Top Developments March 2024
April 22, 2024 —
Complex Insurance Coverage ReporterCLAIMS-MADE COVERAGE
Zurich Am. Ins. Co. v. Syngenta Crop Prot. LLC, 2024 Del. LEXIS 68 (Del. Feb. 26, 2024)
Delaware Supreme Court concludes that a letter from a lawyer informing an insured of possible lawsuits without identifying potential plaintiffs or demanding payment is not a “claim for damages” within the meaning of claims-made CGL and umbrella liability policies. Citing case law from Delaware and other jurisdictions, it reasoned that, in the ordinary sense, a “claim for damages” (which the policies did not define) is “a demand or request for monetary relief by or on behalf of an identifiable claimant.” According to the court, the letter in question did not meet this definition because it did not identify any claimants “except in the vaguest terms” or request monetary relief on any claimant’s behalf, but rather communicated only a threat of future litigation. As a result, the letter was not a claim made before the policy periods at issue.
POLLUTION EXCLUSION
Wesco Ins. Co. v. Brad Ingram Constr., 2024 U.S. App. LEXIS 1488 (9th Cir. Jan. 23, 2024)
A divided Ninth Circuit panel, applying California law, holds that a pollution exclusion* in a CGL policy does not preclude a duty to defend an underlying suit alleging physical injury from exposure to “clouds of toxic dust” deposited in the environment by a wildfire and released during clean up efforts. Citing MacKinnon v. Truck Ins. Exch., 73 P.3d 1205 (Cal. 2003), the majority explained that determining whether a “pollution event” (i.e., “environmental pollution”) resulting in excluded injury has occurred involves consideration of “the character of the injurious substance” and whether the exposure resulted from a “mechanism specified in the policy.” It concluded that a potential for coverage (and, therefore, a defense obligation) existed because, although wildfire debris may be considered a “pollutant” in certain circumstances, the mechanism alleged in the underlying complaint – “expos[ure] . . . to clouds of toxic dust during the loading and unloading of [the underlying plaintiff’s] truck” – did not clearly constitute an “event commonly thought of as pollution.”
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White and Williams LLP
White and Williams Announces Partner and Counsel Promotions
February 19, 2024 —
White and Williams LLPPHILADELPHIA–White and Williams LLP is pleased to announce the promotion of the following attorneys: Paul A. Briganti, Patrick A. Haggerty, Timothy (T.J.). Keough, Randy J. Maniloff, and Eric A. Sauter. All five attorneys have been promoted to the Firm’s partnership. The Firm has also promoted Michael L. DeBona, Lynndon K. Groff, and Susan J. Zingone from Associate to Counsel.
“All of our new Partners and Counsel enrich the firm both internally and externally. They have demonstrated a deep commitment to providing our clients with best-in-class service and through their dedication and leadership earned elevation to partner and counsel at White and Williams,” said firm Managing Partner Tim Davis. “We look forward to their many continued successes and contributions to the Firm.”
Paul A. Briganti practices out of the Philadelphia office and represents national and international insurance companies in coverage disputes and complex commercial litigation. He has significant experience litigating and advising clients on issues arising under various lines of coverage, including general liability, cyber, D&O, employers liability, commercial auto and homeowners. In addition, Paul is an editor of the firm’s Complex Insurance Coverage Reporter newsletter and a regular pro bono volunteer with the Senior Law Center. He received his J.D. from Villanova University School of Law.
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White and Williams LLP
Exploring Architects’ Perspectives on AI: A Survey of Fears and Hopes
March 19, 2024 —
Aarni Heiskanen - AEC BusinessRIBA, the Royal Institute of British Architects, ran a survey in late 2023 with 500 respondents on the impact of AI on their profession. The study also explored the near-term outlook for AI adoption and use. The results reveal divided opinions among architects. A popular view is that AI threatens the profession, even though a larger portion sees tools like AI as necessary in the coming years.
The Present Use of AI
The respondents were asked, for the projects they are currently working on, how often their practice used AI in any way.
In all, 41% said that they use AI to some degree. Of those, 43% agree that AI has improved efficiency in the architectural design processes, while 24% disagree.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Graham & Who May Trigger The Need To Protest
December 23, 2023 —
Hugo Fraga - Ahlers Cressman & Sleight PLLCOn May 30, 2023, the Washington Court of Appeals, Division I, issued a decision that appears to expand a contractor’s obligation with respect to WSDOT notice and claim procedures. In
Graham Contracting, Ltd. v. City of Federal Way, No. 83494-1-I, 2023 WL 3721171 (Wash. Ct. App. May 30, 2023) (Unpublished), the Court held that under the 2016 WSDOT Standard Specifications for Road, Bridge, and Municipal Construction (“Standard Specifications”), a Contractor must protest the actions of not only the “Engineer” but also the actions of any person or organization acting on behalf of the Owner.
This case arises out of a public construction contract in which Graham Contracting Ltd (“Graham”) built a multi-million dollar roadway improvement for the City of Federal Way along a stretch of Pacific Highway. The appeal was from the trial court’s granting of the City’s motion for summary judgment to dismiss claims by Graham for extra time and money due to delays and impacts to Graham’s construction of the Project.
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Hugo Fraga, Ahlers Cressman & Sleight PLLCMr. Fraga may be contacted at
hugo.fraga@acslawyers.com
A New Lawsuit Might Change the Real Estate Industry Forever
December 23, 2023 —
Tracy Alloway, Joe Weisenthal, and Aashna Shah - BloombergLast month, a Missouri jury found that real estate brokers colluded to artificially inflate and fix their own commissions, and as a result, ordered the National Association of Realtors to pay $1.8 billion in damages. While the ruling will be appealed, with highly uncertain damages and remedies, the case is shining a light on how participants in the real estate industry get paid, and raising the question of whether homebuyers are paying too much to their brokers. So how do brokers get paid? What are their incentives? And why haven't fees for brokers gone down, even as online platforms that compete with them have proliferated. On this episode of the podcast, we speak with Andra Ghent, a finance professor at the University of Utah and a specialist in real estate who explains how the structure works currently, and how the lawsuit could ultimately change the entire business model of buying and selling homes. This transcript has been lightly edited for clarity.
Reprinted courtesy of
Tracy Alloway, Bloomberg,
Joe Weisenthal, Bloomberg and
Aashna Shah, Bloomberg Read the full story...
When OSHA Cites You
April 22, 2024 —
Michael Metz-Topodas - Construction ExecutiveWith the strong bonds that form among construction project teams, workers looking out for each other helps keep safety foremost in everyone’s mind. But sometimes, even the very best intentions alone can’t prevent an occasional misstep—a forgotten hard hat, a sagging rope line—which can and often does result in an OSHA citation. These regulatory reminders can bring unfortunate consequences: penalties, higher insurance premiums, potential worker injury claims, loss of bidding eligibility, loss of reputation and even public embarrassment, because citations are published on OSHA’s website.
Due to citations’ adverse effects, contractors have incentives to minimize them. They can do this by asserting available defenses, because a citation is only an alleged violation, not a confirmed one. But making defenses available begins well before a citation is issued, well before OSHA arrives to a construction site and well before a violation even occurs. Instead, contractors’ ongoing safety programs should incorporate the necessary measures to preserve OSHA citation defenses in three key areas: lack of employee exposure, lack of employer knowledge and impossibility.
EMPLOYEE EXPOSURE
To sustain a citation against an employer, OSHA must not only identify an applicable standard that the company violated but also show that the violation exposed employees to hazards and risk of injury. Absent evidence of actual exposure, OSHA often makes this showing by asserting that performing job functions necessarily exposes employees to the cited hazard.
Reprinted courtesy of
Michael Metz-Topodas, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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michael.metz-topodas@saul.com
Navigating the Construction Burrito: OCIP Policies in California’s Construction Defect Cases
November 16, 2023 —
Alexa Stephenson & Ivette Kincaid - Kahana FeldIn the early 2000’s, Owner-Controlled Insurance Programs (OCIP) or WRAPS, were traditionally used in large commercial projects of over $50 million in construction costs. As construction defect lawsuits became more prevalent, subcontractors found themselves unable to meet the insurance requirements of their contracts with developers and general contractors because they could not find insurance companies that were willing to insure the risk. This presented a problem for developers and general contractors and left them with no option but to look into new insurance products that would insure them and all subcontractors who worked on the project. OCIPs became in some instances the only insurance option for developers, general contractors, and subcontractors to build single-family or multi-family projects in California and other western states.
OCIPS or WRAPS, often likened to the layers of a savory burrito, offer both enticing benefits and potential pitfalls. Just as a burrito’s ingredients can harmonize or clash, OCIP policies can shape the outcome of legal battles, impacting contractors, developers, and insurers alike.
Pros – Savoring the OCIP Burrito:
1. Wrapped Protection: Much like a well-folded burrito envelops its contents, OCIP policies offer comprehensive coverage for construction projects. Developers, general contractors, and subcontractors find comfort in knowing that their liability risks are bundled into a single policy, ensuring all enrolled parties have coverage in the event of a claim.
Reprinted courtesy of
Alexa Stephenson, Kahana Feld and
Ivette Kincaid, Kahana Feld
Ms. Stephenson may be contacted at astephenson@kahanafeld.com
Ms. Kincaid may be contacted at ikincaid@kahanafeld.com
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Drawing the Line: In Tennessee, the Economic Loss Doctrine Does Not Apply to Contracts for Services
December 11, 2023 —
Gus Sara - The Subrogation StrategistIn Commercial Painting Co. v. Weitz Co. LLC, No. W2019-02089-SC-R11-CV, 2023 Tenn. LEXIS 39 (Weitz), the Supreme Court of Tennessee (Supreme Court) considered whether the economic loss doctrine barred the plaintiff’s claims for fraud, negligent misrepresentation and punitive damages arising out of a contract with the defendant for construction services. The court held that the economic loss doctrine only applies to product liability cases and does not apply to claims arising from contracts for services. This case establishes that, in Tennessee, the economic loss doctrine does not bar tort claims in disputes arising from service contracts.
In Weitz, defendant, Weitz Co. LLC (Weitz), was the general contractor for a construction project and hired plaintiff Commercial Painting Co. (Commercial) as a drywall subcontractor. Weitz refused to pay Commercial for several of its payment applications, claiming that the applications were submitted untimely and contained improper change order requests. Commercial filed a lawsuit against Weitz seeking over $1.9 million in damages, alleging breach of contract, unjust enrichment, enforcement of a mechanic’s lien, and interest and attorney’s fees under the Prompt Pay Act of 1991. Weitz filed a counterclaim for $500,000 for costs allegedly incurred due to Commercial’s delay and defective workmanship. In response, Commercial amended its complaint to add claims for fraud, intentional and negligent misrepresentation, rescission of the contract and $10 million in punitive damages. Commercial alleged that Weitz received an extension of the construction schedule but fraudulently withheld this information from Commercial and continued to impose unrealistic deadlines.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com
