District Court's Ruling Affirmed in TCD v American Family Mutual Insurance Co.
May 10, 2012 —
CDJ STAFFIn the case, TCD, Inc. v American Family Mutual Insurance Company, the district court’s summary judgment was in favor of the defendant. In response, the Plaintiff, TCD, appealed “on the ground that the insurance company had no duty to defend TCD under a commercial general liability (CGL) insurance policy.” The appeals court affirmed the decision.
The appeals ruling provides a brief history of the case: “This case arises out of a construction project in Frisco, Colorado. The developer, Frisco Gateway Center, LLC (Gateway), entered into a contract with TCD, the general contractor, to construct a building. TCD entered into a subcontract with Petra Roofing and Remodeling Company (Petra) to install the roof on the building. The subcontract required Petra to "indemnify, hold harmless, and defend" TCD against claims arising out of or resulting from the performance of Petra’s work on the project. The subcontract also required Petra to name TCD as an additional insured on its CGL policy in connection with Petra’s work under the subcontract.”
Furthermore, “TCD initiated this case against Petra and the insurance company, asserting claims for declaratory judgment, breach of insurance contract, breach of contract, and negligence. The district court entered a default judgment against Petra, and both the remaining parties moved for summary judgment. The court granted summary judgment on the entirety of the action, in favor of the insurance company, concluding that the counterclaims asserted by Gateway against TCD did not give rise to an obligation to defend or indemnify under the CGL policy.”
The appeals court rejected each contention made by TCD in turn. First, “TCD contend[ed] that Gateway’s counterclaims constitute[d] an allegation of ‘property damage,’ which is covered under the CGL policy.” The appeals court disagreed. Next, “TCD argue[d] that [the court] should broaden or extend the complaint rule, also called the ‘four corners’ rule, and allow it to offer evidence outside of the counterclaims to determine the insurance company’s duty to defend in this case.” The appeals court was not persuaded by TCD’s argument.
The judgment was affirmed. Judge Roman and Judge Miller concur.
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Home Prices in 20 U.S. Cities Increase at Slower Pace
February 25, 2014 —
Victoria Stilwell – BloombergHome prices in the U.S. climbed at a slower pace in the year through December, pointing to a moderation in the market that will help keep more properties within reach for prospective buyers.
The S&P/Case-Shiller index of property values in 20 cities rose 13.4 percent from December 2012 after increasing 13.7 percent in the year ended in November, the group said today in New York. It was the first deceleration since June. The gain matched the median estimate of 33 economists surveyed by Bloomberg.
Price appreciation is slowing as rising mortgage rates combined with harsh winter weather to cool home purchases over the past few months. Smaller increases mean more homes will remain affordable as the labor market improves, helping maintain the rebound in residential real estate that has boosted growth.
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Victoria Stilwell, BloombergMs. Stilwell may be contacted at
vstilwell1@bloomberg.net
Too Late for The Blame Game: Massachusetts Court Holds That the Statute of Repose Barred a Product Manufacturer from Seeking Contribution from a Product Installer
March 21, 2022 —
Gus Sara - The Subrogation StrategistIn State Farm Fire & Cas. Co. v. Wangs Alliance Corp., No. 21-cv-10389-AK, 2022 U.S. Dist. LEXIS 26712, the United States District Court for the District of Massachusetts (District Court) considered whether a product manufacturer was barred by the Commonwealth’s six-year statute of repose for improvements to real property from joining the installer of the product as a third-party defendant. The court denied the defendant’s motion for leave to file a third-party complaint to join the installer, finding that the installer completed its work more than six years prior to the motion being filed. This case reminds us that Massachusetts’ six-year statute of repose for improvement to real property also bars a defendant’s contribution claims against third parties.
The Wangs Alliance case involves a subrogation action filed by State Farm Fire & Casualty Insurance (Insurer) against Wangs Alliance Corp. (Wangs), a manufacturer of rope lighting. Insurer insured the homeowners, who experienced a fire in their home in 2018. The home was originally built in 2002 by Wellen Construction (Wellen). As part of the original construction, Wellen installed rope lighting manufactured by Wangs in the house.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
SCOTUS Opens Up Federal Courts to Land Owners
July 15, 2019 —
Wally Zimolong - Supplemental ConditionsFor nearly 36 years, the United States Supreme Court’s decision in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985) severely frustrated, if not all but foreclosed, a property owner’s right to bring a claim in federal court based on a regulatory taking. Under the Fifth Amendment, a property owner whose land has been “taken” by the government is entitled to just compensation. There are two types of takings direct or “inverse” or regulatory takings. A direct taking is where the government declares that it needs your land for public use and offers to pay you compensation. You might disagree with the amount offered – and that often is the case. But, a mechanism exists whereby a neutral third party – a condemnation board – will arrive at the compensation that is owed. On the other hand, an inverse condemnation or regulatory taking occurs when the government takes some action that restricts the use of the land in such a way as to severely impact it beneficial economic use. For example, if you own a strip of commercial property and intend to develop it and then the municipality comes along and suddenly changes the zoning classification of the parcel such that you can no longer develop it in a beneficial way, then you might have a regulatory takings case.
Under the Court’s Williamson County decision, property owners falling within the later category were required to exhaust state remedies before proceeding to federal court under a claim that their Fifth Amendment rights were violated. The problem with this is that, as the Supreme Court explained, it creates a Catch-22. If property owners exhaust their state remedies and the state remedies result in an unfavorable outcome, the federal court is powerless to overturn that decision under the doctrines of res judicata and the full faith and credit clause of the Constitution.
Well, yesterday, the Court overturned Williamson County, in Knick v. Township of Scott, 588 U.S. _____ (2019). There the Court held unequivocally a “property owner has suffered a violation of his Fifth Amendment rights when the government takes his property without just compensation, and therefore may bring his claim in federal court under Section 1983 at that time.”
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Certifying Claim Under Contract Disputes Act
June 08, 2020 —
David Adelstein - Florida Construction Legal UpdatesUnder the Contract Disputes Act (41 USC 7101 en seq.), when a contractor submits a claim to the government in excess of $100,000, the claim MUST contain a certification of good faith, as follows:
For claims of more than $100,000 made by a contractor, the contractor shall certify that–
(A) the claim is made in good faith;
(B) the supporting data are accurate and complete to the best of the contractor’s knowledge and belief;
(C) the amount requested accurately reflects the contract adjustment for which the contractor believes the Federal Government is liable; and
(D) the certifier is authorized to certify the claim on behalf of the contractor.
41 U.S.C. 7103(b)(1). See also 48 C.F.R. s. 33.207(c) as to the wording of the certification.
The contracting officer is not required to render a final decision on the claim within 60 days if, during this time period, he/she notifies the contractor of the reasons why the certification is defective. 41 U.S.C. 7103(b)(3). Importantly, the contracting officer’s failure to render a decision within 60 days is deemed an appealable denial.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
'Right to Repair' and Fixing Equipment in a Digital Age
August 30, 2021 —
Jeff Rubenstone - Engineering News-RecordWhen a piece of equipment breaks down on site, rental agreements, subcontractor contracts and other arrangements generally make it clear who gets to open the hood and start tinkering. But heavy equipment made in the last two decades increasingly relies on digital components for many basic functions. Embedded computer systems oversee electronically controlled hydraulics and regulate engine behavior and emissions-control systems. The tools to access these firmware and software systems are not always easy to come by, and in some cases repairs can’t be done without working directly with a manufacturer-approved dealer or technician. Some repairs may require a digital handshake to take effect.
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Jeff Rubenstone, Engineering News-Record
Mr. Rubenstone may be contacted at rubenstonej@enr.com
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Should CGL Insurer have Duty to Defend Insured During Chapter 558 Notice of Construction Defects Process???
September 01, 2016 —
David Adelstein – Florida Construction Legal UpdatesDoes a CGL insurer have a duty to defend its insured-contractor during Florida Statutes Chapter 558 notice of construction defects pre-suit process? This answer is currently undecided and will be up to the Florida Supreme Court to decide. (It is on appeal stemming from a federal district court saying that an insurer does not have a duty to defend its insured-contractor in the 558 process based on the definition of the word “suit” in the CGL policy.)
Why is this an important issue?
The 558 pre-suit notice of construction defects process is designed to facilitate an avenue for construction defect lawsuits to get resolved without having to file a lawsuit or, at least, have issues narrowed before a lawsuit needs to be filed. (Check here for a summary of the 558 process.) It requires pre-suit notifications so that implicated parties can become aware of the defects and have an opportunity to inspect the defects / damage, test the defects / damage, and respond to the notice of construction defects; it provides an avenue for beneficial pre-suit discovery. Through participating in the 558 process, the contractor and/or design professional (and those downstream from them) can: (i) offer to remedy the defect, (ii) settle the defect, whether through money or a combination of money and repairs, (iii) dispute the defect, or (iv) advise that available insurance proceeds will be determined by its liability insurer. See Fla. Stat. s. 558.004.
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David M. Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Las Vegas HOA Conspiracy & Fraud Case Delayed Again
September 17, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the Las Vegas Review-Journal, “[T]he federal trial of former construction company boss Leon Benzer and five others in a massive scheme to take over Las Vegas-area homeowners associations” has been delayed to February 2015 by U.S. District Judge James Mahan.
Defense attorneys “argued they needed more time to review thousands of pages of new documents provided by prosecutors.” The prosecutors did not object to the delay.
Benzer and the other defendants face conspiracy and fraud charges in an HOA takeover scheme that allegedly occurred between 2003 and 2009.
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