Suit Limitation Provision Upheld

Illustration of judge sitting at court

The one-year limitation was not tolled due to either fraudulent concealment or equitable principles.

March 4, 2019
Tred R. Eyerly - Insurance Law Hawaii

The policy's one year suit limitation provision was upheld, depriving insureds of benefits under the policy. Oswald v. South Central Mut. Ins. Co., 2018 Minn. App. Unpub. LEXIS 1077 (Dec. 24, 2018).

The Oswalds' hog barn burned down on June 21, 2016. Arson was a possible cause.

The Oswalds were insured under a combination policy issued by North Star Mutual Insurance Company and South Central Mutual Insurance Company. Central provided coverage for basic perils, broad perils, and limited perils, which included fire losses. The Central policy required property claims to be brought within one year after the loss. By endorsement, the North Star policy required suits be brought within two years after the loss. Presumably, the claims was denied, although the decision does not state this.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Coyness is Nice. Just Not When Seeking a Default Judgment

Three business people discussing topic

If you’re going to sue, state the amount you are suing for. Don’t be coy about it.

March 4, 2019
Garret Murai - California Construction Law Blog

As Morrissey of the Smith’s sang: Coyness is nice, but Coyness can stop you, from saying all the things in life you’d like to.

It’s not uncommon in litigation to see a complaint asking for “damages according to proof.” Call it laziness. Call it hiding the ball. Call it coy, even. I call it risky.

And here’s why: If a defendant doesn’t appear and you need to seek a default judgment against him, her, or it, you are barred from doing so, since you are limited to recovering the amount you sought. And last I checked, something of nothing is nothing.

In Yu v. Liberty Surplus Insurance Corporation, California Court of Appeals for the Fourth District, Case No. G054522 (December 11, 2018), one plaintiff found this out the hard way, although perhaps not quite in the way they expected it.

Mr. Murai may be contacted at gmurai@wendel.com


Federal Lawsuit Accuses MOX Contractors of Fraud

Construction worker holding plans walking through building

The controversial project was canceled after cost and schedule estimates increased significantly.

March 4, 2019
Scott Judy - Engineering News-Record

A subcontractor employee working on the now-canceled MOX project in South Carolina used football tickets, automobile tires, barbecue grills and other gifts to persuade employees of CB&I AREVA MOX Services and other vendors to help approve thousands of fraudulent invoices cumulatively valued at more than $6.4 million, according to a Dept. of Justice lawsuit filed Feb. 14 that names both companies as defendants. The controversial project at the Savannah River Site in Aiken, S.C., originally scheduled for completion in 2016, was canceled in January after cost and schedule estimates increased significantly.

Mr. Judy may be contacted at judys@enr.com


Pennsylvania Federal Court Addresses Recurring Asbestos Coverage Issues

Illustration of judge and lawyer

A Pennsylvania federal court issued rulings addressing expedited funding orders, number of “occurrences,” and the applicability of aggregate limits.

March 4, 2019
Craig O’Neill & Laura Rossi - Complex Insurance Coverage Reporter

In a pair of recent asbestos coverage decisions, a Pennsylvania federal court issued rulings addressing expedited funding orders, number of “occurrences,” and the applicability of aggregate limits under the Fourth Circuit’s Wallace & Gale approach.

Zurn Industries, LLC v. Allstate Insurance Company, 2018 U.S. Dist. LEXIS 197481 (W.D. Pa. Nov. 20, 2018)

Policyholder Zurn, a manufacturer and distributor of boilers, was named as a defendant in thousands of underlying asbestos-related bodily injury suits. After its primary insurers claimed exhaustion, Zurn moved on an expedited basis to require two of its excess insurers to each assume fifty percent of its defense and indemnity costs until they reached a permanent cost-sharing agreement. In denying Zurn’s expedited request for interim funding, the court held that the record was insufficient “in the opening stages of litigation, before discovery has occurred” to determine whether the underlying coverage had been properly exhausted but left the door open for Zurn to refile its motion on a more developed record.

Reprinted courtesy of Craig O’Neill, White and Williams LLP and Laura Rossi, White and Williams LLP
Mr. Levine may be contacted at oneillc@whiteandwilliams.com
Ms. Rossi may be contacted at rossil@whiteandwilliams.com


Eleventh Circuit Reverses Attorneys’ Fee Award to Performance Bond Sureties in Dispute with Contractor arising from Claim against Subcontractor Performance Bond

Two business people arms folded standing back to back

The issue was whether the District Court was wrong when it determined that the nonperforming Sureties were entitled to an award of prevailing party attorneys’ fees against the Contractor.

February 27, 2019
CDJ STAFF

On October 26, 2018, the United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) issued a decision which reversed an award of prevailing party attorneys’ fees to performance bond sureties in their dispute with a contractor arising from the contractor’s claim against a subcontractor’s performance bond. Had the lower court’s decision been affirmed, the performance bond sureties would have been able to recover prevailing party attorneys’ fees against the contractor even though they were not parties to the underlying subcontract and the subcontract did not contain a prevailing party attorneys’ fee provision.

The underlying case is complicated and arose from the construction of Brickell CityCentre in Miami. Americaribe-Moriarty JV (the “Contractor”) asserted a claim against a performance bond procured by a defaulted subcontractor and issued by International Fidelity Insurance Company and Allegheny Casualty Company (collectively, the “Sureties”). The Sureties filed a declaratory judgment action against the Contractor in the United States District Court for the Southern District of Florida (the “District Court”), seeking a declaration that the Contractor failed to perfect its claim against the performance bond.

Reprinted courtesy of Gary M. Stein, Peckar & Abramson and K. Stefan Chin, Peckar & Abramson
Mr. Stein may be contacted at gstein@pecklaw.com
Mr. Chin may be contacted at kschin@pecklaw.com


Attorney's Erroneous Conclusion that Limitations Period Had Not Expired Was Not Grounds For Relief Under C.C.P. § 473(b)

Clock with water illustration

Jackson is a reminder of the limited circumstances under which the mandatory provision is available.

February 27, 2019
David W. Evans & Stephen J. Squillario

In Jackson v. Kaiser Foundation Hospitals, Inc. (2/8/19 No. A150833), the First District Court of Appeal affirmed the trial court’s denial of a motion for relief from a voluntary dismissal, without prejudice, filed by the plaintiff based on the erroneous conclusion of an attorney who she had consulted (but who had not yet appeared as counsel in her case) that the applicable statute of limitations had not yet expired. In reality, the limitations period had expired on the same date plaintiff had filed her complaint in propria persona. The plaintiff later retained the attorney on a limited basis to present the motion for relief pursuant to Code of Civil Procedure § 473(b) based on the attorney’s affidavit of fault. Therein, the attorney testified that he had advised the plaintiff to dismiss her action voluntarily based on a misinterpretation of the applicable limitations period, which the attorney characterized as having been based on his “mistake, inadvertence, surprise, or neglect.”

Section 473 provides two distinct provisions for relief from default or dismissal – one is discretionary, while the other is mandatory. Discretionary relief is available in the case of an attorney’s mistake, inadvertence, surprise, or excusable neglect. In contrast, mandatory relief is available where the resulting dismissal was caused by an attorney’s mistake, whether or not excusable. In denying the plaintiff’s motion, the trial court reasoned that the plaintiff could not rely upon Section 473(b) because (1) the attorney did not represent the plaintiff at the time and (2) this provision did not apply to the voluntary dismissal of an action without prejudice.

Reprinted courtesy of David W. Evans, Haight Brown & Bonesteel LLP and Stephen J. Squillario, Haight Brown & Bonesteel LLP
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Squillario may be contacted at ssquillario@hbblaw.com


Groundbreaking Women in Construction Conference

February 27, 2019
Beverley BevenFlorez - CDJ STAFF

The Groundbreaking Women in Construction conference (GWIC) is for women and men in all construction sectors—architecture, engineering, consulting, contracting, supplier-vendors and related businesses, and in all career fields and levels, to expand their understanding of workplace interactions, key industry issues and better talent management. This annual conference presented by ENR and in partnership with Peckar & Abramson, P.C., is comprised of Keynote Addresses, Panel Discussions, Breakout Sessions, and more.

May 23rd-24th, 2019
Hyatt Regency San Francisco
5 Embarcadero Center
San Francisco, CA 94111


Reasonableness of Denial of Requests for Admission Based Upon Expert’s Opinions Depends On Factors Within Party’s Understanding

Two business people shaking hands in front of Skyscrapers

Orange County Water District provides important guidance to litigators.

February 27, 2019
Stephen M. Tye & Lawrence S. Zucker II - Haight Brown & Bonesteel LLP

In Orange County Water District v. The Arnold Engineering Company (D070763), the Fourth Appellate District examined the criteria for evaluating the reasonableness of a parties’ denial of requests for admission (RFA’s) based upon their expert’s opinions and the proof required to recover costs for unreasonable denials.

In Orange County Water District, the Orange County Water District (the District) sued several current and former owners and operators of industrial sites, including The Arnold Engineering Company (Arnold), to recover expenses associated with groundwater cleanup efforts intended to address groundwater contamination caused by volatile organic compounds (VOC’s) and other chemicals. Over six years, the parties conducted extensive discovery, including document productions, depositions, and soil sampling and monitoring.

Reprinted courtesy of Stephen M. Tye, Haight Brown & Bonesteel LLP and Lawrence S. Zucker II, Haight Brown & Bonesteel LLP
Mr. Tye may be contacted at stye@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com


The Complex Insurance Coverage Reporter – A Year in Review

Review key on keyboard

There is much more to talk about than just the ALI Restatement.

February 27, 2019
White and Williams LLP

Welcome to CICR’s annual review of insurance cases. Here, we spotlight five (actually, seven) decisions from the last year that you should know about, and five pending cases—all before state high courts—to keep an eye on. The choices were not always easy.

That is because 2018 saw a number of notable insurance coverage developments. Among them was the “Restatement of the Law – Liability Insurance,” a nearly five hundred-page document that the American Law Institute (ALI) adopted after eight years and twenty-nine drafts.

Already, much has been written about the ALI Restatement, including by us. There will be more to come. Going forward, we will continue to highlight significant examples where courts address its provisions.


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

Money symbol

The Texas Supreme Court’s reversal clarifies how Texas courts should apply the rules of policy construction.

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


Floors Collapse at Russian University in St. Petersburg

Beware under construction black and yellow stripes

Eighty-one people were evacuated from the building.

February 27, 2019
The Associated Press - Bloomberg

St. Petersburg, Russia (AP) -- Part of the roof and several floors of university building in Russia's second-largest city collapsed Saturday, but officials say there were no casualties.

The Emergencies Ministry said the collapse at the Saint Petersburg National Research University of Information Technologies, Mechanics and Optics took place as construction work was underway. An investigation into criminal violation of construction safety has been opened.


General Release of Contractor Upheld Despite Knowledge of Construction Defects

Judges behind bench illustration

The decision was grounded primarily on how the purchase agreement was drafted.

February 27, 2019
Garret Murai - California Construction Law Blog

Ah, the elusive Lepus Cornutus, commonly known as the Jackalope. Rarely seen, we may have one in SI 59 LLC v. Variel Warner Ventures, LLC, Court of Appeals for the Second District, Case No. B285086 (November 15, 2018), an interesting case involving a developer, a contractor, a general release, and Civil Code section 1688.

SI 59 LLC v. Variel Warner Ventures, LLC

In 2005, Variel Warner Ventures, LLC (Variel Warner) entered into a construction contract with Verdugo Management & Investment, Inc. (Verdugo) to construct improvements at an 85 unit apartment complex. Under the terms of the contract, Verdugo agreed to construction the improvements in a good and workmanlike manner in strict compliance with all drawings and specifications and to comply with all laws. It didn’t. The work was defectively flashed, counterflashed, and waterproofed.

Mr. Murai may be contacted at gmurai@wendel.com


Federal Government Partial Shutdown – Picking Up the Pieces

White House

Some guidelines for moving forward after the shutdown.

February 27, 2019
Jacob W. Scott -

Now that the partial shutdown has ended (though with the specter of another just around the corner), contractors are asking, “What now?” and “What did that cost me?” Although every case is fact-specific, following are some guidelines for moving forward after the shutdown.

Following up on our previous guidance, contractors should make sure that any court, board, or agency filings made during the shutdown were received and properly docketed. If there is any question whether a filing was received, file it again as soon as possible with proof of the earlier attempt to file. The busiest tribunals, such as the federal courts, the Court of Federal Claims, the Boards of Contract Appeals, and the Government Accountability Office, remained open, or at least open to accept filings, and all indications are that filings made during the shutdown were received and acknowledged. But for some of the other tribunals or agencies, such as the Small Business Administration (“SBA”) Office of Hearings and Appeals and the SBA Office of Government Contracting and Business Development, prudence dictates double-checking that all filings were received. In many cases, non-statutory deadlines have been or will be adjusted by the court, board, or agency.

Mr. Scott may be contacted at jwscott@smithcurrie.com


GE to Repay $87 Million for Scaled-Back Headquarters Plan

Money bills coming out of computer monitor

Proceeds from the sale will go to reimburse the state for $87 million it spent on buying and developing the property.

February 27, 2019
Rick Clough - Bloomberg

General Electric Co. will reimburse the state of Massachusetts for funds used to develop the manufacturer’s future headquarters, a project that is now being scaled back under Chief Executive Officer Larry Culp.

GE and the state will jointly sell the property in Boston’s Fort Point neighborhood where the company will make its future home, according to an agreement revealed Thursday. GE still plans to move into the campus later this year -- as a tenant rather than owner -- but it’s scrapping plans to build an adjacent 12-story tower.


Prosecutions of Union Officials in 2018 Unmasked Theft, Embezzlement

February 27, 2019
Scott Van Voorhis - Engineering News-Record

Building trades officials and employees embezzled millions of dollars over the past year, raiding the bank accounts of their locals to pay for trips to Las Vegas, lavish jewelry, luxury cars, home renovations and even a new puppy, U.S. Labor Dept. records show.

ENR may be contacted at ENR.com@bnpmedia.com


New York Appellate Court Expands Policyholders’ Ability to Plead and Seek Consequential Damages

Three judges sitting behind the bench

A NY appellate court held that an insured need not provide a detailed factual description or explanation for why consequential damages are recoverable at the pleading stage.

February 27, 2019
Michael S. Levine & Joshua S. Paster - Hunton Andrews Kurth

In a huge win for policyholders, a New York appellate court, in D.K. Property, Inc. v National Union Fire Insurance Company of Pittsburgh, Pa., held that an insured need not provide a detailed factual description or explanation for why consequential damages are recoverable at the pleading stage. Rather, an insured’s complaint must only (i) specify the types of consequential damages claimed; and (ii) allege that those damages reasonably were contemplated by the parties prior to contracting.

Here, D.K. Property’s building was damaged as a result of construction on an adjoining building, and it timely filed a claim with National Union under a policy that covers “direct physical loss or damage to” the building. National Union neither paid the claim nor disclaimed coverage. Instead, according to D.K. Property, National Union made unreasonable and increasingly burdensome information demands over a three-year period, which it alleges was a “tactic” to make pursuing the claim so expensive that D.K. Property would abandon the claim. As a result of the delay, D.K. Property alleges the structural damage to its building has worsened.

Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and Joshua S. Paster, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Paster may be contacted at jpaster@HuntonAK.com


The Proposed House Green New Deal Resolution

Earth sitting on Green Grass

The Green New Deal proposes transitioning to an economy based upon 100% clean and renewable energy.

February 27, 2019
Anthony B. Cavender - Gravel2Gavel

A Resolution has been proposed to the House for consideration that would recognize the Federal Government’s duty “to create a Green New Deal.” It sets forth a very ambitious 10-year program to mobilize and transform every aspect of American life to combat the threats of climate change by transitioning to an economy based upon 100% clean and renewable energy.

In doing so, millions of new jobs would be created, and everyone who wants a job would be guaranteed a job. The sponsors’ talking points declare that there is no time to lose, that Americans love a challenge, and “this is our moonshot.” The obvious goal is to eliminate the generation and use of fossil fuel and nuclear energy—they are simply not part of the solution.

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com


Three Ways Technology Is Changing How We Look at a Construction Site

February 27, 2019
Michael McLin - Construction Executive

Technology is helping the construction industry shed its image of being slow to integrate change. Smartphones and mobile apps have made communication and collaboration on construction projects much easier and, more importantly, are significantly increasing the speed of sharing information. BIM is improving project visualization, making scheduling more efficient and reducing waste and rework.

Reprinted courtesy of Michael McLin, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.


Ninth Circuit Clears the Way for Review of Oregon District Court’s Rulings in Controversial Climate Change Case

Close up of green grass

Anthony B. Cavender discusses the case Juliana, et al. v. United States of America.

February 27, 2019
Anthony B. Cavender - Gravel2Gavel

On December 26, a divided panel of the U.S. Court of Appeals for the Ninth Circuit accepted an interlocutory appeal of the presiding District Court’s pre-trial rulings in the novel climate change case that is being tried in Oregon. The case is Juliana, et al. v. United States of America.

In its ruling, the Ninth Circuit held that the District Court certification of this case for interlocutory appeal satisfied the provisions of 28 U.S.C. § 1292(b). Ninth Circuit precedents authorize such an appeal when a District Court order “involves a controlling question of law as to which there is a substantial ground for difference of opinion”—which aptly characterizes the U.S. Supreme Court’s view of this litigation.

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com


Three Reasons Lean Construction Principles Are Still Valid

Three thumbs up by diverse business people

The number of lean construction critics multiplied significantly in recent months.

February 27, 2019
Kevin Clary - Construction Executive

When lean principles were first introduced to the construction industry five years ago, project managers raced to implement the production method. The internet was rife with content about how to easily overhaul a jobsite and transform it into the picture of efficiency.

However, the number of lean construction critics have multiplied significantly in recent months. They claim concepts are near impossible to implement or, even worse, automation eliminates the need for deliberate human processes. These ideas are misleading. Lean principles are still valid for a few key reasons.

1. Lean involves seeing things from the customer’s point of view

One of the defining principles of lean construction is understanding value from the customer’s point of view. The concept encourages stakeholders, including the owner, contractor and supplier, to come together during the early planning stage of the project. The significant level of trust created from this exercise can’t be replicated by machinery. It involves compassion, collaboration and a sense of creativity that artificial intelligence is yet to possess. Moreover, the rapport gained through this service-oriented exercise is worth the time investment.

Reprinted courtesy of Kevin Clary, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.



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