New Insurance Case: Owners' Insurance Barred in Reimbursement Action against Tenant
April 17, 2019 —
Jason Adams - Gibbs GidenThe Western Heritage Ins. Co. v. Frances Todd, Inc. (2019 Cal.App. LEXIS 299 / 2019 WL 1450731) case has potential implications for insurance carriers, policyholders, condominium associations, unit owners, landlords and tenants.
The case involves a fire at a commercial condominium complex (the “Association”). The Association’s CC&Rs required the Association to purchase a master fire insurance policy for the benefit of the Association and owners, with a waiver of subrogation endorsement that stated the insurance company could not seek reimbursement from the Association, its officers, owners or occupants of the units in the event of a covered fire. The CC&Rs also prohibited individual owners from obtaining their own fire insurance. The Association purchased the required fire insurance policy from Western Heritage Insurance Company (“Western Heritage”).
One of the owner’s tenants, Frances Todd, Inc. (“Frances Todd”), allegedly caused a fire that damaged several units. Although the unit owner was covered as an additional named insured under the Western Heritage fire policy, the tenant, Frances Todd, was not. Western Heritage paid for the common area fire damage caused by Francis Todd, and then sued Frances Todd in a subrogation action to recover the amounts paid.
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Jason M. Adams, Gibbs GidenMr. Adams may be contacted at
jadams@gibbsgiden.com
Mitsui Fudosan Said to Consider Rebuilding Tilted Apartments
October 28, 2015 —
Katsuyo Kuwako – BloombergMitsui Fudosan Co., Japan’s biggest developer, is considering rebuilding an apartment complex in Yokohama after one of the four buildings started to tilt, according to a person familiar with the situation.
Kiyotaka Fujibayashi, president and chief executive officer of Mitsui Fudosan Residential Co., on Thursday explained the plans to residents, according to the person, who asked not to be named because the information is private. Another option the company is studying is buying back the apartments from the residents at a price higher than what they had paid, the person said. The project was sold in 2006.
Mitsui Fudosan is the latest developer to come under scrutiny for defects at residential projects in the Tokyo area. Mitsubishi Estate Co., Japan’s biggest developer by market value, said last year it would rebuild a residential complex in the upscale Aoyama neighborhood after finding faults. Also last year, Sekisui House Ltd. said it would reconstruct a residential complex that was being built by Taisei Corp. after finding some columns were missing reinforcing metals.
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Katsuyo Kuwako, Bloomberg
Kahana Feld Partner Noelle Natoli Named President of Women Lawyers Association of Los Angeles
October 07, 2024 —
Linda Carter - Kahana FeldLOS ANGELES – Sep. 16, 2024 – Kahana Feld is pleased to announce that partner Noelle Natoli was recently installed as the 2024-25 president of the Women Lawyers Association of Los Angeles (WLALA).
The mission of WLALA is to promote the full participation in the legal profession of women lawyers and judges from diverse perspectives and backgrounds, maintain the integrity of our legal system by advocating principles of fairness and equality, and improve the status of women by supporting their exercise of equal rights.
Natoli is a partner based in Kahana Feld’s Los Angeles office and focuses her civil trial practice on the defense of both insurers and insureds primarily in the areas of elder abuse, transportation defense, and general liability. Her clients include individuals, family-owned businesses, and national corporations. Natoli also chairs the Diversity & Inclusion Committee for the Trucking Industry Defense Association and serves as a board member of the National Conference of Women’s Bar Associations.
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Linda Carter, Kahana FeldMs. Carter may be contacted at
lcarter@kahanafeld.com
Insurers Subrogating in Arkansas Must Expend Energy to Prove That Their Insureds Have Been Made Whole
July 30, 2019 —
Michael J. Ciamaichelo - The Subrogation StrategistArkansas employs the “made whole” doctrine, which requires an insured to be fully compensated for damages (i.e., to be “made whole”) before the insurer is entitled to recover in subrogation.[1] As the Riley court established, an insurer cannot unilaterally determine that its insured has been made whole (in order to establish a right of subrogation). Rather, in Arkansas, an insurer must establish that the insured has been made whole in one of two ways. First, the insurer and insured can reach an agreement that the insured has been made whole. Second, if the insurer and insured disagree on the issue, the insurer can ask a court to make a legal determination that the insured has been made whole.[2] If an insured has been made whole, the insurer is the real party in interest and must file the subrogation action in its own name.[3] However, when both the insured and an insurer have claims against the same tortfeasor (i.e., when there are both uninsured damages and subrogation damages), the insured is the real party in interest.[4]
In EMC Ins. Cos. v. Entergy Ark., Inc., 2019 U.S. App. LEXIS 14251 (8th Cir. May 14, 2019), EMC Insurance Companies (EMC) filed a subrogation action in the District Court for the Western District of Arkansas alleging that its insureds’ home was damaged by a fire caused by an electric company’s equipment. EMC never obtained an agreement from the insureds or a judicial determination that its insureds had been made whole. In addition, EMC did not allege in the complaint that its insureds had been made whole and did not present any evidence or testimony at trial that its insureds had been made whole. After EMC presented its case-in-chief, the District Court ruled that EMC lacked standing to pursue its subrogation claim because “EMC failed to obtain a legal determination that its insureds had been made whole . . . prior to initiating this subrogation action.” Thus, the District Court granted Entergy Ark., Inc.’s motion for judgment as a matter of law and EMC appealed the decision.
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Michael J. Ciamaichelo, White and Williams LLPMr. Ciamaichelo may be contacted at
ciamaichelom@whiteandwilliams.com
Fatal Boston Garage Demolition Leaves Long Road to Recovery
April 04, 2022 —
Scott Van Voorhis - Engineering News-RecordMassachusetts' officials are bracing for a lengthy recovery process following the March 26 fatal collapse during demolition of a section of a hulking Brutalist-era parking garage in Boston. JDC Demolition was razing the Government Center structure to make way for a 410,000-sq-ft life-sciences complex, when a multistory portion near the top failed, killing 51-year-old operating engineer Peter Monsini.
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Scott Van Voorhis, Engineering News-Record
ENR may be contacted at enr@enr.com
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New York Court Temporarily Enjoins UCC Foreclosure Sale
September 21, 2020 —
Steven E. Ostrow, Timothy E. Davis, Steven E. Coury & Kristen E. Andreoli - White and WilliamsNew York courts have become a battleground for challenges to foreclosure sales under the Uniform Commercial Code (UCC) amidst the COVID-19 pandemic. Another trial court of the New York State Supreme Court (New York County) issued a preliminary injunction in Shelbourne BRF LLC v. SR 677 Bway LLC, halting a mezzanine lender’s August 19, 2020 UCC foreclosure sale. The decision confirms that the impact of the pandemic on the value of commercial real estate, and upon traditional steps taken to conduct a foreclosure auction, are both key factors that courts will continue to consider in determining whether a UCC foreclosure sale scheduled during the pandemic can be conducted in a commercially reasonable manner as required by the UCC.
THE CASE
In Shelbourne, the mezzanine borrowers owned the membership or equity interests in the companies (collectively, the “Property Owner”) that held title to a 12-story office building in Albany, New York. As security for the $3.35 million mezzanine loan, the mezzanine borrowers pledged their equity interests to the mezzanine lender. In May 2020, the mezzanine lender declared a default under the mezzanine loan as a result of the Property Owner’s default under the $28.5 million senior loan secured by a mortgage against the office building. The mezzanine lender then scheduled a public UCC foreclosure sale of the equity interests in the Property Owner for August 19, 2020. If the sale had been held, the equity interests in the Property Owner (and right to control the Property Owner and office building) would have been transferred to the successful bidder, either the mezzanine lender or a third party purchaser.
Reprinted courtesy of White and Williams attorneys
Steven E. Ostrow,
Timothy E. Davis,
Steven E. Coury and
Kristen E. Andreoli
Mr. Ostrow may be contacted at ostrows@whiteandwilliams.com
Mr. Davis may be contacted at davist@whiteandwilliams.com
Mr. Coury may be contacted at courys@whiteandwilliams.com
Ms. Andreoli may be contacted at andreolik@whiteandwilliams.com
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Dreyer v. Am. Natl. Prop. & Cas. Co. Or: Do Not Enter into Nunn-Agreements for Injuries that Occurred After Expiration of the Subject Insurance Policy
January 20, 2020 —
Jean Meyer - Colorado Construction LitigationWhile Nunn-Agreements[1] may be appealing for both plaintiffs and defendants where an insurer unreasonably fails to defend a lawsuit, a recent opinion from The Honorable Marcia Krieger in the United States District Court of Colorado[2] (“Opinion”) demonstrates the importance of first confirming that there exists a viable insurance claim before proceeding with such a Nunn- Agreement.
The facts giving rise to the Opinion were as follows. In March 2015, a Homeowner couple (the “Homeowners”) suffered damages to their home resulting from a brushfire. Fortunately, the Homeowners were insured, they submitted their claim to their homeowners’ insurance carrier which was in effect at the time of the brushfire (the “Insurance Carrier”), and the Insurance Carrier paid the claim. Ostensibly as part of the Homeowners’ remediation efforts to their home they removed a large bush which left a hole in the ground. After paying the claim, in August 2015 the Insurance Carrier cancelled or elected not to renew the Homeowners’ policy. In October 2015, a repairman working on the Home (the “Repairman”) was injured after his ladder fell over allegedly because of the hole in the ground caused by the bush that had been removed.
As a result of injuries caused by the fall from the ladder, the Repairman brought suit against the Homeowners. In response to the Repairman’s claim, the Homeowners again tendered to their Insurance Carrier. This time, however, the Insurance Carrier denied coverage on the basis that the Repairman’s injuries occurred after the expiration of the relevant policy. Without insurance coverage, the Homeowner’s entered into a Nunn-Agreement with the Repairman, conceding liability, and assigning any claims they might have had against the Insurance Carrier in lieu of execution of any judgment against the Homeowners.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
Hovnanian Increases Construction Defect Reserves for 2012
January 06, 2012 —
CDJ STAFFIn their fourth quarter earnings call, executives of Hovnanian Enterprises made some projections for investors, covering the company’s plans for 2012. During the call, Ara K. Hovnanian, the firm’s CEO, discussed their reserves to meet construction defect claims. The firm does an annual actuarial study of their construction defect reserves.
Mr. Hovnanian noted that there have been no changes for the past several years, but this year they are increasing their reserves by about $6.3 million. Additionally, the firm has added $2.5 million to their legal reserves. Mr. Hovnanian stated “we do not anticipate that changes of this magnitude will be recurring as we look forward to 2012.”
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