Insurer's Motion to Dismiss "Redundant Claims" Denied
June 21, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe insurer's motion to dismiss was more appropriate for an eventual summary judgment motion and was consequently denied. Sivan Lam v. Scottsdale Ins. Co., 2024 U.S. Dist. LEXIS 81262 (M.D. Fla. April 12, 2024).
Lam suffered a loss to her home due to Hurricane Ian. When only a portion of the claim was paid, Lam sued his insurer, Scottsdale, for breach of contract (Count I) and declaratory relief (Count II).
Scottsdale argued that Lam's request for declaratory relief was redundant of her breach of contract claim. The court noted that Rule 12 (b)(6), Fed. R. Civil P., was a vehicle to challenge a claim's sufficiency. Redundancy was not insufficiency, and it was not a ground for dismissal under Rule 12 (b)(6).
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Hawaii Supreme Court Says Aloha to Insurers Trying to Recoup Defense Costs From Policyholders
January 02, 2024 —
Lara Degenhart Cassidy & Yosef Itkin - Hunton Insurance Recovery BlogThe Hawaii Supreme Court emphatically rejected insurer efforts to seek reimbursement of defense costs absent a provision in the policy providing for such reimbursement in St. Paul Fire & Marine Insurance Company v. Bodell Construction Company, No. SCCQ-22-0000658, 2023 WL 7517083, (Haw. Nov. 14, 2023). The state high court’s well-reasoned decision rests on bedrock law regarding insurance policy construction and application, follows the nationwide trend of courts compelling insurers to satisfy their contractual obligations in full, and should carry great weight as other jurisdictions continue to debate the same issue.
In Bodell, the Hawaii Supreme Court joined the swelling ranks of courts recognizing that an insurer may not use a reservation of rights to create the extra-contractual “right” to recoup already paid defense costs for a claim on which the insurer ultimately owes no coverage. See, e.g., Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526 (Pa. 2010). Other jurisdictions, such as California, will permit an insurer to seek reimbursement from a policyholder for defense costs incurred in defending claims later determined to be uncovered. See Buss v. Superior Court, 16 Cal.4th 35 (1997) (holding insurers have a right to reimbursement of defense costs incurred for noncovered claims).
Reprinted courtesy of
Lara Degenhart Cassidy, Hunton Andrews Kurth and
Yosef Itkin, Hunton Andrews Kurth
Ms. Cassidy may be contacted at lcassidy@HuntonAK.com
Mr. Itkin may be contacted at yitkin@HuntonAK.com
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Landmark Contractor Licensing Case Limits Disgorgement Remedy in California
November 09, 2020 —
Candace Matson - Construction & Infrastructure Law BlogContractors performing work in California are required to be licensed by the California State License Board (“CSLB”). Cal. Bus. & Prof. Code §7065. Except for sole proprietors, contractors are typically licensed through “qualifiers,” i.e., officers or employees who take a licensing exam and meet other requirements to become licensed on behalf of the contractor’s company. Contractors who perform work in California without being properly licensed are subject to a world of hurt, including civil and criminal penalties (see, e.g., Cal. Bus. & Prof. Code §§ 7028, 7028.6, 7028.7, 7117, and Cal. Labor Code §§ 1020-1022), and the inability to maintain a lawsuit to recover compensation for their work. Cal. Bus & Prof. Code § 7031(a); Hydra Tech Systems Ltd. v. Oasis Water Park, 52 Cal.3rd 988 (1991).
But arguably the worst ramification of not being property licensed is that established in Business & Professions Code Section 7031(b), which provides that any person who uses the services of an unlicensed contractor may bring an action for the return of all compensation paid for the performance of the work, commonly known as “disgorgement.” This remedy is particularly harsh (often described as “draconian”) because it makes no allowance for the fact that an unlicensed contractor will likely have already paid out the bulk of its compensation to its subcontractors, suppliers and vendors, but nevertheless can be ordered to disgorge all compensation.
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Candace Matson, Sheppard MullinMs. Matson may be contacted at
cmatson@sheppardmullin.com
Traub Lieberman Partners Lisa Rolle, Erin O’Dea, and Nicole Verzillo Win Motion for Summary Judgment in Favor of Property Owner
September 30, 2024 —
Lisa M. Rolle, Erin O’Dea, Nicole Verzillo - Traub LiebermanTraub Lieberman Partners Lisa Rolle, Erin O’Dea, and Nicole Verzillo won motion for summary judgment in a premises liability matter brought before the Supreme Court of the State of New York, Westchester County. The Plaintiff allegedly tripped and fell in a pothole on the common driveway of five abutting properties and sustained an injury. The firm represented one of the multiple property owners. Traub Lieberman moved for summary judgment, asserting that the claims against the firm’s client should be dismissed as they did not own, operate, control or make special use of the driveway where the incident occurred. The firm also asserted that the alleged condition of the driveway that allegedly caused Plaintiff’s accident was a non-actionable, trivial defect. The firm also moved to dismiss the cross-claims asserted against them, contending that there was no evidence of negligence on behalf of the firm’s client. As such, the court found that the defect was a non-actionable, trivial defect. The firm secured dismissal of Plaintiff’s claims against the firm’s clients and against all moving and non-moving Defendants.
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Lisa M. Rolle, Traub Lieberman,
Erin O’Dea, Traub Lieberman and
Nicole Verzillo, Traub Lieberman
Ms. Rolle may be contacted at lrolle@tlsslaw.com
Ms. O'Dea may be contacted at eodea@tlsslaw.com
Ms. Verzillo may be contacted at nverzillo@tlsslaw.com
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Courthouse Reporter Series: Louisiana Supreme Court Holds Architect Has No Duty to Safeguard Third Parties Against Injury, Regardless of Knowledge of Dangerous Conditions on the Project
July 31, 2024 —
Stu Richeson - The Dispute ResolverIn Bonilla v. Verges Rome Architects, 2023-00928 (La. 3/22/24); 382 So.3d 62, the Louisiana Supreme Court held because the terms of the agreement between the architect and the public owner did not give the architect responsibility for the means and methods of construction or for safety on the project, the architect did not have a duty to safeguard third parties against injury, regardless of whether the architect may have had knowledge of dangerous conditions on the project.
In Bonilla, the City of New Orleans entered into a contract for the renovation of a building owned by the city. The city also entered into an agreement with Verges Rome Architects (“VRA”) to serve as the project architect. The general contractor on the project subcontracted the demolition work to Meza Services, Inc. (“Meza”).
An employee of Meza was injured while attempting to demolish a “vault” on the project. The vault was a ten-foot by ten-foot cinderblock room with a nine-foot-high concrete slab ceiling located on the second floor of the building. The walls of the vault had been partially demolished when one of the employees of Meza was directed by his supervisor to stand on the ceiling of the vault with a jackhammer to continue the demolition. Shortly after beginning the task, the vault structure collapsed and caused the employee to suffer significant injury.
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Stu Richeson, PhelpsMr. Richeson may be contacted at
stuart.richeson@phelps.com
The Fifth Circuit, Applying Texas Law, Strikes Down Auto Exclusion
July 11, 2022 —
Jeremy S. Macklin - Traub Lieberman Insurance Law BlogPenn-America Ins. Co. v. Tarango Trucking, LLC, 30 F.4th 440 (5th Cir. 2022), involved a coverage dispute over Penn-America Insurance Company’s (“Penn-America”) duty to defend and indemnify third-party claims against Tarango Trucking, LLC (“Tarango”) for a fatal accident on its property. At the time of the accident, Penn-America insured Tarango under a commercial general liability policy, which included an “Auto Exclusion” and “Parking Exception” provision. The Auto Exclusion stated the policy did not apply to bodily injury or property damage arising out of the use of any automobile, including the operation and loading or unloading. The Parking Exception stated the Auto Exclusion did not apply to parking an auto on Tarango’s premises. The main issues on appeal were whether the Parking Exception restored coverage otherwise precluded by the Auto Exclusion, and whether the district court prematurely decided Penn-America’s duty to indemnify. The appellate court answered yes to both.
On March 2, 2020, a truck driver employed by WS Excavation, LLC (“WS”), parked his tractor-trailer on Tarango’s property and proceeded to inspect and off-load heavy equipment. While operating the hydraulic lift, the tractor’s braking system disengaged. The tractor rolled back and struck the WS driver and his personal vehicle, resulting in his death and significant property damage. Notably, WS allegedly failed to properly maintain the tractor’s electronic and braking systems, and Tarango allegedly failed to maintain a level parking and loading facility compliant with industry standards and guidelines.
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Jeremy S. Macklin, Traub LiebermanMr. Macklin may be contacted at
jmacklin@tlsslaw.com
District Court of Missouri Limits Whining About the Scope of Waiver of Subrogation Clauses in Wine Storage Agreements
May 01, 2019 —
Gus Sara - The Subrogation StrategistIn Netherlands Ins. Co. v. Cellar Advisors, LLC, 2019 U.S. Dist. Lexis 10655 (E.D. Mo.), the United States District Court for the Eastern District of Missouri considered the scope of a waiver of subrogation clause in two wine storage agreements. The court held that the subrogation waivers were limited in scope and, potentially, did not apply to the damages alleged in the pleadings. This case establishes that, in Missouri, waivers of subrogation are narrowly construed and cannot be enforced beyond the scope of the specific context in which they appear.
In 2005, Krista and Reid Buerger (the Buergers) contracted Marc Lazar (Lazar) to assist with purchasing, transporting and storing their wine. In 2006, the Buergers entered into a contract with Lazar’s company, Domaine StL, for the storage of their wine in St. Louis. In 2012, the Buergers contracted with Lazar’s other company, Domaine NY, for storage of their wine in New Jersey. The 2006 and 2012 contracts included subrogation waivers. Pursuant to the contracts, Lazar and the Domaine companies (collectively, Defendants) would buy wine for the Buergers by either using the Buergers’ credit card or invoicing them after a purchase.
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Gus Sara, White and Williams LLPMr. Sara may be contacted at
sarag@whiteandwilliams.com
Denver Court Rules that Condo Owners Must Follow Arbitration Agreement
November 07, 2012 —
CDJ STAFFPrior to initiating a construction defect lawsuit, the Glass House Residential Association voted to invalidate the arbitration agreement that had been written into its declaration and bylaws by the developer and general contractor. After the association started their construction defect claims, the developer and general contractor argued that the case must go to arbitration, as the arbitration clause contained a provision that it could not be altered without the agreement of the developer and general contractor.
The Denver District Court has ruled against that association, determining that the res triction was not in violation of Colorado condominium law. And, as a post from Polsinelli Shughart PC on JDSupra notes, the Colorado Common Interest Ownership Act encourages the use of arbitration procedures to settle disputes. The CCIOA does prohibit “certain restrictions on the homeowners association’s ability to amend the condominium declarations,” however, preserving an arbitration agreement is not one of them.
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