Product Manufacturers Beware: You May Be Subject to Jurisdiction in Massachusetts
July 05, 2023 —
Timothy Keough & Audrey Schoenike - White and Williams LLPSay you are a Floridian product manufacturer that does business in Massachusetts and you receive a Complaint filed in Massachusetts that alleges your product injured a Nova Scotian resident in Nova Scotia. You know that the only time that product was in Massachusetts was during its transport up the eastern seaboard to its final destination at a retailer in Nova Scotia. Can you be hailed into a Massachusetts court for this accident? The answer is seemingly not so simple following the Supreme Judicial Court’s holding in Doucet v. FCA US LLC.
On June 8th, the Massachusetts Supreme Judicial Court, in Doucet v. FCA US LLC, held that FCA US LLC is subject to jurisdiction in Massachusetts for a personal injury action arising out of a motor vehicle accident that occurred in New Hampshire.
No. SJC-13354, slip. op. (Mass. June 8, 2023). The vehicle had been purchased in New Hampshire by a New Hampshire resident. The Court explained that federal due process does not require a causal connection between a company’s business dealings with the jurisdiction and the injury; instead, a mere relationship between the business dealings and the injury will suffice to establish jurisdiction. Because the vehicle at issue was first sold in Massachusetts and FCA US LLC had extensive business dealings unrelated to the vehicle in question in Massachusetts, the Court concluded that a strong enough relationship existed between FCA US LLC, Massachusetts, and the litigation for jurisdiction to exist.
Reprinted courtesy of
Timothy Keough, White and Williams LLP and
Audrey Schoenike, White and Williams LLP
Mr. Keough may be contacted at keought@whiteandwilliams.com
Ms. Schoenike may be contacted at schoenikea@whiteandwilliams.com
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Value In Being Deemed “Statutory Employer” Under Workers Compensation Law
November 21, 2022 —
David Adelstein - Florida Construction Legal UpdatesWhen it comes to workers compensation law, as a contractor, there are a couple of important considerations. One, you will be deemed a statutory employer. And two, you want your subcontractors (and, of course, yourself) to have workers compensation insurance so that you can enjoy the protection of workers compensation immunity. Workers compensation immunity provides immunity to an employer (i.e., a statutory employer) by workers compensation insurance becoming the exclusive form of liability.
A recent non-construction case, Bar-Harbour Tower Condominium Association, Inc. v. Bellorin, 47 Fla.L.Weekly D2114a (Fla. 3d DCA 2022), illustrates the importance of these considerations. Here, a condominium association per its governing documents (i.e., declaration of condominium) was authorized to contract for valet parking services for its unit owners. An employee of the valet company (hired by the association) got hurt and sued the association. The association argued it should be deemed a statutory employer under workers compensation law and, as such, entitled to workers compensation immunity. The trial court disagreed, and the association appealed. The Third District Court of Appeal held the association was the statutory employer and, thus, workers compensation immunity did apply.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Turkey Digs Out From a Catastrophe
April 18, 2023 —
Pam McFarland - Engineering News-RecordIn what’s left of Antakya, a once-thriving and cosmopolitan tourist destination in the southeastern edge of Turkey, the streets seem weirdly quiet. Buildings stand askew at odd angles or are completely toppled, and the rubble from the homes of people who lived inside of them is neatly collected into piles and mounds.
Reprinted courtesy of
Pam McFarland, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com
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Construction Defect Claim not Barred by Prior Arbitration
October 28, 2015 —
Beverley BevenFlorez-CDJ STAFFAccording to Stan Martin of Commonsense Construction Law LLC, the Appellate Court of Connecticut ruled in favor of the owner of a twenty-two building development in a construction defect suit despite the contractor’s objection “that the lawsuit was barred by doctrines of res judicata or collateral estoppel.”
When issues of “construction and alleged defects” arose in 1996, the “contractor eventually filed for arbitration, seeking the contract balance.” The contractor was awarded $82,812.81. During the arbitration, “no claims for defective construction were advanced.”
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New York’s Second Department Holds That Carrier Must Pay Judgment Obtained by Plaintiff as Carrier Did Not Meet Burden to Prove Willful Non-Cooperation
November 23, 2020 —
Craig Rokuson - Traub LiebermanIn the recent case of DeLuca v. RLI Insurance Company, 2020 WL 5931054 (October 7, 2020), the Supreme Court, Appellate Division, Second Department held that RLI had a duty to pay a judgment obtained by an underlying plaintiff against RLI’s insured, MLSC. The underlying plaintiff brought the action directly against the carrier after obtaining a judgment against MLSC, and when the judgment remained unsatisfied, serving RLI with the judgment. As an initial matter, the court found that the direct action by the plaintiff was proper under New York Insurance Law 3420(a), which allows for an injured plaintiff to maintain a direct action against a carrier if a judgment against that carrier’s insured remains unsatisfied for a period of 30 days and the carrier is served with that judgment. In that event, the plaintiff steps into the shoes of the insured and is entitled to the rights of the insured (and is also subject to the carrier’s coverage defenses).
Reprinted courtesy of
Craig Rokuson, Traub Lieberman
Mr. Rokuson may be contacted at crokuson@tlsslaw.com
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Legal Fallout Begins Over Delayed Edmonton Bridges
June 22, 2016 —
Scott Van Voorhis - Engineering News-RecordThe project teams for Edmonton’s two problem bridge-replacement projects have put most of their woes behind them—if trips to civil court and possible late-completion penalties are excluded.
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Scott Van Voorhis, Engineering News-RecordENR may be contacted with questions or comments at
ENR.com@bnpmedia.com
Are COVID-19 Claims Covered by Builders Risk Insurance Policies?
May 04, 2020 —
Jason M. Adams, Gibbs Giden Locher Turner Senet & Wittbrodt LLP and Cheryl L. Kozdrey, Saxe Doernberger & Vita, P.C.If you are an attorney, insurance broker, or other professional representing developers and contractors, then your clients have likely reached out with concerns about losses related to COVID-19. One common question is whether there is potential coverage under builders risk insurance policies.
The short answer is: It depends. As with most questions pertaining to insurance coverage, the answers depend on the specific policy language and underlying facts required to trigger coverage. Builders risk policies are even more fact specific due to the lack of uniformity of base policy forms and endorsements between insurance carriers.
The first step in any analysis is to gather facts and carefully document any impending and potential damages or delays. The facts are crucial because the coverage analysis may vary depending on the specific reason the project was shut down. For example, the analysis would be different if the project was shut down as a result of an express government order, such as those in Northern California and Washington, versus the project shutting down as a result of workers testing positive for COVID-19. Properly analyzing builders risk coverage involves a granular account of the facts and damages, and can require a great deal of hair splitting with respect to specific policy language.
Regardless of the strength of the insured’s facts and damages, or the breadth of its policy language, the policyholder still likely faces an uphill battle in finding coverage for COVID-19 related claims. The unfortunate reality of most builders risk policies is that they are property policies that require some evidence of physical loss or damage to trigger coverage. Whether or not COVID-19 claims constitute property damage will be the subject of great debate and litigation over the coming months and years. The outcome will likely depend on how the insured’s jurisdiction ultimately rules on the litany of COVID-19 cases that have already been filed – specifically, how broadly each court interprets the meaning of “physical loss or damage.”
Although these key issues have yet to be clearly defined by the courts, some policies are better than others and there are specific variables that could affect the likelihood of coverage. For example, some of the more policyholder-friendly insurance programs may contain coverage extensions for delay in completion, business interruption, loss of rental income, or civil authority that may not be tied to the property damage requirement, and which would tend to support coverage for COVID-19 claims.
Even if the insured crosses the initial threshold and can demonstrate a covered claim, the following common endorsements and exclusions may require additional analysis depending on the facts.
- Virus or Pandemic Exclusions: Virus or pandemic exclusions are not as common on builders risk policies as they may be on other forms of coverage. However, they do exist and, if present, result in a significant barrier to coverage. As with the policy itself, every endorsement is different and should be analyzed in terms of the express language contained in the endorsement and the facts.
- Abandonment or Cessation of Work: Most builders risk policies include provisions that preclude coverage in the event of the abandonment of the project or a lengthy cessation of work. As a result, the insured should take steps to articulate to the carrier that the project has not been abandoned, and that there exists an intent to return as soon as possible. The insured should also maintain a record of ongoing project oversight and protection efforts taken during the period when construction operations are suspended.
- Security and Safety Requirements: Many builders risk policies contain provisions requiring the insured to maintain protective safeguards and security protocols throughout the pendency of the project. Safety fencing, lighting and security guards are common examples. The policy should be analyzed to ensure that the policyholder can meet any such requirements during a COVID-19 related shutdown. For example, can the insured continue to staff a security guard? If not, arrangements will likely need to be made with the carrier depending on the language of the policy.
- Insurable Limits: Builders risk policies are typically underwritten based upon the total completed value of the structure, including materials and labor. The insured will need to analyze the policy to consider whether increased material or labor costs as a result of COVID-19 will alter the terms of coverage, trigger any escalation clauses, or result in an increase in premium due. If increased cost projections become apparent, the insured should report these changes to the carrier immediately.
- Extensions of Coverage: The insurance industry was facing a hard market even before the COVID-19 pandemic, which resulted in higher premiums and limited coverage options. The COVID-19 pandemic has only exacerbated these issues and it may be difficult to obtain coverage extensions on projects that have been shut down. The insured should work with its risk management team (risk manager, insurance broker and lawyer) to engage the carriers to negotiate any necessary coverage extensions resulting from COVID-19 related project delays.
To summarize, builders risk coverage for COVID-19 claims is far from certain, but not impossible. Insureds should provide notice of a claim to all potentially applicable carriers in order to preserve their rights. The insured should also report increased construction cost and articulate its intent to return to the project to preserve their escalation clause and avoid arguments that they have abandoned the project. The insured should continue to document its claims and damages, and be ready to substantiate its claims and push back on any coverage denial. Throughout the entirety of this process, the insured should work with its risk management team to get out in front of any extensions it may need to complete the project. In a climate where insurance carriers are receiving an insurmountable number of claims, the insured should be prepared to fight for coverage and not simply throw up its hands in the face of a denial. Given the intense social, legislative and executive pressure to cover COVID-19 claims, there may be a tendency for the courts to find coverage in gray areas, particularly if the insured was fortunate enough to have purchased one of the broader coverage forms referenced above.
About the Authors
Jason M. Adams, Esq. (jadams@gibbsgiden.com) is a partner at Gibbs Giden representing construction professionals in the areas of Construction Law, Insurance Law and Risk Management and Business/Civil Litigation. Adams is also a licensed property and casualty insurance broker and certified Construction Risk & Insurance Specialist (CRIS). Jason represents developers, contractors, public entities, investors, lenders, REITs, design professionals, and other construction professionals at all stages of the construction process. Jason is a published author and sought-after speaker at seminars across the country regarding high level construction risk management and insurance topics. 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.
Cheryl L. Kozdrey, Esq. (clk@sdvlaw.com) is an associate at Saxe Doernberger & Vita, P.C., a national insurance coverage law firm dedicated exclusively to policyholder representation and advocacy. Cheryl advises insurance brokers, risk managers, and construction industry professionals regarding optimal risk transfer strategies and insurance solutions, including key considerations for Builder’s Risk, Commercial General Liability, D&O, and Commercial Property policies. She assists clients with initial policy reviews, as well as renewals and modification(s) of existing policies to ensure coverage needs are satisfied. Cheryl also represents policyholders throughout the claims process, and in coverage dispute litigation against insurance carriers. She is currently working on some of the largest construction defect cases in the country. Cheryl is a published author and is admitted to practice in the State of California and all federal district courts within the State.
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Third Circuit Holds That Duty to Indemnify "Follows" Duty to Defend
December 27, 2021 —
Jeffrey J. Vita - Saxe Doernberger & Vita, P.C.In a win for policyholders, the Third Circuit Court of Appeals recently affirmed a District Court’s 2018 ruling, which held that the duty to indemnify follows the duty to defend where a settlement precludes a determination on the facts of the case relative to liability and apportionment.
In Liberty Mutual Insurance Co. v. Penn National Mutual Casualty Insurance Co.,1 a large concrete panel collapsed and killed a construction worker at a construction site in New Kensington, Pennsylvania. Cost Company (“Cost”), Liberty Mutual’s insured, was a masonry subcontractor on the project and had further subcontracted with Pittsburgh Flexicore Co. (“Flexicore”), Penn National’s insured, for the concrete panels. Cost’s subcontract agreement required Flexicore to name Cost as an additional insured under its general liability policy issued by Penn National.
When the construction worker’s widow filed a wrongful death lawsuit against Cost and Flexicore, Cost demanded that Penn National defend and indemnify it as an additional insured under the policy. Penn National refused, arguing that any additional insured status had terminated at the conclusion of Flexicore’s work for Cost. As a result, Liberty Mutual defended Cost in the lawsuit, which was ultimately settled.
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Jeffrey J. Vita, Saxe Doernberger & Vita, P.C.Mr. Vita may be contacted at
JVita@sdvlaw.com
