SEATTLE WASHINGTON BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Assignment of Construction Defect Claims Not Covered

April 20, 2017 — Tred R. Eyerly - Insurance Law Hawaii
Assignment of insurance proceeds as part of a settlement against the subcontractor for faulty workmanship was not covered under the CGL policy in accordance with Illinois law. Allied Prop. & Cas. Ins Co v. Metro North Condominium Assoc., 2017 U.S. App. LEXIS 4107 (7th Cir. March 8, 2017). Metro North Condominium Association hired a developer to build a condominium. The developer used CSC Glass to install the building's windows. CSC installed the windows defectively, causing the building to sustain significant water damage following a rain storm. Metro North sued the developer, who turned out to be insolvent. Metro North amended its complaint to add a claim against CSC for breach of the implied warranty of habitability. Metro North eventually dismissed its lawsuit in exchange for an assignment of CSC's policy with Allied and payment of any right to $700,000 worth of insurance coverage. The settlement specified that it was not intended to compensate Metro North for the cost of repairing or replacing CSC's defectively installed windows, but rather for the damage to the remaining parts of Metro North's condominium. 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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Architects Group Lowers U.S. Construction Forecast

July 30, 2014 — Nadja Brandt – Bloomberg
Spending on non-residential construction in the U.S. will be less than initially projected as state and local governments scale back investments in such properties as schools and health-care buildings, the American Institute of Architects said. Total spending on commercial and institutional development probably will increase 4.9 percent this year, down from an earlier estimate of 5.8 percent, according to a semi-annual survey by the Washington-based group. A slowdown in funding for institutional projects, which include education, health-care, religious and public-safety facilities, has been a drag on the recovery of the wider industry, according to Kermit Baker, the AIA’s chief economist. The group expects institutional-construction spending to fall 0.1 percent this year, compared with January’s projection for an increase of 3.4 percent, Baker said. Read the court decision
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Reprinted courtesy of Nadja Brandt, Bloomberg
Ms. Brandt may be contacted at nbrandt@bloomberg.net

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Indemnity: What You Don’t Know Can Hurt You!

September 19, 2022 — Caitlin Kicklighter & Bill Shaughnessy - ConsensusDocs
Risk allocation between the parties is a critical component of any construction contract. Indemnity obligations can be some of the important risk-shifting provisions of any design or construction contract. Indemnity provisions typically require one party, the Indemnitor, to agree to “hold harmless,” and/or reimburse another party, the indemnitee, from claims and liability arising out of the party’s work. Considering the financial consequences that an indemnity provision can have on a construction project, it is critical that all parties to a construction contract know the legal implications of the contract indemnity provisions and understand any limitations in enforcing the indemnity provisions depending on the controlling jurisdiction. While most indemnity clauses and obligations are enforceable, many states have enacted anti-indemnity statutes prohibiting or restricting specific indemnification provisions. These anti-indemnity statutes afford protection to contractors and subcontractors not generally in a position to protect themselves from overly extensive indemnity obligations. This article highlights several examples of indemnity provisions typically seen in construction contracts, the measures are taken by a growing number of states to protect parties with less bargaining power in the form of anti-indemnity statutes, and offers practical considerations when negotiating or drafting indemnity provisions.[1] Reprinted courtesy of Caitlin Kicklighter, Emory Law Student (2024 Graduate), (ConsensusDocs) and Bill Shaughnessy, Jones Walker LLP (ConsensusDocs) Mr. Shaughnessy may be contacted at bshaughnessy@joneswalker.com Read the court decision
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Indiana Court of Appeals Holds That Lease Terms Bar Landlord’s Carrier From Subrogating Against Commercial Tenant

April 03, 2019 — Gus Sara - The Subrogation Strategist
In Youell v. Cincinnati Ins. Co., 2018 Ind. App. LEXIS 497 (2018), the Court of Appeals of Indiana considered whether a landlord’s carrier could bring a subrogation claim against a commercial tenant for fire-related damages when the lease, which did not reference subrogation, explicitly required the landlord to maintain fire insurance coverage for the leased premises. The court held that subrogation was barred because the provision requiring the landlord to maintain fire insurance established an agreement to provide both parties with the benefits of insurance. The Youell case establishes that, in Indiana, if the lease explicitly states that the landlord will maintain fire casualty insurance for the building, the lease evidences an agreement by the parties to shift the risk of loss to the insurer. This agreement bars a landlord’s insurance carrier from subrogating against a commercial tenant in the event of a casualty. In 2013, the building owner, Greg Dotson, began leasing a commercial building to Robert Youell for his tire business, Best One Giant Tire, Inc. (collectively, Youell). The lease agreement required that the landlord maintain fire and extended coverage insurance on the building and the leased premises. The lease also required the tenant to purchase fire and extended coverage insurance for its personal property. The lease did not mention subrogation. Dotson obtained a property insurance policy through Cincinnati Insurance. Read the court decision
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Reprinted courtesy of Gus Sara, White and Williams LLP
Mr. Sara may be contacted at sarag@whiteandwilliams.com

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Texas Supreme Court Holds Anadarko’s $100M Deepwater Horizon Defense Costs Are Not Subject To Joint Venture Liability Limits

February 27, 2019 — Sergio F. Oehninger & Michael S. Levine - Hunton Andrews Kurth
Reversing a Texas Court of Appeals decision that allowed Anadarko’s Lloyd’s of London excess insurers to escape coverage for more than $100 million in defense costs incurred in connection with claims from the Deepwater Horizon well blowout, the Supreme Court of Texas held that the insurers’ obligations to pay defense costs under an “energy package” liability policy are not capped by a joint venture coverage limit for “liability” insured. Anadarko Petroleum Corp. et al. v. Houston Casualty Co. et al., No. 16-1013 (Tex. Jan. 25, 2019). While the Lloyd’s of London insurers had agreed to pay Anadarko $37.5 million for damages, they declined to cover $100 million-plus in defense fees, arguing that both Anadarko’s liability and defense expenses are subject to the $37.5 million joint venture limit for “liability” insured. Anadarko asserted that only amounts paid as damages to third parties are subject to that limit. Defense costs, however, are not amounts paid as damages to a third party and, thus, are not a “liability.” Those amounts, therefore, are not subject to the joint venture limit and are instead subject to the policy’s $150 million coverage limit. Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews Kurth and Michael S. Levine, Hunton Andrews Kurth Mr. Oehninger may be contacted at soehninger@HuntonAK.com Mr. Levine may be contacted at mlevine@HuntonAK.com Read the court decision
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Certifying Claim Under Contract Disputes Act

June 08, 2020 — David Adelstein - Florida Construction Legal Updates
Under 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. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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The “Ugly” Property Next Door is Ruining My Property Value

September 14, 2017 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog
Traditional bases for private nuisance claims include circumstances where noise, light, vibration, or odor emanating from a neighboring property harm the value of your property. Such bases can be objectively verified and quantified. Courts in various states depart, however, on the issue of whether pure unsightliness of a neighboring property, which diminishes the value of your property, supports a cognizable damages claim against the neighboring property owner under the law of nuisance. 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

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Car Crashes Through Restaurant Window. Result: Lesson in the History of Additional Insured Coverage

December 29, 2020 — Randy J. Maniloff - White and Williams LLP
Back in the day, additional insureds were oftentimes afforded coverage for liability “arising out of” the named insured’s work for the additional insured. When confronted with such language, courts often concluded that it dictated “but for” causation. In other words, but for the named insured doing the work for the additional insured, the additional insured would not be in the liability-facing situation that it is in. The result in some cases: additional insureds were entitled to coverage for their sole negligence. Decisions reaching such a conclusion were generally not well-received by insurers. This was especially so when you consider that the premium received by insurers, for the AI coverage, may not have been enough to buy a package of Twizzlers. Insurer frustration with such decisions -- which insurers did not believe expressed the intent of additional insured coverage -- led ISO to make revisions to additional insured forms in 2004 (later revisions followed). At the heart of these revisions was an attempt to require fault on the part of the named insured before coverage could be afforded to the additional insured. (This is a very brief and simple history of this complex issue.) Read the court decision
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Reprinted courtesy of Randy J. Maniloff, White and Williams LLP
Mr. Maniloff may be contacted at maniloffr@whiteandwilliams.com

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