’s largest Construction Defect event kicked off its 25th Anniversary celebration. As has been every year since 1993, the Seminar provided insurance, legal, and industry professionals an exciting and informative array of salient and timely panel topics, as well as a stellar faculty of gifted panelists. This year’s West Coast Casualty’s Construction Defect Seminar, like the past 25 years, was not only informative and educational, but also a promise for another 25 years of peerless service to the Construction Defect Community.
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Newmeyer Dillion Named 2020 Best Law Firm in Multiple Practice Areas by U.S. News-Best Lawyers
November 24, 2019 —
Newmeyer DillionProminent business and real estate law firm Newmeyer Dillion is pleased to announce that U.S. News-Best Lawyers® has recognized the firm in its 2020 "Best Law Firms" rankings, with six of its practice areas earning the highest ranking possible - Tier 1 in the Orange County Metro area. The practices recognized include Commercial Litigation, Construction Law, Insurance Law, Litigation - Construction, Litigation - Real Estate and Real Estate Law.
Firms included in the 2020 "Best Law Firms" list have been recognized by their clients and peers for their professional excellence. Firms achieving a Tier 1 ranking have consistently demonstrated a unique combination of quality law practice and breadth of legal expertise.
“We are grateful that the firm’s clients and our peers again recognize our personalized approach to legal service. We strive to provide creative solutions that propel our clients’ businesses forward,” said Managing Partner Paul Tetzloff.
To be eligible for the “Best Law Firms” ranking, a firm must have at least one attorney recognized in the current edition of The Best Lawyers in America for a specific practice area. Best Lawyers recognizes the top 4 percent of practicing attorneys in the U.S., selected through exhaustive peer-review surveys in which leading lawyers confidentially evaluate their professional peers.
ABOUT NEWMEYER DILLION
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results for a wide array of clients. With over 70 attorneys practicing in all aspects of corporate, privacy & data security, employment, real estate, construction, insurance law and trial work, Newmeyer Dillion delivers legal services tailored to meet each client’s needs. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com
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Hawaii State Senate Requires CGL Carriers to Submit Premium Information To State Legislature
March 20, 2011 —
CDJ STAFFIn light of the decision in Hawaii’s Intermediate Court of Appeals in Group Builders, Inc.,v. Admiral Insurance Company, 231 P.3d 67(2010), Hawaii’s state senate is requesting that "every domestic and foreign insurance company that has ever issued commercial general liability policies in the State is requested to submit information to the Legislature on the total premiums received for their commercial general liability policies during the past ten years"
Read Full Text of Hawaii State Senate Resolution
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Contract Disruptions: Navigating Supply Constraints and Labor Shortages
January 24, 2022 —
Greg Ross & Tim Lynch - Construction ExecutiveThe biggest worries in today’s economy—supply chain disruptions, labor shortages and the worst inflation in decades—are creating big headaches in the construction industry. What’s worse, large projects underway are often based on contracts hammered out pre-pandemic, before the uncertainties and disruptions that spread around the globe with COVID-19. Construction firms find themselves executing on contracts signed when the potential for delayed timelines and rising costs seemed more remote.
A recent report from the U.S. Chamber of Commerce finds almost all contractors (93%) say they are experiencing a shortage of an important product such as steel, lumber or copper. A rising number of companies on commercial projects (54%) also cite difficulty finding skilled workers. Grant Thornton clients, among them some of the country’s biggest construction companies, report that sourcing materials and hiring workers is a bigger challenge today—and more expensive—than at any other time in recent decades.
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Greg Ross and Tim Lynch, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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