Cambridge Massachusetts Building Expert Directory

Landlords Beware: Subordination Agreements

May 03, 2017 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog
In the recent Arizona Court of Appeals case Earle Investments, LLC v. Southern Desert Medical Center Partners, 762 Ariz. Adv. Rep. 12 (2017), the Court of Appeals addressed the question of the scope of a subordination agreement signed by the property owner (Lessor/Landlord) at the request of the Lessee/Tenant and Lessee/Tenant’s Lender. In general, by subordination, Party No. 1 with a higher/better lien priority agrees to allow Party No. 2 (usually a lender providing construction funds for the overall betterment of the property) to get a lien position in front of Party No. 1. Party No. 1 presumably believes the switch of lien position in return for someone else paying for the property improvements will benefit Party No. 1 in the long run by resulting in an increase in the value of Party No. 1’s position. Read the court decision
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Reprinted courtesy of Kevin J. Parker, Snell & Wilmer
Mr. Parker may be contacted at kparker@swlaw.com

The Texas Supreme Court Limits the Use of the Economic Loss Rule

September 03, 2014 — Beverley BevenFlorez-CDJ STAFF
According to David Fisk of Kane Russell Coleman & Logan PC, in an article published by JD Supra Business Advisor, “[T]he Texas Supreme Court issued a per curium opinion limiting the application of the economic loss doctrine or rule, as it is referred to in Texas, in the context of residential construction defect claims.” In Chapman Custom Homes, Inc. v Dallas Plumbing Co., the court “ruled that a plumbing subcontractor assumes an implied duty not to flood or otherwise damage a home while performing its contract with a builder” and that “the economic loss rule does not apply in this context.” Read the court decision
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Flood Coverage Denied Based on Failure to Submit Proof of Loss

November 26, 2014 — Tred R. Eyerly – Insurance Law Hawaii
The court granted summary judgment to the insurer because the insureds submitted only documentation of damage by flood, not proof of loss forms required by the policy. Alexander v. Allstate Ins. Co., 2014 U.S. Dist. LEXIS 143284 (E.D. La. Oct. 8, 2014). Hurricane Isaac caused flood damaged to the insureds' home. A claim was filed for flood damage under their Standard Flood Insurance Policy issued by Allstate. An independent adjuster estimated that building repairs would be $50,025. Allstate also prepared a contents loss estimate of $22,655 based on a personal property list submitted by the insureds. Proof of loss forms for these amounts were sent to the insureds and returned to Allstate. Consequently, these claims were paid. The insureds submitted a new proof of loss for additional lost contents, and another payment was made. Additional building damages were found. Again, the proof of loss was resubmitted and an additional payment was made by Allstate. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Insured's Commercial Property Policy Deemed Excess Over Unobtained Flood Policy

June 10, 2019 — Tred R. Eyerly - Insurance Law Hawaii
The court granted the insurer's motion for summary judgment, deciding that there was no breach of the policy for failure to pay for flood damage when the insured failed to obtain a policy under the National Flood Insurance Program (NFIP). 570 Smith St. Realty Corp. v. Seneca Ins. Co. Inc., 2019 N.Y. Misc. LEXIS 1773 (N.Y. Sup. Ct. April 4, 2019). The insured's property in Brooklyn was insured by Seneca. Included in the policy was flood coverage in the amount of $1 million with a $25,000 deductible. While the policy was in effect, Hurricane Sandy hit, damaging the property. Plaintiffs timely filed a claim seeking reimbursement of up to policy limits. Seneca paid only $35,883 and later made an additional payment of $33,015. The insured sued for, among other things, breach of the policy for failure to properly indemnify for the losses. Seneca moved for partial summary judgment dismissing the breach of policy claims. Seneca pointed out that the "Other Insurance" provision in the Flood Coverage Endorsement of the policy stated that if the loss was eligible to be covered under a NFIP policy, but there was no such policy in effect, the insurer would only pay for the amount of loss in excess of the maximum limit payable for flood damage under the policy. The maximum NFIP coverage was $500,000. The insured's loss caused by flood was less than $500,000. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

There is No Claims File Privilege in Florida, Despite What Insurers Want You to Think

June 17, 2024 — Susana Arce & Stephanie A. Giagnorio - Saxe Doernberger & Vita, P.C.
As Florida insurers continue their attempts to narrow protections for policyholders, it is imperative - now more than ever - that insureds be well-informed and know their rights. Most recently, in Florida, insurers are attempting to weaponize the death of Senate Bill 1726 and House Bill 1287 to limit the documents disclosed to policyholders. Specifically, the proposed bill, which required insurers to disclose their claims file to policyholders, hoped to thwart insurers from utilizing “claims file privilege” to obstruct justice for policyholders and help level the playing field. The goal of the proposed bill was to promote transparency of the claim adjustment process and undercut insurers’ attempts to dodge discovery of relevant and necessary information during litigation, forcing the insurers to fully and honestly justify their basis for withholding coverage . Unfortunately for policyholders, on March 8, 2024, the proposed legislation was not passed by the Insurance and Banking Subcommittee. While insurers want you to believe this is a significant victory and a free pass to continue withholding documents under a “claims file privilege,” this is not the case. The proposed bill merely codified current Florida law – simply put, the “claims file privilege” never existed, and still does not. Reprinted courtesy of Susana Arce, Saxe Doernberger & Vita, P.C. and Stephanie A. Giagnorio, Saxe Doernberger & Vita, P.C. Ms. Arce may be contacted at SArce@sdvlaw.com Ms. Giagnorio may be contacted at SGiagnorio@sdvlaw.com Read the court decision
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CGL Insurer’s Duty To Defend Broader Than Duty To Indemnify And Based On Allegations In Underlying Complaint

April 10, 2019 — David Adelstein - Florida Construction Legal Updates
The duty to defend an insured with respect to a third-party claim is broader than the duty to indemnify the insured for that claim. The duty to defend is triggered by allegations in the underlying complaint. However, an insurer is only required to indemnify its insured for damages covered under the policy. A recent case example demonstrating the duty to defend is broader than the duty to indemnify can be found in Southern Owners Ins. Co. v. Gallo Building Services, Inc., 2018 WL 6619987 (M.D.Fla. 2019). In this case, a homebuilder built a 270-unit condominium project where the units were included in 51-buildings. Upon turnover of the condominium association to the unit owners, the condominium association served a Florida Statutes Chapter 558 Notice of Construction Defects letter. There was numerous nonconforming work spread out among various subcontractor trades including nonconforming stucco work. The homebuilder incurred significant costs to repair defective work and resulting property damage, and relocated unit owners during repairs. The homebuilder then filed a lawsuit against implicated subcontractors. One of the implicated subcontractors was the stucco subcontractor. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Contractor to Repair Defective Stucco, Plans on Suing Subcontractor

February 21, 2013 — CDJ STAFF
The contractor for the Manatee County Judicial Center will be replacing the defective stucco on the building, but they have stated that they intend to go after the subcontractor who initially installed the defective stucco. The contractor, Balfour Beatty LLC, has said they will pay for the repairs, but Steve Holt, an executive of the firm said that “we have initiated a lawsuit against the subcontractor, who we believe was substantially or completely responsible to recover those funds.” Mr. Holt named Commercial Plastering as the subcontractor responsible. Read the court decision
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BP Is Not an Additional Insured Under Transocean's Policy

April 01, 2015 — Tred R. Eyerly – Insurance Law Hawaii
Responding to a certified question from the Fifth Circuit, the Texas Supreme Court determined that BP was not an additional insured under Transocean's liability policy and had no coverage under the policy for the deaths caused by the explosion of the Deepwater Horizon. In re Horizon, 2015 Tex. LEXIS 141 (Tex. Feb. 13, 2015). We have previously posted on this case in the federal courts here and here. Transocean owned the Deepwater Horizon, a mobile offshore drilling unit operating in the Gulf of Mexico pursuant to a contract with BP. After an explosion in April 2010, the rig caught fire, killing eleven crew members. Both Transocean and BP sought coverage under Transocean's primary and excess policies. Although they did not dispute that BP was an additional insured, Transocean and its insurers argued that BP was not entitled to coverage for pollution-related liabilities arising from subsurface oil releases in connection with the Deepwater Horizon accident. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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