Not at all, said the Louisiana Supreme Court, in a case dealing with the timing of filing of a claim for indemnity.

In the case, a Louisiana intermediate appellate court had earlier ruled in very short order on a supervisory writ application (reversing the trial court) that a claim for indemnity (based upon an indemnity clause in a construction contract) was “premature” until a “determination that damages are actually owed and the indemnitee sustains a loss. … At this time, the lawsuit is still pending against [the putative indemnitee], and no determination of liability had been made; thus, there is no obligation for indemnity and defense costs. … Stated differently, indemnity (or reimbursement) is not available at this time because [the indemnitee] has not discharged a liability which [the indemnitor] should have assumed or otherwise suffered any loss or damages. … Accordingly, [the] cause of action for indemnity and defense is not ripe for adjudication.” Bennett v. Demco Energy Servs., LLC, 2023-0581 (La. App. 1 Cir. 09/11/23); 2023 La. App. LEXIS 1449.

The theory of “setoff” is an important theory in construction disputes. Florida’s Fourth District Court of Appeal recently provided worthy discussion on contractual setoffs:

Setoffs in contract claims are governed by [Florida Statute] section 46.015(2), which provides that if a plaintiff has released “any person in partial satisfaction of the damages sued for, the court shall [setoff] this amount from the amount of any judgment to which the plaintiff would be otherwise entitled at the time of rendering judgment.” The setoff statute intends to prohibit plaintiffs from getting double recoveries.

A setoff requires that settling and non-settling parties be jointly and severally liable. The settled damages must also be the same damages for which the setoff is sought; stated differently, a setoff is not proper where the trial damages to be setoff are separate and distinct from the settled damages.

Close Construction, LLC v. City of Riviera Beach Utility Special District, 49 Fla.L.Weekly D1184d (Fla. 4th DCA 2024) (internal citations omitted).

In a lawsuit filed in Orange County, Traub Lieberman Partner Michael Logan and Associate Christian Romaguera achieved a voluntary dismissal in favor of their Client, a construction company. The Plaintiff claimed that he was seriously and permanently injured, and demanded $1,000,000.00. The Plaintiff turned out to be an employee of our Client’s subcontractor, and the Plaintiff received worker’s compensation benefits from his employer, the subcontractor. Under Florida Statute § 440.11(1), “The liability of an employer . . . shall be exclusive and in place of all other liability, including vicarious liability, of such employer to any third-party tortfeasor and to the employee . . .” When a subcontractor provides workers’ compensation benefits to its injured employee, workers’ compensation immunity would not only apply to the subcontractor but to the general contractor as well. This is also known as “vertical immunity.” The Traub Lieberman team filed a detailed motion and memorandum of law to argue its case, and the Plaintiff voluntarily withdrew the claim against the Client just before that motion was set to be argued before the Judge.

The insurer's motion to dismiss was more appropriate for an eventual summary judgment motion and was consequently denied. Sivan Lam v. Scottsdale Ins. Co., 2024 U.S. Dist. LEXIS 81262 (M.D. Fla. April 12, 2024).

Lam suffered a loss to her home due to Hurricane Ian. When only a portion of the claim was paid, Lam sued his insurer, Scottsdale, for breach of contract (Count I) and declaratory relief (Count II).

Scottsdale argued that Lam's request for declaratory relief was redundant of her breach of contract claim. The court noted that Rule 12 (b)(6), Fed. R. Civil P., was a vehicle to challenge a claim's sufficiency. Redundancy was not insufficiency, and it was not a ground for dismissal under Rule 12 (b)(6).

China Construction Bank Corp., the nation’s third-largest commercial lender, was accused in a US lawsuit of enabling a massive fraud in the reinsurance industry that left companies with “monumental losses” and sinking stock prices.

The bank allowed employees to conspire with Israeli insurance startup Vesttoo Ltd. to sell reinsurance policies that weren’t real, according to a complaint filed late Thursday by the Porch Group in Manhattan federal court.

Vesttoo filed for Chapter 11 bankruptcy in August after it was accused of using some $2 billion of fraudulent letters of credit.

The Porch Group said that its unit Homeowners of America Insurance Co. lost tens of millions of dollars when its purported $300 million letter of credit proved worthless.

“Not only did HOA incur colossal losses, but news of its exposure to the fraud perpetrated by Vesttoo and CCB shocked the market and imposed severe losses on Porch Group’s shareholders as its stock price plummeted,” according to the suit.

Norfolk Southern Corp. has agreed to pay more than $310 million and implement safety improvements as part of a settlement with the U.S. Environmental Protection Agency and U.S. Dept. of Justice over the disastrous February 2023 train derailment in East Palestine, Ohio, officials and the company announced May 23.

Reprinted courtesy of James Leggate, Engineering News-Record

Mr. Leggate may be contacted at leggatej@enr.com

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In our latest roundup, summer travelers seek alternative lodging options, purpose-built wellness real estate investments grow, bonds backed by CRE debt hit are hit with losses, and more!

• Across all property types, purpose-built wellness real estate investment has grown dramatically in recent years, including properties with wellness features as a focus. (Mary Salmonsen, Multifamily Dive)
• The travelers on the road this summer will have different demographics, budgets and reasons for travel and different preferences on accommodations, with more travelers opting for alternative housing options. (Noelle Mateer, Hotel Dive)
• Megaprojects are on the rise, with massive projects, from rail tunnels to computer chip factories, having myriad stakeholders and lengthy timelines that span political administrations. (Julie Strupp, Construction Dive)

White and Williams practice groups and attorneys have been ranked in this year's Chambers USA 2024 Guide. Among the rankings, the firm has been recognized in the areas of Insurance and Real Estate: Finance in Pennsylvania, and Construction in Maryland.

Chambers recognized Tim Davis, Managing Partner of the Firm, and Nancy Frantz, Chair of the Real Estate Finance Group, both of whom were recognized for Real Estate: Finance. Chambers also ranked Steven Coury, Managing Partner of the Stamford, CT Office, for Real Estate, as well as Randy Maniloff, Partner, and Patricia Santelle, Chair Emeritus/Former Managing Partner and Chair of the Executive Committee, for Insurance. David Marion, Senior Counsel and Chambers’ Senior Statespeople (22-years ranked) was recognized for Litigation: General Commercial. Partner David Gilliss, Managing Partner of the Maryland office, was recognized for Construction and Amy Vulpio, Co-Chair of the Financial Restructuring and Bankruptcy Practice, was recognized for Bankruptcy/Restructuring.

In one review of Tim Davis, a client described, "He's been around a long time; he's seen it all and has an instinctive feel for getting to the right outcome." Davis has been listed for the past four years and was described by Chambers as, “experienced in representing clients, including insurance companies, banks and investments funds, in a wide variety of real estate finance transactions.”