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Tred Eyerly practices law in Honolulu, Hawaii, and focuses on insurance coverage issues.

Coverage Denied Where Occurrence Takes Place Outside Coverage Territory

Tuesday, December 11, 2018 — Tred R. Eyerly - Insurance Law Hawaii

The court held there was no coverage for construction defect claims that occurred outside the coverage territory. Foremost Signature Ins. Co. v. Silverboys, 2018 U.S. Dist. LEXIS 154524 (S.D. Fla. Sept. 11, 2018).

Solo Design, LLC, a Miami-based design company, entered into a contract with Silverboys, LLC (Owner) to provide interior design services in conjunction with the renovation of the Owner's vacation home in the Bahamas. Solo retained Whittingham, a Bahamian architect, as a subcontractor to serve as project manager.

Owner sued Solo, Whittingham and others in Florida for breach of contract, fraud, conversion and negligence when the project did not go as planned. The underlying complaint alleged intentional misconduct, lying about qualifications and the progress of the project, submitting false invoices, requesting money for services that were not performed, etc. Owner alleged that the damages included: (a) the cost to repair substandard work; (b) loss of use of the home due to delay; and (c) overcharges for furnishings, contract fees, and expenses. The underlying complaint set forth only a few instances of physical injury to the home, including mold on the ceiling in the master shower, faulty millwork on the children's playroom bookshelf, and a defective front door and resysta facade.

Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert

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

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Contractor hammering floor

The Third Circuit warned about the application of the “reasonable expectations” doctrine in future similar cases as it could negatively impact the insurance market in Pennsylvania.

Third Circuit Court of Appeals Concludes “Soup to Nuts” Policy Does Not Include Faulty Workmanship Coverage

Tuesday, December 11, 2018 — Timothy Carroll - White and Williams LLP

Earlier this month, in Frederick Mutual Insurance Company v. Hall, the U.S. Court of Appeals for the Third Circuit concluded that coverage for faulty workmanship claims is “simply not the kind of coverage insurance agents and insurance companies expect to provide” to construction industry professionals “unless the insured explicitly requests such coverage.” 2018 U.S. App. LEXIS 31666, at *9 (3d Cir. Nov. 8, 2018). In Hall, a stone masonry contractor was sued by its customer for causing over $350,000 in property damage resulting from “substandard and defective work” performed on the customer’s residence. The insurer sought a declaration that it owed neither a defense nor indemnity for those damages because, under Pennsylvania law, the policy did not cover property damage caused by faulty workmanship.

Reprinted courtesy of Timothy Carroll, White and Williams LLP

Mr. Carroll may be contacted at carrollt@whiteandwilliams.com

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Two businessmen shaking hands

Garret Murai discusses Sandoval v. Qualcomm Incorporated.

Hirer Liable for Injury to Subcontractor’s Employee Due to Failure to Act, Not Just Affirmative Acts, Holds Court of Appeal

Tuesday, December 11, 2018 — Garret Murai - California Construction Law Blog

The Privette doctrine, named after the court case Privette v. Superior Court (1993) 5 Cal.4th 689, provides that a higher-tiered party such as an owner or general contractor is not liable for injuries sustained by employees of a lower-tiered party such as a subcontractor on a construction project. There are, however, exceptions to the Privette doctrine. One of these exceptions is known as the “retained control doctrine.”

Under the retained control doctrine, a higher-tiered party cannot avoid liability under the Privette doctrine if the higher-tiered party: (1) retains control over the conditions of the work; (2) negligently exercises control over such conditions; and (3) its negligent exercise of control contributes to the injuries sustained by the employee of the lower-tiered party.

Reprinted courtesy of Garret Murai, Wendel, Rosen, Black & Dean LLP

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

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Construction Billionaire Appears in Thai Court as Poaching Trial Begins

December 11, 2018 — The Associated Press - Bloomberg

Kanchanaburi, Thailand (AP) -- The trial of a Thai billionaire construction tycoon charged with poaching an endangered black panther and other animals in a wildlife sanctuary began Tuesday after months of delay.


A Guide to Homeowners' Insurance for California Wildfire Losses

December 11, 2018 — William S. Bennett - Saxe Doernberger & Vita, P.C.

In 2017 and 2018 alone, California experienced the two largest and the first and fourth deadliest fires in its history.

Sadly, a University of California report predicts that the frequency and potency of these fires will only continue to increase in the coming years and decades, increasing the importance of knowing about insurance.

Mr. Bennett may be contacted at wsb@sdvlaw.com


U.S. Housing Starts Rise as Apartment Groundbreaking Gains

December 11, 2018 — Katia Dmitrieva - Bloomberg

U.S. new-home construction picked up in October on a rebound in apartments and other multifamily housing, offering some hope that the market is stabilizing despite rising prices and borrowing costs.


100th Annual AGC Convention

December 11, 2018 — Beverley BevenFlorez – CDJ Staff

The Associated General Contractor’s annual convention is coming to Denver next spring. This centennial event will feature 15 education breakout sessions, keynote presentations, and more than 125 companies in the AGC Equipment, Technology & Construction Solutions Expo. Attendees of the conference will include construction superintendents, project managers and senior executives.

April 1st-4th, 2019
Colorado Convention Center
700 14th Street
Denver, Colorado 80202

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Laptop screen showing dollar decline in value

The Thee Sombrero decision has significant implications in California and other jurisdictions.

California Appeals Court Says Loss of Use Is “Property Damage” Under Liability Policy, and Damages Can be Measured by Diminished Value

Tuesday, December 11, 2018 — Michael S. Levine & David M. Costello - Hunton Insurance Recovery Blog

In a win for policyholders, a California appellate court has held that the loss of use of property resulting from alleged negligence constitutes property damage under a liability insurance policy.

In Thee Sombrero, Inc. v. Scottsdale Insurance Company, the property owner, Thee Sombrero, operated a venue as a nightclub. After a shooting inside the nightclub caused a patron’s death, the local government revoked Sombrero’s right to use the property as a nightclub and, instead, limited permissible use of the property to a banquet hall. Sombrero sued the security company it had hired to keep guns out of the club, alleging that it was the security company’s negligence that caused the city to revoke Sombrero’s nightclub use permit and that the loss of use of the facility as a nightclub resulted in damages of almost a million dollars based on an assessment of the property’s diminished market value. The security company did not contest the claim, and Sombrero obtained a default judgment.

Reprinted courtesy of Michael S. Levine, Hunton Andrews Kurth and David M. Costello, Hunton Andrews Kurth
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Costello may be contacted at dcostello@HuntonAK.com

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David Adelstein analyzes the case Assurance Co. of America v. Lucas Waterproofing Co., Inc.

CGL Policy Covering Attorney’s Fees in Property Damage Claims

Tuesday, December 11, 2018 — David Adelstein - Florida Construction Legal Updates

Does a CGL policy cover attorney’s fees and costs in property damages claims, to the extent there is a contractual or statutory basis to recover attorney’s fees? Naturally, you need to review the policies and this is not a clear-cut issue, but there is law to argue under.

A case I have argued in support of CGL policies providing for coverage for attorney’s fees as a component of property damage claims when there is a contractual or statutory basis is Assurance Co. of America v. Lucas Waterproofing Co., Inc., 581 F.Supp.2d 1201 (S.D.Fla. 2008). In this case, the following applied:

  • The policy provided coverage for “those sums that the insured becomes legally obligated to pay as damages of… ‘property damage’….
  • Property damage was defined as “physical injury to tangible property, including all resulting loss of use of that property.”
  • The term damage, in of itself, was not defined in the policy.
Reprinted courtesy of David Adelstein, Kirwin Norris

Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Person in handcuffs

Duhaime faces charges of fraud, conspiracy to commit fraud and using forged documents.

Former SNC-Lavalin CEO Now Set for Trial in Bribe Case

Tuesday, December 11, 2018 — Debra K. Rubin - Engineering News-Record

Pierre Duhaime, the former CEO of Canadian design-build giant SNC-Lavalin—who resigned from the firm in 2012 in the wake of a contracting bribery scandal in which he was arrested for his alleged role—is now set for a February trial start in Quebec Superior Court. The case relates to payoffs on one project, a multibillion-dollar Montreal hospital on which the firm led the public-private construction consortium.

Reprinted courtesy of Debra K. Rubin, ENR

Ms. Rubin may be contacted at rubind@enr.com

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Judge at court illustration

Shannon M. Warren discusses Ohio N. Univ. v. Charles Constr. Servs.

Ohio Rejects the Majority Trend and Finds No Liability Coverage for a Subcontractor’s Faulty Work

Tuesday, December 11, 2018 — Shannon M. Warren - The Subrogation Strategist

In Ohio N. Univ. v. Charles Constr. Servs., 2018 Ohio LEXIS 2375 (No. 2017-0514, October 9, 2018), the Supreme Court of Ohio was recently called upon to determine if a general contractor’s Commercial General Liability (CGL) insurance policy provided coverage for defective work completed by its subcontractor. Rejecting the majority trend, the court held that, because the subcontractor’s faulty work was not an “occurrence” caused by an accident – i.e. a fortuitous event – within the meaning of the contractor’s CGL policy, the insurer did not have to defend or indemnify the contractor with respect to the plaintiff’s claims.

Reprinted courtesy of Shannon M. Warren, White and Williams LLP

Ms. Warren may be contacted at warrens@whiteandwilliams.com

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Fire flames

Sources say investigators are zeroing in on this "transpositional" tower that helps switch power among transmission lines on the Caribou-Palermo circuit.

99-Year-Old Transmission Tower Seen as Possible Cause of Devastating Calif. Wildfire

Tuesday, December 11, 2018 — Contra Costa Times - Engineering News-Record

Dec. 08 --PULGA -- With winds gusting around 50 mph in the morning hours of Nov. 8 , portions of a PG&E steel lattice transmission tower -- exposed to the elements high on a ridgetop and originally built when Woodrow Wilson was president -- failed.
As high-voltage lines got loose and whipped around, striking the metal tower, molten aluminum and metal sprayed across tinder dry vegetation, igniting the brush. Arriving firefighters could only watch as the blaze underneath the power lines quickly spread to wild timber and brush.

Reprinted courtesy of Engineering News-Record

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

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If the wrap-up exclusion is too broadly drafted, the exclusion can eliminate coverage for the general contractor and owner even when the subcontractor is not enrolled in the wrap-up.

Fourth Circuit Rejects Application of Wrap-Up Exclusion to Additional Insured

Tuesday, December 11, 2018 — K. Alexandra Byrd & Samantha M. Oliveira - Saxe Doernberger & Vita, P.C.

Utilizing an owner-controlled or contractor-controlled insurance program (collectively known as “wrap-ups”) can reduce claims, save costs, and give owners and general contractors comfort in knowing their project is adequately insured. However, problems often arise when a subcontractor doesn’t enroll in the wrap-up and, instead, agrees to provide additional insured coverage to the owner and general contractor on the subcontractor’s own general liability policy. One of those problems is the prevalence of wrap-up exclusions on subcontractors’ general liability policies. If the wrap-up exclusion is too broadly drafted, the exclusion can eliminate coverage for the general contractor and owner even when the subcontractor is not enrolled in the wrap-up.

Reprinted courtesy of K. Alexandra Byrd, Saxe Doernberger & Vita, P.C. and Samantha M. Oliveira, Saxe Doernberger & Vita, P.C.
Ms. Byrd may be contacted at kab@sdvlaw.com
Mr. Oliveira may be contacted at smm@sdvlaw.com

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Nearly 1000 Missing in California Fire Areas


Keinänen envisions a future where BIM can be used for construction management, logistics, site safety, risk management, training, and so on.

Making the World’s Longest Undersea Railway Tunnel Possible with BIM

Tuesday, December 11, 2018 — Aarni Heiskanen - AEC Business

Finland and Estonia are Baltic sea neighbors separated by the Gulf of Finland. Over eight million travelers and 1.2 million cars travel between Helsinki and Tallinn every year by boat. However, a consortium of companies is now planning to build the Finest railway tunnel between the two countries.

The vision of such a tunnel has been around since the 1990s. In June 2016, Peter Vesterbacka, previously known as the marketer behind Rovio’s Angry Birds, made the latest endeavor public in his AEC Hackathon presentation.

Reprinted courtesy of Aarni Heiskanen, AEC Business

Mr. Heiskanen may be contacted at aec-business@aepartners.fi

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Illustration of three judges in court

The lesson from this case is that whether and how an HOA can restrict short-term rentals depends on a number of factors.

Court Addresses HOA Attempt to Restrict Short Term Rentals

Tuesday, December 11, 2018 — Kevin J. Parker - Snell & Wilmer Real Estate Litigation Blog

In a recent case, the Texas Supreme Court addressed an attempt by a homeowners’ association (“HOA”) to restrict short-term rentals based upon recorded Covenants, Conditions, and Restrictions (“CC&Rs”) applicable to a residential subdivision. The property was a single-family home. The homeowner rented the home through websites such as VRBO. The HOA issued notices of violation; the homeowner kept renting; the HOA assessed fines against the property. The property owner then sought a declaration from the court that the CC&Rs did not impose a minimum duration on occupancy or leasing. The trial court agreed with the HOA. The Texas Court of Appeals also agreed with the HOA. The Texas Supreme Court reversed, holding that the CC&Rs, as properly interpreted, did not prohibit short-term rentals. In arriving at its holding, the Texas Supreme Court analyzed the CC&Rs in detail and came to an interpretation different than the trial court and the Court of Appeals.

Reprinted courtesy of Kevin J. Parker, Snell & Wilmer

Mr. Parker may be contacted at kparker@swlaw.com

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Survey form with pen resting on it

The health issues aren't well understood yet, a survey finds

Survey: Workers Lack Awareness of Potentially Hazardous Nanomaterials

Tuesday, December 11, 2018 — Scott Van Voorhis – Engineering News-Record

Microscopic nanoparticles are part of the mix in nearly 600 construction products. The particles add strength, durability and other desired characteristics.

Reprinted courtesy of Scott Van Voorhis, ENR

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

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Palm trees at sunset

Payne & Fears LLP serves clients in the areas of employment and labor law counseling and litigation, business litigation, business transactions and insurance coverage litigation.

Key California Employment Law Cases: October 2018

Tuesday, December 11, 2018 — Alejandro G. Ruiz & Eric C. Sohlgren - Payne & Fears

This month’s key employment law cases address the test for independent contractor status, the legality of an incentive compensation system, and personal liability for wage and hour violations.

Garcia v. Border Transp. Group, LLC, Cal. Ct. App. Oct. 22, 2018

Summary: Defendants must satisfy Dynamex ABC test to establish independent contractor status as defense to wage order claims, but Borello multifactor test applies to non-wage-order claims.

Facts: Plaintiff leased a taxicab license and taxicab from defendants. Plaintiff brought several employment claims against defendants, including claims for whistleblower wrongful termination, unpaid wages, minimum wages, meal and rest break penalties, wage statement penalties, civil penalties under the California Labor Code Private Attorney Generals Act (“PAGA”), waiting time penalties, and unfair competition. Defendants filed a motion for summary judgment on all claims on the ground that plaintiff was an independent contractor and not an employee. Relying on the factors described in Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341, 256 Cal. Rptr. 543 (1989), defendant presented evidence that plaintiff set his own hours, used the cab for personal business, kept collected fares, used a radio dispatch service, entered into sublease agreements, held other jobs, and advertised services in his own name.The trial court granted summary judgment in favor of defendants. While plaintiff’s appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903, 232 Cal. Rptr. 3d 1 (2018), establishing a new test for independent contractor status under the definition of employment found in the California Industrial Welfare Commission Wage Orders.

Reprinted courtesy of Alejandro G. Ruiz, Payne & Fears and Eric C. Sohlgren, Payne & Fears
Mr. Ruiz may be contacted at agr@paynefears.com
Mr. Sohlgren may be contacted at ecs@paynefears.com

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