No Coverage for Roof Collapse During Hurricane
January 29, 2024 —
Tred R. Eyerly - Insurance Law HawaiiThe Fifth Circuit affirmed the district court's determination that the insured's roof collapse was not covered. Exclusive Real Estate Inv., L.L.C. v. S.G.L. No. 1, Ltd., 2023 U.S. App. LEXIS 29368 (5th Cir. Nov. 3, 2023).
A building owned by Exclusive Real Estate partially collapsed during a rain-storm. The insurer, SGL, inspected the roof and determined that there was no coverage. Exclusive sued SGL for breach of contract and bad faith. SGL moved for summary judgment, which was granted by the district court. Exclusive appealed.
The poicy covered "direct physical loss to the property" caused by windstorms. Exclusions, however, precluded coverage for losses "caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening."
Read the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Judgment Proof: Reducing Litigation Exposure with Litigation Risk Insurance
March 04, 2024 —
Latosha M. Ellis & Charlotte Leszinske - Hunton Insurance Recovery BlogIt is not just your imagination: verdicts are getting bigger. So-called “nuclear verdicts” have increased in size and frequency over the past decade, particularly after the COVID-19 pandemic. Litigation risk insurance is a little known, but highly effective, option meant to compliment traditional insurance products and provide additional protection for policyholders nervous about litigation exposure.
Unfortunately, it is difficult to predict the exposure presented by any particular case. Between 2020 and 2022, the median
verdict increased 95%—from $21.5 million to $41.1 million. In
2022, a jury handed down a verdict worth $7.3 billion for injury to a single plaintiff. Even if an injury or loss is minor, juries have shown that they are willing to penalize corporate defendants with punitive damages that significantly exceed the award of compensatory damages. With such uncertainty and millions (if not billions) at stake, companies can reduce risk with litigation risk insurance.
Three key types of litigation risk insurance include: (1) punitive wrap insurance, (2) adverse judgment insurance, and (3) judgment preservation insurance.
Reprinted courtesy of
Latosha M. Ellis, Hunton Andrews Kurth and
Charlotte Leszinske, Hunton Andrews Kurth
Ms. Ellis may be contacted at lellis@HuntonAK.com
Ms. Leszinske may be contacted at cleszinske@HuntonAK.com
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Gaps in Insurance Created by Complex Risks
January 22, 2024 —
The Hartford Staff - The Hartford InsightsFrom slips, trips and falls to extreme weather and cyberattacks, businesses are regularly confronted with risks to operations and profitability. In 2023, elevated building costs, increased flooding, and growing ransomware attacks made it compelling for business owners to make sure they had adequate insurance to stay ahead of property and liability exposures. However, if left unchecked, these trends can lead to gaps in coverage. As 2024 approaches, now is the time to assess your risk and collaborate with the right resources to fill any potential voids in insurance.
Economic inflation for example has changed property valuations, which can result in coverage gaps if policyholders have not examined their replacement costs recently.
Read the full story...Reprinted courtesy of
The Hartford Staff, The Hartford Insights
Mass Timber Reduces Construction’s Carbon Footprint, But Introduces New Risk Scenarios
March 04, 2024 —
Michael Bruch & Franck Fumat - Allianz CommercialMass timber has the potential to be a critical building component for the cities of the near future given the need for the construction sector to reduce its reliance on concrete and steel to lower its Co2 emissions. However, as this market grows and mass timber buildings evolve to greater heights, the construction risk landscape will also be transformed, bringing risk management challenges for companies, according to the new Emerging Risk Trend Talk
report from Allianz Commercial.
“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial. “However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”
The need for mass timber
The building and construction sector is among the largest contributors to Co2 emissions, accounting for over 34% of energy demand and around 37% of energy and process related Co2 emissions in
2021 [1]. Given emissions reduction is essential to meet climate change commitments around the world, the need for more sustainable solutions in the built environment has become increasingly important, driven by growing investor and consumer concerns, and legislation, regulation and reporting requirements evolving quickly in many jurisdictions around the world.
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Allianz Commercial
Unjust Enrichment Claims When There Is No Binding Contract
December 04, 2023 —
David Adelstein - Florida Construction Legal UpdatesA recent appellate opinion starts off, “This is a typical South Florida construction dispute.” (See case citation at the bottom) Let’s see, is it? No. It’s a garden variety payment dispute where the parties did NOT have a binding contract. Why? That’s for a different day (because the smart practice is ALWAYS to have a contract!) but it touches on the equitable, unjust enrichment claim. And it touches on competing unjust enrichment claims and the apportionment of those claims. In other words, can both parties be right on their unjust enrichment claims?
An owner hired a general contractor for home renovations. Work started but the relationship soured and the general contractor did not complete the work. The general contractor filed a payment dispute against the owner based on unpaid invoices. It pled alternative theories of recovery against the owner: breach of contract and unjust enrichment. The owner filed a counterclaim against the general contractor for the same claims. During the non-jury trial, the general contractor presented unpaid invoices along with testimony that the invoices represented the value of services rendered. The owner presented evidence of the completion of work damages.
Read the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Homeowner Who Wins Case Against Swimming Pool Contractor Gets a Splash of Cold Water When it Comes to Attorneys’ Fees
February 05, 2024 —
Garret Murai - California Construction Law BlogLooking outside as of late it seems like the glorious, sun-drenched days of Summer are just a nostalgic memory of days long gone. So, to bring back some of those warm-weather memories, I have a swimming pool case for you. Although, like most of the things we write about here on the California Construction Law Blog it’s not all fun-in-the-sun.
The Lee Case
In Lee v. Cardiff, 94 Cal.App.5th 398 (2023), Homeowner Dianne Lee entered into a construction contact with contractor David Brian Cardiff doing business as Advantage Pools Bay Area for a swimming pool and landscaping project totaling $231,500. It must have been quite a pool.
As these things sometimes go, a dispute arose and Cardiff left the job before its was finished. Lee later sued alleging breach of contract, negligent construction and violation of the Contractor State License Law.
Read the full story...Reprinted courtesy of
Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
How the California and Maui Wildfires Will Affect Future Construction Projects
October 30, 2023 —
Susan Doering - Construction ExecutiveJust like any kind of fire, wildfires are caused by the presence of fuel and a spark. In the case of the
2017 fires in the wine country of California, along with the state's 2018
Camp Fire, the fuel was dry leaf litter, branches and downed trees. And the spark, in some cases, resulted from electric utility lines and, in other cases, due to contractor’s work.
More recently, this summer's Maui fires have taken hundreds of lives—deceased and missing—and burned more than 2,500 acres. Lahaina’s historic sites cannot be replaced, and estimates of the rebuild costs are near $5 billion. In Hawaii, the fuel was the same as in California: dried forest debris. It is alleged that the spark was from a powerline downed by extreme winds from Hurricane Dora. While sparks were present, it is the increased volume of fuel that has been the true source of the disastrous recent wildfires.
The increased presence of fuel is the result of recent changes in forestry-management practices, coupled with accelerated climatic shifts in recent years toward hotter, drier weather from 2011 to 2020 in California and 2022 to 2023 in Maui, increasing both frequency and severity.
Reprinted courtesy of
Susan Doering, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Corporate Transparency Act’s Impact on Real Estate: Reporting Companies, Exemptions and Beneficial Ownership Reporting (webinar)
December 04, 2023 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogOn October 23, 2023, colleague
Andrew Weiner and Kevin Gaunt, counsel at Hunton Andrews Kurth, examined the Corporate Transparency Act (CTA), effective Jan. 1, 2024, and its impact on real estate entities and transactions, including who is considered a reporting company subject to new beneficial ownership information (BOI) reporting requirements and whether an exemption applies. The panel also discussed certain state laws that impose similar reporting requirements as the CTA and described best practices for real estate counsel to assist their clients with preparing for the CTA’s implementation and ongoing compliance.
The panel also reviewed other important considerations, including:
- Which real estate entities will likely be most affected by the CTA’s implementation and why?
- What exemptions may apply?
- How will the CTA’s reporting requirements affect real estate transactions for lenders and investors/buyers?
Read the full story...
Reprinted courtesy of Pillsbury's Construction & Real Estate Law Team